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SEAFARER EXPLORATION CORP - Quarter Report: 2016 September (Form 10-Q)

 
    
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
 
(Mark One)
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2016
 
or
 
 
TRANSITION 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.

(Exact name of registrant as specified in its charter)
 
Florida
90-0473054
(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

 
1
 
 
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   ☑   No   ☐
 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
Yes   ☑   No   ☐
 
 
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 filer
 
Accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company)
Smaller reporting company
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
 
Yes   ☐ No  ☑
 
 
As of November 10, 2016, there were 2,052,576,784 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, 2016
 
 TABLE OF CONTENTS
 
 
PART I: FINANCIAL INFORMATION
4
 
 
Item 1. Financial Statements (unaudited)
5
 
 
Condensed Balance Sheets: September 30, 2016 and December 31, 2015
5
 
 
        Condensed Statements of Operations: For the three and nine months ended September 30, 2016 and 2015
6
 
 
Condensed Statements of Cash Flows: Nine months ended September 30, 2016 and 2015
7
 
 
Notes to Condensed Financial Statements
8
 
 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
27
 
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk
32
 
 
Item 4T. Controls and Procedures
32
 
 
PART II: OTHER INFORMATION
34
 
 
Item 1. Legal Proceedings
34
 
 
Item 1A. Risk Factors
34
 
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
35
 
 
Item 3. Defaults Upon Senior Securities
35
 
 
Item 4. Submission of Matters to a Vote of Security Holders
35
 
 
Item 5. Other Information
35
 
 
Item 6. Exhibits
36
 
 
SIGNATURES
37
 
 
 
 
 
 
 
 
 
 
3
 
 
Part 1: 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 1. Financial Statements
 
SEAFARER EXPLORATION CORP.
CONDENSED BALANCE SHEETS
(Unaudited)
 
 
 
September 30,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
Assets
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash
 $6,521 
 $5,097 
Prepaid expenses
  44,771 
  28,557 
Deposits and other receivables
  750 
  316 
Total current assets
  52,042 
  33,970 
 
    
    
Property and equipment, net
  62,788 
  63,276 
 
    
    
Total assets
 $114,830 
 $97,246 
 
    
    
 
Liabilities and Stockholders' Deficit
 
 
    
    
Current liabilities:
    
    
Accounts payable and accrued expense
 $285,155 
 $244,678 
Convertible notes payable, net of discounts of $36,482 and $17,295
  23,268 
  45,705 
Convertible notes payable, related parties, net of discounts of $4,717 and $15,064
  12,683 
  9,000 
Convertible notes payable, in default
  434,952 
  391,300 
Convertible notes payable, in default - related parties
  181,500 
  167,500 
Convertible notes payable at fair value
  - 
  311,076 
Shareholder loan
  29,270 
  32,703 
Notes payable, in default
  37,000 
  30,000 
Notes payable, in default - related parties
  17,500 
  17,500 
Total current liabilities
  1,021,328 
  1,249,462 
 
    
    
Commitments and contingencies
    
    
 
    
    
Stockholders' deficit:
    
    
Preferred stock, $0.0001 par values - 50,000,000 shares authorized; 67 shares issued
    
    
Series A - 7 shares issued and outstanding at September 30, 2016 and December 31, 2015
  - 
  - 
Series B - 60 shares issued and outstanding at September 30, 2016 and December 31, 2015
  - 
  - 
Common stock, $0.0001 par value - 2,300,000,000 shares authorized; 2,147,109,416 and
    
    
1,332,102,348 shares issued and outstanding at September 30, 2016 and
    
    
December 31, 2015, respectively
  216,219 
  133,210 
Additional paid-in capital
  11,395,678 
  10,040,526 
Accumulated deficit
  (12,518,395)
  (11,325,952)
Total stockholders' deficit
  (906,498)
  (1,152,216)
Total liabilities and stockholders' deficit
 $114,830 
 $97,246 
 
See notes to unaudited condensed financial statements.
 
 
5
 
 
SEAFARER EXPLORATION CORP.
CONDENSED  STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
Three months ended September 30,
 
 
Nine months ended September 30,
 
 
 
2016
 
 
2015
 
 
2016
 
 
2015
 
Revenue
 $- 
 $- 
 $- 
 $- 
 
    
    
    
    
Expenses:
    
    
    
    
Consulting and contractor expenses
  166,803 
  125,787 
  338,144 
  479,834 
Professional fees
  30,521 
  12,375 
  78,191 
  62,754 
General and administrative expense
  12,675 
  3,290 
  42,101 
  109,093 
Depreciation expense
  8,496 
  8,496 
  25,488 
  25,488 
Rent expense
  10,517 
  12,799 
  26,577 
  40,901 
Vessel expense
  13,958 
  14,431 
  18,901 
  41,223 
Travel and entertainment expense
  27,662 
  13,711 
  44,949 
  50,044 
Total operating expenses
  270,632 
  190,889 
  574,351 
  809,337 
 
    
    
    
    
Loss from operations
  (270,632)
  (190,889)
  (574,351)
  (809,337)
 
    
    
    
    
Other income (expense):
    
    
    
    
Interest income (expense)
  (414,633)
  (135,227)
  (618,092)
  72,559 
Loss on impairment
    
  - 
  - 
  - 
Total other income (expense)
  (414,633)
  (135,227)
  (618,092)
  72,559 
Net loss
 $(685,265)
 $(326,116)
 $(1,192,443)
 $(736,778)
 
    
    
    
    
Net loss per share - basic and diluted
 $- 
 $- 
 $- 
 $- 
Weighted average common shares outstanding - basic and diluted
  2,005,911,180 
  1,193,601,601 
  1,633,729,734 
  1,120,925,906 
 
  See notes to unaudited condensed financial statements.
 
 
6
 
 
SEAFARER EXPLORATION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
September 30,
 
 
September 30,
 
 
 
2016
 
 
2015
 
Operating activities
 
 
 
 
 
 
Net loss
 $(1,192,443)
 $(736,738)
Adjustments to reconcile net income to
    
    
net cash provided (used) by operating activities
    
    
Depreciation
  25,488 
  25,488 
Change in allowance for uncollectible note receivable
    
    
Interest (income) expense on fair value adjustment
  272,325 
  (170,844)
Amortization of beneficial conversion feature
    
    
of the notes payable
  49,749 
  67,129 
Loss on impairment
  - 
  - 
Common stock issued for services
  406,802 
  243,976 
Common stock issued for loan fees
  81,874 
    
Decrease (increase) in:
    
    
Settlement receivable
  - 
  18,000 
Prepaid expenses and deposits
  (16,648)
  (33,131)
Decrease in shareholder advance
    
    
Increase (decrease) in:
    
    
Accounts payable and accrued expenses
  40,477 
  47,509 
Net cash provided (used) by operating activities
  (332,376)
  (538,611)
 
    
    
Cash flows from investing activities
  - 
  - 
 
    
    
Cash flows from financing activities:
    
    
Proceeds from the issuance of common stock
  192,720 
  331,368 
Proceeds from the issuance convertible notes payable
  121,700 
  202,000 
Proceeds from the issuance convertible notes payable, related
    
    
party
  22,400 
  9,000 
 
    
    
Payment of Convertible note payable
  - 
  (12,000)
Advances from shareholder
  5,760 
  9,420 
Payments to shareholders
  (8,780)
  (10,000)
Net cash provided by financing activities
  333,800 
  529,788 
 
    
    
Net increase (decrease) in cash
  1,424 
  (8,823)
 
    
    
Cash - beginning
  5,097 
  12,424 
Cash - ending
 $6,521 
 $3,601 
 
    
    
Supplemental disclosure of cash flow information:
    
    
Cash paid for interest expense
 $6,000 
 $6,000 
Cash paid for income taxes
 $- 
 $- 
Noncash operating and financing activities:
    
    
Common stock issued to satisfy debt
 $26,571 
 $26,571 
Convertible debt converted and accrued interest to common
    
    
stock
 $465,803 
 $465,803 
Common stock issued for fixed asset purchase
 $25,000 
 $- 
 
See notes to unaudited condensed financial statements.
 
 
7
 
 
SEAFARER EXPLORATION CORP.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
 
The accompanying condensed 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 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 condensed financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in the Company’s Report on Form 10-K for the twelve months ended December 31, 2015, filed with the Securities and Exchange Commission (the “Commission”). The results of operations for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2016 or for any future period.
 
NOTE 1 – DESCRIPTION OF BUSINESS
 
Seafarer Exploration Corp. (the “Company”), formerly Organetix, Inc. (“Organetix”), was incorporated on May 28, 2003 in the State of Delaware.
 
The principal business of the Company is to develop the infrastructure necessary to engage in the archaeologically-sensitive exploration and recovery of historic shipwrecks. During 2008, the Company changed its fiscal year end from April 30 to December 31.
 
NOTE 2 - GOING CONCERN
 
These 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, which raises 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, 2016. Management's plans include raising capital through the equity markets to fund operations and, eventually, the generation of revenue through its business. The Company does not expect to generate any revenues for the foreseeable future.
   
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 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 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.
 

   
 
 
 
8
 
 
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 condensed financial statements.  The condensed financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity.  These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the condensed financial statements.
 
Accounting Method
 
The Company’s condensed financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
 
Cash and Cash Equivalents
 
For purposes of the statement 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.  
 
Revenue Recognition
 
The Company recognizes revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. For the periods ended September 30, 2016 and 2015, the Company did not report any revenues.
 
Earnings Per Share
 
The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 260-10 which provides for 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.  Basic and diluted losses per share were the same at the reporting dates as there were no common stock equivalents outstanding at September 30, 2016 and 2015.
 
Fair Value of Financial Instruments
 
Effective January 1, 2008, fair value measurements are determined by the Company's adoption of authoritative guidance issued by the FASB, with the exception of the application of the statement to non-recurring, non-financial assets and liabilities, as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:
 
Level 1 – Valuation based on unadjusted quoted market prices in active markets for identical assets or liabilities.
 
Level 2 – Valuation based on, observable inputs (other than level one prices), quoted market prices for similar assets such as at the measurement date; quoted prices in the market that are not active; or other inputs that are observable, either directly or indirectly.
 
Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.
 
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The valuation of the Company’s notes recorded at fair value is determined using Level 3 inputs, which consider (i) time value, (ii) current market and (iii) contractual prices.
 
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, receivables, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments.
 
