UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2022March 31, 2023

 

or

 

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _________ to __________.

 

Commission File Number 000-29461

 

(SEAFARER EXPLORATION CORP LOGO)(SEAFARER EXPLORATION CORP LOGO)

 

SEAFARER EXPLORATION CORP.
(Exact name of registrant as specified in its charter)

 

Florida90-0473054
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

 

14497 N. Dale Mabry Highway, Suite 209-N, Tampa, Florida 33618
(Address of principal executive offices) (Zip code)
 
(813) 448-3577
Registrant’s telephone number
 
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.0001 per share

1

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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. Yes x No o

1

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filero Accelerated filero
     
Non-accelerated filerx Smaller reporting companyx
   
 Emerging growth companyo

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

 

As of November 14, 2022,May 19, 2023, there were 7,070,348,4337,535,746,325 shares of the registrant’s common stock, $.0001 par value per share, outstanding.

2

 

SEAFARER EXPLORATION CORP.
Form 10-Q
For the Quarterly Period Ended September 30, 2022March 31, 2023

 


TABLE OF CONTENTS

 

PART I: FINANCIAL INFORMATION4
  
Item 1. Financial Statements5
  
Consolidated Balance Sheets: September 30, 2022 (unaudited)March 31, 2023 unaudited and December 31, 202120225
  
Unaudited Consolidated Statements of Operations: Three months ended March 31, 2023 and nine months ended September 30, 2022 and 2021 (unaudited)6
  
Unaudited Consolidated Statements of Changes in Stockholders’ Deficit: Three months ended March 31, 2023 and nine months ended September 30, 2022 and 2021 (unaudited)77-8
  
Unaudited Consolidated Statements of Cash Flows: NineThree months ended September 30,March 31, 2023 and 2022 and 2021 (unaudited)89
  
Notes to Unaudited Consolidated Financial Statements (unaudited)910
  
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations2123
  
Item 3. Quantitative and Qualitative Disclosures About Market Risk2829
  
Item 4. Controls and Procedures2829
  
PART II: OTHER INFORMATION3031
  
Item 1. Legal Proceedings3031
  
Item 1A. Risk Factors3031
  
Item 2. Recent Sales and Other Issuances of Unregistered Securities3031
  
Item 3. Defaults Upon Senior Securities3132
  
Item 4. Mine Safety Disclosures3132
  
Item 5. Other Information3132
  
Item 6. Exhibits3233
  
SIGNATURES3334

3

 

Part I: Financial Information

 

Statements in this Form 10-Q Quarterly Report may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Form 10-Q Quarterly Report, under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other documents which we file with the Securities and Exchange Commission.

 

In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, compliance with government regulations and permits, agreements with third parties to conduct operations, competition, fulfillment of contractual obligations by other parties and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q Quarterly Report, except as required by Federal Securities law.

4

 

Item I. Financial Statements

 

SEAFARER EXPLORATION CORP.
CONSOLIDATED BALANCE SHEETS

 

 September 30, 2022  December 31, 2021  March 31, 2023 December 31, 2022
 Unaudited      Unaudited     
Assets                
Current assets                
Cash $36,394  $81,801  $173,341  $177,409 
Prepaid expenses  -   3,000 
Deposits  750   750   750   750 
Total current assets  37,144   85,551   174,091   178,159 
                
Property, plant and equipment, net  160,226   176,476   151,296   154,761 
Right of use asset  14,760   27,011   122,397   10,464 
Total Assets $212,130  $289,038  $447,784  $343,384 
                
Liabilities and Stockholders’ Deficit                
Current liabilities                
Accounts payable and accrued expenses $699,173  $517,038  $652,848  $624,574 
Deferred revenue  140,000   140,000   140,000   140,000 
Convertible notes payable, related parties, net of discounts of $0 and $3,864, respectively  40,000   2,136      40,000 
Convertible notes payable, in default  285,300   235,300   235,300   235,300 
Convertible notes payable, in default - related parties  644,500   638,500   684,500   644,500 
Notes payable  -   50,000 
Notes payable, in default  118,000   128,000   113,000   118,000 
Notes payable, in default - related parties  18,500   18,500   18,500   18,500 
Shareholder loan  14,400   7,900   5,000   7,400 
Lease liability, current  15,231   16,876 
Operating lease liability, current  6,272   10,807 
Finance lease liability, current  17,870    
Total current liabilities  1,975,104   1,754,250   1,871,668   1,839,081 
                
Lease liability, long-term  -  10,718 
Finance lease liability, long-term  100,050    
Total Liabilities  1,975,104   1,764,968   1,973,340   1,839,081 
                
Commitments and contingencies (Note 8)        
Commitments and contingencies (Note 7)        
                
Stockholders’ Deficit                
Preferred stock, $0.0001 par values - 50,000,000 shares authorized; 67 shares issued                
Series A - 7 shares issued and outstanding  -   -       
Series B - 60 shares issued and outstanding  -   -       
Common stock, $0.0001 par value - 9,900,000,000 shares authorized; 6,837,914,037 and 6,176,318,579 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively  683,892   617,632 
Common stock to be issued, $0.0001 par value, 46,865,550 and 37,750,000 shares outstanding at September 30, 2022 and December 31, 2021, respectively  4,687   3,775 
Common stock, $0.0001 par value - 9,900,000,000 shares authorized; 7,499,729,658 and 7,172,668,896 shares issued and outstanding at March 31, 2023 and December 31, 2022  749,973   717,268 
Common stock to be issued, $0.0001 par value, 28,871,211 and 71,969,820 shares outstanding at March 31, 2023 and December 31, 2022, respectively  2,888   7,197 
Unearned compensation  (52,369)  (261,536)  (226,948)  (488)
Additional paid in capital  22,216,091   20,714,410   24,106,713   22,947,138 
Accumulated deficit  (24,615,275)  (22,550,211)  (26,158,182)  (25,166,812)
Total Stockholders’ Deficit  (1,762,974)  (1,475,930)  (1,525,556)  (1,495,697)
Total Liabilities and Stockholders’ Deficit $212,130  $289,038  $447,784  $343,384 

 

See accompanying notes to the unaudited consolidated financial statements.

5

 


SEAFARER EXPLORATION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 

  For the Three Months Ended
September 30,
  For the Nine Months Ended
September 30,
 
  2022  2021  2022  2021 
Revenue:                
Service income $4,907   5,548  $11,127  $18,922 
                 
Operating Expenses                
Consulting and contractor expenses  280,948   275,361   1,164,348   787,301 
Vessel maintenance and dockage  36,923   28,108   129,837   74,311 
Research and development  16,669   112,610   157,876   323,052 
Professional fees  9,000   14,008   41,271   68,808 
General and administrative expense  166,804   83,048   317,703   287,312 
Depreciation expense  5,465   5,465   16,395   16,395 
Rent expense  9,144   9,052   35,724   30,526 
Travel and entertainment expense  21,854   30,700   56,658   60,021 
Total operating expenses  546,807   558,352   1,919,812   1,647,726 
                 
Net loss from operations  (541,900)  (552,804)  (1,908,685)  (1,628,804)
                 
Other income (expense)                
Interest expense  (17,027)  (25,761)  (50,129)  (95,848)
Loss on extinguishment of debt  (21,250)  (44,258)  (21,250)  (121,847)
Net loss on settlement of accounts payable  -   (449)  -   (449)
Loss on sale of asset  (85,000)  -   (85,000)  - 
Gain on disposal of asset  -   18,500   -   18,500 
Total other income (expenses)  (123,277)  (51,968)  (156,379)  (199,644)
                 
Net loss $(665,177) $(604,772) $(2,065,064) $(1,828,448)
                 
Basic and diluted loss per share $(0.00) $(0.00) $(0.00) $(0.00)
                 
Weighted average shares outstanding  6,695,157,207   4,991,316,919   6,562,530,671   4,886,341,827 

  For the Three Months Ended March 31,
  2023 2022
Revenue:    
Service income $  $3,089 
Total revenue     3,089 
         
Operating Expenses        
Consulting and contractor expenses  519,486   487,698 
Vessel maintenance and dockage  194,819   51,269 
General and administrative expenses  153,379   81,418 
Research and development  32,100   61,419 
Professional Fees  28,056   22,100 
Travel and entertainment expense  21,184   15,569 
Rent expense  13,769   11,234 
Depreciation and amortization expense  11,588   5,465 
Total operating expenses  974,381   736,073 
         
Net loss from operations  (974,381)  (732,984)
         
Other income (expense)        
Interest expense  (16,989)  (15,440)
Total other income (expenses)  (16,989)  (15,440)
         
Net loss $(991,370) $(748,424)
         
Basic and diluted loss per share $(0.00) $(0.00)
         
Weighted average shares outstanding  

7,358,073,442

   5,645,802,431 

  

See accompanying notes to the unaudited consolidated financial statements.

6

 

SEAFARER EXPLORATION CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021MARCH 31, 2023
(UNAUDITED)

 

                          Unarned  Additional  Accumulated    
  Series A Preferred Stock  Series B Preferred Stock  Common Stock  Common Stock to be Issued  Compensation  Paid in Capital  Deficit  Total 
  Shares  Amount  Shares  Amount  Shares  Amount  Shares  Amount             
Balance December 31, 2020  7  $-   60  $-   5,315,683,905  $531,568   1,500,000  $150  $(67,058) $18,513,123  $(19,924,797) $(947,014)
                                                 
Common stock issued for cash  -   -   -   -   75,850,000   7,585   -   -   -   191,965   -   199,550 
                                                 
Stock issued to convert notes payable and accrued interest  -   -   -   -   8,734,640   874   -   -   -   56,774   -   57,648 
                                                 
Amortization of unearned compensation  -   -   -   -   -   -   -   -   18,801   -   -   18,801 
                                                 
Net Loss  -   -   -   -   -   -   -   -   -   -   (589,580)  (589,580)
                                                 
Balance March 31, 2021  7   -   60   -   5,400,268,545   540,027   1,500,000   150   (48,257)  18,761,862   (20,514,377)  (1,260,595)
                                                 
Common stock issued for cash  -   -   -   -   207,733,334   20,773   35,417,000   3,542   -   467,085   -   491,400 
                                                 
Stock issued to convert notes payable and accrued interest  -   -   -   -   15,594,247   1,559   -   -   -   77,971   -   79,530 
                                                 
Stock issued for services  -   -   -   -   13,756,154   1,376   -   -   (23,500)  67,675   -   45,551 
                                                 
Amortization of unearned compensation  -   -   -   -   -   -   -   -   19,010   -   -   19,010 
                                                 
Net Loss  -   -   -   -   -   -   -   -   -   -   (634,096)  (634,096)
                                                 
Balance June 30, 2021  7   -   60   -   5,637,352,280   563,735   36,917,000   3,692   (52,747)  19,374,593   (21,148,473)  (1,259,200)
                                                 
Common stock issued for cash  -   -   -   -   198,000,000   19,800   -   -   -   397,200   -   417,000 
                                                 
Stock issued to convert notes payable and accrued interest  -   -   -   -   35,615,390   3,562   -   -   -   142,462   -   146,024 
                                                 
Stock issued for services  -   -   -   -   1,581,182   158   -   -   -   6,173   -   6,331 
                                                 
Amortization of unearned compensation  -   -   -   -   -   -   -   -   19,220   -   -   19,220 
                                                 
Net Loss  -   -   -   -   -   -   -   -   -   -   (604,772)  (604,772)
                                                 
Balance September 30, 2021  7   $-   60   $-   5,872,548,852  $587,255   36,917,000  $3,692  $(33,527) 19,920,428  (21,753,245) $(1,275,397)
                                                 
                                                 
Balance December 31, 2021  7  $-   60  $-   6,176,318,579  $617,632   37,750,000  $3,775  $(261,536) $20,714,410  $(22,550,211) $(1,475,930)
                                                 
Common stock issued for cash  -   -   -   -   328,000,000   32,800   -   -   -   631,200   -   664,000 
                                                 
Stock issued for services, committed in prior period  -   -   -   -   14,000,000   1,400   (14,000,000)  (1,400)  -   -   -   - 
                                                 
Stock issued for services  -   -   -   -   19,885,913   2,089   -   -   (3,300)  77,183   -   75,972 
                                                 
Cancellation of shares  -   -   -   -   (61,183,646)  (6,118)  -   -   -   6,118   -   - 
                                                 
Amortization of unearned compensation  -   -   -   -   -   -   -   -   85,470   -   -   85,470 
                                                 
Net Loss  -   -   -   -   -   -   -   -   -   -   (748,424)  (748,424)
                                                 
Balance March 31, 2022  7   -   60   -   6,477,020,846   647,803   23,750,000   2,375   (179,366)  21,428,911   (23,298,635)  (1,398,912)
                                                 
Common stock issued for cash  -   -   -   -   202,500,000   20,250   -   -   -   384,750   -   405,000 
                                                 
Stock issued for services  -   -   -   -   13,924,764   1,392   -   -   -   38,608   -   40,000 
                                                 
Cancellation of shares  -   -   -   -   (23,500,000)  (2,350)  -   -   -   2,350   -   - 
                                                 
Amortization of unearned compensation  -   -   -   -   -   -   -   -   63,151   -   -   63,151 
                                                 
Net Loss  -   -   -   -   -   -   -   -   -   -   (651,463)  (651,463)
                                                 
Balance June 30, 2022  7   -   60   -   6,669,945,610   667,095   23,750,000   2,375   (116,215)  21,854,619   (23,950,098)  (1,542,224)
                                                 
Common stock issued for cash  -   -   -   -   153,123,189   15,312   23,115,550   2,312   -   320,607   -   338,231 
                                                 
Stock issued for services  -   -   -   -   14,345,238   1,435   -   -   -   39,515   -   40,950 
                                                 
Stock issued for financing fees  -   -   -   -   500,000   50   -   -   -   1,350   -   1,400 
                                                 
Amortization of unearned compensation  -   -   -   -   -   -   -   -   63,846   -   -   63,846 
                                                 
Net Loss  -   -   -   -   -   -   -   -   -   -   (665,177)  (665,177)
                                                 
Balance September 30, 2022  7  $-   60  $-   6,837,914,037  $683,892   46,865,550  $4,687  $(52,369) $22,216,091  $(24,615,275) $(1,762,974)

  Series A Preferred Stock Series B Preferred Stock Common Stock Common Stock to be Issued Unearned
Compensation
 Additional
Paid in Capital
 Accumulated
 Deficit
 Total
  Shares Amount Shares Amount Shares Amount Shares Amount        
Balance December 31, 2022  7  $   60  $   7,172,668,896  $717,268   71,929,820  $7,197  $(488) $22,947,138  $(25,166,812) $(1,495,697)
                                                 
Common stock issued for cash              228,859,347   22,885   (40,083,333)  (4,008)     507,123      526,000 
                                                 
Stock issued as charitable donation              1,000,000   100            7,100      7,200 
                                                 
Stock issued for services              97,201,415   9,720   (3,015,276)  (301)  (280,800)  645,352      373,971 
                                                 
Amortization of unearned compensation                          54,340         54,340 
                                                 
Net Loss                                (991,370)  (991,370)
                                                 
Balance March 31, 2023  7  $   60  $   7,499,729,658  $749,973   28,871,211  $2,888  $(226,948) $24,106,713  $(26,158,182) $(1,525,556)

  

See accompanying notes to the unaudited consolidated financial statements.

