News & Media
Odyssey Marine Exploration Announces 2008 Financial Results
Tampa, FL – March 11, 2009 - Odyssey Marine Exploration (NasdaqCM: OMEX), pioneers in the field of deep-ocean shipwreck exploration, today reported full year 2008 financial results.
For the full year 2008, Odyssey reported revenues of $4.1 million, compared to $6.1 million in 2007. The Company reported a net loss of $24.8 million for the full year 2008, compared to a net loss of $23.8 million in 2007. The net loss per share for the full year 2008 was $0.50, compared to a net loss per share of $0.54 in 2007.
Operating expenses decreased $0.8 million from $29.9 million in 2007 to $29.1 million in 2008. While operations and research expenses increased $4.3 million from $14.3 million in 2007 to $18.6 million in 2008, marketing, general and administrative expenses decreased $3.5 million from $13.3 million to $9.8 million. In addition, the cost of sales was $1.7 million lower in 2008 than in 2007.
Odyssey attributed the 2008 increase in operations and research expense to several factors, including increased vessel operating expenses ($2.8 million) related to additional ship charters utilized to supplement our operating schedule in the "Atlas" search area while the Ocean Alert was undergoing repairs, as well as vessel repair and maintenance expenses ($2.1 million), offset by lower themed attraction expenses ($0.6 million).
"We are very pleased with the results of our 2008 operational season which was very successful. The discovery of Admiral Balchin's HMS Victory in the "Atlas" search area in spring 2008 marked yet another historic find, proving the repeatable success of our search operations. We added four admiralty arrests, including the Victory, to our portfolio in 2008, demonstrating that continuous investments in upgrading our technology and search capabilities are paying off. We have already commenced 2009 "Atlas" operations utilizing some revolutionary new search and inspection tools that I believe will continue to increase our success rate. Although these are tough times in the worldwide economy, the current favorable changes in foreign exchange rates and the significant decrease in fuel costs should lower our cost of offshore operations," commented Greg Stemm, Odyssey's Chief Executive Officer.
"Another major 2008 accomplishment was the agreement with JWM Productions to produce an 11-episode primetime series titled "Treasure Quest" for Discovery Channel, which recently premiered in the US and the UK and is scheduled to air throughout most other markets in the world during the second and third quarters of 2009. This series has served to acquaint the public with Odyssey's ground-breaking exploration and archaeological work and - along with the launch of our upgraded main shipwreck.net website, our new www.shipwreckstore.com webstore, and the continued success of our interactive traveling exhibit, "SHIPWRECK! Pirates & Treasure" - represents additional milestones in our ongoing brandbuilding efforts. All in all, we are looking to the future with great optimism and excitement as we move into our next search season," Mr. Stemm continued.
Revenue is generated through the sale of coins, artifacts and merchandise, the lease of our themed attraction exhibit and beginning in the second quarter of 2008, expedition charter revenue associated with the production of a shipwreck exploration television series. Revenues for 2008 and 2007 were $4.1 million and $6.1 million, respectively, which included $1.9 million of expedition charter revenue in 2008 related to the television series. The decrease of $3.9 million in revenue for 2008 (excluding the impact of the $1.9 million expedition charter revenue) is primarily due to fewer coins sold in 2008 versus the same period in 2007. Also, the sales mix in 2008 represented predominantly all silver coins while the 2007 sales mix included approximately 18% gold coins which are priced much higher than silver coins. With the SS Republic gold inventory sold out, except for a small quantity of high grade coins, we continue to develop the SS Republic silver coin products to sustain demand until we are able to offer a more diverse product line with new shipwreck products and stories.
The SS Republic silver program was re-developed in the first quarter of 2008 to take advantage of emerging research on the silver coins from the SS Republic. This includes the release of the 1861-O silver half dollar issued by the State of Louisiana in between the time it seceded from the Union and when it joined the Confederate States of America. Additionally, Odyssey has continued to expand distribution channels with a broader base of coin and collectible marketers, including opening markets overseas. We have also re-evaluated our efforts with our direct marketing partner (inbound and outbound call center and infrastructure) and restructured our agreement to expand on our indirect sales programs and distribution channels where our profit margins are much greater. In 2008 and 2007, we sold through several independent dealers of which two represented 69% and 58% of total artifact sales, respectively. As of December 31, 2008, we had a remaining inventory of approximately 31,000 silver coins. Our revenue for 2008 and 2007 was predominantly U.S. domestic-based.