 
 
 
 
 
9
 
 
 
The following table represents the Company’s assets and liabilities by level measured at fair value on a recurring basis at December 31, 2015:
Description
 
Level 1
 
 
 
Level 2
 
 
 
Level 3
 
Notes payable at fair value
 $- 
 $- 
 $311,076 
 
The following table represents the Company’s assets and liabilities by level measured at fair value on a recurring basis at September 30, 2016:
Description
 
 
Level 1
 
 
 
Level 2
 
 
 
Level 3
 
Notes payable at fair value
 $- 
 $- 
 $-
 
The following assets and liabilities are measured on the balance sheets at fair value on a recurring basis utilizing significant unobservable inputs or Level 3 assumptions in their valuation. The following tables provide a reconciliation of the beginning and ending balances of the liabilities:
   
The change in the notes payable at fair value for the nine month period ended September 30, 2016 is as follows:
 
 
 
 
 
 
 
 
 New  
 
 
 
 
 
 
 
 
Fair Value
 
 
Change in fair
 
 
Convertible
 
 
 
 
 
Fair Value
 
 
 
January 1, 2016
 
 
Value
 
 
Notes
 
 
Conversions
 
 
September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable at fair value
 $311,074 
 $109,992 
 $135,884
 $(556,950)
 $   -
 
The change in the notes payable at fair value for the three months ended September 30, 2016 are as follows:
 
 
 
Fair Value
 
 
Change in fair
 
 
Convertible
 
 
 
 
 
Fair Value
 
 
 
June 30, 2016
 
 
Value
 
 
Notes
 
 
Conversions
 
 
September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable at fair value
 $186,605 
 $221,059 
 $-
 $(407,664)
 $   -
 
All gains and losses on assets and liabilities measured at fair value on a recurring basis and classified as Level 3 within the fair value hierarchy are recognized in interest income or expense in the accompanying financial statements.
 
The significant unobservable inputs used in the fair value measurement of the liabilities described above present value of the future interest payments. 
 
 
10
 
Property and Equipment and Depreciation
 
Fixed assets are recorded at historical cost. Depreciation is computed on the straight-line method over the estimated useful lives of the respective assets. Property and equipment, net consist of the following at September 30, 2016 and December 31, 2015:
 
 
 
September 30, 2016
 
 
December 31, 2015
 
Diving vessel
 $326,005 
 $326,005 
Equipment
  32,420 
  7,420 
Less accumulated depreciation
  (295,637)
  (270,149)
 
 $62,788 
 $63,276 
 
Depreciation expense for the nine month periods ended September 30, 2016 and 2015 amounted to $25,488.
 
Impairment of Long-Lived Assets
 
In accordance with ASC 360-10, 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 periods ended September 30, 2016 and 2015.
 
Employee Stock Based Compensation
 
The FASB issued SFAS No.123 (revised 2004), Share-Based Payment , which was superseded by ASC 718-10. ASC 718-10 provides investors and other users of financial statements with more complete and neutral financial information, by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. SFAS 123(R) covers a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As of September 30, 2016, the Company has not implemented an employee stock based compensation plan.
 
Non-Employee Stock Based Compensation
 
The Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in EITF 96-18,  Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services , which was superseded by ASC 505-50.  The Company has previously issued compensatory shares for various services including, but not limited to, executive, board of directors, business consulting, corporate advisory, accounting, research, archeological, operations, strategic planning, corporate communications, financial, legal and administrative consulting services. As determined by Management the Company may issue compensatory shares in the future for these or other services.  
 
Use of Estimates
 
The process of preparing condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses.  Such estimates primarily relate to unsettled transactions and events as of the date of the condensed financial statements.  Accordingly, upon settlement, actual results may differ from estimated amounts.
 
 
 
11
 
Convertible Notes Payable
 
The Company accounts for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined by ASC 815-40.
 
The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. 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.  
 
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.  Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. 
 
Convertible Notes Payable at Fair Value
 
The   Company   elected   to   account   for   this   hybrid   contract   under   the   guidance   of   ASC   815-15-25-4.  This guidance allows an entity that initially recognizes a hybrid financial instrument that under paragraph   ASC 815-15-25-1 would be required to be separated into a host contract and a derivative instrument may irrevocably elect to initially and subsequently measure that hybrid financial instrument in its entirety at fair value (with changes in fair value recognized in earnings).
 
The fair value election is also available when a previously recognized financial instrument subject to a re-measurement event and the separate recognition of an embedded derivative. The fair value election may be made instrument by instrument. For purposes of this paragraph, a re-measurement event (new basis event) is an event identified in generally accepted accounting principles, other than the recognition of an other-than-temporary impairment, that requires a financial instrument to be re-measured to its fair value at the time of the event but does not require that instrument to be reported at fair value on a continuous basis with the change in fair value recognized in earnings. Examples of re-measurement events are business combinations and significant modifications of debt as defined in Subtopic 470-50.
 
NOTE 4 - LOSS PER SHARE
 
Components of loss per share for the three months ended September 30, 2016 and 2015 are as follows:
                                                                                                                
 
 
For the Three Months Ended
September 30, 2016
 
 
For the Three Months Ended
September 30, 2015
 
Net loss attributable to common stockholders
 $(685,265)
 $(326,116)
 
    
    
Weighted average shares outstanding:
    
    
Basic and diluted
  2,005,911,180 
  1,193,601,601 
 
    
    
Loss per share:
    
    
Basic and diluted
 $(0.00)
 $(0.00)
                                                                                               
Components of loss per share for the nine months ended September 30, 2016 and 2015 are as follows:
 
 
 
For the Nine Months Ended
September 30, 2016
 
 
For the Nine Months Ended
September 30, 2015
 
Net loss attributable to common stockholders
 $(1,192,443)
 $(736,738)
 
    
    
Weighted average shares outstanding:
    
    
Basic and diluted
  1,633,729,734 
  1,120,925,906 
 
    
    
Loss per share:
    
    
Basic and diluted
 $(0.00)
 $(0.00)
                                                                
 
12
 
NOTE 5 – CAPITAL STOCK
 
At September 30, 2016 the Company was authorized to issue 2,300,000,000 shares of $0.0001 par value common stock.
 
Preferred Stock
 
The Company is authorized to sell or issue 50,000,000 shares of preferred stock.
 
Series A Preferred Stock
 
At September 30, 2016, 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.  As of September 30, 2016 and 2015, no shares of preferred stock had been converted into 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
 
During the three month period ended September 30, 2016, the Company issued the following warrants:
 
Term
Amount
Exercise Price
07/12/16 to 01/12/18
4,000,000
$0.0020
07/20/16 to 08/26/17
18,181,818
$0.0033
08/26/16 to 08/26/17
7,000,000
$0.0050
08/31/16 to 08/31/18
25,000,000
$0.0010
 
54,181,818
 
 
As of September 30, 2016, the Company had a total of 143,531,818 warrants outstanding with exercise prices ranging from $0.0005 to $0.01 per share.
 
NOTE 6 - INCOME TAXES
 
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes are as follows:
 
 
 
For the Nine Months Ended September 30, 2016
 
 
For the Nine Months Ended September 30, 2015
 
Income tax at federal statutory rate
  (34.00)%
  (34.00)%
State tax, net of federal effect
  (3.96)%
  (3.96)%
 
  37.96%
  37.96%
Valuation allowance
  (37.96)%
  (37.96)%
Effective rate
  0.00%
  0.00%
 
 
13
 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
 
As of September 30, 2016 and December 31, 2015, the Company’s only significant deferred income tax asset was an estimated net tax operating loss of $12,518,000 and $11,326,000 respectively that is available to offset future taxable income, if any, in future periods, subject to expiration and other limitations imposed by the Internal Revenue Service. Management has considered the Company's operating losses incurred to date and believes that a full valuation allowance against the deferred tax assets is required as of September 30, 2016 and December 31, 2015. Company is preparing information for tax returns for past years. Due to the Company’s lack of revenue since inception, management does not believe that there is any income tax liability for past years. Management has evaluated tax positions in accordance with ASC 740 and has not identified any tax positions, other than those discussed above, that require disclosure.
 
NOTE 7 - LEASE OBLIGATION
 
Corporate Office
 
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, 2015 through June 30, 2017. Under the amended lease agreement the base monthly rent is $1,215 from July 1, 2015 through June 30, 2016 and $1,251 from July 1, 2016 to June 30, 2017.  There may be additional monthly charges for pro-rated maintenance, late fees, etc.
 
Diving Operations House
 
The Company has an operating lease for a house located in Palm Bay, Florida. 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 term of the lease agreement commenced on October 1, 2015 and expired on October 31, 2016. The Company is leasing the property on a month to month basis subsequent to October 31, 2016 under the same terms. The Company pays $1,300 per month to lease the operations house.
 
NOTE 8 - CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE
 
The Company evaluates each financial instrument to determine whether it meets the definition of “conventional convertible” debt under ASC 815-40.  The note payable conversion feature of the outstanding convertible debt met the definition of conventional convertible for purposes of applying the conventional convertible exemption. The definition of conventional contemplates a limitation on the number of shares issuable under the arrangement. Since the convertible notes achieved the conventional convertible exemption, the Company was required to consider whether the hybrid contracts embody a beneficial conversion feature. The calculation of the effective conversion amount did result in a beneficial conversion feature. 
  
Convertible Notes Payable
 
The following table reflects the convertible notes payable, other than five notes that have been remeasured to fair value which are discussed later in Note 8, as of September 30, 2016:
 
Issue
Maturity
 
September 30,
 
 
Interest
 
 
Conversion
 
Date
Date
 
2016
 
 
Rate
 
 
Rate
 
Convertible notes payable:
 
 
 
 
 
 
 
 
 
 
April 4, 2016
November 4, 2016
 $10,000 
  6.00%
  0.0010 
July 19, 2016
July 19, 2017
  4,000 
  6.00%
  0.0015 
August 24, 2016
February 24, 2017
  20,000 
  6.00%
  0.0010 
 
    
    
    
August 31, 2016
August 31, 2017
  25,750 
  6.00%
  0.0010 
 
    
    
    
Unamortized discount
 
  (36,482)
    
    
Balance
 
 $23,268 
    
    
Convertible notes payable – related parties
 
    
    
    
 
    
    
    
May 10, 2016
November 10, 2016
 $5,000 
  6.00%
  0.00050 
May 10,2016
November 10,2016
  5,000 
  6.00%
  0.00050 
May 20, 2016
November 20,2016
  5,000 
  6.00%
  0.00050 
July 12, 2016
January 12,2016
  2,400 
  6.00%
  0.00060 
Unamortized discount
 
  (4,717)
    
    
 
 $12,683 
    
    
 
 
 
14
 
 
Convertible notes payable, in default
 
    
    
    
October 31, 2012
April 30, 2013
 $8,000 
  6.00%
  0.0040 
November 20, 2012
May 20, 2013
  50,000 
  6.00%
  0.0050 
January 19, 2013
July 30, 2013
  5,000 
  6.00%
  0.0040 
February 11, 2013
August 11, 2013
  9,000 
  6.00%
  0.0060 
September 25, 2013
March 25, 2014
  10,000 
  6.00%
  0.0125 
August 28, 2009
November 1, 2009
  4,300 
  10.00%
  0.0150 
April 7, 2010
November 7, 2010
  70,000 
  6.00%
  0.0080 
November 12, 2010
November 7, 2011
  40,000 
  6.00%
  0.0050 
October 4, 2013
April 4, 2014
  50,000 
  6.00%
  0.0125 
October 30, 2013
October 30, 2014
  50,000 
  6.00%
  0.0125 
May 15, 2014
November 15, 2014
  40,000 
  6.00%
  0.0070 
October 13, 2014
April 13, 2015
  25,000 
  6.00%
  0.0050 
June 29, 2015
December 29, 2015
  25,000 
  6.00%
  0.0050 
September 18, 2015
March 18, 2016
  25,000 
  6.00%
  0.0020 
April 20,2015
April 20, 2016
  23,652 
  6.00%
  0.0032 
Balance
 