7

 

SEAFARER EXPLORATION CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWSCHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE NINETHREE MONTHS ENDED SEPTEMBER 30,MARCH 31, 2022 AND 2021
(UNAUDITED)

  

  For the Nine Months Ended
September 30,
 
  2022  2021 
       
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net Loss $(2,065,064) $(1,828,448)
         
Adjustments to reconcile net loss to net cash used by operating activities:        
Depreciation  16,395   16,395 
Amortization of beneficial conversion feature and loan fees  3,864   75,348 
Amortization of unearned compensation  212,467   57,031 
Common stock issued for services  156,922   51,882 
Financing fees on debt  1,400   - 
Gain on disposal of asset  -   (18,500)
Loss on extinguishment of debt  21,250   121,847 
Loss on disposal of asset  85,000   - 
Loss on settlement of accounts payable  -   449 
Decrease (increase) in:        
Prepaid expenses and deposits  3,000   98,956 
Deferred revenue  -   140,000 
Increase (decrease) in:        
Accounts payable & accrued expenses  78,085   21,336 
Net cash from operating activities  (1,486,681)  (1,263,704)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchase of property, plant and equipment  (145)  - 
Proceeds from sale of asset  -   18,500 
Net cash from investing activities  (145)  18,500 
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from the issuance of common stock  1,404,919   1,107,950 
Proceeds from the issuance convertible notes payable  50,000   - 
Proceeds from the issuance convertible notes payable, related party  40,000   - 
Proceeds from the issuance notes payable, related party  5,000   - 
Payments on convertible notes payable, related party  (10,000)  - 
Payments on notes payable, related party  (5,000)  - 
Payments on notes payable  (50,000)  (2,000)
Payments to shareholders  6,500   6,000 
Net cash from financing activities  1,441,419   1,111,950 
         
NET CHANGE IN CASH  (45,407)  (133,254)
CASH, BEGINNING OF PERIOD  81,801   186,873 
CASH, END OF PERIOD $36,394  $53,619 
         
Supplemental disclosure of cash flow information        
Cash paid for interest expense $-  $- 
Cash paid for income taxes $-  $- 
         
Non-cash operating and financing activities:        
Convertible debt and accrued interest converted to common stock $-  $283,202 
Stock issued for prepaid services $3,300  $23,500 
  Series A Preferred Stock Series B Preferred Stock Common Stock Common Stock to be Issued Unearned
Compensation
 Additional
Paid in Capital
 Accumulated
Deficit
 Total
  Shares Amount Shares Amount Shares Amount Shares Amount        
Balance December 31, 2021  7  $   60  $   6,176,318,579  $617,632   37,750,000  $3,775  $(261,536) $20,714,410  $(22,550,211) $(1,475,930)
                                                 
Common stock issued for cash              328,000,000   32,800            631,200      664,000 
                                                 
Stock issued for services, committed in prior period              14,000,000   1,400   (14,000,000)  (1,400)            
                                                 
Stock issued for services              19,885,913   2,089         (3,300)  77,183      75,972 
                                                 
Cancellation of shares              (61,183,646)  (6,118)           6,118       
                                                 
Amortization of unearned compensation                          85,470         85,470 
                                                 
Net Loss                                (748,424)  (748,424)
                                                 
Balance March 31, 2022  7  $   60  $   6,477,020,846  $647,803   23,750,000  $2,375  $(179,366) $21,428,911  $(23,298,635) $(1,398,912)

 

See accompanying notes to the unaudited consolidated financial statements.

8

SEAFARER EXPLORATION CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

  For the Three Months Ended
March 31,
  2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net Loss $(991,370) $(748,424)
         
Adjustments to reconcile net loss to net cash used by operating activities:        
Depreciation  5,465   5,465 
Amortization of beneficial conversion feature and loan fees     880 
Amortization of right of use asset, finance  6,123    
Amortization of unearned compensation  54,340   85,470 
Common stock issued for services  373,971   75,972 
Change in operating assets and liabilities        
Accounts payable and accrued expenses  33,790   (59,814)
Net cash used in operating activities  (517,681)  (640,451)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchase of property, plant and equipment  (2,000)  (145)
Net cash used in investing activities  (2,000)  (145)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from the issuance of common stock  526,000   663,999 
Payments on notes payable  (5,000)  (50,000)
Payments on leased equipment  (2,987)   
Payments on shareholder loans  (2,400)   
Net cash provided by financing activities  515,613   613,999 
         
NET CHANGE IN CASH  (4,068)  (26,597)
CASH, BEGINNING OF PERIOD  177,409   81,801 
CASH, END OF PERIOD $173,341  $55,204 
         
Supplemental disclosure of cash flow information        
Cash paid for interest expense $  $ 
Cash paid for income taxes $  $ 
         
Non-cash operating and financing activities:        
Financing lease liabilities and right of use asset $122,464  $ 
Stock issued for prepaid services $280,800  $ 

See accompanying notes to the unaudited consolidated financial statements.

9

 

SEAFARER EXPLORATION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 

The accompanying unaudited consolidated financial statements of Seafarer Exploration Corp. (“Seafarer” or the “Company”) are unaudited, but in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the Company’s financial position, results of operations, and cash flows as of and for the dates and periods presented. The unaudited consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information.

 

These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes included in the Company’s Report on Form 10-K for the year ended December 31, 2021,2022, filed with the Securities and Exchange Commission (the “Commission”) on March 31, 2022.2023. The results of operations for the ninethree month period ended September 30, 2022March 31, 2023 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 20222023 or for any future period.

 

NOTE 1 – DESCRIPTION OF BUSINESS

 

Seafarer Exploration Corp. (“Seafarer” or the “Company”), was incorporated on May 28, 2003 in the State of Delaware.

 

The principal business of the Company is to engage in the archaeologically-sensitive exploration, documentation, recovery, and conservation of historic shipwrecks with the objective of exploring and discovering Colonial-era shipwrecks for future generations to be able to appreciate and understand.

 

In March of 2014, Seafarer entered into a partnership with Marine Archaeology Partners, LLC (“MAP”), with the formation of Seafarer’s Quest, LLC (“SQ”) for the purpose of exploring a shipwreck site off of Melbourne Beach, Florida. Under the partnership with MAP, Seafarer is the designated manager of SQ.

 

The Company’s wholly owned subsidiary Blockchain LogisTech, LLC (“Blockchain”), was formed on April 4, 2018 and began operations in 2019. The Company is evaluating Blockchain’s business opportunities and does not believe that Blockchain will generate any significant revenues for the foreseeable future.

 

The Company formed a wholly owned subsidiary, Exploration Studios, LLC, in May 2018 in order to explore media strategies and opportunities. Exploration Studios, LLC has not yet commenced operations.

 

Florida Division of Historical Resources Agreements/Permits

 

The Company successfully renewed its permits for both Areas 1 and 2 for the Melbourne Beach site. The Area 1 permit was renewed on March 1, 2019 for a period of three years. The Area 2 permit was renewed on January 14, 2019 for a period of three years. Per Florida Statutes, Seafarer made a timely request for renewal of the 2019 permit for Area 2 on July 29, 2021.2022. In January of 2022, Seafarer received notification from the Florida Division of Historical Resources (“FDHR”) that its permit for Area 2, which was set to expire on January 19, 2022, has been continued indefinitely while the renewal request was being processed. The existing permits will continue until the renewal is finalized or rejected. Per Florida Statutes, Seafarer made a timely request for renewal of the 2019 permit for Area 1 on July 29, 2021. On March 2, 2022, Seafarer received notification that the permit would continue indefinitely with the same terms as Area 2.

 

Federal Admiralty JudgementJudgment

 

Seafarer was granted, through the United States District Court for the Southern District of Florida, a final judgment for its federal admiralty claim on the Juno Beach shipwreck site. The Company is conducting limited exploration operations at the Juno Beach shipwreck site while it awaits updated permitting from the Army Corp of Engineers and the Florida Department of Environmental Protection.

Blockchain Software Services Referral Agreements

Management is reviewing potential alternate plans for Blockchain and believes that it is highly unlikely that Blockchain will generate revenue during 2022.Engineers.

 

NOTE 2 – GOING CONCERN

 

These unaudited consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred net losses since inception and has an accumulated deficit of $24,615,275$26,158,182 as of September 30, 2022.March 31, 2023. During the ninethree month period ended September 30, 2022,March 31, 2023, the Company’s net loss was $2,065,064$991,370 and at September 30, 2022,March 31, 2023, the Company had a working capital deficit of $1,937,960.$1,699,199. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Based on its historical rate of expenditures, the Company expects to expend its available cash in less than one month from November 14, 2022.May 19, 2023. Management’s plans include raising capital through the issuance of common stock and debt to fund operations and, eventually, the generation of revenue through its business. The Company does not expect to generate any significant revenues for the foreseeable future. The Company is in immediate need of further working capital and is seeking options, with respect to financing, in the form of debt, equity or a combination thereof.

910

 

Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. The Company’s ability to raise additional capital through the future issuances of the common stock is unknown. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern; however, the accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These unaudited consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classifications of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Covid-19 Disclosure

The COVID-19 global pandemic may have a serious negative affect on the Company’s operations and business. It is possible that this ongoing global pandemic may cause the Company to have to significantly delay or suspend its operations, which would likely result in a material adverse impact on its business and financial positions.

Furthermore, the Company may be unable to raise sufficient capital due to COVID-19’s effects on the general economy and the capital markets. If the Company is not able to obtain financing due to COVID-19, then it is highly likely that it will be forced to cease operations. Smaller companies such as Seafarer, who lack significant revenues, earnings and cash flows as well as who lack diversified business operations are particularly vulnerable to having to potentially cease operations due to the effects of COVID-19. If the Company were to be unable to raise capital and cease its operations then it would be highly likely that the Company would not survive and lenders and investors would suffer a complete loss of all capital loaned to or invested in the Company.

Current Economic Conditions

 

The Company and certain of its advisors are closely monitoring current domestic economic conditions. Of particular concern is the rate of inflation that has been reported as being near a forty year high and had recently increased nearly 7% on a year-over-year basis from 2020 to 20212022 and the rising cost of fuel. The increasing inflation in the overall economy may lead to higher interest rates which may make it more expensive or potentially more challenging for the Company to access financing. Additionally, the Company’s vessels use large amounts of fuel when in operation and the recent rise in the per gallon cost of gasoline will cause an increase in the Company’s operating expenses. The increase in the cost of fuel may hamper the Company’s ability to conduct operations.

The Company is also aware of the recent decision by the U.S. Federal Reserve to raise interest rates. The rising interest rate environment may have a significant material negative effect on the Company’s business and operations. Higher interest rates may make it more expensive, or potentially impossible, for the Company to raise capital to fund its operations. If the Company is unable to successfully raise capital, then it is highly likely that it will be forced to cease operations which may result in investors losing the entirety of their investment in the Company.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

This summary of significant accounting policies of Seafarer Exploration Corp. is presented to assist in understanding the Company’s unaudited consolidated financial statements. The unaudited consolidated financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the unaudited consolidated financial statements.

 

Principles of Consolidation

 

The unaudited consolidated financial statements of the Company include the accounts of the Company and Blockchain which is a wholly owned subsidiary. Intercompany accounts and transactions have been eliminated in consolidation.

 

Cash and Cash Equivalents

 

For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. There were no cash equivalents at September 30, 2022March 31, 2023 and December 31, 2021.2022. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2022,March 31, 2023, the Company did not have deposits in excess of the FDIC insured limit.

 

Research and Development Expenses

 

Expenditures for research and development are expensed as incurred. The Company incurred research and development expenses of $157,876$32,100 and $323,052 for the nine month periods ended September 30, 2022 and 2021, respectively and $16,669 and $112,610$61,419 for the three month periods ended September 30,March 31, 2023 and 2022, and 2021, respectively, which is included in operating expenses in the accompanying consolidated statements of operations.respectively.

10

 

Revenue Recognition

 

The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”) and all the related amendments. The Company elected to adopt this guidance using the modified retrospective method. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operations or cash flows.

 

The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.

11

 

The Company recognizes revenue from the referrals that Blockchain has made to providers of software services when payment for a referral is received from the provider of software services. Blockchain, at its sole discretion and with no specific sales quotas or targets, provides referrals of potential end users to the software service providers and is paid a referral fee only after the software services providers receive payment from the end user.

 

The Company also has a separate sales referral agreement, with no sales quotas or specific goals or targets, with a limited liability company that provides product/system engineering and development services. The Company’s performance obligation is met when the payment from the customer is received by the provider of the development services, which is at a point in time. The Company receives referral fees when payment is received from the provider of the product/system development services which is when the Company recognizes revenue under the agreement.

 

The Company recognizes revenue when cash is received or when it has met its obligations per the terms of a contract or agreement for services. Payments received for services not yet provided are recorded as deferred revenue and are recognized as revenue when the services have been provided.

 

During the year ended December 31, 2021 the Company entered into an agreement to provide scanning services using its SeaSearcher technology to a corporation involved in searching for historic shipwreck material. Under the terms of the agreement the Company received an upfront payment of $140,000 which has been included in the accompanying unaudited consolidated balance sheets at September 30, 2022March 31, 2023 and December 31, 20212022 as deferred revenue as the services have not yet been provided.

 

Earnings Per Share

 

The Company has adopted the FASB ASC 260-10, Earnings per Share, which provides for the calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity.

