v3.26.1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2026
Equity Method Investments and Joint Ventures [Abstract]  
Principles of Consolidation

Principles of Consolidation

 

The condensed 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 intercompany and intracompany transactions and balances have been eliminated. The portion of amounts attributable to consolidated subsidiaries not wholly owned by the Company and any related activity is reflected as non-controlling interest in the consolidated balance sheets as net (loss) income attributable to non-controlling interest in the consolidated statements of operations. The results of operations attributable to the non-controlling interests are presented within equity and net (loss) income and are shown separately from the Company’s equity and net (loss) income attributable to the Company. Some of the existing intercompany balances, which are eliminated upon consolidation, include features allowing the liabilities of Exploraciones Oceánicas S. de R.L. de CV (“ExO”) and Oceanica Resources, S. de R.L. (“Oceanica”), majority owned subsidiaries of the Company, to be converted into additional equity of a subsidiary, which, if exercised, could increase the Company’s direct or indirect interest in the non-wholly owned subsidiaries. During the second quarter of 2025, the Company converted these intercompany balances into equity interests of Oceánica Resources México, S. de R.L. de C.V., a Mexican company (“ORM”). Refer to Note 6 – Joint Venture for additional information.

 
Use of Estimates

Use of Estimates

 

Management used estimates and assumptions in preparing these condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States (“US GAAP”). Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expenses. Actual results could vary from the estimates that were used.
Bismarck Exploration License

Bismarck Exploration License

 

The Company follows the guidance in Financial Accounting Standards Board (“FASB”) ASC 350, Intangibles-Goodwill and Other (“ASC 350”) in accounting for the exploration license held by Bismarck Mining Corporation, Ltd. (the “Bismarck Exploration License”). Management determined the rights to use the license to have an indefinite life. This assessment is based on the historical success of renewing the license every two years since 2006, and the fact that management believes there are no legal, regulatory, or contractual provisions that would limit the useful life of the asset. Costs incurred to renew or extend the term of the license are expensed as incurred. The most recent renewal was submitted in July 2024 and was issued in March 2026. The Bismarck Exploration License is not dependent upon another asset or group of assets that could potentially limit the useful life of the exploration license. The Bismarck Exploration License is tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired, per the guidance of the ASC 350. The Company did not have any impairment indicators for the three months ended March 31, 2026 and 2025.
Investment in Unconsolidated Entities

Investment in Unconsolidated Entities

 

As discussed in Note 5 – Investment In Unconsolidated Entities, the Company has cost basis method investments and equity method investments with related parties. As of March 31, 2026 and December 31, 2025, there were no variable interest entities (“VIEs”) for which the Company was the primary beneficiary. We also review these investments for any potential impairment annually, or earlier if a triggering event is observed.

 

Refer to Note 6 – Joint Venture, for details on the Company’s joint venture with Capital Latinoamericano, S.A. de C.V. (“CapLat”) and certain affiliates of the Company.
Long-Lived Assets

Long-Lived Assets

 

We did not have any impairment indicators related to long-lived assets for the three months ended March 31, 2026 and 2025.
Earnings Per Share ("EPS")

Earnings Per Share (“EPS”)

 

Basic EPS has been computed pursuant to ASC Topic 260, Earnings Per Share, and is computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. 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, restricted stock units and warrants and use the if-converted method to compute potential common shares from preferred stock, convertible notes or other convertible securities.

 

Dilutive common stock equivalents include the dilutive effect of in-the-money stock equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common stock equivalents if their effect would be anti-dilutive. The potential common shares in the following tables represent potential common shares from outstanding options,

restricted stock awards, convertible notes and other convertible securities that were excluded from the calculation of diluted EPS during the periods presented due to having an anti-dilutive effect:

 

 

Three Months Ended March 31,

 

 

2026

 

 

2025

 

Average market price during the period

 

$

1.70

 

 

$

0.51

 

Option awards

 

 

2,584,574

 

 

 

1,388,824

 

Unvested restricted stock awards

 

 

212,000

 

 

 

—

 

Convertible notes

 

 

—

 

 

 

5,954,695

 

Common Stock Warrant related

 

 

5,611,909

 

 

 

10,727,387

 

Equity exchange rights in connection with Mexican Corporate Transaction

 

 

1,841,137

 

 

 

—

 

 

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,

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Net (loss) income attributable to Odyssey Marine Exploration, Inc.

 

$

347,346

 

 

$

2,241,570

 

Numerator:

 

 

 

 

 

 

Basic net (loss) income available to stockholders

 

$

347,346

 

 

$

2,241,570

 

Loss on equity method investment

 

 

—

 

 

 

(141,414

)

Fair value change of debt instruments

 

 

(2,410,814

)

 

 

(1,600,826

)

Diluted net (loss) income available to stockholders

 

$

(2,063,468

)

 

$

499,330

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

Weighted average common shares outstanding – Basic

 

 

55,788,778

 

 

 

29,102,633

 

Dilutive effect of options

 

 

—

 

 

 

143,570

 

Dilutive effect of other derivative instruments

 

 

—

 

 

 

129,063

 

Dilutive effect of warrants

 

 

938,778

 

 

 

—

 

Dilutive effect of convertible debt instruments

 

 

—

 

 

 

12,241,147

 

Weighted average common shares outstanding – Diluted

 

 

56,727,556

 

 

 

41,616,413

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

Basic

 

$

0.01

 

 

$

0.08

 

Diluted

 

$

(0.04

)

 

$

0.01

 
Segment Reporting

Segment Reporting

The Company evaluates the products and services that produce its revenue and the geographical regions in which the Company operates to determine reportable segments in accordance with ASC 280 – Segment Reporting. Based on that evaluation, the Company has determined that it has only one operating segment.

See Note 16 – Segment Reporting, for further discussion related to the segment information.
Accounting Standards Not Yet Adopted

Accounting Standards Recently Adopted

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The guidance in ASU 2025-05 provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets. The Company adopted ASU 2025-05 effective January 1, 2026. Given the Company’s accounts receivable composition, the adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses.” The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses, including purchases of inventory, employee compensation, and depreciation, amortization, and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on the Company’s condensed consolidated financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for and disclosure of internal-use software costs. The guidance removes all references to project stages, defines the threshold for capitalizing costs, and clarifies the disclosure requirements for capitalized software costs. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years, and can be applied retrospectively, prospectively, or on a modified transition approach. Early adoption is permitted. The Company does not expect adoption of this guidance to have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606)—Derivatives Scope Refinements and Scope Clarifications for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The ASU is intended to address concerns about the application of derivative accounting to contracts with features linked to the operations or activities of one of the parties to the contract and to reduce diversity in the accounting for share-based payments in revenue contracts. This guidance specifically scopes out litigation funding from the definition of a derivative. ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted. The amendments may be applied prospectively or on the modified retrospective method. The Company is continuing to evaluate the potential impact of this update on its condensed consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The standard clarifies the application of interim reporting guidance and reorganizes existing disclosures. This guidance is effective for interim reporting periods beginning after December 15, 2027. The Company does not expect adoption of this guidance to have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-12 Codification Improvements. The ASU provides clarifying guidance intended to improve the consistency and application of existing accounting standards. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted. The Company does not expect adoption of this guidance to have a material impact on the Company’s condensed consolidated financial statements and related disclosures.