 $434,952 
    
    
 
Convertible notes payable - related party, in default
 
 
 
 
 
 
 
 
 
January 19, 2013
July 30, 2013
 $15,000 
  6.00%
  0.0040 
January 9, 2009
January 9, 2010
  10,000 
  10.00%
  0.0150 
January 25, 2010
January 25, 2011
  6,000 
  6.00%
  0.0050 
January 18, 2012
July 18, 2012
  50,000 
  8.00%
  0.0040 
July 26, 2013
January 26, 2014
  10,000 
  6.00%
  0.0100 
January 17, 2014
July 17, 2014
  31,500 
  6.00%
  0.0060 
May 27, 2014
November 27, 2014
  7,000 
  6.00%
  0.0070 
July 21, 2014
January 25, 2015
  17,000 
  6.00%
  0.0080 
October 16, 2014
April 16, 2015
  21,000 
  6.00%
  0.0045 
July 14, 2015
January 14, 2016
  9,000 
  6.00%
  0.0030 
January 12, 2016
July 12, 2016
 $5,000 
  6.00%
  0.00200 
 
    
    
    
Balance
 
 $181,500 
    
    
 
Notes Payable
 
The following table reflects the notes payable as of September 30, 2016:
 
Issue Date
Maturity Date
 
2016
 
 
Interest Rate
 
Notes payable, in default –related parties:
 
 
 
 
 
 
 
 
February 24, 2010
February 24, 2011
 $7,500 
  6.00%
October 6, 2015
November 11, 2015
  10,000 
  6.00%
 
 $17,500 
    
 
15
 
 
Notes payable, in default:
 
 
 
 
 
 
 
June 23, 2011
August 23, 2011
  25,000 
  6.00%
April 27, 2011
April 27, 2012
  5,000 
  6.00%
March 05, 2016
June 16, 2016
  7,000 
  6.00%
 
 $37,000 
    
 
Note Conversions
 
A lender who had a convertible promissory note outstanding with a remaining principal balance of $38,000 elected to convert a portion of the principal balance of $13,348 of the note plus accrued interest and late fees of $6,652 into 12,750,000 shares of the Company’s common stock. The remaining principal balance of this note was $23,652 at September 30, 2016
 
A lender elected to convert the entire principal balance of $15,000 of a convertible promissory note into 30,000,000 shares of the Company’s common stock. The remaining principal balance of this note was $0 at September 30, 2016.
 
A lender elected to receive 10,000,000 shares of the Company’s common stock to pay down $10,000 of the principle balance of a promissory note. The remaining principal balance of this note was $7,000 at September 30, 2016.
 
At September 30, 2016 and December 31, 2015, combined accrued interest on the convertible notes payable, notes payable and stockholder loans was $154,790 and $135,581 respectively, and is included in accounts payable and accrued liabilities on the accompanying balance sheets.
 
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.
 
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 shares of the Company’s common stock there is typically a highly dilutive effect on current shareholders and very possible that such dilution may significantly negatively affect the trading price of the Company’s common stock.
 
Shareholder Loans
 
At September 30, 2016 the Company had two loans outstanding to its CEO totaling $29,270, consisting of a loan in the amount of $28,070 with a 6% annual rate of interest and a loan in the amount of $1,200 at 6% rate of interest and an option to convert the loan into restricted shares of the Company’s common stock at $0.002, and, a loan in the amount of $1,200 at a rate of 0% interest.
 
 
 
 
16
 
 
Convertible Notes Payable at Fair Value
 
Convertible Note Payable Dated August 28, 2015 at Fair Value
 
On August 28, 2015 the Company entered into a convertible note payable with a corporation.  The note payable, with a face value of $44,000, including a $4,000 of original issue discount, bears interest at 12.0% per annum and is due on August 28, 2016. The convertible note payable is convertible, at the holder’s option, into the Company’s common shares at the Variable Conversion Price. The Variable Conversion Price is defined as 62% multiplied by the lowest closing bid price for the Company’s common stock during the twenty (20) trading day period including the day the notice of conversion is received by the Company. If the Company’s market capitalization is less than $1,000,000 on the day immediately prior to the date of the notice of conversion, then the conversion price shall be 25% multiplied by the lowest closing price as of the date notice of conversion is given and if the closing price of the Company’s common stock on the day immediately prior to the date of the notice of conversion is less than $0.00075 then the conversion price shall be 25% multiplied by the lowest closing price as of the date a notice of conversion is given. The conversion feature is subject to full-ratchet, anti-dilution protection if the Company sells shares or share-indexed financing instruments at less than the conversion price.
 
In the evaluation of the financing arrangement, the Company concluded that the conversion feature did not meet the conditions set forth in current accounting standards for equity classification. Since equity classification is not available for the conversion feature, it requires bifurcation and liability classification, at fair value. The Company elected to account for this hybrid contract under the guidance of ASC 815-15-25-4.  
 
In connection with the issuance of the convertible note payable, the Company recognized day-one derivative loss totaling $76,210 related to the recognition of (i) the hybrid note and (ii) the derivative instrument arising from the fair value measurement due to the fair value of the hybrid note and embedded derivative exceeding the proceeds that the Company received from the arrangement. Therefore, the Company was required to record a $76,210 loss on the derivative financial instrument. In addition, the fair value will change in future periods, based upon changes in the Company’s common stock price and changes in other assumptions and market indicators used in the valuation techniques. These future changes will be currently recognized in interest expense or interest income on the Company’s statement of operations.
 
The conversion of the note into shares of the Company’s common stock is potentially highly dilutive to current shareholders. If the note holder elects to sell the shares that it has acquired as a result of converting the note into shares of common stock, then any such sales may result in a significant decrease in the market price of the Company’s shares.  
 
During the nine month period ended September 30, 2016, the principle balance and accrued interest was converted into 54,561,311 shares of common stock.
 
Convertible Note Payable Dated September 3, 2015 at Fair Value
 
On September 3, 2015 the Company entered into a convertible note payable with a corporation.  The note payable in the amount of $38,500, including a $3,500 original issue discount, and bears interest at 12.0% per annum and is due on September 3, 2017. According to the terms of the note, the Company was eligible to utilize up to $200,000 of credit under the note, with potential proceeds received of $180,000, however at the time the Company elected to borrow only the $38,500.  Any additional amount borrowed under this note would require approval of both the Company and the lender. The convertible note payable is convertible, at the holder’s option, into the Company’s common shares at the Variable Conversion Price. The Variable Conversion Price is defined as 65% multiplied by the lowest trade price for the Company’s common stock in the twenty-five (25) trading day period previous to the conversion. The conversion feature is subject to full-ratchet, anti-dilution protection if the Company sells shares or share-indexed financing instruments at less than the conversion price.
 
In the evaluation of the financing arrangement, the Company concluded that the conversion feature did not meet the conditions set forth in current accounting standards for equity classification. Since equity classification is not available for the conversion feature, it requires bifurcation and liability classification, at fair value. The Company elected to account for this hybrid contract under the guidance of ASC 815-15-25-4.  
 
In connection with the issuance of the convertible note payable, the Company recognized day-one derivative loss totaling $42,308 related to the recognition of (i) the hybrid note and (ii) the derivative instrument arising from the fair value measurement due to the fair value of the hybrid note and embedded derivative exceeding the proceeds that the Company received from the arrangement. Therefore, the Company was required to record a $29,789 loss on the derivative financial instrument. In addition, the fair value will change in future periods, based upon changes in the Company’s common stock price and changes in other assumptions and market indicators used in the valuation techniques. These future changes will be currently recognized in interest expense or interest income on the Company’s statement of operations.
 
The conversion of the note into shares of the Company’s common stock is potentially highly dilutive to current shareholders. If the note holder elects to sell the shares that it has acquired as a result of converting the note into shares of common stock, then any such sales may result in a significant decrease in the market price of the Company’s shares.
 
During the nine month period ended September 30, 2016, the principle balance and accrued interest was converted into 86,597,589 shares of common stock.
 
 
 
 
17
 
 
Convertible Note Payable Dated September 8, 2015 at Fair Value
 
On September 8, 2015, the Company entered into a convertible note payable with a corporation.  The convertible note payable, with a face value of $27,000, bears interest at 8.0% per annum and is due on September 8, 2016. The note payable is convertible, at the holder’s option, into the Company’s common shares at the Variable Conversion Price. The Variable Conversion Price is defined as 65% multiplied by the lowest closing bid price   for the Company’s common stock during the fifteen (15) trading day period including the day the notice of conversion is received by the Company. The conversion feature is subject to full-ratchet, anti-dilution protection if the Company sells shares or share-indexed financing instruments at less than the conversion price.
 
In the evaluation of the financing arrangement, the Company concluded that the conversion feature did not meet the conditions set forth in current accounting standards for equity classification. Since equity classification is not available for the conversion feature, it requires bifurcation and liability classification, at fair value. The Company elected to account for this hybrid contract under the guidance of ASC 815-15-25-4.
 
In connection with the issuance of the convertible note payable, the Company recognized day-one derivative loss totaling $16,690 related to the recognition of (i) the hybrid note and (ii) the derivative instrument arising from the fair value measurement due to the fair value of the hybrid note and embedded derivative exceeding the proceeds that the Company received from the arrangement. Therefore, Company was required to record a $16,690 loss on the derivative financial instrument. In addition, the fair value will change in future periods, based upon changes in the Company’s common stock price and changes in other assumptions and market indicators used in the valuation techniques. These future changes will be currently recognized in interest expense or interest income on the Company’s statement of operations.
 
The conversion of the note into shares of the Company’s common stock is potentially highly dilutive to current shareholders. If the note holder elects to sell the shares that it has acquired as a result of converting the note into shares of common stock, then any such sales may result in a significant decrease in the market price of the Company’s shares.
 
During the nine month period ended September 30, 2016, the principle balance and accrued interest was converted into 50,268,153 shares of common stock.
 
Convertible Note Payable Dated December 15, 2015 at Fair Value
 
On December 15, 2015 the Company entered into a convertible note payable with a corporation.  The note payable  in the amount of $27,500, including a $2,500 original issue discount, and bears interest at 12.0% per annum and is due on September 3, 2017. The convertible note payable is convertible, at the holder’s option, into the Company’s common shares at the Variable Conversion Price. The Variable Conversion Price is defined as 65% multiplied by the lowest trade price for the Company’s common stock in the twenty-five (25) trading day period previous to the conversion. The conversion feature is subject to full-ratchet, anti-dilution protection if the Company sells shares or share-indexed financing instruments at less than the conversion price.
 
