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| EX-99.1 - PRESS RELEASE - ODYSSEY MARINE EXPLORATION INC | dex991.htm |
| 8-K - FORM 8-K - ODYSSEY MARINE EXPLORATION INC | d8k.htm |
 Follow-On Offering
Roadshow Presentation
June 2011
Exhibit 99.2 |
 Alternatively, the issuer, any underwriter or any dealer participating in the
offering will arrange to send you the prospectus after filing if you request
it by calling (813) 876-1776. 2
Safe Harbor Statement
Forward Looking Statements
Odyssey Marine Exploration believes the information set forth in this presentation 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. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements
including those made in this presentation. Certain factors that could cause results to differ
materially from those projected in the forward-looking statements are set forth in
"Risk Factors" in the Part I, Item 1A of the Company's Annual Report on Form 10-K for the
year ended December 31, 2010, which was filed with the Securities and Exchange Commission on February
28, 2011. All forward- looking statements are based on information available to management
on this date, and Odyssey Marine Exploration, Inc. assumes no obligation to, and expressly
disclaims any obligation to, update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Industry Information
Information regarding market and industry statistics contained in this presentation is based on
information available to us that we believe is accurate. It is generally based on management
estimates and publications that are not produced for investment or economic analysis. The
financial and operating projections are based solely on the assumptions developed by Odyssey that it believes are reasonable.
The financial and operating projections are based upon information available to Odyssey as of the date
of the presentation, 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, that its
projected results will be achieved, or that variations between the projections and actual future
results will not be material.
Additionally, the information contained in the presentation was prepared to assist interested parties
in making their own evaluation of Odyssey and does not purport to contain all the information
that a prospective investor may desire. The information in the presentation is for background
purposes only and is subject to change. In all cases, interested parties should conduct their own
investigation, analysis and evaluation of Odyssey and the information set forth in the
presentation.
Notice of Prospectus The
issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication
relates. Before you invest, you should read the prospectus in that registration statement and other
documents the issuer has filed with the SEC for more complete information about the issuer and
this offering. You may get these documents for free by visiting EDGAR on the SEC website at
www.sec.gov. |
 Offering Summary
Issuer:
Odyssey Marine Exploration (NASDAQ: OMEX)
Offering:
Underwritten Follow-On Offering
Offering Size:
4.0 Million Shares
Over-Allotment:
15%
Use of Proceeds:
-
Search & Recovery Projects
-
Working Capital and General Corporate Purposes
Bookrunner:
Craig-Hallum Capital Group
Co-Manager:
B. Riley & Co.
Expected Pricing:
June 15
, 2011
Management:
Greg Stemm –
Chief Executive Officer
Mark Gordon –
President & Chief Operating Officer
Mike Holmes –
Chief Financial Officer
3
th |
 Investment Highlights
4
•
Strongest backlog of advanced-stage shipwreck
projects in company history
–
5 potential recoveries in next 12-18 months
•
Raising capital primarily to:
–
Accelerate operations on several shipwreck search
and recovery projects
–
To take advantage of opportunities in deep ocean
mining
•
Enable monetization of deep ocean assets –
shipwrecks and minerals:
–
Targeting approximately 100 high value shipwrecks
with total cargo value estimated in billions of dollars
–
Leading position in emerging field of deep ocean
mineral exploration and mining
•
Monetization of recovered assets over multi-year