An agreement was negotiated during third quarter 2008 with Arqueonautas Worldwide for the exclusive worldwide marketing rights to the collectible quality coins from their Saõ José shipwreck project. These coins have not been available for sale previously and we are marketing them through our authorized distributors. This project generated sales commissions beginning in fourth quarter 2008 and has allowed us to expand our distribution network with new product to prepare for future Odyssey shipwreck products and stories.
Cost and Expenses
Cost of sales consists of shipwreck recovery costs, grading, conservation, packaging, and shipping costs associated with artifact and merchandise sales. The primary cost component is from the sale of coins. Cost of sales for coins decreased $1.7 million for 2008 versus 2007 primarily because of fewer coins sold in 2008. There is no cost of sales component associated with the themed attraction and expedition charter revenues.
Operations and research expenses primarily include all costs within the following departments: Archaeology, Conservation, Research, and Marine Operations, which include all vessel operations. Operations and research expenses were $18.6 million in 2008, compared to $14.3 million in 2007. The $4.3 million increase was primarily due to increased vessel operating expenses primarily related to additional ship charters utilized to supplement our operating schedule in the "Atlas" search area while the Ocean Alert was undergoing repairs ($2.8 million), vessel repairs and maintenance expenses ($2.1 million), offset by lower themed attraction expenses ($0.6 million).
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 were $9.8 million in 2008 versus $13.3 million in 2007. The decrease of $3.5 million was attributable to (i) reduced marketing expenses of $1.8 million primarily related to lower advertising and commissions due to the restructure of our direct sales program with our direct marketing partner, (ii) lower employee compensation and a no bonus policy in 2008 ($1.7 million), (iii) themed attraction expense reduction of $1.2 million primarily related to accelerated depreciation of our attraction development assets associated with the reorganization of our themed attractions in 2007, and (iv) an increase of share-based compensation costs related to adoption of FASB 123R ($0.6 million), and a cash separation payment and consulting fees ($0.6 million) primarily due to the departure our former Chief Executive Officer in January 2008.
Operational Projects and Status
Odyssey has numerous shipwreck projects in various stages of development around the world. In order to protect the identities of the targets of our planned search or recovery operations, in some cases, we defer disclosing specific information relating to our projects until we have located a shipwreck or shipwrecks of interest and determined a course of action to protect our property rights. In some cases, we do not target specific shipwrecks, but instead focus on a search area that historical records suggest may contain unrecorded and recorded high value targets because of the proximity of shipping routes frequented by ships carrying intrinsically high value cargoes.
Our 251' deep-ocean archaeological platform Odyssey Explorer completed its planned 2008 season work in the "Atlas" search area, which included extensive search, inspection and preliminary excavation activities. The Odyssey Explorer served as the primary filming platform for the television series that premiered on Discovery Channel on January 15, 2009 (additional information below). The ship also recently completed repairs and modifications including her five-year Special Survey which is required to maintain vessel Class rating. While the Special Survey was not due until spring, the survey and dry dock were scheduled over the winter months to maximize operational opportunities around anticipated weather conditions. The Odyssey Explorer is currently engaged in search and inspection operations in the English Channel.
Our vessel Ocean Alert has completed an extensive overhaul of engines, transmissions and other equipment which took longer than expected. The engines have now been tested successfully and the ship is currently in dry dock to meet her five-year class survey requirements, scheduled to be completed in March 2009. During the period that the Ocean Alert was not operational, the Company utilized various different charter vessels to conduct search operations, so our search capability was not hampered by the work being done on the Ocean Alert.
"Atlas" Search Project
The "Atlas" project encompasses a minimum of five high-value targets within a search area covering more than 6,000 square miles. We conducted operations in this search area during the 2005, 2006 and 2008 seasons. Results to date in the "Atlas" search area include the discovery of three Colonial period shipwreck sites containing cannon, including HMS Victory, which are the subject of Admiralty arrests filed by Odyssey. The first site was located and arrested in 2006. Admiralty arrests were filed in May 2008 on the two additional cannon sites discovered in 2008. For additional information refer to the "Admiralty Legal Proceedings" section below.