In the evaluation of the financing arrangement, the Company concluded that the conversion feature did not meet the conditions set forth in current accounting standards for equity classification. Since equity classification is not available for the conversion feature, it requires bifurcation and liability classification, at fair value. The Company elected to account for this hybrid contract under the guidance of ASC 815-15-25-4.  
 
In connection with the issuance of the convertible note payable, the Company recognized day-one derivative loss totaling $29,789 related to the recognition of (i) the hybrid note and (ii) the derivative instrument arising from the fair value measurement due to the fair value of the hybrid note and embedded derivative exceeding the proceeds that the Company received from the arrangement. Therefore, the Company was required to record a $29,789 loss on the derivative financial instrument. In addition, the fair value will change in future periods, based upon changes in the Company’s common stock price and changes in other assumptions and market indicators used in the valuation techniques. These future changes will be currently recognized in interest expense or interest income on the Company’s statement of operations.
 
The conversion of the note into shares of the Company’s common stock is potentially highly dilutive to current shareholders. If the note holder elects to sell the shares that it has acquired as a result of converting the note into shares of common stock, then any such sales may result in a significant decrease in the market price of the Company’s shares.
 
During the nine month period ended September 30, 2016, the principle balance and accrued interest was converted into 53,181,384 shares of common stock.
 
 
 
 
18
 
 
Convertible Note Payable Dated March 24, 2016 at Fair Value
 
On March 24, 2016 the Company entered into a convertible note payable with a corporation.  The note payable, with a face value of $33,000, including a $3,000 of original issue discount, bears interest at 12.0% per annum and is due on March 24, 2017. The convertible note payable is convertible, at the holder’s option, into the Company’s common shares at the Variable Conversion Price. The Variable Conversion Price is defined as 62% multiplied by the lowest closing bid price for the Company’s common stock during the twenty-five (25) trading day period including the day the notice of conversion is received by the Company. If the Company’s market capitalization is less than $1,000,000 on the day immediately prior to the date of the notice of conversion, then the conversion price shall be 25% multiplied by the lowest closing price as of the date notice of conversion is given and if the closing price of the Company’s common stock on the day immediately prior to the date of the notice of conversion is less than $0.0009 then the conversion price shall be 25% multiplied by the lowest closing price as of the date a notice of conversion is given. The conversion feature is subject to full-ratchet, anti-dilution protection if the Company sells shares or share-indexed financing instruments at less than the conversion price.
 
In the evaluation of the financing arrangement, the Company concluded that the conversion feature did not meet the conditions set forth in current accounting standards for equity classification. Since equity classification is not available for the conversion feature, it requires bifurcation and liability classification, at fair value. The Company elected to account for this hybrid contract under the guidance of ASC 815-15-25-4.  
 
In connection with the issuance of the convertible note payable, during the three month period ended March 31, 2016 the Company recognized day-one derivative loss totaling $32,210 related to the recognition of (i) the hybrid note and (ii) the derivative instrument arising from the fair value measurement due to the fair value of the hybrid note and embedded derivative exceeding the proceeds that the Company received from the arrangement. Therefore, during the three month period ended March 31, 2016 the Company was required to record a $102,882 loss on the derivative financial instrument and is included in interest expense. In addition, the fair value will change in future periods, based upon changes in the Company’s common stock price and changes in other assumptions and market indicators used in the valuation techniques. These future changes will be currently recognized in interest expense or interest income on the Company’s statement of operations.
  
The conversion of the note into shares of the Company’s common stock is potentially highly dilutive to current shareholders. If the note holder elects to sell the shares that it has acquired as a result of converting the note into shares of common stock, then any such sales may result in a significant decrease in the market price of the Company’s shares.  
 
During the nine month period ended September 30, 2016, the principle balance and accrued interest was converted into 69,091,471 shares of common stock.
 
NOTE 9 – MATERIAL AGREEMENTS
 
Agreement to Explore a Shipwreck Site Located off of Brevard County, Florida
 
On March 1, 2014, Seafarer entered into a partnership and ownership with Marine Archaeology Partners, LLC, with the formation of Seafarer’s Quest, LLC. Such LLC was formed in the State of Florida for the purpose of permitting, exploration and recovery of artifacts from a designated area on the east coast of Florida. Such site area is from a defined, contracted area by a separate entity, which a portion of such site is designated from a previous contracted holding through the State of Florida. Under such agreement, Seafarer is responsible for costs of permitting, exploration and recovery, and is entitled to 60% of such artifact recovery. Seafarer has a 50% ownership, with designated management of the LLC coming from Seafarer.
 
Exploration Permit with the Florida Division of Historical Resources for an Area off of Melbourne Beach, Florida
 
On July 28, 2014, Seafarer’s Quest, LLC, received a 1A-31 Permit (the “Permit”) from the Florida Division of Historical Resources for an area identified off of Melbourne Beach, Florida. The Permit is active for three years from the date of issuance.
 
 
19
 
 
Exploration Permit with the Florida Division of Historical Resources for an Area off of Melbourne Beach, Florida
 
On July 6, 2016, Seafarer’s Quest, LLC, received a 1A-31 Permit (the “Permit”) from the Florida Division of Historical Resources for a second area identified off of Melbourne Beach, Florida. The Permit is active for three years from the date of issuance.
 
Certain Other Agreements
 
In January of 2016 the Company entered into a consulting agreement with an individual under which the individual agreed to provide corporate communications services and shareholder notification and awareness services. The term of the agreements is for twelve months and the Company agreed to pay the consultant 4,000,000 shares of restricted common stock to perform the services.
 
In April of 2016, the Company entered into agreements with seven separate individuals to either join or rejoin the Company’s advisory council. Under the advisory council agreements all of the advisors agreed to provide various advisory services to the Company, including making recommendations for both the short term and the long term business strategies to be employed by the Company, monitoring and assessing the Company's business and to advise the Company’s Board of Directors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of action, making suggestions to strengthen the Company's operations, identifying and evaluating external threats and opportunities to the Company, evaluating and making ongoing recommendations to the Board with respect to the Company's business, and providing such other advisory or consulting services as may be appropriate from time to time. The term of each of the advisory council agreements is for one year. In consideration for the performance of the advisory services, the Company agreed to issue the advisors shares of the Company’s restricted common stock including 4,000,000 shares each to three of the advisors, 3,000,000 shares each to three of the advisors and 2,000,000 shares to one of the advisors, an aggregate total of 23,000,000 restricted shares. According to the agreements each of the advisors’ shares vest at a rate of 1/12 th of the amount per month over the term of the agreement.  If any of the advisors or the Company terminates the advisory council agreements prior to the expiration of the one year terms, then each of the advisors whose agreement has been terminated has agreed to return to the Company for cancellation any portion of their shares that have not vested. Under the advisory council agreements, the Company has agreed to reimburse the advisors for pre approved expenses.
 
In April of 2016, the Company entered into a consulting agreement with a limited liability company under which the consultant agreed to provide diving services, assist in maintaining Seafarer’s vessels and equipment, and provide operational and project management services for Seafarer’s exploration and recovery diving operations. The term of the consulting agreement is from April 1, 2016 to March 31, 2017 and at the end of the term the consulting agreement may be renegotiated. The consultant reports directly to the CEO of Seafarer. The Company agreed to pay $125 per day to the consultant plus an initial $25 per day for operational and site management services. The Company also agreed to pay $700 per month to the consultant for campground and electrical services while the consultant is on site providing services to the Company.. The Company also agreed to pay 4,000,008 shares of restricted common stock to the consultant for the services. The shares vest at a rate of 333,334 shares per month over a twelve month period. If the Company or the consultant terminates the agreement prior to the end of the term of the agreement then any of the shares that have not yet vested will be cancelled. The Company, in its sole discretion, may pay the consultant additional compensation or bonuses.
 
In April of 2016, the Company paid 2,880,000 shares of restricted common stock to an individual for providing past project management services related to the Company’s dive operations.
 
In April of 2016 the Company entered into a consulting agreement with a corporation under which the corporation agreed to provide various services including business development, mergers and acquisitions, business strategy and analysis of business opportunities in the historic shipwreck exploration business in Panama. The consultant will not negotiate on behalf of the Company or provide any market making or listing services. The term of the agreement is open ended and will continue until the completion of the consulting services. The Company agreed to pay the consultant a total of 2,000,000 shares of restricted common stock.
 
In April of 2016 the Company entered into a consulting agreement with a corporation under which the corporation agreed to provide various services including business development, mergers and acquisitions and business. The consultant will not negotiate on behalf of the Company or provide any market making or listing services. The term of the agreement is open ended and will continue until the completion of the consulting services. The Company agreed to pay the consultant a total of 1,000,000 shares of restricted common stock.
 
In May of 2016, the Company entered into an agreement with an individual to rejoin the Company’s advisory council. Under the advisory council agreement the advisor agreed to provide various advisory services to the Company, including making recommendations for both the short term and the long term business strategies to be employed by the Company, monitoring and assessing the Company's business and to advise the Company’s Board of Directors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of action, making suggestions to strengthen the Company's operations, identifying and evaluating external threats and opportunities to the Company, evaluating and making ongoing recommendations to the Board with respect to the Company's business, and providing such other advisory or consulting services as may be appropriate from time to time. The term of each of the advisory council agreement is for one year. In consideration for the performance of the advisory services, the Company agreed to issue the advisor 2,000,000 shares of restricted common stock. According to the agreements the advisor’s shares vest at a rate of 1/12 th of the amount per month over the term of the agreement.  If the advisor or the Company terminates the advisory council agreement prior to the expiration of the one year term, the advisor has agreed to return to the Company for cancellation any portion of the shares that have not vested. Under the advisory council agreement, the Company has agreed to reimburse the advisor for pre approved expenses.
 
 
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In May of 2016, the Company extended the term of a previous agreement with an individual who is related to the Company’s CEO to continue serving as a member of the Company’s Board of Directors. Under the  agreement, the Director agreed to provide various services to the Company including making recommendations for both the short term and the long term business strategies to be employed by the Company, monitoring and assessing the Company's business and to advise the Company’s Board of Directors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of action, making suggestions to strengthen the Company's operations, identifying and evaluating external threats and opportunities to the Company, evaluating and making ongoing recommendations to the Board with respect for one year and may be terminated by either the Company or the Director by providing written notice to the other party. The agreement also terminates automatically upon the death, resignation or removal of the Director.  Under the terms of the agreement, the Company agreed to pay the Director 20,000,000 shares of restricted common stock and to negotiate future compensation on a year-by-year basis. The Company also agreed to reimburse the Director for pre-approved expenses.
 