 

The potentially dilutive common stock equivalents for the ninethree month periods ended September 30,March 31, 2023 and 2022 and 2021 were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss. As of September 30,March 31, 2023 and 2022, and 2021, there were approximately 730,366,968717,620,292 and 673,692,795661,579,069 shares of common stock underlying our outstanding convertible notes payable and warrants, respectively.

 

Fair Value of Financial Instruments

 

The carrying amounts of financial assets and liabilities, such as cash, accounts payable, accrued expenses, convertible notes payable and payables, approximate their fair values because of the short maturity of these instruments.

 

Property, Plant and Equipment

 

Property, plant and equipment are recorded at historical cost. Depreciation is computed on the straight-line method over the estimated useful lives of the respective assets.

 

Depreciation expense was $16,395 for the nine month periods ended September 30, 2022on property, plant and 2021, respectively, andequipment was $5,465 for the three month periods ended September 30,March 31, 2023 and 2022, and 2021, respectively, which is included in operating expenses in the accompanying consolidated statements of operations.

 

Impairment of Long-Lived Assets

 

In accordance with ASC 360-10, Impairment and Disposal of Long Lived Assets, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. There were no impairment charges recorded during the ninethree month periods ended September 30, 2022March 31, 2023 and 2021.2022.

11

 

Use of Estimates

 

The process of preparing consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Significant estimates for the ninethree month periods ended September 30,March 31, 2023 and 2022 and 2021 include useful life of property, plant and equipment, valuation allowances against deferred tax assets and the fair value of non cash equity transactions.

 

Segment Information

 

During 2019, Seafarer’s wholly owned subsidiary, Blockchain began operations, generated revenue and incurred expenses. The business of Blockchain has no relation to the Company’s historic shipwreck exploration and recovery operations other than common ownership. As such, the Company concluded that the operations of Blockchain and Seafarer Exploration were separate reportable segments foras of the ninethree month periods ended September 30,March 31, 2023 and 2022 and 2021 (see Note 109 – Segment Information).

12

 

Convertible Notes PayableDebentures

 

The Company accountsadopted the guidance in Accounting Standards Updated (“ASU”) 2020-06, Accounting for convertible notes deemed conventionalConvertible Instruments and conversion options embeddedContracts in non-conventional convertible notes which qualify as equity under ASC 815, Derivatives and Hedgingan Entity’s Own Equity , in accordance with the provisions of ASC 470-20, Debt with Conversion and Other Options, which provides guidance on January 1, 2022. ASU 2020-06 simplifies an issuer’s accounting for convertible securities withinstruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features. ASC 470-10 addresses classification determination for specific obligations, such as short-term obligations expectedThe Company adopted ASU 2020-06 utilizing the modified retrospective method, which resulted in an immaterial impact to be refinanced on a long-term basis, due-on-demand loan arrangements, callable debt, sales of future revenue, increasing rate debt, debt that includes covenants, revolving credit agreements subject to lock-box arrangements and subjective acceleration clauses. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt.Company.

 

Stock Based Compensation

 

The Company applies the fair value method of FASB ASC 718, Share Based Payment, in accounting for its stock-based compensation. The standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period. The Company values stock-based compensation at the market price for the Company’s common stock and other pertinent factors at the grant date.

 

Fully vested and non-forfeitable shares issued prior to the services being performed are classified as prepaid expenses.

 

Leases

 

The Company accounts for leases under Accounting Standards Update (“ASU”)ASU 2016-02. At the inception of a contract the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.

 

Operating lease right of use (“ROU”) assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented in operating expenses on the consolidated statements of operations.

 

As permitted under the new guidance, the Company has made an accounting policy election not to apply the recognition provisions of the guidance to short term leases (leases with a lease term of twelve months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term.

 

Investments

The Company follows ASC 325-20, Cost Method Investments, to account for its ownership interest in noncontrolled entities. Under ASC 325-20, equity securities that do not have readily determinable fair values (i.e., non-marketable equity securities) and are not required to be accounted for under the equity method are typically carried at cost (i.e., cost method investments). Investments of this nature are initially recorded at cost. Income is recorded for dividends received that are distributed from net accumulated earnings of the noncontrolled entity subsequent to the date of investment. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.

12

Income Taxes

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

Recent Accounting Pronouncements

 

All other recent accounting pronouncements issued by the FASB, did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

13

 

NOTE 4 – OPERATING LEASE AND RIGHT-OF-USE ASSETS AND OPERATING AND FINANCE LEASE LIABILITIES

Operating Leases

 

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is the incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of the Company’s leases are not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. During the three month periods ended March 31, 2023 and 2022, the Company recorded $4,601 as operating lease expense, which is included in rent expense on the consolidated statements of operations.

 

The Company leases 823 square feet of office space located at 14497 North Dale Mabry Highway, Suite 209-N, Tampa, Florida 33618. The Company entered into an amended lease agreement commencing on July 1, 2020 through July 31, 2023 with base month rents of $1,475 from July 1, 2020 to SeptemberJune 30, 2021, $1,519 from July 1, 2021 to SeptemberJune 30, 2022, $1,564 from July 1, 2022 to SeptemberJune 30, 2023 and $1,611 from July 1, 2023 to July 31, 2023. Under the terms of the lease there may be additional fees charged above the base monthly rental fee.

 

On July 1, 2020, upon renewal of the lease, the Company recorded a right-of-use asset and lease liability of $48,957. During

Right-of-use assets at March 31, 2023 and December 31, 2022 are summarized below:

  March 31, 2023  December 31, 2022 
Office lease $48,957  $48,957 
Less accumulated amortization  (42,901)  (38,493)
Right of use assets, net $6,056  $10,464 

Amortization on the nine month periods ended September 30, 2022 and 2021, the Company recorded and $13,802 as operating lease expense, whichright -of -use asset is included in rent expense on the consolidated statements of operations. During the three month periods ended September 30, 2022 and 2021, the Company recorded $4,601 as operating lease expense, which is included in rent expense on the consolidated statements of operations. 

Right-of-use assets at September 30, 2022 and December 31, 2021 are summarized below:

  September 30, 2022  December 31, 2021 
Office lease $48,957  $48,957 
Less accumulated amortization  (34,197)  (21,946)
Right of use assets, net $14,760  $27,011 

 

Operating Lease liabilities are summarized below:

 

 September 30, 2022  December 31, 2021  March 31, 2023  December 31, 2022 
Office lease $15,232  $27,594  $6,273  $10,807 
Less: current portion  (15,232)  (16,876)  (6,273)  (10,807)
Long term portion $-  $10,718  $-  $- 

 

Maturity of lease liabilities are as follows:

 

Year ended December 31, 2022 $4,729 
Year ended December 31, 2023  11,081  $6,352 
Total future minimum lease payments  15,810   6,352 
Less: Present value discount  (578)  (79)
Lease liability $15,232  $6,273 

 

The Company also has an operating lease for a house located in Palm Bay, Florida that it leases on a month-to-month basis for $1,400$1,300 per month. The Company uses the house to store equipment and gear and to provide temporary work-related living quarters for its divers, personnel, consultants and independent contractors involved in its exploration and recovery operations. The Company also pays a rental fee for a space in a park on an as needed basis.


13Finance Leases

Commencing during the quarter ended March 31, 2023, the Company entered into the following leases:

·Vehicle lease – monthly lease payments of $1,167 for 60 months amortized over 5 years at 12%

·Vessel lease - monthly lease payments of $1,557 for 60 months amortized over 5 years at 12%

Finance right of use assets are summarized below:

  As of  As of 
  March 31,  December 31, 
  2023  2022 
Vehicle lease $52,464  $- 
Vessel lease  70,000   - 
   122,464   - 
Less accumulated amortization  (6,123)  - 
Finance right of use asset $116,341  $- 

Finance lease liabilities are summarized below:

  As of  As of 
  March 31,  December 31, 
  2023  2022 
Vehicle lease $50,518  $- 
Vessel lease  67,402   - 
   117,920   - 
Less: current portion  (17,870)  - 
Long term portion $100,050  $- 

  Total 
Year Ended December 31, 2023 $21,792 
Year Ended December 31, 2024  32,690 
Year Ended December 31, 2025  32,690 
Year Ended December 31, 2026  32,690 
Year Ended December 31, 2027  32,690 
Year Ended December 31, 2028  2,724 
Total future minimum lease payments  155,276 
Less imputed interest  (37,356)
PV of payments $117,920 

Expenses incurred with respect to the Company’s finance leases during the three months ended March 31, 2023 and 2022 which are included in general and administrative expenses on the consolidated statements of operations are set forth below.

  March 31,  March 31, 
  2023  2022 
Finance lease amortization $6,123  $- 
Finance lease interest  3,629   - 
Total finance lease expense $9,752  $- 

The weighted average remaining lease term and the weighted average discount rate on the finance leases at March 31, 2023 and 2022 are set forth below.

  March 31,  March 31, 
  2023  2022 
Weighted average remaining lease term  4.75 years   - 
Weighted average discount rate  12%  - 

15

 

NOTE 5 – CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE

 

Upon inception, the Company evaluates each financial instrument to determine whether it meets the definition of “conventional convertible” debt under ASC 470.

 

Convertible Notes Payable

 

The following tables reflect the convertible notes payable at September 30, 2022March 31, 2023 and December 31, 2021: 2022:

               
  Issue Date Maturity
Date
 September 30,
2022
  December 31,
2021
  Rate Conversion
Price
      Principal
Balance
  Principal
Balance
     
Convertible notes payable – related parties            
   10/31/21 04/13/22  $-  $3,000  2.00% 0.0020
  11/10/21 05/10/22  -   3,000  2.00% 0.0020
  07/06/22 01/06/23  20,000   -  6.00% 0.0150
  07/29/22 01/29/23  10,000   -  6.00% 0.0020
  08/04/22 02/04/23  10,000   -  6.00% 0.0020
Face Value      40,000   6,000     
Less unamortized discounts  -   (3,864    
Balance convertible notes payable – related parties $40,000  $2,136     
               
  Issue Date Maturity
Date
 September 30,
2022
  December 31,
2021
  Rate Conversion
Price
      Principal
Balance
  Principal
Balance
     
Convertible notes payable - in default            
  08/28/09 11/01/09 $4,300  $4,300  10.00% 0.0150
  11/20/12 05/20/13  50,000   50,000  6.00% 0.0050
  01/19/13 07/30/13  5,000   5,000  6.00% 0.0040
  02/11/13 08/11/13  9,000   9,000  6.00% 0.0060
  09/25/13 03/25/14  10,000   10,000  6.00% 0.0125
  10/04/13 04/04/14  50,000   50,000  6.00% 0.0125
  05/15/14 11/15/14  40,000   40,000  6.00% 0.0070
  09/18/15 03/18/16  25,000   25,000  6.00% 0.0020
  07/19/16 07/19/17  4,000   4,000  6.00% 0.0015
  03/06/18 09/06/18  6,000   6,000  6.00% 0.0006
  02/06/18 11/07/18  6,000   6,000  6.00% 0.0006
  01/03/19 07/03/19  1,000   1,000  6.00% 0.0010
  09/04/19 03/04/20  25,000   25,000  6.00% 0.0030
  08/31/22 09/29/22  50,000   -  6.00% 0.0020
Balance convertible notes payable - in default $285,300  $235,300     

  Issue Date Maturity
Date
 March 31,
2023
  December 31,
2022
  Rate  Conversion
Price
      Principal
Balance
  Principal
Balance
      
Convertible notes payable - related parties          
                   
  07/06/22 01/06/23 $-  $20,000   6.00% 0.0015
  07/29/22 01/28/23  -   10,000   6.00% 0.0020
  08/04/22 02/04/23  -   10,000   6.00% 0.0020
Face value      -   40,000       
                   
Less unamortized discounts  -   -       
                   
Balance convertible notes payable - related parties $-  $40,000       
               
  Issue Date Maturity
Date
 March 31,
2023
  December 31,
2022
  Rate  Conversion
Price
      Principal
Balance
  Principal
Balance
      
Convertible notes payable - in default            
  08/28/09 11/01/09 $4,300  $4,300   10.00% 0.0150
  11/20/12 05/20/13  50,000   50,000   6.00% 0.0050
  01/19/13 07/30/13  5,000   5,000   6.00% 0.0040
  02/11/13 08/11/13  9,000   9,000   6.00% 0.0060
  09/25/13 03/25/14  10,000   10,000   6.00% 0.0125
  10/04/13 04/04/14  50,000   50,000   6.00% 0.0125
  05/15/14 11/15/14  40,000   40,000   6.00% 0.0070
  09/18/15 03/18/16  25,000   25,000   6.00% 0.0020
  07/19/16 07/19/17  4,000   4,000   6.00% 0.0015
  02/06/18 11/07/18  6,000   6,000   6.00% 0.0006
  03/06/18 09/06/18  6,000   6,000   6.00% 0.0006
  01/03/19 07/03/19  1,000   1,000   6.00% 0.0010
  09/04/19 03/04/20  25,000   25,000   6.00% 0.0030
Balance convertible notes payable - in default $235,300  $235,300       

1416

 

 Issue Date Maturity
Date
 September 30,
2022
  December 31,
2021
  Rate Conversion
Price
 Issue Date Maturity
Date
 March 31,
2023
  December 31,
2022
  Rate  Conversion
Price
     Principal
Balance
 Principal
Balance
          Principal
Balance
 Principal
Balance
     