The Odyssey crews were accompanied by television production crews from JWM Productions during the 2008 season, which focused in the "Atlas" project area, to produce an 11-episode prime-time television series for Discovery Channel. In January 2009, Discovery Channel premiered "Treasure Quest" in the United States, followed by a February 2009 premiere in the United Kingdom. JWM had exclusive access to film Odyssey's operations and at other Odyssey controlled locations as needed for JWM to complete filming for the series. JWM also had limited use of our resources for production of the series. The Odyssey Explorer has returned to the "Atlas" project area with plans to conduct search and recovery operations during 2009.
Two Admiralty arrests were also filed on shipwrecks located in the northern Atlantic Ocean west of the western approaches to the English Channel in November 2008.
HMS Victory Project
In April 2008, as part of its ongoing "Atlas" project in the western English Channel, Odyssey Marine Exploration recorded an interesting target using side-scan sonar and a magnetometer. The resultant high-frequency image depicted a clearly disturbed sea bottom across an oval area of 40m, interspersed with linear objects. The 35-gamma magnetometer profile was suggestive of a wooden wreck with features typifying iron anchors, cannon and ship structure.
From the research platform Odyssey Explorer, Odyssey's Remotely Operated Vehicle (ROV) ZEUS made 23 dives on the site between May and October 2008 and verified the existence of a substantial newly discovered shipwreck. Visual investigation of the site, complemented by a pre-disturbance survey, identified a significant concentration of wreckage covering an area of 61x22m, comprised of the hull remains, the ship's 10 meter-long rudder, rectangular iron ballast, two anchors, a copper kettle, rigging, two probable gunner's wheels and 41 bronze cannon, including eight 42-pounder guns.
Examination of the site and its material culture subsequently lead Odyssey to conclude that it had likely discovered the long-lost wreck of Admiral Sir John Balchin's first-rate Royal Navy warship, HMS Victory, which sank with all hands aboard during a storm in October 1744. After preliminary site inspection and documentation, Odyssey immediately notified the proper authorities in the British Government, and with their agreement, began to further investigate the site. Following the non-disturbance survey, measurement and photography of surface features, Odyssey completed a non-disturbance photomosaic of the site consisting of approximately 2,800 high-resolution still images taken at an elevation of 2.5m above the seabed. A master photomosaic of the wreck site was then produced, and a pre-disturbance site plan photographed all in situ cultural material and defined the level of site preservation and the extent of biological activity. Subsequently, with the agreement of the UK Ministry of Defence (MOD), small-scale trenching was conducted, largely confined to the stern area of the shipwreck where the most diagnostic artifacts were anticipated to be preserved.
With the goal of further establishing a positive identification, and with the agreement of the United Kingdom's Ministry of Defence, Odyssey recovered two bronze cannon from the wreck site: a 12-pounder featuring the royal arms of King George II (r. 1727-60), and a 4 ton, 42-pounder bearing the crest of George I (r. 1714-27). Both guns carry the maker's mark ("SCHALCH"), representing Andrew Schalch of the Royal Brass Foundry, Woolwich, widely recognized as the pre-eminent master founder of his time. The cannon also feature archetypal dolphin handles, common to bronze cannon of the era in which HMS Victory sailed. The dates, size and caliber of the guns recovered, combined with detailed inspection of the visible cannon on the seabed, were key pieces of evidence to conclusively identify the shipwreck as Britain's first-rate warship, HMS Victory—the last Royal Navy warship to be lost at sea with a complete complement of bronze cannon.
Odyssey has been cooperating closely with the UK MOD on the project of HMS Victory, and all activities at the site have been conducted in accordance with protocols agreed to by the MOD and Royal Navy officials. Terms of collaboration between Odyssey and the UK MOD on the project are currently being negotiated, and an agreement similar to the Sussex Partnering Agreement has been proposed.
"Black Swan" Project
The "Black Swan" is a Colonial period site we discovered during 2007 in the Atlantic Ocean. The Company recovered over 500,000 silver coins weighing more than 17 tons, hundreds of gold coins, worked gold and other artifacts from this site.
