Odyssey Marine Exploration Inc – ‘10KSB’ for 2/29/04

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Annual Report — Small Business   —   Form 10-KSB
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Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Odyssey Marine Exploration 2-29-04 10-Ksb             51±   212K 
 2: EX-23       Consent of Experts or Counsel                          1      7K 
 3: EX-31       Exhibit 31.1                                           2±     9K 
 4: EX-31       Exhibit 31.2                                           2±     9K 
 5: EX-32       Exhibit 32.1                                           1      6K 
 6: EX-32       Exhibit 32.2                                           1      6K 

10KSB   —   Odyssey Marine Exploration 2-29-04 10-Ksb
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U.S. SECURITIES AND EXCHANGE COMMISSION 
WASHINGTON, D.C. 20549  

FORM 10-KSB   

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE  
SECURITIES EXCHANGE ACT OF 1934     

For the Fiscal Year ended February 29, 2004 

Commission File Number 0-26136

  ODYSSEY MARINE EXPLORATION, INC.
 -----------------------------------------------------------------
 (Exact name of small business issuer as specified in its charter)

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

 3604 Swann Avenue, Tampa, Florida 33609
 ---------------------------------------
  (Address of principal executive offices)

(813) 876-1776  
   ---------------------------------------------------
   (Registrant's telephone number including area code)

Check whether the issuer (1) filed all reports required to be filed by Section  
13 or 15(d) of the 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.      

[ X ]  Yes          [   ]  No   

As of April 30, 2004, the Registrant had 37,993,099 shares of Common Stock,     
$.0001 Par Value, outstanding, and the aggregate market value of the shares     
held by non-affiliates on that date was approximately $123,000,000.             

Transitional Small Business Disclosure format:    Yes  [   ]   No [ X ]         

PART I    

This Annual Report on Form 10-KSB contains forward-looking statements 
within the meaning of Section 27A of the Securities Act of 1933 and Section     
21E of the Securities Act of 1934. The statements regarding Odyssey Marine      
Exploration, Inc. and its subsidiaries contained in this report that are not    
historical in nature, particularly those that utilize terminology such as       
"may," "will," "should," "likely," "expects," "anticipates," "estimates,"       
"believes" or "plans," or comparable terminology, are forward-looking           
statements based on current expectations and assumptions, and entail various    
risks and uncertainties that could cause actual results to differ materially    
from those expressed in such forward-looking statements.                        

  Important factors known to us that could cause such material differences
are identified in this report and in our "RISK FACTORS" in Item 1. We           
undertake no obligation to correct or update any forward-looking statements,    
whether as a result of new information, future events or otherwise. You are     
advised, however, to consult any future disclosures we make on related          
subjects in future reports to the SEC.                                          

ITEM 1. DESCRIPTION OF BUSINESS                                                 

(a)  Business Development                                                       

 Odyssey Marine Exploration, Inc. ("Odyssey," "the Company," "we," "our"
or "us"), is a Nevada corporation formed March 5, 1986.  Our principal office   
is located at 3604 Swann Ave., Tampa, Florida 33609 and our phone number is     
(813) 876-1776.                                                                 

The Company has four wholly owned and operating subsidiaries:         

Odyssey Marine, Inc., ("OMI") a Florida corporation, was formed on    
November 2, 1998, for the purpose of administering the Company's Florida based  
payroll and insurance plan.                                                     

 Odyssey Marine Services, Inc., ("OMS") a Nevada corporation, was formed
September 11, 2002, for the purpose of holding and leasing our marine assets,   
chartering and leasing vessels and employing marine crew and technical          
personnel.                                                                      

On September 11, 2002, the Company formed a wholly owned Nevada       
corporation, OVH, Inc., ("OVH") for the purpose of owning and chartering a      
research vessel.                                                                

 On July 30, 2003, the Company formed a wholly owned Nevada corporation,
Odyssey Retriever, Inc., ("ORI") for the purpose of owning and operating a      
vessel suitable for conducting archaeologically sensitive exploration and       
recovery of shipwrecks.                                                         

(b)  Business of Issuer                                                         

The Company                                                           

Odyssey Marine Exploration, Inc. is engaged in the archaeologically   
sensitive exploration and recovery of deep-water shipwrecks throughout the      
world.  We employ advanced state-of-the-art technology including side scan      
sonar, remotely operated vehicles, or ROVs, and other advanced technology,      
which enables us to locate and recover shipwrecks at depths that were           
previously unreachable in an economically feasible manner.                      

 2

Odyssey's founders have significant experience in deep ocean shipwreck
exploration, and have supervised extensive deep-water archeological             
excavations with ROVs.  In addition to operational experience, our officers     
have taken a leadership role in the development of a shipwreck exploration      
industry, having founded the Professional Shipwreck Explorer's Association,     
served on the United States delegation for the Convention on the Protection of  
Underwater Cultural Heritage for four consecutive terms, provided advice to     
various government agencies on shipwreck policy issues in both the United       
States and abroad, and negotiated the world's first sovereign shipwreck         
partnering agreement with any government.                                       

   Odyssey is being built on a foundation of shipwreck research, development
of political relationships and advancement of techniques for deep ocean search  
and recovery.                                                                   

Founding Principles                                                   

Odyssey was founded on the following principles:                      

*  Ships have been lost through the centuries in deep water while     
carrying intrinsically valuable artifacts and cargoes.          

*  The technology now exists to both find and recover these lost      
artifacts and cargoes in an archaeologically-sound fashion.     

*  The combination of these factors means that a new industry will    
likely result, and we plan to be the leader within this new     
industry.                                                       

Project Criteria                                                      

Since 1994, we have spent much of our time conducting research in an  
attempt to identify shipwreck projects that meet the following criteria:        

*  The shipwreck must be in deep water, thereby minimizing the        
possibility that it has been broken up and covered by shifting  
sands or the object of previous recovery efforts.               

*  The research must indicate that the shipwreck was carrying enough  
intrinsically valuable cargo to pay for the high cost associated
with deep-ocean archaeological recovery, and to provide an      
attractive return for our investors and shareholders.           

*  The research must provide good navigational information concerning 
the sinking location in order to minimize the search area and   
provide a reasonable expectation that the wreck can be found.   

*  The issues relating to ownership of the shipwreck and its cargo    
 must be resolved or reasonably predictable prior to beginning any
recovery in order to minimize potential for litigation.         

 The United Nations Educational Scientific and Cultural Organization, or
UNESCO, has estimated that there are up to 3,000,000 shipwrecks contained       
within the oceans of the world.  Historical records suggest that many were      
lost with verifiable cargoes of intrinsically valuable material.  Of this       
universe of potential projects, we have identified more than a dozen projects   
that could be initiated immediately.                                            

 3

Mission and Strategy                                                  

Our mission is to become the premier company engaged in deep water    
shipwreck exploration through the application of state-of-the-art technology    
and dedication to the preservation of underwater cultural heritage through      
sound archaeological practices.                                                 

   The cost of mobilizing vessels, complex equipment and a professional team
of technicians, archaeologists, conservators and scientists capable of          
conducting deep-water search and recovery is very high.  Therefore, our         
strategy is to build a "pipeline" of well-researched projects and then move     
equipment and personnel from project to project in a cost-effective and         
efficient manner.                                                               

Revenue Sources                                                       

Although we believe the majority of our anticipated revenue will be   
generated through the sales of intrinsically valuable cargoes, we also plan to  
produce revenue from other activities including marketing shipwreck             
merchandise, expedition sponsorships, sale of intellectual property rights,     
adventure tourism, archaeological services, traveling exhibits and operation    
of themed attractions.                                                          

Active Projects                                                       

Our vessel, Odyssey Explorer, is currently working on the SS Republic 
project and we plan to use it for the recovery of HMS Sussex later this         
summer. Our search vessel, RV Odyssey, is currently conducting search           
operations off the United States east coast.                                    

 We originally submitted our project plan for HMS Sussex on November 11,
2002. On May 22, 2003 the British Government accepted our Project Plan and we   
began to make the arrangements for the financing, vessels, equipment and        
personnel necessary to begin operations. However, prior to completing these     
arrangements, we located the SS Republic, a steamship lost during a hurricane   
in 1865.  We decided that we would conduct operations at the Republic site      
prior to starting the Sussex in order to perfect our archaeological recovery    
protocols.                                                                      

   Since the weather is better for us to work off the United States Atlantic
coast during the spring and early summer, we intend to complete the Republic    
exploration and potentially work on one or more other shipwrecks in that area   
prior to moving our equipment to the Mediterranean for the Sussex exploration.  

In prior years we have disclosed information concerning each of our   
search operations.  In order to protect the identities of our current projects  
we have decided not to release any information relating to our search targets   
until we have located the targeted vessel(s) and determined a course of action  
to protect our property rights.                                                 

SS Republic Project                                                             

  The SS Republic is a side-wheel steamer lost in deep water in 1865 after
battling a hurricane for two days. The ship, en-route from New York to New      
Orleans, was reportedly carrying $400,000 in specie (1865 face value) when it   
sank. The ship's history includes service in both the Confederate and Union     
navies during the Civil War.                                                    

 4

  We discovered the shipwreck in the summer of 2003 nearly 1700 feet below
the surface of the Atlantic Ocean approximately 100 miles off the Georgia       
coast. In March 2004, Odyssey was awarded title and ownership to the SS         
Republic shipwreck and cargo, including the hull, artifacts and the specie      
that was on board when she sank.                                                

The archaeological excavation has been ongoing since mobilization and 
deployment of Odyssey's advanced deep ocean archaeological platform.            

Odyssey completed the pre-disturbance survey work on the SS Republic  
shipwreck site in October of 2003. Over 4,600 digital stills were taken over    
the course of 23 dives. The detailed photomosaic produced a detailed high       
resolution image of the shipwreck site and debris field. This can be used in    
later study and documentation of the SS Republic and serves as a map to help    
the Odyssey team determine excavation priorities.                               

Shortly after commencement of archaeological excavation of the site, a
substantial number of gold and silver coins were revealed using Odyssey's       
Sediment Removal and Filtration (SeRF) system.                                  

To date, the Odyssey team has excavated less than one half of the SS  
Republic shipwreck site. The face value of recovered coins represents 22.7% of  
the "$400,000 in specie" (face value in 1865) that historical research          
indicates was on board the Republic when she sank. Odyssey is now searching     
for additional deposits of coins, but the site is being excavated in a          
systematic fashion, so areas that may potentially hold the remaining coins may  
not be reached until further into the excavation.                               

  The excavation system has proven very effective, and the portions of the
site that have been excavated have been cleaned down to the wooden hull         
timbers, so that there is no possibility of coins or artifacts remaining in     
the excavated areas. The operations team has encountered large beams,           
significant amounts of iron and other obstructions that have slowed down        
excavation, but ZEUS and the recovery team have proven the effectiveness of     
the system by clearing every obstacle. Based on what we see on the remaining    
site, we do not anticipate any obstacles that would prevent excavation of the   
entire site.                                                                    

 In late 2003, when it appeared that all the coins may have been located
in one small area, we anticipated recovering them all within 60 days. We        
recovered significantly more coins than were expected because many of them      
were smaller denomination silver half dollar coins. The coin recovery was       
efficient, allowing for recovery of up to 2,000 coins or more per day, even     
though they were recovered one at a time. The necessity of excavating the       
balance of the shipwreck site to find the balance of the coins which research   
suggests should still be there has required a reevaluation of the timeframe     
for the site excavation.                                                        

As we excavate, we are cleaning everything out of the entire hull in a
methodical manner, making certain that there is no possibility that coins or    
artifacts could remain in the areas excavated. There are several theories       
relating to where the balance of the coins may reside on the shipwreck site.    
Our experience with excavation of the site to date indicates that we will be    
able to completely excavate the additional areas of possible interest during    
the summer of 2004. We remain confident in the research that suggests that      
$400,000 in specie went down with the ship and have no reason to believe that   
the balance of the coins, if there, cannot be found with the demonstrated       
capabilities of our equipment and techniques.                                   

 5

To date more than 51,000 coins have been recovered including $20.00   
Double Eagles, $10.00 Eagles, Half Dollars and Quarter Dollars.  Coins from     
the SS Republic have been divided into two categories.  The "numismatic         
collection" contains coins that are indistinguishable from coins that have      
never been underwater.  These will be priced to correlate with their            
numismatic value and will not be offered for sale until Odyssey has completed   
sufficient coin recovery on the shipwreck site to provide information           
regarding the total population of coins in the collection.                      

The second category includes ungraded shipwreck coins that have been  
conserved and encased in a certified tamper-resistant holder by Numismatic      
Conservation Services (NCS) and Numismatic Guaranty Corporation (NGC).          

The SS Republic "shipwreck effect" Liberty Seated Half Dollars are    
unique.  Unlike the graded numismatic coins from the SS Republic shipwreck      
site, an expert can tell that these coins have been lying in the ocean for      
many years.                                                                     

  These "shipwreck effect" coins were the first available for sale and the
marketing program for them was launched on  May 15, 2004 at a 24 hour marathon  
of Shop at Home Television "Coin Vault" program.  SS Republic ungraded silver   
half dollar coins were offered in a package that included a souvenir wooden     
box with engraved plaque, a 16 page color booklet and DVD of a National         
Geographic MSNBC television special that aired April 25, 2004.  These were      
offered in four, one hour segments dedicated exclusively to SS Republic coins.  

