Le Lézard
Subjects: Contract/Agreement, Funding, Lawsuit, Share Issue, Bond Issue, Business Update

Odyssey Marine Exploration Announces Reduction of Debt & Potential Dilution That Is Accretive to Shareholders; Provides Updates on Company Projects and Progress

Odyssey Marine Exploration, Inc. (NASDAQ: OMEX), a global subsea mineral exploration and development company, has reached an agreement with Altos Hornos de México, S.A.B. de C.V., Minera del Norte S.A. de C.V. and Phosphate One LLC (collectively AHMSA) to terminate a 2015 Stock Purchase Agreement (SPA) and associated Notes and Pledge Agreements in return for a cash payment of $9.0 million and the issuance of 304,879 shares of Odyssey's common stock.

To fund the termination and release agreement with AHMSA, Odyssey entered into a note and warrant purchase agreement with an institutional investor for the issuance of an 11% senior secured note in the principal amount of up to $14 million that will mature in September 2024 and a warrant to purchase up to 3,703,704 shares of Odyssey's common stock at $3.78 per share. The company will use the funds available after the $9 million payment to AHMSA to pay legal fees and expenses related to the company's pending NAFTA arbitration and the financing transaction, working capital, and other general corporate expenses.

These transactions removed approximately $32 million of principal and interest in indebtedness, comprising $24 million in senior secured notes and $8 million in senior secured convertible notes, from Odyssey's balance sheet. Taking into consideration the newly issued $14 million in notes, the net reduction in indebtedness (principal and interest) is $17.45 million.

The termination and release agreement with AHMSA provides for the termination of the right to purchase 15.65 million shares of Odyssey's convertible preferred stock under the SPA and the termination of the right to convert existing indebtedness into almost 1.9 million shares of Odyssey's common stock. After giving effect to the issuance to AHMSA of the new shares of common stock and the warrant, the net effect of the transactions is to reduce by approximately 13.4 million shares the number of shares of common stock potentially issuable by Odyssey.

As part of the transaction, Odyssey and Exploraciones Oceánicas (ExO) obtained a waiver from Poplar Falls, LLC, the funder under the litigation financing for the NAFTA arbitration, to allow Odyssey and ExO to self-fund up to $5 million of any remaining NAFTA legal fees and expenses instead of incurring additional litigation funding that would require payment of an amount equal to four times the amount funded plus 1% of an award amount per million funded from any award by the NAFTA Arbitration tribunal.

"Terminating the SPA with AHMSA and the associated indebtedness clears the way for multiple other opportunities in the near to mid-term, from strategic investments to industry partnerships intended to increase the value of our mineral portfolio, create shareholder value, and provide access to critical minerals," said Mark Gordon, Odyssey's Chief Executive Officer and Chairman of the Board.

"We continue to focus on strengthening our balance sheet and making Odyssey's capital structure more attractive to current and future stakeholders. These transactions represent a major milestone in reaching this goal," explained Christopher E. Jones, Odyssey's Chief Financial Officer. "Additionally, we believe that by removing this indebtedness and the overhang represented by the shares issuable under the SPA and convertible notes, this transaction is accretive to shareholders, makes Odyssey a more attractive investment, and allows Odyssey additional flexibility in achieving operational milestones in the development of subsea mineral projects."

Odyssey Operations Update: Minerals for the Future

Odyssey focuses on providing minerals for the future: critical mineral types that can be extracted economically with minimal environmental impact while offering the potential to provide an abundant source of minerals that will benefit society. The company believes subsea phosphorite deposits and polymetallic nodule resources are two of the best options for near-term extraction.

As part of our efforts, Odyssey plans to deploy a 6,000-meter Remotely Operated Vehicle (ROV) to support the company's mineral programs in the coming months in the South Pacific region. The equipment and technical experts working on it can carry out detailed surveys, capture high-resolution videos and images, and conduct mineral and environmental sampling critical to the research and exploration process. Launching in Spring 2023, the Odyssey ROV will meet the growing demand for deep-ocean ROV services in the Cook Islands and throughout the region.