In May of 2016, the Company extended the term of a previous agreement with an individual who is related to the Company’s CEO to continue serving as a member of the Company’s Board of Directors. Under the  agreement, the Director agreed to provide various services to the Company including making recommendations for both the short term and the long term business strategies to be employed by the Company, monitoring and assessing the Company's business and to advise the Company’s Board of Directors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of action, making suggestions to strengthen the Company's operations, identifying and evaluating external threats and opportunities to the Company, evaluating and making ongoing recommendations to the Board with respect for one year and may be terminated by either the Company or the Director by providing written notice to the other party. The agreement also terminates automatically upon the death, resignation or removal of the Director.  Under the terms of the agreement, the Company agreed to pay the Director 20,000,000 shares of restricted common stock and to negotiate future compensation on a year-by-year basis. The Company also agreed to reimburse the Director for pre-approved expenses.
 
In May of 2016, the Company issued a consultant 5,000,000 shares of restricted common stock for providing various project management services related to the Company’s shipwreck exploration and recovery services. The Company believes that the consultant has provided services at below market rates of compensation and the shares were paid both to more fairly compensate the consultant and as a bonus and inducement for the consultant to continue to provide services to the Company.
 
In June of 2016, the Company entered into a consulting agreement with two individuals under which the individuals agreed to provide various consulting services including website development to include a storefront, and business strategy relating to business development for the Company’s digital storefront and Internet merchandising site. The term of the agreement is open ended and will continue until the completion of the services. The Company agreed to pay each consultant 2,000,000 shares of its restricted common stock, a total of 4,000,000 shares of restricted common stock.
 
In June of 2016, the Company entered into a consulting agreement with an individual who is related to the Company’s CEO under which the individual agreed to provide various consulting services including business development, photography, custom logo design and development, developing corporate identity materials such as business cards, editing, art illustrations, and working with the Company and other consultants to develop its future digital storefront and Internet merchandise site. The term of the agreement is open ended and will continue until the completion of the services. The Company agreed to pay the consultant a total of 5,000,000 shares of restricted common stock.
 
In July of 2016 the Company entered into a consulting agreement with a corporation under which the corporation agreed to provide various services including business development, mergers and acquisitions and business. The consultant will not negotiate on behalf of the Company or provide any market making or listing services. The term of the agreement is open ended and will continue until the completion of the consulting services. The Company agreed to pay the consultant a total of 5,000,000 shares of restricted common stock.
 
In July of 2016 the Company issued 4,732,000 shares of restricted common stock to a consultant to reimburse the consultant for travel expenses and time incurred for setting up various meetings.
 
In July of 2016, the Company entered into a consulting agreement with an individual under which the individual agreed to provide various consulting services including website development to include business development, assistance with other consultants in developing and maintaining a digital store front, film editing, and for other Web based consulting relating to the Company’s efforts to develop Internet merchandising opportunities. The term of the agreement is open ended and will continue until the completion of the services. The Company agreed to pay the consultant 2,500,000 shares of its restricted common stock.
 
In July of 2016, the Company entered into a consulting agreement with an individual under which the individual agreed to provide various consulting services including media, business development related to television and motion pictures, and general consulting related to media and entertainment. The term of the agreement is open ended and will continue until the completion of the services. The Company agreed to pay the consultant 2,000,000 shares of its restricted common stock.
 
In September of 2016 the Company issued 5,000,000 shares of restricted common stock to one of its legal advisors. The shares were issued as retention bonus for the advisor’s willingness to forego receiving payment for services rendered for lengthy time periods, appreciation for past legal services rendered, as well to induce the advisor to continue to provide services on favorable terms to the Company.
 
In September of 2016 the Company issued 1,500,000 shares of restricted common stock to one of its consultants. The shares were issued as retention bonus for the consultant’s willingness to forego receiving payment for services rendered for lengthy time periods, appreciation for past administrative and clerical services rendered, as well to induce the consultant to continue to provide services on favorable terms to the Company.
 
 
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In September of 2016 the Company issued 15,000,000 shares of restricted common stock to one of its business advisory consultants. The shares were issued as retention bonus for the consultant’s willingness to forego receiving payment for services rendered for lengthy time periods, appreciation for past business advisory, strategic planning, assistance with financial reporting, administrative and IT services, as well to induce the consultant to continue to provide services on favorable terms to the Company.
 
In September of 2016 the Company issued a total of 13,000,000 shares of restricted common stock to nine independent contractor consultants who provide various services relating to the Company’s diving operations. The shares were issued were issued as retention bonus for the consultants’ willingness to forego receiving payments for services rendered for lengthy time periods, appreciation for past services rendered, as well to induce the consultants to continue to provide services on favorable terms to the Company.
 
The Company has an ongoing verbal agreement with a limited liability company that is controlled by a person who is related to the Company’s CEO to pay the related party consultant $3,000 per month to provide general business consulting and assessing the Company's business and to advise 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 occasional assist as an administrative specialist to perform various administrative duties and clerical services including reviewing the Company’s agreements and books and records. The consultant provides the services under the direction and supervision of the Company’s CEO.
 
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. At September 30, 2016, the Company owed the related party limited liability company $1,195.
 
The Company has an ongoing agreement to pay a limited liability company a monthly fee of $3,500 in cash or $5,000 per month in restricted stock for archeological services and the review of historic shipwreck research consulting services.
 
The Company has an ongoing agreement to pay an individual a monthly fee of $1,500 per month for archeological consulting services.
 
The Company has an ongoing consulting agreement to pay a limited liability company a minimum of $5,000 per month for business advisory, strategic planning and consulting services, assistance with financial reporting, IT management, and administrative services. The Company also agreed to reimburse the consultant for expenses. The agreement is verbal and may be terminated by the Company or the consultant at any time.
 
NOTE 10 – LEGAL PROCEEDINGS
 
On March 23, 2016 the Board of Directors signed a universal settlement agreement with the Plaintiffs in the litigation matters of Micah Eldred, et al., v. Seafarer Exploration, et al., Hillsborough County, Florida, Case No. 09-CA-30763, and Micah Eldred v. Seafarer Exploration Corp., et al., Hillsborough County, Florida, Case No. 14-CA-5360, and in the matter of Seafarer Exploration, et al. v. Micah Eldred, et al., Hillsborough County, Florida, Court of Appeals Case No. 14-2884, specifically: Micah Eldred, Michael Daniels, Diane J. Harrison, James Eldred, Mary R. Eldred, Michole Eldred, Nathan Eldred, Toni A. Eldred, Toni A. Eldred FBO Jordan Gratton, Toni A. Eldred FBO Justin Gratton, Vanessa A Verbosh, Oksana Savchenko, Matthew J. Presy, Olessia Kritskaia, Ekaterina Messinger, Abby Lord, Ioulia Hess, Anna Krokhina, George Linder, Christine Zitman, Carl Dilley, Heather Dilley, Robert Lizzano, Elizabeth Lizzano, Karen Lizzano, Susan Miller, Jillian Mally, Michael Mona, Alan Wolper, Sarah Wolper, Alan Wolper FBO Michael Wolper, Spartan Securities Group, Ltd., and Am Asia Consulting entered into the settlement agreement with Seafarer. An earlier named party, CADEF, The Childhood Autism Foundation, Inc., had previously entered into a settlement agreement and is no longer a party in the Litigation.
 
The settlement called for both cases to be dismissed, with prejudice, and the Plaintiffs in case number 09-CA-30763 agreed to surrender and cancel all of their 32,300,000 shares of restricted common stock which were returned to the treasury of the Corporation. All such shares have been returned for cancellation. On March 23, 2016 Seafarer CEO signed the resolution to cancel the 32,300,000 shares and instructed the transfer agent ClearTrust LLC to cancel the shares and return them to treasury for the benefit of Seafarer thus reducing the number of outstanding shares by 32,300,000 shares. At the present time the dismissal has been filed and the case closed, with all shares cancelled.
 
On June 18, 2013, Seafarer began litigation against Tulco Resources, LLC, in a lawsuit filed in the Circuit Court in and for Hillsborough County, Florida. Such suit was filed for against Tulco based upon  for breach of contract, equitable relief and injunctive relief. Tulco was the party holding the rights under a permit to a treasure site at Juno Beach, Florida. Tulco and Seafarer had entered into contracts  in March 2008, and later renewed under an amended agreement on June 11, 2010. Such permit was committed to by Tulco to be an obligation and contractual duty to which they would be responsible for payment of all costs in order for the permit to be reissued. Such obligation is contained in the agreement of March 2008 which was renewed in the June 2010 agreement between Seafarer and Tulco. Tulco made the commitment to be responsible for payments of all necessary costs for the gaining of the new permit. Tulco never performed on such obligation, and Seafarer during the period of approximately March 2008 and April 2012 had endeavored and even had to commence a lawsuit to gain such permit which was awarded in April 2012. Seafarer alleges in their complaint the expenditure of large amounts of shares and monies for financing and for delays due to Tulco’s non-performance. Seafarer seeks monetary damages and injunctive relief for the award of all rights held by Tulco to Seafarer Seafarer gained a default and final Judgment on such matter on July 23, 2014. Seafarer is now working with the State for the renewed permit to be in Seafarer’s name and rights only, with Tulco removed per the Order of the Court. On March 4, 2015, the Court awarded full rights to the Juno sight to Seafarer Exploration, erasing all rights of Tulco Resources. The company has currently filed an Admiralty Claim over such sight in the United States District Court which is pending final ruling. On October 21, 2016 a hearing on the Admiralty Claim in the United States District Court for the Southern District of Florida was held, where the Court Ordered actions to take place for ongoing admiralty claim, which will occur during the month of November 2016. The Company expects to complete such claim within a few months.
 
 
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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. 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. Discovery is ongoing on such case.
  
NOTE 12 – RELATED PARTY TRANSACTIONS
 
During the nine month period ended September 30, 2016:
 
In January of 2016, the Company entered into a convertible promissory note agreement in the amount of $5,000 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest was due on or before July 12, 2016. The note is not secured 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 January of 2016 a shareholder who is related to the Company’s CEO provided a loan in the amount of $260 to the Company. This loan pays 0% interest.
 
In February 2016, the Company’s CEO provided a loan to the Company in the amount of $4,000. This loan pays interest at a rate of 6% per annum and if the loan and accrued interest are not repaid within 90 days from February 10, 2016 then the lender is entitled to receive 500,000 shares of the Company’s restricted common stock which has not been issued. The note is not secured 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 May of 2016, the Company’s CEO provided a loan to the Company in the amount of $1,200. This loan was repaid during the nine month period ended September 30, 2016, no interest was paid.
 
In May of 2016, the Company extended the term of a previous agreement with an individual who is related to the Company’s CEO to continue serving as a member of the Company’s Board of Directors. Under the  agreement, the Director agreed to provide various services to the Company including making recommendations for both the short term and the long term business strategies to be employed by the Company, monitoring and assessing the Company's business and to advise the Company’s Board of Directors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of action, making suggestions to strengthen the Company's operations, identifying and evaluating external threats and opportunities to the Company, evaluating and making ongoing recommendations to the Board with respect for one year and may be terminated by either the Company or the Director by providing written notice to the other party. The agreement also terminates automatically upon the death, resignation or removal of the Director.  Under the terms of the agreement, the Company agreed to pay the Director 20,000,000 restricted shares of its common stock and to negotiate future compensation on a year-by-year basis. The Company also agreed to reimburse the Director for pre-approved expenses.
 