   In addition to these sales, a number of the nation's largest coin dealers
have purchased from us the ungraded silver half dollars and have begun          
marketing them.                                                                 

  The balance of the ungraded coins, as well as the graded silver and gold
coins, will be released to the retail marketplace in phases in a manner         
designed to capitalize on brand-building media exposure and public interest in  
the project.                                                                    

HMS Sussex                                                                      

The Sussex project is an expedition to locate, recover and market the 
artifacts and cargo of a large colonial-period British warship, HMS Sussex,     
which was lost in a severe storm in 1694.  Based on research conducted by us    
and contract researchers, we believe that there is a high probability that the  
ship was carrying a cargo of coins with a bullion value of approximately $100   
million and a much higher numismatic value.  We conducted offshore search       
operations on this project in 1998, 1999, 2000 and 2001.  Based on the results  
of these search operations, we believe that there is a high probability we      
have located the remains of HMS Sussex.                                         

 On September 27, 2002, we entered into an agreement with the Government
of the United Kingdom of Great Britain and Northern Ireland, (the "British      
Government"), that 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 provides for us to submit a   
Project Plan to the British Government 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.                                                                      

 6

  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:                                      

     British
Range                   Government     Odyssey      
----------------------------     ----------     -------               
$0 - $45 million                    20%           80%                 
$45 million to $500 million         50%           50%                 
Above $500 million                  60%           40%                 

In addition to the percentages specified above, we will also pay the  
British Government 10% of any net income we derive from intellectual property   
rights associated with the project.                                             

We also 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 the British Government will receive    
3% of the gross sales of such merchandise.                                      

   The Agreement is for a period of 20 years, and can only be terminated if:

*  the shipwreck is not HMS Sussex;                                   

*  no artifacts are retrieved before November 22, 2004; or            

*  we are in serious breach of our obligations under the agreement.   

We have sold through private placements of Revenue Participation      
Certificates ("RPCs") the right to share in our future revenues derived from    
the Cambridge Project which includes a shipwreck we have found that we believe  
to be the HMS Sussex. As of April 30, 1999, when the offering was closed, we    
had sold $825,000 of the Cambridge 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 - $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. A shipwreck we have found, which we believe to be the HMS Sussex, is       
located within the specified search area and we will be responsible to share    
future revenues, if any, from this shipwreck.                                   

Technology                                                            

Odyssey is a pioneer in the use of advanced deep-ocean technology for 
shipwreck exploration.  We are not, for the most part, an inventor of the       
technologies required for deep ocean search and recovery.  We use technologies  
that others, primarily the military, oil industry, and telecommunications       
industry, have developed at great expense.                                      

We have learned how to apply these technologies specifically to locate
shipwrecks and to conduct precise archaeological recoveries at depths of 100    
to 2,000 meters and beyond.  Although we tend to use "off the shelf"            
technology because it is cost effective, we do have several proprietary         
software and equipment applications that maximize the effectiveness of our      
search and recovery systems.  Software to precisely document the complete       
archaeological excavation and advanced sediment removal and filtration systems  
are two examples of our technological innovations.                              

 7

Equipment                                                             

Most of our projects are conducted in two phases.  The search phase is
usually conducted from a smaller vessel outfitted with survey equipment and an  
inspection ROV.  The recovery phase requires a vessel equipped with a work      
class ROV, both long baseline and USBL acoustic positioning systems, and        
certain Odyssey technology and proprietary software, which allows us to record  
the recovery in an archaeologically sound fashion.                              

  In 2003, we elected to purchase the 113-foot search and survey vessel RV
"Odyssey" and to equip it with sophisticated search and identification          
equipment. That ship and search team successfully concluded the SS Republic     
search operation with location of the shipwreck August, 2003. RV Odyssey is     
currently engaged in the search for a number of targets off the eastern         
seaboard of the United States.  RV Odyssey will be our primary search vessel    
for coastal projects and can recover small artifacts that may aid in            
identifying our targets on a cost-effective basis.  This vessel operates with   
a minimum ship's crew of five and a technical crew of two to four.              

We have also upgraded our search system and now use an advanced CHIRP 
side scan system integrated with a Geometrics magnetometer which provides us    
with an extended search swathe to depths of 2,000 meters. We also purchased a   
MaxROVER ROV system that is a significant upgrade to our target inspection      
capability. Its size, dexterity and manipulator provide the opportunity for     
light recovery work in addition to basic inspection of targets.                 

During September 2003, we purchased a 251 foot Dynamically-positioned 
ship which we named the "Odyssey Explorer" and a 2,500 meter 200 HP work-class  
remotely operated vehicle which we nicknamed "ZEUS". Coupled with a             
sophisticated suite of cameras, lighting and positioning equipment as well as   
advanced computer monitoring and proprietary data management systems, ZEUS      
provides us with the capability of performing extensive archaeological          
excavation work to depths of 2,500 meters.                                      

   The system was mobilized in Baltimore and was deployed to the SS Republic
site in October 2003, where it has been conducting archaeological excavation    
of that shipwreck through the entire winter season.                             

In April 2004, we purchased two new advanced Schilling T3 manipulators
that will provide more dexterity and the capability for recording the X,Y and   
Z position of artifacts as they are recovered   which will result in more       
efficient site excavation. These manipulators are due to be delivered by June   
1, 2004 and will be integrated into ZEUS at that time. We have also recently    
taken delivery of a new High Definition camera system that will add HD          
filmmaking to our intellectual property and media capabilities.                 

Our plans include expanding operations capability by purchasing an    
additional work-class ROV system before summer 2004. This system will be        
called "ZEUS 2"and has many of the same systems and operating characteristics   
which will make it easier for spare parts management and for our team members   
to transition from one system to the other. We expect to take delivery of this  
vehicle in June, 2004.                                                          

Archaeology and Science                                               

Many of the shipwrecks that we intend to pursue may have important    
historical and cultural characteristics.  Every such project undertaken by us   
will be subject to stringent archaeological standards, thus adding to the body  
of knowledge of the people, the history and the culture of the vessel's time.   

 8

We believe adherence to these principles will increase the economic value of    
the artifacts and intellectual property rights of each project.                 

   In addition, many deep ocean recovery expeditions will lend themselves to
interdisciplinary scientific studies including oceanography, marine biology,    
environmental research, bio-engineering and other fields.                       

 We will also provide a platform for research and development activities
aimed at improving the efficiency of shipwreck exploration.  The new systems    
we are integrating for our archaeological excavations include advanced          
high-definition television and efficient recovery of a wide variety of          
artifacts.                                                                      

Legal and Political Issues                                            

   Odyssey works with a number of leading international maritime lawyers and
policy experts to constantly monitor international legal initiatives that       
might affect our projects.  As a matter of policy, we begin with the            
assumption that some entity, whether a government, private concern or           
insurance company, likely has some rights to shipwrecks that are slated for     
search and recovery operations.  Based on this assumption, rigorous legal       
tests are applied in order to ascertain which entities might be able to create  
roadblocks to a successful project.  In some cases, such as that of HMS         
Sussex, it is determined that the most prudent mechanism for moving forward is  
to negotiate a contract with the owner of a vessel in order to manage           
litigation risk.                                                                

In other cases, such as the SS Republic Project, we entered into an   
agreement whereby we purchased the insurance company's interest, opening the    
way for an immediate grant of title to Odyssey by the Federal Court.            

  To the extent that we engage in shipwreck search and recovery activities
in the territorial, contiguous or exclusive economic zones of countries,        
Odyssey intends to comply with verifiable applicable regulations and treaties.  
Prior to beginning operations for any project, the legal and political aspects  
are carefully researched to ascertain what effect these issues may have on the  
potential success of the operation.                                             

These factors are taken into account in determining whether to proceed
with a project as planned.  Other factors, such as the new UNESCO Convention    
for the Protection of Underwater Cultural Heritage are also taken into          
consideration.  New political initiatives such as this Convention could         
restrict access to historical shipwrecks throughout the world to the extent     
that they might require compliance with cultural resource management            
guidelines and regulations.  Some of these will require adherence to strict     
archaeological practices, and we intend to follow reasonable guidelines in all  
projects to which they are applicable.  Greg Stemm, Odyssey's co-founder, was   
a member of the United States delegation that negotiated the UNESCO             
Convention, and as such provides us with a thorough understanding of the        
underlying principles and ramifications of the Convention, and advance notice   
of other cultural resource management issues that might affect our projects.    

The UNESCO Convention is not expected to affect operations in         
International Waters and the United States, the United Kingdom and other major  
maritime governments have already stated explicitly that they do not intend to  
sign the Convention. Nevertheless, some countries in whose waters we may work   
may sign the Convention. While the UNESCO Convention states that artifacts may  
not be sold, it also states that this prohibition may not prevent the           
provision of Archaeological services and we intend to provide such services in  

 9

contracts with governments. We believe that the primary value of the cargoes    
we seek are trade goods (such as coins, bullion and gems), which are not        
artifacts of historical, archaeological or cultural significance and so should  
not be subject to the rule prohibiting sale.                                    

We believe there will be increased interest in the protection of      
underwater cultural heritage throughout the oceans of the world.  We are        
uniquely qualified to provide governments and international agencies with       
resources to help manage these resources while providing the public with        
educational, scientific, historical and entertainment initiatives that          
originate from our shipwreck exploration activities.                            

Competition                                                           

There are a number of competing entities engaged in various aspects of
the shipwreck business, and in the future other competitors may emerge.  One    
or more of these competing entities may locate and recover a shipwreck that we  
intend to locate and recover before we can begin operations on that specific    
project.                                                                        

Cost of Environmental Compliance                                      

  With the exception of vessel operations and conservation activities, our
general business operations do not expose us to environmental risks or          
hazards. We carry insurance that provides a layer of protection in the event    
of an environmental exposure resulting from the operation of our vessels. The   
cost of such coverage is minimal on an annual basis. The risk related to        
conservation activities is considered minimal.                                  

Employees                                                             

   The Company has 25 full time employees working from our corporate offices
in Tampa Florida. Additionally, we employ approximately 20 crewmen who operate  
the vessels R/V Odyssey and Odyssey Explorer. We also hire technical personnel  
for marine survey and recovery on the R/V Odyssey and Odyssey Explorer.         
Depending on the particular operations they are conducting the R/V Odyssey      
will utilize 2-4 technicians and the Odyssey Explorer will use from 14 - 20.    
In addition, we hire subcontractors and consultants from time to time to        
perform specific services.                                                      

Risk Factors                                                          

   Investors in shares of the our Common Stock should consider the following
risk factors, in addition to other information in this Report:                  

  1.   SPECIAL RISKS OF THE BUSINESS.  An investment in a business such as
that of the Company should be considered extremely speculative and very risky.  
Although we have access to a substantial amount of research and data, which     
has been compiled regarding our various projects, the quality and reliability   
of such research and data, like all research and data of its nature, is         
unknown.  Even if we are able to plan and obtain permits for our various        
projects, there is a possibility that the shipwrecks may have been salvaged,    
or may not have had anything of value on board at the time of the sinking.      
Furthermore, even if objects of believed value are located and recovered,       
there is the possibility that others, including both private parties and        
governmental entities, asserting conflicting claims, may challenge our rights   
to the recovered objects. Finally, even if we are successful in locating and    
retrieving objects from a shipwreck and establishing good title thereto, there  

  10

can be no assurance as to the value that such objects will bring at their       
sale, as the market for such objects is very uncertain.                         

2.   UNCERTAIN RELIABILITY OF RESEARCH AND DATA.  The success of a    
shipwreck project will be dependent to a substantial degree upon the research   
and data assimilated by us.  By its very nature, however, all such research     
and data regarding shipwrecks, such as those sought by us, is imprecise,        
incomplete and unreliable as it is often composed of or affected by numerous    
assumptions, rumors, legends, historical and scientific inaccuracies and        
inaccurate interpretations which have become a part of such research and data   
over time.                                                                      

3.   NATURAL HAZARDS.  Underwater recovery operations are inherently  
difficult and dangerous and may be delayed or suspended by weather, sea         
conditions or other natural hazards.  Further, such operations may be           
undertaken more safely during certain months of the year than during others.    
There can be no assurances that we will be able to conduct our search and/or    
recovery operations only during such favorable periods.  In addition, even      
though sea conditions in a particular search location may be somewhat           
predictable, the possibility exists that unexpected conditions in a search      
area may occur and that such unexpected conditions might adversely affect our   
operations.  Further, it is possible that natural hazards may prevent or        
significantly delay search and/or recovery operations.                          

   4.   UNCERTAIN TITLE TO OBJECTS LOCATED.  Persons and entities other than
the Company and entities it is affiliated with (both private and governmental)  
may claim title to the shipwrecks.  Even if we are successful in locating and   
recovering shipwrecks, there is no assurance that we will be able to establish  
our rights to property recovered as against governmental entities, prior        
owners, or other attempted salvors claiming an interest therein.                

   5.   UNCERTAIN MARKET FOR AND VALUE OF RECOVERED OBJECTS. It is difficult
to predict the price that might be realized from the sale of items that have    
been recovered or may be recovered in the future from shipwrecks.  The value    
of the recovered items will fluctuate with a precious metals market that has    
been highly volatile in recent years.  Moreover, the entrance on the market of  
a large supply of similar items from shipwrecks located and recovered by        
others could itself depress the market for these items.                         

   6.   DELAY IN DISTRIBUTION OR SALE OF RECOVERED OBJECTS.  The methods and
channels, which may be used in the disposition of the recovered items, are      
uncertain at present and may include one or a combination of several            
alternatives. Ready access to buyers for disposition of any artifacts or other  
valuable items recovered, however, cannot be assured and delays in the          
disposition of such items are very possible.                                    

 7.   THEFT.  If we locate a shipwreck and assert a valid claim to items
of value, there is a risk of theft of such items at sea, both before and after  
their recovery, by "pirates" or poachers and while in transit to a safe         
destination.                                                                    

8.   COMPETITION.  There are a number of competing entities engaged in
various aspects of the shipwreck business.  One or more of these competing      
entities may locate and recover the shipwreck that we are planning to locate    
and recover.  In addition, these competing entities may be better capitalized   
and may have greater resources to devote to their pursuit of the shipwreck.     

9.  FAILURE TO OBTAIN PERMITS.  It is possible that we will not be  
successful in obtaining title to, or permission to excavate the shipwrecks. In  

  11

addition, permits for the projects may never be issued, and if issued, may not  
be legal or honored by the entities that issued them.                           

