10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2017

or

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File Number 001-31895

ODYSSEY MARINE EXPLORATION, INC.

(Exact name of registrant as specified in its charter)

Nevada	84-1018684
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5215 W. Laurel Street, Tampa, Florida 33607

(Address of principal executive offices) (Zip code)

(813) 876-1776

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  ☒    NO  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐  (Do not check if a smaller reporting company)	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ☐    No  ☒

The number of outstanding shares of the registrant’s Common Stock, $.0001 par value, as of April 20, 2017 was 8,388,821.

		Page No.
Part I:	Financial Information
Item 1.	Financial Statements:
	Consolidated Balance Sheets		3
	Consolidated Statements of Operations		4
	Consolidated Statements of Cash Flows		5
	Notes to the Consolidated Financial Statements		6 – 24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25 – 35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		35
Item 4.	Controls and Procedures		35
Part II:	Other Information
Item 1.	Legal Proceedings		35
Item 1A.	Risk Factors		35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		36
Item 4.	Mine Safety Disclosures		36
Item 6.	Exhibits		37
Signatures			38

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PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	Unaudited March 31, 2017			December 31, 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,065,690		$	1,662,643
Restricted cash		10,000			10,000
Accounts receivable and other, net		355,565			473,806
Other current assets		441,680			609,462
Total current assets		1,872,935			2,755,911
PROPERTY AND EQUIPMENT
Equipment and office fixtures		17,188,699			17,188,699
Marine asset held for sale		416,329			416,329
Accumulated depreciation		(16,031,978	)		(15,809,774	)
Total property and equipment		1,573,050			1,795,254
NON-CURRENT ASSETS
Other non-current assets		532,500			532,500
Total non-current assets		532,500			532,500
Total assets	$	3,978,485		$	5,083,665
LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	1,656,789		$	1,397,347
Accrued expenses and other		5,588,944			5,078,125
Loans payable		20,800,001			20,731,807
Total current liabilities		28,045,734			27,207,279
LONG-TERM LIABILITIES
Loans payable		5,141,723			4,335,501
Deferred income and revenue participation rights		4,643,750			4,643,750
Total long-term liabilities		9,785,473			8,979,251
Total liabilities		37,831,207			36,186,530
Commitments and contingencies (NOTE P)
STOCKHOLDERS’ EQUITY/(DEFICIT)
Preferred stock - $.0001 par value; 24,984,166 shares authorized; none outstanding		—			—
Common stock – $.0001 par value; 75,000,000 shares authorized; 7,718,366 and; 7,718,366 issued and outstanding for each period end presented		772			772
Additional paid-in capital		208,170,842			207,962,346
Accumulated deficit		(229,149,701	)		(226,950,436	)
Total stockholders’ equity/(deficit) before non-controlling interest		(20,978,087	)		(18,987,318	)
Non-controlling interest		(12,874,635	)		(12,115,547	)
Total stockholders’ equity/(deficit)		(33,852,722	)		(31,102,865	)
Total liabilities and stockholders’ equity/(deficit)	$	3,978,485		$	5,083,665

The accompanying notes are an integral part of these financial statements.

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ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited

	Three Months Ended
	March 31, 2017			March 31, 2016
REVENUE
Recovered cargo sales and other	$	—		$	4,667
Marine services		649,353			577,810
Total revenue		649,353			582,477
OPERATING EXPENSES
Cost of sales – recovered cargo sales and other		—			—
Marketing, general and administrative		1,629,955			2,380,317
Operations and research		1,302,516			2,199,991
Total operating expenses		2,932,471			4,580,308
(LOSS) FROM OPERATIONS		(2,283,118	)		(3,997,831	)
OTHER INCOME (EXPENSE)
Interest expense		(714,896	)		(334,060	)
Change in derivative liabilities fair value		—			3,337,474
Other		39,663			381,978
Total other income (expense)		(675,233	)		3,385,392
(LOSS) BEFORE INCOME TAXES		(2,958,351	)		(612,439	)
Income tax benefit (provision)		—			—
(LOSS) BEFORE NON-CONTROLLING INTEREST		(2,958,351	)		(612,439	)
Non-controlling interest		759,088			697,083
NET (LOSS) INCOME	$	(2,199,263	)	$	84,644
NET (LOSS) INCOME PER SHARE (See NOTE B)
Basic	$	(0.28	)	$	0.01
Diluted	$	(0.28	)	$	0.01
Weighted average number of common shares outstanding with participating securities per the two-class method
Basic		7,718,366			7,541,111
Diluted		7,718,366			7,632,441

The accompanying notes are an integral part of these financial statements.

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ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - Unaudited

	Three Months Ended
	March 31, 2017			March 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss before non-controlling interest	$	(2,958,351	)	$	(612,439	)
Adjustments to reconcile net loss to net cash (used) by operating activities:
Depreciation and amortization		222,204			325,211
Financed lender fees		—			50,000
Change in derivatives liabilities fair value		—			(3,337,474	)
Note payable interest accretion		124,416			13,581
Share-based compensation		208,496			334,629
(Increase) decrease in:
Accounts receivable		118,241			(25,035	)
Other assets		167,780			(56,390	)
Increase (decrease) in:
Accounts payable		259,442			244,612
Accrued expenses and other		639,655			773,361
Deferred revenue		—			(383,148	)
NET CASH (USED) BY OPERATING ACTIVITIES		(1,218,117	)		(2,673,092	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(51,221	)
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES		—			(51,221	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuances of loans payable		750,000			3,325,000
Repayment of mortgage and loans payable		(128,836	)		(76,789	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		621,164			3,248,211
NET (DECREASE) INCREASE IN CASH		(596,953	)		523,898
CASH AT BEGINNING OF PERIOD		1,662,643			2,241,317
CASH AT END OF PERIOD	$	1,065,690		$	2,765,215
SUPPLEMENTARY INFORMATION:
Interest paid	$	114,901		$	320,068
Income taxes paid	$	—		$	—

The accompanying notes are an integral part of these financial statements.

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ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Odyssey Marine Exploration, Inc. and subsidiaries (the “Company,” “Odyssey,” “us,” “we” or “our”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and the instructions to Form 10-Q and, therefore, do not include all information and footnotes normally included in financial statements prepared in accordance with generally accepted accounting principles. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of management, these financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position as of March 31, 2017 and the results of operations and cash flows for the interim period presented. Operating results for the three-month period ended March 31, 2017 are not necessarily indicative of the results that may be expected for the full year.

Recent accounting pronouncements

In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, which establishes a comprehensive revenue recognition standard under GAAP for almost all industries. The new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein. Early adoption is prohibited. Based on management’s review of this new standard along with the substance of our transactions, management is of the position this standard will not have a material impact on our financial statements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases, which establishes a comprehensive lease standard under GAAP for virtually all industries. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. The new standard will apply for annual periods beginning after December 15, 2018, including interim periods therein, and requires modified retrospective application. Early adoption is permitted. Based on management’s current understanding of this new standard along with the underlying substance of our operations, management believes it will not have a material impact on our financial statements.

Other recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect, if any, on the Company’s financial statements.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of the Company is presented to assist in understanding our financial statements. The financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity and have prepared them in accordance with our customary accounting practices.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, both domestic and international. Equity investments in which we exercise significant influence but do not control and of which we are not the primary beneficiary are accounted for using the equity method. All significant inter-company and intra-company transactions and balances have been eliminated. The results of operations attributable to the non-controlling interest are presented within equity and net income, and are shown separately from the Company’s equity and net income attributable to the Company. Some of the existing inter-company balances, which are eliminated upon consolidation, include features allowing the liability to be converted into equity of a subsidiary, which if exercised, could increase the direct or indirect interest of the Company in the non-wholly owned subsidiaries.

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Use of Estimates

Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

Revenue Recognition and Accounts Receivable

In accordance with Topic A.1. in SAB 13: Revenue Recognition, marine services expedition charter revenue is recognized ratably when realized and earned as time passes throughout the contract period as defined by the terms of the agreement. Expenses related to the marine services expedition charter revenue (also referred to as “marine services” revenue) are recorded as incurred and presented under the caption “Operations and research” on our Consolidated Statements of Operations.

Bad debts are recorded as identified and, from time to time, a specific reserve allowance will be established when required. A return allowance is established for sales that have a right of return. Accounts receivable is stated net of any recorded allowances.

Cash and Cash Equivalents

Cash, cash equivalents and restricted cash include cash on hand and cash in banks. We also consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. We have $10,000 of restricted cash for collateral related to a corporate credit card program.

Long-Lived Assets

Our policy is to recognize impairment losses relating to long-lived assets in accordance with the Accounting Standards Codification (“ASC”) topic for Property, Plant and Equipment. Decisions are based on several factors, including, but not limited to, management’s plans for future operations, recent operating results and projected cash flows. Impairment losses are included in depreciation at the time of impairment.

Property and Equipment and Depreciation

Property and equipment is stated at historical cost. Depreciation is calculated using the straight-line method at rates based on the assets’ estimated useful lives which are normally between three and thirty years. Leasehold improvements are amortized over their estimated useful lives or lease term, if shorter. Major overhaul items (such as engines or generators) that enhanced or extended the useful life of vessel related assets qualified to be capitalized and depreciated over the useful life or remaining life of that asset, whichever was shorter. Certain major repair items required by industry standards to ensure a vessel’s seaworthiness also qualified to be capitalized and depreciated over the period of time until the next scheduled planned major maintenance for that item. All other repairs and maintenance were accounted for under the direct-expensing method and are expensed when incurred.

The smaller vessel we received as consideration when we sold our Odyssey Explorer in 2016 remains under a pending contract of sale. We believe this sale will be completed in the near term. The amount capitalized for this asset is $416,329.

Earnings Per Share

See NOTE I regarding our 1-for-12 reverse stock split. Share related amounts have been retroactively adjusted in this report to reflect this reverse stock-split for all periods presented.

Basic earnings per share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. In periods when the Company has income, the Company would calculate basic earnings per share using the two-class method, if required, pursuant to ASC 260 Earnings Per Share. The two-class method was required effective with the issuance of certain senior convertible notes in the past because these notes qualified as a participating security, giving the holder the right to receive dividends should dividends be declared on common stock. Under the two-class method, earnings for a period are allocated on a pro rata basis to the common stockholders and to the holders of convertible notes based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion. The Company does not use the two-class method in periods when it generates a loss because the holder of the convertible notes does not participate in losses. Currently, we do not have any outstanding convertible notes that qualify as a participating security.

Diluted EPS reflects the potential dilution that would occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. We use the treasury stock method to compute potential common shares from stock options and warrants and the if-converted method to compute potential common shares from preferred stock, convertible notes or other convertible securities.

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For diluted earnings per share, the Company uses the more dilutive of the if-converted method or two-class method. When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted EPS calculation.

At March 31, 2017 and 2016, the weighted average common shares outstanding year-to-date were 7,718,366 and 7,541,111, respectively. For the periods in which net losses occurred, all potential common shares were excluded from diluted EPS because the effect of including such shares would be anti-dilutive.

The potential common shares in the following tables represent potential common shares calculated using the treasury stock method from outstanding options, stock awards and warrants that were excluded from the calculation of diluted EPS:

	Three Months Ended
	March 31, 2017		March 31, 2016
Average market price during the period	$	4.22	$	3.63
In the money potential common shares from options excluded		7,903		—
In the money potential common shares from warrants excluded		19,905		—

Potential common shares from out of the money options and warrants were also excluded from the computation of diluted EPS because calculation of the associated potential common shares has an anti-dilutive effect on EPS. The following table lists options and warrants that were excluded from diluted EPS:

	Three Months Ended
Per share exercise price	March 31, 2017		March 31, 2016
Out of the money options excluded:
$    12.48		137,666		137,666
$    12.84		4,167		4,167
$    26.40		75,158		79,370
$    32.76		—		53,707
$    34.68		73,765		78,705
$    39.00		8,333		8,333
$    41.16		833		3,333
$    42.00		8,333		8,333
$    46.80		1,667		1,667
Out-of-the-money warrants excluded:
$    43.20		—		130,208
Total excluded		309,922		505,489

The weighted average equivalent common shares relating to our unvested restricted stock awards that were excluded from potential common shares in the earning per share calculation due to having an anti-dilutive effect are:

	Three Months Ended
	March 31, 2017		March 31, 2016
Potential common shares from unvested restricted stock awards excluded from EPS		238,921		—

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The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income per share:

	Three Months Ended
	March 31, 2017			March 31, 2016
Net income (loss)	$	(2,199,263	)	$	84,644
Numerator, basic and diluted net income (loss) available to stockholders	$	(2,199,263	)	$	84,644
Denominator:
Shares used in computation – basic:
Weighted average common shares outstanding		7,718,366			7,541,111
Common shares outstanding for basic		7,718,366			7,541,111
Additional shares used in computation – diluted:		—			91,330
Common shares outstanding for basic		7,718,366			7,541,111
Shares used in computing diluted net income per share		7,718,366			7,632,441
Net (loss) per share – basic	$	(0.28	)	$	0.01
Net (loss) per share – diluted	$	(0.28	)	$	0.01

Income Taxes

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or the entire deferred tax asset will not be realized.

Stock-based Compensation

Our stock-based compensation is recorded in accordance with the guidance in the ASC topic for Stock-Based Compensation (See NOTE I).

Fair Value of Financial Instruments

Financial instruments consist of cash, evidence of ownership in an entity, and contracts that both (i) impose on one entity a contractual obligation to deliver cash or another financial instrument to a second entity, or to exchange other financial instruments on potentially unfavorable terms with the second entity, and (ii) conveys to that second entity a contractual right (a) to receive cash or another financial instrument from the first entity, or (b) to exchange other financial instruments on potentially favorable terms with the first entity. Accordingly, our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative financial instruments and mortgage and loans payable. We carry cash and cash equivalents, accounts payable and accrued liabilities, and mortgage and loans payable at the approximate fair market value, and, accordingly, these estimates are not necessarily indicative of the amounts that we could realize in a current market exchange. We carry derivative financial instruments at fair value as is required under current accounting standards. Redeemable preferred stock has been carried at historical cost and accreted carrying values to estimated redemption values over the term of the financial instrument.

Derivative financial instruments consist of financial instruments or other contracts that contain a notional amount and one or more underlying variables (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. See NOTE K for additional information. We generally do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, we have entered into certain other financial instruments and contracts with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815 – Derivatives and Hedging, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements with changes in fair value reflected in our income.

Fair Value Hierarchy

The three levels of inputs that may be used to measure fair value are as follows:

Level 1. Quoted prices in active markets for identical assets or liabilities.

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Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.

Level 3. Unobservable inputs to the valuation methodology are significant to the measurement of the fair value of assets or liabilities. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.

Redeemable Preferred Stock

If we issue redeemable preferred stock instruments (or any other redeemable financial instrument), they are initially evaluated for possible classification as a liability in instances where redemption is certain to occur pursuant to ASC 480 – Distinguishing Liabilities from Equity. Redeemable preferred stock classified as a liability is recorded and carried at fair value. Redeemable preferred stock that does not, in its entirety, require liability classification is evaluated for embedded features that may require bifurcation and separate classification as derivative liabilities. In all instances, the classification of the redeemable preferred stock host contract that does not require liability classification is evaluated for equity classification or mezzanine classification based upon the nature of the redemption features. Generally, mandatory redemption requirements or any feature that could require cash redemption for matters not within our control, irrespective of probability of the event occurring, requires classification outside of stockholders’ equity. Redeemable preferred stock that is recorded in the mezzanine section is accreted to its redemption value through charges to stockholders’ equity when redemption is probable using the effective interest method. We have no redeemable preferred stock outstanding for the periods presented.

Subsequent Events

We have evaluated subsequent events for recognition or disclosure through the date this Form 10-Q is filed with the Securities and Exchange Commission.

NOTE C – ACCOUNTS RECEIVABLE

Our accounts receivable consist of the following:

	March 31, 2017		December 31, 2016
Trade	$	1,387	$	2,569,108
Related party		303,596		205,497
Other		50,582		44,930
Reserve allowance		—		(2,345,729	)
Total accounts receivable, net	$	355,565	$	473,806

The trade receivable balance at December 31, 2016 consists primarily of a trade receivable from Neptune Minerals, Inc., for which a reserve allowance for the full amount of $2,345,729 has been made for the reported period end. In February 2017, we entered into a non-binding Letter of Intent with SMOM Limited for a possible financing arrangement pursuant to which we assigned this Neptune Minerals, Inc. receivable to SMOM as a commitment fee. Being fully reserved, this Neptune Minerals, Inc. receivable had a carrying value of zero. Monaco and related affiliates owes us $303,596 and $205,497 for the periods ended March 31, 2017 and December 31, 2016, respectively, for support services and marine services rendered on their behalf. See NOTE H for further information regarding Monaco.

NOTE D – RELATED PARTY TRANSACTIONS

In December 2015, we entered into an asset acquisition agreement with Monaco Financial, LLC (“Monaco”). See NOTE S to the consolidated financial statements included in our Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2015 for further information. We had accounts receivable with Monaco and related affiliates at March 31, 2017 and December 31, 2016 of $303,596 and $205,497, respectively. We had general operating payables with Monaco at March 31, 2017 and December 31, 2016 of $266,136 and $267,824, respectively. See NOTE H for further debt commitments between the entities. Based on the economic substance of these business transactions, we consider Monaco Financial, LLC to be an affiliated company, thus a related party. We do not own any financial interest in Monaco. We have and expect to perform and complete marine shipwreck search and recovery charter services for this related party from which we will recognize the appropriate revenue. We also lease our corporate office space on an annually renewable basis from Monaco at $20,080 per month.

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NOTE E – INVESTMENTS IN UNCONSOLIDATED ENTITIES

Neptune Minerals, Inc. (“NMI”)

Our current investment position in NMI consists of 3,092,488 Class B Common non-voting shares and 2,612 Series A Preferred non-voting shares. These preferred shares are convertible into an aggregate of 261,200 shares of Class B non-voting common stock. Our holdings now constitute an approximate 14% ownership in NMI. At December 31, 2016, our estimated share of unrecognized NMI equity-method losses is approximately $21.3 million. We have not recognized the accumulated $21.3 million in our income statement because these losses exceeded our investment in NMI. Our investment has a carrying value of zero as a result of the recognition of our share of prior losses incurred by NMI under the equity method of accounting. We believe it is appropriate to allocate this loss carryforward of $21.3 million to any incremental NMI investment that may be recognized on our balance sheet in excess of zero since the losses occurred when they were an equity-method investment. The aforementioned loss carryforward is based on NMI’s last unaudited financial statements as of December 31, 2016. We do not have any financial obligations to NMI, and we are not committed to provide financial support.

Although we are a shareholder of NMI, we have no representation on the board of directors or in management of NMI and do not hold any Class A voting shares. We are not involved in the management of NMI nor do we participate in their policy-making. Accordingly, we are not the primary beneficiary of NMI and are not required to consolidate NMI. As of March 31, 2017, the net carrying value of our investment in NMI was zero in our consolidated financial statements.

Chatham Rock Phosphate, Ltd.

During 2012, we performed deep-sea mining exploratory services for Chatham Rock Phosphate, Ltd. (“CRP”) valued at $1,680,000. As payment for these services, CRP issued 9,320,348 ordinary shares to us. During March 2017, Antipodes Gold Limited completed the acquisition of CRP. The surviving entity is now named Chatham Rock Phosphate Limited (“CRPL”). In exchange for our 9,320,348 shares of CRP we received 141,884 shares of CPRL, which represents equity ownership of approximately 1% of the surviving entity. Since CRP was a thinly traded stock and pursuant to guidance per ASC 320: Debt and Equity Securities regarding readily determinable fair value, we believe it was appropriate to not recognize this amount as an asset nor as revenue during that period. We continue to carry the value of our investment in CPRL at zero in our consolidated financial statements.

NOTE F - INCOME TAXES

During the three-month period ended March 31, 2017, we generated a federal net operating loss (“NOL”) carryforward of $2.2 million and generated $1.5 million of foreign NOL carryforwards. As of March 31, 2017, we had consolidated income tax NOL carryforwards for federal tax purposes of approximately $156.5 million and net operating loss carryforwards for foreign income tax purposes of approximately $26.7 million. The federal NOL carryforwards from 2005 forward will expire in various years beginning in 2025 and ending through the year 2036.

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. We have recorded a net deferred tax asset of $0 at March 31, 2017. As required by the Accounting for Income Taxes topic in the ASC, we have concluded 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 substantial profits from our mining operations and thus a valuation allowance has been recorded as of March 31, 2017. There was no U.S. income tax expense for the three months ended March 31, 2017 due to the generation of net operating losses.

The increase in the valuation allowance as of March 31, 2017 is due to the generation of approximately $2.2 million in net operating loss year-to-date.

The change in the valuation allowance is as follows:

March 31, 2017	$	70,163,364
December 31, 2016		69,481,041
Change in valuation allowance	$	682,323

Our estimated annual effective tax rate as of March 31, 2017 is 31.02% while our March 31, 2017 effective tax rate is 0.0% because of the full valuation allowance.

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We have determined no adjustment is necessary to the liability for unrecognized tax benefits and have not recorded any provisions for accrued interest and penalties related to uncertain tax positions. The earliest tax year still subject to examination by a major taxing jurisdiction is 2013.

NOTE G – COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company may be subject to a variety of claims and suits that arise from time to time in the ordinary course of business. We are currently not a party to any litigation.

Contingency

During March 2016, our Board of Directors approved the grant and issuance of 3.0 million new equity shares of Oceanica Resources, S.R.L. to two attorneys for their future services. This equity is only issuable upon the Mexican’s government approval of the Environmental Impact Assessment (“EIA”) for our Mexican subsidiary. The EIA has not been approved as of the date of this report. This grant of new shares was also approved by the Administrators of Oceanica Resources, S.R.L.

Going Concern Consideration

We have 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 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. On March 24, 2017, we received NASDAQ communication notifying us our market capitalization was below the required minimum of $35.0 million for 30 consecutive days. We have 180 days, until September 30, 2017, to regain compliance. To regain compliance during this period, the market capitalization of our public common shares must be at least $35.0 million for ten consecutive business days. Our 2017 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects. We 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. One or more of the planned opportunities for raising cash may not be realized to the extent needed which may require us to curtail our desired business plan until we generate additional cash. In February 2017, we executed a letter of intent for a financing agreement with an affiliate of our related party, Monaco Financial, LLC for up to $5.0 million of which we received $750,000 in February 2017 and another $750,000 in April 2017, see NOTE H. This financing agreement has subsequently been reduced to $3.0 million from the original $5.0 million. On March 11, 2015, we entered into a Stock Purchase Agreement with Minera del Norte S.A. de c.v. (“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. (See Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financings.) If cash inflow is not sufficient to meet our desired projected business plan requirements, we will be required to follow a contingency business plan which is based on curtailed expenses and fewer cash requirements. Our consolidated non-restricted cash balance at March 31, 2017 was $1.1 million which is insufficient to support operations for the following 12 months. We have a working capital deficit at March 31, 2017 of $26.2 million. Our largest loan of $14.75 million from MINOSA had a maturity date of March 18, 2017. We pledged the majority of our remaining assets 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 $4.0 million at March 31, 2017 and the fair market value of these assets may differ from their net carrying book value. Even though we executed the above noted financing arrangements, Penelope must purchase the shares for us to be able to complete the equity component of the transaction. The Penelope equity transaction is heavily dependent on the outcome of our subsidiary’s application approval process for an environmental permit to commercially develop a mineralized phosphate deposit off the coast of Mexico. Therefore, the factors 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.

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NOTE H –LOANS PAYABLE

The Company’s consolidated debt consisted of the following at:

	March 31, 2017		December 31, 2016
Note 1 – Monaco 2014	$	2,800,000		2,800,000
Note 2 – Monaco 2016		1,591,723		1,535,501
Note 3 – MINOSA		14,750,001		14,750,001
Note 4 – Epsilon		6,050,000		5,981,806
Note 5 – SMOM		750,000		—
	$	25,941,724	$	25,067,308

Note 1 – Monaco 2014

On August 14, 2014, we entered into a Loan Agreement with Monaco Financial, LLC (“Monaco”), a strategic marketing partner, pursuant to which Monaco agreed to lend us up to $10.0 million. The loan was issued in three tranches: (i) $5.0 million (the “First Tranche”) was advanced upon execution of the Loan Agreement; (ii) $2.5 million (the “Second Tranche”) was issued on October 1, 2014; and (iii) $2.5 million (the “Third Tranche”) was issued on December 1, 2014. The Notes bear interest at a rate equal to 11% per annum. The Notes also contain an option whereby Monaco can purchase shares of Oceanica held by Odyssey (the “Share Purchase Option”) at a purchase price which is the lower of (a) $3.15 per share or (b) the price per share of a contemplated equity offering of Oceanica which totals $1.0 million or more in the aggregate. The share purchase option was not clearly and closely related to the host debt agreement and required bifurcation.

On December 10, 2015, these promissory notes were amended as part of the asset acquisition agreement with Monaco. The amendment included the following material changes: (i) $2.2 million of the indebtedness represented by the Notes was extinguished, (ii) $5.0 million of the indebtedness represented by the Notes ceased to bear interest and is only repayable under certain circumstances from certain sources of cash, and (iii) the maturity date on the Notes was extended to December 31, 2017. During March 2016, the maturity date was amended to April 1, 2018 and the purchase price of the Share Purchase Option was re-priced to $1.00 per share. See “Loan Modification (March 2016)” below.

The outstanding interest-bearing balance of these Notes was $2.8 million at March 31, 2017 and December 31, 2016, respectively. The book carrying value of the Notes was $2.8 million, all of which is classified as long term. There was no amortization of debt discount recorded for the three months ended March 31, 2017 or March 31, 2016.

Note 2 – Monaco 2016

In March 2016, Monaco agreed to lend us an additional $1.825 million, which is the outstanding balance at March 31, 2017. These loan proceeds were received in full during the first quarter of 2016. The indebtedness bears interest at 10.0% percent per year. All principal and any unpaid interest is payable on April 15, 2018. The current outstanding balance is $1.825 million. The indebtedness is convertible at any time until the maturity date into shares of Oceanica held by us at a conversion price of $1.00 per share. Pursuant to this loan and as security for the indebtedness, Monaco was granted a second priority security interest in (a) one-half of the indebtedness evidenced by the Amended and Restated Consolidated Note and Guaranty, dated September 25, 2015 (the “ExO Note”), in the original principal amount of $18.0 million, issued by Exploraciones Oceanicas S. de R.L. de C.V. to Oceanica Marine Operations, S.R.L. (“OMO”), and all rights associated therewith (the “OMO Collateral”); and (b) all technology and assets aboard the MV Dorado Discovery and in our possession or control used for offshore exploration, including an ROV system, deep-tow search systems, winches, multi-beam sonar, and other equipment. The carrying value of this equipment is $1.5 million. We unconditionally and irrevocably guaranteed all obligations of Odyssey and its subsidiaries to Monaco under this loan agreement. As further consideration for the loan, Monaco was granted an option (the “Option”) to purchase the OMO Collateral. The Option is exercisable at any time before the earlier of (a) the date that is 30 days after the loan is paid in full or (b) the maturity date of the ExO Note, for aggregate consideration of $9.3 million, $1.8 million of which would be paid at the closing of the exercise of the Option, with the balance paid in ten monthly installments of $750,000.

Accounting considerations

ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The option to purchase the OMO Collateral is an embedded feature that is not clearly and closely related to the host debt agreement and thus requires bifurcation. Since the option is out of the money, it has no material fair value as of the inception date or currently. The debt agreement did not contain any additional embedded terms or features that have characteristics of derivatives. However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount did result in a BCF because the effective conversion price was less than the market price on the date of issuance, therefore a BCF of $456,250 was recorded. The BCF represents a debt discount which will be amortized over the life of the loan. For the three months ended March 31, 2017 and March 31, 2016, interest expense related to the discount in the amount of $56,222 and $9,722, respectively, was recorded. For the three months ended March 31, 2017 and March 31, 2016, accrued interest in the amount of $45,000 and $6,774, respectively, was recorded.

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Loan modification (December 2015)

In connection with the Acquisition Agreement entered into with Monaco on December 10, 2015, Monaco agreed to modify certain terms of the loans as partial consideration for the purchase of assets. For the First Tranche ($5,000,000 issued on August 14, 2014), Monaco agreed to cease interest as of December 10, 2015 and reduce the loan balance by (i) the cash or other value received from the SS Central America shipwreck project (“SSCA”) or (ii) if the proceeds received from the SSCA project are insufficient to pay off the loan balance by December 31, 2017, then Monaco can seek repayment of the remaining outstanding balance on the loan by withholding Odyssey’s 21.25% “additional consideration” in new shipwreck projects performed for Monaco in the future. For the Second Tranche ($2,500,000 issued on October 1, 2014), Monaco agreed to reduce the principal amount by $2,200,000 leaving a new principal balance of $300,000 and extension of maturity to December 31, 2017. For the Third Tranche ($2,500,000 issued on December 1, 2014), Monaco agreed to the extension of maturity to December 31, 2017.

On December 10, 2015, the Monaco call option on $10 million of Oceanica shares held by Odyssey was maintained for the full amount of the original loan amount and was extended until December 31, 2017.

The Acquisition Agreement was accounted for as a troubled debt restructuring in accordance with ASC 470-60. As a result of the troubled debt restructuring, the carrying values of the remaining Monaco loans were required to be recorded at their undiscounted future cash flow values, which amounted to $3,449,632. No interest expense was to be recorded going forward. Interest payments in the three months ended March 31, 2016 reduced the carrying value.

Loan modification (March 2016)

In connection with the $1.825 million loan agreement with Monaco in March 2016, the existing $2.8 million notes were modified. Of the $2.8 million existing loans, $1,349,603 is convertible into shares of Oceanica at a fixed conversion price of $1.00 per share while the remaining $1,450,397 is not convertible. Additionally, the modification eliminated Monaco’s option (“share purchase option”) to purchase 3,174,603 shares of Oceanica stock at a price of $3.15 per share. The modification was analyzed under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”) to determine if extinguishment accounting was applicable. Under ASC 470-50-40-10 a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting. Since this modification added a substantive conversion option, extinguishment accounting is applicable. In accordance with the extinguishment accounting guidance (a) the share purchase option was first marked to its pre-modification fair value, (b) the new debt was recorded at fair value and (c) the old debt and share purchased option was removed. The difference between the fair value of the new debt and the sum of the pre-modification carrying amount of the old debt and the share purchase option’s fair value represented a gain on extinguishment. ASC 470-50-40-2 indicates that debt restructuring with a related party may be in essence a capital transaction and as a result the gain upon extinguishment was recognized in additional paid in capital. We performed the following steps:

Step 1: After the share purchase option has been market to its pre-modification fair value, the fair value of the new debt is determined. The fair value of the new debt is as follows:

Monaco loans	Loan one
Forward cash flows:
Principal	$	2,800,000
Interest		559,463
Total forward cash flows	$	3,359,463
Present value of forward cash flows	$	2,554,371
Fair value of equity conversion option		1,063,487
Fair value of debt	$	3,617,858

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Significant inputs and results arising from the Binomial Lattice process are as follows for the conversion option that is classified in equity after the modification in March 2016:

Underlying price on valuation date		$1.25
Contractual conversion rate		$1.00
Contractual term to maturity		1.82 Years
Implied expected term to maturity		1.82 Years
Market volatility:
Range of volatilities		96.0% - 154.0%
Equivalent volatilities		120.1%
Risk free rates using zero coupon US Treasury Security rates		0.29% - 0.68%
Equivalent market risk adjusted interest rates		0.52%
Monaco loans	Loan one
Forward cash flows:
Face value	$	2,800,000
Fair value		3,617,858
Difference (premium)*	$	817,858

* ASC 470-20-25-13 provides that if a convertible debt instrument is issued at a substantial premium, there is a presumption that such premium represents paid in capital. Since the total face amount of the new loans is $2,800,000, we conclude that the $817,858 was substantial and recorded that premium to additional paid-in capital.