period will generate significant recurring revenue
•
Building partnership model with nations |
 Shipwreck Industry
•
Large, underserved markets
•
UNESCO estimates over 3 million shipwrecks in
the world
–
OMEX proprietary database contains over 6,000
targets
–
Includes a minimum of 100 potential high-value
targets (each >$50MM retail)
–
Potential value in the billions of dollars
•
Recovered shipwreck cargo monetized in
various markets
–
Collectors
o
$10 billion annual US retail coin collectors market
o
Sold at a premium (20-300 times commodity value)
with longer sales period
–
Commodities markets
o
Sold at commodities pricing very quickly
•
Nations seeking to collect and manage heritage
5 |
 A World
Leader: Deep-Ocean Shipwreck Exploration •
Over $100MM invested in technology,
infrastructure and operations
•
17 years of experience
•
Advanced technological capabilities
•
World-class archaeological expertise and
experience
•
Knowledgeable and skilled marine
operations team
•
Legal and contractual rights to key
shipwrecks
•
Expansive proprietary research
•
Extensive legal and diplomatic
experience
•
Growing number of government
partnerships
6 |
   Odyssey
Disclosed Shipwreck Projects •
8 announced advanced stage shipwreck projects
7
Project
Stage
OMEX Ownership
Next Steps
Comments
SS Republic
Recovered:
100%
•
•
- 51,000+ Coins
- 14,000+ Artifacts
"Black Swan
"
Recovered:
Pending
•
Pending outcome of legal
•
Oral arguments held on 5/23/11
~ 594,000 coins
proceedings
•
Coins held in OMEX custody
weighing ~17 tons
HMS Sussex
Verification
80% up to $45M
•
On hold pending Black Swan
•
Believed to have found the site but
50% btw. $45M - $500M
legal proceedings
operations to verify wreck on hold
40% above $500M
•
Research suggests large cargo of gold
or silver specie
HMS Victory
Recovery
OMEX proposal
•
Reach agreement with UK
•
Received 80% salvage award on
submitted to UK Govt.
government
recovered cannon in 2009
•
Potential to begin archaeological
•
Research suggests over 3 tons of gold
excavation in 2H 2011
coins
SS Gairsoppa
Search process
80%
•
Begin search in 2H 2011
•
Research indicates large cargo of
•
Potential recovery in 2H 2011-12
silver bullion (commodity sale)
"Enigma"
Verification
50% or more
•
Verification of wreck & cargo
•
High value cargo reported aboard
•
Potential recovery in 2H 2011
"Shantaram"
Verification
50% or more
•
Verification of wreck & cargo
•
High value cargo reported aboard
•
Potential recovery in 2H 2011
"Firebrand"
Search process
50% or more
•
Continue search operations
•
High value cargo reported aboard
Continue to monetize coins
through established distribution
channels on 4 continents
Sold approximately 50% of coins for an
aggregate value of ~$42M |
 Shipwreck Projects –
Estimated Timeline
8
•
8 announced advanced stage shipwreck projects
Project
SS Republic
"Black Swan"
HMS Sussex
HMS Victory
SS Gairsoppa
"Enigma"
"Shantaram"
"Firebrand"
2011
2012
Monetization
Search Operations
Potential Monetization
Potential Monetization
On Hold - Pending Outcome of "Black Swan" Legal Proceedings
Cargo Recovered - Monetization Pending Outcome of Legal Proceedings
Potential Recovery
Potential Monetization
Search Operations
Recovery Planning
Potential Recovery
Verification
Potential Recovery
Verification
Potential Recovery
Finalize UK Agmt. |
 Ocean
Floor Mining Opportunity •
Market Characteristics
–
Discovery of new land-based deposits shrinking and cost of
land-based exploration increasing
–
Ocean floor mineral deposits are concentrated and untapped
o
High concentrations of gold, copper, zinc and silver
o
Capital expenses can be spread across many deposits
o
Smaller impact on the environment
o
Lower costs of recovery and transport
–
Similar opportunity as deep ocean oil drilling in 1940’s
•
Economics:
–
Projected recoverable ore: 1 –
100 million tons/mineral deposit
–
Potential metal values range from $500 –
$1,200/ton and more
–
Expected cost to recover & process less than $150-$200/ton
–
Hedged raw commodities –
gold & copper
9 |
 Neptune Minerals, Inc.