In May of 2016, the Company extended the term of a previous agreement with an individual who is related to the Company’s CEO to continue serving as a member of the Company’s Board of Directors. Under the  agreement, the Director agreed to provide various services to the Company including making recommendations for both the short term and the long term business strategies to be employed by the Company, monitoring and assessing the Company's business and to advise the Company’s Board of Directors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of action, making suggestions to strengthen the Company's operations, identifying and evaluating external threats and opportunities to the Company, evaluating and making ongoing recommendations to the Board with respect for one year and may be terminated by either the Company or the Director by providing written notice to the other party. The agreement also terminates automatically upon the death, resignation or removal of the Director.  Under the terms of the agreement, the Company agreed to pay the Director 20,000,000 restricted shares of its common stock and to negotiate future compensation on a year-by-year basis. The Company also agreed to reimburse the Director for pre-approved expenses.
 
In May of 2016, the Company entered into a convertible promissory note agreement in the amount of $5,000 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before November 10, 2016. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0005 per share.  The related party lender received 2,500,000 warrants to purchase shares of the Company’s common stock at a price of $0.002. This note remains unpaid.
 
 
23
 
 
In May of 2016, the Company entered into a convertible promissory note agreement in the amount of $5,000 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before November 10, 2016. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0005 per share.  The related party lender received 2,500,000 warrants to purchase shares of the Company’s common stock at a price of $0.002. This note remains unpaid.
 
In May of 2016, the Company entered into a convertible promissory note agreement in the amount of $5,000 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before November 20, 2016. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0005 per share.  The related party lender received 10,000,000 warrants to purchase shares of the Company’s common stock at a price of $0.002.  This note remains unpaid.
 
In June of, 2016, the Company entered into a consulting agreement with an individual who is related to the Company’s CEO under which the individual agreed to provide various consulting services including business development, photography, custom logo design and development, developing corporate identity materials such as business cards, editing, art illustrations, and working with the Company to develop its future digital storefront and Internet merchandise site. The term of the agreement is open ended and will continue until the completion of the services. The Company agreed to pay the consultant a total of 5,000,000 million shares of its restricted common stock.
 
On various dates in July of 2016 the Company repaid a total of $4,100 of the principal balance of loans owed to its CEO. No interest or financing fees were paid to the Company’s CEO in conjunction with the repayment of the loans.
 
On various dates in July of 2016 the Company repaid a total of $3,180 of the principal balance of several loans owed to a related party. No interest or financing fees were paid to the related party in conjunction with the repayment of the loans.
 
In July of 2016, the Company entered into a convertible promissory note agreement in the amount of $2,400 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before January 12, 2017. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0006 per share.  The related party lender received 4,000,000 warrants to purchase shares of the Company’s common stock at a price of $0.002.
 
In August of 2016, the Company entered into a debt settlement agreement with a related party vendor to settle a total of $32,213 of outstanding debt related to transfer agent fees and legal fees incurred by the related party vendor due to a lawsuit against the Company in which suit the related party vendor was also named as a defendant due to its position as the Company’s stock transfer agency. The Company issued 32,212,790 shares of its restricted common stock to this vendor as satisfaction for the outstanding debt. The agreement between the Company and the vendor stipulated that should the transfer agency realize less than $32,213from the sale of the stock, then the consultant is entitled to receive up to an additional 11,000,000 shares of common stock or a cash payment until the balance is paid in full.
 
In September of 2016, the Company agreed to pay a related party who is related to the Company’s CEO, 25,000,000 shares of its restricted common stock for the purchase of a magnetometer owned by the related party. The related party had previously purchased the magnetometer and agreed to rent the equipment to the Company in 2015, however the Company and the related party never agreed to a specific rental price and the Company never made any rental payments or paid any fees for use of the equipment. The agreement specifically states that the Company does not owe the related party any past fees for rental or equipment charges for use of the magnetometer.  
 
The Company has an ongoing verbal agreement with a limited liability company that is controlled by a person who is related to the Company’s CEO to pay the related party consultant $3,000 per month to provide general business consulting and assessing the Company's business and to advise 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 occasional assist as an administrative specialist to perform various administrative duties and clerical services including reviewing the Company’s agreements and books and records. The consultant provides the services under the direction and supervision of the Company’s CEO.
 
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. At September 30, 2016, the Company owed the related party limited liability company $1,195 for transfer agency services rendered and for the reimbursement of legal fees
 
At September 30, 2016 the following promissory notes and shareholder loans were outstanding to related parties:
 
A convertible note payable dated January 9, 2009 due to a person related to the Company’s CEO with a face amount of $10,000. This note bears interest at a rate of 10% per annum with interest payments to be paid monthly and is convertible at the note holder’s option into the Company’s common stock at $0.015 per share.  The convertible note payable was due on or before January 9, 2010 and is secured.  This note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated January 25, 2010 in the principal amount of $6,000 with a person who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest were due on or before January 25, 2011. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.005 per share. This note is currently in default due to non-payment of principal and interest.
 
 
24
 
 
A note payable dated February 24, 2010 in the principal amount of $7,500 with a corporation. The Company’s CEO was a director of the corporation. The loan is not secured and pays interest at a rate of 6% per annum and the principle and accrued interest were due on or before February 24, 2011. This note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated January 18, 2012 in the amount of $50,000 with two individuals who are related to the Company’s CEO. This loan pays interest at a rate of 8% per annum and the principle and accrued interest were due on or before July 18, 2012. The note is secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.004 per share. The note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated January 19, 2013 due to a person related to the Company’s CEO with a face amount of $15,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.004 per share.  The convertible note payable was due on or before July 30, 2013 and is not secured.  The note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated July 26, 2013 due to a person related to the Company’s CEO with a face amount of $10,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.01 per share.  The convertible note payable was due on or before January 26, 2014 and is not secured.  The note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated January 17, 2014 due to a person related to the Company’s CEO with a face amount of $31,500. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.006 per share.  The convertible note payable is due on or before July 17, 2015 and is not secured. The note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated May 27, 2014 due to a person related to the Company’s CEO with a face amount of $7,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.007 per share.  The convertible note payable was due on or before November 27, 2014 and is not secured. The note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated July 21, 2014 due to a person related to the Company’s CEO with a face amount of $17,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.008 per share. The convertible note payable was due on or before January 25, 2015 and is not secured. The note is currently in default due to non-payment of principal and interest.
  
A convertible note payable dated October 16, 2014 due to a person related to the Company’s CEO with a face amount of $21,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.0045 per share.  The convertible note payable was due on or before April 16, 2015 and is not secured.  The note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated July 14, 2015 due to a person related to the Company’s CEO with a face amount of $9,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.0030 per share.  The convertible note payable was due on or before January 14, 2016 and is not secured.  The note is currently in default due to non-payment of principal and interest.
 
A note payable dated October 6, 2015 in the principal amount of $10,000 due to one of the Company’s Directors. The loan is not secured and pays interest at a rate of 6% per annum and the principle and accrued interest was due on or before November 11, 2015. This note is currently in default due to non-payment of principal and interest.
 
A loan in the amount of $28,070 due to the Company’s CEO. The loan is not secured and pays interest at a 6% per annum and the principal and accrued interest and was due on or before June 14, 2016. The note is currently in default due to non-payment of principal and interest.
 
A convertible note payable dated January 12, 2016 due to a person related to the Company’s CEO with a face amount of $5,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.0020 per share.  The convertible note payable was due on or before July 12, 2016 and is not secured.  The note is currently in default due to non-payment of principal and interest.
 
A loan in the amount with the remaining principal balance of $1,200 due to the Company’s CEO. The loan is not secured and pays interest at a 6% per annum. The lender is entitled to receive 500,000 shares of the Company’s restricted common stock due to the loan not being repaid within 90 days from February 10, 2016.
 
 
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A convertible note payable dated May 10, 2016 due to a person related to the Company’s CEO with a face amount of $5,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.0005 per share.  The convertible note payable is due on or before November 10, 2016 and is not secured.  
 
A convertible note payable dated May 10, 2016 due to a person related to the Company’s CEO with a face amount of $5,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.0005 per share.  The convertible note payable is due on or before November 10, 2016 and is not secured.  
 
A convertible note payable dated May 20, 2016 due to a person related to the Company’s CEO with a face amount of $5,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.0005 per share.  The convertible note payable is due on or before November 20, 2016 and is not secured.  
 
A convertible note payable dated July 12, 2016 due to a person related to the Company’s CEO with a face amount of $2,400. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.0006 per share.  The convertible note payable is due on or before January 12, 2017 and is not secured.  
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of 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-Q 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 for 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. This Item should be read in conjunction with the 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 site 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 and 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
 
It has been estimated, but not verified, by the United Nations Educational, Scientific and Cultural Organization (“UNESCO”) that there are over three million undiscovered shipwrecks around the world and a few of these shipwrecks were lost with verifiable cargoes that contained valuable materials, including artifacts and treasure. However, many of these shipwrecks may have very little archaeological or historical value.
 
The Company’s principal business plan is to develop the infrastructure to engage in the archaeologically-sensitive exploration, recovery and conservation of historic shipwrecks. Once artifacts have been properly conserved, they will be made available for scientific research and allowed to be displayed for the public. The Company believes it will eventually be conducting archaeological research around the world and potentially supporting organizations like UNESCO and The National Oceanic and Atmospheric Administration (“NOAA”) in the documentation of historic shipwrecks. The business plan also includes in-depth archival research and translation of historical documents from various international archives and repositories. These translations of archival research will be made available to government states, university researchers, NOAA, UNESCO, and other responsible academic parties upon reasonable request. In addition to the research, there is ongoing education of personnel involved in operations with the Company. College level courses in archaeology are being periodically taught by a Ph.D. in a program to help educate the personnel in context, work methodology, documentation, and conservation. It is the Company’s intent to have the highest educated personnel possible.
 
This type of business venture is extremely speculative in nature and carries a tremendous amount of risk. An investment in our securities is highly speculative and extremely 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.
 
The exploration and recovery of historic shipwrecks involves a multi-year, multi stage process. It may take many years and/or be prohibitively expensive to locate, if any are ever located at all, and recover valuable artifacts from historic shipwrecks. Locating and recovering valuable artifacts is very challenging and the probability that the Company will locate and recover valuable artifacts or treasure is remote. If the Company is able to recover valuable artifacts, the artifacts will be very expensive to conserve and store. If the Company is not able to locate and recover artifacts or treasure that are of significant value, then there is high probability that the Company will face adverse consequences.
 
Underwater recovery operations are inherently difficult and dangerous and may be delayed or suspended by weather, sea conditions or other natural hazards. In addition, even though sea conditions in a particular search location may be somewhat predictable, the possibility exists that unexpected conditions may occur, and already have occurred, that adversely affect the Company’s operations. It is also possible that natural hazards may prevent or significantly delay exploration and recovery operations.
 