Step 2: The old debt and call option are removed with any difference between the fair value of the new debt and the sum of the pre-modification carrying amount of the old debt and the call option’s fair value recognized as a gain or loss upon extinguishment. The allocation is as follows:

	Allocation
Derivative liabilities (share purchase options)	$	1,456,825
Monaco Loan (Old Debt)		3,372,844
Monaco Loan (New Debt)		(2,800,000	)
APIC (Premium)		(817,858	)
Difference to APIC*	$	1,211,811

* The difference between the fair value of the new debt and the sum of the pre-modification carrying amount of the old debt and the share purchase option’s fair value represented a gain on extinguishment. ASC 470-50-40-2 indicates that debt restructuring with a related party may be in essence a capital transaction and as a result the gain upon extinguishment was recognized in additional paid in capital.

Note 3 – MINOSA

On March 11, 2015, in connection with a Stock Purchase Agreement (See NOTE M), Minera del Norte, S.A. de C.V. (“MINOSA”) agreed to lend us up to $14.75 million. The entire $14.75 million was loaned in five advances from March 11 through June 30, 2015. The outstanding indebtedness bears interest at 8.0% percent per annum. The Promissory Note was amended on April 10, 2015 and on October 1, 2015 so 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 to occur of: (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 the Don Diego Project, which determination is other than an approval or (y) Odyssey Marine Enterprises or any of its affiliates withdraws such application without MINOSA’s 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) December 31, 2015; 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. In connection with the loans, we granted MINOSA an option to purchase our 54% interest in Oceanica for $40.0 million (the “Oceanica Call Option. As of March 11, 2016, the Oceanica Call has expired. Completion of the transaction requires amending the Company’s articles of incorporation to (a) effect a reverse stock split, which was done on February 19, 2016, (b) adjusting the Company’s 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 Company’s articles of incorporation filed or to be filed with the Nevada Secretary of State. As collateral for the loan, we granted MINOSA a security interest in the Company’s 54% interest in Oceanica. The outstanding principal balance of this debt was $14.75 million at March 31, 2017 and December 31, 2016, respectively. The maturity date of this note has been amended and matured on March 18, 2017.

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Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued. Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”).

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. The Oceanica Call Option is considered a freestanding financial instrument because it is both (i) legally detachable and (ii) separately exercisable. The Oceanica Call Option did not fall under the guidance of ASC 480. Additionally, it did not meet the definition of a derivative under ASC 815 because the option has a fixed value of $40.0 million and does not contain an underlying variable which is indicative of a derivative. This instrument is considered an option contract for a sale of an asset. The guidance applied in this case is ASC 360-20, which provides that in situations when a party lends funds to a seller and is given an option to buy the property at a certain date in the future, the loan shall be recorded at its present value using market interest rates and any excess of the proceeds over that amount credited to an option deposit account. If the option is exercised, the deposit shall be included as part of the sales proceeds; if not exercised, it shall be credited to income in the period in which the option lapses.

Based on the previous conclusions, we allocated the cash proceeds first to the debt at its present value using a market rate of 15%, which is management’s estimate of a market rate loan for the Company, with the residual allocated to the Oceanica Call Option, as follows:

	Tranche 1		Tranche 2		Tranche 3		Tranche 4		Tranche 5		Total
Promissory Note	$	1,932,759	$	5,826,341	$	2,924,172	$	1,960,089	$	1,723,492	$	14,366,853
Deferred Income (Oceanica Call Option)		67,241		173,659		75,828		39,911		26,509		383,148
Proceeds	$	2,000,000	$	6,000,000	$	3,000,000	$	2,000,000	$	1,750,0001	$	14,750,001

The call option amount of $383,148 represented a debt discount. This discount has been fully accreted up to face value using the effective interest method.

Note 4 – Epsilon

On March 18, 2016 we entered into a Note Purchase Agreement (“Purchase Agreement”) with Epsilon Acquisitions LLC (“Epsilon”). Pursuant to the Purchase Agreement, Epsilon loaned us $3.0 million in two installments of $1.5 million on March 31, 2016 and April 30, 2016. The indebtedness bears interest at a rate of 10% per annum and is due on March 18, 2017. We were also responsible for $50,000 of the lender’s out of pocket costs. This amount is included in the loan balance. In pledge agreements related to the loans, we granted security interests to Epsilon in (a) the 54 million cuotas (a unit of ownership under Panamanian law) of Oceanica Resources S. de R.L. (“Oceanica”) held by our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd. (“OME”), (b) all notes and other receivables from Oceanica and its subsidiary owed to the Odyssey Pledgors, and (c) all of the outstanding equity in OME. Epsilon has the right to convert the outstanding indebtedness into shares of our common stock upon 75 days’ notice to us or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the conversion price of $5.00 per share, which represents the five-day volume-weighted average price of Odyssey’s common stock for the five trading day period ending on March 17, 2016. Upon the occurrence and during the continuance of an event of default, the conversion price will be reduced to $2.50 per share. Following any conversion of the indebtedness, Penelope Mining LLC (an affiliate of Epsilon) (“Penelope”), may elect to reduce its commitment to purchase preferred stock of Odyssey under the Stock Purchase Agreement, dated as of March 11, 2015 (as amended, the “Stock Purchase Agreement”), among Odyssey, Penelope, and Minera del Norte, S.A. de C.V. (“MINOSA”) by the amount of indebtedness converted.

Pursuant to the Purchase Agreement (a) we agreed to waive our rights to terminate the Stock Purchase Agreement in accordance with the terms thereof until December 31, 2016, and (b) MINOSA agreed to extend, until March 18, 2017, the maturity date of the $14.75 million loan extended by MINOSA to OME pursuant to the Stock Purchase Agreement. The indebtedness may be accelerated upon the occurrence of specified events of default including (a) OME’s failure to pay any amount payable on the date due and payable; (b) OME or we fail to perform or observe any term, covenant, or agreement in the Purchase Agreement or the related documents, subject to a five-day cure period; (c) an event of default or material breach by OME, us or any of our affiliates under any of the other loan documents shall have occurred and all grace periods, if any, applicable thereto shall have expired; (d) the Stock Purchase Agreement shall have been terminated; (e) specified dissolution, liquidation, insolvency, bankruptcy, reorganization, or similar cases or actions are commenced by or against OME or any of its subsidiaries, in specified circumstances unless dismissed or stayed within 60 days; (f) the entry of judgment or award against OME or any of its subsidiaries in excess or $100,000; and (g) a change in control (as defined in the Purchase Agreement) occurs.

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In connection with the execution and delivery of the Purchase Agreement, we and Epsilon entered into a registration rights agreement pursuant to which we agreed to register new shares of our common stock with a formal registration statement with the Securities and Exchange Commission upon the conversion of the indebtedness.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued. Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”).

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount did result in a BCF because the effective conversion price was less than the Company’s stock price on the date of issuance, therefore a BCF of $96,000 was recorded. The BCF represents a debt discount which will be amortized over the life of the loan.

Loan modification (October 1, 2016)

On October 1, 2016 Odyssey Marine Enterprises, Ltd. (“OME”), entered into an Amended and Restated Note Purchase Agreement (the “Restated Note Purchase Agreement”) with Epsilon Acquisitions LLC (“Epsilon”). In connection with the existing $3.0 million loan agreement, Epsilon agreed to lend an additional $3.0 million of secured convertible promissory notes. The convertible promissory notes bear an interest rate of 10.0% per annum and are due and payable on March 18, 2017. The principal balance of this debt at March 31, 2017 is $6,050,000. Epsilon has the right to convert all amounts outstanding under the Restated Note into shares of our common stock upon 75 days’ notice to OME or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the applicable conversion price, which is (a) $5.00 per share with respect to the $3.0 million already advanced under the Restated Note and (b) with respect to additional advances under the Restated Note, the five-day volume-weighted average price of our common stock for the five trading day period ending on the trading day immediately prior to the date on which OME submits a borrowing notice for such advance. On January 25, 2017, Epsilon provided notice to us that it will convert the initial $3.0 million plus accrued interest per the Restated Note Purchase Agreement at $5.00 per share in accordance with the terms of the agreement. The conversion and issuance of new shares is effective April 10, 2017 and includes accrued interest of $302,274 for a total 670,455 shares. Notwithstanding anything herein to the contrary, we shall not issue any of our common stock upon conversion of any outstanding tranche (other than the first $3.0 million already advanced) under this Restated Note in excess of 1,388,769 shares of common stock. The additional tranches were issued as follows: (a) $1,000,000 (“Tranche 3”) was issued on October 16, 2016 with a conversion price of $3.52 per share; (b) $1,000,000 (“Tranche 4”) was issued on November 15, 2016 with a conversion price of $4.19 per share; and (c) $1,000,000 (“Tranche 5”) was issued on December 15, 2016 with a conversion price of $4.13 per share. During 2016, Epsilon assigned $2,000,000 of this debt to MINOSA under the same terms as the original debt.

As an inducement for the issuance of the additional $3.0 million of promissory notes, we also delivered to Epsilon a common stock purchase warrant (the “Warrant”) pursuant to which Epsilon has the right to purchase up to 120,000 shares of our common stock at an exercise price of $3.52 per share, which exercise price represents the five-day volume-weighted average price of our common stock for the five trading day period ending on the trading day immediately prior to the day on which the Warrant was issued. Epsilon may exercise the Warrant in whole or in part at any time during the period ending October 1, 2021. The Warrant includes a cashless exercise feature and provides that, if Epsilon is in default of its obligations to fund any advance pursuant to and in accordance with the Restated Note Purchase Agreement, then, thereafter, the maximum aggregate number of shares of common stock that may be purchased under the Warrant shall be the number determined by multiplying 120,000 by a fraction, (a) the numerator of which is the aggregate principal amount of advances that have been extended to the OME by Epsilon pursuant to the Restated Note Purchase Agreement on or after the date of the Warrant and prior to the date of such failure and (b) the denominator of which is $3.0 million.

Accounting considerations for additional tranches

We evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”). This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. Additionally, the warrant agreement did not contain any terms or features that would preclude equity classification. We were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The allocations of the three additional tranches were as follows.

	Tranche 3		Tranche 4		Tranche 5
Promissory Note	$	981,796	$	939,935	$	1,000,000
Beneficial Conversion Feature (“BCF”)*		18,204		60,065		—
Proceeds	$	1,000,000	$	1,000,000	$	1,000,000

A beneficial conversion feature arises when the calculation of the effective conversion price is less than the Company’s stock price on the date of issuance. Tranche 5 did not result in a BCF because the effective conversion price was greater than the company’s stock price on the date of issuance.

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The warrants fair values were calculated using Black-Scholes Merton (“BSM”). The aggregate fair value of the warrants totaled $303,712. Since the warrants were issued as an inducement to Epsilon to issue additional debt, we recorded an inducement expense of $303,712. For the three months ended March 31, 2017 and March 31, 2016, interest expense related to the discount in the amount of $68,194 and $3,859, respectively, was recorded. For the three months ended March 31, 2017 and March 31, 2016, accrued interest in the amount of $149,178 and $411, respectively, was recorded.

Term Extension (March 21, 2017)

On March 21, 2017 we entered into an amendment to the Restated Note Purchase Agreement with Epsilon. In connection with the existing $6.0 million loan agreement, the adjusted principal balance is due and payable in full upon the earlier of (i) written demand by Epsilon or (ii) such time as Odyssey or the guarantor pays any other indebtedness for borrowed money prior to its stated maturity date. As such the Company amortized the notes up to their face value of $6,050,000 and they are classified as short-term.

Note 5 – SMOM

On May 4, 2017, we entered into a Loan and Security Agreement (“Loan Agreement”) with SMOM Limited (“SMOM”). Pursuant to the Loan Agreement, SMOM agreed to loan us up to $3.0 million in convertible promissory notes. As a commitment fee, we assigned the remaining 50% of our Neptune Minerals, LLC receivable to SMOM. This receivable had zero carrying value on our balance sheet (See NOTE C). We received advances of $1.5 million under this agreement of which we received $750,000 in February 2017 and $750,000 in April 2017. The indebtedness bears interest at a rate of 10% per annum and matures on the second anniversary of this Loan Agreement. The holder has the option to convert any unpaid principal and interest into up to 50% of the equity interest held by Odyssey in Aldama Mining Company, S.de R.L. de C.V. which is a wholly owned subsidiary of ours. The conversion value of $1.0 million equates to 10% of the equity interest in Aldama. If the holder elects to acquire the entire 50.0% of the equity interest, but the amount of debt and interest accumulated to be converted is insufficient to acquire the entire 50% equity interest, the Holder has to pay the deficiency in cash. As additional consideration for the loan, the holder has the right to purchase from Odyssey all or a portion of the equity collateral (up to the 50% of the equity interest of Aldama) for the option consideration ($1.0 million for each 10% of equity interests) during the period that is the later of (i) one year after the maturity date and (ii) one year after the loan is repaid in full, the expiration date. The lender may also choose to extend the expiration date annually by paying $500,000 for each year extended.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued. Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”).

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount did not result in a BCF because the effective conversion price was equal to the value of the Company’s value on the date of issuance. Management is further reviewing the loan documents and will make a final evaluation of the applicable accounting related to this loan and security agreement and adjust as necessary.

NOTE I – STOCKHOLDERS’ EQUITY (DEFICIT)

At our Annual Meeting of Stockholders on June 9, 2015, our stockholders approved a 1-for-6 reverse stock split. On February 9, 2016, our Board of Directors authorized an additional 1-for-2 reverse stock split, to be effective immediately after the stockholder-approved 1-for-6 reverse stock split is implemented. The reverse stock splits were effective on February 19, 2016. The two reverse stock splits have the combined effect of a 1-for-12 reverse stock split. At the effective time of the reverse stock splits, every 12 shares of issued and outstanding common stock were converted into one share of issued and outstanding common stock, and the authorized shares of common stock were reduced from 150,000,000 to 75,000,000 shares. The par value remains at $0.0001. All shares and related financial information in this Form 10-Q have been retroactively adjusted to reflect this 1-for-12 reverse stock split.

Convertible Preferred Stock

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. de C.V.

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(the “Lender”). The Purchase Agreement provides for the Company to issue and sell to the Investor shares of the Company’s preferred stock in the amounts set forth in the following table (numbers have been adjusted for the February 2016 reverse stock split):

Convertible Preferred Stock	Shares		Price Per Share		Total Investment
Series AA-1		8,427,004	$	12.00	$	101,124,048
Series AA-2		7,223,145	$	6.00		43,338,870
		15,650,149			$	144,462,918

The Investor’s option to purchase the Series AA-2 shares is subject to the closing price of the Common Stock on the NASDAQ market having been greater than or equal to $15.12 per share for a period of twenty (20) consecutive business days on which the NASDAQ market is open.

The closing of the sale and issuance of shares of the Company’s preferred stock to the Investor is subject to certain conditions, including the Company’s receipt of required approvals from the Company’s stockholders, the receipt of regulatory approval, performance by the Company of its obligations under the Stock Purchase Agreement, the listing of the underlying common stock on the NASDAQ Stock Market and the Investor’s satisfaction, in its sole discretion, with the viability of certain undersea mining projects of the Company. This transaction received stockholders’ approval on June 9, 2015. Completion of the transaction requires amending the Company’s articles of incorporation to (a) effect a reverse stock split, which was done on February 19, 2016, (b) adjusting the Company’s 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 Company’s articles of incorporation filed or to be filed with the Nevada Secretary of State.

Series AA Convertible Preferred Stock Designation

The Purchase Agreement provides for the issuance of up to 8,427,004 shares of Series AA-1 Convertible Preferred Stock, par value $0.0001 per share (the “Series AA-1 Preferred”) and 7,223,145 shares of Series AA-2 Convertible Preferred Stock, par value $0.0001 per share (the “Series AA-2 Preferred”), subject to stockholder approval which was received on June 9, 2015 and satisfaction of other conditions. Significant terms and conditions of the Series AA Preferred are as follows:

Dividends. If and when the Company declares a dividend and any other distribution (including, without limitation, in cash, in capital stock (which shall include, without limitation, any options, warrants or other rights to acquire capital stock) of the Company, then the holders of each share of Series AA Preferred Stock are entitled to receive, a dividend or distribution in an amount equal to the amount of dividend or distribution received by the holders of common stock for which such share of Series AA Preferred Stock is convertible.

Liquidation Preference. The Liquidation Preference on each share of Series AA Preferred Stock is its Stated Value plus accretion at the rate of 8% per annum compounded on each December 31 from the date of issue of such share until the date such share is converted. For any accretion period which is less than a full year, the Liquidation Preference shall accrete in an amount to be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed.

Voting Rights. The holders of Series AA Preferred will be entitled to one vote for each share of common stock into which the Series AA Preferred is convertible and will be entitled to notice of meetings of stockholders.

Conversion Rights. At any time after the Preferred Shares have been issued, any holder of shares of Series AA Preferred may convert any or all of the shares of preferred stock into one fully paid and non-assessable share of Common Stock.

Adjustments to Conversion Rights. If Odyssey pays a dividend or makes a distribution on its common stock in shares of common stock, subdivides its outstanding common stock into a greater number of shares, or combines its outstanding common stock into a smaller number of shares, or if there is a reorganization, or a merger or consolidation of Odyssey with or into any other entity which results in a conversion, exchange, or cancellation of the common stock, or a sale of all or substantially all of Odyssey’s assets, then the conversion rights described above will be adjusted appropriately so that each holder of Series AA Preferred will receive the securities or other consideration the holder would have received if the holder’s Series AA Preferred had been converted before the happening of the event. The conversion price in effect from time to time is also subject to downward adjustment if we issue or sell shares of common stock for a purchase price less than the conversion price or if we issue or sell shares convertible into or exercisable for shares of common stock with a conversion price or exercise price less than the conversion price for the Series AA Preferred.

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Accounting considerations

As stated above, the issuance of the Series AA Convertible Preferred Stock is subject to certain contingencies. No accounting treatment determination is required until these contingencies are met and the Series AA Convertible Preferred Stock has been issued. However, we have analyzed the instrument to determine the proper accounting treatment that will be necessary once the instruments have been issued.

ASC 480 generally requires liability classification for financial instruments that are certain to be redeemed, represent obligations to purchase shares of stock or represent obligations to issue a variable number of common shares. We concluded that the Series AA Preferred was not within the scope of ASC 480 because none of the three conditions for liability classification was present.

ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. However, in order to perform this analysis, we were first required to evaluate the economic risks and characteristics of the Series AA Convertible Preferred Stock in its entirety as being either akin to equity or akin to debt. Our evaluation concluded that the Series AA Convertible Preferred Stock was more akin to an equity-like contract largely due to the fact that most of its features were participatory in nature. As a result, we concluded that the embedded conversion feature is clearly and closely related to the host equity contract and will not require bifurcation and liability classification.

The option to purchase the Series AA-2 Convertible Preferred Stock was analyzed as a freestanding financial instruments and has terms and features of derivative financial instruments. However, in analyzing this instrument under applicable guidance it was determined that it is both (i) indexed to the Company’s stock and (ii) meet the conditions for equity classification.

Warrants

In conjunction with the Restated Note Purchase Agreement related to Note 4 – Epsilon in NOTE H, we issued warrants tied to each of the three tranches of debt issued. A total of 120,000 warrants were granted. These warrants have an expiration date of October 1, 2021. All of these 120,000 warrants have an exercise price of $3.52. Each single warrant is exercisable to purchase one share of our common stock.

Stock-Based Compensation

We have two stock incentive plans. The first is the 2005 Stock Incentive Plan that expired in August 2015. After the expiration of this plan, equity instruments cannot be granted but this plan shall continue in effect until all outstanding awards have been exercised in full or are no longer exercisable and all equity instruments have vested or been forfeited.

On June 9, 2015, our shareholders approved our 2015 Stock Incentive Plan (the “Plan”) that was adopted by our Board of Directors (the “Board”) on January 2, 2015, which is the effective date. The plan expires on the tenth anniversary of the effective date. The Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights. This plan was initially capitalized with 450,000 shares that may be granted. The Plan is intended to comply with Section 162(m) of the Internal Revenue Code, which stipulates that the maximum aggregate number of Shares with respect to one or more Awards that may be granted to any one person during any calendar year shall be 83,333, and the maximum aggregate amount of cash that may be paid in cash to any person during any calendar year with respect to one or more Awards payable in cash shall be $2,000,000. The original maximum number of shares that were to be used for Incentive Stock Options (“ISO”) under the Plan was 450,000. During our June 2016 stockholders meeting, the stockholders approved the addition of 200,000 incremental shares to the Plan. With respect to each grant of an ISO to a participant who is not a ten percent stockholder, the exercise price shall not be less than the fair market value of a share on the date the ISO is granted. With respect to each grant of an ISO to a participant who is a ten percent stockholder, the exercise price shall not be less than one hundred ten percent (110%) of the fair market value of a share on the date the ISO is granted. If an award is a non-qualified stock option (“NQSO”), the exercise price for each share shall be no less than (1) the minimum price required by applicable state law, or (2) the fair market value of a share on the date the NQSO is granted, whichever price is greatest. Any award intended to meet the performance based exception must be granted with an exercise price not less than the fair market value of a share determined as of the date of such grant.

Share-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest. As share-based compensation expense recognized in the statement of operations is based on awards ultimately expected to vest, it can be reduced for estimated forfeitures. The ASC topic Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The share based compensation charged against income for the three-month periods ended March 31, 2017 and 2016 was $208,496 and $334,629, respectively.

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We did not grant employee stock options in the three-month periods ended March 31, 2017 and 2016. The weighted average fair value of stock options granted is determined using the Black-Scholes option-pricing model, which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the life of the option. The Black-Scholes option valuation model was developed for estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Because option valuation models require the use of subjective assumptions, changes in or variations from these assumptions can materially affect the fair value of the options.

NOTE J – CONCENTRATION OF CREDIT RISK

We maintain the majority of our cash at one financial institution. At March 31, 2017, our uninsured cash balance was approximately $841,769.

We do not currently have any debt obligations with variable interest rates.

NOTE K — DERIVATIVE FINANCIAL INSTRUMENTS

The following table summarizes the amounts that were reflected in our income related to our derivatives for the three months ended March 31, 2017 and March 31, 2016:

	Three Months Ended March 31,
	2017		2016
Derivative income (expense):
Unrealized gains (losses) from fair value changes:
2014 Convertible Promissory Notes	$	—	$	3,396,190
Warrant derivatives		—		(58,716	)
Total derivative income (expense)	$	—	$	3,337,474

Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. In addition, the standards do not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be bundled together and fair valued as a single, compound embedded derivative. We have selected the Monte Carlo Simulations valuation technique to fair value the compound embedded derivative because we believe that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving compound embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk free rates. We have selected Binomial Lattice to fair value our warrant derivatives because we believe this technique is reflective of all significant assumption types market participants would likely consider in transactions involving freestanding warrants derivatives. The Monte Carlo Simulations (“MCS”) technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators.

Significant inputs and results arising from the Monte Carlo Simulations process are as follows for the share purchase options that have been bifurcated from our Monaco Notes and classified in liabilities as of March 8, 2016 (Modification Date:

Tranche 1 – August 14, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%

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Tranche 2 – October 1, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%
Tranche 3 – December 1, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%

* The instrument is convertible into shares of the Company’s subsidiary, Oceanica, which is not a publicly-traded entity. Therefore, its shares do not trade on a public exchange. As a result, the underlying value was originally based on private sales of the subsidiary’s shares because that was the best indicator of the value of the shares in the past. The last sale of Oceanica’s shares in which a private investor accumulated 24% of the shares of which their last purchase price was for $2.50 per share in December 2013. Accordingly, the underlying price used in the past in the MCS calculations was the $2.50 for the inception dates and December 31, 2015.    Being far removed from December 2013 while considering the modification in March 2016 of the new option price of $1.00 and other market conditions currently prevailing, management determined $1.25 to be representative of the per share fair value.

** On December 10, 2015 the term was extended to December 31, 2017.

In March 2016 the term was extended to April 1, 2018.

*** In March 2016 the purchase price of the share purchase options was modified to $1.00 per share. As a result of the re-pricing, the share purchase options no longer require measurement as derivative liabilities. The MCS were calculated for the instruments just prior to the modification on March 8, 2016.

The following table reflects the issuances of the Share Purchase Option derivatives and changes in fair value inputs and assumptions for these derivatives during the three months ended March 31, 2017 and 2016.

	For the three months ended March 31,
	2017		2016
Balances at January 1	$	—	$	3,396,191
Issuances		—		—
Modification		—		(1,456,826	)
Changes in fair value inputs and assumptions reflected in income		—		(1,939,365	)
Balances at March 31	$	—	$	—

The fair value of all Share Purchase Option derivatives is significantly influenced by our trading market price, the price volatility in trading and the risk free interest components of the Binomial Lattice technique.

On October 11, 2010, we also issued warrants to acquire 150,000 of our common shares in connection with the Series G Convertible Preferred Stock Financing. During April 4-8, 2011, we issued warrants to acquire 43,750 of our common shares in connection the Series G Convertible Preferred Stock and Warrant Settlement Transaction. Finally, on November 8, 2011, we issued warrants to acquire 108,507 of our common shares in connection with the Senior Convertible Note Financing Transaction. These warrants required liability classification as derivative financial instruments because certain down-round anti-dilution protection or price protection features included in the warrant agreements are not consistent with the concept of equity. We applied the Binomial Lattice valuation technique in estimating the fair value of the warrants because we believe that this technique is most appropriate and reflects all of the assumptions that market participants would likely consider in transactions involving the warrants, including the potential incremental value associated with the down-round anti-dilution protections.

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The Binomial Lattice technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. Warrants linked to 143,750 shares of common stock associated with the Series G Convertible Preferred Stock Financing were exercised on October 11, 2013.

Of the 108,507 common shares for which the warrant issued on November 8, 2011 could be exercised, 36,169 of those common shares were accessible only based upon the Company’s election to require the lender to provide the additional financing. When the lender provided additional financing of $8,000,000 on May 10, 2012, the additional 36,169 of common shares became accessible. Warrants indexed to an additional 21,701 were issued in conjunction with the additional financing.

All remaining warrants linked to 43,750 shares of common stock associated with the Series G Convertible Preferred Stock Financing expired unexercised on April 13, 2014 and are no longer outstanding.

All remaining warrants linked to 130,208 shares of common stock associated with the Senior Convertible Note Financing Transaction expired unexercised on April 13, 2014 and are no longer outstanding.

The following table reflects the issuances of derivative warrants and changes in fair value inputs and assumptions related to the derivative warrants during the three months ended March 31, 2017 and 2016.

	Three months ended March 31,
	2017		2016
Balances at January 1	$	—	$	6,225
Changes in fair value inputs and assumptions reflected in income		—		58,716
Expired		—
Balances at March 31	$	—	$	64,941

The fair value of all warrant derivatives is significantly influenced by our trading market price, the price volatility in trading and the risk free interest components of the Binomial Lattice technique.

NOTE L – DEFERRED INCOME AND REVENUE PARTICIPATION RIGHTS

The Company’s participating revenue rights and deferred income consisted of the following at:

	March 31, 2017		December 31, 2016
“Cambridge” project	$	825,000	$	825,000
“Seattle” project		62,500		62,500
Galt Resources, LLC (HMS Victory project)		3,756,250		3,756,250
Total deferred income and participating revenue rights	$	4,643,750	$	4,643,750

“Cambridge” project

We previously sold Revenue Participation Certificates (“RPCs”) that represent the right to share in our future revenues derived from the “Cambridge” project, which is also referred to as the HMS Sussex shipwreck project. The “Cambridge” RPC units constitute restricted securities.

Each $50,000 convertible “Cambridge” RPC entitles the holder to receive a percentage of the gross revenue received by us from the “Cambridge” project, which is defined as all cash proceeds payable to us as a result of the “Cambridge” project, less any amounts paid to the British Government or their designee(s); provided, however, that all funds received by us to finance the project are excluded from gross revenue. The “Cambridge” project holders are entitled to 100% of the first $825,000 of gross revenue, 24.75% of gross revenue from $4 - 35 million, and 12.375% of gross revenue above $35 million generated by the project.

“Seattle” project

In a private placement that closed in September 2000, we sold “units” consisting of “Republic” Revenue Participation Certificates and Common Stock. Each $50,000 “unit” entitled the holder to 1% of the gross revenue generated by the now named “Seattle” project (formerly referred to as the “Republic” project), and 100,000 shares of Common Stock. Gross revenue is defined as all cash proceeds payable to us as a result of the “Seattle” project, excluding funds received by us to finance the project.

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The participating rights balance will be amortized under the units of revenue method once management can reasonably estimate potential revenue for each of these projects. The RPCs for the “Cambridge” and “Seattle” projects do not have a termination date, therefore these liabilities will be carried on the books until revenue is recognized from these projects or we permanently abandon either project.

Galt Resources, LLC

In February 2011, we entered into a project syndication deal with Galt Resources LLC (“Galt”) for which they invested $7,512,500 representing rights to future revenues of any one project Galt selected prior to December 31, 2011. If the project is successful and generates sufficient proceeds, Galt will recoup their investment plus three times the investment. Galt’s investment return will be paid out of project proceeds. Galt will receive 50% of project proceeds until this amount is recouped. Thereafter, they will share in additional net proceeds of the project at the rate of 1% for every million invested. Subsequent to the original syndication deal, we reached an agreement permitting Galt to bifurcate their selection between two projects, the SS Gairsoppa and HMS Victory with the residual 1% on additional net proceeds assigned to the HMS Victory project only. The bifurcation resulted in $3,756,250 being allocated to each of the two projects. Therefore, Galt will receive 7.5125% of net proceeds from the HMS Victory project after they recoup their investment of $3,756,250 plus three times the investment. Galt has been paid in full for their share of the Gairsoppa project investment. There are no future payments remaining due to Galt for the Gairsoppa project. Based on the timing of the proceeds earmarked for Galt, the relative corresponding amount of Galt’s revenue participation right of $3,756,250 was amortized into revenue in 2012 based upon the percent of Galt-related proceeds from the sale of silver as a percentage of total proceeds that Galt earned under the revenue participation agreement ($15.0 million). There is no expiration date on the Galt deal for the HMS Victory project. If the archaeological excavation of the shipwreck is performed and insufficient proceeds are obtained, then the deferred income balance will be recognized as other income. If the archaeological excavation of the shipwreck is performed and sufficient proceeds are obtained, then the deferred income balance will be recognized as revenue.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion will assist in the understanding of our financial condition and results of operations. The information below should be read in conjunction with the financial statements, the related notes to the financial statements and our Annual Report on Form 10-K for the year ended December 31, 2016.

In addition to historical information, this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 regarding the Company’s expectations concerning its future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent the Company’s expectations, but the expectations concerning its future operations, earnings and prospects may change. The Company’s expectations involve risks and uncertainties and are based on many assumptions that the Company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the Company’s expectations and the forward-looking statements will be correct. Please refer to the Company’s most recent Annual Report on Form 10-K for a description of risk factors that could cause actual results to differ from the expectations stated in this discussion. Odyssey disclaims any obligation to update any of these forward-looking statements except as required by law.

Operational Update

Additional information regarding our announced projects can be found in our Annual Report on Form 10-K for the year ended December 31, 2016. Only projects material in nature or have material status updates are discussed below. We may have other projects in various stages of planning or execution that may not be disclosed for security or legal reasons until considered appropriate by management.