We have taken great care to archaeologically document this site and to carefully conserve and record all artifacts to the highest professional standards. The site which is primarily comprised of cargo spread over a large area, does not contain an actual vessel or hull of a shipwreck. There are no signs of human remains at the site; however, the site is being treated with the utmost respect. We believe it is important to keep the location of the site confidential to protect the integrity of the site.
The Kingdom of Spain, which has filed a claim in this case, has stated in court documents their belief that the site in question is definitely the Nuestra Señora de las Mercedes (the "Mercedes"), a Spanish vessel which sunk in 1804 while carrying mostly private merchant cargo. While one of Odyssey's working hypotheses is that the vessel related to the cargo found at this deep-water site may be the.Mercedes, there is some evidence which suggest the site may not be related to the Mercedes, including eyewitness accounts of her sinking much closer to land than the "Black Swan" site. The cargo and artifacts recovered from the site have been brought to the United States under an Admiralty arrest action and we have been appointed substitute custodian by the federal US District Court. For additional information refer to the "Admiralty Legal Proceedings" section.
North Carolina Project
We reached an agreement with shipwreck exploration firm Intersal, Inc. to pursue operations at a site off the coast of North Carolina.
Intersal is seeking to renew its exploration permit from the North Carolina Department of Cultural Resources, which includes the site and additional surrounding areas, some of which may correlate with Odyssey's "Firefly" shipwreck project. Odyssey and Intersal are committed to continuing Intersal's policy of maintaining high archaeological standards and close co-operation with the North Carolina State Government.
The agreement also entitles Odyssey to share in substantial research and data acquired by Intersal over the years relating to the target shipwreck and the work completed to date in the permit area. A number of artifacts have been recovered from the site, which is the subject of an admiralty arrest action by Intersal in the Eastern District of North Carolina.
The area covered by this permit and arrest is located near Odyssey's current "Firefly" project, which was acquired by Odyssey from BDJ Discovery Group in 2007 and includes one arrested site that has already produced a small number of gold and silver artifacts. This new Intersal site and permit area may also be related to the high-value, Colonial-era merchant vessel believed to be located in the area. The agreements with BDJ and Intersal are similar but separate and the areas do not overlap.
Plans are being developed to resume work in both areas in 2009.
HMS Sussex Project
The Sussex project is an expedition to locate and recover the artifacts and cargo of a large colonial-period British warship, HMS Sussex, which was lost in a severe storm in 1694. Based on documentary research conducted by contract researchers and our in-house research team in libraries and historical archives in Great Britain, France and other countries, we believe that there is a high probability the ship was carrying a cargo of coins with a substantial numismatic and collector value. Our analysis of the data was accumulated from a review of the ship's logs, court martial records, state papers, treasury books and various other letters and reports. We conducted offshore search operations on this project in 1998, 1999, 2000 and 2001. Based on the results of these search operations, we believe there is a high probability we may have located the HMS Sussex, but this will only be confirmed after additional excavation of the site.
On September 27, 2002, we entered into an agreement with the Government of the United Kingdom of Great Britain and Northern Ireland, which we refer to as Her Majesty's Government (HMG), which allows us to conduct an archaeologically sensitive exploration of the shipwreck believed to be HMS Sussex and to recover artifacts from the shipwreck site. The agreement provided for us to submit a Project Plan to HMG concerning the equipment, personnel and methodologies we intend to use in the exploration of the shipwreck, and the conservation and documentation of any artifacts and cargo that may be recovered. This Plan was submitted and was declared fit for purpose during 2004 with the exception of the staffing plan, which could not be completed until the actual start date was agreed upon and the availability of personnel could be determined. The staffing plan was approved during 2005 and we began exploration of the site during December 2005.
In late 2005 and early 2006, Odyssey completed to the satisfaction of HMG all work detailed in Phase 1A of the HMS Sussex archaeological project plan. The Company has also completed a portion of Phase 1B. The Company temporarily halted operations on the project at the request of the Spanish Ministry of Foreign Affairs while issues relative to the archaeological plan for excavation of the site, territorial and cultural resource management issues were negotiated.