In addition to natural hazards there are constant repair and maintenance issues with historic shipwreck exploration and recovery vessels, which tend to be older vessels that were originally used in other capacities that have been converted for use in historic shipwreck exploration and recovery operations. The repairs, maintenance and upkeep of this type of vessel, and in particular the Company’s main vessel, is time consuming and can be very expensive and there may be significant periods of vessel down time that results from needed repairs being made or a lack of current financing to make repairs to the vessel.
 
 
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Furthermore, 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 be able to enter into agreements with government agencies in order to explore and salvage historic shipwrecks.
 
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.
 
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, etc. The length of time it takes to obtain permits or enter into agreements may cause the Company to expend significant resources while gearing up to do work with little or no visibility as to the timing of receiving a permit.
 
It is also 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. Even if the Company is able to obtain permits for shipwreck projects there is a possibility that the shipwrecks may have already been recovered or may not be found, or may not have had anything valuable on board at the time that they sank.
 
It is the Company’s intent to find shipwrecks where available research suggests there were not any previous recovery efforts or past recovery efforts failed or were not completed. In the event that valuable artifacts are located and recovered, it is possible that the cost of recovery will exceed the value of the artifacts recovered. It is also possible that other entities, including both private parties and governmental entities, will assert conflicting claims and challenge the Company’s rights to the recovered artifacts which could lead to lengthy and expensive legal issues.
 
Moreover, there is the possibility that should the Company be successful in locating and recovering artifacts that have significant archeological, historical and/or monetary value that a country whose ship was recovered may attempt to assert ownership of the artifacts by pursuing litigation. In the event that the Company is able to make a valid claim to artifacts or other items at a shipwreck site there is a risk of theft of such items at sea, both before or after the recovery or while the artifacts are in transit to a designated and safe destination, as well as when stored in a secured location. Such thefts may not be adequately covered by insurance. Based on a number of these and other potential issues the Company could spend a great deal of time and invest a large sum in a specific shipwreck project and receive very little or no salvage claim or revenue for its work.
 
There are a number significant issues and challenges that make the exploration and recovery of historic shipwrecks a speculative and highly risky business venture including, but not limited to, government regulation, the Company’s inability to secure permits and contracts or lengthy delays in obtaining permits or entering into agreements, periodic lack of financing, lack of revenue and cash flow and continued losses from operations. There is also a significant expense involved in research and ongoing educational programs. Research expenses involve paying scientists for translations, dues and fees for various historical entities such as archives, travel and accommodations, and research materials. 
 
There is a possibility that the Company will be forced to cease its operations if it is not successful in eventually locating valuable artifacts or treasure. If the Company were to cease its operations, 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 extremely speculative and of exceptionally high risk.
 
There is currently a limited trading market for our securities. We cannot assure when and if an active-trading market in our shares will be established, or whether any such market will be sustained or sufficiently liquid to enable holders of shares of our common stock to liquidate their investment in our company. The sale of unregistered and restricted securities by current shareholders, including shares issued to consultants and shares issued to settle convertible promissory notes and to settle other loans and debt, may cause a significant decline in the market price of the Company’s securities.
 
Accordingly, an investment in our securities is highly speculative and extremely risky and should only be considered by those investors who do not require liquidity and who can afford to suffer a complete and total loss of their investment. An investor should consider consulting with professional financial advisers before making an investment in our securities.
 
Plan of Operation
 
During the periods ended September 30, 2016 and 2015, 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, and recovering historic shipwrecks. The Company has performed some research, exploration and recovery activities.
 
Spent considerable time and money researching potential shipwrecks, including past physical visits to obtain information from foreign archives.
 
Although the Company has not generated revenues to date our business goals continue to evolve. Relationships are being developed with foreign dignitaries and scientists around the world for the purpose of identifying, researching, locating and obtaining the exploration rights to historic shipwrecks.
 
 
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The Company is discussing and reviewing revenue producing opportunities at this time.
 
The Company has evaluated various opportunities to enter into agreements or contracts to conduct exploration and recovery operations at known historic shipwreck locations or potential locations. The Company has previously spent some of its efforts exploring what it believes may be a historic shipwreck site located off of Juno Beach, Florida. As previously noted on its form 8-K filed on May 9, 2011, the Company and Tulco Resources received a 1A-31 Recovery Permit from the Florida Division of Historical Resources. The Recovery Permit was previously active through April 25, 2014. It is necessary for the Company to obtain a renewal to the Recovery Permit for the Juno Beach shipwreck site in order to continue to perform work at the site after April 25, 2014. Management is pursuing the renewal of the permit, however the renewal process is anticipated to be a very slow, complex and complicated process. The potential renewal and name change will eventually involve a State Judge, Federal Judge, the U.S. Marshall’s Service and the Florida Division of Historical Resources. Due to these multiple additional steps, the renewal of the permit has not been issued as of the filing of this report and Management is not able to predict the timing or success of any such renewal. The Company met with a Federal Judge in of October 2016, and is moving forward as instructed.
    
The Juno Beach Shipwreck site is a speculative project as far as the potential for the Company to ever locate valuable artifacts or treasure. Although the Company has recovered various artifacts that it believes are interesting, it has not located artifacts and/or treasure of any significant value from the Juno Beach Shipwreck site. There is also the possibility that there are no artifacts of significant value located at the Juno Beach shipwreck site. Even if there are valuable artifacts and/or treasure located at the site, recovering them may be extremely difficult or impossible due to a variety of challenges that include, but are not limited to; inclement weather, hazardous ocean conditions, large amounts of sand that cover large areas of the site, ongoing maintenance and repair issues with the Company’s main salvage vessel, permitting issues and/or a lack of financing, etc. Additionally, Management believes the previous partner, Tulco Resources, deleted a significant portion of the 2003 magnetometer survey which may contain portions of the wreck itself. The Company is planning the process to perform additional research and a cesium vapor magnetometer survey of the deleted area. This survey has not been completed as of the filings of this report.
 
Moreover, the Company does not currently have sufficient data to positively identify the potential Juno Beach shipwreck, or its country of origin, and it is therefore not possible to determine whether or not the ship was originally carrying cargo of any significant value. Only remnants and scattered pieces of a sunken ship have been located to date; no main shipwreck body has been located, although there is a large deleted area which has not been searched. It is also possible, although there is no proof suggesting this, that a ship began to break up on the site but the body of the ship actually sank in another area that is outside of the designated Juno Beach site area and all that was left on the Juno Beach site were scattered remnants of the original ship that have little or no archeological or actual value. There is a possibility that there are no artifacts of significant value located on the Juno Beach shipwreck site.  
  
On July 28, 2014, Seafarer’s Quest, LLC received a 1A-31 Exploration Permit with a Dig and Identify modification (the “Permit”) from the Florida Division of Historical Resources for an area identified as area 2 off of Melbourne Beach, Florida. The Permit is active for three years from the date of issuance. In the past in addition to the Company’s main salvage vessel, the Company has utilized additional vessels in order to perform operations. On occasion, inclement weather and difficult sea conditions have hampered the Company’s ability to perform exploration operations at this site. An archeologist with the technical skills, knowledge, and experience from around the world was hired to help insure the integrity of the work. On July 6, 2016 Seafarer’s Quest, LLC received a 1A-31 Exploration Permit with a Dig and Identify modification (the “Second Melbourne Permit”) from the Florida Division of Historical Resources for an area identified as area 1 located off of Melbourne Beach, Florida. The Second Melbourne Permit is active for three years from the date of issuance.
 
The Company regularly reviews opportunities to perform exploration and recovery operations at purported historic shipwreck sites; however, the Company does not have specific plans to perform exploration and recovery operations at other shipwreck sites at the present time. 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.
 
If the Company is not able to perform any exploration or recovery operations, then it may have to suspend or cease its operations. If the Company ceases its previously stated efforts, there are currently no plans to pursue other business opportunities.     
 
Limited Operating History
 
The Company has not currently generated any revenue from operations and does not expect to report any significant revenue from operations for the foreseeable future.
 
At September 30, 2016, the Company had a working capital deficit of $969,286. 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 operation 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.
 
 
 
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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, 2016.
 
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.
 
The Company’s lack of operating cash flow and reliance on the sale of its commons 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 likely that all capital invested in and/or borrowed by the Company will be lost.  
 
Summary of Nine Months Ended September 30, 2016 Results of Operations
 
The Company’s net loss for the nine month period ended September 30, 2016 was $1,192,443 as compared to a net loss of $736,778 during the nine month period ended September 30, 2015. The increase in net losses of approximately 62% in 2016 was primarily due to the impact of the fair value measurement adjustments on several convertible promissory notes that resulted in an interest expense of $618,092 in 2016 as compared to interest income of $72,559 in 2015. The swing from interest income in 2015 to an interest expense in 2016 was due to the fair value measurement of several convertible notes. During the nine month period ended September 30, 2016, the Company incurred consulting related expenses of $338,144 versus $479,834 during the nine month period ended September 30, 2015, a decrease of 29.5%. The decrease in consulting and contractor expenses was largely due to a lull in operations during the first half of 2016 and significantly less stock based compensation being paid for services. During the nine month period ended September 30, 2016, the Company incurred professional fees of $78,191 as compared to $62,754 during the nine month period ended September 30, 2015, an increase of approximately 25%. During the nine month period ended September 30, 2016, the Company’s general and administrative expenses were $42,101 as compared to $109,093 during the nine month period ended September 30, 2015, an decrease of approximately 61.4%.  During the nine month period ended September 30, 2016, the Company incurred vessel related expenses of $18,901 versus $41,223 during the nine month period ended September 30, 2015, a decrease of approximately 54%. The 54% decrease in vessel expenses was due to fewer overall significant maintenance issues with the Company’s primary salvage vessel in 2016 as compared to some prior years. The Company has tried to keep repair costs lower for its main salvage vessel by being more proactive with vessel maintenance, however due to the advancing age of the vessel the Company anticipates that it will continue to require repairs and in some cases major unforeseen repairs. The Company has also utilized a few newer and smaller vessels in its operations and these vessels do not require as much maintenance and upkeep which helps to keep costs down. Travel and entertainment expenses decreased approximately 10.1%, from $50,044 for the nine month period ended September 30, 2015 to $44,949 for the nine month period ended September 30, 2016. The decrease in travel and entertainment expenses was generally due to the Company not having to pay for hotel lodging expenses on a regular basis for several of its independent contract divers and operations personnel as a result of renting an operations house where personnel are able to stay while performing services for the Company. Rent expense was $26,577 for the nine month period ended September 30, 2016 versus $40,901for the same period in 2015, a decrease of nearly 35%.
   