We have numerous marine projects in various stages of development around the world for ourselves and for external clients. In order to protect the targets of our planned survey, search or recovery operations, we may defer disclosing specific information relating to our projects until we have located a shipwreck, mineral deposits or other potentially valuable sources of interest and determined a course of action to protect our property rights and those of our clients. With respect to mineral deposits, SEC Industry Guide 7 outlines the Commission’s basic mining disclosure policy and what information may be disclosed in public filings. With respect to shipwrecks, the identity of the ship may be indeterminable and the nature and amount of cargo may be uncertain, thus before completing any recovery, specific information about the project may be unavailable. If work is conducted on behalf of a client, release of information may be limited by the client.

We own specialized marine services survey and recovery equipment that we mobilize for customers on leased vessels. This proprietary equipment is operated by our technical team when conducting operations worldwide. This allowed us to launch the CLIO Offshore services program, increasing the utilization and leverage of the technical team and assets between our projects. CLIO Offshore is focused on third-party survey, remotely operated vehicle (ROV) and recovery projects down to 6,000 meters depth. This program also offers services for deep-ocean resource explorations, ship and airplane wreck explorations, archaeological recovery and conservation and insurance documentation.

Subsea Mineral Mining Exploration Projects

Oceanica Resources, S. de R.L.

In February 2013, we disclosed Odyssey’s ownership interest, through Odyssey Marine Enterprises, Ltd., a wholly owned Bahamian company (“Enterprises”), in Oceanica Resources, S. de R.L., a Panamanian company (“Oceanica”), and Exploraciones Oceanicas, S. De R.L. De C.V. (“ExO”), a subsidiary of Oceanica. ExO is in the business of mineral exploration and controls exclusive permits in an area in Mexican waters that contains a large amount of phosphate mineralized material (known as the “Don Diego” deposit). Phosphate is a key ingredient of fertilizers. In March 2014, Odyssey completed a first NI 43-101 compliant report on the deposit and periodically updates this report. The Don Diego deposit is currently our main mineral project and is important to Odyssey’s future. Odyssey believes that the Don Diego deposit contains a large amount of high-grade phosphate rock that can be extracted on a financially attractive basis and that the product will be attractive to Mexican and other world producers of fertilizers.

ExO has conducted extensive scientific testing of the mineralized phosphate material and of the environmental impact of recovering the mineralized material from the seafloor. Oceanica has been working with leading environmental experts on the impact assessment and permitting process, with Royal Boskalis on the extraction and processing program, and with JPMorgan and the AHMSA group of companies on the strategic growth alternatives.

ExO applied for and was granted additional mining concession areas by the Mexican government. These additional areas are adjacent to the zones with the highest concentration of mineralization in the original mining concession area. ExO also relinquished certain parts of the granted concession areas where the mineral concentration levels were less attractive for mining purposes.

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In September 2014, ExO reported that the Environmental Impact Assessment (“EIA”) for proposed dredging and recovery of phosphate sands from the Don Diego deposit had been filed with the Mexican Secretary of Environment and Natural Resources (SEMARNAT). This EIA application is needed in order to obtain an environmental permit to begin the commercial extraction of phosphate from the tenement area. In November 2014, SEMARNAT held a public hearing on the EIA in Mexico and asked supplemental questions to Oceanica on its EIA application. In full compliance with the SEMARNAT process, a response to the questions was filed in March 2015. In addition to providing supplemental scientific information and studies, the response included additional mitigation and economic considerations to reinforce ExO’s commitment to being good corporate citizens and stewards of the environment. In June 2015, ExO withdrew its Environmental Impact Assessment (EIA) application to allow additional time for review and regional briefings. The EIA was re-submitted in June 2015, and additional information was filed in August 2015. A public hearing on this application was conducted by SEMARNAT on October 8, 2015, additional questions were received from SEMARNAT in November 2015, and ExO’s responses to the questions were filed with SEMARNAT on December 3, 2015. On April 8, 2016, SEMARNAT denied the application for this environmental license as presented. Odyssey’s subsidiaries and partners have been managing the administrative, legal and political process necessary to review and overturn the April decision. The process is expected to conclude in 2017. To move to the next phase of development of the deposit, Odyssey and its subsidiaries need the approval of this environmental permit application.

Enterprises initially held 77.6 million of Oceanica’s 100.0 million outstanding shares. Subsequently, Enterprises sold and transferred to Mako Resources, LLC (“Mako”) 15.0 million shares for a purchase price of $1.00 per share, or $15.0 million, and granted Mako options to purchase an additional 15.0 million shares at the purchase price of $2.50 per share before December 31, 2013.

In June 2013, Mako agreed to exercise a portion of these options to purchase 8.0 million shares at a reduced exercise price of $1.25 per share. As part of Odyssey’s strategy to maintain a control position in Oceanica, in parallel with the early exercise, Enterprise purchased 1.0 million shares of Oceanica from another Oceanica shareholder at $1.25 per share. This transaction also granted Odyssey voting rights on an additional 3.0 million shares of Oceanica held by such other Oceanica shareholder so long as there is no change in control of Odyssey.

An option to purchase an additional 1.0 million shares was exercised by Mako on December 30, 2013 for a total amount of $2.5 million. The options on the remaining 6.0 million shares were extended in 2014 and 2015. On March 11, 2015, these options were terminated in exchange for the issuance of 4.0 million shares of our common stock to Mako. This termination was a requirement of the March 11, 2015 financing deal. In August 2014, we entered into a loan agreement with Monaco Financial, LLC, a marketing partner. Under terms of that agreement, Monaco may convert all or part of the loan balance into Oceanica shares held by us or to purchase Oceanica shares from us at a pre-defined price (See NOTE I). This loan was amended on December 10, 2015, extending the maturity date of the loan to December 31, 2017 and allowing Monaco to retain the call option on the $10 million worth of Oceanica shares held by Odyssey until December 31, 2017. In March 2015, Odyssey entered into a loan arrangement with Minera del Norte, S.A. de C.V. (“MINOSA”) whereby Odyssey pledged all of its shares in Oceanica as collateral for a $14.75 million loan from MINOSA. The MINOSA loan has been amended several times and now matures March 18, 2017, see NOTE H for further information.

Shipwreck Exploration Projects

Other Projects

Odyssey began conducting offshore services for our shipwreck business partner, Magellan Offshore Services, in 2016. Offshore work is currently underway on the second shipwreck services contract with Magellan which includes multiple targets. The master services agreement governing these projects states Odyssey will be paid cost plus a specified mark-up and Odyssey will receive 21.25% of net returns, if any, from these projects.

Critical Accounting Policies and Changes to Accounting Policies

There have been no material changes in our critical accounting estimates since December 31, 2016, nor have we adopted any accounting policy that has or will have a material impact on our consolidated financial statements.

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 in Part I, Item 1.

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Three-months ended March 31, 2017, compared to three-months ended March 31, 2016

Increase/(Decrease)						2017 vs. 2016
(Dollars in millions)	2017			2016		$			%
Total revenues	$	0.6		$	0.6	$	0.1			11	%
Cost of sales	$	—		$	—	$	—			—	%
Marketing, general and administrative		1.6			2.4		(0.8	)		32	%
Operations and research		1.3			2.2		(0.9	)		41	%
					—
Total operating expenses	$	2.9		$	4.6	$	(1.6	)		36	%
Other income (expense)	$	(0.7	)	$	3.4	$	(4.1	)		120	%
Income tax benefit (provision)	$	—		$	—	$	—			0	%
Non-controlling interest	$	0.8		$	0.7	$	0.1			9	%
Net income (loss)	$	(2.2	)	$	0.1	$	(2.3	)		2,698	%

Revenue

Revenue is primarily generated through the sale of marine services either through expedition charters or for the services from our crew and equipment.

Total revenue in the current quarter was $0.6 million, a $0.1 million increase over the revenue in the same period a year ago and was derived from the performance of expedition marine survey and recovery services to Magellan, whom we consider a related party. The $0.6 million revenue in the same quarter last year was generated from providing equipment and personnel to an offshore operator under a survey expedition services agreement.

Operating Expenses

We did not have any cost of sales in either period due to not having any remaining inventory. All of our inventory items held for re-sale were sold in the course of 2015 and we thus have no similar inventory items or costs of sales remaining.

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 expenses decreased by $0.8 million from $2.4 million in 2016 to $1.6 million in 2017 primarily as a result of (i) a reduction of $0.4 million of personnel compensation and related expenses including share-based compensation of $0.1 million, (ii) $0.3 million decrease in legal services and corporate supportive professional services that were not required in 2017 and (iii) $0.1 million of general corporate overhead reductions.

Operations and research expenses primarily include all costs within Archaeology, Conservation, Exhibits, Research, and Marine operations, which include all vessel and charter operations. Operations and research expenses decreased by $0.9 million from 2016 to 2017 primarily as a result of a $0.7 million reduction of marine services costs which include technical crew costs as well as other marine operational costs such as fuel, port fees and consumables. 2016 included the full time operations of our former vessel, the Odyssey Explorer, which was sold in mid-2016. The remaining $0.2 million reduction is related to 2016 marine expedition specific project costs of $0.1 million and a $0.1 reduction in depreciation.

Other Income and Expense

Other income and expense has generally consisted of interest expense on our bank term and other mortgage loans and convertible notes as well as the fair value change of derivatives carried on the balance sheet. The derivatives related to our issuance of certain convertible warrants and notes. Total other income and expense decreased from income of $3.4 million in 2016 to an expense of $0.7 million in 2017, a decrease of $4.1 million. This $4.1 million is primarily the $3.3 million income from the fair value derivative accounting attached to Monaco loans in 2016, the 2016 expiration of the $0.4 million MINOSA call option and $0.4 million of of interest expense on new interest bearing debt.

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Taxes and Non-Controlling Interest

Due to losses, we did not accrue any taxes in either period ending 2017 or 2016.

Starting in 2013, we became the controlling shareholder of Oceanica. Our financial statements thus include the financial results of Oceanica. Except for intercompany transactions that are fully eliminated upon consolidation, Oceanica’s revenues and expenses, in their entirety, are shown in our consolidated financial statements. The share of Oceanica’s 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 in the first quarter of 2017 was $0.8 million as compared to $0.7 million in the first quarter of 2016. This increase is mainly attributable to the compounding debt interest on our Mexican subsidiary’s balance sheet.

Liquidity and Capital Resources

	Three-Months Ended
(In thousands)	March 2017			March 2016
Summary of Cash Flows:
Net cash used by operating activities	$	(1,218	)	$	(2,673	)
Net cash provided by investing activities		—			(51	)
Net cash provided by financing activities		621			3,248
Net (decrease) increase in cash and cash equivalents	$	(597	)	$	524
Beginning cash and cash equivalents		1,663			2,241
Ending cash and cash equivalents	$	1,066		$	2,765

Discussion of Cash Flows

Net cash used by operating activities for the first three months of 2017 was $1.2 million, or an improvement of $1.5 million compared to the same period in 2016. This net cash used by operating activities reflects a net loss before non-controlling interest of $(3.0) million offset in part by non-cash items of $0.6 million which primarily include depreciation and amortization of $0.2 million, share-based compensation $0.2 million and debt interest accretion of $0.2 million. Other operating activity changes resulted in an increase in working capital of $1.2 million. This primarily included changes to accrued expenses and accounts payable in 2017 of $0.9 million.

Cash flows used for investing activities for the first three months of 2017 were $0.0 million compared to ($0.1) million for purchase of marine exploration equipment in the same period in 2016.

Cash flows provided by financing activities for the first three months of 2017 were $0.6 million. During this period, we borrowed $0.8 million from SMOM Ltd (see NOTE H). This cash inflow was partially offset by repayment of debt obligations $0.2 million. Cash flows provided by financing activities for the same period of 2016 were $3.2 million. During this period, we borrowed $1.5 million from Epsilon and $1.8 million from Monaco (see NOTE H). This cash inflow was partially offset by repayment of debt obligations.

Other Cash Flow and Equity Areas

General Discussion

At March 31, 2017, we had cash and cash equivalents of $1.1 million, a decrease of $0.7 million from the December 31, 2016 balance of $1.7 million. This decrease was mainly the net result of cashflows associated with the year-to-date operating loss that is partially offset by the new loan of $0.8 million from SMOM Ltd (see NOTE H).

Financial debt of the company, excluding the derivative component of such debt, increased by $0.9 million in the first three months of 2017, from a balance of $25.1 million at December 31, 2016 to a balance of $26.0 million at March 31, 2017. This increase is primarily related to the new $0.8 million loan from the agreement with SMOM Ltd (see NOTE H) and $0.1 million of interest accretion.

Financings

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. de C.V. (the “MINOSA”). The Purchase Agreement provides for us to issue and sell to the Investor shares of the our preferred stock in the

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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, 2016):

Series	No. of Shares		Price per Share
Series AA-1		8,427,004	$	12.00
Series AA-2		7,223,142	$	6.00

The closing of the sale and issuance of shares of the Company’s preferred stock to the Investor is subject to certain conditions, including the Company’s receipt of required approvals from the Company’s 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 Investor’s satisfaction, in its sole discretion, with the viability of certain undersea mining projects of the Company. Completion of the transaction requires amending the Company’s articles of incorporation to (a) effect a reverse stock split, which was done on February 19, 2016, (b) adjusting the Company’s 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 Company’s 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:

Date	No. Series AA- 1 Shares		Total Purchase Price
March 1, 2016		1,806,989	$	21,683,868
September 1, 2016		1,806,989	$	21,683,868
March 1, 2017		1,517,871	$	18,214,446
March 1, 2018		378,488	$	4,541,856

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 Investor’s 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 Company’s 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 March 31, 2017 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,

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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 to occur of: (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 the Don Diego Project, which determination is other than an approval or (y) Enterprises or any of its affiliates withdraws such application without MINOSA’s 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).

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 holder’s 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 Company’s stockholders at which directors are to be elected, the Company will (i) nominate for election as members of the Company’s board of directors a number of individuals designated by the Investor (“Investor Designees”) equivalent to the Investor’s proportionate ownership of the Company’s 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 directors; (b) the Company will cause one of the Investor Designees to serve as a member of (or at such Investor Designee’s election, as an observer to) each committee of the Company’s 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.

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Other loans

Promissory Note

On August 14, 2014, we entered into a Loan Agreement with Monaco Financial, LLC (“Monaco”), a strategic marketing partner, pursuant to which Monaco agreed to lend us up to $10.0 million. The loan was issued in three tranches: (i) $5.0 million (the “First Tranche”) was advanced upon execution of the Loan Agreement; (ii) $2.5 million (the “Second Tranche”) was issued on October 1, 2014; and (iii) $2.5 million (the “Third Tranche”) was issued on December 1, 2014. The Notes bear an interest rate of 11%. The Notes also contain an option whereby Monaco can purchase shares of Oceanica held by Odyssey (the “Share Purchase Option”) at a purchase price which is the lower of (a) $3.15 per share or (b) the price per share of a contemplated equity offering of Oceanica which totals $1.0 million or more in the aggregate. The share purchase option was not clearly and closely related to the host debt agreement and required bifurcation.

On December 10, 2015, these promissory notes were amended as part of the asset acquisition agreement with Monaco. The amendment included the following material changes: (i) $2.2 million of the indebtedness represented by the Notes was extinguished, (ii) $5.0 million of the indebtedness represented by the Notes ceased to bear interest and is only repayable under certain circumstances from certain sources of cash, and (iii) the maturity date on the Notes was extended to December 31, 2017. During March 2016, the maturity date was amended to April 1, 2018 and the purchase price of the Share Purchase Option was re-priced to $1.00 per share. See “Loan Modification (March 2016)” in NOTE H. The outstanding interest-bearing balance of these Notes was $2.8 million at March 31, 2017 and December 31, 2016, respectively.

Promissory Note

On March 18, 2016 we entered into a Note Purchase Agreement (“Purchase Agreement”) with Epsilon Acquisitions LLC (“Epsilon”). Pursuant to the Purchase Agreement, Epsilon loaned us $3.0 million in two installments of $1.5 million on March 31, 2016 and April 30, 2016. The indebtedness bears interest at a rate of 10% per annum and is due on March 18, 2017. We were also responsible for $50,000 of the lender’s out of pocket costs. This amount is included in the loan balance. In pledge agreements related to the loans, we granted security interests to Epsilon in (a) the 54 million cuotas (a unit of ownership under Panamanian law) of Oceanica Resources S. de R.L. (“Oceanica”) held by our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd. (“OME”), (b) all notes and other receivables from Oceanica and its subsidiary owed to the Odyssey Pledgors, and (c) all of the outstanding equity in OME. Epsilon has the right to convert the outstanding indebtedness into shares of our common stock upon 75 days’ notice to us or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the conversion price of $5.00 per share, which represents the five-day volume-weighted average price of Odyssey’s common stock for the five trading day period ending on March 17, 2016. Upon the occurrence and during the continuance of an event of default, the conversion price will be reduced to $2.50 per share. Following any conversion of the indebtedness, Penelope Mining LLC (an affiliate of Epsilon) (“Penelope”), may elect to reduce its commitment to purchase preferred stock of Odyssey under the Stock Purchase Agreement, dated as of March 11, 2015 (as amended, the “Stock Purchase Agreement”), among Odyssey, Penelope, and Minera del Norte, S.A. de C.V. (“MINOSA”) by the amount of indebtedness converted.

Pursuant to the Purchase Agreement (a) we agreed to waive our rights to terminate the Stock Purchase Agreement in accordance with the terms thereof until December 31, 2016, and (b) MINOSA agreed to extend, until March 18, 2017, the maturity date of the $14.75 million loan extended by MINOSA to OME pursuant to the Stock Purchase Agreement. The indebtedness may be accelerated upon the occurrence of specified events of default including (a) OME’s failure to pay any amount payable on the date due and payable; (b) OME or we fail to perform or observe any term, covenant, or agreement in the Purchase Agreement or the related documents, subject to a five-day cure period; (c) an event of default or material breach by OME, us or any of our affiliates under any of the other loan documents shall have occurred and all grace periods, if any, applicable thereto shall have expired; (d) the Stock Purchase Agreement shall have been terminated; (e) specified dissolution, liquidation, insolvency, bankruptcy, reorganization, or similar cases or actions are commenced by or against OME or any of its subsidiaries, in specified circumstances unless dismissed or stayed within 60 days; (f) the entry of judgment or award against OME or any of its subsidiaries in excess or $100,000; and (g) a change in control (as defined in the Purchase Agreement) occurs.

In connection with the execution and delivery of the Purchase Agreement, we and Epsilon entered into a registration rights agreement pursuant to which we agreed to register new shares of our common stock with a formal registration statement with the Securities and Exchange Commission upon the conversion of the indebtedness.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued. Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”).

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This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount did result in a BCF because the effective conversion price was less than the Company’s stock price on the date of issuance, therefore a BCF of $96,000 was recorded. The BCF represents a debt discount which will be amortized over the life of the loan.

Loan modification (October 1, 2016)

On October 1, 2016 Odyssey Marine Enterprises, Ltd. (“OME”), entered into an Amended and Restated Note Purchase Agreement (the “Restated Note Purchase Agreement”) with Epsilon Acquisitions LLC (“Epsilon”). In connection with the existing $3.0 million loan agreement, Epsilon agreed to lend an additional $3.0 million of secured convertible promissory notes. The convertible promissory notes bear an interest rate of 10.0% per annum and are due and payable on March 18, 2017. The principal balance of this debt at March 31, 2017 is $6,050,000. Epsilon has the right to convert all amounts outstanding under the Restated Note into shares of our common stock upon 75 days’ notice to OME or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the applicable conversion price, which is (a) $5.00 per share with respect to the $3.0 million already advanced under the Restated Note and (b) with respect to additional advances under the Restated Note, the five-day volume-weighted average price of our common stock for the five trading day period ending on the trading day immediately prior to the date on which OME submits a borrowing notice for such advance. On January 25, 2017, Epsilon provided notice to us that it will convert the initial $3.0 million plus accrued interest per the Restated Note Purchase Agreement at $5.00 per share in accordance with the terms of the agreement. The conversion and issuance of these new shares is effective April 10, 2017 and includes accrued interest of $302,274 for a total 670,455 shares. Notwithstanding anything herein to the contrary, we shall not issue any of our common stock upon conversion of any outstanding tranche (other than the first $3.0 million already advanced) under this Restated Note in excess of 1,388,769 shares of common stock. The additional tranches were issued as follows: (a) $1,000,000 (“Tranche 3”) was issued on October 16, 2016 with a conversion price of $3.52 per share; (b) $1,000,000 (“Tranche 4”) was issued on November 15, 2016 with a conversion price of $4.19 per share; and (c) $1,000,000 (“Tranche 5”) was issued on December 15, 2016 with a conversion price of $4.13 per share. During 2016, Epsilon assigned $2,000,000 of this debt to MINOSA under the same terms as the original debt.

As an inducement for the issuance of the additional $3.0 million of promissory notes, we also delivered to Epsilon a common stock purchase warrant (the “Warrant”) pursuant to which Epsilon has the right to purchase up to 120,000 shares of our common stock at an exercise price of $3.52 per share, which exercise price represents the five-day volume-weighted average price of our common stock for the five trading day period ending on the trading day immediately prior to the day on which the Warrant was issued. Epsilon may exercise the Warrant in whole or in part at any time during the period ending October 1, 2021. The Warrant includes a cashless exercise feature and provides that, if Epsilon is in default of its obligations to fund any advance pursuant to and in accordance with the Restated Note Purchase Agreement, then, thereafter, the maximum aggregate number of shares of common stock that may be purchased under the Warrant shall be the number determined by multiplying 120,000 by a fraction, (a) the numerator of which is the aggregate principal amount of advances that have been extended to the OME by Epsilon pursuant to the Restated Note Purchase Agreement on or after the date of the Warrant and prior to the date of such failure and (b) the denominator of which is $3.0 million.

Accounting considerations for additional tranches

We evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”). This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. Additionally, the warrant agreement did not contain any terms or features that would preclude equity classification. We were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The allocations of the three additional tranches were as follows.

	Tranche 3		Tranche 4		Tranche 5
Promissory Note	$	981,796	$	939,935	$	1,000,000
Beneficial Conversion Feature (“BCF”)*		18,204		60,065		—
Proceeds	$	1,000,000	$	1,000,000	$	1,000,000

A beneficial conversion feature arises when the calculation of the effective conversion price is less than the Company’s stock price on the date of issuance. Tranche 5 did not result in a BCF because the effective conversion price was greater than the company’s stock price on the date of issuance.

The warrants fair values were calculated using Black-Scholes Merton (“BSM”). The aggregate fair value of the warrants totaled $303,712. Since the warrants were issued as an inducement to Epsilon to issue additional debt, we recorded an inducement expense of $303,712. For the three months ended March 31, 2017 and March 31, 2016, interest expense related to the discount in the amount of $68,194 and $3,859, respectively, was recorded. For the three months ended March 31, 2017 and March 31, 2016, accrued interest in the amount of $149,178 and $411, respectively, was recorded.

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Term Extension (March 21, 2017)

On March 21, 2017 Odyssey Marine Enterprises, Ltd. (“OME”), entered into an Amended and Restated Note Purchase Agreement (the “Restated Note Agreement”) with Epsilon Acquisitions LLC (“Epsilon”). In connection with the existing $6.0 million loan agreement, the adjusted principal balance is due and payable in full upon the earlier of (i) written demand by Epsilon or (ii) such time as Odyssey or the guarantor pays any other indebtedness for borrowed money prior to its stated maturity date. As such the Company amortized the notes up to their face value of $6,050,000 and they are classified as short-term.

Promissory Note

On April 15, 2016, Odyssey Marine Exploration, Inc. (“Odyssey”) and its wholly owned subsidiaries Oceanica Marine Operations, S.R.L. (“OMO”), Odyssey Marine Services, Inc. (“OMS”), and Odyssey Marine Enterprises, Ltd. (“OME”) executed a Loan and Security Agreement (the “Loan Agreement”) with Monaco Financial LLC (“Monaco”) pursuant to which Odyssey borrowed $1.825 million from Monaco. Monaco advanced the entire amount to us in March 2016 upon execution of a Letter of Intent. The indebtedness is evidenced by a Convertible Promissory Note (the “Note”) that provides for interest at the rate of 10.0% per annum on the outstanding amount of principal, with the entire unpaid principal sum outstanding, together with any unpaid interest thereon, being due and payable on April 15, 2018. Odyssey has the right to prepay the indebtedness, in whole or in part, upon 30 days’ notice to Monaco.

Pursuant to the Loan Agreement and as security for the indebtedness, Monaco was granted a security interest in (a) one-half of the indebtedness evidenced by the Amended and Restated Consolidated Note and Guaranty, dated September 25, 2015 (the “ExO Note”), in the original principal amount of $18.0 million, issued by Exploraciones Oceanicas S. de R.L. de C.V. to OMO, and all rights associated therewith (the “OMO Collateral”); and (b) all marine technology and assets in OMS’s possession or control used for offshore exploration, including a deep-tow search systems, winches, multi-beam sonar, and other equipment. OME unconditionally and irrevocably guaranteed all obligations of Odyssey, OMO, and OMS to Monaco under the Loan Agreement.

As further consideration for the loan, Monaco was granted an option (the “Option”) to purchase the OMO Collateral. The Option is exercisable at any time before the earlier of (a) the date that is 30 days after the loan is paid in full or (b) the maturity date of the ExO Note, for aggregate consideration of $9.3 million, $1.8 million of which would be paid at the closing of the exercise of the Option, with the balance paid in ten monthly installments of $750,000.

The Loan Agreement also contains customary representations and warranties of the parties, covenants, and events of default.

The Note provides that Monaco has the right, at any time before April 15, 2018, to convert any portion of the outstanding principal amount and any accrued interest under the Note and up to $1,374,603 of the promissory notes issued by Odyssey to Monaco in August 2014, into cuotas of Oceanica Resources S. de R.L. (“Oceanica”) held by OME, at a conversion price of $1.00. The Note further provides that the maximum number of Oceanica cuotas that can be acquired by Monaco upon conversion is 3,174,603 cuotas.

Promissory Note

On May 4, 2017, we entered into a Loan and Security Agreement (“Loan Agreement”) with SMOM Limited (“SMOM”). Pursuant to the Loan Agreement, SMOM agreed to loan us up to $3.0 million in convertible promissory notes. As a commitment fee, we assigned the remaining 50% of our Neptune Minerals, LLC receivable to SMOM. This receivable had zero carrying value on our balance sheet (See NOTE C). We received advances of $1.5 million under this agreement of which we received $750,000 in February 2017 and $750,000 in April 2017. The indebtedness bears interest at a rate of 10% per annum and matures on the second anniversary of this Loan Agreement. The holder has the option to convert any unpaid principal and interest into up to 50% of the equity interest held by Odyssey in Aldama Mining Company, S.de R.L. de C.V. which is a wholly owned subsidiary of ours. The conversion value of $1.0 million equates to 10% of the equity interest in Aldama. If the holder elects to acquire the entire 50.0% of the equity interest, but the amount of debt and interest accumulated to be converted is insufficient to acquire the entire 50% equity interest, the Holder has to pay the deficiency in cash. As additional consideration for the loan, the holder has the right to purchase from Odyssey all or a portion of the equity collateral (up to the 50% of the equity interest of Aldama) for the option consideration ($1.0 million for each 10% of equity interests) during the period that is the later of (i) one year after the maturity date and (ii) one year after the loan is repaid in full, the expiration date. The lender may also choose to extend the expiration date annually by paying $500,000 for each year extended.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued. Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”).

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This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount did not result in a BCF because the effective conversion price was equal to the value of the Company’s value on the date of issuance. Management is further reviewing the loan documents and will make a final evaluation of the applicable accounting related to this loan and security agreement and adjust as necessary.

Going Concern Consideration

We have 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 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. On March 24, 2017 we received NASDAQ communication notifying us our market capitalization was below the required minimum of $35.0 million for 30 consecutive days. We have 180 days, until September 30, 2017, to regain compliance. In order to regain compliance during this period, the market capitalization of our public common shares must be at least $35.0 million for ten consecutive business days. Our 2017 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects. We 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. One or more of the planned opportunities for raising cash may not be realized to the extent needed which may require us to curtail our desired business plan until we generate additional cash. In February 2017 we executed a letter of intent for a financing agreement with an affiliate of our related party, Monaco Financial, LLC for up to $5.0 million of which we received $750,000 in February 2017 and another $750,000 in April 2017 (see NOTE H). This financing agreement has subsequently been reduced to $3.0 million from the original $5.0 million. On March 11, 2015, we entered into a Stock Purchase Agreement with Minera del Norte S.A. de c.v. (“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. (See Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financings.) If cash inflow is not sufficient to meet our desired projected business plan requirements, we will be required to follow a contingency business plan which is based on curtailed expenses and fewer cash requirements. Our consolidated non-restricted cash balance at March 31, 2017 was $1.1 million which is insufficient to support operations for the following 12 months. We have a working capital deficit at March 31, 2017 of $26.2 million. Our largest loan of $14.75 million from MINOSA had a maturity date of March 18, 2017. We pledged the majority of our remaining assets 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 $4.0 million at March 31, 2017 and the fair market value of these assets may differ from their net carrying book value. Even though we executed the above noted financing arrangements, Penelope must purchase the shares for us to be able to complete the equity component of the transaction. The Penelope equity transaction is heavily dependent on the outcome of our subsidiary’s application approval process for an environmental permit to commercially develop a mineralized phosphate deposit off the coast of Mexico. Therefore, the factors 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.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, which establishes a comprehensive revenue recognition standard under GAAP for almost all industries. The new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein. Early adoption is prohibited. Based on management’s review of this new standard along with the substance of our transactions, management is of the position this standard will not have a material impact on our financial statements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases, which establishes a comprehensive lease standard under GAAP for virtually all industries. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. The new standard will apply for annual periods beginning after December 15, 2018, including interim periods therein, and requires modified retrospective application. Early adoption is permitted. Based on management’s current understanding of this new standard along with the underlying substance of our operations, management believes it will not have a material impact on our financial statements.

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Other recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect, if any, on the Company’s financial statements.

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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices. We currently do not have any debt obligations with variable interest rates.

ITEM 4. CONTROLS AND PROCEDURES

We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. As of the end of the period covered by this report, based on an evaluation carried out under the supervision and with the participation of our management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures, the CEO and CFO have concluded that our disclosure controls and procedures are effective. There have been no significant changes in our internal controls over financial reporting to date in 2017 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

The Company is not currently a party to any litigation. From time to time in the ordinary course of business, we may be subject to or may assert a variety of claims or lawsuits.

ITEM 1A. Risk Factors

For information regarding risk factors, please refer to Item 1A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Investors should consider such risk factors, as well as the risk factor set forth below, prior to making an investment decision with respect to the Company’s securities.

The issuance of shares at conversion prices lower than the market price at the time of conversion and the sale of such shares could adversely affect the price of our common stock. We may enter into convertible debt deals whereas our shares may be acquired from time to time upon conversion of the outstanding debt. At times, conversion prices could be lower than market price of our common stock at the time of conversion.

Our common stock is listed on the NASDAQ Capital Market, which imposes, among other requirements, a minimum bid requirement and a minimum market capitalization requirement. If we are not compliant with these continued listing requirements, we could be de-listed from the NASDAQ Capital Market. On March 24, 2017 we were notified by NASDAQ Capital Market we were not compliant with their $35.0 million minimum market capitalization requirement. The rules provide for a compliance period of 180 in which to regain compliance. To regain compliance, the market capitalization of our common shares must be at least $35.0 million for ten consecutive business days. There is no guarantee we can regain compliance.