As a sovereign warship, HMS Sussex remains the property of HMG which, to our knowledge, has not been contested by the Spanish government or other entities. As part of the partnering agreement signed between Odyssey and HMG in 2002, the following sharing arrangements have been agreed upon with respect to the aggregate amount of the appraised values and/or selling prices of the artifacts, net of agreed selling expenses:
In addition to the percentages specified above, we will also pay HMG 10% of any net income we derive from intellectual property rights associated with the project.
Under the agreement, HMG has the right to keep all artifacts together in one collection, and to then compensate Odyssey by paying us the commensurate percentage of the appraised retail value of the collection. Alternatively, HMG may decide to de-accession duplicate artifacts such as coins and to compensate us by giving us a percentage of those artifacts in an amount that correlates with the percentage of the value due us.
Also, we received the exclusive worldwide right to use the name "HMS Sussex" in connection with sales and marketing of merchandise (exclusive of artifacts) related to the shipwreck, and HMG will receive 3% of the gross sales of such merchandise.
Our agreement with HMG is for a period of 20 years, and can only be terminated if:
The shipwreck that is believed to be HMS Sussex is located in the search area for a project that we have previously referred to as our "Cambridge" project. We sold through private placements of Revenue Participation Certificates, or RPCs, the right to share in our future revenues derived from the "Cambridge" project. As of April 30, 1999, when the offering was closed, we had sold $825,000 of the RPCs. As a group, the holders are entitled to 100 % of the first $825,000 of gross revenue, 24.75 % of gross revenue from $4 million to $35 million, and 12.375 % of gross revenue above $35 million generated by the "Cambridge" project. Additionally, on May 26, 1998, we signed an agreement with a subcontractor that entitled it to receive 5 % of the post-finance cost proceeds from any shipwrecks in a certain search area of the Mediterranean Sea. The shipwreck we believe is HMS Sussex is located within the specified search area, and we will be responsible to share future revenues, if any, from this shipwreck with the subcontractor. The subcontractor's rights were foreclosed upon during 2002 and the purchaser was a limited liability company which was partially owned by two of our officers and directors at the time. In order to remove any potential conflicts of interest, these two persons sold their interests in the limited liability company during 2005.
Because the government of Spain is pursuing claims against our recovery from the "Black Swan" project, the HMS Sussex project, which has involved work in the Mediterranean Sea off the coast of Gibraltar, has been delayed. See "Black Swan" Arrest in the next section.
Admiralty Legal Proceedings
An Admiralty arrest is a legal process in which Odyssey seeks recognition from the Court of Odyssey's salvor in possession status for a specific shipwreck, site or cargo. It is the first legal step in establishing Odyssey's rights to ownership or to a salvage award. Odyssey currently has eight pending Admiralty arrest cases; three in the "Atlas" search area, two in the north Atlantic, the "Black Swan," the "Firefly" and a 20th century passenger liner in the Mediterranean. Status updates are discussed below.
We will continue to pursue prompt resolutions of all claims. If we are able to confirm that any entity has a potential legitimate legal claim to any of the materials recovered from these sites, we intend to provide specific legal notice to any and all potential claimants. Even if another entity is able to prove that it has an ownership interest in the shipwreck and/or cargo and that they had not legally abandoned the shipwreck, Odyssey would seek a salvage award from the Admiralty Court. In cases such as this, salvors are typically awarded a salvage award based on their efforts which may be up to 90% or more of the recovery.
"Black Swan" Arrest
In April 2007, we filed an Admiralty arrest on a site in the Atlantic Ocean approximately 1,100 meters deep, beyond the territorial waters or contiguous zone of any sovereign nation, and we were appointed substitute custodian for all artifacts recovered from the site. Odyssey code named the site "Black Swan." In May 2007, the Kingdom of Spain filed a notice in this case stating that the Spanish government did not intend to give up rights to any Spanish property which might be on the site. Through the discovery process, Odyssey shared information and documentation with Spain regarding the site and items recovered. On March 6, 2008, the Court denied Spain's Motion to Dismiss Odyssey's claims for possession and ownership of this and two other arrested sites and for salvage awards.
On March 12, 2008, the Court issued orders in this case, the 2006 "Atlas" case, and the Mediterranean case confirming that Odyssey had complied with all discovery orders thus far and instructing Odyssey to respond within thirty days to interrogatories regarding its theory as to the identities of any vessels related to the sites.