Convertible notes payable - related parties, in defaultConvertible notes payable - related parties, in default            Convertible notes payable - related parties, in default           
 01/09/09 01/09/10 $10,000  $10,000  10.00% 0.0150 01/09/09 01/09/10 $10,000  $10,000   10.00% 0.0150
 01/25/10 01/25/11  6,000   6,000  6.00% 0.0050 01/25/10 01/25/11  6,000   6,000   6.00% 0.0050
 01/18/12 07/18/12  50,000   50,000  8.00% 0.0040 01/18/12 07/18/12  50,000   50,000   8.00% 0.0040
 01/19/13 07/30/13  15,000   15,000  6.00% 0.0040 01/19/13 07/30/13  15,000   15,000   6.00% 0.0040
 07/26/13 01/26/14  10,000   10,000  6.00% 0.0100 07/26/13 01/26/14  10,000   10,000   6.00% 0.0100
 01/17/14 07/17/14  31,500   31,500  6.00% 0.0060 01/17/14 07/17/14  31,500   31,500   6.00% 0.0060
 05/27/14 11/27/14  7,000   7,000  6.00% 0.0070 05/27/14 11/27/14  7,000   7,000   6.00% 0.0070
 07/21/14 01/25/15  17,000   17,000  6.00% 0.0080 07/21/14 01/25/15  17,000   17,000   6.00% 0.0080
 10/16/14 04/16/15  21,000   21,000  6.00% 0.0045 10/16/14 04/16/15  21,000   21,000   6.00% 0.0045
 07/14/15 01/14/16  9,000   9,000  6.00% 0.0030 07/14/15 01/14/16  9,000   9,000   6.00% 0.0030
 01/12/16 07/12/16  5,000   5,000  6.00% 0.0020 01/12/16 07/12/16  5,000   5,000   6.00% 0.0020
 05/10/16 11/10/16  5,000   5,000  6.00% 0.0005 05/10/16 11/10/16  5,000   5,000   6.00% 0.0005
 05/10/16 11/10/16  5,000   5,000  6.00% 0.0005 05/10/16 11/10/16  5,000   5,000   6.00% 0.0005
 05/20/16 11/20/16  5,000   5,000  6.00% 0.0005 05/20/16 11/20/16  5,000   5,000   6.00% 0.0005
 07/12/16 01/12/17  2,400   2,400  6.00% 0.0006 07/12/16 01/12/17  2,400   2,400   6.00% 0.0006
 01/26/17 03/12/17  5,000   5,000  6.00% 0.0005 01/26/17 03/12/17  5,000   5,000   6.00% 0.0005
 02/14/17 08/14/17  25,000   25,000  6.00% 0.0008 02/14/17 08/14/17  25,000   25,000   6.00% 0.0008
 08/16/17 09/16/17  3,000   3,000  6.00% 0.0008 08/16/17 09/16/17  3,000   3,000   6.00% 0.0008
 03/14/18 05/14/18  25,000   25,000  6.00% 0.0007 01/09/18 01/09/19  12,000   12,000   6.00% 0.0008
 04/04/18 06/04/18  3,000   3,000  6.00% 0.0007 03/14/18 05/14/18  25,000   25,000   6.00% 0.0007
 04/11/18 06/11/18  25,000   25,000  6.00% 0.0007 04/04/18 06/04/18  3,000   3,000   6.00% 0.0007
 05/08/18 07/08/18  25,000   25,000  6.00% 0.0007 04/11/18 06/11/18  25,000   25,000   6.00% 0.0007
 05/30/18 08/30/18  25,000   25,000  6.00% 0.0007 05/08/18 07/08/18  25,000   25,000   6.00% 0.0007
 06/12/18 09/12/18  3,000   3,000  6.00% 0.0007 05/30/18 08/30/18  25,000   25,000   6.00% 0.0007
 06/20/18 09/12/18  500   500  6.00% 0.0007 06/12/18 09/12/18  3,000   3,000   6.00% 0.0007
 01/09/18 01/09/19  12,000   12,000  6.00% 0.0006 06/20/18 09/12/18  500   500   6.00% 0.0007
 08/27/18 02/27/19  2,000   2,000  6.00% 0.0007 08/27/18 02/27/19  2,000   2,000   6.00% 0.0007
 10/02/18 04/02/19  1,000   1,000  6.00% 0.0008 10/02/18 04/02/19  1,000   1,000   6.00% 0.0008
 10/23/18 04/23/19  4,200   4,200  6.00% 0.0007 10/23/18 04/23/19  4,200   4,200   6.00% 0.0007
 11/07/18 05/07/19  2,000   2,000  6.00% 0.0008 11/07/18 05/07/19  2,000   2,000   6.00% 0.0008
 11/14/18 05/14/19  8,000   8,000  6.00% 0.0008 11/14/18 05/14/19  8,000   8,000   6.00% 0.0008
 01/08/19 07/08/19  7,000   7,000  6.00% 0.0008 01/08/19 07/08/19  7,000   7,000   6.00% 0.0008
 04/25/19 12/23/19  20,000   20,000  6.00% 0.0040 04/25/19 12/23/19  20,000   20,000   6.00% 0.0040
 06/07/19 12/07/19  5,100   5,100  6.00% 0.0030 06/07/19 12/07/19  5,100   5,100   6.00% 0.0030
 09/17/19 04/17/20  12,000   12,000  6.00% 0.0030 09/17/19 04/17/20  12,000   12,000   6.00% 0.0030
 11/12/19 05/12/20  25,000   25,000  6.00% 0.0025 11/12/19 05/12/20  25,000   25,000   6.00% 0.0025
 11/26/19 05/26/20  25,200   25,200  6.00% 0.0030 11/26/19 05/26/20  25,200   25,200   6.00% 0.0030
 12/03/19 06/03/20  15,000   15,000  6.00% 0.0030 12/03/19 06/03/20  15,000   15,000   6.00% 0.0030
 01/07/20 06/20/20  51,000   51,000  6.00% 0.0030 01/07/20 06/20/20  51,000   51,000   6.00% 0.0030
 08/06/20 02/06/21  25,200   25,200  6.00% 0.0035 08/06/20 02/06/21  25,200   25,200   6.00% 0.0035
 08/06/20 02/06/21  35,000   35,000  6.00% 0.0035 08/06/20 02/06/21  35,000   35,000   6.00% 0.0035
 08/14/20 02/14/21  50,400   50,400  6.00% 0.0035 08/14/20 02/14/21  50,400   50,400   6.00% 0.0035
 10/13/21 04/13/22  3,000   -  2.00% 0.0020 10/31/21 04/13/22  3,000   3,000   2.00% 0.0020
 11/10/21 05/10/22  3,000   -  2.00% 0.0020 11/10/21 05/10/22  3,000   3,000   2.00% 0.0020
 07/06/22 01/06/23  20,000   -   6.00% 0.0015
 07/29/22 01/28/23  10,000   -   6.00% 0.0020
 08/04/22 02/04/23  10,000   -   6.00% 0.0020
                  
Balance convertible notes payable - related parties, in defaultBalance convertible notes payable - related parties, in default $644,500  $638,500    Balance convertible notes payable - related parties, in default $684,500  $644,500       
              
Balance all convertible notes payableBalance all convertible notes payable $969,800  $875,936    Balance all convertible notes payable $919,800  $919,800       

1517

 

Notes Payable

 

The following tables reflect the notes payable at September 30, 2022March 31, 2023 and December 31, 2021:2022:

 

  Issue Date Maturity
Date
 September 30,
2022
  December 31,
2021
  Rate
      Principal
Balance
  Principal
Balance
   
Notes payable              
  12/08/21 01/08/22 $-  $50,000  6.00%
Balance notes payable     $-  $50,000   
               
  Issue Date Maturity
Date
 September 30,
2022
  December 31,
2021
  Rate
      Principal
Balance
  Principal
Balance
   
Notes payable - in default              
  04/27/11 04/27/12 $5,000  $5,000  6.00%
  12/14/17 12/14/18  8,000   18,000  6.00%
  11/29/17 11/29/19  105,000   105,000  2.06%
Balance notes payable – default     $118,000  $128,000   
               
  Issue Date Maturity
Date
 September 30,
2022
  December 31,
2021
  Rate
      Principal
Balance
  Principal
Balance
   
Notes payable - related parties, in default              
  02/24/10 02/24/11 $7,500  $7,500  6.00%
  10/06/15 11/15/15  10,000   10,000  6.00%
  02/08/18 04/09/18  1,000   1,000  6.00%
Balance notes payable - related parties, in default     $18,500  $18,500   
               
Balance all notes payable     $136,500  $196,500   

16

  Issue Date Maturity
Date
 March 31,
2023
  December 31,
2022
  Rate 
      Principal
Balance
  Principal
Balance
    
Notes payable - in default              
  04/27/11 04/27/12 $5,000  $5,000   6.00%
  12/14/17 12/14/18  3,000   8,000   6.00%
  11/29/17 11/29/19  105,000   105,000   2.06%
Balance notes payable – default   $113,000  $118,000     
                 
  Issue Date Maturity
Date
 March 31,
2023
  December 31,
2022
  Rate 
      Principal
Balance
  Principal
Balance
    
Notes payable - related parties, in default             
  02/24/10 02/24/11 $7,500  $7,500   6.00%
  10/06/15 11/15/15  10,000   10,000   6.00%
  02/08/18 04/09/18  1,000   1,000   6.00%
Balance notes payable - related parties, in default $18,500  $18,500     
                 
Balance all notes payable $131,500  $136,500     

 

New Notes Payable and Convertible Notes Payable Issued During the Ninethree Month Periods Ended September 30,March 31, 2023 and 2022 and 2021

 

During the ninethree month periodperiods ended September 30,March 31, 2023 and 2022, the Company entered into the following new convertible note or notes payable agreements:

In July of 2022, the Company entered into a convertible promissory note agreement in the amount of $20,000 with a related party who is a member of the Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest is due on or before January 6, 2023. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.015 per share.

In July of 2022, the Company entered into a convertible promissory note agreement in the amount of $10,000 with a related party who is a member of the Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest is due on or before January 29, 2023. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.002 per share.

In August of 2022, the Company entered into a convertible promissory note agreement in the amount of $10,000 with a related party who is a member of the Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest is due on or before February 4, 2023. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.002 per share.

In August of 2022, the Company entered into a promissory note agreement in the amount of $5,000 with a related party. This note paid interest at a rate of 6% per annum and the principal and accrued interest was due on or before August 26, 2022. The lender received 500,000 shares of the Company’s restricted common stock as a loan origination fee. The note was repaid and the balance at September 30, 2022 was $0.

In August of 2022, the Company entered into a convertible promissory note agreement in the amount of $50,000 with an individual. This note pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before September 29, 2022. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.002 per share. This convertible not payable is in default due to non payment of principal and accrued interest.

During the nine month period ended September 30, 2021, the Company did not enter intoissue any new convertible notes payable or notes payable agreements.

 

Repayment of Promissory NotesNote

 

During the ninethree month period ended September 30,March 31, 2023, the Company repaid a total of $5,000 of the principal of a note payable with an original principal balance of $75,000 that was due on December 14, 2018. The remaining principal balance of the note at March 31, 2023 was $3,000.

During the three month period ended March 31, 2022, the Company repaid a total of $50,000 of the principal of a promissory note with an original principal balance of $50,000 that was due on January 8, 2022.

 

During the nine month period ended September 30, 2021, the Company repaid a total of $10,000 of the principal of a promissory note with an original principal balance of $75,000 that was due on December 14, 2018. The remaining principal balance of the note at September 30, 2022 was $8,000.

Note Conversions

 

There were no conversions of convertible promissory notes during the ninethree month periodperiods ended September 30,March 31, 2023 and 2022.

 

During the nine month period ended September 30, 2021:

The Company issued 8,734,640 shares of restricted common stock to a related party to settle $20,302 of accrued interest owed on sixteen convertible notes payable, with a total share value of $57,648.

The Company issued 15,594,247 shares of restricted common stock to a convertible note holder to settle $45,000 of the principal balance and $1,783 of accrued interest on a convertible note payable with a total share value of $79,530.

The Company issued 35,615,390 shares of restricted common stock to a convertible note holder to settle $73,000 of the principal balance and $28,761 of accrued interest on four convertible notes payable with a total share value of $146,024.

Shareholder Loan

 

At September 30, 2022March 31, 2023 the Company had the following loans outstanding to its CEO in the total amount of $5,000 as follows:

-A loan with no due date with a $1,500 remaining balance and an interest rate of 2% and a conversion rate of $0.0005; and
-A loan due on September 9, 2022 with a remaining balance of $3,500, and an interest rate of 1%.

18

At December 31, 2021,2022 the Company had the following loans outstanding to its CEO in the total amounts of $14,400 and $7,900, respectively,$7,400 as follows:

 

 -A loan with no due date with a remaining balance of $1,500 and an interest rate of 2% and a conversion rate of $0.0005;
-A loan due on October 26, 2021 with a remaining balance of $4,000 and an interest rate of 1%;
   
 -A loan due on January 22, 2022 with a remaining balance of $1,400 and an interest rate of 1%;
   
 -A loan due on January 26, 2022 with a remaining balance of $1,000 and an interest rate of 1%; and
   
 -

A loan due on June 16, 2022 with a remaining balance of $3,000 and an interest rate of 1%; and

-A loan due on September 9, 2022 with a remaining balance of $3,500, and an interest rate of 1%.

17

 

Collateralized Promissory Notes

 

Two convertible notes outstanding with related parties, dated January 9, 2009 and January 18, 2012 are collateralized by Company assets.

 

Convertible Notes Payable and Notes Payable, in Default

 

The Company does not have additional sources of debt financing to refinance its convertible notes payable and notes payable that are currently in default. If the Company is unable to obtain additional capital, such lenders may file suit, including suit to foreclose on the assets held as collateral for the obligations arising under the secured notes. If any of the lenders file suit to foreclose on the assets held as collateral, then the Company may be forced to significantly scale back or cease its operations, which would more than likely result in a complete loss of all capital that has been invested in or borrowed by the Company. The fact that the Company is in default of several promissory notes held by various lenders makes investing in the Company or providing any loans to the Company extremely risky with a very high potential for a complete loss of capital.

NOTE 6 – IMPAIRMENT OF ASSET

During 2022, the Company entered into an agreement with a corporation to lease a boat for use in its operations. Under the agreement the Company agreed to pay the owner of the boat $2,000 per month until a total of $85,000 was paid, at which point title of the boat would be transferred to the Company. The boat was damaged while in use and the Company has agreed to pay the boat’s owner the full value of the contractual agreement for the lease purchase of the boat. The Company has estimated a full loss on the boat during the nine month period ended September 30, 2022 and wrote off the contractual value of the boat, $85,000, which is included in the consolidated statements of operations as a loss on sale of asset. The amount due as of September 30, 2022 of $85,000 has been included in the accompanying consolidated balance sheets in accounts payable and accrued expenses.

 

NOTE 76 – STOCKHOLDERS’ DEFICIT

 

Series A Preferred Stock

 

At September 30, 2022March 31, 2023 and December 31, 2021,2022, the Company had seven shares of Series A preferred stock issued and outstanding. Each share of Series A preferred stock has the right to convert into 214,289 shares of the Company’s common stock.