Our ability to continue as a going concern is largely dependent upon our ability to raise capital, including consummating the transactions contemplated by the Stock Purchase Agreement with Minera del Norte S.A. de c.v. (“MINOSA”) and Penelope Mining LLC (“Penelope”), an affiliate of MINOSA. MINOSA’s and Penelope’s obligation to consummate the transactions is conditioned upon, among other things, their satisfaction with the viability, including our receipt of the necessary permits, of our project to develop a mineralized phosphate deposit in Mexico’s exclusive economic zone in the Pacific Ocean. Our environmental permit application filed in June 2015 was denied on April 8, 2016, but we are still seeking approval of our application. We cannot assure our ability to continue as a going concern unless we are able to raise additional capital.

We depend on information technology networks and systems to process, transmit and store electronic information and to communicate among our locations around the world and among ourselves within our company. Additionally, one of our

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significant responsibilities is to maintain the security and privacy of our confidential and proprietary information and the personal data of our employees. Our information systems, and those of our service and support providers, are vulnerable to an increasing threat of continually evolving cybersecurity risks. Computer viruses, hackers and other external hazards, as well as improper or inadvertent staff behavior could expose confidential company and personal data systems and information to security breaches. Techniques used to obtain unauthorized access or cause system interruption change frequently and may not immediately produce signs of intrusion. As a result, we may be unable to anticipate these incidents or techniques, timely discover them, or implement adequate preventative measures. With respect to our commercial arrangements with service and support providers, we have processes designed to require third-party IT outsourcing, offsite storage and other vendors to agree to maintain certain standards with respect to the storage, protection and transfer of confidential, personal and proprietary information. However, we remain at risk of a data breach due to the intentional or unintentional non-compliance by a vendor’s employee or agent, the breakdown of a vendor’s data protection processes, or a cyber-attack on a vendor’s information systems or our information systems.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 4. Mine Safety Disclosures

Not applicable

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ITEM 6. Exhibits

10.1	Convertible Promissory Note dated May 4, 2017 (Filed herewith electronically)
10.2	Loan and Security Agreement dated May 4, 2017 (Filed herewith electronically)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith electronically)
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith electronically)
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (Filed herewith electronically)
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (Filed herewith electronically)
101.1	Interactive Data File

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ODYSSEY MARINE EXPLORATION, INC.
Date: May 10, 2017	By:	/s/ Jay A. Nudi
		Jay A. Nudi, as Interim Chief Financial Officer, Chief Accounting Officer, and Authorized Officer (Principal Financial Officer)

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EX-10.1

Exhibit 10.1

Execution Copy

5/3/2017

NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES (COLLECTIVELY, THE “ACTS”). THIS NOTE AND THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE MAY NOT BE SOLD, DISTRIBUTED, OFFERED, PLEDGED, ENCUMBERED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF THE FOLLOWING: (1) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACTS COVERING THE TRANSACTION, (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACTS, OR (3) THE COMPANY OTHERWISE SATISFIES ITSELF THAT REGISTRATION IS NOT REQUIRED UNDER THE ACTS.

CONVERTIBLE PROMISSORY NOTE

$3,000,000.00 May 3, 2017

FOR VALUE RECEIVED, ODYSSEY MARINE EXPLORATION, INC., a Nevada corporation (“Borrower”), hereby promises to pay to the order of SMOM LIMITED, a registered private company organized under the Companies (Jersey) Law 1991 (“Lender”), the principal sum of up to Three Million Dollars ($3,000,000.00), together with interest accruing at the rate of ten percent (10.0%) per annum on the outstanding amount of principal. This Note evidences advances made pursuant to that certain Loan and Security Agreement of even date herewith by and between Borrower and Lender (the “Loan Agreement”). Capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

Article 1

Definitions

For purposes of this Note, the following terms shall have the respective meanings given to them below:

“Conversion Basis” means $10.0 million.

“Equity Interests” means the Equity Interests in Aldama.

“Aldama” means Aldama Mining Company, S. de R.L. de C.V., a Mexican company, 100.0% of the equity interests of which are owned, directly or indirectly, by Borrower as of the date of this Note.

“Maturity Date” means the second anniversary of the date of this Note.

Article 2

Payment Terms

Section 2.01. Maturity. The entire unpaid principal sum disbursed and outstanding, together with any interest thereon remaining unpaid and any other sums due the Lender in connection with the Loan shall be due and payable in full on the Maturity Date.

Section 2.02. Prepayment. Subject to the provisions of Article 4, Borrower shall have the right to prepay this Note, in whole or part, at any time, in accordance with the terms of this Note and the Loan Agreement upon 30 days’ written notice (a “Prepayment Notice”) to Lender.

Article 3

Default and Remedies

Section 3.01. Default. The occurrence of an Event of Default under the Loan Agreement shall constitute an “Event of Default” hereunder.

Section 3.02. Remedies. Upon the occurrence and continuation of an Event of Default that has not been cured in accordance with the terms of the Loan Agreement, or at any time thereafter, at the option of Lender, all indebtedness hereunder immediately will become due and payable upon written notice to Borrower from Lender, and Lender shall be entitled to exercise its other rights and remedies set forth in Article 8 of the Loan Agreement.

Article 4

Conversion

Section 4.01. Option to Convert. Lender shall have the right at any time and from time to time during the period commencing on the date of this Note and ending on the date that is the later of (a) 12 months after the Maturity Date or (b) 12 months after the entire unpaid principal sum disbursed and outstanding, together with any interest thereon remaining unpaid and any other sums due the Lender in connection with the Loan is repaid in full (as applicable, the “Conversion Period”), in accordance with the procedures set forth below, to convert all or any portion of the outstanding principal amount of this Note and any accrued and unpaid interest thereon (the “Convertible Obligations”) into up to 50.0% of the Equity Interests. For the avoidance of doubt, 50.0% is the maximum percentage of the Equity Interests into which Lender may convert the Convertible Obligations pursuant to this Article 4.

Section 4.02. Exercise of Option. If Lender elects to exercise its right to convert the Convertible Obligations, Lender shall (a) specify in a written notice to Borrower (an “Exercise Notice”) (a) that Lender elects to exercise its right to convert all or a portion of the Convertible Obligations, (b) the amount of the Convertible Obligations to be so converted, and (c) whether Equity Interests purchased pursuant to this Article 4 are to be issued in the name of Lender or a designee; and (ii) surrender this Note to Odyssey and furnish any appropriate endorsements and transfer documents if required by Lender. As soon as practicable thereafter, the Equity Interests purchased by Lender pursuant to this Article 4 shall be registered in the name of Lender or its designee(s).

Section 4.03. Option Consideration. If Lender elects to exercise its right to convert all or a portion of the Convertible Obligations, then the percentage of the Equity Interests that Lender shall be entitled to receive shall equal the quotient, stated as a percentage, determined by dividing (a) the amount of the Convertible Obligations to be converted, as specified in the Exercise Notice, by (b) the Conversion Basis. For example, if Lender elects to convert $2.5 million of the Convertible Obligations, then Lender would be entitled to receive 25.0% ($2.5 million divided by the Conversion Basis of $10 million) of the Equity Interests. If (x) Lender desires to acquire the entire 50.0% of the Equity Interests, but (y) the amount of the Convertible Obligations is insufficient to acquire such amount upon conversion of the Convertible Obligations then, at the time that Lender delivers the Exercise Notice to Borrower, Lender shall also deliver to Borrower cash in the amount of the deficiency by wire transfer of immediately available funds to an account designated by Borrower.

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Section 4.04. Conversion Date. Any conversion of the Convertible Obligations pursuant to this Note by Lender shall be deemed to occur on the date which Lender delivers the Exercise Notice and surrenders this Note to Lender (the “Conversion Date”), except that, if Lender delivers an Exercise Notice within thirty days before the Maturity Date, then the Conversion Date shall be the Maturity Date.

Section 4.05. Partial Conversion. If the Convertible Obligations are converted in part only, then upon surrender of this Note, Borrower shall issue to the holder of this Note a new note or notes (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for a principal amount equal to the principal amount on the face of this Note minus the principal amount so converted.

Article 5

Miscellaneous

Section 5.01. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 5.01):

If to Borrower:	Odyssey Marine Exploration, Inc.
	5215 West Laurel Street
	Tampa, Florida 33607
	Attention: President and CFO
	Email: mark@odysseymarine.com
With a copy to:	Akerman LLP
	401 East Jackson Street
	Suite 1700
	Tampa, Florida 33602
	Attention: David M. Doney
	Email: david.doney@akerman.com
If to Lender:	SMOM Limited
	17 The Esplanade
	St Helier
	Jersey
	JE2 3QA
	Attention Frederick Deacon
	Email: frederick@whitmill.com
With a copy to:	Borchard & Callahan, APC
	25909 Pala
	Suite 300
	Mission Viejo, California 92691
	Attention: Thomas Borchard
	Email: tborchard@borchardlaw.com

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Section 5.02. Interpretation. For purposes of this Note, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Note as a whole. Unless the context otherwise requires, references herein: (x) to Articles and Sections mean the Articles and Sections of, and Exhibits attached to, this Note; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Note shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

Section 5.03. Headings. The headings in this Note are for reference only and shall not affect the interpretation of this Note.

Section 5.04. Severability. If any term or provision of this Note is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Note so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 5.05. Successors and Assigns. This Note shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed, except that Lender may assign its rights hereunder to an affiliate of Lender without the prior consent of Borrower.

Section 5.06. Amendment and Modification; Waiver. This Note may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Note shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 5.07. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a)    This Note shall be governed by and construed in accordance with the internal laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction).

(b)    ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF FLORIDA IN EACH CASE LOCATED IN THE CITY OF TAMPA AND COUNTY OF HILLSBOROUGH, AND

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EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)    EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10(c).

Section 5.08. Counterparts. This Note may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Note delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Note.

[Signatures on following page(s).]

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IN WITNESS WHEREOF, the parties hereto have caused this Note to be executed as of the date first written above by their respective officers thereunto duly authorized.

ODYSSEY MARINE EXPLORATION, INC.
By:	/s/ Mark D. Gordon
	Mark D. Gordon
	President and Chief Executive Officer

Agreed and accepted as payee:
SMOM LIMITED
By:	/s/ Frederick Deacon
	Frederick Deacon
	Authorized Director or Officer

6

EX-10.2

Exhibit 10.2

Execution Copy

5/3/2017

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT, dated May 3, 2017 (this “Agreement”), is made and entered into by and among SMOM LIMITED, a Jersey limited liability Company with registered No. 123188 and incorporated under the Companies (Jersey) Law 1991, as amended (“Lender”), ODYSSEY MARINE EXPLORATION, INC., a Nevada corporation (“Borrower”), and, solely for purposes of Article 9, ALDAMA MINING COMPANY, S. DE R.L. DE C.V., a Mexican company (“Guarantor”).

Witnesseth:

WHEREAS, Borrower and Guarantor have requested that Lender enter into financing arrangements with Borrower pursuant to which Lender will make loans to Borrower; and

WHEREAS, Guarantor is a directly and indirectly wholly owned subsidiary of Odyssey and, as a result, will receive substantial benefits from financing arrangements contemplated by this Agreement; and

WHEREAS, Lender is willing to agree to make such loans, on the terms and conditions set forth herein.

Article 1

Definitions

For purposes of this Agreement, the following terms shall have the respective meanings given to them below:

“Advance” means a disbursement of Loan funds made, or to be made, to Borrower by Lender under the terms and conditions of this Agreement.

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Collateral” means, collectively, the Equity Collateral and the Rights Collateral(a) 50.0% of the equity interests in Guarantor (the “Equity Collateral”) and (b) Borrower’s contractual rights to receive payments from the Buyer Parties (as defined in the Acquisition Agreement) pursuant to, and in accordance with, Section 2.06 of the Acquisition Agreement (the “Rights Collateral”).

“Equity Collateral” means 50.0% of the equity interests in Guarantor. For the avoidance of doubt, Borrower holds 100.0% of the equity interests in Guarantor, and the Equity Collateral represents one-half of the interests held by Borrower.

“Loan Documents” means this Agreement and the Note.

“Maturity Date” means the second anniversary of the date of this Agreement.

“Obligations” means the Loan (as defined below), accrued interest, and all attorneys’ fees, court costs and expenses of whatever kind incident to the collection of the Loan, accrued interest, and the enforcement and protection of the security interest created hereby.

“Odyssey Parties” means Borrower and Guarantor, collectively.

“Option Consideration” means an amount equal to $1.0 million for each 10.0% of equity interest in Guarantor purchased by Lender pursuant to Article 10. For example, if Lender exercises the Option (as defined below) with respect to one-half of the Equity Collateral, the Option Consideration would be $2.5 million.

“Person” means an individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association or other entity.

“Rights Collateral” has the meaning set forth in Appendix A attached hereto.

“Wholly Owned Subsidiary” means any corporation, partnership, limited liability company, joint venture, other business entity, trust or estate of or in 100.0% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class of such corporation may have voting power upon the happening of a contingency), (b) the interest in the capital or profits of such partnership, limited liability company, joint venture, or other business entity or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled through one or more intermediaries, or both, by Guarantor.

“$” means United States Dollars.

Article 2

Advances

Section 2.01. Advances. Subject to the terms and conditions of this Agreement and the Note, Lender agrees to make Advances to Borrower in the aggregate amount of up to $3.0 million (the “Loan”) at the request of Borrower. Borrower acknowledges that Lender has made Advances of $1.5 million as of the date hereof.

Section 2.02. Borrowing Procedures. Subject to the terms and conditions of this Agreement and the Note, if Borrower desires to receive an Advance under the Loan, Borrower shall deliver an irrevocable, written borrowing notice (a “Borrowing Notice”) to Lender no later 10:00 a.m. (Eastern Time) three Business Days prior to the requested Advance Date (as defined below). Each Borrowing Notice shall set forth (a) the amount of the Advance requested by Borrower and (b) the date on which Borrower desires to receive such Advance (the “Advance Date”).

Section 2.03. Limitations. Lender’s obligation to make any Advance is subject to the following limitations:

(a)    Borrower may not deliver more than one Borrowing Notice during any 30-day period;

(b)    the maximum amount of any single Advance shall not exceed $750,000;

(c)    the maximum amount of all Advances shall not exceed $3.0 million; and

(d)    Borrower shall not request any Advance with an Advance Date after December 31, 2017.

Section 2.04. Maturity Date. The entire unpaid principal sum disbursed and outstanding, together with any interest thereon remaining unpaid and any other sums due Lender in connection with each Advance shall be due and payable in full no later than the Maturity Date.

Section 2.05. The Note. The Loan shall be evidenced by and repaid in accordance with the terms of a promissory note of Borrower payable to the order of Lender in the maximum principal amount of $3.0 million (the “Note”). The repayment terms applicable to the Loan are set forth in the Note. Interest shall accrue on amounts outstanding under the Note as set forth therein.

Section 2.06. Payments. All payments of principal, interest, and any other amounts due hereunder or under the Note shall be made to Lender by wire transfer in immediately available funds to the account designated in writing by Lender.

Article 3

Security

Section 3.01. Grant of Security Interest. As security for the Loan, Borrower hereby grants to Lender a continuing security interest in the Collateral and all substitutions, replacements, additions, accessions, proceeds, products to or of the Collateral.

Section 3.02. Secured Indebtedness. The security interest granted hereby shall secure the prompt payment of the Obligations and the prompt performance of each of the covenants and duties under this Agreement and the Loan Documents.

Section 3.03. Perfection by Filing. Borrower hereby specifically authorizes Lender at any time and from time to time to file financing statements, continuation statements, similar perfection documents, and amendments thereto that describe the Collateral and contain any other information required by the applicable law of the jurisdiction of organization of Borrower for the sufficiency or filing office acceptance of any financing statement, continuation statement, similar perfection documents, or amendment.

Section 3.04. Perfection Other Than by Filing. At any time and from time to time, Borrower shall take such steps as Lender may reasonably request for Lender to ensure the continued perfection and priority of Lender’s security interest in any of the Collateral and of the preservation of its rights therein.

Article 4

Representations and Warranties of Borrower and Guarantor

Each of Borrower and Guarantor represents and warrants to Lender as follows:

Section 4.01. Organization. Each of the Odyssey Parties (a) is a company duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and (b) has all requisite power to own its property and conduct its business as now conducted.

Section 4.02. Authorization. The execution, delivery, and performance of the Loan Documents and the transactions contemplated hereby and thereby (a) are within the authority of each of the Odyssey Parties that is a party thereto, (b) have been duly authorized by all necessary proceedings of each of the Odyssey Parties, (c) do not conflict with or result in any material breach or contravention of any provision

of law, statute, rule, or regulation to which any Odyssey Party is subject, and (d) do not conflict with any provision of the articles of incorporation or organization, operating agreement, or other organizational document of Borrower.

Section 4.03. Enforceability. The execution, delivery, and performance of the Loan Documents will result in valid and legally binding obligations of the Odyssey Parties, and their respective successors and assigns, enforceable against them in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief or other equitable remedy is subject to the discretion of the court before which any proceeding therefore may be brought.

Section 4.04. Governmental Approvals. The execution, delivery, and performance by each of the Odyssey Parties of the Loan Documents to which it is a party and the transactions contemplated hereby and thereby do not require any approval or consent of, or filing with, any governmental agency or authority the failure of which to obtain would reasonably be expected to have a material adverse effect on any of the Odyssey Parties.

Article 5

Representations and Warranties of Lender

Lender represents and warrants to Borrower as follows:

Section 5.01. Organization. Lender (a) is a company duly incorporated and registered, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and (b) has all requisite power to own its property and conduct its business as now conducted.

Section 5.02. Authorization. The execution, delivery, and performance of the Loan Documents and the transactions contemplated hereby and thereby (a) are within the authority of Lender, (b) have been duly authorized by all necessary proceedings of Lender, (c) do not conflict with or result in any material breach or contravention of any provision of law, statute, rule, or regulation to which any Lender is subject, and (d) do not conflict with any provision of the articles of association, operating agreement, or other organizational document of Lender.

Section 5.03. Enforceability. The execution, delivery, and performance of the Loan Documents will result in valid and legally binding obligations of the Lender and its successors and assigns, enforceable against them in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief or other equitable remedy is subject to the discretion of the court before which any proceeding therefore may be brought.

Section 5.04. Governmental Approvals. The execution, delivery, and performance by Lender of the Loan Documents to which it is a party and the transactions contemplated hereby and thereby do not require any approval or consent of, or filing with, any governmental agency or authority the failure of which to obtain would reasonably be expected to have a material adverse effect on Lender.

Article 6

Covenants of Borrower and Guarantor

Section 6.01. Payment. Borrower will pay or cause to be paid the principal and interest on the Loan and all fees and other amounts provided for in this Agreement and the Note, all in accordance with the terms of this Agreement and the Note.

Section 6.02. Conduct of Business. Borrower will continue to engage in a business of the same general type and manner as conducted by it on the date of this Agreement. Without 10 days’ prior written notice to Lender, Borrower shall not change its name or the location of its principal executive office. If Borrower changes its name or location of doing business, Borrower shall promptly execute any and all financing statements and amendments or continuations thereof and any other documents that Lender may reasonably request to evidence, continue, and/or perfect any security interest in or pledge of collateral securing the Loan.

Section 6.03. Use of Proceeds. The Loan and any Extension Payment (as defined below) will be used for Borrower’s working capital requirements and for Aldama’s operating expenses. The proceeds of the Loan and any Extension Payment shall not be used to repay indebtedness for borrowed money of Borrower or any of its Affiliates.

Section 6.04. Business Operations. Borrower and Guarantor covenant and agree that, as long as either (a) there are any Odyssey Obligations outstanding to Lender or (b) Lender holds 10.0% or more of all the outstanding equity interests of Guarantor (the “Specified Conditions”), Borrower shall, and shall cause Guarantor to, (i) conduct all of their business and operations directly or indirectly relating to the subsea exploration, research, mining, processing, purchase, sale or distribution of polymetallic nodules mined from the deep ocean in the Clarion Clipperton Zone or any other part of the Pacific Ocean (the “Covered Activities”) through Guarantor or a Wholly Owned Subsidiary and (ii) pursue with commercially reasonable efforts the approval of all applications for mining permits that have been submitted as of the date of hereof and, following the grant of any such permits, use commercially reasonable efforts to maintain such permits in good standing, including the payment of any required maintenance fees and expenses. If Borrower, Guarantor, or any of their respective Affiliates organizes or acquires an entity that is not a Wholly Owned Subsidiary (a “New Entity”) to engage in any of the Covered Activities, then Borrower and Guarantor shall cause such New Entity to issue equity interests in the New Entity to Lender in an amount sufficient to cause Lender’s direct or indirect economic interest in the New Entity, on a percentage basis, to equal the economic interest in Guarantor, on a percentage basis, that Lender has acquired upon exercise of the Option (as defined below). For avoidance of doubt, the processing of polymetallic nodules from the Pacific Ocean to convert the mined ore into marketable products, wherever the ore has been sourced, is considered an integral part of the business of Guarantor and is a significant inducement for Lender to enter into this Agreement.

Section 6.05. Guarantor and New Entity Documents. As soon as practicable after the date of this Agreement, Borrower shall take such actions, or cause such actions to be taken, as are reasonably necessary or appropriate to prepare or amend Guarantor’s documents or instruments that are the Mexican equivalents of articles of incorporation, bylaws, and shareholder agreements (collectively, (“Organizational Documents”) to contemplate Guarantor having more than one owner, including (a) such provisions as are customarily set forth in such documents, (b) preemptive rights for Lender, (c) a “Russian Roulette” provision as a definitive dispute mechanism, (d) that if Lender acquires 50.0% of the equity interests of Guarantor, so long thereafter as either of the Specified Conditions are met, Lender shall have the right to designate a number of the members of the board of directors (or body performing similar functions) of Guarantor equal to the Specified Number (as defined below), and (e) such other provisions as Odyssey and SMOM shall mutually agree (collectively, “Required Provisions”). Odyssey shall take such actions, or cause such actions to be taken, as are reasonably necessary or appropriate to include the Required Provisions in the Organizational Documents of any New Entity, mutatis mutandis. For the purposes of this Agreement, the “Specified Number” means one-half of (x) the number at which the size

of the board of directors (or body performing similar functions) of Guarantor is fixed minus (y) one. For the avoidance of doubt, Borrower and Lender agree that the size of the board of directors (or body performing similar functions) of Guarantor or any New Entity shall be fixed at an odd number, with each of Lender and Borrower being entitled to designate the Specified Number. The one additional member of the board of directors (or body performing similar functions) shall be an individual mutually agreeable to Borrower and Lender. If Borrower and Lender are unable to mutually agree on such individual, their dispute shall be resolved through the dispute resolution provisions set forth in the Organizational Documents.

Article 7

Conditions to Closing

Section 7.01. Initial Advance. The obligation of Lender to fund the initial Advance to be made hereunder is subject to the fulfillment of each of the following conditions:

(a)    each of the Odyssey Parties shall have performed and complied in all material respects with all of the covenants, agreements, obligations, and conditions required by this Agreement;

(b)    Borrower shall have delivered to Lender the Note, executed by Borrower, in form and substance satisfactory to Lender; and

(c)    Lender shall have received such other approvals and documents as Lender may reasonably request.

Section 7.02. Additional Advances. The obligation of Lender to fund each additional Advance to be made hereunder is subject to the fulfillment of each of the following conditions:

(a)    each of the Odyssey Parties shall have performed and complied in all material respects with all of the covenants, agreements, obligations, and conditions required by this Agreement;

(b)    no Event of Default (as defined below) shall have occurred and be continuing; and

(c)    Lender shall have received such other approvals and documents as Lender may reasonably request.

Article 8

Default and Remedies

Section 8.01. Events of Default. Lender’s delivery of a written notice to Borrower of the occurrence of any of the following shall constitute an “Event of Default” hereunder:

(a)    any default in the payment of the principal of or interest on the indebtedness evidenced by the Note in accordance with the terms of the Note, which default is not cured within five days;

(b)    any material misrepresentation by any of the Odyssey Parties hereunder or under the Note; or

(c)    any failure by any of the Odyssey Parties to perform any of its obligations, covenants or agreements under any of the Loan Documents.

Section 8.02. Remedies. Upon the occurrence and continuation of any Event of Default described in Section 8.01 that has not been cured within five days, the indebtedness evidenced by the Note shall be immediately due and payable in full upon demand by Lender; and upon the occurrence and continuation of any other Event of Default described above, Lender at any time thereafter may at their option accelerate the maturity of the indebtedness evidenced by the Note. Upon the occurrence of any such Event of Default, demand by Lender, and the acceleration of the maturity of the indebtedness evidenced by the Note, Lender shall have any and all other rights and remedies that Lender may now or hereafter possess at law, in equity, or by statute.

Section 8.03. Remedies Cumulative; No Waiver. No right, power, or remedy conferred upon or reserved to Lender by this Agreement or the Note is intended to be exclusive of any other right, power, or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power, and remedy given hereunder, or under the Note, or now or hereafter existing at law, in equity or by statute. No delay or omission by Lender to exercise any right, power, or remedy accruing upon the occurrence of any Event of Default shall exhaust or impair any such right, power, or remedy or shall be construed to be a waiver of any such Event of Default or an acquiescence therein, and every right, power, and remedy given by this Agreement and the other Loan Documents to Lender may be exercised from time to time and as often as may be deemed expedient by Lender.

Article 9

Guaranty

Section 9.01. Guaranty. For value received, Guarantor hereby unconditionally and irrevocably guarantees to Lender all obligations of the other Odyssey Parties pursuant to or arising from this Agreement (collectively, the “Odyssey Obligations”). Lender may bring a separate action against Guarantor for any accrued but unpaid Odyssey Obligations without making any demand upon Borrower, and without separately proceeding against the other Odyssey Parties, and without pursuing any other remedy.

Section 9.02. Certain Guaranty Matters.

(a)    Lender shall have the right, without notice to Guarantor, to: (i) renew, extend, accelerate, waive, compromise, release, restructure and otherwise modify, or refuse to modify, the Odyssey Obligations, the liability of any person therefor as principal, guarantor, surety or otherwise, and/or any security therefor; and (ii) pursue or not pursue, or make elections among, Lender’s remedies against any such persons, even if any rights that Guarantor may have, including subrogation, reimbursement, indemnity, contribution and/or participation in security, are impaired or extinguished. Guarantor waives any right or defense that might arise by reason of Lender’s exercise of any such rights.

(b)    Guarantor’s liability shall not be affected by any circumstance constituting legal or equitable discharge of a guarantor or surety other than payment in full of the Odyssey Obligations. Guarantor hereby waives, and agrees not to exercise, any rights it may have arising from or based on: (i) any right to require Lender to proceed against Borrower or to pursue any other remedy whatsoever; (ii) any defense based upon any legal disability of, any discharge or limitation of the liability of, any restraint or stay applicable to actions against, or the lack of authority or termination of existence of any other Odyssey Party; (iii) any right of setoff, recoupment or counterclaim, other than any right of setoff that may be applicable under this Agreement; (iv) presentment, protest, notice of acceptance, notice of protest, notice of dishonor and notice of any action or inaction; and (v) any defense based upon negligence of Lender, including any failure to file a claim in any bankruptcy.

Article 10

Option to Purchase Equity Collateral

Section 10.01. Grant of Option. As additional consideration for the Loan, during the period commencing on the date hereof and ending on the date that is the later of (a) 12 months after the Maturity Date or (b) 12 months after the Loan is repaid in full (as applicable, the “Expiration Date”), Lender shall have the right to purchase from Borrower, and Borrower shall be obligated to sell to Lender, all or a portion of the Equity Collateral in exchange for the Option Consideration (the “Option”). On or prior to the Expiration Date, Lender may extend the Expiration Date and the period during which Lender is entitled to exercise the Option for a period of up to two years from the original Expiration Date by (x) delivering to Borrower a notice to the effect that Lender is electing to extend the Expiration Date and the period during which Lender is entitled to exercise the Option, specifying the duration of such period and (y) paying $500,000 to Borrower (at the time of any delivery a notice pursuant to the foregoing clause (x)) (the “Extension Payment”) for each year that Lender desires to extend the Expiration Date and the period during which Lender is entitled to exercise the Option.

Section 10.02. Exercise of the Option. Lender may exercise the Option by delivering to Borrower a notice (the “Exercise Notice”) on or before the Expiration Date, specifying a desired date not less than five (5) nor more than thirty (30) business days from the date of such Exercise Notice on which Lender desires to consummate the purchase and sale contemplated by the Option (the “Option Closing Date”).

Section 10.03. Option Closing.

(a)    The closing of the exercise of the Option (the “Option Closing”) shall occur at 10:00 a.m. (Eastern time, U.S.A.) on the Option Closing Date. The Option Closing shall occur at the offices of Borrower or at such other location as the parties hereto shall agree.

(b)    On the Option Closing Date, Borrower shall deliver to Lender an assignment with respect to the Equity Collateral, duly endorsed in blank with appropriate transfer powers.

(c)    On the Option Closing Date, Lender shall deliver to Borrower the Option Consideration, by wire transfer of immediately available funds to an account designated by Borrower.

Article 11

Miscellaneous

Section 11.01. Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

Section 11.02. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient. Such communications must be sent to

the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.02):

If to any of the Odyssey Parties:	Odyssey Marine Exploration, Inc.
	5215 West Laurel Street
	Tampa, Florida 33607
	Attention: President and CEO
	Email: mark@odysseymarine.com
With a copy to:	Akerman LLP
	401 East Jackson Street
	Suite 1700
	Tampa, Florida 33602
	Attention: David M. Doney
	Email: david.doney@akerman.com
If to Lender:	SMOM Limited
	17 The Esplanade
	St Helier
	Jersey
	JE2 3QA
With copies to:	c/o Borchard & Callahan, APC
	25909 Pala
	Suite 300
	Mission Viejo, California 92691
	Attention: Thomas Borchard
	Email: tborchard@borchardlaw.com
	and
	Lexstone Lawyers
	17 The Esplanade
	St Helier
	Jersey
	JE2 3QA
	Attention: Marcus Stone
	Email: marcus.stone@lexstone,je

Section 11.03. Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, and Exhibits mean the Articles and Sections of, and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

Section 11.04. Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 11.05. Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 11.06. Entire Agreement. This Agreement and the Note constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous representations, warranties, understandings and agreements, both written and oral, with respect to such subject matter.

Section 11.07. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed, except that Lender may assign its rights (but not delegate its obligations) hereunder to any of Lender’s Affiliates without the prior written consent of Borrower.

Section 11.08. Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 11.09. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a)    This Agreement shall be governed by and construed in accordance with the internal laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction).

(b)    ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF FLORIDA IN EACH CASE LOCATED IN THE CITY OF TAMPA AND COUNTY OF HILLSBOROUGH, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY

WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)    EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE NOTE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.09(c).

Section 11.10. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

(Signatures on following page(s).)

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

SMOM LIMITED		ODYSSEY MARINE EXPLORATION, INC.
By:	/s/ Frederick Deacon	By:	/s/ Mark D. Gordon
	Duly Authorized Director		Mark D. Gordon
			President and Chief Executive Officer
ALDAMA MINING COMPANY, S. DE R.L. DE C.V.
By:	/s/ John D. Longley Jr.
Name:	John D. Longley, Jr.
Title:	President

Appendix A

Rights Collateral

For purposes of this Agreement:

“Rights Collateral” means Borrower’s right to receive 21.25% of the Net Proceeds with respect to each Covered Shipwreck, where:

“Covered Shipwrecks” means (a) the shipwrecks included in the proprietary shipwreck database and research library of Borrower as of December 10, 2015, excluding any Excluded Shipwrecks, and (b) any other shipwrecks discovered or identified by or presented to Borrower or Lender or any of its Affiliates during the five-year period ending December 10, 2020.

“Excluded Shipwrecks” means the wrecks associated with these projects of Borrower as of December 10, 2015: the HMS Victory Project, the HMS Sussex Project, the Enigma II Project, and the C-46 Airplane Cargo Project.