 10.  GENERIC PREFERRED STOCK AUTHORIZED.  Our Articles of Incorporation
authorize the issuance of up to 10,000,000 shares of Preferred Stock. The       
Board of Directors has the right to establish the terms, preference, rights     
and restrictions of the Preferred Stock. Other companies on occasion have       
issued series of such preferred stock with terms, rights, preferences and       
restrictions that could be considered to discourage other persons from          
attempting to acquire control of such companies and thereby insulate incumbent  
management.  It is possible we could issue shares of our Preferred Stock for    
such a purpose.  In certain circumstances, the existence of corporate devices   
that would inhibit or discourage takeover attempts could have a depressant      
effect on the market value of our Common Stock.                                 

ITEM 2.  DESCRIPTION OF PROPERTY                                                

 We maintain our offices at 3604 Swann Avenue, Tampa, Florida 33609. The
offices consist of approximately 2,900 square feet of office space that we      
lease from a non-affiliated company on a month-to-month basis for               
approximately $4,000 per month.  The approximate rental for the year ending     
February 29, 2004 was $45,000. We also have a one year lease through November   
2004, on 1,600 square feet of office space at 3606 Swann Avenue, Tampa, Fl      
33609 for approximately $2,000 per month. We spent approximately $6,000 on the  
lease through February 29, 2004.                                                

 We own a 113' Research Vessel the "Odyssey" which we utilize for search
and inspection of shipwreck targets. We purchased the vessel in September 2002  
for $465,000 and it is in good condition to carry out its intended purpose.     

   During August and September of 2003, we spent approximately $2,670,000 to
purchase and retrofit a 251 foot Dynamically-positioned ship which we named     
the "Odyssey Explorer" and a 2,500 meter 200 HP work-class remotely operated    
vehicle which we nicknamed "ZEUS". This equipment is utilized for the           
archaeological exploration and recovery of shipwrecks and is in good condition  
to carry out its intended purpose.                                              

ITEM 3.  LEGAL PROCEEDINGS                                                      

None.                                                                 

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS                  

None.                                                                 

PART II 

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS               

PRINCIPAL MARKET OR MARKETS.                                                    

Our Common Stock was traded on the OTC Bulletin Board under the symbol
"OMEX" until November 18, 2003. On November 19, 2003, our stock was listed on   
the American Stock Exchange and is traded under the symbol "OMR."               

The following table sets forth the high and low sale prices for our   
securities during each quarter for the last two years.                          

  12

     Price
      High         Low
Quarter Ended               -----        -----                      

February 28, 2002           $1.93        $0.52                      
May 31, 2002                $1.60        $0.88                      
August 31, 2002             $1.15        $0.69                      
November 30, 2002           $1.84        $0.97                      
February 28, 2003           $1.38        $0.66                      
May 31, 2003                $1.45        $0.45                      
August 31, 2003             $5.50        $1.09                      
November 30, 2003           $5.60        $3.12                      
February 29, 2004           $6.50        $4.20                      

APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK.                                  

The number of record holders of our $.0001 par value Common Stock at  
April 30, 2004 was 306.  This does not include shareholders that hold their     
stock in accounts in street name with broker/dealers.                           

DIVIDENDS.                                                                      

   Holders of the Common Stock are entitled to receive such dividends as may
be declared by our Board of Directors. No dividends have been declared with     
respect to our Common or Preferred Stock and none are anticipated in the        
foreseeable future.                                                             

RECENT SALES OF UNREGISTERED SECURITIES.                                        

During the three months ending February 29, 2004, we issued 630,000   
shares to four individuals and four companies that exercised warrants for the   
purchase of common stock for $1,069,000 in cash.                                

  The securities were issued pursuant to the exemption provided by Section
4(2) of the Securities Act of 1933.  The purchasers of these securities are     
accredited investors who made an informed investment decision and had access    
to material information regarding the Company. The certificates representing    
the common shares bear an appropriate legend restricting the transfer of such   
securities, and stop transfer instructions have been provided to our transfer   
agent in accordance therewith.                                                  

ITEM 6.  MANAGEMENT'S PLAN OF OPERATION                                         

In the long term, we expect to derive substantially all of our revenue
through the sale and/or display of shipwreck cargoes and artifacts, including   
replicas, and through the operation of exhibits and/or themed attractions.      

 During May 2004 we began selling coins from the SS Republic. We believe
the revenue generated through coin sales will provide us with enough working    
capital to meet our financial commitments and obligations for the next twelve   
months. In addition, we intend to pledge $20 million worth of gold coins as     
collateral for a $5 million secured credit facility through The Bank of Tampa   
which we expect to close in the beginning of June 2004.  This credit facility   
will be used to cover any short-term cash requirements and to purchase a new    
remotely operated vehicle, estimated to cost approximately $1.7 million.  We    
plan to retire this credit facility within one year through the profits         
generated from the sale of coins.                                               

13

   For the next twelve months, we anticipate spending approximately $350,000
per month to pay salaries and general office expenses, approximately $500,000   
per month to operate our recovery ship and approximately $100,000 per month to  
operate our search vessel. We will also be conserving artifacts and the budget  
for this activity will approximate $2.1 million based upon the coins and        
artifacts recovered to date. During May of 2004 we spent approximately          
$400,000 purchasing manipulator arms for the ROV.                               

We are studying the feasibility of operating a traveling exhibit      
featuring the SS Republic and opening a permanent shipwreck attraction.  The    
budgets for these exhibits are not fixed at this time; however, we believe we   
will be able to finance the exhibits out of cash flow from coin sales.          

For the next twelve months we intend to use the Odyssey Explorer to   
complete the recovery of the SS Republic, conduct limited recovery of one or    
more shipwrecks off the east coast of the United States and to commence         
recovery operations on the Sussex Project.  We intend to use the RV Odyssey to  
conduct search operations.                                                      

OFF BALANCE SHEET ARRANGEMENTS                                                  

We have no off-balance sheet arrangements that have or are reasonably 
likely to have a current or future effect on our financial condition, changes   
in financial condition, revenues or expenses, results of operations,            
liquidity, capital expenditures or capital resources.                           

ITEM 7.  FINANCIAL STATEMENTS                                                   

Please see pages F - 1 through F - 23.                                

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND        
FINANCIAL DISCLOSURE                                                            

None.                                                                 

ITEM 8A.  CONTROLS AND PROCEDURES.                                              

   As of February 29, 2004, under the supervision and with the participation
of the Company's Chief Executive Officer and the Chief Financial Officer,       
management has evaluated the effectiveness of the design and operation of the   
Company's disclosure controls and procedures.  Based on that evaluation, the    
Chief Executive Officer and the Chief Financial Officer concluded that the      
Company's disclosure controls and procedures were effective as of February 29,  
2004.  There have been no changes in internal control over financial reporting  
that occurred during the fourth quarter of the fiscal year covered by this      
report that have materially affected, or are reasonably likely to affect, the   
Company's internal control over financial reporting.                            

  14

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;          
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT                               

The following table sets forth the names, ages and positions of the   
officers and directors.                                                         

NAME                 AGE                      POSITION          
-----------------          ---        ----------------------------------    
John C. Morris             55         Chairman and CEO                      

Gregory P. Stemm           47         Vice-President - Research and         
                       Operations and Director

George Knutsson            66         Director                              

David J. Saul              64         Director                              

Henri Germain Delauze      74         Director                              

George E. Lackman          73         Director                              

George J. Becker, Jr.      69         Chief Operating Officer               

Michael J. Holmes          54         Chief Financial Officer               

David A. Morris            53         Secretary and Treasurer               

There is no family relationship between any of the Directors or the   
Executive Officers of the Company except John Morris and David Morris who are   
brothers.                                                                       

All directors will hold office until the next annual meeting of the   
Shareholders.                                                                   

The following sets forth biographical information as to the business  
experience of each Officer and Director of the Company for at least the last    
five years.                                                                     

  John C. Morris has served as President, CEO and Chairman of the Board of
Directors of the Company since May 1994.  In these capacities, Mr. Morris has   
been responsible for strategic planning, financing, and general execution of    
our business plan.  He has overseen the first deep water archaeological         
recovery of a Spanish shipwreck from the 1622 fleet using a remotely operated   
vehicle and has been instrumental in the planning and execution of the          
company's current search and recovery operations.                               

Gregory P. Stemm has served as Vice President, Research and Operations
and as a member of the Board of Directors since May 1994. He is responsible     
for research and operations on all shipwreck projects. Greg has extensive       
experience in managing shipwreck exploration operations since entering the      
field in 1986, including deep ocean search and robotic archaeological           
excavation on a number of projects. A panelist at the 1998 Law of the Sea       
Institute, Stemm was appointed for four consecutive terms to the United States  
delegation to the United Nations Educational, Scientific and Cultural           
Organization (UNESCO) expert meeting to negotiate the "Draft Convention for     
the Protection of Underwater Cultural Heritage." He was selected as a Fellow    
of the Explorers Club, and was the founder and past-president of the            

  15

Professional Shipwreck Explorers Association (ProSEA). Stemm served as a        
founding director (1986-93) and international president (1992-93) of YEO        
(Young Entrepreneurs Organization) and was also a founding member of the World  
Entrepreneurs Organization, where he served on the International Board of       
Directors (1997-98).                                                            

  George Knutsson has served as a Director of the Company since June 2001.
Since 1995, Mr. Knutsson has been the President and Chairman of American Boat   
Trailer Rental Company, Inc., which is the largest provider of boat trailer     
rentals in the Southeast US.  In 1978, he founded Dollar Rental Car of Florida  
and served as CEO until 1990, when he sold the company. Mr. Knutsson also       
owned and operated Pirates Cove Marina in the Tampa Bay area from 1984 until    
he sold it in 1995.  From 1995 to 1999, he was the co-founder and Chief         
Financial Officer of Pro-Tech Monitoring, which uses patented GPS/cellular      
technology in the monitoring and tracking of felons worldwide.  He received     
his Bachelors degree from the University of Florida and a MBA from the          
University of South Florida.                                                    

Dr. David J. Saul, who is retired, has served as a member of the      
Company's Board of Directors since October 2001.  Dr. Saul was Bermuda's        
Minister of Finance from 1989 to 1995, and Premier of Bermuda from 1995 to      
1997. In addition to his political background, Dr. Saul held two senior posts   
with Fidelity Investments, from 1984 through 1995, as the President of          
Fidelity Bermuda and Executive Vice President of Fidelity International. He     
retired from the firm in 1999, but remains a Director of Fidelity's main        
international Board, and a Director of some 40 other Fidelity Companies around  
the world - including the U.K., Bermuda, Jersey, Tokyo, Hong Kong, Cayman       
Islands, Luxembourg and Taiwan. Dr. Saul's professional activities include two  
stints as a Director of the Bermuda Monetary Authority and he currently serves  
as a Director of Lombard Odier (Bermuda), a subsidiary of the Swiss Bank, and   
a Director of the London Steam Ship Owners' Mutual Insurance Association        
(Bermuda) Ltd. A keen oceanographer with a passion for shipwrecks and the sea,  
he is a founding Trustee of the Bermuda Underwater Exploration Institute, and   
a founding Director of the Professional Shipwreck Explorers Association.        

Henri Germain Delauze has served as a member of the Company's Board of
Directors since October 2001.  Mr. Delauze, one of the world's leading          
underwater technology pioneers, brings extensive technical, operational and     
management expertise to Odyssey's Board of Directors. Mr. Delauze was founder   
of one of the world's leading underwater technology companies, COMPAGNIE        
MARITIME D'EXPERTISES (COMEX), where he has served as President since November  
1961. Mr. DeLauze pioneered deep saturation diving using synthetic breathing    
mixtures. Delauze was the first man to reach 335 m. depth during an             
experimental dive in May 1968, and his company holds world records for both     
deep sea and chamber saturation diving. In 1975, he created COMEX INDUSTRIES    
and COMEX PRO, two subsidiaries that design, manufacture and market             
sophisticated equipment for professional diving, work submarines and remote     
operated vehicles (ROV's). COMEX SERVICES, the Group's oil subsidiary,          
extended its activities to all the major offshore oil production areas around   
the world from 1966 onwards. Mr. Delauze is still the principal shareholder of  
COMEX SA, which maintains the following divisions: CYBERNETIX (advanced         
robotics, manned observation submarines and ROVs/AUVs for scientific            
deep-water archaeology and military purposes), COMEX PRO (manufactures          
hyperbaric centers for deep diving, large hospital centers and develops and     
manufactures ROVs, especially the ACHILLE and the 2,000 m. SUPER ACHILLE.)      
During the year 2002, COMEX S.A., its subsidiaries and CYBERNETIX (group        
consolidation) employed over 500 people, including 200 engineers.               

  16

 George E. Lackman Jr., has served as a member of the Company's Board of
Directors since November 2002, and brings experience from his distinguished     
career in banking, business operations, shipbuilding, international business    
and public service to Odyssey Marine Exploration. Mr. Lackman was founding      
Chairman and President of Citrus Park Bank, which was sold to Florida National  
Bank in 1985. At Florida National, he served as head of Retail Banking,         
Business Banking and Commercial Banking for the Tampa area.  After the merger   
of Florida National and First Union National Bank he started First Union's      
first Private Banking Program in the Tampa area. He retired from First Union    
as Vice President of Corporate Development. Mr. Lackman spent 25 years in the   
shipyard business, including service as Vice President of Tampa Ship Repair     
and Dry Dock Company, Tampa's largest shipyard. He was President of Nutri-Sol   
Chemical Company, Marine Insulation Company, Corban Industries and Acetogen     
Gas Company of Florida. Mr. Lackman's international experience spans service    
as President of an International Investment Group, Chairman of the Tampa        
Chamber of Commerce International Board and as President/Chairman of the Tampa  
Bay International Business Council. He also served as an Advisor to the         
Central American Banks. Mr. Lackman extensive public and community service      
includes service to and leadership of many health care organizations. He was    
especially active in groups working to reduce infant mortality and increase     
prenatal care. Two Florida Governors have called on Mr. Lackman to serve on     
various health care and community service groups.                               