 

Series B Preferred Stock

 

On February 10, 2014, the Board of Directors of the Company under the authority granted under Article V of the Articles of Incorporation, defined and created a new preferred series of shares from the 50,000,000 authorized preferred shares. Pursuant to Article V, the Board of Directors has the power to designate such shares and all powers and matters concerning such shares. Such share class shall be designated Preferred Class B. The preferred class was created for 60 Preferred Class B shares. Such shares each have a voting power equal to one percent of the outstanding shares issued (totaling 60%) at the time of any vote action as necessary for share votes under Florida law, with or without a shareholder meeting. Such shares are non-convertible to common stock of the Company and are not considered as convertible under any accounting measure. Such shares shall only be held by the Board of Directors as a Corporate body, and shall not be placed into any individual name. Such shares were considered issued at the time of this resolution’s adoption, and do not require a stock certificate to exist, unless selected to do so by the Board for representational purposes only. Such shares are considered for voting as a whole amount, and shall be voted for any matter by a majority vote of the Board of Directors. Such shares shall not be divisible among the Board members, and shall be voted as a whole either for or against such a vote upon the vote of the majority of the Board of Directors. In the event that there is any vote taken which results in a tie of a vote of the Board of Directors, the vote of the Chairman of the Board shall control the voting of such shares. Such shares are not transferable except in the case of a change of control of the Corporation when such shares shall continue to be held by the Board of Directors. Such shares have the authority to vote for all matters that require a share vote under Florida law and the Articles of Incorporation.

 

Warrants and Options

 

The Company did not issue any warrants or options during the ninethree month periods ended September 30, 2022March 31, 2023 and 2021.

At September 30, 2022 there were 4,000,000 warrants outstanding with a weighted average exercise price of $0.005, weighted average reaming life of 0.13 years and an average intrinsic value of $0.0.001. There were no warrants granted during the three month period ended September 30, 2022. At December 31, 2021, there were 4,000,000 warrants with a weighted average exercise price of $0.005, weighted average reaming life of 0.92 years, and an average intrinsic value of $0.001.

1819

 

NOTE 87 – COMMITMENTS AND CONTINGENCIES

 

Agreement to Explore a Shipwreck Site Located off of Melbourne Beach, Florida

 

In March of 2014, Seafarer entered into a partnership with MAP, with the formation of Seafarer’s Quest, LLC for the purpose of exploring a shipwreck site off of Melbourne Beach, Florida. Seafarer owns 50% of Seafarer’s Quest, LLC and is handling the operations on behalf of Seafarer’s Quest. To date there has been no significant financial activity in Seafarer’s Quest. Under the partnership with MAP, Seafarer is the designated manager of Seafarer’s Quest, LLC and is responsible for the costs of permitting, exploration and recovery. Seafarer is entitled to receive 80% and MAP is entitled to receive 20% of artifacts and treasure recovered from the site after the State of Florida receives its share, which is anticipated to be 20% under any future recovery permits. The permits with the State of Florida for two areas on the site, designated as Areas 1 and 2, were extended in early 2022 for an indefinite time period pending formal renewal. There are currently no recovery permits for the site that have been applied for or issued as of the date of this filing. It will be necessary to be granted a recovery permit in order to recover any artifacts and treasure that may potentially be located on the site. The required, affiliated environmental permits from the U.S. Army Corps of Engineers (“USACE”) and Florida Department of Environmental Protection (“FLDEP’) were previously issued in the name of a partner that is no longer active. In 2020 Seafarer worked with the various State of Florida governmental agencies involved to update and consolidate all of these environmental permits solely under the Company’s name. The State of Florida Bureau of Archeological Research (“FBAR”) had ordered the Company not to disturb the ocean’s bottom while the changes and updates to the Company’s permits were in process. Some requests of change are questionable to the Company. Since the issuance of the USACE and FLDEP environmental permits, FBAR has continued to stop or delay ground disturbance in Seafarer’s legally permitted area with ongoing questions and requests.

 

Vessel and Trailer Rental and Purchase Agreement

In January of 2023, the Company entered into a rental and purchase agreement for a vessel and trailer. Under the terms of the agreement, the Company has the right to exclusive use of the vessel, a thirty four foot King Cat manufactured by Baha Cruisers, and trailer to be able to haul the vessel. The Company agreed to make a one time payment of 15,000,000 shares of its restricted common stock, with an agreed upon value of $30,000 for the purposes of the valuation of the vessel and trailer, and pay $1,557 per month for sixty months. The Company and the owner of the vessel and trailer agreed that the price of the shares for the purposes of the share price calculation was $0.002. Once the Company has paid the amount totaling the agreed upon purchase price of $100,000, the owner of the vessel agreed to transfer the title and ownership of the vessel and trailer to the Company.

Vehicle Rental and Purchase Agreement

In January of 2023, the Company entered into a rental and purchase agreement for a vehicle for use in the Company’s operations to tow vessels and other equipment. Under the terms of the agreement, the Company has the right to exclusive use of the vehicle, a 2021 Dodge RAM 3500. The Company agreed to make a one time payment of 11,242,350 shares of its restricted common stock, with an agreed upon value of $22,485 for the purposes of the valuation of the truck, and pay $1,167 per month for sixty two months. Once the Company has an amount totaling the payoff amount, $52,464, to the seller, the seller agreed to transfer title and ownership of the vehicle to the Company.

Certain Other Agreements

 

See Note 4 Operating Lease Right-of-Use Assets and Operating Lease Liabilities.

 

NOTE 98 – RELATED PARTY TRANSACTIONS

 

During the nine month period ended September 30, 2022,In January of 2023, the Company has had extensive dealingsextended the term of previous agreements with related parties including the following:

In Mayfour individuals to continue serving as members of 2022, the Company’s CEO provided a loanBoard of Directors. Two of the individuals are related to the Company’s CEO. Under the agreement, the Directors agreed to provide various services to the Company inincluding making recommendations for both the amount of $3,000. This loan pays interest at a rate of 1% per annumshort term and the principal and accrued interest was due on or before June 17, 2022.

In July of 2022,long term business strategies to be employed by the Company, entered into a convertible promissory note agreement inmonitoring and assessing the amount of $20,000 with a related party who is a member ofCompany’s business and to advise the Company’s Board of Directors. This note pays interest at a rateDirectors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of 6% per annum and the principal and accrued interest is due on or before January 6, 2023. The note is unsecured and is convertible at the lender’s option into shares ofaction, making suggestions to strengthen the Company’s common stock at a rate of $0.015 per share.

In July of 2022, the Company entered into a convertible promissory note agreement in the amount of $10,000 with a related party who is a member of the Board of Directors. This note pays interest at a rate of 6% per annumoperations, identifying and the principalevaluating external threats and accrued interest is due on or before January 29, 2023. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.002 per share.

In August of 2022, the Company entered into a convertible promissory note agreement in the amount of $10,000 with a related party who is a member of the Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest is due on or before February 4, 2023. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.002 per share.

In August of 2022, the Company’s CEO provided a loanopportunities to the Company, inevaluating and making ongoing recommendations to the amount of $3,500. This loan pays interest at a rate of 1% per annumBoard with respect for one year and the principal and accrued interest was due on or before September 9, 2022.

In August of 2022,may be terminated by either the Company entered into a promissory noteor the Director by providing written notice to the other party. The previous agreement inalso terminates automatically upon the amountdeath, resignation or removal of $5,000 with a related party. This note paid interest at a ratethe Directors. Under the terms of 6% per annum and the principal and accrued interest was due on or before August 26, 2022. The lender received 500,000agreement, the Company agreed to compensate the Board members via payment of 10,000,000 restricted shares of the Company’s restrictedits common stock aseach, an aggregate total of 30,000,000 shares, and to negotiate future compensation on a loan origination fee.year-by-year basis. The note was repaid andCompany also agreed to reimburse the balance at September 30, 2022 was $0.individuals for preapproved expenses.

20

 

Additional related party transactions:

The Company has an informal consulting agreement with a limited liability company that is owned and controlled by a person who is related to its CEO to provide general business consulting services including periodically assessing the Company’s business and advising management with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions, perform period background research including background checks and provide investigative information on individuals and companies and to assist, when needed, as an administrative specialist to perform various administrative duties and clerical services including reviewing the Company’s agreements and books and records.agreements. The consultant provides the services under the direction and supervision of the Company’s CEO. During the ninethree month periods ended September 30,March 31, 2023 and 2022, and 2021, the Company paid the related party limited liability company consulting fees of $22,000$9,000 and $9,000, respectively, for services rendered. During the three month periods ended September 30, 2022 and 2021, the Company paid the related party limited liability company consulting fees of $5,000 and $2,000,$11,000, respectively, for services rendered. These fees are recorded as an expense in consulting and contractor expenses in the accompanying consolidated statements of operations. At March 31, 2023 and December 31, 2022, the Company owed the related party limited liability company $3,000 and $3,000, respectively.

19

 

The Company has an ongoing agreement with a limited liability company that is owned and controlled by a person who is related to the Company’s CEO to provide stock transfer agency services. During the ninethree month periods ended September 30,March 31, 2023 and 2022 and 2021 the Company paid the related party limited liability company fees of $6,478 and $11,225, respectively, for services rendered. During the three month periods ended September 30, 2022 and 2021, the Company paid the related party limited liability company consulting fees of $0 and $2,300,$4,700, respectively, for services rendered. These fees are recorded as an expense in consulting and contractor expenses in the accompanying consolidated statements of operations. At March 31, 2023 and December 31, 2022, the Company owed the related party limited liability company $9,803 and $3,975, respectively.

 

During the ninethree month periods ended September 30,March 31, 2023 and 2022, and 2021, the Company paid a related party consultant fees of $27,000$12,000 and $20,000, respectively. During the three month periods ended September 30, 2022 and 2021, the Company paid a related party consultant fees of $9,000.$9,000, respectively for consulting services for social media. All of the fees paid to the related party consultant are recorded as an expense in consulting and contractor expenses in the accompanying consolidated statements of operations. At March 31, 2023 and December 31, 2022, the Company owed the related party limited liability company $3,000 and $3,000, respectively.

 

During the ninethree month periodperiods ended September 30, 2021,March 31, 2023 and 2022, the Company has had extensive dealings withpaid a person who is related parties including the following:

In April of 2021, Seafarer’s CEO provided a loan to the Company in the amountCompany’s CEO fees of $6,000. The loan pays a 1% annual rate of interest, is due$1,192 and payable on October 26, 2021 and is not secured.

In October of 2021, Seafarer’s CEO provided a loan to the Company in the amount of $1,400. The loan pays a 1% annual rate of interest, was due and payable on January 25, 2022 and is not secured.

In October of 2021, Seafarer’s CEO provided a loan to the Company in the amount of $1,000. The loan pays a 1% annual rate of interest, was due and payable on January 26, 2022 and is not secured.

The Company issued 8,734,640 shares of restricted common stock to a related party to settle $20,302 of accrued interest owed on sixteen convertible notes payable. $0, respectively, for clerical services.

 

At September 30, 2022, the following promissory notes and shareholder loans were outstanding to related parties:Shareholder Loan

 

See Note 56 convertible notes payable – related parties, convertible notes payable – related parties, in default, and notes payable - related parties, in default.

At March 31, 2023, the following promissory notes and shareholder loans were outstanding to related parties:

See Note 6 convertible notes payable – related parties, convertible notes payable – related parties, in default, and notes payable - related parties, in default.

21

NOTE 109 – SEGMENT INFORMATION

 

Seafarer’s wholly owned subsidiary Blockchain began operations in 2019 by providing referrals to a private company in exchange for referral fees for closed business.

 

Due to Blockchain starting operations which have no relation to the Company’s shipwreck and exploration recovery business, the Company evaluated this business and its impact upon the existing corporate structure. The Company has determined that Blockchain and Seafarer Exploration Corp. operate as separate segments of the business. As such, the Company has presented the income (loss) from operations during the ninethree month periods ended September 30,March 31, 2023 and 2022 and 2021 incurred by the two separate segments below.

 

During the ninethree month periods ended September 30,March 31, 2023 and 2022, Blockchain revenues were $0 and 2021, Blockchain did not generate any revenues. The Company is currently evaluating Blockchain’s business and does not believe that it will generate anywere 0% of the consolidated revenues forof the foreseeable future.Company.

 

Segment information relating to the Company’s two operating segments for the ninethree month period ended September 30, 2022March 31, 2023 is as follows:

 

 September 30, 2022 September 30, 2022 September 30, 2022  March 31, 2023 March 31, 2023 March 31, 2023 
 Blockchain LogisTech, LLC    Seafarer Exploration Corp.    Consolidated  Blockchain LogisTech, LLC  Seafarer Exploration Corp.  Consolidated 
Service revenues $-  $11,127  $11,127  $-  $-  $- 
            
Total operating expenses  -   1,919,812   1,919,812   -   974,381   974,381 
            
Net loss from operations $-  $(1,908,685) $(1,908,685) $-  $(974,381) $(974,381)

 

Segment information relating to the Company’s two operating segments for the ninethree month period ended September 30, 2021March 31, 2022 is as follows:

 

 September 30, 2021 September 30, 2021 September 30, 2021  March 31, 2022 March 31, 2022 March 31, 2022 
 Blockchain LogisTech, LLC    Seafarer Exploration Corp.    Consolidated  Blockchain LogisTech, LLC  Seafarer Exploration Corp.  Consolidated 
Service revenues $-  $18,922  $18,922  $-  $3,089  $3,089 
            
Total operating expenses  29,386   1,618,340   1,647,726   10   736,063   736,073 
            
Net loss from operations $(29,386) $(1,599,418) $(1,628,804) $(10) $(732,974) $(732,984)

 

NOTE 11–10 – SUBSEQUENT EVENTS

 

Subsequent to September 30, 2022,March 31, 2023, the Company issued or has agreed to issue shares of its common stock as follows:

 

 (i)sales of 203,192,47336,016,667 shares of the Company’s restricted common stock under subscription agreements for proceeds of $420,000;$73,475; and

 

 (ii)issuance of 25,221,918600,000 shares of restricted common stock to settle $50,444 of principal and accrued interest of one convertible notes payable; anda service provider.

(iii)4,020,005 shares of restricted common stock were issued for services totaling $12,000.