On April 11, 2008, Odyssey filed its responses to the Court's interrogatories and identified the Nuestra Señora de las Mercedes (the "Mercedes"), a vessel assigned to transport mail, private passengers, consignments of merchant goods and other cargoes, as one vessel potentially related to the "Black Swan" site, although there is evidence which may contradict this hypothesis. Odyssey reiterated that no vessel has been found at the site, and stated that other hypotheses were also being explored. Spain then filed its answers to the Court's interrogatories indicating that it had concluded that the vessel related to the "Black Swan" site was the Mercedes.
Spain filed a Motion to Dismiss the case on September 22, 2008, based upon the Foreign Sovereign Immunities Act ("FSIA"), alleging that the U.S. District Court lacks jurisdiction. Odyssey filed a response on November 17, 2008, to which Spain filed a reply on January 26, 2009. Odyssey filed a response to that reply on February 13, 2009. We are awaiting the Court's ruling on the Motion to Dismiss. All pleadings have been filed with the U.S. District Court for the Middle Division of Florida, Tampa Division, Case number 8:07-cv-00614. Claims have been filed in the case by Spain and Peru as well as named individuals who assert an interest in property which was aboard the Mercedes. Those named individuals have specifically acknowledged Odyssey's right to a salvage award in the case. At Odyssey's request, on January 20, 2009 the Court issued an order setting January 31, 2009, as the deadline for the filing of claims in the case.
We currently have three pending Admiralty arrest cases on sites in the "Atlas" search area. Case number 8:06-cv-1685 was discovered and arrested in 2006. This site remains unidentified. Case numbers 8:08-cv-01044 and 8:08-cv-01045 were discovered and arrested in 2008. The site related to case number 8:08-cv-01045 has been identified as HMS Victory and the site associated with case number 8:08-cv-01044 is believed to be the privateer Marqise de Tornay.
Case number 8:06-cv-1685 (unidentified):
In May 2007, the Kingdom of Spain filed a notice in this case stating that the Spanish government did not intend to give up rights to any Spanish property which might be on the sites. On December 20, 2007, Keith Bray filed an Intervening Complaint in this case involving the site arrested in September 2006. His claim includes counts for Fraud, Rescission and Mutual Mistake and seeks to have the Court rescind his contract with Odyssey which specifically provided that Bray was entitled only to the cash payment paid to him for historical research work. On January 9, 2008, Odyssey filed its Answer and Affirmative Defenses to the Intervening Complaint denying Bray's allegations and attaching a copy of the Research Agreement which Odyssey had with Bray.
On March 12, 2008, the Court issued orders in this case confirming that Odyssey had complied with all discovery orders thus far and instructing Odyssey to respond within thirty days to interrogatories regarding its theory as to the identities of any vessels related to the sites. On April 11, 2008, Odyssey filed in this case its responses to the Court's interrogatories. Odyssey stated that it had not confirmed the identity of any vessel related to this site, but named the Merchant Royall, a British merchant vessel lost in 1641, as a possible vessel related to the site, although there is some evidence being examined that may contradict this theory. Spain filed its answers to the Court's interrogatories indicating that it believed the vessel related to this arrested site was the Merchant Royall.
After initial discovery and several pre-trial hearings, the parties appeared again in Court on June 9, 2008. Considering Spain's admission that it had no claim to anything that had been brought before the Court in this case, at the status hearing, the Court urged Spain and Odyssey to reach a settlement. Odyssey proposed a voluntary dismissal without prejudice, but Spain refused. A status conference in the case was held on January 8, 2009, in which Odyssey requested the Court to move forward with adjudication of its rights to the items recovered from the site. The Court has taken the matter under advisement. Odyssey is proceeding with the litigation as to Bray's claim, but believes his claim has no merit.
Case numbers 8:08-cv-01045 (HMS Victory) and 8:08-cv-01044 (Marqise de Tornay):
In May 2008, we filed Admiralty arrests on two separate Colonial period shipwreck sites in the "Atlas" search area (Case numbers 8:08-cv-01044 and 8:08-cv-01045). Both sites contain cannon and other artifacts. On June 20, 2008, U.S. District Court for the Middle District of Florida appointed Odyssey as Substitute Custodian of both sites and the artifacts recovered therefrom. These two arrests are in addition to the site located and arrested in September 2006 in the "Atlas" area (Case number 8:06-cv-01685).