“Net Proceeds” means, with respect to each Covered Shipwreck, an amount equal to the difference between (a) the proceeds to Lender or any of its Affiliates from sales of the portion of Valuable Trade Cargo from such Covered Shipwreck that is monetized by Lender or any of its Affiliates, and (b) the Recovery Costs incurred by Lender or any of its Affiliates related to such Covered Shipwreck.

“Recovery Costs” means (a) all reasonable and direct costs and expenses for offshore archaeological operations with respect to a Covered Shipwreck, plus any costs of conservation, documentation, certification, legal fees, transportation and any other costs that are reasonably necessary to complete a project related to such Covered Shipwreck, in each case incurred by Lender or any of its Affiliates; (b) any payments or percentages to owners, governments or other entities as may be negotiated or determined by a court of competent jurisdiction; (c) any percentages up to 5.0% paid or incurred as marketing fees; and (d) any percentages paid to investors, provided that those obligations were disclosed in advance and Borrower has been provided with a right of refusal to participate proportionally in any investment that may be required to fund the project for such Covered Shipwreck to prevent any dilution to Borrower’s economic interest in Covered Shipwreck.

“Valuable Trade Cargo” means numismatic coins, collectible coins, bullion coins, bullion, ingots, pottery and other valuable trade goods that are recovered from any Covered Shipwreck that will be available for sale by any of Lender or any of its Affiliates.

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark D. Gordon, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Odyssey Marine Exploration, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2017

/s/ Mark D. Gordon

Mark D. Gordon

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jay A. Nudi, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Odyssey Marine Exploration, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2017

/s/ Jay A. Nudi

Jay A. Nudi

Interim Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

ODYSSEY MARINE EXPLORATION, INC.

PURSUANT TO 18 U.S.C. SECTION 1350

I hereby certify that, to the best of my knowledge, the quarterly report on Form 10-Q of Odyssey Marine Exploration, Inc. for the period ending March 31, 2017:

(1) complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material aspects, the financial condition and results of operations of Odyssey Marine Exploration, Inc.

/s/ Mark D. Gordon

Mark D. Gordon

Chief Executive Officer

May 10, 2017

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Odyssey Marine Exploration, Inc. and will be retained by Odyssey Marine Exploration, Inc. and furnished to the Securities and Exchange Commission upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

ODYSSEY MARINE EXPLORATION, INC.

PURSUANT TO 18 U.S.C. SECTION 1350

I hereby certify that, to the best of my knowledge, the quarterly report on Form 10-Q of Odyssey Marine Exploration, Inc. for the period ending March 31, 2017:

(1) complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material aspects, the financial condition and results of operations of Odyssey Marine Exploration, Inc.

/s/ Jay A. Nudi

Jay A. Nudi

Interim Chief Financial Officer

May 10, 2017

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Odyssey Marine Exploration, Inc. and will be retained by Odyssey Marine Exploration, Inc. and furnished to the Securities and Exchange Commission upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 20, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	OMEX
Entity Registrant Name	ODYSSEY MARINE EXPLORATION INC
Entity Central Index Key	0000798528
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,388,821

XML

Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash and cash equivalents	$ 1,065,690	$ 1,662,643
Restricted cash	10,000	10,000
Accounts receivable and other, net	355,565	473,806
Other current assets	441,680	609,462
Total current assets	1,872,935	2,755,911
PROPERTY AND EQUIPMENT
Equipment and office fixtures	17,188,699	17,188,699
Marine asset held for sale	416,329	416,329
Accumulated depreciation	(16,031,978)	(15,809,774)
Total property and equipment	1,573,050	1,795,254
NON-CURRENT ASSETS
Other non-current assets	532,500	532,500
Total non-current assets	532,500	532,500
Total assets	3,978,485	5,083,665
CURRENT LIABILITIES
Accounts payable	1,656,789	1,397,347
Accrued expenses and other	5,588,944	5,078,125
Loans payable	20,800,001	20,731,807
Total current liabilities	28,045,734	27,207,279
LONG-TERM LIABILITIES
Loans payable	5,141,723	4,335,501
Deferred income and revenue participation rights	4,643,750	4,643,750
Total long-term liabilities	9,785,473	8,979,251
Total liabilities	37,831,207	36,186,530
Commitments and contingencies (NOTE P)
STOCKHOLDERS' EQUITY/(DEFICIT)
Preferred stock	0	0
Common stock - $.0001 par value; 75,000,000 shares authorized; 7,718,366 and; 7,718,366 issued and outstanding for each period end presented	772	772
Additional paid-in capital	208,170,842	207,962,346
Accumulated deficit	(229,149,701)	(226,950,436)
Total stockholders' equity/(deficit) before non-controlling interest	(20,978,087)	(18,987,318)
Non-controlling interest	(12,874,635)	(12,115,547)
Total stockholders' equity/(deficit)	(33,852,722)	(31,102,865)
Total liabilities and stockholders' equity/(deficit)	$ 3,978,485	$ 5,083,665

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	24,984,166	24,984,166
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	7,718,366	7,718,366
Common stock, shares outstanding	7,718,366	7,718,366

XML

Consolidated Statements of Operations - Unaudited - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
REVENUE
Recovered cargo sales and other		$ 4,667
Marine services	$ 649,353	577,810
Total revenue	649,353	582,477
OPERATING EXPENSES
Cost of sales - recovered cargo sales and other	0	0
Marketing, general and administrative	1,629,955	2,380,317
Operations and research	1,302,516	2,199,991
Total operating expenses	2,932,471	4,580,308
(LOSS) FROM OPERATIONS	(2,283,118)	(3,997,831)
OTHER INCOME (EXPENSE)
Interest expense	(714,896)	(334,060)
Change in derivative liabilities fair value		3,337,474
Other	39,663	381,978
Total other income (expense)	(675,233)	3,385,392
(LOSS) BEFORE INCOME TAXES	(2,958,351)	(612,439)
Income tax benefit (provision)	0	0
(LOSS) BEFORE NON-CONTROLLING INTEREST	(2,958,351)	(612,439)
Non-controlling interest	759,088	697,083
NET (LOSS) INCOME	$ (2,199,263)	$ 84,644
NET (LOSS) INCOME PER SHARE (See NOTE B)
Basic	$ (0.28)	$ 0.01
Diluted	$ (0.28)	$ 0.01
Weighted average number of common shares outstanding with participating securities per the two-class method
Basic	7,718,366	7,541,111
Diluted	7,718,366	7,632,441

XML

Consolidated Statements of Cash Flows - Unaudited - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss before non-controlling interest	$ (2,958,351)	$ (612,439)
Adjustments to reconcile net loss to net cash (used) by operating activities:
Depreciation and amortization	222,204	325,211
Financed lender fees		50,000
Change in derivatives liabilities fair value		(3,337,474)
Note payable interest accretion	124,416	13,581
Share-based compensation	208,496	334,629
(Increase) decrease in:
Accounts receivable	118,241	(25,035)
Other assets	167,780	(56,390)
Increase (decrease) in:
Accounts payable	259,442	244,612
Accrued expenses and other	639,655	773,361
Deferred revenue		(383,148)
NET CASH (USED) BY OPERATING ACTIVITIES	(1,218,117)	(2,673,092)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(51,221)
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES		(51,221)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuances of loans payable	750,000	3,325,000
Repayment of mortgage and loans payable	(128,836)	(76,789)
NET CASH PROVIDED BY FINANCING ACTIVITIES	621,164	3,248,211
NET (DECREASE) INCREASE IN CASH	(596,953)	523,898
CASH AT BEGINNING OF PERIOD	1,662,643	2,241,317
CASH AT END OF PERIOD	1,065,690	2,765,215
SUPPLEMENTARY INFORMATION:
Interest paid	114,901	320,068
Income taxes paid	$ 0	$ 0

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Odyssey Marine Exploration, Inc. and subsidiaries (the “Company,” “Odyssey,” “us,” “we” or “our”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and the instructions to Form 10-Q and, therefore, do not include all information and footnotes normally included in financial statements prepared in accordance with generally accepted accounting principles. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of management, these financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position as of March 31, 2017 and the results of operations and cash flows for the interim period presented. Operating results for the three-month period ended March 31, 2017 are not necessarily indicative of the results that may be expected for the full year.

Recent accounting pronouncements

In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, which establishes a comprehensive revenue recognition standard under GAAP for almost all industries. The new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein. Early adoption is prohibited. Based on management’s review of this new standard along with the substance of our transactions, management is of the position this standard will not have a material impact on our financial statements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases, which establishes a comprehensive lease standard under GAAP for virtually all industries. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. The new standard will apply for annual periods beginning after December 15, 2018, including interim periods therein, and requires modified retrospective application. Early adoption is permitted. Based on management’s current understanding of this new standard along with the underlying substance of our operations, management believes it will not have a material impact on our financial statements.

Other recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect, if any, on the Company’s financial statements.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of the Company is presented to assist in understanding our financial statements. The financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity and have prepared them in accordance with our customary accounting practices.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, both domestic and international. Equity investments in which we exercise significant influence but do not control and of which we are not the primary beneficiary are accounted for using the equity method. All significant inter-company and intra-company transactions and balances have been eliminated. The results of operations attributable to the non-controlling interest are presented within equity and net income, and are shown separately from the Company’s equity and net income attributable to the Company. Some of the existing inter-company balances, which are eliminated upon consolidation, include features allowing the liability to be converted into equity of a subsidiary, which if exercised, could increase the direct or indirect interest of the Company in the non-wholly owned subsidiaries.

Use of Estimates

Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

Revenue Recognition and Accounts Receivable

In accordance with Topic A.1. in SAB 13: Revenue Recognition, marine services expedition charter revenue is recognized ratably when realized and earned as time passes throughout the contract period as defined by the terms of the agreement. Expenses related to the marine services expedition charter revenue (also referred to as “marine services” revenue) are recorded as incurred and presented under the caption “Operations and research” on our Consolidated Statements of Operations.

Bad debts are recorded as identified and, from time to time, a specific reserve allowance will be established when required. A return allowance is established for sales that have a right of return. Accounts receivable is stated net of any recorded allowances.

Cash and Cash Equivalents

Cash, cash equivalents and restricted cash include cash on hand and cash in banks. We also consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. We have $10,000 of restricted cash for collateral related to a corporate credit card program.

Long-Lived Assets

Our policy is to recognize impairment losses relating to long-lived assets in accordance with the Accounting Standards Codification (“ASC”) topic for Property, Plant and Equipment. Decisions are based on several factors, including, but not limited to, management’s plans for future operations, recent operating results and projected cash flows. Impairment losses are included in depreciation at the time of impairment.

Property and Equipment and Depreciation

Property and equipment is stated at historical cost. Depreciation is calculated using the straight-line method at rates based on the assets’ estimated useful lives which are normally between three and thirty years. Leasehold improvements are amortized over their estimated useful lives or lease term, if shorter. Major overhaul items (such as engines or generators) that enhanced or extended the useful life of vessel related assets qualified to be capitalized and depreciated over the useful life or remaining life of that asset, whichever was shorter. Certain major repair items required by industry standards to ensure a vessel’s seaworthiness also qualified to be capitalized and depreciated over the period of time until the next scheduled planned major maintenance for that item. All other repairs and maintenance were accounted for under the direct-expensing method and are expensed when incurred.

The smaller vessel we received as consideration when we sold our Odyssey Explorer in 2016 remains under a pending contract of sale. We believe this sale will be completed in the near term. The amount capitalized for this asset is $416,329.

Earnings Per Share

See NOTE I regarding our 1-for-12 reverse stock split. Share related amounts have been retroactively adjusted in this report to reflect this reverse stock-split for all periods presented.

Basic earnings per share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. In periods when the Company has income, the Company would calculate basic earnings per share using the two-class method, if required, pursuant to ASC 260 Earnings Per Share. The two-class method was required effective with the issuance of certain senior convertible notes in the past because these notes qualified as a participating security, giving the holder the right to receive dividends should dividends be declared on common stock. Under the two-class method, earnings for a period are allocated on a pro rata basis to the common stockholders and to the holders of convertible notes based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion. The Company does not use the two-class method in periods when it generates a loss because the holder of the convertible notes does not participate in losses. Currently, we do not have any outstanding convertible notes that qualify as a participating security.

Diluted EPS reflects the potential dilution that would occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. We use the treasury stock method to compute potential common shares from stock options and warrants and the if-converted method to compute potential common shares from preferred stock, convertible notes or other convertible securities.

For diluted earnings per share, the Company uses the more dilutive of the if-converted method or two-class method. When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted EPS calculation.

At March 31, 2017 and 2016, the weighted average common shares outstanding year-to-date were 7,718,366 and 7,541,111, respectively. For the periods in which net losses occurred, all potential common shares were excluded from diluted EPS because the effect of including such shares would be anti-dilutive.

The potential common shares in the following tables represent potential common shares calculated using the treasury stock method from outstanding options, stock awards and warrants that were excluded from the calculation of diluted EPS:

	Three Months Ended
	March 31, 2017		March 31, 2016
Average market price during the period	$	4.22	$	3.63
In the money potential common shares from options excluded		7,903		—
In the money potential common shares from warrants excluded		19,905		—

Potential common shares from out of the money options and warrants were also excluded from the computation of diluted EPS because calculation of the associated potential common shares has an anti-dilutive effect on EPS. The following table lists options and warrants that were excluded from diluted EPS:

	Three Months Ended
Per share exercise price	March 31, 2017		March 31, 2016
Out of the money options excluded:
$    12.48		137,666		137,666
$    12.84		4,167		4,167
$    26.40		75,158		79,370
$    32.76		—		53,707
$    34.68		73,765		78,705
$    39.00		8,333		8,333
$    41.16		833		3,333
$    42.00		8,333		8,333
$    46.80		1,667		1,667
Out-of-the-money warrants excluded:
$    43.20		—		130,208
Total excluded		309,922		505,489

The weighted average equivalent common shares relating to our unvested restricted stock awards that were excluded from potential common shares in the earning per share calculation due to having an anti-dilutive effect are:

	Three Months Ended
	March 31, 2017		March 31, 2016
Potential common shares from unvested restricted stock awards excluded from EPS		238,921		—

The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income per share:

	Three Months Ended
	March 31, 2017			March 31, 2016
Net income (loss)	$	(2,199,263	)	$	84,644
Numerator, basic and diluted net income (loss) available to stockholders	$	(2,199,263	)	$	84,644
Denominator:
Shares used in computation – basic:
Weighted average common shares outstanding		7,718,366			7,541,111
Common shares outstanding for basic		7,718,366			7,541,111
Additional shares used in computation – diluted:		—			91,330
Common shares outstanding for basic		7,718,366			7,541,111
Shares used in computing diluted net income per share		7,718,366			7,632,441
Net (loss) per share – basic	$	(0.28	)	$	0.01
Net (loss) per share – diluted	$	(0.28	)	$	0.01

Income Taxes

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or the entire deferred tax asset will not be realized.

Stock-based Compensation

Our stock-based compensation is recorded in accordance with the guidance in the ASC topic for Stock-Based Compensation (See NOTE I).

Fair Value of Financial Instruments

Financial instruments consist of cash, evidence of ownership in an entity, and contracts that both (i) impose on one entity a contractual obligation to deliver cash or another financial instrument to a second entity, or to exchange other financial instruments on potentially unfavorable terms with the second entity, and (ii) conveys to that second entity a contractual right (a) to receive cash or another financial instrument from the first entity, or (b) to exchange other financial instruments on potentially favorable terms with the first entity. Accordingly, our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative financial instruments and mortgage and loans payable. We carry cash and cash equivalents, accounts payable and accrued liabilities, and mortgage and loans payable at the approximate fair market value, and, accordingly, these estimates are not necessarily indicative of the amounts that we could realize in a current market exchange. We carry derivative financial instruments at fair value as is required under current accounting standards. Redeemable preferred stock has been carried at historical cost and accreted carrying values to estimated redemption values over the term of the financial instrument.

Derivative financial instruments consist of financial instruments or other contracts that contain a notional amount and one or more underlying variables (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. See NOTE K for additional information. We generally do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, we have entered into certain other financial instruments and contracts with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815 – Derivatives and Hedging, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements with changes in fair value reflected in our income.

Fair Value Hierarchy

The three levels of inputs that may be used to measure fair value are as follows:

Level 1. Quoted prices in active markets for identical assets or liabilities.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.

Level 3. Unobservable inputs to the valuation methodology are significant to the measurement of the fair value of assets or liabilities. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.

Redeemable Preferred Stock

If we issue redeemable preferred stock instruments (or any other redeemable financial instrument), they are initially evaluated for possible classification as a liability in instances where redemption is certain to occur pursuant to ASC 480 – Distinguishing Liabilities from Equity. Redeemable preferred stock classified as a liability is recorded and carried at fair value. Redeemable preferred stock that does not, in its entirety, require liability classification is evaluated for embedded features that may require bifurcation and separate classification as derivative liabilities. In all instances, the classification of the redeemable preferred stock host contract that does not require liability classification is evaluated for equity classification or mezzanine classification based upon the nature of the redemption features. Generally, mandatory redemption requirements or any feature that could require cash redemption for matters not within our control, irrespective of probability of the event occurring, requires classification outside of stockholders’ equity. Redeemable preferred stock that is recorded in the mezzanine section is accreted to its redemption value through charges to stockholders’ equity when redemption is probable using the effective interest method. We have no redeemable preferred stock outstanding for the periods presented.

Subsequent Events

We have evaluated subsequent events for recognition or disclosure through the date this Form 10-Q is filed with the Securities and Exchange Commission.

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Accounts Receivable

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Accounts Receivable

NOTE C – ACCOUNTS RECEIVABLE

Our accounts receivable consist of the following:

	March 31, 2017		December 31, 2016
Trade	$	1,387	$	2,569,108
Related party		303,596		205,497
Other		50,582		44,930
Reserve allowance		—		(2,345,729	)
Total accounts receivable, net	$	355,565	$	473,806

The trade receivable balance at December 31, 2016 consists primarily of a trade receivable from Neptune Minerals, Inc., for which a reserve allowance for the full amount of $2,345,729 has been made for the reported period end. In February 2017, we entered into a non-binding Letter of Intent with SMOM Limited for a possible financing arrangement pursuant to which we assigned this Neptune Minerals, Inc. receivable to SMOM as a commitment fee. Being fully reserved, this Neptune Minerals, Inc. receivable had a carrying value of zero. Monaco and related affiliates owes us $303,596 and $205,497 for the periods ended March 31, 2017 and December 31, 2016, respectively, for support services and marine services rendered on their behalf. See NOTE H for further information regarding Monaco.

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Related Party Transactions

3 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

NOTE D – RELATED PARTY TRANSACTIONS

In December 2015, we entered into an asset acquisition agreement with Monaco Financial, LLC (“Monaco”). See NOTE S to the consolidated financial statements included in our Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2015 for further information. We had accounts receivable with Monaco and related affiliates at March 31, 2017 and December 31, 2016 of $303,596 and $205,497, respectively. We had general operating payables with Monaco at March 31, 2017 and December 31, 2016 of $266,136 and $267,824, respectively. See NOTE H for further debt commitments between the entities. Based on the economic substance of these business transactions, we consider Monaco Financial, LLC to be an affiliated company, thus a related party. We do not own any financial interest in Monaco. We have and expect to perform and complete marine shipwreck search and recovery charter services for this related party from which we will recognize the appropriate revenue. We also lease our corporate office space on an annually renewable basis from Monaco at $20,080 per month.

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Investments In Unconsolidated Entities

3 Months Ended

Mar. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Investments In Unconsolidated Entities

NOTE E – INVESTMENTS IN UNCONSOLIDATED ENTITIES

Neptune Minerals, Inc. (“NMI”)

Our current investment position in NMI consists of 3,092,488 Class B Common non-voting shares and 2,612 Series A Preferred non-voting shares. These preferred shares are convertible into an aggregate of 261,200 shares of Class B non-voting common stock. Our holdings now constitute an approximate 14% ownership in NMI. At December 31, 2016, our estimated share of unrecognized NMI equity-method losses is approximately $21.3 million. We have not recognized the accumulated $21.3 million in our income statement because these losses exceeded our investment in NMI. Our investment has a carrying value of zero as a result of the recognition of our share of prior losses incurred by NMI under the equity method of accounting. We believe it is appropriate to allocate this loss carryforward of $21.3 million to any incremental NMI investment that may be recognized on our balance sheet in excess of zero since the losses occurred when they were an equity-method investment. The aforementioned loss carryforward is based on NMI’s last unaudited financial statements as of December 31, 2016. We do not have any financial obligations to NMI, and we are not committed to provide financial support.

Although we are a shareholder of NMI, we have no representation on the board of directors or in management of NMI and do not hold any Class A voting shares. We are not involved in the management of NMI nor do we participate in their policy-making. Accordingly, we are not the primary beneficiary of NMI and are not required to consolidate NMI. As of March 31, 2017, the net carrying value of our investment in NMI was zero in our consolidated financial statements.

Chatham Rock Phosphate, Ltd.

During 2012, we performed deep-sea mining exploratory services for Chatham Rock Phosphate, Ltd. (“CRP”) valued at $1,680,000. As payment for these services, CRP issued 9,320,348 ordinary shares to us. During March 2017, Antipodes Gold Limited completed the acquisition of CRP. The surviving entity is now named Chatham Rock Phosphate Limited (“CRPL”). In exchange for our 9,320,348 shares of CRP we received 141,884 shares of CPRL, which represents equity ownership of approximately 1% of the surviving entity. Since CRP was a thinly traded stock and pursuant to guidance per ASC 320: Debt and Equity Securities regarding readily determinable fair value, we believe it was appropriate to not recognize this amount as an asset nor as revenue during that period. We continue to carry the value of our investment in CPRL at zero in our consolidated financial statements.

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Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

NOTE F - INCOME TAXES

During the three-month period ended March 31, 2017, we generated a federal net operating loss (“NOL”) carryforward of $2.2 million and generated $1.5 million of foreign NOL carryforwards. As of March 31, 2017, we had consolidated income tax NOL carryforwards for federal tax purposes of approximately $156.5 million and net operating loss carryforwards for foreign income tax purposes of approximately $26.7 million. The federal NOL carryforwards from 2005 forward will expire in various years beginning in 2025 and ending through the year 2036.

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. We have recorded a net deferred tax asset of $0 at March 31, 2017. As required by the Accounting for Income Taxes topic in the ASC, we have concluded 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 substantial profits from our mining operations and thus a valuation allowance has been recorded as of March 31, 2017. There was no U.S. income tax expense for the three months ended March 31, 2017 due to the generation of net operating losses.

The increase in the valuation allowance as of March 31, 2017 is due to the generation of approximately $2.2 million in net operating loss year-to-date.

The change in the valuation allowance is as follows:

March 31, 2017	$	70,163,364
December 31, 2016		69,481,041
Change in valuation allowance	$	682,323

Our estimated annual effective tax rate as of March 31, 2017 is 31.02% while our March 31, 2017 effective tax rate is 0.0% because of the full valuation allowance.

We have determined no adjustment is necessary to the liability for unrecognized tax benefits and have not recorded any provisions for accrued interest and penalties related to uncertain tax positions. The earliest tax year still subject to examination by a major taxing jurisdiction is 2013.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE G – COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company may be subject to a variety of claims and suits that arise from time to time in the ordinary course of business. We are currently not a party to any litigation.

Contingency

During March 2016, our Board of Directors approved the grant and issuance of 3.0 million new equity shares of Oceanica Resources, S.R.L. to two attorneys for their future services. This equity is only issuable upon the Mexican’s government approval of the Environmental Impact Assessment (“EIA”) for our Mexican subsidiary. The EIA has not been approved as of the date of this report. This grant of new shares was also approved by the Administrators of Oceanica Resources, S.R.L.

Going Concern Consideration

We have 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 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. On March 24, 2017, we received NASDAQ communication notifying us our market capitalization was below the required minimum of $35.0 million for 30 consecutive days. We have 180 days, until September 30, 2017, to regain compliance. To regain compliance during this period, the market capitalization of our public common shares must be at least $35.0 million for ten consecutive business days. Our 2017 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects. We 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. One or more of the planned opportunities for raising cash may not be realized to the extent needed which may require us to curtail our desired business plan until we generate additional cash. In February 2017, we executed a letter of intent for a financing agreement with an affiliate of our related party, Monaco Financial, LLC for up to $5.0 million of which we received $750,000 in February 2017 and another $750,000 in April 2017, see NOTE H. This financing agreement has subsequently been reduced to $3.0 million from the original $5.0 million. On March 11, 2015, we entered into a Stock Purchase Agreement with Minera del Norte S.A. de c.v. (“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. (See Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financings.) If cash inflow is not sufficient to meet our desired projected business plan requirements, we will be required to follow a contingency business plan which is based on curtailed expenses and fewer cash requirements. Our consolidated non-restricted cash balance at March 31, 2017 was $1.1 million which is insufficient to support operations for the following 12 months. We have a working capital deficit at March 31, 2017 of $26.2 million. Our largest loan of $14.75 million from MINOSA had a maturity date of March 18, 2017. We pledged the majority of our remaining assets 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 $4.0 million at March 31, 2017 and the fair market value of these assets may differ from their net carrying book value. Even though we executed the above noted financing arrangements, Penelope must purchase the shares for us to be able to complete the equity component of the transaction. The Penelope equity transaction is heavily dependent on the outcome of our subsidiary’s application approval process for an environmental permit to commercially develop a mineralized phosphate deposit off the coast of Mexico. Therefore, the factors 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.

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Loans Payable

3 Months Ended

Mar. 31, 2017

Text Block [Abstract]

Loans Payable

NOTE H –LOANS PAYABLE

The Company’s consolidated debt consisted of the following at:

	March 31, 2017		December 31, 2016
Note 1 – Monaco 2014	$	2,800,000		2,800,000
Note 2 – Monaco 2016		1,591,723		1,535,501
Note 3 – MINOSA		14,750,001		14,750,001
Note 4 – Epsilon		6,050,000		5,981,806
Note 5 – SMOM		750,000		—
	$	25,941,724	$	25,067,308

Note 1 – Monaco 2014

On August 14, 2014, we entered into a Loan Agreement with Monaco Financial, LLC (“Monaco”), a strategic marketing partner, pursuant to which Monaco agreed to lend us up to $10.0 million. The loan was issued in three tranches: (i) $5.0 million (the “First Tranche”) was advanced upon execution of the Loan Agreement; (ii) $2.5 million (the “Second Tranche”) was issued on October 1, 2014; and (iii) $2.5 million (the “Third Tranche”) was issued on December 1, 2014. The Notes bear interest at a rate equal to 11% per annum. The Notes also contain an option whereby Monaco can purchase shares of Oceanica held by Odyssey (the “Share Purchase Option”) at a purchase price which is the lower of (a) $3.15 per share or (b) the price per share of a contemplated equity offering of Oceanica which totals $1.0 million or more in the aggregate. The share purchase option was not clearly and closely related to the host debt agreement and required bifurcation.

On December 10, 2015, these promissory notes were amended as part of the asset acquisition agreement with Monaco. The amendment included the following material changes: (i) $2.2 million of the indebtedness represented by the Notes was extinguished, (ii) $5.0 million of the indebtedness represented by the Notes ceased to bear interest and is only repayable under certain circumstances from certain sources of cash, and (iii) the maturity date on the Notes was extended to December 31, 2017. During March 2016, the maturity date was amended to April 1, 2018 and the purchase price of the Share Purchase Option was re-priced to $1.00 per share. See “Loan Modification (March 2016)” below.

The outstanding interest-bearing balance of these Notes was $2.8 million at March 31, 2017 and December 31, 2016, respectively. The book carrying value of the Notes was $2.8 million, all of which is classified as long term. There was no amortization of debt discount recorded for the three months ended March 31, 2017 or March 31, 2016.

Note 2 – Monaco 2016

In March 2016, Monaco agreed to lend us an additional $1.825 million, which is the outstanding balance at March 31, 2017. These loan proceeds were received in full during the first quarter of 2016. The indebtedness bears interest at 10.0% percent per year. All principal and any unpaid interest is payable on April 15, 2018. The current outstanding balance is $1.825 million. The indebtedness is convertible at any time until the maturity date into shares of Oceanica held by us at a conversion price of $1.00 per share. Pursuant to this loan and as security for the indebtedness, Monaco was granted a second priority security interest in (a) one-half of the indebtedness evidenced by the Amended and Restated Consolidated Note and Guaranty, dated September 25, 2015 (the “ExO Note”), in the original principal amount of $18.0 million, issued by Exploraciones Oceanicas S. de R.L. de C.V. to Oceanica Marine Operations, S.R.L. (“OMO”), and all rights associated therewith (the “OMO Collateral”); and (b) all technology and assets aboard the MV Dorado Discovery and in our possession or control used for offshore exploration, including an ROV system, deep-tow search systems, winches, multi-beam sonar, and other equipment. The carrying value of this equipment is $1.5 million. We unconditionally and irrevocably guaranteed all obligations of Odyssey and its subsidiaries to Monaco under this loan agreement. As further consideration for the loan, Monaco was granted an option (the “Option”) to purchase the OMO Collateral. The Option is exercisable at any time before the earlier of (a) the date that is 30 days after the loan is paid in full or (b) the maturity date of the ExO Note, for aggregate consideration of $9.3 million, $1.8 million of which would be paid at the closing of the exercise of the Option, with the balance paid in ten monthly installments of $750,000.

Accounting considerations

ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The option to purchase the OMO Collateral is an embedded feature that is not clearly and closely related to the host debt agreement and thus requires bifurcation. Since the option is out of the money, it has no material fair value as of the inception date or currently. The debt agreement did not contain any additional embedded terms or features that have characteristics of derivatives. However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount did result in a BCF because the effective conversion price was less than the market price on the date of issuance, therefore a BCF of $456,250 was recorded. The BCF represents a debt discount which will be amortized over the life of the loan. For the three months ended March 31, 2017 and March 31, 2016, interest expense related to the discount in the amount of $56,222 and $9,722, respectively, was recorded. For the three months ended March 31, 2017 and March 31, 2016, accrued interest in the amount of $45,000 and $6,774, respectively, was recorded.

Loan modification (December 2015)

In connection with the Acquisition Agreement entered into with Monaco on December 10, 2015, Monaco agreed to modify certain terms of the loans as partial consideration for the purchase of assets. For the First Tranche ($5,000,000 issued on August 14, 2014), Monaco agreed to cease interest as of December 10, 2015 and reduce the loan balance by (i) the cash or other value received from the SS Central America shipwreck project (“SSCA”) or (ii) if the proceeds received from the SSCA project are insufficient to pay off the loan balance by December 31, 2017, then Monaco can seek repayment of the remaining outstanding balance on the loan by withholding Odyssey’s 21.25% “additional consideration” in new shipwreck projects performed for Monaco in the future. For the Second Tranche ($2,500,000 issued on October 1, 2014), Monaco agreed to reduce the principal amount by $2,200,000 leaving a new principal balance of $300,000 and extension of maturity to December 31, 2017. For the Third Tranche ($2,500,000 issued on December 1, 2014), Monaco agreed to the extension of maturity to December 31, 2017.

On December 10, 2015, the Monaco call option on $10 million of Oceanica shares held by Odyssey was maintained for the full amount of the original loan amount and was extended until December 31, 2017.

The Acquisition Agreement was accounted for as a troubled debt restructuring in accordance with ASC 470-60. As a result of the troubled debt restructuring, the carrying values of the remaining Monaco loans were required to be recorded at their undiscounted future cash flow values, which amounted to $3,449,632. No interest expense was to be recorded going forward. Interest payments in the three months ended March 31, 2016 reduced the carrying value.