2022

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations

 

FORWARD LOOKING STATEMENTS

 

The following discussion contains certain forward-looking statements that are subject to business and economic risks and uncertainties, and which speak only as of the date of this annual report. No one should place strong or undue reliance on any forward-looking statements. The use in this Form 10-Q10-K of such words as “believes”, “plans”, “anticipates”, “expects”, “intends”, and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. The Company’s actual results or actions may differ materially from these forward-looking statements due to many factors and the success of the Company is dependent on our efforts and many other factors including, primarily, our ability to raise additional capital. Such factors include, among others, the following: our ability to continue as a going concern, general economic and business conditions; competition; success of operating initiatives; our ability to raise capital and the terms thereof; changes in business strategy or development plans; future revenues; the continuity, experience and quality of our management; changes in or failure to comply with government regulations or the lack of government authorization to continue our projects; and other factors referenced in the Form 10-Q.10-K. This Item should be read in conjunction with the consolidated financial statements, the related notes and with the understanding that the Company’s actual future results may be materially different from what is currently expected or projected by the Company.

 

We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Such forward-looking statements are based on the beliefs and estimates of our management, as well as on assumptions made by and information currently available to us at the time such statements were made. Forward looking statements are subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward looking statements, including, without limitation, the failure to successfully locate cargo and artifacts from the Juno Beach shipwreck sitessite and a number of other risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements, either as a result of the matters set forth or incorporated in this Report generally andor due to certain economic and business factors, some of which may be beyond our control.

 

We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

 

Overview

 

General

 

The Company’s principal business plan is to develop the infrastructure and technology to engage in the archaeologically-sensitive exploration, recovery and conservation of historic shipwrecks and to eventually monetize the recovery of the shipwrecks without selling the treasure by creating revenue through media and technology alternatives for different industry sectors. Once artifacts have been properly conserved, they may be made available for scientific research and allowed to be displayed for the public. The Company’s secondary business is to attempt to develop revenue streams to support its historic shipwreck exploration and recovery operations. Such revenue streams will complement the technology developed by Seafarer.

21

 

The Company has received from the Florida Department of State a notice of lack of authority to permit or deny recovery activities on the unidentified shipwreck on Juno Beach. The Florida Bureau of Archaeological Research (the “Bureau” or “FBAR”), Division of Historical Resources, Florida Department of State stated to Seafarer “The shipwreck is non-permittable pursuant to Rule 1A-31.0045(2), F.A.C.” The Bureau cited an order dated November 14, 2017 where the United States District Court entered a Final Order of Court Default and Final Judgement Granting Award for Admiralty in Rem. The District Court’s order ruled “Seafarer is hereby the true, sole, and exclusive owner of the Defendant Shipwrecked Vessel and having exclusive right to conduct recovery operation on the Defendant Shipwrecked Vessel and any items recovered therefrom.” Additional permitting will still be necessary with the Florida Department of Environmental Protection and the U.S. Army Corps of Engineers. Applications have been made to both entities and the Company has been told they are currently processing the permits.

In order to potentially find more efficient methods to explore and document historical shipwrecks, the Company has investigated various technologies and non-scientific methodologies. To the present date, none of these technologies have been proven to work with the exception of the SeaSearcher, which has been developed to scan historic shipwreck sites for both ferrous and nonferrous artifacts. The ongoing developmental work and improvements to the SeaSearcher whichhave been expensive and managementManagement anticipates that the expenses for these development costs will continue to be incurred for the foreseeable future. Advances in algorithms and artificial intelligence (AI) will continue indefinitely while the present model can be currently used in the field. The Company will continue to experiment with unproven technologies and will actively work with third parties, consultants and scientists to develop its own proprietary technology which has and will result in considerable expenses. The Company has completed field usage on the Ring site in Area 2 of Melbourne Beach where multiple non precious metals were properly identified under the sand at various depths. 

The Company continues to review revenue producing opportunities including joint ventures and partnerships with other companies and potentially governmental agencies which could potentially align with the technologies that Seafarer is developing.

 

There is a possibility that the Company will be forced to cease its operations if it is not successful in eventually locating and recovering valuable artifacts and treasure or can’t build a revenue stream to offset its expenses. If the Company were to cease its operations, and not find or engage another business entity, then it is likely that there would be complete loss of all capital invested in or borrowed by the Company. As such, an investment in Seafarer is both highly speculative and very risky.

 

This type of business venture is highly speculative in nature and carries a very high degree of risk. An investment in the Company’s securities is very risky and should only be considered by those investors or lenders who do not require liquidity and who can afford to suffer a complete and total loss of their investment.

 

There is currently a limited trading market for the Company’s securities. It is impossible for the Company to assure that when and if an active-trading market in its shares will be established, or whether any such market will be sustained or sufficiently liquid to enable holders of shares of the Company’s common stock to liquidate their investment in our company.

23

 

The issuance and subsequent sale of restricted securities after the restrictive legend has been removed pursuant to regulatory rules and restrictions such as Rule 144, by current shareholders, including shares issued under subscription agreements, shares issued to service providers,consultants, independent contractors, Board members, as well as shares issued to settle convertible promissory notes or to settle other loans and debt, is potentiallyare highly dilutive anddilutive. The issuance of shares for financings, to settle debt, as compensation, or for other reasons may cause a significant decline in the market price of the Company’s securities. Furthermore, in recent years regulatory agencies have made it very difficult for broker dealers to accept stock certificates from issuers of low priced stocks and the Company believes that it may become and has become, even more challenging to deposit stock certificates and this trend may continue for the foreseeable future.

 

Moreover, in the past few years several major securities brokerage firms have indicated that they will not allow their clients to deposit stock certificates of low priced stocks. Some securities clearing firms who used to clear low priced securities for multiple brokerage firms have shut down or been acquired, resulting in fewer brokerage firms that are willing or able to accept lower priced securities for deposit. Unless an investor has a large and well-established relationship with a brokerage firm, it may be extremely difficult and potentially expensive to deposit lower priced securities. An investor should consider consulting with professional financial advisers before making an investment in our securities. The Company is a current and fully reporting company and has been for almost fourteen years.

 

Plan of Operation

 

The Company has taken the following steps to implement its business plan:

 

 To date, the Company has devoted its time towards establishing its business to develop the infrastructure capable of researching, exploring, recovering and conserving historic shipwrecks. The Company has performed some research, exploration and recovery activities.

 Spent considerable time and capital researching potential shipwrecks, including obtaining information from foreign archives.

 The Company has worked in combination with its technology development partner, Wild Manta, Labs, to build a research and conservation lab with full x-ray equipment and detailed metal identification analysis.

 The Company has generated very limited revenues to date. Management does not believe that the Company will generate any significant revenues for the foreseeable future.

22

 

 The Company continues to review revenue producing opportunities including joint ventures with other companies. The Company is actively looking to work with revenue producing companies. These opportunities have been slow to develop, but the Company will continue to pursue those endeavors that it believes have the potential to increase the value of the Company’s shares.

 

 The Company has investigated various types of equipment and technology to expedite the process of finding artifacts other than iron or ferrous metals. Most have been of no help, but the Company continues to explore new technologies. The Company has developed its own proprietary technology, the SeaSearcher, and will attempt to continue to develop additional proprietary technologies or work with third parties to develop technologies to aid in its exploration and recovery operations. Development of technologies will require additional time and financing. The cost of developing the new technology has, to date, been very expensive for a small company.

 The Company has investigated media opportunities to develop content centered on its specific historic shipwreck exploration and recovery activities as well as the historic shipwreck and related historical period genre in general and will continue to evaluate various media strategies.

 

Other Information

 

There are very strict international, federal and state laws that govern the exploration and recovery of historic shipwrecks. While the Company has been able to obtain some permits, there is no guarantee that the Company will be able to secure future permits or enter into agreements with government agencies in order to explore and recoversalvage historic shipwrecks. Seafarer believes they are the only company to be issued a full recovery permit by FBAR since 1986, other than one entity with an Admiralty Claim. This demonstrates the difficulty of obtaining a recovery permit from FBAR. There is a risk that government entities may enact legislation that is so strict that any recovery of artifacts and cargo from historic shipwrecks will be nearly impossible. Additionally, permits and agreements with governmental agencies to conduct historic shipwreck exploration and recovery operations are expensive, in terms of both direct costs and ongoing compliance costs. It is also possible that the Company will not be successful in obtaining title or permission to excavate certain wrecks, even if the law allows it. It is possible that permits that are sought for potential future international projects may never be issued, and if issued, may not be legal or honored by the entities that issued them. For the above reasons, the Company has extended its research into shipwrecks outside of State waters.

 

It is possible that permits that are sought for potential future international projects may never be issued, and if issued, may not be legal or honored by the entities that issued them. Governmental agencies may require various types of permits to explore shipwreck sites, and the permitting process is often lengthy and complex. Obtaining permits and entering into agreements with governmental and quasi-governmental agencies to conduct historic shipwreck exploration and recovery operations is generally a very complex, time consuming, and expensive process. Furthermore, the process of entering into agreements and/or obtaining permits may be subject to lengthy delays, possibly in excess of a year. Some governmental agencies may refuse to issue permits to the Company for recovery of artifacts or intentionally delay the permitting process, or go beyond their authority and request halting of ground disturbance.

24

 

The reasons for a lengthy permitting process may be due to a number of potential factors including but not limited to requests by permitting agencies for additional information, submitted applications that need to be revised or updated, newly discovered information that needs to be added to an application or agreement, changes to either the agreement or permit terms or revisions to other information contained in the permit, excessive administrative time lags at permitting agencies, work halts based on biased predispositions with no authority given by rule 1A-31, etc. Existing permits and agreements may be put on hold or suspended without notice for lengthy periods of time due to administrative issues and disagreements over the terms and conditions. The length of time it takes to obtain permits, enter into agreements, or rectify any conditions that are causing a permit to be suspended or on hold may cause and has caused, the Company to expend significant resources while gearing up to do work with little or no visibility as to timing. An example of delays implemented by FBAR for Seafarer’s permitted Area 2 in Melbourne Beach, Seafarer was prevented from performing certain activities authorized under the permit for 747 days out of the 1,095 days during the course of the last three year permit for Area 2 even though the permit was active.

 

The Company regularly reviews opportunities to perform exploration and recovery operations at purported historic shipwreck sites. The Company currently does have some specific plans to perform exploration and recovery operations at other shipwreck sites in the future, however these plans are subject to change based on a number of factors. The Company is actively reviewing other potential historic shipwreck sites, including sites located internationally, for possible exploration and recovery. Should the Company decide that it will pursue exploration and recovery activities at other potential shipwreck sites, it may be necessary to obtain various permits as well as environmental permits.

 

The Company continually monitors media rights for potential revenue opportunities. The Company has had discussions with media entities to further understand the potential advantages offered. Management believes various forms of media can represent a potential future revenue opportunity for the Company, if the right circumstances arise. The Company is exploring opportunities and strategies to develop media content based on its exploration activities with a goal of potentially generating revenue through social media platforms.

 

This type of business venture is extremely speculative in nature and carries a tremendous amount of risk. An investment in the Company’s securities is highly speculative and very risky and should only be considered by those investors or lenders who do not require near-term liquidity and who can afford to suffer a complete and total loss of their investment.

23

 

Results of Operations

 

We have generated only minimal revenue from operations and do not expect to report any significant revenue from operations for the foreseeable future. We have incurred recurring losses to date. Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

The Company expects to continue to incur significant operating losses and to generate negative cash flow from operating activities, while building out its infrastructure in order to explore and salvage historic shipwreck sites and establishing itself in the marketplace. Based on our historical rate of expenditures, the Company expects to expend its available cash in less than one month from November 14, 2022.May 19, 2023.

 

At September 30, 2022March 31, 2023 and December 31, 2021,2022, the Company had working capital deficits of $1,937,960$1,699,199 and $1,668,699$1,660,992 respectively. The working capital deficit increased by $38,207 from December 31, 2022. The Company’s working capital deficit, along with its lack of meaningful cash flows from operations with which to service the debt, indicates that there is substantial risk to the continued viability of the Company.Company and a high degree of risk that the Company could become insolvent within a very short period of time. The Company is in immediate need of further working capital and is seeking options, with respect to financing, in the form of debt, equity or a combination thereof.

 

Since inception, the Company has funded its operations through common stock issuances and loans in order to meet its strategic objectives; however, there can be no assurance that the Company will be able to obtain further funds to continue with its efforts to establish a new business. There is a very significant risk that the Company will be unable to obtain financing to fund its operations and as such the Company may be forced to cease operations at any time which would likely result in a complete loss of all capital that has been invested in and/or borrowed by the Company to date.

 

The Company’s ability to eliminate operating losses and to generate positive cash flow from operations in the future will depend upon a variety of factors, many of which it is unable to control. If the Company is unable to implement its business plan successfully, it may not be able to eliminate operating losses, generate positive cash flow or achieve or sustain profitability, which may have a material adverse effect on the Company’s business, operations, and financial results, as well as its ability to make payments on its debt obligations, and the Company may be forced to cease operations.

 

If the Company is unable to secure additional financing, our business may fail and our stock price will likely be materially adversely affected. The Company’s lack of operating cash flow and reliance on the sale of its common stock and loans to fund operations is extremely risky. If the Company is unable to continue to raise capital or obtain loans or other financing on terms that are acceptable to the Company, or at all, then it is highly likely that the Company will be forced to cease operations. If the Company ceases its operations, then it is highly likely that all capital invested in and/or borrowed by the Company will be lost.

2425

 

Summary of the Three Month Period Ended September 30, 2022March 31, 2023 Results of Operations Compared to the Three Month Period Ended September 30, 2021March 31, 2022 Results of Operations

 

Revenue

 

The Company’s core business involving the exploration and recovery of historic shipwrecks has not generated any revenues to date and is not expected to generate any significant revenues for the foreseeable future. During the three month periods ended September 30,March 31, 2023 and 2022, and 2021, the Company generated $4,907$0 and $5,548$3,089 of revenue respectively, which is shown as service income on the accompanying consolidated statements of operations.