•
Odyssey is the largest shareholder of Neptune Minerals, Inc. (private company)
•
Neptune seeks to commercialize mineral deposits from the ocean floor
•
Recently merged with Dorado bringing two of the largest players in the space
together
•
Neptune holds the second largest tenement position in the Southwest Pacific
“Ring of Fire”
area –
nearly 150,000 km²
and also holds valuable tenements off New Zealand
and Japan
•
Odyssey is generating profitable revenue by providing marine exploration services to
Neptune
under
a
charter
agreement,
the
potential
exists
to
offer
these
services
to
other players in this emerging market
10 |
 •
Joined Odyssey in 2004, became CFO in 2005
•
25+ years experience in senior financial management including Anheuser-Busch
Companies, Inc., SeaWorld Orlando and Busch Gardens •
Joined Odyssey in 2005, served as Executive Vice President of Business Development,
promoted to President and Chief Operating Officer in 2007 •
20+ years owning and/or managing entrepreneurial ventures including founding
Synergy Networks •
Co-founded Odyssey in 1994
•
25+ years shipwreck exploration operations including deep-ocean search and
robotic archaeological excavation Executive Management
•
Has served as Secretary since 1997
•
20+ years experience in shipwreck exploration operations and administration
•
Joined Odyssey in 1998, became Director of Communications and Marketing in 2003,
appointed Vice President in 2007 •
25+ years experience including promotion and marketing for several major television
networks •
Joined Odyssey in in 2006, became General Counsel in 2007, appointed Vice President
in 2008 •
20+ years practicing law as a litigation consultant, providing counsel to attorneys
in all areas of law •
Joined Odyssey in 2003 as Director of Operations
•
40+ years marine engineering experience, including Project Manager for the first
and second phase of Space Shuttle Challenger recovery •
Joined Odyssey in 2004 as Senior Project Manager
•
35+ years of ocean exploration experience, including Scientific Engineer on Jacques
Cousteau’s Calypso and led Dr. Ballard’s Titanic expedition
•
Joined Odyssey in 2007 as Director of International Business Development
•
25+
years
with
the
U.S.
Navy
as
Liaison
and
Consul
to
Gibraltar,
as
well
as
various
operational
and
leadership
positions
in
international
Navy
11
Mike Holmes |
CFO –
25+ years experience
Melinda
MacConnel
|
Vice
President
and
General
Counsel
–
20+
years
experience
Laura
Barton
|
Vice
President
and
Director
of
Communications
and
Marketing
–
25+
years
experience
David Morris |
Secretary –
20+ years experience
Roy
Truman
|
Director
of
Marine
Operations
–
40+
years
experience
Tom
Dettweiler
|
Senior
Project
Manager
–
35+
years
experience
Aladar
Nesser
|
Director
of
Government
Relations
–
25+
years
experience
Greg Stemm |
CEO –
25+ years experience
Mark
Gordon
|
President
and
COO
–
20+
years
experience |
 Project Financing
•
Shipwreck Project Syndication (Robert Fraser & Partners)
–
Intellectual property purchased (research)
–
Paid contract services (search, recovery, conservation, sales)
–
Above recorded as revenue
–
Odyssey retains 50% + of the back-end
net revenue
•
Project Rights Agreements (Galt)
–
Upfront cash to OMEX for right to participate
in a project’s net proceeds
–
Not recorded as revenue
–
No restriction on use of funds
–
A less dilutive method of project financing for projects with potential income
over $75 million
12 |
 Revenue Sources –
Developing Recurring Revenue Model
Shipwrecks
Current Year
1 -
5 Years
5+ Years
Mining
Contracted
Projects
Revenue from Operations –
Cash Flow
Revenue from Operations –
Cash Flow
Revenue from Operations –
Cash Flow
Revenue from Cargo Sales
Revenue from Mining
(Gold / Silver / Copper / Zinc)
13 |
 Financial Data
14
(1)
(2)
(1)
Operations Data
2009
2010
Q1 '11
Revenue ($ in Millions)
4.3
$
21.0
$
2.1
$