Loan modification (March 2016)

In connection with the $1.825 million loan agreement with Monaco in March 2016, the existing $2.8 million notes were modified. Of the $2.8 million existing loans, $1,349,603 is convertible into shares of Oceanica at a fixed conversion price of $1.00 per share while the remaining $1,450,397 is not convertible. Additionally, the modification eliminated Monaco’s option (“share purchase option”) to purchase 3,174,603 shares of Oceanica stock at a price of $3.15 per share. The modification was analyzed under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”) to determine if extinguishment accounting was applicable. Under ASC 470-50-40-10a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting. Since this modification added a substantive conversion option, extinguishment accounting is applicable. In accordance  with the extinguishment accounting guidance (a) the share purchase option was first marked to its pre-modification fair value, (b) the new debt was recorded at fair value and (c) the old debt and share purchased option was removed. The difference between the fair value of the new debt and the sum of the pre-modification carrying amount of the old debt and the share purchase option’s fair value represented a gain on extinguishment. ASC 470-50-40-2 indicates that debt restructuring with a related party may be in essence a capital transaction and as a result the gain upon extinguishment was recognized in additional paid in capital. We performed the following steps:

Step 1: After the share purchase option has been market to its pre-modification fair value, the fair value of the new debt is determined. The fair value of the new debt is as follows:

Monaco loans	Loan one
Forward cash flows:
Principal	$	2,800,000
Interest		559,463
Total forward cash flows	$	3,359,463
Present value of forward cash flows	$	2,554,371
Fair value of equity conversion option		1,063,487
Fair value of debt	$	3,617,858

Significant inputs and results arising from the Binomial Lattice process are as follows for the conversion option that is classified in equity after the modification in March 2016:

Underlying price on valuation date		$1.25
Contractual conversion rate		$1.00
Contractual term to maturity		1.82 Years
Implied expected term to maturity		1.82 Years
Market volatility:
Range of volatilities		96.0% - 154.0%
Equivalent volatilities		120.1%
Risk free rates using zero coupon US Treasury Security rates		0.29% - 0.68%
Equivalent market risk adjusted interest rates		0.52%
Monaco loans	Loan one
Forward cash flows:
Face value	$	2,800,000
Fair value		3,617,858
Difference (premium)*	$	817,858

* ASC 470-20-25-13 provides that if a convertible debt instrument is issued at a substantial premium, there is a presumption that such premium represents paid in capital. Since the total face amount of the new loans is $2,800,000, we conclude that the $817,858 was substantial and recorded that premium to additional paid-in capital.

Step 2: The old debt and call option are removed with any difference between the fair value of the new debt and the sum of the pre-modification carrying amount of the old debt and the call option’s fair value recognized as a gain or loss upon extinguishment. The allocation is as follows:

	Allocation
Derivative liabilities (share purchase options)	$	1,456,825
Monaco Loan (Old Debt)		3,372,844
Monaco Loan (New Debt)		(2,800,000	)
APIC (Premium)		(817,858	)
Difference to APIC*	$	1,211,811

* The difference between the fair value of the new debt and the sum of the pre-modification carrying amount of the old debt and the share purchase option’s fair value represented a gain on extinguishment. ASC 470-50-40-2 indicates that debt restructuring with a related party may be in essence a capital transaction and as a result the gain upon extinguishment was recognized in additional paid in capital.

Note 3 – MINOSA

On March 11, 2015, in connection with a Stock Purchase Agreement (See NOTE M), Minera del Norte, S.A. de C.V. (“MINOSA”) agreed to lend us up to $14.75 million. The entire $14.75 million was loaned in five advances from March 11 through June 30, 2015. The outstanding indebtedness bears interest at 8.0% percent per annum. The Promissory Note was amended on April 10, 2015 and on October 1, 2015 so 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 to occur of: (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 the Don Diego Project, which determination is other than an approval or (y) Odyssey Marine Enterprises or any of its affiliates withdraws such application without MINOSA’s 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) December 31, 2015; 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. In connection with the loans, we granted MINOSA an option to purchase our 54% interest in Oceanica for $40.0 million (the “Oceanica Call Option. As of March 11, 2016, the Oceanica Call has expired. Completion of the transaction requires amending the Company’s articles of incorporation to (a) effect a reverse stock split, which was done on February 19, 2016, (b) adjusting the Company’s 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 Company’s articles of incorporation filed or to be filed with the Nevada Secretary of State. As collateral for the loan, we granted MINOSA a security interest in the Company’s 54% interest in Oceanica. The outstanding principal balance of this debt was $14.75 million at March 31, 2017 and December 31, 2016, respectively. The maturity date of this note has been amended and matured on March 18, 2017.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued. Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”).

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. The Oceanica Call Option is considered a freestanding financial instrument because it is both (i) legally detachable and (ii) separately exercisable. The Oceanica Call Option did not fall under the guidance of ASC 480. Additionally, it did not meet the definition of a derivative under ASC 815 because the option has a fixed value of $40.0 million and does not contain an underlying variable which is indicative of a derivative. This instrument is considered an option contract for a sale of an asset. The guidance applied in this case is ASC 360-20, which provides that in situations when a party lends funds to a seller and is given an option to buy the property at a certain date in the future, the loan shall be recorded at its present value using market interest rates and any excess of the proceeds over that amount credited to an option deposit account. If the option is exercised, the deposit shall be included as part of the sales proceeds; if not exercised, it shall be credited to income in the period in which the option lapses.

Based on the previous conclusions, we allocated the cash proceeds first to the debt at its present value using a market rate of 15%, which is management’s estimate of a market rate loan for the Company, with the residual allocated to the Oceanica Call Option, as follows:

	Tranche 1		Tranche 2		Tranche 3		Tranche 4		Tranche 5		Total
Promissory Note	$	1,932,759	$	5,826,341	$	2,924,172	$	1,960,089	$	1,723,492	$	14,366,853
Deferred Income (Oceanica Call Option)		67,241		173,659		75,828		39,911		26,509		383,148
Proceeds	$	2,000,000	$	6,000,000	$	3,000,000	$	2,000,000	$	1,750,0001	$	14,750,001

The call option amount of $383,148 represented a debt discount. This discount has been fully accreted up to face value using the effective interest method.

Note 4 – Epsilon

On March 18, 2016 we entered into a Note Purchase Agreement (“Purchase Agreement”) with Epsilon Acquisitions LLC (“Epsilon”). Pursuant to the Purchase Agreement, Epsilon loaned us $3.0 million in two installments of $1.5 million on March 31, 2016 and April 30, 2016. The indebtedness bears interest at a rate of 10% per annum and is due on March 18, 2017. We were also responsible for $50,000 of the lender’s out of pocket costs. This amount is included in the loan balance. In pledge agreements related to the loans, we granted security interests to Epsilon in (a) the 54 million cuotas (a unit of ownership under Panamanian law) of Oceanica Resources S. de R.L. (“Oceanica”) held by our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd. (“OME”), (b) all notes and other receivables from Oceanica and its subsidiary owed to the Odyssey Pledgors, and (c) all of the outstanding equity in OME. Epsilon has the right to convert the outstanding indebtedness into shares of our common stock upon 75 days’ notice to us or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the conversion price of $5.00 per share, which represents the five-day volume-weighted average price of Odyssey’s common stock for the five trading day period ending on March 17, 2016. Upon the occurrence and during the continuance of an event of default, the conversion price will be reduced to $2.50 per share. Following any conversion of the indebtedness, Penelope Mining LLC (an affiliate of Epsilon) (“Penelope”), may elect to reduce its commitment to purchase preferred stock of Odyssey under the Stock Purchase Agreement, dated as of March 11, 2015 (as amended, the “Stock Purchase Agreement”), among Odyssey, Penelope, and Minera del Norte, S.A. de C.V. (“MINOSA”) by the amount of indebtedness converted.

Pursuant to the Purchase Agreement (a) we agreed to waive our rights to terminate the Stock Purchase Agreement in accordance with the terms thereof until December 31, 2016, and (b) MINOSA agreed to extend, until March 18, 2017, the maturity date of the $14.75 million loan extended by MINOSA to OME pursuant to the Stock Purchase Agreement. The indebtedness may be accelerated upon the occurrence of specified events of default including (a) OME’s failure to pay any amount payable on the date due and payable; (b) OME or we fail to perform or observe any term, covenant, or agreement in the Purchase Agreement or the related documents, subject to a five-day cure period; (c) an event of default or material breach by OME, us or any of our affiliates under any of the other loan documents shall have occurred and all grace periods, if any, applicable thereto shall have expired; (d) the Stock Purchase Agreement shall have been terminated; (e) specified dissolution, liquidation, insolvency, bankruptcy, reorganization, or similar cases or actions are commenced by or against OME or any of its subsidiaries, in specified circumstances unless dismissed or stayed within 60 days; (f) the entry of judgment or award against OME or any of its subsidiaries in excess or $100,000; and (g) a change in control (as defined in the Purchase Agreement) occurs.

In connection with the execution and delivery of the Purchase Agreement, we and Epsilon entered into a registration rights agreement pursuant to which we agreed to register new shares of our common stock with a formal registration statement with the Securities and Exchange Commission upon the conversion of the indebtedness.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued. Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”).

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount did result in a BCF because the effective conversion price was less than the Company’s stock price on the date of issuance, therefore a BCF of $96,000 was recorded. The BCF represents a debt discount which will be amortized over the life of the loan.

Loan modification (October 1, 2016)

On October 1, 2016 Odyssey Marine Enterprises, Ltd. (“OME”), entered into an Amended and Restated Note Purchase Agreement (the “Restated Note Purchase Agreement”) with Epsilon Acquisitions LLC (“Epsilon”). In connection with the existing $3.0 million loan agreement, Epsilon agreed to lend an additional $3.0 million of secured convertible promissory notes. The convertible promissory notes bear an interest rate of 10.0% per annum and are due and payable on March 18, 2017. The principal balance of this debt at March 31, 2017 is $6,050,000. Epsilon has the right to convert all amounts outstanding under the Restated Note into shares of our common stock upon 75 days’ notice to OME or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the applicable conversion price, which is (a) $5.00 per share with respect to the $3.0 million already advanced under the Restated Note and (b) with respect to additional advances under the Restated Note, the five-day volume-weighted average price of our common stock for the five trading day period ending on the trading day immediately prior to the date on which OME submits a borrowing notice for such advance. On January 25, 2017, Epsilon provided notice to us that it will convert the initial $3.0 million plus accrued interest per the Restated Note Purchase Agreement at $5.00 per share in accordance with the terms of the agreement. The conversion and issuance of new shares is effective April 10, 2017 and includes accrued interest of $302,274 for a total 670,455 shares. Notwithstanding anything herein to the contrary, we shall not issue any of our common stock upon conversion of any outstanding tranche (other than the first $3.0 million already advanced) under this Restated Note in excess of 1,388,769 shares of common stock. The additional tranches were issued as follows: (a) $1,000,000 (“Tranche 3”) was issued on October 16, 2016 with a conversion price of $3.52 per share; (b) $1,000,000 (“Tranche 4”) was issued on November 15, 2016 with a conversion price of $4.19 per share; and (c) $1,000,000 (“Tranche 5”) was issued on December 15, 2016 with a conversion price of $4.13 per share. During 2016, Epsilon assigned $2,000,000 of this debt to MINOSA under the same terms as the original debt.

As an inducement for the issuance of the additional $3.0 million of promissory notes, we also delivered to Epsilon a common stock purchase warrant (the “Warrant”) pursuant to which Epsilon has the right to purchase up to 120,000 shares of our common stock at an exercise price of $3.52 per share, which exercise price represents the five-day volume-weighted average price of our common stock for the five trading day period ending on the trading day immediately prior to the day on which the Warrant was issued. Epsilon may exercise the Warrant in whole or in part at any time during the period ending October 1, 2021. The Warrant includes a cashless exercise feature and provides that, if Epsilon is in default of its obligations to fund any advance pursuant to and in accordance with the Restated Note Purchase Agreement, then, thereafter, the maximum aggregate number of shares of common stock that may be purchased under the Warrant shall be the number determined by multiplying 120,000 by a fraction, (a) the numerator of which is the aggregate principal amount of advances that have been extended to the OME by Epsilon pursuant to the Restated Note Purchase Agreement on or after the date of the Warrant and prior to the date of such failure and (b) the denominator of which is $3.0 million.

Accounting considerations for additional tranches

We evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”). This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. Additionally, the warrant agreement did not contain any terms or features that would preclude equity classification. We were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The allocations of the three additional tranches were as follows.

	Tranche 3		Tranche 4		Tranche 5
Promissory Note	$	981,796	$	939,935	$	1,000,000
Beneficial Conversion Feature (“BCF”)*		18,204		60,065		—
Proceeds	$	1,000,000	$	1,000,000	$	1,000,000

A beneficial conversion feature arises when the calculation of the effective conversion price is less than the Company’s stock price on the date of issuance. Tranche 5 did not result in a BCF because the effective conversion price was greater than the company’s stock price on the date of issuance.

The warrants fair values were calculated using Black-Scholes Merton (“BSM”). The aggregate fair value of the warrants totaled $303,712. Since the warrants were issued as an inducement to Epsilon to issue additional debt, we recorded an inducement expense of $303,712. For the three months ended March 31, 2017 and March 31, 2016, interest expense related to the discount in the amount of $68,194 and $3,859, respectively, was recorded. For the three months ended March 31, 2017 and March 31, 2016, accrued interest in the amount of $149,178 and $411, respectively, was recorded.

Term Extension (March 21, 2017)

On March 21, 2017 we entered into an amendment to the Restated Note Purchase Agreement with Epsilon. In connection with the existing $6.0 million loan agreement, the adjusted principal balance is due and payable in full upon the earlier of (i) written demand by Epsilon or (ii) such time as Odyssey or the guarantor pays any other indebtedness for borrowed money prior to its stated maturity date. As such the Company amortized the notes up to their face value of $6,050,000 and they are classified as short-term.

Note 5 – SMOM

On May 4, 2017, we entered into a Loan and Security Agreement (“Loan Agreement”) with SMOM Limited (“SMOM”). Pursuant to the Loan Agreement, SMOM agreed to loan us up to $3.0 million in convertible promissory notes. As a commitment fee, we assigned the remaining 50% of our Neptune Minerals, LLC receivable to SMOM. This receivable had zero carrying value on our balance sheet (See NOTE C). We received advances of $1.5 million under this agreement of which we received $750,000 in February 2017 and $750,000 in April 2017. The indebtedness bears interest at a rate of 10% per annum and matures on the second anniversary of this Loan Agreement. The holder has the option to convert any unpaid principal and interest into up to 50% of the equity interest held by Odyssey in Aldama Mining Company, S.de R.L. de C.V. which is a wholly owned subsidiary of ours. The conversion value of $1.0 million equates to 10% of the equity interest in Aldama. If the holder elects to acquire the entire 50.0% of the equity interest, but the amount of debt and interest accumulated to be converted is insufficient to acquire the entire 50% equity interest, the Holder has to pay the deficiency in cash. As additional consideration for the loan, the holder has the right to purchase from Odyssey all or a portion of the equity collateral (up to the 50% of the equity interest of Aldama) for the option consideration ($1.0 million for each 10% of equity interests) during the period that is the later of (i) one year after the maturity date and (ii) one year after the loan is repaid in full, the expiration date. The lender may also choose to extend the expiration date annually by paying $500,000 for each year extended.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued. Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”) and ASC 320 Property, Plant and Equipment (“ASC 320”).

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives. However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount did not result in a BCF because the effective conversion price was equal to the value of the Company’s value on the date of issuance. Management is further reviewing the loan documents and will make a final evaluation of the applicable accounting related to this loan and security agreement and adjust as necessary.

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Stockholders' Equity (Deficit)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Stockholders' Equity (Deficit)

NOTE I – STOCKHOLDERS’ EQUITY (DEFICIT)

At our Annual Meeting of Stockholders on June 9, 2015, our stockholders approved a 1-for-6 reverse stock split. On February 9, 2016, our Board of Directors authorized an additional 1-for-2 reverse stock split, to be effective immediately after the stockholder-approved 1-for-6 reverse stock split is implemented. The reverse stock splits were effective on February 19, 2016. The two reverse stock splits have the combined effect of a 1-for-12 reverse stock split. At the effective time of the reverse stock splits, every 12 shares of issued and outstanding common stock were converted into one share of issued and outstanding common stock, and the authorized shares of common stock were reduced from 150,000,000 to 75,000,000 shares. The par value remains at $0.0001. All shares and related financial information in this Form 10-Q have been retroactively adjusted to reflect this 1-for-12 reverse stock split.

Convertible Preferred Stock

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. de C.V. (the “Lender”). The Purchase Agreement provides for the Company to issue and sell to the Investor shares of the Company’s preferred stock in the amounts set forth in the following table (numbers have been adjusted for the February 2016 reverse stock split):

Convertible Preferred Stock	Shares		Price Per Share		Total Investment
Series AA-1		8,427,004	$	12.00	$	101,124,048
Series AA-2		7,223,145	$	6.00		43,338,870
		15,650,149			$	144,462,918

The Investor’s option to purchase the Series AA-2 shares is subject to the closing price of the Common Stock on the NASDAQ market having been greater than or equal to $15.12 per share for a period of twenty (20) consecutive business days on which the NASDAQ market is open.

The closing of the sale and issuance of shares of the Company’s preferred stock to the Investor is subject to certain conditions, including the Company’s receipt of required approvals from the Company’s stockholders, the receipt of regulatory approval, performance by the Company of its obligations under the Stock Purchase Agreement, the listing of the underlying common stock on the NASDAQ Stock Market and the Investor’s satisfaction, in its sole discretion, with the viability of certain undersea mining projects of the Company. This transaction received stockholders’ approval on June 9, 2015. Completion of the transaction requires amending the Company’s articles of incorporation to (a) effect a reverse stock split, which was done on February 19, 2016, (b) adjusting the Company’s 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 Company’s articles of incorporation filed or to be filed with the Nevada Secretary of State.

Series AA Convertible Preferred Stock Designation

The Purchase Agreement provides for the issuance of up to 8,427,004 shares of Series AA-1 Convertible Preferred Stock, par value $0.0001 per share (the “Series AA-1 Preferred”) and 7,223,145 shares of Series AA-2 Convertible Preferred Stock, par value $0.0001 per share (the “Series AA-2 Preferred”), subject to stockholder approval which was received on June 9, 2015 and satisfaction of other conditions. Significant terms and conditions of the Series AA Preferred are as follows:

Dividends. If and when the Company declares a dividend and any other distribution (including, without limitation, in cash, in capital stock (which shall include, without limitation, any options, warrants or other rights to acquire capital stock) of the Company, then the holders of each share of Series AA Preferred Stock are entitled to receive, a dividend or distribution in an amount equal to the amount of dividend or distribution received by the holders of common stock for which such share of Series AA Preferred Stock is convertible.

Liquidation Preference. The Liquidation Preference on each share of Series AA Preferred Stock is its Stated Value plus accretion at the rate of 8% per annum compounded on each December 31 from the date of issue of such share until the date such share is converted. For any accretion period which is less than a full year, the Liquidation Preference shall accrete in an amount to be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed.

Voting Rights. The holders of Series AA Preferred will be entitled to one vote for each share of common stock into which the Series AA Preferred is convertible and will be entitled to notice of meetings of stockholders.

Conversion Rights. At any time after the Preferred Shares have been issued, any holder of shares of Series AA Preferred may convert any or all of the shares of preferred stock into one fully paid and non-assessable share of Common Stock.

Adjustments to Conversion Rights. If Odyssey pays a dividend or makes a distribution on its common stock in shares of common stock, subdivides its outstanding common stock into a greater number of shares, or combines its outstanding common stock into a smaller number of shares, or if there is a reorganization, or a merger or consolidation of Odyssey with or into any other entity which results in a conversion, exchange, or cancellation of the common stock, or a sale of all or substantially all of Odyssey’s assets, then the conversion rights described above will be adjusted appropriately so that each holder of Series AA Preferred will receive the securities or other consideration the holder would have received if the holder’s Series AA Preferred had been converted before the happening of the event. The conversion price in effect from time to time is also subject to downward adjustment if we issue or sell shares of common stock for a purchase price less than the conversion price or if we issue or sell shares convertible into or exercisable for shares of common stock with a conversion price or exercise price less than the conversion price for the Series AA Preferred.

Accounting considerations

As stated above, the issuance of the Series AA Convertible Preferred Stock is subject to certain contingencies. No accounting treatment determination is required until these contingencies are met and the Series AA Convertible Preferred Stock has been issued. However, we have analyzed the instrument to determine the proper accounting treatment that will be necessary once the instruments have been issued.

ASC 480 generally requires liability classification for financial instruments that are certain to be redeemed, represent obligations to purchase shares of stock or represent obligations to issue a variable number of common shares. We concluded that the Series AA Preferred was not within the scope of ASC 480 because none of the three conditions for liability classification was present.

ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. However, in order to perform this analysis, we were first required to evaluate the economic risks and characteristics of the Series AA Convertible Preferred Stock in its entirety as being either akin to equity or akin to debt. Our evaluation concluded that the Series AA Convertible Preferred Stock was more akin to an equity-like contract largely due to the fact that most of its features were participatory in nature. As a result, we concluded that the embedded conversion feature is clearly and closely related to the host equity contract and will not require bifurcation and liability classification.

The option to purchase the Series AA-2 Convertible Preferred Stock was analyzed as a freestanding financial instruments and has terms and features of derivative financial instruments. However, in analyzing this instrument under applicable guidance it was determined that it is both (i) indexed to the Company’s stock and (ii) meet the conditions for equity classification.

Warrants

In conjunction with the Restated Note Purchase Agreement related to Note 4 – Epsilon in NOTE H, we issued warrants tied to each of the three tranches of debt issued. A total of 120,000 warrants were granted. These warrants have an expiration date of October 1, 2021. All of these 120,000 warrants have an exercise price of $3.52. Each single warrant is exercisable to purchase one share of our common stock.

Stock-Based Compensation

We have two stock incentive plans. The first is the 2005 Stock Incentive Plan that expired in August 2015. After the expiration of this plan, equity instruments cannot be granted but this plan shall continue in effect until all outstanding awards have been exercised in full or are no longer exercisable and all equity instruments have vested or been forfeited.

On June 9, 2015, our shareholders approved our 2015 Stock Incentive Plan (the “Plan”) that was adopted by our Board of Directors (the “Board”) on January 2, 2015, which is the effective date. The plan expires on the tenth anniversary of the effective date. The Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights. This plan was initially capitalized with 450,000 shares that may be granted. The Plan is intended to comply with Section 162(m) of the Internal Revenue Code, which stipulates that the maximum aggregate number of Shares with respect to one or more Awards that may be granted to any one person during any calendar year shall be 83,333, and the maximum aggregate amount of cash that may be paid in cash to any person during any calendar year with respect to one or more Awards payable in cash shall be $2,000,000. The original maximum number of shares that were to be used for Incentive Stock Options (“ISO”) under the Plan was 450,000. During our June 2016 stockholders meeting, the stockholders approved the addition of 200,000 incremental shares to the Plan. With respect to each grant of an ISO to a participant who is not a ten percent stockholder, the exercise price shall not be less than the fair market value of a share on the date the ISO is granted. With respect to each grant of an ISO to a participant who is a ten percent stockholder, the exercise price shall not be less than one hundred ten percent (110%) of the fair market value of a share on the date the ISO is granted. If an award is a non-qualified stock option (“NQSO”), the exercise price for each share shall be no less than (1) the minimum price required by applicable state law, or (2) the fair market value of a share on the date the NQSO is granted, whichever price is greatest. Any award intended to meet the performance based exception must be granted with an exercise price not less than the fair market value of a share determined as of the date of such grant.

Share-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest. As share-based compensation expense recognized in the statement of operations is based on awards ultimately expected to vest, it can be reduced for estimated forfeitures. The ASC topic Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The share based compensation charged against income for the three-month periods ended March 31, 2017 and 2016 was $208,496 and $334,629, respectively.

We did not grant employee stock options in the three-month periods ended March 31, 2017 and 2016. The weighted average fair value of stock options granted is determined using the Black-Scholes option-pricing model, which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the life of the option. The Black-Scholes option valuation model was developed for estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Because option valuation models require the use of subjective assumptions, changes in or variations from these assumptions can materially affect the fair value of the options.

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Concentration of Credit Risk

3 Months Ended

Mar. 31, 2017

Risks and Uncertainties [Abstract]

Concentration of Credit Risk

NOTE J – CONCENTRATION OF CREDIT RISK

We maintain the majority of our cash at one financial institution. At March 31, 2017, our uninsured cash balance was approximately $841,769.

We do not currently have any debt obligations with variable interest rates.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

NOTE K — DERIVATIVE FINANCIAL INSTRUMENTS

The following table summarizes the amounts that were reflected in our income related to our derivatives for the three months ended March 31, 2017 and March 31, 2016:

	Three Months Ended March 31,
	2017		2016
Derivative income (expense):
Unrealized gains (losses) from fair value changes:
2014 Convertible Promissory Notes	$	—	$	3,396,190
Warrant derivatives		—		(58,716	)
Total derivative income (expense)	$	—	$	3,337,474

Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. In addition, the standards do not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be bundled together and fair valued as a single, compound embedded derivative. We have selected the Monte Carlo Simulations valuation technique to fair value the compound embedded derivative because we believe that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving compound embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk free rates. We have selected Binomial Lattice to fair value our warrant derivatives because we believe this technique is reflective of all significant assumption types market participants would likely consider in transactions involving freestanding warrants derivatives. The Monte Carlo Simulations (“MCS”) technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators.

Significant inputs and results arising from the Monte Carlo Simulations process are as follows for the share purchase options that have been bifurcated from our Monaco Notes and classified in liabilities as of March 8, 2016 (Modification Date:

Tranche 1 – August 14, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%

Tranche 2 – October 1, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%
Tranche 3 – December 1, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%

* The instrument is convertible into shares of the Company’s subsidiary, Oceanica, which is not a publicly-traded entity. Therefore, its shares do not trade on a public exchange. As a result, the underlying value was originally based on private sales of the subsidiary’s shares because that was the best indicator of the value of the shares in the past. The last sale of Oceanica’s shares in which a private investor accumulated 24% of the shares of which their last purchase price was for $2.50 per share in December 2013. Accordingly, the underlying price used in the past in the MCS calculations was the $2.50 for the inception dates and December 31, 2015.    Being far removed from December 2013 while considering the modification in March 2016 of the new option price of $1.00 and other market conditions currently prevailing, management determined $1.25 to be representative of the per share fair value.

** On December 10, 2015 the term was extended to December 31, 2017.

In March 2016 the term was extended to April 1, 2018.

*** In March 2016 the purchase price of the share purchase options was modified to $1.00 per share. As a result of the re-pricing, the share purchase options no longer require measurement as derivative liabilities. The MCS were calculated for the instruments just prior to the modification on March 8, 2016.

The following table reflects the issuances of the Share Purchase Option derivatives and changes in fair value inputs and assumptions for these derivatives during the three months ended March 31, 2017 and 2016.

	For the three months ended March 31,
	2017		2016
Balances at January 1	$	—	$	3,396,191
Issuances		—		—
Modification		—		(1,456,826	)
Changes in fair value inputs and assumptions reflected in income		—		(1,939,365	)
Balances at March 31	$	—	$	—

The fair value of all Share Purchase Option derivatives is significantly influenced by our trading market price, the price volatility in trading and the risk free interest components of the Binomial Lattice technique.

On October 11, 2010, we also issued warrants to acquire 150,000 of our common shares in connection with the Series G Convertible Preferred Stock Financing. During April 4-8, 2011, we issued warrants to acquire 43,750 of our common shares in connection the Series G Convertible Preferred Stock and Warrant Settlement Transaction. Finally, on November 8, 2011, we issued warrants to acquire 108,507 of our common shares in connection with the Senior Convertible Note Financing Transaction. These warrants required liability classification as derivative financial instruments because certain down-round anti-dilution protection or price protection features included in the warrant agreements are not consistent with the concept of equity. We applied the Binomial Lattice valuation technique in estimating the fair value of the warrants because we believe that this technique is most appropriate and reflects all of the assumptions that market participants would likely consider in transactions involving the warrants, including the potential incremental value associated with the down-round anti-dilution protections.

The Binomial Lattice technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. Warrants linked to 143,750 shares of common stock associated with the Series G Convertible Preferred Stock Financing were exercised on October 11, 2013.

Of the 108,507 common shares for which the warrant issued on November 8, 2011 could be exercised, 36,169 of those common shares were accessible only based upon the Company’s election to require the lender to provide the additional financing. When the lender provided additional financing of $8,000,000 on May 10, 2012, the additional 36,169 of common shares became accessible. Warrants indexed to an additional 21,701 were issued in conjunction with the additional financing.

All remaining warrants linked to 43,750 shares of common stock associated with the Series G Convertible Preferred Stock Financing expired unexercised on April 13, 2014 and are no longer outstanding.

All remaining warrants linked to 130,208 shares of common stock associated with the Senior Convertible Note Financing Transaction expired unexercised on April 13, 2014 and are no longer outstanding.

The following table reflects the issuances of derivative warrants and changes in fair value inputs and assumptions related to the derivative warrants during the three months ended March 31, 2017 and 2016.

	Three months ended March 31,
	2017		2016
Balances at January 1	$	—	$	6,225
Changes in fair value inputs and assumptions reflected in income		—		58,716
Expired		—
Balances at March 31	$	—	$	64,941

The fair value of all warrant derivatives is significantly influenced by our trading market price, the price volatility in trading and the risk free interest components of the Binomial Lattice technique.

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Deferred Income and Revenue Participation Rights

3 Months Ended

Mar. 31, 2017

Deferred Revenue Disclosure [Abstract]

Deferred Income and Revenue Participation Rights

NOTE L – DEFERRED INCOME AND REVENUE PARTICIPATION RIGHTS

The Company’s participating revenue rights and deferred income consisted of the following at:

	March 31, 2017		December 31, 2016
“Cambridge” project	$	825,000	$	825,000
“Seattle” project		62,500		62,500
Galt Resources, LLC (HMS Victory project)		3,756,250		3,756,250
Total deferred income and participating revenue rights	$	4,643,750	$	4,643,750

“Cambridge” project

We previously sold Revenue Participation Certificates (“RPCs”) that represent the right to share in our future revenues derived from the “Cambridge” project, which is also referred to as the HMS Sussex shipwreck project. The “Cambridge” RPC units constitute restricted securities.

Each $50,000 convertible “Cambridge” RPC entitles the holder to receive a percentage of the gross revenue received by us from the “Cambridge” project, which is defined as all cash proceeds payable to us as a result of the “Cambridge” project, less any amounts paid to the British Government or their designee(s); provided, however, that all funds received by us to finance the project are excluded from gross revenue. The “Cambridge” project holders are entitled to 100% of the first $825,000 of gross revenue, 24.75% of gross revenue from $4 - 35 million, and 12.375% of gross revenue above $35 million generated by the project.

“Seattle” project

In a private placement that closed in September 2000, we sold “units” consisting of “Republic” Revenue Participation Certificates and Common Stock. Each $50,000 “unit” entitled the holder to 1% of the gross revenue generated by the now named “Seattle” project (formerly referred to as the “Republic” project), and 100,000 shares of Common Stock. Gross revenue is defined as all cash proceeds payable to us as a result of the “Seattle” project, excluding funds received by us to finance the project.

The participating rights balance will be amortized under the units of revenue method once management can reasonably estimate potential revenue for each of these projects. The RPCs for the “Cambridge” and “Seattle” projects do not have a termination date, therefore these liabilities will be carried on the books until revenue is recognized from these projects or we permanently abandon either project.