   George Becker Jr., joined Odyssey as Chief Operating Officer during April
2002. From 1992 until April 2002, Mr. Becker was the President of George J.     
Becker Jr. & Associates, consultants to companies in the leisure, themed        
attraction and hospitality industries. Mr. Becker is a senior executive with    
thirty years experience in major leisure industry profit center development,    
management, marketing, staffing and operations. For twenty-two years, Mr.       
Becker was involved in the development and management of the Sea World marine   
life parks in the United States and served at various times in several          
positions including as the former Executive Vice President of Sea World Inc.,   
Chairman and Chief Executive Officer, Sea World of Texas, President and Chief   
Executive Officer of Sea World of California and President and Chief Executive  
Officer of Sea World of Florida. In 1997 Mr. Becker became President of         
Entercitement LLC. He led the creative concept and design of a proposed theme   
park in Indianapolis, Indiana.  Park development was stopped in 1998 due to a   
lack of financing and Mr. Becker resigned in 1999 from Entercitement. Mr.       
Becker has been recognized as a tourism leader for his work in several regions  
of the country. A skilled new business developer and team builder, Mr. Becker   
is known for creating viable management teams, achieving excellent              
productivity and harmony between employees of widely divergent skills and       
personalities. Becker has been active in a number of national, regional and     
state visitor organizations. He served as Executive Director of the Florida     
Tourism Commission. In 1983, he was President of the Florida Chamber of         
Commerce and in 1984 he chaired Governor Bob Graham's Commission on Public      
Facility Financing.                                                             

  Michael J. Holmes joined Odyssey as Controller in March 2004, and became
Chief Financial Officer on May 24, 2004, although Michael Barton continued to   
perform the function of the Chief Financial Officer through May 28, 2004. Mr.   
Holmes has served in a variety of subsidiary financial management positions     
with Anheuser-Busch Companies, Inc. to include Vice President Finance, Sea      
World Orlando; Vice President Finance, Busch Gardens Tampa Bay; Corporate       
Controller, Metal Container Corp in St Louis; VP Finance & CFO Exploration      
Cruise Lines in Seattle, Washington; and Director Internal Audit Services for   
Anheuser-Busch in St Louis.  Mike received his undergraduate degree from the    
University of Missouri and his MBA from Crummer Graduate School of Business at  
Rollins College in Orlando.  Mike has also served as an adjunct professor of    

  17

Accounting at the Rosen School of Hospitality Management, University of         
Central Florida in Orlando.  Mike has been very active in community leadership  
positions to include board member of the Orlando Regional Chamber of Commerce,  
the ETC of Central Florida (International Drive Transportation Group) and       
Junior Achievement of Tampa Bay.  He is currently serving on the Crummer        
Graduate School of Business Alumni Board and is a graduate of Leadership        
Tampa.                                                                          

David A. Morris has served as Secretary and Treasurer of the Company  
since August 1997.  Mr. Morris graduated with a Bachelor of Science degree in   
Mechanical Engineering from Michigan State University in 1974.                  

COMMITTEES OF THE BOARD OF DIRECTORS                                            

   Our Audit Committee consists of George Knutsson, David J. Saul and George
Lackman, all of whom are independent outside Directors.                         

Our Compensation Committee consists of George Knutsson and George     
Lackman, both of whom are independent outside Directors.                        

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT                               

Based solely on a review of Forms 3 and 4 and amendments thereto      
furnished to the Company during its most recent fiscal year, and Form 5 and     
amendments thereto furnished to the Company with respect to its most recent     
fiscal year and certain written representations, no persons who were either a   
Director, Officer or beneficial owner of more than 10% of the Company's Common  
Stock, failed to file on a timely basis reports required by Section 16(a) of    
the Exchange Act during the most recent fiscal year, except that Michael V.     
Barton, the Company's former Chief Financial Officer, reported one transaction  
late in a Form 4.                                                               

ITEM 10.  EXECUTIVE COMPENSATION                                                

The following table sets forth information regarding the executive    
compensation for the Company's President for the years ended February 29,       
2004, February 28, 2003, and February 28, 2002, and each other executive        
officer who had total annual salary and bonus in excess of $100,000 during      
such years.                                                                     

  SUMMARY COMPENSATION TABLE

                                        Long-Term Compensation
                                    ----------------------------
          Annual Compensation          Awards          Payouts
         --------------------      ----------------    -------
                                   Securi-
                                ties
                                        Re-       Under-             All
Name and                                    stricted  lying      LTIP   Other   
Principal                                   Stock     Options/  Payout Compen-  
Position          Year   Salary    Bonus    Awards    SARs(#)    ($)    sation  
----------------- ----   -------- -------- -------   --------  ------ -------   
John C. Morris,   2004   $150,000 $246,500      -0-   250,000      -0-     -0-  
President       2003   $150,000 $  2,000      -0-        -0-     -0-     -0-
                2002   $125,000 $     -0-     -0-   100,000      -0-     -0-

  18

Gregory P. Stemm, 2004   $150,000 $246,500      -0-   250,000      -0-     -0-  
Vice-President  2003   $150,000 $  2,000      -0-        -0-     -0-     -0-
                2002   $125,000 $    -0-      -0-   100,000      -0-     -0-

Michael V. Barton,2004   $100,000 $ 14,500      -0-   100,000      -0-     -0-  
Former CFO       2003   $ 79,175 $  1,000      -0-        -0-     -0-     -0- 

George J. Becker, 2004   $100,000 $ 14,500      -0-   100,000      -0-     -0-  
Jr., COO        2003   $ 87,500 $  1,000      -0-        -0-     -0-     -0-

David A. Morris,  2004   $100,000 $ 14,500      -0-   200,000      -0-     -0-  
 Secr/Treas     2003   $100,000 $  1,500      -0-        -0-     -0-     -0-
                2002   $ 90,000 $     -0-     -0-        -0-     -0-     -0-

OPTIONS                                                                         

  The following table sets forth certain information concerning individual
grants of stock options made during the year ended February 29, 2004 to each    
Named Executive Officer of the company:                                         

 OPTION GRANTS IN LAST FISCAL YEAR (1)
Individual Grants 

Number of   % of Total                    
Securities    Options                       
Underlying   Granted to    Exercise or      
        Options    Employees in   Base Price    Expiration
Name        Granted(#)   Fiscal Year   ($/Share)       Date         
----------------  ----------  ------------   ------------  -----------          
John C. Morris       125,000         7.25%       $ 2.50      2/28/2008          
John C. Morris       125,000         7.25%       $ 1.25      2/28/2008          
Greg P. Stemm        125,000         7.25%       $ 2.50      2/28/2008          
Greg P. Stemm        125,000         7.25%       $ 1.25      2/28/2008          
Michael Barton        50,000         2.90%       $ 2.50      2/28/2008          
Michael Barton        50,000         2.90%       $ 1.25      2/28/2008          
George J. Becker,Jr.  50,000         2.90%       $ 2.50      2/28/2008          
George J. Becker,Jr.  50,000         2.90%       $ 1.25      2/28/2008          
David A. Morris      100,000         5.80%       $ 2.50      2/28/2008          
David A. Morris      100,000         5.80%       $ 1.25      2/28/2008          

____________                                                                    

(1) Options generally have a 5-year term. The exercise price of the options     
granted exceeded the fair market value of our Common Stock on the date of       
grant. The options vest by 25% each six month anniversary of the grant date,    
and become 100% vested on the two year anniversary of the grant date.           

  19

AGGREGATE OPTION EXERCISES IN YEAR ENDED    
FEBRUARY 29, 2004 AND FEBRUARY 29, 2004 OPTION VALUES   

                                                                [Download Table]


                                            Securities Under-  Value of Unexer- 
                                            lying Unexercised    cised In-The-  
                       Shares                  Options at      Money Options at 
                     Acquired on            February 29, 2004  February 29, 2004
                      Exercise     Value      Exercisable/       Exercisable/   
Name                  (Number)    Realized   Unexercisable      Unexercisable   
----------------      ---------- ---------  -----------------  -----------------
                                                                                
John C. Morris            50,000 $ 225,000   162,500/ 187,500  $612,813/$548,438
Greg P. Stemm             50,000   222,000   162,500/ 187,500   612,813/ 548,438
Michael V. Barton             -0-       -0-   75,000/ 100,000   263,125/ 314,375
George J. Becker, Jr.     10,000    19,500   100,000/ 100,000   358,125/ 314,375
David A. Morris           50,000   177,300    50,000/ 150,000   146,250/ 438,750

EMPLOYMENT AGREEMENTS                                                           

John Morris, Greg Stemm, David Morris and George Becker, Jr. have     
employment agreements through February 28, 2005.  For the year commencing on    
March 1, 2004, the Compensation Committee has set the base salaries for John    
Morris and Greg Stemm at $250,000 per year.  The base salaries for David        
Morris and George Becker, Jr. have been set at $120,000.  We anticipate that    
in addition to their base salary each of these individuals will receive stock   
options and certain other benefits as determined by the Board of Directors.     
Michael Barton, who served as the chief financial officer from May 2002 until   
May 24, 2004, had an employment agreement and his base salary was $200,000 per  
year during the period from March 1, 2004 until May 31, 2004.  Mr. Barton       
resigned as CFO on May 24, 2004, however, he continued to perform the function  
of the CFO until May 28, 2004, and will continue to perform special             
assignments for the Company.  The employment agreement for Michael Holmes, the  
new CFO, has not been completed as of the date of the filing of this report.    

EMPLOYEE STOCK OPTION PLAN                                                      

During the Special Shareholder Meeting held September 8, 1997, the    
Shareholders approved an Employee Stock Option Plan (the "Plan").  The Plan     
authorized the issuance of options to purchase up to two million shares of the  
Company's Common Stock.  On November 7, 2001, the shareholders approved an      
amendment to the Plan increasing the number of shares in the Plan to three      
million five hundred thousand shares.                                           

The Plan allows the Board of Directors to grant non-qualified stock   
options from time to time to employees, officers and directors, and             
consultants of the Company.  The board determines vesting provisions at the     
time options are granted.  The option price for any option will be no less      
than the fair market value of the Common Stock on the date the option is        
granted.                                                                        

 During the fiscal year ended February 29, 2004, we issued the following
options to directors, in addition to those itemized in the Summary              
Compensation Table above, from the Plan:                                        

20

                  Date       Number of  Option    Date
                Of         Options    Exercise  Of
Grantee             Position   Grant      Granted    Price     Expiration       
-----------------   ---------  ---------  ---------  -------   ---------        

George Knutsson     Director   3/18/2003  25,000     $1.25     2/28/2008        
                       3/18/2003  25,000     $2.50     2/28/2008
David Saul          Director   3/18/2003  25,000     $1.25     2/28/2008        
                       3/18/2003  25,000     $2.50     2/28/2008
Henri G. DeLauze    Director   3/18/2003  25,000     $1.25     2/28/2008        
                       3/18/2003  25,000     $2.50     2/28/2008
George Lackman      Director   3/18/2003  25,000     $1.25     2/28/2008        
                       3/18/2003  25,000     $2.50     2/28/2008

DIRECTOR COMPENSATION                                                           

Effective March 1, 2004 our outside Directors are compensated for     
attending meetings according to the following structure:                        

*  Each outside director will receive $10,000 annually.  In addition  
outside directors shall receive $1,000 per meeting attended on  
behalf of the Board of Directors including full Board Meetings, 
Audit Committee Meetings, and Compensation Committee Meetings.  

 *  Meetings attended telephonically or in conjunction with a full Board
Meeting shall earn a compensation of $500 for attendance.       

*  Committee Chairman shall receive and additional $250 per meeting   
over which they preside.                                        

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT        

  The following table set forth, as of April 30, 2004, the stock ownership
of each person known by the Company to be the beneficial owner of five percent  
or more of the Company's Common Stock, each Officer and Director individually   
and all Officers and Directors of the Company as a Group.                       

 Amount of
Name of                             Beneficial              Percentage          
Beneficial Owner                    Ownership               of Class            
-------------------                 --------------          ----------          

MacDougald Family                                                               
Limited Partnership                 7,094,008  (1)           18.7%              
260 First Avenue South, Suite 110                                               
St. Petersburg, FL 33701                                                        

Gregory P. Stemm                    2,009,241  (2)            5.3%              
3604 Swann Ave                                                                  
Tampa, FL  33609                                                                

John C. Morris                      1,649,129  (3)            4.3%              
3604 Swann Ave                                                                  
Tampa, FL 33609                                                                 

David A. Morris                       436,940  (4)            1.2%              
3604 Swann Ave                                                                  
Tampa, FL 33609                                                                 

21

Michael V. Barton                     327,115  (5)            0.9%              
3604 Swann Avenue                                                               
Tampa, FL   33609                                                               

David J. Saul                         530,000  (6)            1.4%              
3604 Swann Ave                                                                  
Tampa, FL 33609                                                                 

Henri DeLauze                         330,000  (7)            0.9%              
3604 Swann Ave                                                                  
Tampa, FL 33609                                                                 

George Knutsson                       149,000  (8)            0.4%              
3604 Swann Avenue                                                               
Tampa, FL 33609                                                                 

George Becker                         193,400  (9)            0.5%              
3604 Swann Avenue                                                               
Tampa, FL   33609                                                               

George Lackman                        262,500 (10)            0.7%              
3604 Swann Avenue                                                               
Tampa, FL   33609                                                               

All Officers and Directors                                                      
as a group (9 persons)                 5,787,325              14.7%             
________________                                                                

(1) Includes 7,094,008 shares beneficially held by MacDougald Family Limited    
Partnership(MFLP). MacDougald Management, Inc.(MMI)is the general partner of    
MacDougald Family Limited Partnership. Limited Partners are James E.            
MacDougald, his wife Suzanne M. MacDougald, and two trusts created for the      
children and grandchildren of Mr. and Mrs. MacDougald.                          