On February 2, 2009, Odyssey announced that one of these sites was the site of HMS Victory, the last Royal Navy warship to be lost at sea with a complete complement of bronze cannon. Odyssey also announced that it had recovered two unique cannon from the site and that the company's research indicated that HMS Victory sunk with a substantial amount of gold and silver specie aboard.
Odyssey has been cooperating closely with the United Kingdom's Ministry of Defence (MOD) on the project, and all activities at the site have been conducted in accordance with protocols agreed upon with MOD and Royal Navy officials. Terms of collaboration between Odyssey and the UK MOD on the project are currently being negotiated, and an agreement similar to the Sussex Partnering Agreement has been proposed.
Based on a bell recovered from the shipwreck site, site exploration and artifacts, Odyssey believes the other arrest to be the shipwreck of the privateer Marqise de Tornay. On January 23, 2009, the company published notice of the likely identity. No claimants have come forward to date.
North Atlantic Arrests
In November 2008, Admiralty arrests were also filed on two shipwrecks located in the North Atlantic Ocean over 300 miles from the western approaches to the English Channel (Case numbers 8:08-cv-02219 and 8:08-cv-02220). Both sites bear characteristics of certain ships that we believe may contain valuable cargo. On November 13, 2008, the U.S. District Court for the Middle District of Florida appointed Odyssey as Substitute Custodian of both sites and the artifacts recovered therefrom. On February 9, 2009, The United Kingdom filed Verified Statements of Right or Interest in each of the cases, asserting a potential interest in the vessels and/or cargo recovered from the sites. Odyssey intends to file a response to those claims.
In April 2007, Odyssey filed an Admiralty arrest on a shipwreck in the Mediterranean believed to be the Ancona, a 20th century passenger liner believed to be carrying valuable cargo, and was appointed substitute custodian of the artifacts recovered (Case number 8:07-cv-00616). In May 2007, the Kingdom of Spain filed a notice in this case stating that the Spanish government did not intend to give up rights to any Spanish property which might be on the site. On March 12, 2008, the Court issued orders in this case confirming that Odyssey had complied with all discovery orders thus far. On April 1, 2008, Spain voluntarily dismissed its claim in this Admiralty case. Odyssey intends to file a Motion for Summary Judgment in the case.
About Odyssey Marine Exploration
Odyssey Marine Exploration, Inc. (NasdaqCM: OMEX) is engaged in the exploration of deep-ocean shipwrecks and uses innovative methods and state-of-the-art technology to conduct extensive search and archaeological recovery operations around the world. Odyssey discovered the Civil War era shipwreck of the SS Republic® in 2003 and recovered over 50,000 coins and 14,000 artifacts from the site nearly 1,700 feet deep. In May 2007, the Company announced the historic deep-ocean treasure recovery of over 500,000 silver and gold coins, weighing 17 tons, from a Colonial era site code-named "Black Swan." In February 2009, Odyssey announced the discovery of Balchin's HMS Victory. The Company also has other shipwreck projects in various stages of development around the world.
Odyssey offers various ways to share in the excitement of deep-ocean exploration by making shipwreck treasures and artifacts available to collectors, the general public and students through its webstore, exhibits, books, television, merchandise, and educational programs. JWM Productions recently concluded filming Odyssey's 2008 "Atlas" expeditions for an 11-part primetime series for Discovery Channel, which premiered in early 2009 in the United States and the United Kingdom, and which is scheduled to air worldwide later in 2009. Following previous successful engagements in New Orleans, Tampa, and Detroit, Odyssey's "SHIPWRECK! Pirates & Treasure" exhibit is now on display at Science Center Oklahoma in Oklahoma City, OK through May 2009. For details on the Company's activities and its commitment to the preservation of maritime heritage please visit www.shipwreck.net.
For more detailed information on Odyssey, please contact Natja Igney, Odyssey's Manager of Corporate Communications, at 813-876-1776.
Consolidated Financial Statements (PDF). You will need Adobe Acrobat to view this file. If you do not have this program, you can download a free Adobe Acrobat Reader at Adobe.com
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," and "Business" in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, which has been filed with the Securities and Exchange Commission.
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