Galt Resources, LLC

In February 2011, we entered into a project syndication deal with Galt Resources LLC (“Galt”) for which they invested $7,512,500 representing rights to future revenues of any one project Galt selected prior to December 31, 2011. If the project is successful and generates sufficient proceeds, Galt will recoup their investment plus three times the investment. Galt’s investment return will be paid out of project proceeds. Galt will receive 50% of project proceeds until this amount is recouped. Thereafter, they will share in additional net proceeds of the project at the rate of 1% for every million invested. Subsequent to the original syndication deal, we reached an agreement permitting Galt to bifurcate their selection between two projects, the SS Gairsoppa and HMS Victory with the residual 1% on additional net proceeds assigned to the HMS Victory project only. The bifurcation resulted in $3,756,250 being allocated to each of the two projects. Therefore, Galt will receive 7.5125% of net proceeds from the HMS Victory project after they recoup their investment of $3,756,250 plus three times the investment. Galt has been paid in full for their share of the Gairsoppa project investment. There are no future payments remaining due to Galt for the Gairsoppa project. Based on the timing of the proceeds earmarked for Galt, the relative corresponding amount of Galt’s revenue participation right of $3,756,250 was amortized into revenue in 2012 based upon the percent of Galt-related proceeds from the sale of silver as a percentage of total proceeds that Galt earned under the revenue participation agreement ($15.0 million). There is no expiration date on the Galt deal for the HMS Victory project. If the archaeological excavation of the shipwreck is performed and insufficient proceeds are obtained, then the deferred income balance will be recognized as other income. If the archaeological excavation of the shipwreck is performed and sufficient proceeds are obtained, then the deferred income balance will be recognized as revenue.

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Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Recent accounting pronouncements

Recent accounting pronouncements

In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, which establishes a comprehensive revenue recognition standard under GAAP for almost all industries. The new standard will apply for annual periods beginning after December 15, 2017, including interim periods therein. Early adoption is prohibited. Based on management’s review of this new standard along with the substance of our transactions, management is of the position this standard will not have a material impact on our financial statements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases, which establishes a comprehensive lease standard under GAAP for virtually all industries. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. The new standard will apply for annual periods beginning after December 15, 2018, including interim periods therein, and requires modified retrospective application. Early adoption is permitted. Based on management’s current understanding of this new standard along with the underlying substance of our operations, management believes it will not have a material impact on our financial statements.

Other recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect, if any, on the Company’s financial statements.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, both domestic and international. Equity investments in which we exercise significant influence but do not control and of which we are not the primary beneficiary are accounted for using the equity method. All significant inter-company and intra-company transactions and balances have been eliminated. The results of operations attributable to the non-controlling interest are presented within equity and net income, and are shown separately from the Company’s equity and net income attributable to the Company. Some of the existing inter-company balances, which are eliminated upon consolidation, include features allowing the liability to be converted into equity of a subsidiary, which if exercised, could increase the direct or indirect interest of the Company in the non-wholly owned subsidiaries.

Use of Estimates

Use of Estimates

Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

Revenue Recognition and Accounts Receivable

Revenue Recognition and Accounts Receivable

In accordance with Topic A.1. in SAB 13: Revenue Recognition, marine services expedition charter revenue is recognized ratably when realized and earned as time passes throughout the contract period as defined by the terms of the agreement. Expenses related to the marine services expedition charter revenue (also referred to as “marine services” revenue) are recorded as incurred and presented under the caption “Operations and research” on our Consolidated Statements of Operations.

Bad debts are recorded as identified and, from time to time, a specific reserve allowance will be established when required. A return allowance is established for sales that have a right of return. Accounts receivable is stated net of any recorded allowances.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash, cash equivalents and restricted cash include cash on hand and cash in banks. We also consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. We have $10,000 of restricted cash for collateral related to a corporate credit card program.

Long-Lived Assets

Long-Lived Assets

Our policy is to recognize impairment losses relating to long-lived assets in accordance with the Accounting Standards Codification (“ASC”) topic for Property, Plant and Equipment. Decisions are based on several factors, including, but not limited to, management’s plans for future operations, recent operating results and projected cash flows. Impairment losses are included in depreciation at the time of impairment.

Property and Equipment and Depreciation

Property and Equipment and Depreciation

Property and equipment is stated at historical cost. Depreciation is calculated using the straight-line method at rates based on the assets’ estimated useful lives which are normally between three and thirty years. Leasehold improvements are amortized over their estimated useful lives or lease term, if shorter. Major overhaul items (such as engines or generators) that enhanced or extended the useful life of vessel related assets qualified to be capitalized and depreciated over the useful life or remaining life of that asset, whichever was shorter. Certain major repair items required by industry standards to ensure a vessel’s seaworthiness also qualified to be capitalized and depreciated over the period of time until the next scheduled planned major maintenance for that item. All other repairs and maintenance were accounted for under the direct-expensing method and are expensed when incurred.

The smaller vessel we received as consideration when we sold our Odyssey Explorer in 2016 remains under a pending contract of sale. We believe this sale will be completed in the near term. The amount capitalized for this asset is $416,329.

Earnings Per Share

Earnings Per Share

See NOTE I regarding our 1-for-12 reverse stock split. Share related amounts have been retroactively adjusted in this report to reflect this reverse stock-split for all periods presented.

Basic earnings per share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. In periods when the Company has income, the Company would calculate basic earnings per share using the two-class method, if required, pursuant to ASC 260 Earnings Per Share. The two-class method was required effective with the issuance of certain senior convertible notes in the past because these notes qualified as a participating security, giving the holder the right to receive dividends should dividends be declared on common stock. Under the two-class method, earnings for a period are allocated on a pro rata basis to the common stockholders and to the holders of convertible notes based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion. The Company does not use the two-class method in periods when it generates a loss because the holder of the convertible notes does not participate in losses. Currently, we do not have any outstanding convertible notes that qualify as a participating security.

Diluted EPS reflects the potential dilution that would occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. We use the treasury stock method to compute potential common shares from stock options and warrants and the if-converted method to compute potential common shares from preferred stock, convertible notes or other convertible securities.

For diluted earnings per share, the Company uses the more dilutive of the if-converted method or two-class method. When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted EPS calculation.

At March 31, 2017 and 2016, the weighted average common shares outstanding year-to-date were 7,718,366 and 7,541,111, respectively. For the periods in which net losses occurred, all potential common shares were excluded from diluted EPS because the effect of including such shares would be anti-dilutive.

The potential common shares in the following tables represent potential common shares calculated using the treasury stock method from outstanding options, stock awards and warrants that were excluded from the calculation of diluted EPS:

	Three Months Ended
	March 31, 2017		March 31, 2016
Average market price during the period	$	4.22	$	3.63
In the money potential common shares from options excluded		7,903		—
In the money potential common shares from warrants excluded		19,905		—

Potential common shares from out of the money options and warrants were also excluded from the computation of diluted EPS because calculation of the associated potential common shares has an anti-dilutive effect on EPS. The following table lists options and warrants that were excluded from diluted EPS:

	Three Months Ended
Per share exercise price	March 31, 2017		March 31, 2016
Out of the money options excluded:
$    12.48		137,666		137,666
$    12.84		4,167		4,167
$    26.40		75,158		79,370
$    32.76		—		53,707
$    34.68		73,765		78,705
$    39.00		8,333		8,333
$    41.16		833		3,333
$    42.00		8,333		8,333
$    46.80		1,667		1,667
Out-of-the-money warrants excluded:
$    43.20		—		130,208
Total excluded		309,922		505,489

The weighted average equivalent common shares relating to our unvested restricted stock awards that were excluded from potential common shares in the earning per share calculation due to having an anti-dilutive effect are:

	Three Months Ended
	March 31, 2017		March 31, 2016
Potential common shares from unvested restricted stock awards excluded from EPS		238,921		—

The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income per share:

	Three Months Ended
	March 31, 2017			March 31, 2016
Net income (loss)	$	(2,199,263	)	$	84,644
Numerator, basic and diluted net income (loss) available to stockholders	$	(2,199,263	)	$	84,644
Denominator:
Shares used in computation – basic:
Weighted average common shares outstanding		7,718,366			7,541,111
Common shares outstanding for basic		7,718,366			7,541,111
Additional shares used in computation – diluted:		—			91,330
Common shares outstanding for basic		7,718,366			7,541,111
Shares used in computing diluted net income per share		7,718,366			7,632,441
Net (loss) per share – basic	$	(0.28	)	$	0.01
Net (loss) per share – diluted	$	(0.28	)	$	0.01

Income Taxes

Income Taxes

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or the entire deferred tax asset will not be realized.

Stock-based Compensation

Stock-based Compensation

Our stock-based compensation is recorded in accordance with the guidance in the ASC topic for Stock-Based Compensation (See NOTE I).

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Financial instruments consist of cash, evidence of ownership in an entity, and contracts that both (i) impose on one entity a contractual obligation to deliver cash or another financial instrument to a second entity, or to exchange other financial instruments on potentially unfavorable terms with the second entity, and (ii) conveys to that second entity a contractual right (a) to receive cash or another financial instrument from the first entity, or (b) to exchange other financial instruments on potentially favorable terms with the first entity. Accordingly, our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative financial instruments and mortgage and loans payable. We carry cash and cash equivalents, accounts payable and accrued liabilities, and mortgage and loans payable at the approximate fair market value, and, accordingly, these estimates are not necessarily indicative of the amounts that we could realize in a current market exchange. We carry derivative financial instruments at fair value as is required under current accounting standards. Redeemable preferred stock has been carried at historical cost and accreted carrying values to estimated redemption values over the term of the financial instrument.

Derivative financial instruments consist of financial instruments or other contracts that contain a notional amount and one or more underlying variables (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. See NOTE K for additional information. We generally do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, we have entered into certain other financial instruments and contracts with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815 – Derivatives and Hedging, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements with changes in fair value reflected in our income.

Fair Value Hierarchy

The three levels of inputs that may be used to measure fair value are as follows:

Level 1. Quoted prices in active markets for identical assets or liabilities.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.

Level 3. Unobservable inputs to the valuation methodology are significant to the measurement of the fair value of assets or liabilities. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.

Redeemable Preferred Stock

Redeemable Preferred Stock

If we issue redeemable preferred stock instruments (or any other redeemable financial instrument), they are initially evaluated for possible classification as a liability in instances where redemption is certain to occur pursuant to ASC 480 – Distinguishing Liabilities from Equity. Redeemable preferred stock classified as a liability is recorded and carried at fair value. Redeemable preferred stock that does not, in its entirety, require liability classification is evaluated for embedded features that may require bifurcation and separate classification as derivative liabilities. In all instances, the classification of the redeemable preferred stock host contract that does not require liability classification is evaluated for equity classification or mezzanine classification based upon the nature of the redemption features. Generally, mandatory redemption requirements or any feature that could require cash redemption for matters not within our control, irrespective of probability of the event occurring, requires classification outside of stockholders’ equity. Redeemable preferred stock that is recorded in the mezzanine section is accreted to its redemption value through charges to stockholders’ equity when redemption is probable using the effective interest method. We have no redeemable preferred stock outstanding for the periods presented.

Subsequent Events

Subsequent Events

We have evaluated subsequent events for recognition or disclosure through the date this Form 10-Q is filed with the Securities and Exchange Commission.

Debt and Equity Securities

Since CRP was a thinly traded stock and pursuant to guidance per ASC 320: Debt and Equity Securities regarding readily determinable fair value, we believe it was appropriate to not recognize this amount as an asset nor as revenue during that period. We continue to carry the value of our investment in CPRL at zero in our consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2017

Reconciliation of Numerators and Denominators used in Computing Basic and Diluted Net Income Per Share

The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income per share:

	Three Months Ended
	March 31, 2017			March 31, 2016
Net income (loss)	$	(2,199,263	)	$	84,644
Numerator, basic and diluted net income (loss) available to stockholders	$	(2,199,263	)	$	84,644
Denominator:
Shares used in computation – basic:
Weighted average common shares outstanding		7,718,366			7,541,111
Common shares outstanding for basic		7,718,366			7,541,111
Additional shares used in computation – diluted:		—			91,330
Common shares outstanding for basic		7,718,366			7,541,111
Shares used in computing diluted net income per share		7,718,366			7,632,441
Net (loss) per share – basic	$	(0.28	)	$	0.01
Net (loss) per share – diluted	$	(0.28	)	$	0.01

In the Money Potential Common Shares [Member]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The potential common shares in the following tables represent potential common shares calculated using the treasury stock method from outstanding options, stock awards and warrants that were excluded from the calculation of diluted EPS:

	Three Months Ended
	March 31, 2017		March 31, 2016
Average market price during the period	$	4.22	$	3.63
In the money potential common shares from options excluded		7,903		—
In the money potential common shares from warrants excluded		19,905		—

Out of Money Potential Common Shares [Member]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Potential common shares from out of the money options and warrants were also excluded from the computation of diluted EPS because calculation of the associated potential common shares has an anti-dilutive effect on EPS. The following table lists options and warrants that were excluded from diluted EPS:

	Three Months Ended
Per share exercise price	March 31, 2017		March 31, 2016
Out of the money options excluded:
$    12.48		137,666		137,666
$    12.84		4,167		4,167
$    26.40		75,158		79,370
$    32.76		—		53,707
$    34.68		73,765		78,705
$    39.00		8,333		8,333
$    41.16		833		3,333
$    42.00		8,333		8,333
$    46.80		1,667		1,667
Out-of-the-money warrants excluded:
$    43.20		—		130,208
Total excluded		309,922		505,489

Unvested Restricted Stock Awards Excluded from EPS [Member]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The weighted average equivalent common shares relating to our unvested restricted stock awards that were excluded from potential common shares in the earning per share calculation due to having an anti-dilutive effect are:

	Three Months Ended
	March 31, 2017		March 31, 2016
Potential common shares from unvested restricted stock awards excluded from EPS		238,921		—

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Accounts Receivable (Tables)

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Summary of Accounts Receivable

Our accounts receivable consist of the following:

	March 31, 2017		December 31, 2016
Trade	$	1,387	$	2,569,108
Related party		303,596		205,497
Other		50,582		44,930
Reserve allowance		—		(2,345,729	)
Total accounts receivable, net	$	355,565	$	473,806

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Change in Valuation Allowance

The change in the valuation allowance is as follows:

March 31, 2017	$	70,163,364
December 31, 2016		69,481,041
Change in valuation allowance	$	682,323

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Loans Payable (Tables)

3 Months Ended

Mar. 31, 2017

Schedule of Consolidated Debt

The Company’s consolidated debt consisted of the following at:

	March 31, 2017		December 31, 2016
Note 1 – Monaco 2014	$	2,800,000		2,800,000
Note 2 – Monaco 2016		1,591,723		1,535,501
Note 3 – MINOSA		14,750,001		14,750,001
Note 4 – Epsilon		6,050,000		5,981,806
Note 5 – SMOM		750,000		—
	$	25,941,724	$	25,067,308

Summary of Fair Value of Debt

The fair value of the new debt is as follows:

Monaco loans	Loan one
Forward cash flows:
Principal	$	2,800,000
Interest		559,463
Total forward cash flows	$	3,359,463
Present value of forward cash flows	$	2,554,371
Fair value of equity conversion option		1,063,487
Fair value of debt	$	3,617,858

Summary of Debt Premium

Monaco loans	Loan one
Forward cash flows:
Face value	$	2,800,000
Fair value		3,617,858
Difference (premium)*	$	817,858

* ASC 470-20-25-13 provides that if a convertible debt instrument is issued at a substantial premium, there is a presumption that such premium represents paid in capital. Since the total face amount of the new loans is $2,800,000, we conclude that the $817,858 was substantial and recorded that premium to additional paid-in capital.

Summary of Gain or Loss Upon Extinguishment Allocation

The allocation is as follows:

	Allocation
Derivative liabilities (share purchase options)	$	1,456,825
Monaco Loan (Old Debt)		3,372,844
Monaco Loan (New Debt)		(2,800,000	)
APIC (Premium)		(817,858	)
Difference to APIC*	$	1,211,811

* The difference between the fair value of the new debt and the sum of the pre-modification carrying amount of the old debt and the share purchase option’s fair value represented a gain on extinguishment. ASC 470-50-40-2 indicates that debt restructuring with a related party may be in essence a capital transaction and as a result the gain upon extinguishment was recognized in additional paid in capital.

Schedule of Allocation of Cash Proceeds to Derivative Components at their Fair Values

The allocations of the three additional tranches were as follows.

	Tranche 3		Tranche 4		Tranche 5
Promissory Note	$	981,796	$	939,935	$	1,000,000
Beneficial Conversion Feature (“BCF”)*		18,204		60,065		—
Proceeds	$	1,000,000	$	1,000,000	$	1,000,000

Oceanica Resources S. de. R.L [Member]

Schedule of Allocation of Cash Proceeds to Derivative Components at their Fair Values

Based on the previous conclusions, we allocated the cash proceeds first to the debt at its present value using a market rate of 15%, which is management’s estimate of a market rate loan for the Company, with the residual allocated to the Oceanica Call Option, as follows:

	Tranche 1		Tranche 2		Tranche 3		Tranche 4		Tranche 5		Total
Promissory Note	$	1,932,759	$	5,826,341	$	2,924,172	$	1,960,089	$	1,723,492	$	14,366,853
Deferred Income (Oceanica Call Option)		67,241		173,659		75,828		39,911		26,509		383,148
Proceeds	$	2,000,000	$	6,000,000	$	3,000,000	$	2,000,000	$	1,750,0001	$	14,750,001

Note 2 [Member] | Monaco Notes [Member]

Summary of Significant Conversion Option Valuation Inputs and Results

Significant inputs and results arising from the Binomial Lattice process are as follows for the conversion option that is classified in equity after the modification in March 2016:

Underlying price on valuation date	$1.25
Contractual conversion rate	$1.00
Contractual term to maturity	1.82 Years
Implied expected term to maturity	1.82 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Risk free rates using zero coupon US Treasury Security rates	0.29% - 0.68%
Equivalent market risk adjusted interest rates	0.52%

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Stockholders' Equity (Deficit) (Tables)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Summary of Preferred Stock Allocated to Investors

The Purchase Agreement provides for the Company to issue and sell to the Investor shares of the Company’s preferred stock in the amounts set forth in the following table (numbers have been adjusted for the February 2016 reverse stock split):

Convertible Preferred Stock	Shares		Price Per Share		Total Investment
Series AA-1		8,427,004	$	12.00	$	101,124,048
Series AA-2		7,223,145	$	6.00		43,338,870
		15,650,149			$	144,462,918

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Changes in Fair Values of Derivative Liabilities

	Three Months Ended March 31,
	2017		2016
Derivative income (expense):
Unrealized gains (losses) from fair value changes:
2014 Convertible Promissory Notes	$	—	$	3,396,190
Warrant derivatives		—		(58,716	)
Total derivative income (expense)	$	—	$	3,337,474

Senior Convertible Notes [Member]

Significant Assumptions Utilized in Valuation Technique

Significant inputs and results arising from the Monte Carlo Simulations process are as follows for the share purchase options that have been bifurcated from our Monaco Notes and classified in liabilities as of March 8, 2016 (Modification Date:

Tranche 1 – August 14, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%

Tranche 2 – October 1, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%
Tranche 3 – December 1, 2014:	March 8, 2016***
Underlying price on valuation date*	$1.25
Contractual conversion rate	$3.15
Contractual term to maturity**	1.82 Years
Implied expected term to maturity	1.24 Years
Market volatility:
Range of volatilities	96.0% - 154.0%
Equivalent volatilities	120.1%
Contractual interest rate	11.00%
Equivalent market risk adjusted interest rates	11.60%
Range of credit risk adjusted yields	3.49% - 5.02%
Equivalent credit risk adjusted yield	4.13%

* The instrument is convertible into shares of the Company’s subsidiary, Oceanica, which is not a publicly-traded entity. Therefore, its shares do not trade on a public exchange. As a result, the underlying value was originally based on private sales of the subsidiary’s shares because that was the best indicator of the value of the shares in the past. The last sale of Oceanica’s shares in which a private investor accumulated 24% of the shares of which their last purchase price was for $2.50 per share in December 2013. Accordingly, the underlying price used in the past in the MCS calculations was the $2.50 for the inception dates and December 31, 2015.    Being far removed from December 2013 while considering the modification in March 2016 of the new option price of $1.00 and other market conditions currently prevailing, management determined $1.25 to be representative of the per share fair value.

** On December 10, 2015 the term was extended to December 31, 2017.

In March 2016 the term was extended to April 1, 2018.

*** In March 2016 the purchase price of the share purchase options was modified to $1.00 per share. As a result of the re-pricing, the share purchase options no longer require measurement as derivative liabilities. The MCS were calculated for the instruments just prior to the modification on March 8, 2016.

2014 Share Purchase Option [Member]

Changes in Fair Value Inputs and Assumptions

The following table reflects the issuances of the Share Purchase Option derivatives and changes in fair value inputs and assumptions for these derivatives during the three months ended March 31, 2017 and 2016.

	For the three months ended March 31,
	2017		2016
Balances at January 1	$	—	$	3,396,191
Issuances		—		—
Modification		—		(1,456,826	)
Changes in fair value inputs and assumptions reflected in income		—		(1,939,365	)
Balances at March 31	$	—	$	—

Warrant Derivatives [Member]

Changes in Fair Value Inputs and Assumptions

The following table reflects the issuances of derivative warrants and changes in fair value inputs and assumptions related to the derivative warrants during the three months ended March 31, 2017 and 2016.

	Three months ended March 31,
	2017		2016
Balances at January 1	$	—	$	6,225
Changes in fair value inputs and assumptions reflected in income		—		58,716
Expired		—
Balances at March 31	$	—	$	64,941

XML

Deferred Income and Revenue Participation Rights (Tables)

3 Months Ended

Mar. 31, 2017

Deferred Revenue Disclosure [Abstract]

Participating Revenue Rights

The Company’s participating revenue rights and deferred income consisted of the following at:

	March 31, 2017		December 31, 2016
“Cambridge” project	$	825,000	$	825,000
“Seattle” project		62,500		62,500
Galt Resources, LLC (HMS Victory project)		3,756,250		3,756,250
Total deferred income and participating revenue rights	$	4,643,750	$	4,643,750

XML

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2016	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Short-term investment maturity period	3 months
Restricted cash	$ 10,000			$ 10,000
Capitalized cost of assets held for sale	$ 416,329
Weighted average number of common shares outstanding	7,718,366	7,541,111	7,541,111
Redeemable preferred stock outstanding	0
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment, estimated useful life	3 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment, estimated useful life	30 years

XML

Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share for in the Money Potential Common Shares (Detail) - $ / shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Average market price during the period	$ 4.22	$ 3.63
Potential common shares excluded from EPS	309,922	505,489
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common shares excluded from EPS	7,903
Warrant Derivatives [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common shares excluded from EPS	19,905

XML

Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share for Out of Money Potential Common Shares (Detail) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	309,922	505,489
Stock Options With an Exercise Price of $12.48 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	137,666	137,666
Stock Options With an Exercise Price of $12.84 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	4,167	4,167
Stock Options With an Exercise Price of $26.40 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	75,158	79,370
Stock Options With an Exercise Price of $32.76 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded		53,707
Stock Options With an Exercise Price of $34.68 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	73,765	78,705
Stock Options With an Exercise Price of $39.00 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	8,333	8,333
Stock Options With an Exercise Price of $41.16 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	833	3,333
Stock Options With an Exercise Price of $42.00 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	8,333	8,333
Stock Options With an Exercise Price of $46.80 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded	1,667	1,667
Stock Options With an Exercise Price of $43.20 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Out of the money options and warrants excluded		130,208

XML

Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share for Out of Money Potential Common Shares (Parenthetical) (Detail) - $ / shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Stock Options With an Exercise Price of $12.48 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	$ 12.48	$ 12.48
Stock Options With an Exercise Price of $12.84 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	12.84	12.84
Stock Options With an Exercise Price of $26.40 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	26.40	26.40
Stock Options With an Exercise Price of $32.76 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	32.76	32.76
Stock Options With an Exercise Price of $34.68 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	34.68	34.68
Stock Options With an Exercise Price of $39.00 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	39.00	39.00
Stock Options With an Exercise Price of $41.16 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	41.16	41.16
Stock Options With an Exercise Price of $42.00 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	42.00	42.00
Stock Options With an Exercise Price of $46.80 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	46.80	46.80
Stock Options With an Exercise Price of $43.20 per Share [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options exercise price per share	$ 43.20	$ 43.20

XML

Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share, Unvested Restricted Stock Awards (Detail) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common shares excluded from EPS	309,922	505,489
Unvested Restricted Stock Awards Excluded from EPS [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common shares excluded from EPS	238,921

XML

Summary of Significant Accounting Policies - Reconciliation of Numerators and Denominators used in Computing Basic and Diluted Net Income Per Share (Detail) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2016
Accounting Policies [Abstract]
Net income (loss)	$ (2,199,263)	$ 84,644
Numerator, basic and diluted net income (loss) available to stockholders	$ (2,199,263)	$ 84,644
Shares used in computation - basic:
Weighted average common shares outstanding	7,718,366	7,541,111	7,541,111
Common shares outstanding for basic	7,718,366	7,541,111	7,541,111
Additional shares used in computation - diluted:		91,330
Common shares outstanding for basic	7,718,366	7,541,111	7,541,111
Shares used in computing diluted net income per share	7,718,366	7,632,441
Net (loss) per share - basic	$ (0.28)	$ 0.01
Net (loss) per share - diluted	$ (0.28)	$ 0.01

XML

Accounts Receivable - Summary of Accounts Receivable (Detail) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Reserve for doubtful accounts receivable		$ (2,345,729)
Total accounts receivable, net	$ 355,565	473,806
Trade [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	1,387	2,569,108
Related Party [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	303,596	205,497
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	$ 50,582	$ 44,930

XML

Accounts Receivable - Additional Information (Detail) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Reserves for doubtful accounts		$ 2,345,729
Accounts receivable, net	$ 355,565	473,806
Neptune Minerals, Inc. [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Reserves for doubtful accounts		2,345,729
Accounts receivable, net		0
Monaco [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 303,596	$ 205,497

XML

Related Party Transactions - Additional Information (Detail) - Monaco [Member] - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Accounts receivables	$ 303,596	$ 205,497
Operating payable	266,136	$ 267,824
Lease amount	$ 20,080

XML

Investments in Unconsolidated Entities - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2012	Dec. 31, 2016
Chatham Rock Phosphate, Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Investment carrying value		$ 0
Deep sea mining exploratory services		$ 1,680,000
Shares received from CRP	141,884	9,320,348
Outstanding equity stake in CRP	1.00%
Neptune Minerals, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage	14.00%
Investment carrying value	$ 0		$ 0
Neptune Minerals, Inc. [Member] | Common Class A [Member]
Schedule of Equity Method Investments [Line Items]
Shares owned	0
Neptune Minerals, Inc. [Member] | Common Class B Non Voting Shares [Member]
Schedule of Equity Method Investments [Line Items]
Current investment position in NMI	3,092,488
Aggregate number of shares converted	261,200
Neptune Minerals, Inc. [Member] | Series A Preferred Non Voting Shares [Member]
Schedule of Equity Method Investments [Line Items]
Current investment position in NMI	2,612
Dorado Ocean Resources, Ltd. [Member]
Schedule of Equity Method Investments [Line Items]
Loss from unconsolidated entity			$ 21,300,000

XML

Income Taxes - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2017 USD ($)
Income Taxes [Line Items]
Net deferred tax asset	$ 0
Income tax expense	0
Dividend from subsidiaries	$ 0.022
Estimated annual effective tax rate	31.02%
Effective tax rate	0.00%
Federal [Member]
Income Taxes [Line Items]
Net operating loss carryforwards	$ 2,200,000
Net operating loss carryforwards subject to expiration	$ 156,500,000
Net operating loss carryforwards expiration year	2025
Net operating loss carryforwards expiration year	2036
Foreign [Member]
Income Taxes [Line Items]
Net operating loss carryforwards	$ 1,500,000
Net operating loss carryforwards subject to expiration	$ 26,700,000

XML

Income Taxes - Schedule of Change in Valuation Allowance (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Valuation allowance	$ 70,163,364	$ 69,481,041
Change in valuation allowance	$ 682,323

XML

Commitments and Contingencies - Additional Information (Detail) - USD ($)		3 Months Ended
	Mar. 11, 2015	Mar. 31, 2017	Apr. 30, 2017	Mar. 24, 2017	Feb. 28, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015	May 10, 2012
Gain Contingencies [Line Items]
Required minimum market capitalization value				$ 35,000,000
Loan amount borrowed		$ 0
Cash and cash equivalents		1,065,690				$ 1,662,643	$ 2,765,215	$ 2,241,317
Working capital deficit		26,200,000
Total assets		3,978,485				$ 5,083,665
Aggregate amount issuable									$ 8,000,000
Penelope Mining LLC [Member]
Gain Contingencies [Line Items]
Investment in convertible preferred stock	$ 101,000,000
Investment agreement period	3 years
Monaco [Member]
Gain Contingencies [Line Items]
Amount of debt financed					$ 5,000,000
Loan amount borrowed					$ 750,000,000,000
Monaco [Member] | Subsequent Event [Member]
Gain Contingencies [Line Items]
Amount of debt financed			$ 3,000,000
Loan amount borrowed			$ 750,000,000,000
MINOSA [Member]
Gain Contingencies [Line Items]
Amount of debt financed	$ 14,750,000
MINOSA [Member] | Promissory Note [Member]
Gain Contingencies [Line Items]
Aggregate amount issuable		$ 14,750,000
Debt instrument maturity date		Mar. 18, 2017
Oceanica Resources S. de. R.L [Member]
Gain Contingencies [Line Items]
Grant and issuance of new equity shares							3,000,000

XML

Loans Payable - Schedule of Consolidated Debt (Detail) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Loans payable	$ 25,941,724	$ 25,067,308
Loans Payable [Member] | Note1- Monaco 2014 [Member]
Debt Instrument [Line Items]
Loans payable	2,800,000	2,800,000
Loans Payable [Member] | Note 2 - Monaco 2016 [Member]
Debt Instrument [Line Items]
Loans payable	1,591,723	1,535,501
Loans Payable [Member] | Note 3 - MINOSA [Member]
Debt Instrument [Line Items]
Loans payable	14,750,001	14,750,001
Loans Payable [Member] | Note 4 - Epsilon [Member]
Debt Instrument [Line Items]
Loans payable	6,050,000	$ 5,981,806
Loans Payable [Member] | Note 5 - SMOM [Member]
Debt Instrument [Line Items]
Loans payable	$ 750,000

XML

Loans Payable - Note 1 - Monaco 2014 - Additional Information (Detail) - USD ($)			3 Months Ended
	Dec. 10, 2015	Aug. 14, 2014	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 01, 2014	Oct. 01, 2014	Dec. 31, 2013	May 10, 2012
Debt Instrument [Line Items]
Aggregate amount issuable									$ 8,000,000
Loan amount borrowed			$ 0
Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Per share value of shares purchased by private investor								$ 2.50
Note1- Monaco 2014 [Member]
Debt Instrument [Line Items]
Aggregate amount issuable		$ 10,000,000
Interest rate, stated percentage		11.00%
Extinguishment of debt, amount	$ 2,200,000
Notes ceased to bear interest, amount	$ 5,000,000
Debt instrument maturity date	Dec. 31, 2017
Outstanding notes balance			2,800,000		$ 2,800,000
Long term notes			2,800,000
Amortization of components included in interest expense			$ 0	$ 0
Note1- Monaco 2014 [Member] | Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Per share value of shares purchased by private investor		$ 3.15
Aggregate value of shares issued to lender		$ 1,000,000
Note1- Monaco 2014 [Member] | Oceanica Resources S. de. R.L [Member] | Loan Modification March Two Thousand Sixteen [Member]
Debt Instrument [Line Items]
Per share value of shares purchased by private investor				$ 1.00
Note1- Monaco 2014 [Member] | First Tranche [Member]
Debt Instrument [Line Items]
Loan amount borrowed		$ 5,000,000
Note1- Monaco 2014 [Member] | Second Tranche [Member]
Debt Instrument [Line Items]
Loan amount borrowed							$ 2,500,000
Note1- Monaco 2014 [Member] | Third Tranche [Member]
Debt Instrument [Line Items]
Loan amount borrowed						$ 2,500,000