(2) Includes 606,182 shares held by Greg and Laurie Stemm, 1,178,059 shares     
held by Adanic Capital, Ltd., a limited partnership for which Greg Stemm        
serves as general partner, and 225,000 shares underlying currently exercisable  
stock options.                                                                  

(3) Includes 1,424,229 shares held by John Morris, and 225,000 shares           
underlying currently exercisable stock options.                                 

(4) Includes 312,626 shares held by David A. Morris, 24,314 shares held by      
Chad E. Morris his son who lives in the same household, and 100,000 shares      
underlying currently exercisable stock options.                                 

(5) Includes 82,000 shares and 125,000 shares underlying currently exercisable  
options held by Michael Barton, and 95,115 shares and 25,000 shares underlying  
currently exercisable options held by Laura Barton, Mr. Barton's wife.          

(6) Includes 280,000 shares held by David J. Saul and his wife Christine, and   
150,000 shares underlying currently exercisable stock options, and 100,000      
shares underlying a currently exercisable warrant held by David J. Saul.        

(7) Includes 225,000 shares and  25,000 shares underlying currently             
exercisable stock options held by Henri Delauze, and 80,000 shares held by      
COMEX, SA of which Mr. DeLauze is owner.                                        

22

(8) Includes 99,000 shares and 50,000 shares underlying currently exercisable   
stock options held by George Knutsson.                                          

(9) Includes 43,400 shares and 150,000 shares underlying currently exercisable  
stock options held by George Becker.                                            

(10) Includes 100,000 shares, 62,500 shares underlying currently exercisable    
stock options, and 100,000 shares underlying a currently exercisable warrant    
held by Mr. Lackman.                                                            

      EQUITY COMPENSATION PLAN INFORMATION

                                                                [Download Table]


Plan category   Number of securities   Weighted Average     Number of securities
                to be issued upon ex-  exercise price of    remaining available 
                exercise of outstand-  outstanding options  for future issuance 
                ing options, warrants  warrants and rights                      
                and rights                                                      
--------------  ---------------------  -------------------  --------------------
                                                                                
Equity compen-                                                                  
sation plans                                                                    
approved by                                                                     
securityholders         2,439,000                 $ 3.18                 421,500
--------------------------------------------------------------------------------
Equity compen-                                                                  
sation plans                                                                    
not approved by                                                                 
securityholders                -0-                    -0-                    -0-
--------------------------------------------------------------------------------
Total                   2,439,000                 $ 3.18                421,500 

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

During the last two years certain officers, directors, and beneficial 
owners entered into transactions with the Company as follows:                   

On January 1, 2001, we renewed loan agreements with Gregory Stemm and 
John Morris authorizing each to borrow a maximum of $120,000 from the Company   
at 8% annual interest compounded quarterly. On October 10, 2001, the loans      
were revised authorizing borrowing up to $130,000 under the same terms and an   
additional $20,000 for the exercise of stock options. On March 1, 2002, the     
loans were revised to allow borrowing up to $150,000 under the same terms and   
up to $20,000 for the exercise of stock options.  These loans would have        
become due on December 31, 2004. On December 5, 2003 John Morris and Greg       
Stemm re-paid the balances in full of the principal amounts and all             
accumulated interest due on the loans.                                          

  On April 1, 2001, we entered into a loan extension agreement with Robert
Stemm, Gregory Stemm's father, wherein Mr. Stemm extended the due date on his   
loan to the Company until March 31, 2003. The principal amount of $56,144 bore  
interest at 10% per annum and was secured by an inventory of raw emeralds.      
This loan was convertible into shares of Common Stock at the rate of $.50 per   
share. On March 31, 2003, we entered into a Debt Conversion Agreement wherein,  

23

Mr. Stemm was paid $13,373 in cash and received 108,000 shares of our common    
stock for payment in full of the note and accrued interest. Payment of the      
note established March 31, 2005, as the expiration date of the warrants for     
the purchase of common stock previously issued to Mr. Stemm as an inducement    
to extend the loan due dates, and terminated the security interest in the       
inventory of raw emeralds that previously secured the note. Warrants held by    
Mr. Stemm as a result of his loan to the Company are as follows:                

Date issued     Number of shares     Exercise Price     Expiration Date         
-----------     ----------------     --------------     ---------------         
4/1/1999            11,000           $ 3.00/share       March 31, 2005          
4/1/2000            21,500           $ 2.00/share       March 31, 2005          

On February 28, 2001, we completed the sale of shares of our Series B 
Convertible Preferred Stock, Common Stock and Warrants to MacDougald Family     
Limited Partnership ("MFLP") for $3,000,000 in cash.  The sale of securities    
was made pursuant to a Stock Purchase Agreement dated February 28, 2001.  MFLP  
purchased 850,000 shares of our Series B Convertible Preferred Stock, 864,008   
shares of Common Stock and Warrants to purchase an additional 1,889,000 shares  
of Common Stock. The cash used came from operating funds of MFLP. Warrants to   
purchase 1,659,000 shares subsequently expired. As of the date of this report,  
MFLP holds options to purchase 230,000 shares at $0.30 per share.               

Under the terms of the Stock Purchase Agreement, MFLP received certain
rights to require us to register the Common Stock purchased and the shares of   
Common Stock issuable on the conversion or exercise of the Preferred Stock and  
Warrants for resale under the Securities Act of 1933.                           

   MFLP is a Nevada limited partnership of which MacDougald Management, Inc.
("MMI") is sole general partner.  The limited partners include James E.         
MacDougald, his wife Suzanne M. MacDougald, and two trusts for the benefit of   
the children and grandchildren of Mr. and Mrs. MacDougald.  James E.            
MacDougald is the President of MMI.  Mr. McDougald served on the Board of       
Directors of the Company from February through October, 2001.                   

   On October 12, 2001, MFLP delivered a Notice of Conversion to us pursuant
to which MFLP converted 850,000 shares of Preferred Stock held by MFLP into     
8,500,000 shares of Common Stock in accordance with the terms of the Stock      
Purchase Agreement and the Certificate of Designation.  No additional funds     
were expended by MFLP in connection with its acquisition of the Common Stock.   
The consideration for the Common Stock was the Preferred Stock tendered by      
MFLP to us.                                                                     

  As a condition and an inducement to MFLP to convert the Preferred Stock,
the Company and MFLP executed an Amended and Restated Registration Rights       
Agreement, dated October 12, 2001 ("Amended and Restated Registration Rights    
Agreement"), pursuant to which the Issuer granted MFLP up to five demand        
registration rights.  Concurrently with the execution of the Amended and        
Restated Registration Rights Agreement, the Company and MFLP entered into the   
First Amendment to Series B Stock Purchase Agreement, dated October 12, 2001    
("First Amendment to Stock Purchase Agreement"), which eliminated certain of    
MFLP's rights under the Stock Purchase Agreement.                               

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. A shipwreck we    
have found, which we believe to be the HMS Sussex, is located within the        
specified search area and we will be responsible to share future revenues, if   
any, from this shipwreck. On December 9, 2002, a Georgia limited liability      

24

company acquired the 5% interest in the Cambridge Project from the              
subcontractor through a foreclosure sale. John Morris and Greg Stemm have       
member interests of 32% and 28%, respectively, in the limited liability         
company.                                                                        

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                       

(a)  Exhibits.                                                        

Exhibit                                                                         
Number    Description                        Location                           
--------  -----------                        --------                           

3.1      Articles of Incorporation, as      Incorporated by reference to      
   amended                            Exhibit 3.1 to the Company's
                                      Annual Report on Form 10-KSB
                                         for the year ended February 28,
              2001

3.2      Bylaws                             Incorporated by reference to      
                                      Exhibit 3.2 to the Company's
                                      Annual Report on Form 10-KSB
                                         for the year ended February 28,
              2001

3.3      Designation of Series B            Incorporated by reference to      
   Convertible Preferred Stock        Exhibit 3.3 to the Company's
                                  Report on Form 8-K dated
                           February 28, 2001

2.4      Amended Certificate of             Incorporated by reference to      
   Designation of Series C            Exhibit 3.4 to the Company's
Convertible Preferred Stock        Report on Form 8-K dated 
                            September 19, 2002

10.1      Employment Agreement dated         Incorporated by reference to       
    May 22, 2002, with David A.        Exhibit 10.1 to the Company's
   Morris                             Annual Report on From 10-KSB
                                         For the year ended February 28,
              2002

10.2      Employment Agreement dated         Incorporated by reference to       
    May 22, 2002, with Greg Stemm      Exhibit 10.2 to the Company's
                                      Annual Report on From 10-KSB
                                         For the year ended February 28,
              2002

10.3      Employment Agreement dated         Incorporated by reference to       
    May 22, 2002, with John C.         Exhibit 10.3 to the Company's
   Morris                             Annual Report on From 10-KSB
                                         For the year ended February 28,
              2002

10.4      Employment Agreement dated         Incorporated by reference to       
    May 22, 2002, with Michael V.      Exhibit 10.4 to the Company's
   Barton                             Annual Report on Form 10-KSB
                                         For the year ended February 28,
              2003

25

10.5      Employment Agreement dated         Incorporated by reference to       
    May 22, 2002, with George          Exhibit 10.4 to the Company's
   Becker                             Annual Report on Form 10-KSB
                                         For the year ended February 28,
              2003

10.6      Series B Convertible Preferred     Incorporated by reference to       
    Stock Purchase Agreement           Exhibit 10.6 to the Company's
                            Report on Form 8-K
                                 dated February 28, 2001

10.7      1997 Stock Option Plan             Incorporated by reference to       
                                       Exhibit 10.7 to the Company's
                                          Annual Report on Form 10-KSB for
                                          the year ended February 28, 2001

10.8      Commercial Lease with              Incorporated by reference to       
    Corinthian Custom Homes,           Exhibit 10.8 to the Company's
       Inc. dated January 24, 2001        Annual Report on Form 10-KSB for
                                          the year ended February 28, 2001

10.9      Amended and Restated Registration  Incorporated by reference to       
    Rights Agreement with              Exhibit 10.9 to the Company's
       MacDougald Family Limited          Annual Report on Form 10-KSB for
       Partnership                        the year ended February 28, 2002

10.10     First Amendment to Series B        Incorporated by reference to       
     Stock Purchase Agreement           Exhibit 10.10 to the Company's
                                          Annual Report on Form 10-KSB for
                                          the year ended February 28, 2002

10.11     Partnering Agreement Memorandum    Incorporated by reference to       
     Concerning the Shipwreck of HMS    Exhibit 10.11 to the Company's
      Sussex, dated September 27, 2002   Quarterly Report on Form 10-QSB
                                          For the quarter ended August 31,
              2002

23        Consent of Independent Public      Filed herewith electronically      
Accountants                                                 

(b)  Reports on Form 8-K.  None.                                      

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                 

The following presents aggregate fees billed to the Company for the   
fiscal years ended February 28, 2003 and February 29, 2004 by Ferlita, Walsh &  
Gonzalez, P.A., the Company's principal accountant.  All fees described below   
were approved by the Audit Committee.                                           

Audit Fees.  Audit fees billed were $21,601 and $28,375 for the years 
ended February 28, 2003 and February 29, 2004, respectively.  The fees were     
for professional services rendered for the audits of our consolidated           
financial statements, reviews of the financial statements included in our       
quarterly reports, consultations on matters that arose during our audit and     
reviews of SEC registration statements.                                         

   Audit-Related Fees.  No audit related fees were billed in the years ended
February 28, 2003 and February 29, 2004.                                        

26

 Tax Fees.  No tax fees were billed in the years ended February 28, 2003
and February 29, 2004.                                                          

All Other Fees.  No other fees were billed in the years ended February
28, 2003 and February 29, 2004.                                                 

Pre-Approval Policies for Non-Audit Services.  The Audit Committee    
Charter requires pre-approval for any non-audit services performed by our       
independent accountants.  No non-audit services have been performed by          
Ferlita, Walsh & Gonzalez, P.A. during the fiscal years ended February 28,      
2003 and February 29, 2004.                                                     

27

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INDEX TO FINANCIAL STATEMENTS         
ODYSSEY MARINE EXPLORATION, INC.        

                                          PAGE

Report of Independent Certified Public Accountants . . . . . . .  F-2           

Financial Statements:                                                           

Consolidated Balance Sheet - February 29, 2004 . . . . . . .  F-3       

Consolidated Statements of Operations for the years                     
ended February 29, 2004, and February 28, 2003. . . . . . . F-4     

Consolidated Statements of Changes in Stockholders'                     
Equity and Comprehensive Income for the years ended                 
February 29, 2004, and February 28, 2003 . . . . . . . . .  F-5     

Consolidated Statements of Cash Flows for the years                     
 ended February 29, 2004 and February 28, 2003. . . . . . .  F-6 - F-7

Notes to the Consolidated Financial Statements . . . . . . .  F-8 - F-23

F-1       

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                         

Board of Directors                                                              
Odyssey Marine Exploration, Inc.                                                
Tampa, Florida                                                                  

We have audited the accompanying consolidated balance sheet of Odyssey Marine   
Exploration, Inc. and subsidiaries as of February 29, 2004, and the related     
consolidated statements of operations, stockholders' equity and comprehensive   
income, and cash flows for the years ended February 29, 2004 and February 28,   
2003.  These consolidated financial statements are the responsibility of the    
Company's management.  Our responsibility is to express an opinion on these     
consolidated financial statements based on our audits.                          