 

Operating Expenses

 

Operating expenses were $546,807$974,381 for the three month period ended September 30, 2022March 31, 2023 versus $558,352$736,073 for the same period in 2021, a decrease2022, an increase of approximately 2.1%32%. The increase in operating expenses in 2023 was primarily due to an increase in vessel related expenses and general and administrative expenses. The inflationary environment has continued to pressure costs relating to vessel fuel, consulting and contractor expenses and other expenses. Consulting and contractor expense was $280,948$519,486 for the three month period ended September 30, 2022March 31, 2023 versus $275,361$487,698 for the same period in 2021,2022, an increase of 2%7%. The Company incurred vessel related expenses of $36,923$194,819 during the three month period ended September 30, 2022March 31, 2023 versus $28,108$51,269 during the three month period ended September 30, 2021,March 31, 2022, an increase of approximately 31.4%280%. VesselThe increase in vessel related expenses periodically fluctuatewas due to a variety of factors, during the three month period ended September 30, 2022 the Company incurred higherentering into a rental and purchase agreement for a vessel related fuel and maintenance costs. The researchtrailer. Research and development expenses were $16,669$32,100 in 2023 versus $61,419 in 2022, versus $112,610a decrease of 48% in 2021.2023. The Company’s research and development expenses were related to the continued development of its SeaSearcher autonomous underwater device. The decrease in research and development expenses in 2022 were partially due to2023 was a result of the Company accruing somefocusing on the practical use of the fees owed for researchSeaSearcher as opposed to new and development. During the three month period ended September 30, 2022, professional fees were $9,000 as compared to $14,008 during the three month period ended September 30, 2021, a decrease of approximately 35.8%. Professional fees declined in 2022 due to the Company using fewer legal services. During the three month period ended September 30, 2022, general and administrative expenses were $166,804 as compared to $83,048 during the three month period ended September 30, 2021, an increase of 101%. The primary reason for the increase in general and administrative expenses in 2022 was due to the Company renting a boat for use in operations. Depreciation expense was $5,465 during the three month periods ended September 30, 2022 and 2021. Rent expense was $9,144 during the three month period ended September 30, 2022 versus $9,052 for the same period in 2021, an increase of approximately 1.0%. The Company incurred travel and entertainment expenses of $21,854 during the three month period ended September 30, 2022 as compared to $30,700 during the three month period ended September 30, 2021, an approximate 29% decrease on a quarter-over-quarter basis.

Other Income (Expenses)

Other income (expense) was ($123,277) during the three month period ended September 30, 2022 versus ($51,968) during the three month period ended September 30, 2021. Interest expense for the three month period ended September 30, 2022 was $17,027 versus $25,761 for the same period in 2021, a decrease of approximately 33.9%. The decrease in interest expense was mostly due to a decrease in the amortization of interest relating to the beneficial conversion features of several convertible notes. Loss on extinguishment of debt was $21,250 during the three month period ended September 30, 2022 versus $44,258 during the same period in 2021. During the three month period ended September 30, 2022, loss on sale of asset was $85,000 versus $0 in 2021. The loss on sale of asset in 2022 was due to the Company writing off the value of a boat that it was leasing and had agreed to purchase The Company decided to write off the value of the boat because it became damaged. During the three month period ended September 30, 2022, gain on disposal of asset was $0 versus $18,500 in 2021. The gain on disposal of asset in 2021 was due to the sale of one of the Company’s salvage vessels that had been fully depreciated.

Net Loss

The Company’s net loss for the three months ended September 30, 2022 and 2021 was $665,177, and $604,772 respectively, a quarter-over-quarter increase of approximately 10.0%.

Summary of the Nine Month Period Ended September 30, 2022 Results of Operations Compared to the Nine Month Period Ended September 30, 2021 Results of Operations

Revenue

The Company’s core business involving the exploration and recovery of historic shipwrecks has not generated any revenues to date and is not expected to generate any significant revenues for the foreseeable future. During the nine month periods ended September 30, 2022 and 2021, the Company generated $11,127 and $18,922 of revenue respectively, which is shown as service income on the accompanying condensed consolidated statements of operations.

25

Operating Expenses

Operating expenses were $1,919,812 for the nine month period ended September 30, 2022 versus $1,647,726 for the same period in 2021, an increase of 16.5%. The increase in operating expenses in 2022 was primarily due to increases in consulting and contractor expenses, vessel related maintenance and dockage expenses, and general and administrative fees. Consulting and contractor expense was $1,164,348 for the nine month period ended September 30, 2022 versus $787,301 for the same period in 2021, an increase of nearly 47.9%. The Company had increased activity during 2022 and utilized additional consulting services and independent contractors for its operations. The Company incurred vessel related expenses of $129,837 during the nine month period ended September 30, 2022 versus $74,311 during the nine month period ended September 30, 2021, an increase of approximately 75%. The primary reason for the increase in vessel related expenses in 2022, were increases in fuel costs and the Company made several major repairs and upgrades to its owned and leased vessels. Research and development expenses were $157,876 in 2022 versus $323,052 in 2021. The Company’searly research and development expenses were related to the development of its SeaSearcher autonomous underwater device. The Company’s Research and development expenses decreased in 2022 due to the early stage development of the SeaSearcher having been completed.technology which is more expensive and time consuming. The Company believes that it will continue to expend significant resources to further develop the SeaSearcher and to begin developing next generation versions of the technology. During the ninethree month period ended September 30, 2022,March 31, 2023, professional fees were $41,271$28,056 as compared to $68,808$22,001 during the ninethree month period ended September 30, 2021, a decreaseMarch 31, 2022 an increase of approximately 40.0%27%. Professional fees decreased duringfluctuate based on the nineuse of professional service providers. During the three month period ended September 30,2022 due to the Company using fewer legal services. During the nine month period ended September 30, 2022,March 31, 2023, general and administrative expenses were $317,703$153,379 as compared to $287,312$81,418 during the ninethree month period ended September 30, 2021,March 31, 2022, an increase of 10.6%88%. General and administrative expenses primarily increased due to the Company entering into an agreement to lease a truck to haul its vessels and also due to increased costs for web hosting and Internet services. Depreciation and amortization expense was $16,395$11,588 during the nine month periods ended September 30, 2022 and 2021. Rent expense was $35,724 during the ninethree month period ended September 30, 2022March 31, 2023 versus $30,526$5,465 for the same period in 2021,2022, an increase of 112%. Depreciation and amortization expense increased due to the Company entering into agreement to lease a vessel, trailer and truck. Rent expense was $13,769 during the three month period ended March 31, 2023 versus $11,234 for the same period in 2022, an increase of approximately 17.0%. Rent expense increased primarily23%, mostly due to the overall increases in rents due to the inflation resulting from current economic activities and the Company leased some space for onecost of its archaeological consultants during time that the consultant was required to be on the site of one of the Company’s historic shipwreck locations.rents. The Company incurred travel and entertainment expenses of $56,658$21,184 during the ninethree month period ended September 30, 2022March 31, 2023 as compared to $60,021$15,569 during the ninethree month period ended September 30, 2021,March 31, 2022, an approximate 6% decrease.

36% increase on a quarter-over-quarter basis, entertainment and travel expenses may fluctuate due to inflationary increase in costs.

 

Other Income (Expenses)

 

Other income (expense) was $(156,379)$(16,989) during the ninethree month period ended September 30, 2022March 31, 2023 versus ($199,644)$(15,440) during the ninethree month period ended September 30, 2021, a decreaseMarch 31, 2022, an increasee of $43,265.$1,549. The 21.7% decrease10% increase in other income (expense)expense in 2022 was primarily due to decreases in loss on extinguishment of debt and interest expense. Loss on extinguishment of debt was $21,250 during the nine month period ended September 30, 2022 versus $121,847 during the same period in 2021, a decrease of 82.6%. The decrease on the loss from extinguishment of debt2023 was due to fewer conversions of the principal and accrued interest of several of convertible promissory notes. Interest expense for the nine month period ended September 30, 2022 was $50,129 versus $95,848 for the same period in 2021, a decrease of approximately 48%. The decreasean increase in interest expense was mostly due to a decrease in the amortization of interest relating to the beneficial conversion features of several convertible notes. During the nine month period ended September 30, 2022, loss on sale of asset was $85,000 versus $0 in 2021. The loss on sale of asset in 2022 was due to the Company writing off the value of a boat that it was leasing and had agreed to purchase. The Company decided to write off the value of the boat because it became damaged. During the nine month period ended September 30, 2022, gain on disposal of asset was $0 versus $18,500 in 2021. The gain on disposal of asset in 2021 was due to the sale of one of the Company’s salvage vessels that had been fully depreciated.

expense.

 

Net LossLosses

 

The Company’s net loss for the ninethree months ended September 30,March 31, 2023 and 2022 was $991,370, and 2021 was $2,065,064, and $1,828,448,$784,424, respectively, a year-over-year increase of approximately 13.0%26%.

26

 

Cash Flows from Operating Activities

 

For the three month period ended March 31, 2023 net cash flows used in operating activities was $517,681.

For the ninethree month period ended September 30,March 31, 2022 net cash flows used in operating activities was $1,486,681.

For the nine month period ended September 30, 2021 net cash flows used in operating activities was $1,263,704.$640,451.

 

Cash flows used in operating activities increaseddecreased in 20222023 due to reconciling the increased net loss, an increase in thecommon stock issued for services and a decrease in amortization of unearned compensation, a loss on the disposal of an boat related asset and an increase in services by various service providers.

compensation.

 

Cash Flows from Investing Activities

 

For the three month period ended March 31, 2023 net cash flows used in investing activities was $2,000.

For the ninethree month period ended September 30,March 31, 2022 net cash flows used in investing activities was ($145).

For the nine month period ended September 30, 2021 net cash flows used in investing activities was $18,500.$145.

 

Cash flows used in investing activities decreased due to the Company not receiving the proceeds from the disposal of an assetnominally increased in 2022, whereas in 2021 the Company received $18,500 from the disposal of an asset.

2023.

 

Cash Flows from Financing Activities

 

For the three month period ended March 31, 2023 net cash provided by financing activities was $515,613.

For the ninethree month period ended September 30,March 31, 2022 net cash provided by financing activities was $1,441,419.$613,999.

 

For the nine month period ended September 30, 2021 net cashCash flows provided by financing activities was $1,111,950.

Cash flows usedprimarily decreased in financing activities primarily increased in 20222023 due to an increasea decrease in the proceesproceeds from the issuance of common stock and proceeds from the issuance of convertible notes payable and convertible notes payable to related parties.

stock.

 

Liquidity and Capital Resources

 

At September 30, 2022,March 31, 2023, the Company had $36,394$173,341 cash in the bank. During the ninethree month periods ended September 30,March 31, 2023 and 2022 and 2021 the Company incurred net losses of $2,065,064,$991,370 and $1,828,448,$784,424 respectively. At September 30, 2022,March 31, 2023, the Company had $37,144$174,091 in current assets and $1,975,104$1,873,290 in current liabilities, leaving the Company a working capital deficit of $1,937,960.$1,699,199.

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Lack of Liquidity

 

A major financial challenge and significant risk facing the Company is a lack of positive cash flow and liquidity. The Company continued to operate with significant debt and a working capital deficit during the ninethree month period ended September 30, 2022.March 31, 2023. This working capital deficit indicates that the Company is unable to meet its short-term liabilities with its current assets. This working capital deficit is extremely risky for the Company as it may be forced to cease its operations due to its inability to meet its current obligations. If the Company is forced to cease its operations, then it is highly likely that all capital invested in and/or borrowed by the Company will be lost.

 

The expenses associated with being a small publicly traded company attempting to develop the infrastructure to explore and salvage historic shipwrecks recovery are extremely prohibitive, especially given that the Company does not currently generate any significant revenues and does not expect to generate any significant revenues in the near future. There are ongoing expenses associated with operations that are incurred whether the Company is conducting shipwreck recovery operations or not. Vessel maintenance, upkeep expenses and docking fees are continuous and unavoidable regardless of the Company’s operational status. Management anticipates that the vessels utilized by the Company in its operations will need continuous and unavoidable repairs and maintenance, particularly if the Company ramps up its operational footprint and is working on more than one site simultaneously as anticipated. These repairs and maintenance are expensive and have a negative impact on the Company’s cash position.

 

In addition to the operation expenses, a publicly traded company also incurs the significant recurring corporate expenses related to maintaining publicly traded status, which include, but are not limited to accounting, legal, audit, executive, administrative, corporate communications, rent, telephones, etc. The recurring expenses associated with being a publicly traded company are very burdensome for smaller public companies such as Seafarer. This lack of liquidity creates a very risky situation for the Company in terms of its ability to continue operating, which in turn makes owning shares of the Company’s common stock extremely risky and highly speculative. The Company’s lack of liquidity may cause the Company to be forced to cease operations at any time which would likely result in a complete loss of all capital invested in or borrowed by the Company to date.

 

Due to the fact that the Company does not generate any revenues and does not expect to generate revenues for the foreseeable future it must rely on outside equity and debt funding. The combination of the ongoing operating expenses that must be met even during times when there is little or no exploration or recovery activities taking place, and corporate expenses, creates a very risky situation for the Company and its shareholders in terms of the need to access external financing to fund operations. This working capital shortfall and lack of access to cash to fund corporate activities is extremely risky and may force the Company to cease its operations which would more than likely result in a complete loss of all capital invested in or loaned to the Company to date.

27

 

Lack of Revenues and Cash Flow/Significant Losses from Operations

 

The exploration and recovery of historic shipwrecks requires a multi-year, multi-stage process and it may be many years before any significant revenue is generated from exploration and recovery activities, if ever. The Company does not believe that it will generate any significant revenues in the near future. The Company believes that it may be several years before it is able to generate any cash flow from its operations, if any are ever generated at all. Without revenues and cash flow the Company does not have reliable cash flow to pay its expenses. The Company relies on outside financing in the form of equity and debt and it is possible that the Company may not be able to obtain outside financing in the future. If the Company is not able to obtain financing it would more than likely be forced to cease operations and all of the capital that has been invested in or borrowed by the Company would be lost.

 

If the Company is unable to secure additional financing, our business may fail or our operating results and our stock price may be materially adversely affected. The raising of additional financing would in all likelihood result in dilution or reduction in the value of the Company’s securities.

 

The Company may not be able to continue as a going concern. If the Company is not able to continue as a going concern, it is highly likely that all capital invested in the Company or borrowed by the Company will be lost. The report of our independent auditors for the years ended December 31, 20212022 and 20202021 raises substantial doubt as to our ability to continue as a going concern. As discussed in Note 2 to our consolidated financial statements for the ninethree month period ended September 30, 2022,March 31, 2023, we have experienced operating losses in every year since our inception resulting in an accumulated deficit. If the Company is not able to continue as a going concern, it is highly likely that all capital invested in the Company or borrowed by the Company will be lost.

 

The Company has experienced a net loss in every fiscal year since inception. The Company’s losses from operations were $1,908,685$974,381 for the ninethree month period ended September 30, 2022March 31, 2023 and $1,628,804$732,984 for the ninethree month period ended September 30, 2021.March 31, 2022. The Company believes that it will continue to generate losses from its operations for the foreseeable future and the Company may not be able to generate a profit in the long-term, or ever.