XML

Loans Payable - Note 2 - Monaco 2016 - Additional Information (Detail)		1 Months Ended	3 Months Ended
	Dec. 10, 2015 USD ($)	Mar. 31, 2016 USD ($) Installment $ / shares shares	Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2016 USD ($)	Dec. 31, 2013 $ / shares	May 10, 2012 USD ($)
Debt Instrument [Line Items]
Aggregate amount issuable							$ 8,000,000
Equipment carrying value			$ 17,188,699		$ 17,188,699
Expected interest expenses			714,896	$ 334,060
Loans payable			25,941,724		25,067,308
Monaco Notes [Member]
Debt Instrument [Line Items]
Aggregate amount issuable			2,800,000
Expected interest expenses			0
Notes payable, carrying value			3,449,632
Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Per share value of shares purchased by private investor | $ / shares						$ 2.50
Note 2 [Member]
Debt Instrument [Line Items]
Aggregate amount issuable		$ 1,825,000	1,825,000	$ 1,825,000
Interest rate, stated percentage		10.00%		10.00%
Debt instrument maturity date		Apr. 15, 2018
Outstanding notes balance			1,825,000
Note 2 [Member] | Monaco Notes [Member]
Debt Instrument [Line Items]
Aggregate amount issuable			2,800,000
Fair value			3,617,858
Equity component in loans payable			1,063,487
Note 2 [Member] | Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Conversion price of Notes | $ / shares		$ 1.00		$ 1.00
Note 2 [Member] | Exploraciones Oceanicas [Member]
Debt Instrument [Line Items]
Aggregate amount issuable		$ 18,000,000		$ 18,000,000
Debt instrument maturity date		Sep. 25, 2015
Note 2 [Member] | Oceanica Marine Operations [Member]
Debt Instrument [Line Items]
Aggregate amount issuable		$ 9,300,000		9,300,000
Debt instrument term		30 days
Aggregate consideration payable		$ 1,800,000		1,800,000
Debt instrument number of installments | Installment		10
Installment amount of Notes		$ 750,000		750,000
Fair value					$ 0
Equipment carrying value		$ 1,500,000		$ 1,500,000
Loan Modification [Member]
Debt Instrument [Line Items]
Conversion price of Notes | $ / shares		$ 1.00		$ 1.00
BCF amount recorded			456,250
Expected interest expenses			56,222	$ 9,722
Accrued interest			$ 45,000	6,774
Loans payable		$ 2,800,000		2,800,000
Debt component in loans payable		1,450,397		1,450,397
Loan Modification [Member] | First Tranche [Member]
Debt Instrument [Line Items]
Call option	$ 5,000,000
Agreement description			Monaco agreed to cease interest as of December 10, 2015 and reduce the loan balance by (i) the cash or other value received by Monaco from the SS Central America shipwreck project (“SSCA”) or (ii) if the proceeds received by Monaco from the SSCA project are insufficient to pay off the loan balance by December 31, 2017, then Monaco can seek repayment of the remaining outstanding balance on the loan by withholding Odyssey’s 21.25% “additional consideration” in new shipwreck projects performed for Monaco in the future.
Additional consideration percentage	21.25%
Loan Modification [Member] | Second Tranche [Member]
Debt Instrument [Line Items]
Aggregate amount issuable	$ 300,000
Debt instrument maturity date	Dec. 31, 2017
Call option	$ 2,500,000
Reduced principal amount	$ 2,200,000
Loan Modification [Member] | Third Tranche [Member]
Debt Instrument [Line Items]
Debt instrument maturity date	Dec. 31, 2017
Call option	$ 2,500,000
Loan Modification [Member] | Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Debt instrument maturity date			Dec. 31, 2017
Call option	$ 10,000,000
Equity component in loans payable		$ 1,349,603		$ 1,349,603
Loan Modification [Member] | Monaco [Member]
Debt Instrument [Line Items]
Number of options eliminated under share purchase option | shares		3,174,603		3,174,603
Per share value of shares purchased by private investor | $ / shares		$ 3.15		$ 3.15

XML

Loans Payable - Summary of Fair Value of Debt (Detail) - USD ($)	Mar. 31, 2017	Mar. 31, 2016	May 10, 2012
Forward cash flows:
Principal			$ 8,000,000
Note 2 [Member]
Forward cash flows:
Principal	$ 1,825,000	$ 1,825,000
Monaco Notes [Member]
Forward cash flows:
Principal	2,800,000
Monaco Notes [Member] | Note 2 [Member]
Forward cash flows:
Principal	2,800,000
Interest	559,463
Total forward cash flows	3,359,463
Present value of forward cash flows	2,554,371
Fair value of equity conversion option	1,063,487
Fair value of debt	$ 3,617,858

XML

Loans Payable - Summary of Significant Conversion Option Valuation Inputs and Results (Detail) - After Modification [Member] - Binomial Lattice Process [Member] - Share Purchase Options Classified in Equity [Member]	3 Months Ended
	Mar. 31, 2017 $ / shares
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Underlying price on valuation date	$ 1.25
Contractual conversion rate	$ 1.00
Contractual term to maturity	1 year 9 months 26 days
Implied expected term to maturity	1 year 9 months 26 days
Market volatility:
Equivalent volatilities	120.10%
Equivalent market risk adjusted interest rates	0.52%
Minimum [Member]
Market volatility:
Range of volatilities	96.00%
Risk free rates using zero coupon US Treasury Security rates	0.29%
Maximum [Member]
Market volatility:
Range of volatilities	154.00%
Risk free rates using zero coupon US Treasury Security rates	0.68%

XML

Loans Payable - Summary of Debt Premium (Detail) - USD ($)	Mar. 31, 2017	Mar. 31, 2016	May 10, 2012
Forward cash flows:
Face value			$ 8,000,000
Monaco Notes [Member]
Forward cash flows:
Face value	$ 2,800,000
Note 2 [Member]
Forward cash flows:
Face value	1,825,000	$ 1,825,000
Note 2 [Member] | Monaco Notes [Member]
Forward cash flows:
Face value	2,800,000
Fair value	3,617,858
Difference (premium)	$ 817,858

XML

Loans Payable - Summary of Debt Premium (Parenthetical) (Detail) - USD ($)	Mar. 31, 2017	May 10, 2012
Debt Instrument [Line Items]
Face amount of new loans		$ 8,000,000
Monaco Notes [Member]
Debt Instrument [Line Items]
Face amount of new loans	$ 2,800,000
Monaco Notes [Member] | Paid-in Capital [Member]
Debt Instrument [Line Items]
Debt premium recorded to additional paid-in capital	$ 817,858

XML

Loans Payable - Summary of Gain or Loss Upon Extinguishment Allocation (Detail) - Note 2 - Monaco 2016 [Member]	3 Months Ended
	Mar. 31, 2017 USD ($)
Extinguishment of Debt [Line Items]
Difference to APIC	$ 1,211,811
Derivative Liabilities (Share Purchase Options) [Member]
Extinguishment of Debt [Line Items]
Difference to APIC	1,456,825
Monaco Loan (Old Debt) [Member]
Extinguishment of Debt [Line Items]
Difference to APIC	3,372,844
Monaco Loan (New Debt) [Member]
Extinguishment of Debt [Line Items]
Difference to APIC	(2,800,000)
Paid-in Capital [Member] | Premium [Member]
Extinguishment of Debt [Line Items]
Difference to APIC	$ (817,858)

XML

Loans Payable - Note 3 - MINOSA - Additional Information (Detail)	3 Months Ended	4 Months Ended
	Mar. 31, 2017 USD ($)	Jun. 30, 2015 Tranches	Dec. 31, 2016 USD ($)	Mar. 11, 2015 USD ($)	May 10, 2012 USD ($)
Debt Instrument [Line Items]
Promissory note face amount					$ 8,000,000
Oceanica Call Option [Member] | Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Derivative, fixed value	$ 40,000,000
Promissory Note [Member] | Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Promissory note outstanding amount	14,750,001
Promissory Note [Member] | Deferred Income Call Option [Member] | Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Promissory note outstanding amount	383,148
Debt discount amount	383,148
MINOSA [Member] | Promissory Note [Member]
Debt Instrument [Line Items]
Promissory note face amount	$ 14,750,000
Debt instrument maturity date	Mar. 18, 2017
Estimated market rate loan percentage	15.00%
MINOSA [Member] | Stock Purchase Agreement [Member] | Oceanica Call Option [Member] | Oceanica Resources S. de. R.L [Member]
Debt Instrument [Line Items]
Share purchase agreement expiration date	Mar. 30, 2016
Stock granted during period, value	$ 40,000,000
Stock granted during period, percentage	54.00%
Call option expiration date	Mar. 11, 2016
MINOSA [Member] | Stock Purchase Agreement [Member] | Promissory Note [Member]
Debt Instrument [Line Items]
Promissory note face amount				$ 14,750,000
Number of advances | Tranches		5
Interest rate, stated percentage	8.00%
Promissory note outstanding amount	$ 14,750,000		$ 14,750,000
Debt instrument maturity date	Mar. 18, 2017

XML

Loans Payable - Schedule of Allocation of Cash Proceeds to Derivative Components at their Fair Values - Promissory Note (Detail) - Promissory Note [Member] - Oceanica Resources S. de. R.L [Member]	Mar. 31, 2017 USD ($)
Debt Instrument [Line Items]
Cash proceeds	$ 14,750,001
Deferred Income Call Option [Member]
Debt Instrument [Line Items]
Cash proceeds	383,148
2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	14,366,853
First Tranche [Member]
Debt Instrument [Line Items]
Cash proceeds	2,000,000
First Tranche [Member] | Deferred Income Call Option [Member]
Debt Instrument [Line Items]
Cash proceeds	67,241
First Tranche [Member] | 2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	1,932,759
Second Tranche [Member]
Debt Instrument [Line Items]
Cash proceeds	6,000,000
Second Tranche [Member] | Deferred Income Call Option [Member]
Debt Instrument [Line Items]
Cash proceeds	173,659
Second Tranche [Member] | 2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	5,826,341
Third Tranche [Member]
Debt Instrument [Line Items]
Cash proceeds	3,000,000
Third Tranche [Member] | Deferred Income Call Option [Member]
Debt Instrument [Line Items]
Cash proceeds	75,828
Third Tranche [Member] | 2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	2,924,172
Fourth Tranche [Member]
Debt Instrument [Line Items]
Cash proceeds	2,000,000
Fourth Tranche [Member] | Deferred Income Call Option [Member]
Debt Instrument [Line Items]
Cash proceeds	39,911
Fourth Tranche [Member] | 2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	1,960,089
Fifth Tranche [Member]
Debt Instrument [Line Items]
Cash proceeds	17,500,001
Fifth Tranche [Member] | Deferred Income Call Option [Member]
Debt Instrument [Line Items]
Cash proceeds	26,509
Fifth Tranche [Member] | 2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	$ 1,723,492

XML

Loans Payable - Note 4 - Epsilon - Additional Information (Detail) - USD ($)							3 Months Ended		12 Months Ended
	Apr. 10, 2017	Dec. 15, 2016	Nov. 15, 2016	Oct. 16, 2016	Oct. 01, 2016	Mar. 18, 2016	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Mar. 21, 2017	May 10, 2012
Debt Instrument [Line Items]
Aggregate amount issuable											$ 8,000,000
Warrant right exercise price							$ 3.52	$ 1.00
Aggregate fair value of warrants							$ 303,712
Interest expenses							714,896	$ 334,060
Epsilon Acquisitions, LLC [Member]
Debt Instrument [Line Items]
Inducement expense							$ 303,712
Notes Payable, Other Payables [Member] | Third Tranche [Member]
Debt Instrument [Line Items]
Conversion price of Notes				$ 3.52
Conversion of stock, shares Issued				1,000,000
Notes Payable, Other Payables [Member] | Fourth Tranche [Member]
Debt Instrument [Line Items]
Conversion price of Notes			$ 4.19
Conversion of stock, shares Issued			1,000,000
Notes Payable, Other Payables [Member] | Fifth Tranche [Member]
Debt Instrument [Line Items]
Conversion price of Notes		$ 4.13
Conversion of stock, shares Issued		1,000,000
Notes Payable, Other Payables [Member] | Epsilon Acquisitions, LLC [Member]
Debt Instrument [Line Items]
Aggregate amount issuable					$ 3,000,000	$ 3,000,000				$ 6,000,000
Installment amount of Notes						$ 1,500,000
Interest rate, stated percentage					10.00%	10.00%
Notes security description							We granted security interests to Epsilon in (a) the 54 million cuotas (a unit of ownership under Panamanian law) of Oceanica Resources S. de R.L. ("Oceanica") held by our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd. ("OME"), (b) all notes and other receivables from Oceanica and its subsidiary owed to the Odyssey Pledgors, and (c) all of the outstanding equity in OME.
Conversion price of Notes					$ 5.00	$ 5.00
Conversion price of Notes upon default						$ 2.50
Debt instrument maturity date					Mar. 18, 2017	Mar. 18, 2017
Security deposit liability						$ 54,000,000
Number of trading days					75 days	75 days
Lender's out of pocket costs							$ 50,000
Beneficial conversion feature recorded							96,000
Principal balance of debt							6,050,000			$ 6,050,000
Accrued interest							$ 149,178	411
Debt conversion amount									$ 2,000,000
Common stock purchase warrant					120,000
Warrant right exercise price					$ 3.52
Warrant Expiration Date							Oct. 01, 2021
Warrant right exercise price description							Warrant shall be the number determined by multiplying 120,000 by a fraction, (a) the numerator of which is the aggregate principal amount of advances that have been extended to the OME by Epsilon pursuant to the Restated Note Purchase Agreement on or after the date of the Warrant and prior to the date of such failure and (b) the denominator of which is $3.0 million.
Interest expenses							$ 68,194	$ 3,859
Notes Payable, Other Payables [Member] | Epsilon Acquisitions, LLC [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Conversion of stock, shares Issued	670,455
Notes Payable, Other Payables [Member] | Epsilon Acquisitions, LLC [Member] | Maximum [Member] | Tranche [Member]
Debt Instrument [Line Items]
Conversion of stock, shares Issued					1,388,769
Notes Payable, Other Payables [Member] | Epsilon Acquisitions, LLC [Member] | Maximum [Member] | Tranche [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Accrued interest	$ 302,274
Notes Payable, Other Payables [Member] | MINOSA [Member]
Debt Instrument [Line Items]
Aggregate amount issuable						$ 14,750,000
Debt Instrument, acceleration clause description							The indebtedness may be accelerated upon the occurrence of specified events of default including (a) OME’s failure to pay any amount payable on the date due and payable; (b) OME or we fail to perform or observe any term, covenant, or agreement in the Purchase Agreement or the related documents, subject to a five-day cure period; (c) an event of default or material breach by OME, us or any of our affiliates under any of the other loan documents shall have occurred and all grace periods, if any, applicable thereto shall have expired; (d) the Stock Purchase Agreement shall have been terminated; (e) specified dissolution, liquidation, insolvency, bankruptcy, reorganization, or similar cases or actions are commenced by or against OME or any of its subsidiaries, in specified circumstances unless dismissed or stayed within 60 days; (f) the entry of judgment or award against OME or any of its subsidiaries in excess or $100,000; and (g) a change in control (as defined in the Purchase Agreement) occurs.
Debt instrument, number of shares						100,000

XML

Loans Payable - Schedule of Allocation of Cash Proceeds to Derivative Components at their Fair Values - Additional Tranches (Detail) - Promissory Note [Member] - Epsilon Acquisitions, LLC [Member]	Mar. 31, 2017 USD ($)
Third Tranche [Member]
Debt Instrument [Line Items]
Cash proceeds	$ 1,000,000
Third Tranche [Member] | Beneficial Conversion Feature ("BCF") [Member]
Debt Instrument [Line Items]
Cash proceeds	18,204
Third Tranche [Member] | 2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	981,796
Fourth Tranche [Member]
Debt Instrument [Line Items]
Cash proceeds	1,000,000
Fourth Tranche [Member] | Beneficial Conversion Feature ("BCF") [Member]
Debt Instrument [Line Items]
Cash proceeds	60,065
Fourth Tranche [Member] | 2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	939,935
Fifth Tranche [Member]
Debt Instrument [Line Items]
Cash proceeds	1,000,000
Fifth Tranche [Member] | 2014 Convertible Promissory Notes [Member]
Debt Instrument [Line Items]
Cash proceeds	$ 1,000,000

XML

Loans Payable - Note 5 - SMOM - Additional Information (Detail) - USD ($)	May 04, 2017	Apr. 30, 2017	Mar. 31, 2017	Feb. 28, 2017	May 10, 2012
Debt Instrument [Line Items]
Aggregate amount issuable					$ 8,000,000
Loan amount borrowed			$ 0
Note 5 - SMOM [Member]
Debt Instrument [Line Items]
Loan amount borrowed				$ 750,000
Subsequent Event [Member] | Note 5 - SMOM [Member]
Debt Instrument [Line Items]
Aggregate amount issuable	$ 3,000,000
Loan amount borrowed	$ 1,500,000	$ 750,000
Interest rate, stated percentage	10.00%
Annual Principal Payment	$ 500,000
Subsequent Event [Member] | Note 5 - SMOM [Member] | Neptune Minerals, Inc. [Member]
Debt Instrument [Line Items]
Accounts receivable assigned for loan	50.00%
Accounts receivable, gross	$ 0
Subsequent Event [Member] | Note 5 - SMOM [Member] | Aldama Mining Company, S.de R.L. de C.V [Member]
Debt Instrument [Line Items]
Percentage of equity interest	10.00%
Value of equity interest	$ 1,000,000
Subsequent Event [Member] | Note 5 - SMOM [Member] | Aldama Mining Company, S.de R.L. de C.V [Member] | Maximum [Member]
Debt Instrument [Line Items]
Percentage of equity interest	50.00%

XML

Stockholders' Equity (Deficit) - Additional Information (Detail)			3 Months Ended		12 Months Ended
	Feb. 09, 2016	Jun. 09, 2015 USD ($) shares	Mar. 31, 2017 USD ($) Incentive_Plan $ / shares shares	Mar. 31, 2016 USD ($) $ / shares	Dec. 31, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reverse stock split, conversion ratio	0.50000	0.16666	0.08333
Common stock shares authorized			75,000,000		75,000,000
Common stock, par value | $ / shares			$ 0.0001		$ 0.0001
Preferred stock, par value | $ / shares			$ 0.0001		$ 0.0001
Preferred stock, shares authorized			24,984,166		24,984,166
Number of warrants			120,000
Warrants, exercise price | $ / shares			$ 3.52	$ 1.00
Warrants, expiration date			Jan. 10, 2021
Number of stock incentive plans | Incentive_Plan			2
Stock incentive plan expiration date			Aug. 31, 2015
Share-based compensation | $			$ 208,496	$ 334,629
Weighted average fair value of options granted | $ / shares			$ 0	$ 0
2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for stock-based compensation		450,000
Board Of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reverse stock split ratio			1-for-2
Series AA-2 Convertible Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock, par value | $ / shares			$ 0.0001
Preferred stock, shares authorized			7,223,145
Series AA-2 Convertible Preferred Stock [Member] | Penelope Mining LLC [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of trading days			20 days
Series AA-1 Convertible Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock, par value | $ / shares			$ 0.0001
Preferred stock, shares authorized			8,427,004
Preferred stock Liquidation preference accretion rate					8.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares authorized			150,000,000
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares authorized			75,000,000
Minimum [Member] | Series AA-2 Convertible Preferred Stock [Member] | Penelope Mining LLC [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing price of common stock | $ / shares			$ 15.12
Incentive Stock Options [Member] | 2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for stock-based compensation		450,000
Additional shares authorized for stock-based compensation			200,000
Common Stock [Member] | Incentive Stock Options [Member] | 2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of incentive option granted			With respect to each grant of an ISO to a participant who is not a ten percent stockholder, the exercise price shall not be less than the fair market value of a share on the date the ISO is granted. With respect to each grant of an ISO to a participant who is a ten percent stockholder, the exercise price shall not be less than one hundred ten percent (110%) of the fair market value of a share on the date the ISO is granted.
Maximum aggregate number of Shares with respect to one or more Awards that may be granted to any one person during any calendar year		83,333
Maximum aggregate amount of cash that may be paid in cash to any person during any calendar year | $		$ 2,000,000
Common Stock [Member] | Incentive Stock Options [Member] | Minimum [Member] | 2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Eligible employee threshold percentage			10.00%
Purchase price of common stock percentage			110.00%

XML

Stockholders' Equity (Deficit) - Summary of Preferred Stock Allocated to Investors (Detail) - Penelope Mining LLC [Member]	Mar. 31, 2017 USD ($) $ / shares shares
Preferred Stock [Line Items]
Shares | shares	15,650,149
Total Investment | $	$ 144,462,918
Series AA-1 Convertible Preferred Stock [Member]
Preferred Stock [Line Items]
Shares | shares	8,427,004
Price Per Share | $ / shares	$ 12.00
Total Investment | $	$ 101,124,048
Series AA-2 Convertible Preferred Stock [Member]
Preferred Stock [Line Items]
Shares | shares	7,223,145
Price Per Share | $ / shares	$ 6.00
Total Investment | $	$ 43,338,870

XML

Concentration of Credit Risk - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2017 USD ($) Institution
Debt Disclosure [Abstract]
Uninsured cash balance	$ 841,769
Number of financial institutions in which cash is deposited | Institution	1
Amount of loan outstanding	$ 0

XML

Derivative Financial Instruments - Changes in Fair Values of Derivative Liabilities (Detail)	3 Months Ended
	Mar. 31, 2016 USD ($)
Derivative [Line Items]
Total derivative income (expense)	$ 3,337,474
Warrant Derivatives [Member]
Derivative [Line Items]
Derivative income (expense)	(58,716)
2014 Convertible Promissory Notes [Member]
Derivative [Line Items]
Derivative income (expense)	$ 3,396,190

XML

Derivative Financial Instruments - Significant Assumptions Utilized in Valuation Technique (Detail) - $ / shares	Mar. 08, 2016	Mar. 31, 2016	Dec. 31, 2015	Dec. 01, 2014	Oct. 01, 2014	Aug. 14, 2014	Dec. 31, 2013
Derivative [Line Items]
Underlying price on valuation date		$ 1.25	$ 2.50	$ 2.50	$ 2.50	$ 2.50	$ 2.50
Monte Carlo Simulations [Member] | Monaco Notes [Member] | First Tranche [Member]
Derivative [Line Items]
Underlying price on valuation date	$ 1.25
Contractual conversion rate	$ 3.15
Contractual term to maturity	1 year 9 months 26 days
Implied expected term to maturity	1 year 2 months 27 days
Market volatility:
Range of equivalent volatilities	120.10%
Contractual interest rate	11.00%
Range of equivalent market risk adjusted interest rates	11.60%
Range of equivalent credit risk adjusted yields	4.13%
Range of equivalent credit risk adjusted yields	4.13%
Monte Carlo Simulations [Member] | Monaco Notes [Member] | Second Tranche [Member]
Derivative [Line Items]
Underlying price on valuation date	$ 1.25
Contractual conversion rate	$ 3.15
Contractual term to maturity	1 year 9 months 26 days
Implied expected term to maturity	1 year 2 months 27 days
Market volatility:
Range of equivalent volatilities	120.10%
Contractual interest rate	11.00%
Range of equivalent market risk adjusted interest rates	11.60%
Range of equivalent credit risk adjusted yields	4.13%
Range of equivalent credit risk adjusted yields	4.13%
Monte Carlo Simulations [Member] | Monaco Notes [Member] | Third Tranche [Member]
Derivative [Line Items]
Underlying price on valuation date	$ 1.25
Contractual conversion rate	$ 3.15
Contractual term to maturity	1 year 9 months 26 days
Implied expected term to maturity	1 year 2 months 27 days
Market volatility:
Range of equivalent volatilities	120.10%
Contractual interest rate	11.00%
Range of equivalent market risk adjusted interest rates	11.60%
Range of equivalent credit risk adjusted yields	4.13%
Range of equivalent credit risk adjusted yields	4.13%
Minimum [Member] | Monte Carlo Simulations [Member] | Monaco Notes [Member] | First Tranche [Member]
Market volatility:
Range of volatilities	96.00%
Range of equivalent credit risk adjusted yields	3.49%
Range of equivalent credit risk adjusted yields	3.49%
Minimum [Member] | Monte Carlo Simulations [Member] | Monaco Notes [Member] | Second Tranche [Member]
Market volatility:
Range of volatilities	96.00%
Range of equivalent credit risk adjusted yields	3.49%
Range of equivalent credit risk adjusted yields	3.49%
Minimum [Member] | Monte Carlo Simulations [Member] | Monaco Notes [Member] | Third Tranche [Member]
Market volatility:
Range of volatilities	96.00%
Range of equivalent credit risk adjusted yields	3.49%
Range of equivalent credit risk adjusted yields	3.49%
Maximum [Member] | Monte Carlo Simulations [Member] | Monaco Notes [Member] | First Tranche [Member]
Market volatility:
Range of volatilities	154.00%
Range of equivalent credit risk adjusted yields	5.02%
Range of equivalent credit risk adjusted yields	5.02%
Maximum [Member] | Monte Carlo Simulations [Member] | Monaco Notes [Member] | Second Tranche [Member]
Market volatility:
Range of volatilities	154.00%
Range of equivalent credit risk adjusted yields	5.02%
Range of equivalent credit risk adjusted yields	5.02%
Maximum [Member] | Monte Carlo Simulations [Member] | Monaco Notes [Member] | Third Tranche [Member]
Market volatility:
Range of volatilities	154.00%
Range of equivalent credit risk adjusted yields	5.02%
Range of equivalent credit risk adjusted yields	5.02%

XML

Derivative Financial Instruments - Significant Assumptions Utilized in Valuation Technique (Parenthetical) (Detail) - $ / shares		1 Months Ended
	Mar. 31, 2016	Dec. 31, 2013	Mar. 31, 2017	Dec. 31, 2015	Dec. 01, 2014	Oct. 01, 2014	Aug. 14, 2014
Derivative [Line Items]
Underlying price on valuation date	$ 1.25	$ 2.50		$ 2.50	$ 2.50	$ 2.50	$ 2.50
New option price	1.00		$ 3.52
Purchase price of the share purchase options	$ 1.00
Oceanica Resources S. de. R.L [Member]
Derivative [Line Items]
Percentage of shares purchased by private investor		24.00%
Per share value of shares purchased by private investor		$ 2.50

XML

Derivative Financial Instruments - Changes in Fair Value Inputs and Assumptions Related to Share Purchase Option (Detail) - 2014 Share Purchase Option [Member] - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivative [Line Items]
Balances at January 1		$ 3,396,191
Issuances	$ 0	0
Modification		(1,456,826)
Changes in fair value inputs and assumptions reflected in income		$ (1,939,365)

XML

Derivative Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2017	Apr. 13, 2014	Oct. 11, 2013	May 10, 2012	Nov. 08, 2011	Apr. 08, 2011	Oct. 11, 2010
Derivative [Line Items]
Warrants issued to acquire common shares				21,701	108,507		150,000
Shares available for issuance upon exercise				36,169	36,169
Face amount of new loans				$ 8,000,000
Senior Convertible Notes [Member]
Derivative [Line Items]
Warrants exercisable date	Apr. 13, 2014
Warrants Attached to Series G Preferred Stock [Member]
Derivative [Line Items]
Warrants issued to acquire common shares						43,750
Warrants exercisable date	Apr. 13, 2014
Warrants Attached to Senior Convertible Debt [Member]
Derivative [Line Items]
Warrants issued to acquire common shares					108,507
Common Stock [Member] | Senior Convertible Notes [Member]
Derivative [Line Items]
Linked common shares		130,208
Common Stock [Member] | Level 3 [Member]
Derivative [Line Items]
Linked common shares			143,750
Warrants exercisable date	Oct. 11, 2013
Common Stock [Member] | Warrants Attached to Series G Preferred Stock [Member]
Derivative [Line Items]
Linked common shares		43,750

XML

Derivative Financial Instruments - Changes in Fair Value Inputs and Assumptions Related to Derivative Warrants (Detail) - Warrant Derivatives [Member] - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivative [Line Items]
Balances at January 1		$ 6,225
Changes in fair value inputs and assumptions reflected in income		58,716
Expired	$ 0	0
Balances at March 31		$ 64,941

XML

Deferred Income and Revenue Participation Rights - Participating Revenue Rights (Detail) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Deferred Revenue Arrangement [Line Items]
Deferred income and participating revenue rights	$ 4,643,750	$ 4,643,750
"Cambridge" Project [Member]
Deferred Revenue Arrangement [Line Items]
Deferred income and participating revenue rights	825,000	825,000
"Seattle" Project [Member]
Deferred Revenue Arrangement [Line Items]
Deferred income and participating revenue rights	62,500	62,500
Galt Resources, LLC (HMS Victory project) [Member]
Deferred Revenue Arrangement [Line Items]
Deferred income and participating revenue rights	$ 3,756,250	$ 3,756,250

XML

Deferred Income and Revenue Participation Rights - Additional Information (Detail)	1 Months Ended	3 Months Ended
	Feb. 28, 2011 USD ($)	Mar. 31, 2017 USD ($) Project Investment $ / Security shares
Deferred Revenue Arrangement [Line Items]
Revenue participation agreement		$ 15,000,000
"Seattle" Project [Member]
Deferred Revenue Arrangement [Line Items]
Percentage of revenue owed to certificate holder per each million invested		1.00%
Common shares issued per unit | shares		100,000
Galt Resources, LLC [Member]
Deferred Revenue Arrangement [Line Items]
Percentage of revenue owed to certificate holders		50.00%
Percentage of revenue owed to certificate holder per each million invested		1.00%
Investment multiplier in case of project success | Investment		3
Projects after bifurcation | Project		2
Galt Resources, LLC [Member] | SS Gairsoppa [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue		$ 3,756,250
Galt Resources, LLC [Member] | Maximum [Member]
Deferred Revenue Arrangement [Line Items]
Investment for future revenue rights	$ 7,512,500
HMS Victory Project [Member]
Deferred Revenue Arrangement [Line Items]
Percentage of revenue owed to certificate holders		7.5125%
Revenue Participation Certificates [Member] | "Cambridge" Project [Member]
Deferred Revenue Arrangement [Line Items]
Revenue participation certificates per unit value | $ / Security		50,000
Revenue Participation Certificates [Member] | "Seattle" Project [Member]
Deferred Revenue Arrangement [Line Items]
Revenue participation certificates per unit value | $ / Security		50,000
First Payment [Member] | "Cambridge" Project [Member]
Deferred Revenue Arrangement [Line Items]
Percentage of revenue owed to certificate holders		100.00%
Revenue owed to certificate holder		$ 825,000
Second Payment [Member] | "Cambridge" Project [Member]
Deferred Revenue Arrangement [Line Items]
Percentage of revenue owed to certificate holders		24.75%
Second Payment [Member] | "Cambridge" Project [Member] | Minimum [Member]
Deferred Revenue Arrangement [Line Items]
Revenue owed to certificate holder		$ 4,000,000
Second Payment [Member] | "Cambridge" Project [Member] | Maximum [Member]
Deferred Revenue Arrangement [Line Items]
Revenue owed to certificate holder		$ 35,000,000
Third Payment [Member] | "Cambridge" Project [Member]
Deferred Revenue Arrangement [Line Items]
Percentage of revenue owed to certificate holders		12.375%
Revenue owed to certificate holder		$ 35,000,000