We conducted our audits in accordance with the standards of the Public Company  
Accounting Oversight Board (United States).  Those standards require that we    
plan and perform the audit to obtain reasonable assurance about whether the     
consolidated financial statements are free of material misstatement.  An Audit  
includes examining, on a test basis, evidence supporting the amounts and        
disclosures in the consolidated financial statements.  An audit also includes   
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement               
presentation.  We believe that our audits provide a reasonable basis for our    
opinion.                                                                        

In our opinion, the consolidated financial statements referred to above         
present fairly, in all material respects, the financial position of Odyssey     
Marine Exploration, Inc. and subsidiaries as of February 29, 2004, and the      
results of their operations and their cash flows for the years ended February   
29, 2004 and February 28, 2003, in conformity with U.S. generally accepted      
accounting principles.                                                          

/s/ Ferlita, Walsh & Gonzalez, P.A.                                             

FERLITA, WALSH & GONZALEZ, P.A.                                                 
Certified Public Accountants                                                    
Tampa, Florida                                                                  
May 3, 2004                                                                     

 F-2

     ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET  
FEBRUARY 29, 2004   
ASSETS                                                                          
CURRENT ASSETS                                                                  
Cash                                                         $ 1,351,340    
Investments                                                    1,996,420    
Inventory                                                      1,928,180    
Prepaid expenses                                                 382,240    
Deferred tax asset                                             3,914,853    
Other current assets                                               7,811    
                                                         -----------
    Total current assets                                   9,580,844

PROPERTY AND EQUIPMENT                                                          
Equipment and office fixtures                                  4,476,490    
Accumulated depreciation                                        (603,463)   
                                                         -----------
                                                           3,873,027
OTHER ASSETS                                                                    
Artifacts                                                        404,929    
Inventory (non current)                                        1,736,271    
Deposits                                                         177,613    
Deferred tax asset                                             2,121,745    
                                                         -----------
                                                           4,440,558
                                                         -----------
                                                         $17,894,429
                                                         ===========
LIABILITIES AND STOCKHOLDERS' EQUITY                                            
CURRENT LIABILITIES                                                           
Accounts payable                                             $ 1,033,526    
Accrued expenses                                                 117,207    
                                                         -----------
      Total current liabilities                          $ 1,150,733

DEFERRED INCOME FROM REVENUE PARTICIPATION CERTIFICATES            887,500      

STOCKHOLDERS' EQUITY                                                            
Preferred stock - $.0001 par value;  9,300,000                                
shares authorized; none outstanding                                 - 
Preferred stock series A convertible - $.0001 par value;                      
510,000 shares authorized;  none issued and                           
none outstanding                                                    - 
Common stock - $.0001 par value; 100,000,000 shares                           
authorized; 37,993,099 issued and outstanding                   3,799 
Additional paid-in capital                                    25,147,839    
Unrealized gain on investments, net of tax                         2,988    
Accumulated deficit                                           (9,298,430)   
                                                         -----------
      Total stockholders' equity                          15,856,196
                                                         -----------
                                                         $17,894,429
                                                         ===========

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

F-3       

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF OPERATIONS 

                                          Year Ended    Year Ended
                                            February 29,  February 28,
                                          2004          2003
                                           -----------   -----------

REVENUE                                          $    73,879   $         -      

GENERAL AND ADMINISTRATIVE EXPENSES                                             
Administrative                                    2,378,013     1,259,086     
Depreciation                                        264,778       101,371     
                                           -----------   -----------
Total general and administrative expenses         2,642,791     1,360,457     

OPERATING EXPENSES                                                              
Project operations                                2,406,233     1,160,746     
Marketing and promotion                             129,895        99,734     
                                           -----------   -----------
Total operating expenses                          2,536,128     1,260,480     

(LOSS) FROM OPERATIONS                            (5,105,040)   (2,620,937)     

OTHER INCOME OR (EXPENSE)                                                       
Interest income                                     23,958        33,296    
Interest expense                                  (109,227)       (5,615)   
Loss on disposal of equipment                      (31,927)            -    
Other income                                        40,000           500    
Revenue participation                              (12,986)            -    
                                           -----------   -----------
Total other income or (expense)                      (90,182)       28,181      
                                           -----------   -----------
NET(LOSS)                                         (5,195,222)   (2,592,756)     

Income tax benefit                                 5,762,103             -      
                                           -----------   -----------
NET INCOME (LOSS) AFTER TAX                          566,881    (2,592,756)     
                                           ===========   ===========

BASIC INCOME (LOSS) PER SHARE                    $      0.02   $     (0.09)     

Weighted average number of common                                               
shares outstanding                               32,952,161    27,688,992     

DILUTED INCOME (LOSS) PER SHARE                  $      0.02   $     (0.09)     

Weighted average number of common                                               
shares and potential common shares,                                           
basic and diluted, outstanding                   34,278,545    27,688,992     

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

F-4       

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND
COMPREHENSIVE INCOME  

                                                        [Enlarge/Download Table]

                                                                          Accumul-                             
                                                               Addi-      ated Un-                             
                                                               tional     realized                 Comprehen-  
                          Preferred Stock    Common Stock      Paid-In    Loss in     Accumulated     sive     
                           Shares  Amount   Shares    Amount   Capital    Investment   (Deficit)     Income    
                           ------  ------ ----------  ------  ----------  --------- -------------  ----------- 
                                                                                                               

Balance at                                                                                                     
 February 28, 2002              0  $    - 26,565,536  $2,656  $7,646,895  $         $ (7,272,555)  $(1,573,643)
                                                                                                   =========== 
Preferred stock                                                                                                
 converted to common            1       -                        500,000                                       
Common stock issued                                                                                            
 for cash                                  2,137,800  $  214   2,498,813                                       
Common stock issued                                                                                            
 for accrued expenses                          9,000  $    1       8,999                                       
Common stock issued                                                                                            
 for services                                  9,550  $    1       9,999                                       
Net loss for the year                                                                                          
 ended February 28, 2003                                                               (2,592,756)  (2,592,756)
Balance at                -------  -----  ----------  ------   ----------  --------  ------------  ----------- 
 February 28, 2003              1  $   -  28,721,886  $2,872  $10,664,706  $      -  $ (9,865,311) $(2,592,756)
                                                                                                   =========== 
Common stock issued for                                                                                        
 conversion of Series C                                                                                        
 Preferred stock               (1)     -      400,000      40         (40)                                     
Common stock issued                                                                                            
 for cash                                   8,731,435     873  14,109,564                                      
Common stock issued                                                                                            
 for services                                 139,778      14      97,237                                      
Net change in unrealized                                                                                       
 gain on investments, net                                                                                      
 of related tax effect                                                       2,988                      2,988  
Net income for the year                                                                                        
 ended February 29, 2004                                                            $    566,881  $   566,881  
Tax benefit related to                                                                                         
exercise of employee stock                                                                                     
options                                                          276,372                                       
Balance at               --------  -----  ----------  ------ -----------  --------- ------------  -----------  
 February 29, 2004              0  $   -  37,993,099  $3,799 $25,147,839  $   2,988 $ (9,298,430) $   569,869  
                         ========  =====  ==========  ====== ===========  ========= ============  ===========  


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

F-5       

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES   
CONSOLIDATED STATEMENTS OF CASH FLOWS   

                                          Year Ended    Year Ended
                                            February 29,  February 28,
                                          2004          2003
                                           -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES:                                           
Net Income (Loss)                               $   566,881   $(2,592,756)    
Adjustments to reconcile net income (loss)                                      
to net cash used by operating activity:                                       
Tax effect of unrealized gain on investments          (1,877)            -      
Tax benefit related to exercise of employee                                     
stock options                                        276,372             -      
Common stock issued for:                                                        
Services                                            74,150        10,000    
Officer and director compensation                   50,600             -    
Interest payable                                   108,750             -    
Depreciation                                         380,013       101,371      
Loss on disposal of equipment                         31,927             -      
Interest income related parties                            -       (21,387)     
Interest expense accrued                                   -         5,615      
Inventory                                         (4,049,689)          308      
Increase in:                                                                    
Advances, prepaids, deposits                      (475,295)      (66,784)   
Deferred tax asset                              (6,036,598)            -    
Increase in:                                                                    
Accounts payable                                   953,372        49,387    
Accrued expenses                                    80,875        22,572    
                                           -----------   -----------
NET CASH USED IN OPERATING ACTIVITIES             (8,040,519)   (2,491,674)     
                                           -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:                                           
Purchase of property and equipment              (3,607,691)     (564,343)   
Purchase of U.S. Treasury bills                 (1,991,555)            -    
                                           -----------   -----------
NET CASH USED IN INVESTING ACTIVITIES             (5,599,246)     (564,343)     
                                           -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:                                           
Advances for related party loans receivable              -       (15,000)   
Repayment of note payable to related party          (2,144)            -    
Proceeds from:                                                              
Related party loans receivable                    292,627             -   
Issuance of common stock                       12,936,313     2,499,027   
Issuance of preferred stock                             -       500,000   
Issuance on notes payable                         978,750             -   
                                           -----------   -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES         14,205,546     2,984,027      
                                           -----------   -----------
NET INCREASE(DECREASE)IN CASH                        565,781       (71,990)     
CASH AT BEGINNING OF YEAR                            785,559       857,549      
                                           -----------   -----------
CASH AT END OF YEAR                              $ 1,351,340   $   785,559      
                                           ===========   ===========

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

F-6       

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES   
CONSOLIDATED STATEMENTS OF CASH FLOWS - continued   

SUPPLEMENTARY INFORMATION:                                                      
Interest paid                                    $   11,229    $        -     
Income taxes paid                                $        -    $        -     

SUMMARY OF SIGNIFICANT NON CASH TRANSACTIONS                                    

During August 2003 the holder of Series C Convertible Preferred stock elected   
to convert the share into 400,000 shares of common stock and a warrant to       
purchase an additional 400,000 shares of common stock at a price of $2.50 per   
share. Also during August, ten unrelated note-holders converted $978,750 of     
principal and $108,750 of interest into 870,000 shares of common stock. In      
addition a consultant received 7,143 shares of common stock for services        
valued at $5,000. During March 2003, a note holder elected to convert           
principal in the amount of $54,000 into 108,000 shares of common stock. In      
addition, during 2003, 210,413 shares valued at $137,450 were issued for        
consulting services (90,278 shares valued at $69,950), director compensation    
(50,000 shares valued at $27,500), officer bonuses (56,000 shares valued at     
$30,800) and other expenses (14,135 shares valued at $9,200).                   

During the quarter ending August 31, 2002, a related party exercised a          
non-statutory stock option in part by conversion of an accrued expense account  
due to the related party in the amount of $9,000. Also, an unrelated party      
elected under the terms of a consulting agreement with the Company, to receive  
9,550 shares of restricted common stock in satisfaction of services valued at   
$5,000 and payment toward an account receivable of $5,000 due from the          
Company.                                                                        

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

F-7       

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  

NOTE A - ORGANIZATION AND BUSINESS                                              

ORGANIZATION                                                                    

Odyssey Marine Exploration, Inc. was incorporated March 5, 1986, as a Colorado  
corporation named Universal Capital Corporation, Inc. On August 8, 1997         
Odyssey Marine Exploration, Inc. (the "Company"), completed the acquisition of  
100% of the outstanding Common Stock of Remarc International, Inc., a Delaware  
corporation formed May 20, 1994,("Remarc") in exchange for the Company's        
Common Stock in a reverse acquisition. On September 7, 1997, the Company        
changed its domicile to Nevada and its name was changed to Odyssey Marine       
Exploration, Inc.                                                               

For accounting purposes the acquisition has been treated as a                   
re-capitalization of Remarc, with Remarc as the acquirer (reverse               
acquisition). The historical financial statements prior to August 8, 1997 are   
those of Remarc. Remarc International, Inc. then adopted February as its        
fiscal year end.                                                                

Subsequently, on February 25, 1999, Remarc International, Inc. and Odyssey      
Marine Exploration, Inc. were merged with Odyssey Marine Exploration, Inc.      
being the surviving corporation.                                                

Odyssey Marine, Inc., a Florida corporation, was incorporated on November 2,    
1998, as a wholly owned subsidiary of Odyssey Marine Exploration, Inc. for the  
purpose of administering the Company's payroll and health plan.                 

On September 11, 2002, the Company formed a wholly owned Nevada corporation,    
Odyssey Marine Services, Inc., ("OMS") for the purpose of holding and leasing   
marine assets, chartering and leasing vessels and employing marine crew and     
technical personnel.                                                            

On September 11, 2002, the Company formed a wholly owned Nevada corporation,    
OVH, Inc., ("OVH") for the purpose of owning and chartering a research vessel.  

On July 30, 2003, the Company formed a wholly owned Nevada corporation,         
Odyssey Retriever, Inc., ("ORI") for the purpose of owning and operating a      
vessel suitable for conducting archaeologically sensitive exploration and       
recovery of shipwrecks.                                                         

BUSINESS ACTIVITY                                                               

Odyssey Marine Exploration, Inc., is engaged in the archaeologically sensitive  
exploration and recovery of deep-water shipwrecks throughout the world. The     
corporate headquarters are located in Tampa, Florida.                           

We own a 113 foot search vessel the R/V Odyssey equipped with side scan sonar,  
inspection class remote operated vehicle("ROV") and navigation                  

F-8       

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  

NOTE A - ORGANIZATION AND BUSINESS - continued                                  

equipment for conducting wide area searches for shipwrecks. We also own a       
251-foot recovery vessel the "Odyssey Explorer" equipped with a 7-ton, 205      
horsepower work class ROV. We are currently recovering the SS Republic which    
sank in 1865 which was located during our July 2003 survey operations.          

We are currently developing plans to market cargoes and other products derived  
from the recovery operations and to open exhibit attractions to the public.     

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 wholly owned subsidiaries, Odyssey Marine, Inc., Odyssey Marine Services,   
Inc., OVH, Inc, and Odyssey Retriever, Inc.  All significant inter-company      
transactions and balances have been eliminated.                                 