 

Additionally, the ongoing effects of the COVID-19 global pandemic may cause the Company to be unable to obtain financing to fund its business and operations. If the Company is not able to obtain financing due to COVID-19 then it is highly likely that it will be forced to cease its operations which would likely result in the Company not surviving which would result in a complete loss of all capital invested in the Company.

27

Convertible Notes Payable and Notes Payable, in Default

 

The Company does not have additional sources of debt financing to refinance its convertible notes payable and notes payable that are currently in default. If the Company is unable to obtain additional capital, such lenders may file suit, including suit to foreclose on the assets held as collateral for the obligations arising under the secured notes. If any of the lenders file suit to foreclose on the assets held as collateral, then the Company may be forced to significantly scale back or cease its operations which would more than likely result in a complete loss of all capital that has been invested in or borrowed by the Company. The fact that the Company is in default regarding several loans held by various lenders makes investing in the Company or providing any loans to the Company extremely risky with a very high potential for a complete loss of capital.

 

The convertible notes that have been issued by the Company are convertible at the lender’s option. These convertible notes represent significant potential dilution to the Company’s current shareholders as the convertible price of these notes is generally lower than the current market price of the Company’s shares. As such when these notes are converted into equity there is typically a highly dilutive effect on current shareholders and very high probability that such dilution may significantly negatively affect the trading price of the Company’s common stock. Furthermore, management intends to have discussions or has already had discussions with several of the promissory note holders who do not currently have convertible notes regarding converting their notes into equity. Any such amended agreements to convert promissory notes into equity would more than likely have a highly dilutive effect on current shareholders and there is a very high probability that such dilution may significantly negatively affect the trading price of the Company’s common stock. Some of these note holders have already amended their notes and converted the notes into equity. Based on conversations with other note holders, the Company believes that additional note holders will amend their notes to contain a convertibility clause and eventually convert the notes into equity.

 

Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments which affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities (see Note 3, Significant Accounting Policies, contained in the notes to the Company’s consolidated financial statements for the ninethree month periods ended September 30,March 31, 2023 and 2022 and 2021 contained in this filing). On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions which we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates based upon different assumptions or conditions; however, we believe that our estimates are reasonable.

 

Management is aware that certain changes in accounting estimates employed in generating financial statements can have the effect of making the Company look more or less profitable than it actually is. Management does not believe that the Company has made any such changes in accounting estimates.

 

Off-balance Sheet Arrangements

 

None.

28

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not required for smaller reporting companies.

 

Item 4. Controls and Procedures

 

Management’s Responsibility for Controls and Procedures

 

The Company’s management is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting. The Company’s controls over financial reporting are designed under the supervision of the Company’s Principal Executive Officer and Principal Financial Officer to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our principal executive officer, the Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act, as of September 30, 2022.March 31, 2023. Based on this evaluation, management concluded that our financial disclosure controls and procedures were not effective so as to timely record, process, summarize and report financial information required to be included on our Securities and Exchange Commission (“SEC”) reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. However, as a result of our evaluation and review process, management believes that the financial statements and other information presented herewith are materially correct.

28

 

Internal Control Over Financial Reporting

 

As of September 30, 2022,March 31, 2023, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our internal control over financial reporting, as defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 and based on the criteria for effective internal control described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (as revised). Based on our evaluation, management concluded that our internal control over financial reporting was not effective so as to timely record, process, summarize and report financial information required to be included on our Securities and Exchange Commission (“SEC”) reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. However, as a result of our evaluation and review process, management believes that the financial statements and other information presented herewith are materially correct.

 

Management, including its Principal Executive Officer/Principal Financial Officer, does not expect that its disclosure controls and procedures, or its internal controls over financial reporting will prevent all error and all fraud. A control system no matter how well conceived and operated, can provide only reasonable not absolute assurance that the objectives of the control system are met. Further, the design of the control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs.

 

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

 

The Company has limited resources and as a result, a material weakness in financial reporting currently exists, because of our limited resources and personnel, including those described below.

 

 *The Company has an insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis.
   
 *We have not achieved the optimal level of segregation of duties relative to key financial reporting functions.
   
 *We do not have an audit committee or an independent audit committee financial expert. While not being legally obligated to have an audit committee or independent audit committee financial expert, it is Management’s view that to have an audit committee, comprised of independent board members, and an independent audit committee financial expert is an important entity-level control over the Company’s financial statements.

 

A material weakness is a deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) auditing standard 5) or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that a material weakness exists due to a lack of segregation of duties, resulting from the Company’s limited resources and personnel.

29

 

Remediation Efforts to Address Deficiencies in Internal Control Over Financial Reporting

 

As a result of these findings, management, upon obtaining sufficient capital and operations, intends to take practical, cost-effective steps in implementing internal controls, including the possible remedial measures set forth below. As of September 30, 2022March 31, 2023 we did not have sufficient capital and/or operations to implement any of the remedial measures described below:

 

 *Assessing the current duties of existing personnel and consultants, assigning additional duties to existing personnel and consultants, and, in a cost effective manner, potentially hiring additional personnel to assist with the preparation of the Company’s financial statements to allow for proper segregation of duties, as well as additional resources for control documentation.
   
 *Assessing the duties of the existing officers of the Company and, in a cost effective manner, possibly promote or hire additional personnel to diversify duties and responsibilities of such executive officers.
   
 *Board to review and make recommendations to shareholders concerning the composition of the Board of Directors, with particular focus on issues of independence. The Board of Directors will consider nominating an audit committee and audit committee financial expert, which may or may not consist of independent members.
   
 *Interviewing and potentially hiring outside consultants that are experts in designing internal controls over financial reporting based on criteria established in Internal Control Integrated Framework issued by Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (as revised).

 

This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

 

(b) Change in Internal Control Over Financial Reporting

 

The Company has not made any change in our internal control over financial reporting during the ninethree month period ended September 30, 2022.March 31, 2023.

2930

 

Part II. Other Information

 

Item 1. Legal Proceedings

 

On September 3, 2014, the Company filed a lawsuit against Darrel Volentine, of California. Mr. Volentine was sued in two counts of libel per se under Florida law, as well as a count for injunction against the Defendant to exclude and prohibit internet postings. Such lawsuit was filed in the Circuit Court in Hillsborough County, Florida. Such suit is based upon internet postings on www.investorshub.com.www.investorshub.com. On or about October 15, 2015, the Company and Volentine entered into a stipulation whereby Volentine admitted to his tortious conduct, however the stipulated damages agreed to were rejected by the Court, and the Company is proceeding to trial on damages against Volentine in a non-jury trial on December 1, 2015. The Defendant is the subject of a contempt of court motion which was heard on April 7, 2016, whereby the Court found a violation and modified the injunction against the Defendant, and imposed other matters of potential penalties against the Defendant. The Court also awarded attorney’s fees against the Defendant on behalf of Seafarer for such motion. The Defendant subsequently attempted to have such ruling, evidence and testimony attacked through a motion heard before the Court on October 24, 2016. The Court dismissed the Defendant’s motion after presentation of the Defendant’s case at the hearing. The Plaintiff has set the matter for entry of the attorney’s fees amount due from the Defendant for hearing in December 2016. As well the Plaintiff has set for hearing its motion for sanctions in the form of attorney’s fees for frivolous filing of the October 24th motion, which motion is also set for hearing in December 2016. The Plaintiff filed a renewed and amended motion for punitive damages in the case on September 11, 2016, which has not been set for hearing. The Defendant had also filed a motion for summary judgment on the matter of notice entitlement pre-suit, which motion is pending before the Court. The Plaintiff filed a motion for sanctions against the Defendant for the motion for summary judgment being frivolous under existing law, and such motion is pending ruling on the motion. On December 7, 2016, the Court held a hearing on the Defendant’s motion for sanctions, and essentially attempting to rehear the motion for contempt against the Defendant. The Court dismissed the Defendant’s motions, and renewed the ability of the Company to seek attorney’s fees on such matter, which hearing has not been set at present. On February 28, 2017, the Court entered an Order denying the Defendant’s motion for summary judgment. The Company has filed a motion for punitive damages in March 2021 to be added to the cause of action and to be heard by the Court. The counsel for Volentine filed a motion to withdraw which was granted on March 7, 2021, and Volentine was given 60 days to obtain new counsel or proceed without such. The Company is seeking to get such matter to trial as soon as possible. Volentine, as of the date of this publication, has not obtained new counsel.

 

On April 17, 2020, the Company filed a lawsuit in the Circuit Court in and for Hillsborough County, Florida against Michael Torres (“Torres”), regarding fraud, fraud in the inducement, breach of contract and civil theft under Florida law, as well as for injunctive relief to cancel shares issued. Such shares are currently locked up with the transfer agent pending ruling of the Court. The civil theft claim seeks triple the damages for monies paid to Torres, plus attorney’s fees and costs. Torres filed a motion to dismiss which was denied by the Circuit Court on July 28, 2020. Torres filed a general denial in an answer. Seafarer was in the discovery phase of the case when both sides agreed to a mediation of the matter. Mediation of the case occurred in January 2021, and the parties reached a confidential settlement agreement which is formally being entered, which includes cancellation of all shares issued to Torres. The case will officially be closed with entry of the final judgment accepting the settlement.

 

On January 18, 2022, Seafarer received notification from the Circuit Court of the Thirteenth Judicial Circuit that 61,183,646 restricted common shares from the Defendant could be returned to the Plaintiff. On January 19, 2022, such shares were returned to the treasury stock of Seafarer and accounted for by Seafarer’s transfer agent. The settlement also included “Defendant (Torres) has agreed and hereby it is recognized by the Court that Defendant has made a full retraction of his assertions…” and agreed to pay back an undisclosed amount of money to Seafarer that the Company does not anticipate being able to collect.

On December 21, 2022, the Company filed a lawsuit in the Circuit Court in and for Hillsborough County, Florida against John Grimm (“Grimm”), for one count of Conversion. Personal Service on Grimm was completed on January 11, 2023. On February 8, 2023, the Company amended its Complaint to include Zachary Smith as co-plaintiff (the Company and Smith are collectively the “Plaintiffs”) against Grimm for one count of Conversion, one count of Rescission, one count of Civil Theft, one count of Breach of Fiduciary Duty, and one count of Judicial Dissolution. The Plaintiff’s jointly seek treble damages, attorney’s fees, equitable relief, and the judicial dissolution of Delta Tango Foxtrot Customs, LLC. As of March 1, 2023, Grimm has evaded exhaustive Personal Service attempts by both private process servers and the Brevard County Sheriff’s Department. If attempts of Personal Service remain unsuccessful, the Plaintiffs shall file a Motion requesting that the court approve personal service on Grimm via email, text message and Facebook messenger.

 

Item 1A. Risk Factors

 

Not required for smaller reporting companies.

 

Item 2. Recent Sales and Other Issuances of Unregistered Securities

 

During the three month period ended September 30, 2022,March 31, 2023, the Company issued 14,345,32897,201,415 shares of its restricted common stock for various services. During the three month period ended March 31, 2023, the Company issued 1,000,000 shares of its restricted common stock for a charitable donation. The Company believes that the issuance of the securities was exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering and based on the fact that such securities were issued for services to sophisticated or accredited investors and persons who are thoroughly familiar with the Company’s proposed business by virtue of their affiliation with the Company.

 

On various dates during the three month period ended September 30, 2022,March 31, 2023, the Company entered into subscription agreements to sell 153,123,189228,859,347 shares of its restricted common stock in exchange for proceeds of $338,231.$526,000. The proceeds received were used for general corporate purposes, working capital and repayment of some debt.

During the three month period ended September 30, 2022, the Company issued 500,000 shares of its restricted common stock for financing fees related to a note payable agreement.

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Exemptions from Registration for Sales of Restricted Securities.

 

The issuance of securities referenced above were issued to persons who the Company believes were either “accredited investors,” or “sophisticated investors” who, by reason of education, business acumen, experience or other factors, were fully capable of evaluating the risks and merits of an investment in us; and each had prior access to all material information about us. None of these transactions involved a public offering. An appropriate restrictive legend was placed on each certificate that has been issued, prohibiting public resale of the shares, except subject to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) or in compliance with Rule 144. The Company believes that the offer and sale of these securities was exempt from the registration requirements of the Securities Act pursuant to Section 4(2) under the Securities Act of 1933 (the “Act”) thereof, and/or Regulation D. There may be additional exemptions available to the Company.

 

Repurchase of Securities

 

During the ninethree month period ended September 30, 2022,March 31, 2023, the Company did not purchase any shares of its common stock and the Company is not likely to purchase any shares in the foreseeable future.

 

Stock Option Grants

 

The Company does not have any compensatory stock option grants outstanding at this time.

 

Warrants

 

The Company did not issue any warrants during the ninethree month period ended September 30, 2022. Please see Note 7 - Stockholders’ Deficit for a list of warrants outstanding at September 30, 2022.March 31, 2023.

 

Item 3. Defaults Upon Senior Securities

 

The Company has several promissory notes and loans that are currently in default to non-payment of principle and interest. See Note 5 – Convertible Notes Payable and Notes Payable for a listing of the debt obligations of the Company that are in default.

 

Item 4. Mine Safety Disclosures

 

None.

 

Item 5. Other Information

 

None

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Item 6. Exhibits

 

Set forth below is a list of the exhibits to this quarterly report on Form 10-Q.

 

Exhibit
Number
 Description
*31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
*32.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934, as amended, and 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
99.1 Temporary Hardship Exemption
   
**101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
   
**101.SCH Inline XBRL Taxonomy Extension Schema Document
   
**101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
   
 **101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
   
**101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
   
 **101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
   
**104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

*Filed herewith.

**To be furnished by amendment per Temporary Hardship Exemption under Regulation S-T.

3233

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 SEAFARER EXPLORATION CORP.
   
Date: November 14, 2022May 19, 2023By: /s/ Kyle Kennedy
  Kyle Kennedy
  President, Chief Executive Officer, and Chairman of the Board
(Principal Executive Officer and Principal Accounting Officer)
   
Date: November 14, 2022May 19, 2023By:/s/ Charles Branscum
  Charles Branscum, Director
   
Date: November 14, 2022May 19, 2023By:/s/ Robert L. Kennedy
  Robert L. Kennedy, Director
   
Date: November 14, 2022May 19, 2023By:/s/ Thomas Soeder
  Thomas Soeder, Director
   
Date: November 14, 2022May 19, 2023By:/s/ Bradford Clark
  Bradford Clark, Director

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