ExO Phosphate Project Update

Odyssey discovered and developed the ExO Phosphate Project, one of the largest deposits of phosphate in the world.

In 2012, ExO, a company in which Odyssey holds an approximately 56% interest, was granted a 50-year mining concession (extendable for another 50 years at ExO's option) by Mexico. Odyssey conducted significant offshore exploration, sampling, and environmental testing and, in 2014, completed an NI 43-101 compliant technical report.

With the assistance of experts in marine dredging who have completed more than 200 projects in Mexican waters using the proposed technology and leading environmental scientists from around the world, Odyssey spent three years preparing an environmentally responsible development plan for the deposit, which lies 25-40 km offshore in Baja California Sur, Mexico. Odyssey believes the Mexican Ministry of the Environment and Natural Resources (SEMARNAT) rejected the environmental permit necessary to move forward with the project in April 2016 for political rather than environmental reasons.

ExO challenged the decision in a Mexican federal court. In March 2018, the Tribunal Federal de Justicia Administrativa (TFJA), an 11-judge panel, unanimously ruled that SEMARNAT denied the application in violation of Mexican law and ordered the agency to re-take its decision. After SEMARNAT denied the necessary permit again, ExO refiled the case, and Odyssey began the NAFTA proceeding against Mexico to protect our shareholders' interests and significant investment in the project. OMEX management remains open to a commercial solution to the project

Odyssey's claim on behalf of itself and ExO seeks compensation of over US$2 billion on the basis that SEMARNAT's wrongful denial of authorization has destroyed the value of our investment in the country and is in violation of various provisions of NAFTA. Filings in the case were completed in 2022, and many are available on the ICSID website. Additional information about the case and evidence is included in Odyssey's 10-K and 10-Q filings at www.sec.gov and on Odyssey's website at www.odysseymarine.com/NAFTA.

Although neither Odyssey nor its legal counsel can predict the length of the TFJA's or the NAFTA arbitration tribunal's deliberations or the outcome of either of the proceedings, the company remains confident in the merits of its cases.

CIC Project Update (Polymetallic Nodules)

Odyssey is a consortium member of and marine operations provider for CIC Ocean Research, which holds an exploration license in the Cook Islands' Exclusive Economic Zone. Odyssey owns approximately 14.5% of CIC in non-voting shares.

The CIC team completed a series of exploration activities in its license area in 2022, sampling the bottom sediment while collecting baseline data to understand the local and regional environment. CIC is planning additional offshore exploration and research activities for 2023 to continue to gather geological and environmental data in line with the company's license requirements and the Cook Islands' seabed mineral regulations.

Odyssey has invested more than $4.5 million of in-kind services to the project and cash financing of more than $1.5M to date.

More information about Odyssey's current project portfolio and business development strategy can be found on its website www.OdysseyMarine.com.

About Odyssey Marine Exploration

Odyssey Marine Exploration, Inc. (Nasdaq: OMEX) is a deep-ocean exploration pioneer engaged in the discovery, validation, and development of subsea mineral deposits in a socially and environmentally responsible manner. Odyssey provides marine services for private clients and governments interested in exploring their Exclusive Economic Zones to survey, map, and identify any potential mineral resources. The company focuses on exploring polymetallic nodules (battery metals to power the future) and subsea phosphate deposits (fertilizer to feed the future), which the company believes will benefit society now and in the future. For additional details, please visit www.odysseymarine.com. An investor presentation is available in the Investors section of the website.

Forward Looking Information

Odyssey Marine Exploration believes the information set forth in this Press Release may include "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission on March 31, 2022. The financial and operating projections as well as estimates of mining assets are based solely on the assumptions developed by Odyssey that it believes are reasonable based upon information available to Odyssey as of the date of this release. All projections and estimates are subject to material uncertainties and should not be viewed as a prediction or an assurance of actual future performance. The validity and accuracy of Odyssey's projections will depend upon unpredictable future events, many of which are beyond Odyssey's control and, accordingly, no assurance can be given that Odyssey's assumptions will prove true or that its projected results will be achieved.

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