Use of Estimates                                                                

Management uses estimates and assumptions in preparing these financial          
statements in accordance with generally accepted accounting principles. 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                                                             

Although we have generated minimal revenues to date, marketing of the cargoes,  
replicas and ancillary products will be recognized on the point of sale         
method.                                                                         

Cash Equivalents                                                                

Cash equivalents 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.                                               

Fair Value of Financial Instruments                                             

The carrying value of cash, investments, accounts payable, and accrued          
expenses approximate fair value.                                                

F-9       

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                 

Considerable judgment is necessarily required in interpreting market data to    
develop the estimates of fair value, and, accordingly, the estimates are not    
necessarily indicative of the amounts that we could realize in a current        
market exchange.                                                                

Inventory                                                                       

Our inventory consists primarily of artifacts from the SS Republic shipwreck    
and the Tortugas artifacts collection.  The Company has accounted for its       
inventory at the lower of costs or market.                                      

Long-Lived Assets                                                               

Our policy is to recognize impairment losses relating to long-lived assets in   
accordance with Financial Accounting Standards Board No. 144, "Accounting for   
the Impairment or Disposal of Long-Lived Assets" based on several factors,      
including, but not limited to, management's plans for future operations,        
recent operating results and projected cash flows. To date no such impairment   
has been indicated.                                                             

Comprehensive Income                                                            

United States Treasury bills owned by us during the year ending February 29,    
2004, were deemed available-for-sale and carried at fair value. Unrealized      
gains and losses on these securities were excluded from earnings and reported,  
net of any income tax effect, as a separate component of stockholders' equity.  

Depreciation                                                                    

Property and equipment is stated at historical cost.  Depreciation is provided  
using the straight-line method at rates based on the assets' estimated useful   
lives.                                                                          

Earnings Per Share                                                              

Basic earnings per share (EPS) is computed by dividing income available to      
common shareholders by the weighted-average number of common shares             
outstanding for the year. Diluted EPS reflects the potential dilution that      
would occur if dilutive securities and other contracts to issue Common Stock    

F-10      

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                 

were exercised or converted into Common Stock or resulted in the issuance of    
Common Stock that then shared in our earnings.                                  

At February 29, 2004 potential common shares, calculated using the treasury     
stock method, were included in the computation of diluted EPS as follows:       

Weighted average shares outstanding                     32,952,161              
Potential common shares due to warrants and options      1,326,384              
                                          ----------
Weighted average common and potential                                           
common shares outstanding                               34,278,545              
                                          ==========

At February 28, 2003 potential common shares were excluded in the computation   
of diluted EPS because their inclusion would have had an antidilutive effect    
on EPS. At February 28, 2003, there were options for 658,792 shares and         
warrants for 255,000 shares that were exercisable between $0.30 and $.68 per    
share which were thus excluded from the computation of diluted EPS. On          
February 28, 2003, all of the other exercisable stock options and stock         
warrants were excluded from the computation of diluted EPS because the options  
exercise prices were greater than the average market price of the common        
shares.                                                                         

Stock-Based Compensation                                                        

We account for stock-based compensation using the intrinsic value method in     
accordance with Accounting Principles Board Opinion No. 25, "Accounting for     
Stock Issued to Employees," and have adopted the disclosure provisions of       
Statement of Financial Accounting Standards No. 148, "Accounting for            
Stock-Based Compensation -- Transition and Disclosure, an amendment of FASB     
Statement No. 123." Under APB No. 25, when the exercise price of our employee   
stock options equals or exceeds the market price of the underlying stock on     
the date of grant, no compensation expense is recognized. Accordingly, no       
compensation expense has been recognized in the consolidated financial          
statements in connection with employee stock option grants.                     

The following table illustrates the effect on net income and earnings per       
share had we applied the fair value recognition provisions of Statement of      
Financial Accounting Standards No. 123, "Accounting for Stock-Based             
Compensation," to stock-based employee compensation.                            

                           2004           2003
                            -----------    -----------
Net income(loss):                                                               
As reported                            $   566,881    $(2,592,756)          
Pro forma adjustment for                                                    
compensation, net of tax                  (252,823)      (252,027)          
                            -----------    -----------
Pro forma                              $   314,058    $(2,844,783)          
                            ===========    ===========

F-11          

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                 

Basic income(loss) per share:                                                   
As reported                            $      0.02    $     (0.09)          
Pro forma                              $      0.01    $     (0.10)          

Diluted income(loss) per share:                                                 
As reported                            $      0.02    $     (0.09)          
Pro forma                              $      0.01    $     (0.10)          

The weighted average estimated fair value of stock options granted during the   
years ended February 29, 2004 and 2003 was $1.21 and $1.07 respectively. These  
amounts were 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      
assumptions used in the Black-Scholes model were as follows for stock options   
granted in the years ended February 29:                                         

                             2004           2003
                            -------        -------
Risk-free interest rate                      3.0%           2.3%                
Expected volatility of common stock          496%           193%                
Dividend Yield                                 0%             0%                
Expected life of options                4-5 years        4 years                

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 these assumptions can materially affect the fair value  
of the options. Our options do not have the characteristics of traded options,  
therefore, the option valuation models do not necessarily provide a reliable    
measure of the fair value of our options.                                       

Equity instruments issued, if any, to non-employees in exchange for goods,      
fees and services are accounted for under the fair value-based method of SFAS   
No. 123.                                                                        

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 all of the deferred tax asset will not be  
realized.                                                                       

F-12      

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                 

Revenue Participation Certificates                                              

Revenue was received during the period ended May 31, 2003 that is subject to    
revenue sharing with holders of the Cambridge Revenue Participation             
Certificates. The obligation, which was accrued and subsequently paid, has      
been classified as other expense.                                               

NOTE C - CONCENTRATION OF CREDIT RISK                                           

We maintain our cash in one financial institution.  The Federal Deposit         
Insurance Corporation insures up to $100,000. At February 29, 2004 our          
uninsured cash balance was approximately $1,078,000.                            

NOTE D - INVESTMENTS                                                            

Investments consist of two United States Treasury Bills which mature for        
$1,000,000 each if held to maturity. These were purchased November 28, 2003 at  
a cost of $1,991,555 with original maturity dates of greater than 90 days and   
have been classified as available for sale securities. At February 29, 2004 an  
unrealized gain on investment was recorded in the amount of $4,865 due to the   
increase in the fair market value of the investments. The carrying value of     
investments at February 29, 2004 is determined as follows:                      

                     Investment     Maturity
                     -----------    --------
                    $   996,275    4/22/04
                    $   995,280    5/20/04
         -----------
         $ 1,991,555
Unrealized gain   $     4,865         
         -----------
         $ 1,996,420
         ===========
NOTE E - INVENTORY                                                              

During the current year we began to recover cargo consisting of gold and        
silver coins, bottles and other items from the SS Republic. At February 29,     
2004, our inventory consisted of $19,692 in raw emeralds, $5,944 of             
merchandise, $3,638,815 of SS Republic cargo. These amounts have been           
classified as $1,928,180 as current and $1,736,271 as non current assets. The   
carrying amount of the SS Republic cargo has been valued by capitalizing the    
costs of recovery of these items.                                               

NOTE F - PREPAID EXPENSE                                                        

Prepaid expenses consist of $215,655 of prepaid insurance premiums and          
$166,585 of other prepaid operating costs. All prepaid expenses are amortized   
on a straight-line basis over the term of the underlying agreements.            

F-13      

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE G - PROPERTY AND EQUIPMENT                                                 

At February 29, 2004 Property and Equipment consist of:                         

                               Accumulated
                           Original    Depreciation/    Book
Class                         Cost      Amortization     Value
-------------------------------     -----------  ------------  -----------      
Computers and peripherals          $   116,426   $    36,641   $    79,785      
Furniture and office equipment          47,350        12,563        34,787      
Vessels and marine equipment         4,312,714       554,259     3,758,455      
                             -----------   -----------   -----------
                             $ 4,476,490   $   603,463   $ 3,873,027
                             ===========   ===========   ===========

NOTE H - ARTIFACTS                                                              

Artifacts consist of $73,557 of artifacts recovered from the SS Republic and    
$331,372 of other artifacts which are held for displays or attractions.         

NOTE I - DEPOSITS                                                               

Deposits are held by various vendors for equipment, services, and in            
accordance with agreements in the normal course of business. At February 29,    
2004 deposits total $177,613.                                                   

NOTE J - ACCRUED EXPENSES                                                       

Accrued expenses at February 29, 2004, consist of:                              

Compensation and payroll taxes                             $     59,827   
Other operating expenses                                         57,380   
                                                         -----------
                                                         $   117,207
                                                         ===========
NOTE K - RELATED PARTY TRANSACTIONS                                             

Related Party Loans Receivable                                                  

On December 5, 2003 two officers paid a total of $270,082 for payment in full   
of loans and accrued interest.                                                  

Related Party Interest in Revenue Participation Agreement                       

On December 9, 2002, a Georgia limited liability company acquired rights from   
an unrelated third party through a foreclosure sale to receive 5% of post       
finance cost proceeds, if any, from shipwrecks that we may recover within a     
predefined search area of the Mediterranean Sea. The shipwreck we believe to    
be HMS Sussex is located within this search area. Two of our officers and       
directors have member interests in the limited liability company of 32% and     
28% respectively.                                                               

F-14      

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE L - SALE OF REVENUE PARTICIPATION CERTIFICATES                             

We have sold through private placements of Revenue Participation Certificates   
("RPCs") the right to share in our future revenues derived from the Cambridge   
or Republic projects. 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.                      

As of April 30, 1999, when the offering was closed, we had sold $825,000 of a   
maximum of $900,000 of the Cambridge 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 - 35 million, and 12.375% of gross revenue above $35 million    
generated by the Cambridge project.                                             

Distributions are to be made to each certificate holder within 15 days from     
the end of each quarterly reporting period in which we receive any cash         
proceeds from, or as a result of, the Cambridge Project. The Cambridge RPC      
units constitute restricted securities. In a private placement, which closed    
in September 2000, we sold "units" comprised of Republic Revenue Participation  
Certificates, and Common Stock. Each $50,000 "unit" entitled the holder to 1%   
of the gross revenue generated by the 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.                          

When the offering was closed, in September 2000, a total of five $50,000 units  
consisting of one Republic RPC and 100,000 shares of Common Stock had been      
sold, and the cost of each unit was allocated as $37,500 for the stock and      
$12,500 for the RPC. Therefore, a total of $62,500 was reflected on the books   
as deferred income from the sale of Republic Revenue Participation              
Certificates.                                                                   

As of February 29, 2004, we had sold, in total, $887,500 of RPCs, which are     
reflected on the books as Deferred RPC Income to be amortized under the units   
of revenue method.                                                              

NOTE M - PREFERRED STOCK                                                        

We currently have 9,300,000 shares of Preferred Stock and 510,000 shares of     
Series A Convertible Preferred Stock that have been authorized and none         
outstanding. The Preferred Stock may be issued in series from time to time      
with such rights, designations, preferences and limitation as our Board of      
Directors may determine by resolution.                                          

F-15      

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE M - PREFERRED STOCK - continued                                            

Series C Preferred Stock                                                        

On September 18, 2002, we established a series of Preferred Stock known as      
"Series C Convertible Preferred Stock"("Series C Preferred Stock"), having a    
par value of $.0001 per share and an authorization of one (1) share. One share  
of Series C Convertible Preferred Stock was issued for $500,000 in cash.        

On August 19, 2003 the share of Series C Convertible Preferred Stock was        
converted into 400,000 shares of our Common Stock and warrants to purchase      
400,000 shares of our Common Stock at an exercise price of $2.50 per share.     

The converted share was then restored to the status of authorized but           
un-issued shares of Preferred Stock of the Corporation, without designation as  
to series, and may thereafter be issued.                                        

NOTE N - COMMON STOCK OPTIONS AND WARRANTS                                      

We adopted the 1997 Stock Option Plan on September 8, 1997.  Under the terms    
of the plan, non-statutory options to purchase Common Stock are granted to      
employees, consultants and non-employee directors at not less than 100% of the  
fair market value of the shares on the date of grant or the par value thereof   
whichever is greater.  Options currently expire no later than 5 years from the  
date of grant and are fully vested in two years or less. The cumulative number  
of shares which may be subject to options issued and outstanding pursuant to    
the plan is limited to 3,500,000 shares. Additional information with respect    
to the plan's stock option activity is as follows:                              

                                     Number of      Weighted Average
                                     Shares         Exercise Price
                                    ----------     -----------------
Outstanding at February 28, 2002           2,735,500             $1.64          
Granted                                    190,000             $1.28        
Exercised                                  166,000             $0.52        
Cancelled                                1,619,500             $2.30        
              ----------
Outstanding at February 28, 2003           1,140,000             $0.80          
Granted                                  1,745,000             $2.34        
Exercised                                  423,500             $0.68        
Cancelled                                   22,500             $1.62        
              ----------
Outstanding at February 29, 2004           2,439,000             $1.91          
                                    ==========     =================

F-16      

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE N - COMMON STOCK OPTIONS AND WARRANTS - continued                          

Options exercisable at                                                          
February 28, 2003                           742,500             $0.65         
                                    ==========     =================
Options exercisable at                                                          
February 29, 2004                         1,024,000             $1.21         
                                    ==========     =================

The following table summarizes information about stock options outstanding at   
February 29, 2004:                                                              

Stock Options Outstanding                                                       

    --------------------------------------------------
        Weighted Average
        Number of        Remaining          Weighted
Range of           Shares         Contractual          Average          
Exercise Prices     Outstanding     Life in Years      Exercise Price         
-----------------    -----------   ---------------      --------------          
$0.30 - $0.50        200,000            1.25              $0.50             
$1.00 - $2.50      1,964,000            3.39              $1.62             
$2.60 - $5.00        275,000            5.00              $5.00             
----------                              
      2,439,000            3.40              $1.91
==========                              