Adj. EBITDA
(14.1)
$
(12.1)
$
(2.8)
$
(1)
Odyssey has an NOL of $110MM
(2)
See Exhibit A
Balance Sheet Data
3/31/11
ProForma
Cash ($ in Millions)
6.1
$
21.4
$
Mortgage & Loans Payable
7.9
$
7.9
$
Preferred Stock -
Series G
4.4
$
4.4
$
Shares Outstanding (MM)
67.2
71.2
(1) |
 •
Potential positive “Black Swan”
ruling
–
“Aqua Log”
decision subsequent to district court ruling sets favorable
precedent and requires possession for sovereign immunity
–
WikiLeaks documentation of U.S. Government’s attempted interference in the
case
•
Potential for identification, recovery and/or monetization of one or more
projects:
–
HMS Victory
–
Two advance-stage Robert Fraser projects in verification phase, both
of which exhibit evidence that corresponds with the target shipwrecks
–
SS Gairsoppa
operations planned for this season (contract with UK already in
place for 80% salvage award)
–
Multiple other undisclosed projects
•
Positive assay, verification mining and core drilling results from mining
exploration
•
Additional government partnerships to conduct operations in territorial
waters and/or on sovereign shipwrecks
Potential Events in 2011
15 |
 Investment Highlights
16
•
Strongest backlog of advanced-stage shipwreck
projects in company history
–
5 potential recoveries in next 12-18 months
•
Raising capital primarily to:
–
Accelerate operations on several shipwreck search
and recovery projects
–
To take advantage of opportunities in deep ocean
mining
•
Enable monetization of deep ocean assets –
shipwrecks and minerals:
–
Targeting approximately 100 high value shipwrecks
with total cargo value estimated in billions of dollars
–
Leading position in emerging field of deep ocean
mineral exploration and mining
•
Monetization of recovered assets over multi-year
period will generate significant recurring revenue
•
Building partnership model with nations |
 Exhibit A
17
Non-GAAP Financial Measures
Odyssey
uses
adjusted
EBITDA
as
a
measure
of
performance
to
demonstrate
earnings
exclusive
of
interest
and
certain
non-cash
events.
Odyssey,
in
its
daily
management
of
its
business
affairs
and
analysis
of
its
monthly,
quarterly
and
annual
performance,
makes
its
decisions
based
on
cash
flows,
not
on
the
depreciation
of
assets
obtained
through
historical
activities.
Odyssey,
in
managing
its
current
and
future
affairs,
cannot
affect
the
depreciation
and
amortization
of
its
assets
to
any
material
degree,
and
therefore
uses
adjusted
EBITDA
as
its
primary
management
guide.
Since
an
outside
investor
may
base its evaluation of Odyssey’s performance based on Odyssey’s net
income or loss not its cash flows, there is a limitation to the adjusted EBITDA
measurement.
Adjusted EBITDA is not, and should not be considered, an alternative to net income
or loss, loss from operations, or any other measure for determining
operating performance of liquidity, as determined under accounting principles generally accepted in the United States (GAAP).
Adjusted
EBITDA
is
a
supplemental
non-GAAP
financial
measure.
The
most
directly
comparable
GAAP
measure
to
adjusted
EBITDA
in
Odyssey’s case
is net income (loss). Adjusted EBITDA is equal to net income (loss) excluding: (a)
total other income (expense); (b) depreciation and amortization; (c)
stock-based compensation; and (d) income taxes.
Three Months
Ended
(amounts in thousands)
March 31,
December 31,
December 31,
2011
2010
2009
(unaudited)
EBITDA Reconciliation:
Net Loss on a GAAP Basis:
(5,174)
$
(23,343)
$
(18,628)
$
Adjustments:
Interest income
(0)
(4)
(38)
Interest expense
98
516
334
Change in derivative liabilities
fair value 1,289
3,638
-
Loss
on debt extinguishment -
383
-
Income (loss) from unconsolidated entity
-
2,447
53
Other income
5
(45)
(75)
Depreciation and
amortization 528
2,162
2,276
Stock-Based Compensation
449
2,137
2,027
Income Taxes
-
-
-
Adjusted EBITDA
(2,806)
$
(12,108)
$
(14,051)
$
Year Ended |