We have issued warrants to one individual in connection with loans made to us   
and to one consultant for services. We have also issued warrants to ten         
individuals in connection with the conversion of loans into common stock, and   
to 52 individuals who purchased units in a private placement offering during    
August of 2003. Warrants exercisable at February 29, 2004 are as follows:       

       Price          Expiration
Warrants       per Share           Date             
----------       ---------        ----------            
11,000            3.00         3/31/05          
4,217,500            2.50        10/05/05             
21,500            2.00         3/31/05          
----------                                              
4,250,000                                             
==========                                              

NOTE O- COMPREHENSIVE INCOME                                                    

Comprehensive income for the years ended February 29, 2004 and February 28,     
2003 was $4,865 and none, respectively. The comprehensive income resulted       
entirely from the unrecognized gains on the value of marketable securities      
held by us at February 29, 2004.                                                

F-17      

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE P - INCOME TAXES                                                           

As of February 29, 2004, the Company had consolidated income tax net operating  
loss ("NOL") carryforwards for federal tax purposes of approximately            
$19,531,000.  The NOL will expire in various years ending through the year      
2023.                                                                           

The components of the provision for income taxes (benefits) are attributable    
to continuing operations as follows:                                            

    2004            2003
  -----------      -----------
Current                                                               
Federal               $         0      $         0                    
State                           0                0                    
  -----------      -----------
  $         0      $         0

Deferred                                                              
Federal               $(5,228,090)     $         0                    
State                    (534,013)               0                    
  -----------      -----------
  $(5,762,103)     $         0
  ===========      ===========

Deferred income taxes reflect the net tax effects of the temporary differences  
between the carrying amounts of assets and liabilities for financial reporting  
purposes and the amounts used for income tax purposes.  Significant components  
of the Company's deferred tax assets and liabilities are as follows:            

Deferred tax assets:                                                            
Net operating loss carryforwards          $7,812,338                  
Less: valuation allowance                          0                  
                        ----------
                        $7,812,338
                        ----------
Deferred tax liability:                                                         
Excess of tax over book depreciation      $  349,322                  
Artifacts recovery costs                   1,424,542                  
Unrealized gain on marketable securities       1,876                  
                        ----------
                        $1,775,740
                        ----------
Net deferred tax asset                         $6,036,598                       
Less: current net deferred tax asset            3,914,853                       
                        ----------
Net non-current deferred tax asset        $2,121,745                  
                        ==========

F-18      

 ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE P - INCOME TAXES - continued                                               

Through February 28, 2003, the Company had not recognized any tax provision or  
benefit and recorded a 100% valuation allowance because of the uncertainty of   
being able to utilize the deferred tax asset.  As reflected above, the Company  
has recorded a net deferred tax asset of $6,036,598 at February 29, 2004.       
Management has determined that a valuation allowance is not necessary because   
of the potential for future coin sales.  Management believes the Company will   
be profitable and will generate taxable income sufficient to utilize the loss   
carryforwards.  The amount of the net deferred tax assets considered            
realizable, however, could change in the near future if estimates of future     
taxable income during the carry-forward period are changed.                     

The change in the valuation allowance is as follow:                             

February 29, 2004              $         0                  
February 28, 2003              $ 3,756,168                  
             -----------
Decrease in valuation allowance     $(3,756,168)                      
             ===========

Income taxes for the years ended February 29, 2004 and February 28, 2003        
differ from the amounts computed by applying the effective income tax rate of   
38.5% to income before income taxes as a result of the following:               

                     2004               2003
                    ----------        ----------
Federal income tax computed at                                                  
US statutory rate                 ($1,818,328)        ($907,465)              
State income taxes net of                                                       
federal benefits                     (185,730)          (92,691)              
Valuation allowance adjustment      (3,756,168)        1,000,156                
Unrealized gain on marketable                                                   
securities                             (1,877)                0               
                   -----------        ----------
Income tax benefits                ($5,762,103)                0                
                   ===========        ==========

NOTE Q - COMMITMENTS AND CONTINGENCIES                                          

Rights to Future Revenues, If Any                                               

We have sold the rights to share in future revenues, if any, with respect to    
the Seattle (formerly Republic) and Cambridge projects and have recorded        
$887,000 as Deferred Income From Revenue Participation Certificates (See NOTE   
H). We are contingently liable to share in the future revenue of these          
projects only if revenue is derived from these specific projects.               

To date the only income derived from these projects resulted in a one time      
revenue distribution payment of $12,986 to the holders of the Cambridge RPC's.  

F-19        

 ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE Q - COMMITMENTS AND CONTINGENCIES - continued                              

In addition, 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 predefined search area of the Mediterranean Sea.  A shipwreck   
we have found, which we believe to be the HMS Sussex, is located within the     
specified search area and we will be responsible to share future revenues, if   
any, from this shipwreck. On December 9, 2002, a Georgia limited liability      
company acquired the 5% interest from the subcontractor through a foreclosure   
sale. (See NOTE K)                                                              

Industry Related Risks                                                          

Although we have access to a substantial amount of research and data which has  
been compiled regarding the shipwreck business, the quality and reliability of  
such research and data, like all research and data of its nature, is unknown.   
Even if we are able to plan and obtain permits for our projects, there is a     
possibility that the shipwreck may have been salvaged, or may not have had      
anything of value on board at the time of the sinking.  Furthermore, even if    
objects of believed value are located and recovered, there is the possibility   
that our rights to the recovered objects will be challenged by others,          
including both private parties and governmental entities, asserting             
conflicting claims.  Finally, even if we are successful in locating and         
retrieving objects from a shipwreck and establishing good title thereto, there  
can be no assurance as to the value that such objects will bring at their sale  
as the market for such objects is very uncertain.                               

Partnering Agreement                                                            

On September 27, 2002, we entered into an agreement (the "Agreement") with the  
Government of the United Kingdom of Great Britain and Northern Ireland (the     
"British Government").  The Agreement allows us to conduct an archaeologically  
sensitive exploration of the shipwreck believed to be HMS Sussex and to         
recover artifacts and cargoes from the wreck site.                              

The Agreement provides for us to submit a Project Plan (the "Plan") to the      
British Government 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. We submitted    
our Plan to the government on November 11, 2002, and received approval on May   
22, 2003.                                                                       

We have paid a 5,000 pounds (approximately $7,845) refundable license fee and   
will be required to make an expense deposit, prior to the commencement of       
recovery operations, of approximately 150,000 pounds (approximately $279,000    
at February 29, 2004) for the British Government's expenses in connection with  
the project.  In the event the project is not successful, we are responsible    

F-20      

 ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE Q - COMMITMENTS AND CONTINGENCIES - continued                              

for a maximum amount of 250,000 pounds (approximately $465,000 at February 29,  
2004) of the British Government's expenses related to the project. At such      
time as we represent to the British Government that we have recovered $3.5      
million worth of cargo and/or artifacts, all funds advanced for the British     
Government's expenses will be returned to us. We are also required to make a    
$100,000 deposit to ensure that funds are available for the conservation and    
documentation of any artifacts recovered. This deposit will be required before  
any activities may commence and the Agreement provides a mechanism for raising  
or lowering the deposit amount depending upon the quantity and condition of     
the artifacts that need to be conserved, documented and curated.                

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:                                      

     British
Range                Government     Odyssey   
----------------------------   ----------     -------             
$0 - $45 million                  20%           80%               
$45 million to $500 million       50%           50%               
Above $500 million                60%           40%               

In addition to the percentages specified above, we will also pay the British    
Government 10% of any net income we derive from intellectual property rights    
associated with the project.                                                    

We also 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 wreck, and the British Government will receive 3% of the gross   
sales of such merchandise.                                                      

The Agreement is for a period of 20 years, and may only be terminated if the    
shipwreck is not the HMS Sussex; if no artifacts are retrieved before November  
22, 2004; or if we are in serious breach of our obligations under the           
Agreement.                                                                      

Administrative Office Commitment                                                

We maintain our offices in two adjacent buildings in Tampa, Florida. The        
offices consist of approximately 2,900 square feet of office space that we      
lease from a non-affiliated company on a month-to-month basis for               
approximately $4,000 per month.  The approximate rental for the year ending     
February 29, 2004 was $45,000. We also have a one year lease through November   
2004, on 1,600 square feet of office space for approximately $2,000 per month.  
We spent approximately $6,000 on the lease through February 29, 2004 and will   
spend an additional $18,000 through the term of the lease.                      

F-21      

 ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE R - SUBSEQUENT EVENTS                                                      

Title to artifacts                                                              

On March 22, 2004 a judgment was awarded by the U.S. District Court for the     
Middle District of Florida, Tampa Division granting us title and ownership to   
the SS Republic shipwreck and cargo, including the hull, all artifacts and the  
specie that was on board when the ship sank.                                    

Revenue from Operations                                                         

During May 2004, the company began to generate its first significant revenue    
as a result of the sales of SS Republic shipwreck silver coins.  The company    
expects to record sales during the month of approximately $3 million.           

Purchase Commitment                                                             

On March 17, 2004 we entered into a sales agreement for the purchase of wood    
boxes for the packaging of coins in the amount of $401,500. Under the terms of  
the sales agreement we entered into an irrevocable standby letter of credit     
for an amount up to $321,200 which expires on December 31, 2004.                

Revolving Credit Facility                                                       

On May 3, 2004 we received a commitment letter for a $5 million revolving       
credit facility. The facility from The Bank of Tampa is for a term of 1 year,   
carries a floating interest rate of the banks published prime rate, currently   
4%, and is secured by a portion of our gold coin inventory. The facility        
requires interest only payments on any outstanding balance and must be repaid   
in full at the end of the term. We expect to close the loan in the beginning    
of June, 2004.                                                                  

NOTE S - RECENTLY ISSUED ACCOUNTING STANDARDS                                   

Below is a listing of the most recent accounting standards and their effect on  
the Company.                                                                    

SFAS 149 AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING       
ACTIVITIES                                                                      

This Statement amends and clarifies financial accounting and reporting for      
derivative instruments, including certain derivative instruments embedded in    
other contracts  (collectively referred to as derivatives) and for hedging      
activities under FASB Statement NO. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS  
AND HEDGING ACTIVITIES.                                                         

SFAS 150 FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND     
EQUITY                                                                          

This Statement requires that such instruments be classified as liabilities in   
the balance sheet. SFAS 150 is effective for financial instruments entered      
into or modified after May 31, 2003.                                            

F-22      

 ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE S - RECENTLY ISSUED ACCOUNTING STANDARDS - continued                       

FASB Interpretation No. 46, "Consolidation of Variable Interest Entities"       
("Interpretation No.  46") clarifies the application of Accounting Research     
Bulletin No. 51, "Consolidated Financial Statements," to certain entities in    
which equity investors do not have the characteristics of a controlling         
financial interest or do not have sufficient equity at risk for the entity to   
finance its activities without additional subordinated financial support from   
other parties.                                                                  

The adoption of these new Statements is not expected to have a material effect  
on the Company's financial position, results or operations, or cash flows.      

F-23        

SIGNATURES        

Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this Report to be signed   
on its behalf by the undersigned thereunder duly authorized.                    

                    ODYSSEY MARINE EXPLORATION, INC.

Dated: May 28, 2004               By:/s/ John C. Morris                         
                   John C. Morris, President

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant     
and in the capacities and on the dates indicated:                               

SIGNATURE                     TITLE                         DATE      

/s/ John C. Morris         President and Chairman              May 28, 2004     
John C. Morris                                                                  

/s/ Gregory P. Stemm       Vice President and Director         May 28, 2004     
Gregory P. Stemm                                                                

/s/ Michael V. Barton      Performing the function of          May 28, 2004     
Michael V. Barton          the Chief Financial Officer                          

/s/ David A. Morris        Secretary and Treasurer             May 28, 2004     
David A. Morris            (Principal Accounting Officer)                       

/s/ Henri G. DeLauze       Director                            May 28, 2004     
Henri G. DeLauze                                                                

/s/ George Knutsson        Director                            May 28, 2004     
George Knutsson                                                                 

/s/ David J. Saul          Director                            May 28, 2004     
David J. Saul                                                                   

/s/ Geroge E. Lackman      Director                            May 28, 2004     
George E. Lackman, Jr.                                                          

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
		3/31/05		1					10-Q
		2/28/05		1
		12/31/04		1		2			10-KT,  10KSB/A,  4
		11/22/04		1		2
		6/1/04		1					4
		5/31/04		1					10QSB
Filed on:		5/28/04		1		2			4
		5/24/04		1					3
		5/15/04		1
		5/3/04		2
		4/30/04		1
		4/25/04		1
		3/22/04		2
		3/17/04		2
		3/1/04		1					4
For Period End:		2/29/04		1		2			5
		12/5/03		1		2
		11/30/03		1					10QSB
		11/28/03		2
		11/19/03		1					4
		11/18/03		1					4
		8/31/03		1					10QSB
		8/19/03		2
		7/30/03		1		2
		5/31/03		1		2			10QSB
		5/22/03		1		2
		3/31/03		1					4
		2/28/03		1		2			10KSB
		12/9/02		1		2
		11/30/02		1					10QSB
		11/11/02		1		2
		9/27/02		1		2
		9/19/02		1					8-K
		9/18/02		2
		9/11/02		1		2
		8/31/02		1		2			10QSB
		5/31/02		1					10QSB
		5/22/02		1
		3/1/02		1
		2/28/02		1					10KSB
		11/7/01		1
		10/12/01		1
		10/10/01		1					10QSB
		4/1/01		1
		2/28/01		1					10KSB,  8-K
		1/24/01		1
		1/1/01		1
		4/30/99		1		2
		2/25/99		2
		11/2/98		1		2
		5/26/98		1		2
		9/8/97		1		2			DEF 14C,  PRES14C
		9/7/97		2
		8/8/97		2					8-K,  8-K/A
		5/20/94		2
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