Summary of Three Months Ended September 30, 2016 Results of Operations
 
The Company’s net loss for the three month period ended September 30, 2016 was $685,265 as compared to a net loss of $326,116 during the three month period ended September 30, 2015. The 110% increase in the net loss for the three month period ended September 30, 2016 was primarily attributable to 207% increase in interest expense and a 41.8% increase in losses from operations. Interest expense for the three month period ended September 30, 2016 was $414,633 versus $135,227 for the three month period ended September 30, 2015.  The approximate 207% increase in interest expense was due to the fair value measurement adjustments on several convertible promissory notes.  During the three month period ended September 30, 2016, the Company incurred consulting and independent contractor related expenses of $166,803 versus $125,787 during the three month period ended September 30, 2015, an increase of 32.6%. The 32.6% decrease in consulting and independent contractor related expenses was due to a ramping up of operations during the period and increased stock based compensations paid to several consultants and independent contractors for various services including business advisory, legal, operations, administrative, media consulting, digital storefront development, strategic planning, etc. The Company issued shares to several consultants as a retention bonus and inducement for the consultants to continue to provide services under terms that are favorable to the Company. During the three month period ended September 30, 2016, the Company incurred professional fees of $30,521 as compared to $12,375 during the three month period ended September 30, 2015, an increase of 146.6%. The increase in professional fees paid during 2016 was due stock based compensation paid to one of the Company’s legal advisors. During the three month period ended September 30, 2016, the Company incurred travel and entertainment expenses of $27,662 versus $13,711 during the three month period ended September 30, 2015, increase of approximately102%. During the three month period ended September 30, 2016, the Company’s general and administrative expenses were $12,675 as compared to $3,290 during the three month period ended September 30, 2015, an increase of 285%. During the three month period ended September 30, 2016, the Company incurred vessel related expenses of $13,958 versus $14,431 during the three month period ended September 30, 2015, a decrease of approximately 3.2%. The decrease in vessel expenses was due to fewer overall maintenance issues with the Company’s primary salvage vessel, however as the vessel is an older ship it continues to require constant maintenance and upkeep that may be very expensive.
 
 
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Lack of Revenues and Cash Flow/Significant Losses from Operations
 
It is extremely challenging to build a publicly traded historic shipwreck exploration and recovery company. The exploration and recovery of historic shipwrecks requires a multi-year, multi stage process and it may be many years before any revenue is generated from exploration and recovery activities, if ever. 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 any steady 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 likely be lost.
 
The Company has experienced a net loss in every fiscal year since the reverse merger in 2008. The Company’s losses from operations were $574,351 for the nine months ended September 30, 2016 and $809,337 for the nine months ended September 30, 2015. The Company believes that it will continue to generate losses from its operation for the foreseeable future and the Company may not be able to generate a profit in the long-term, or ever.
 
Liquidity and Capital Resources
 
At September 30, 2016, the Company had cash in the bank of $6,521.  During the nine month period ended September 30, 2016 the Company incurred net losses of $1,192,443. At September 30, 2016, the Company had $52,042 in current assets and $1,021,328 in current liabilities, leaving the Company with a working capital deficit of $969,286.
 
Lack of Liquidity
 
A major financial challenge and significant risk facing the Company is a lack of liquidity. The company continued to operate with significant debt and a working capital deficit during the three and nine month periods ended September 30, 2016. 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 all of 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 recover historic shipwrecks are extremely prohibitive, especially given that the Company does not currently generate any revenues and does not expect to generate any revenues in the near future. There are ongoing expenses associated with operations that are incurred whether the Company is conducting shipwreck exploration and recovery operations or not. Vessel maintenance, particularly for an older vessel such as the Company’s main salvage vessel, upkeep expenses and docking fees are continuous and unavoidable regardless of the Company’s operational status. These repairs and maintenance are expensive and a drain on the Company’s cash.
 
In addition to the operations 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, 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 commons 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 the Company must rely on outside equity and debt funding. The combination of the ongoing operational, even during times when there is little or no exploration or salvage activities taking place, and corporate expenses as well as the need for outside financing creates a very risky situation for the Company and its shareholders. 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.
 
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 revenue is generated from exploration and recovery activities, if ever. 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.
 
 
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Convertible Notes Payable and Notes Payable, in Default
 
At September 30, 2016, the Company had convertible notes payable and notes payable with a face value of $748,102 of which $670,952 were 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 non-convertible notes to be convertible 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 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, Summary of Significant Accounting Policies, contained in the notes to the Company’s financial statements for the periods ended September 30, 2016 and 2015.)  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 either the Company or its auditors have made any such changes in accounting estimates.
 
Off-Balance Sheet Arrangements
 
None.
  
Item 3. Quantitative and Qualitative Disclosures About Market Risk
 
Not required for smaller reporting companies.
    
Item 4T. 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/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/principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
 
 
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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) and 15d-15(e) promulgated under the Exchange Act, as of September 30, 2016.  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.
 
The 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 the managements view that to have 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.
 
 
*
We have not achieved an optimal segregation of duties for executive officers of the Company.
 
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.
 
Remediation Efforts to Address Deficiencies in Disclosure Controls and Procedures
 
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, 2016 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.
 
(b) Change in Internal Control Over Financial Reporting
 
The Company has not made any change in our internal control over financial reporting during the period ended September 30, 2016.
 
 
 
 
33
 
 
     Part II. Other Information
 
Item 1. Legal Proceedings
 
On March 23, 2016 the Board of Directors signed a universal settlement agreement with the Plaintiffs in the litigation matters of Micah Eldred, et al., v. Seafarer Exploration, et al., Hillsborough County, Florida, Case No. 09-CA-30763, and Micah Eldred v. Seafarer Exploration Corp., et al., Hillsborough County, Florida, Case No. 14-CA-5360, and in the matter of Seafarer Exploration, et al. v. Micah Eldred, et al., Hillsborough County, Florida, Court of Appeals Case No. 14-2884, specifically: Micah Eldred, Michael Daniels, Diane J. Harrison, James Eldred, Mary R. Eldred, Michole Eldred, Nathan Eldred, Toni A. Eldred, Toni A. Eldred FBO Jordan Gratton, Toni A. Eldred FBO Justin Gratton, Vanessa A Verbosh, Oksana Savchenko, Matthew J. Presy, Olessia Kritskaia, Ekaterina Messinger, Abby Lord, Ioulia Hess, Anna Krokhina, George Linder, Christine Zitman, Carl Dilley, Heather Dilley, Robert Lizzano, Elizabeth Lizzano, Karen Lizzano, Susan Miller, Jillian Mally, Michael Mona, Alan Wolper, Sarah Wolper, Alan Wolper FBO Michael Wolper, Spartan Securities Group, Ltd., and Am Asia Consulting entered into the settlement agreement with Seafarer. An earlier named party, CADEF, The Childhood Autism Foundation, Inc., had previously entered into a settlement agreement and is no longer a party in the Litigation.
 
The settlement called for both cases to be dismissed, with prejudice, and the Plaintiffs in case number 09-CA-30763 agreed to surrender and cancel all of their 32,300,000 shares of restricted common stock which were returned to the treasury of the Corporation. All such shares have been returned for cancellation. On March 23, 2016 Seafarer CEO signed the resolution to cancel the 32,300,000 shares and instructed the transfer agent ClearTrust LLC to cancel the shares and return them to treasury for the benefit of Seafarer thus reducing the number of outstanding shares by 32,300,000 shares. At the present time the dismissal has been filed and the case closed, with all shares cancelled.
 
On June 18, 2013, Seafarer began litigation against Tulco Resources, LLC, in a lawsuit filed in the Circuit Court in and for Hillsborough County, Florida. Such suit was filed for against Tulco based upon  for breach of contract, equitable relief and injunctive relief. Tulco was the party holding the rights under a permit to a treasure site at Juno Beach, Florida. Tulco and Seafarer had entered into contracts  in March 2008, and later renewed under an amended agreement on June 11, 2010. Such permit was committed to by Tulco to be an obligation and contractual duty to which they would be responsible for payment of all costs in order for the permit to be reissued. Such obligation is contained in the agreement of March 2008 which was renewed in the June 2010 agreement between Seafarer and Tulco. Tulco made the commitment to be responsible for payments of all necessary costs for the gaining of the new permit. Tulco never performed on such obligation, and Seafarer during the period of approximately March 2008 and April 2012 had endeavored and even had to commence a lawsuit to gain such permit which was awarded in April 2012. Seafarer alleges in their complaint the expenditure of large amounts of shares and monies for financing and for delays due to Tulco’s non-performance. Seafarer seeks monetary damages and injunctive relief for the award of all rights held by Tulco to Seafarer Seafarer gained a default and final Judgment on such matter on July 23, 2014. Seafarer is now working with the State for the renewed permit to be in Seafarer’s name and rights only, with Tulco removed per the Order of the Court. On March 4, 2015, the Court awarded full rights to the Juno sight to Seafarer Exploration, erasing all rights of Tulco Resources. The company has currently filed an Admiralty Claim over such sight in the United States District Court which is pending final ruling. On October 21, 2016 a hearing on the Admiralty Claim in the United States District Court for the Southern District of Florida was held, where the Court Ordered actions to take place for ongoing admiralty claim, which will occur during the month of November 2016. The Company expects to complete such claim within a few months.
 
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. 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. Discovery is ongoing on such case.
 
Item 1A.   Risk Factors
 
Not required for smaller reporting companies.
 
 
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
During the three month period ended September 30, 2016, the Company issued 58,732,000 restricted common shares of its common stock to various consultants for services including business advisory, legal, administrative, operations, diving and exploration, media and entertainment, website development and editing, consulting, as retention bonuses and bonuses to several independent contractors, other services. From time to time in the regular course of its business the Company issues shares of its restricted common stock to consultants and other vendors for a variety of services rendered including, but not limited to, legal, financial, accounting, administrative, archeological, executive, corporate communications, operations, diving, etc. The Company issued 13,100,000 shares to two shareholders in conjunction with repricing agreements. The anti-dilution protection extends through the date upon which all registration restrictions expires, typically one year from the date the shares were issued, and is based upon the trading market value at the end of that period. The Company issued 2,500,000 shares of its restricted common stock as financing fees to a lender in exchange for the lender extending the term of a loan. 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, 2016, the Company entered into subscription agreements to sell 142,834,199 shares of its restricted common stock to nine investors and receive proceeds of $129,200. The proceeds were used for general corporate purposes, working capital and the repayment of some debt.
 
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.
 
Issuance of Securities Due to Conversion of Notes and Debt
 
During the three month period ended September 30, 2016 the holder of a convertible promissory notes with a remaining principal balance of $87,348 elected to convert the principal balance of their notes plus accrued interest into 165,022,855 shares of the Company’s common stock.. A holder of a convertible promissory note elected to convert a portion of the principal balance of $13,348 of the note plus accrued interest and late fees of $6,652 into 12,750,000 shares of the Company’s common stock. A holder of a convertible promissory note elected to convert the remaining principal balance of its note totaling $15,000 into 30,000,000 shares of the Company’s common stock. The Company settled $10,000 of the principal balance of a note payable by issuing 20,000,000 shares of its restricted common stock to the note holder. A related party vendor agreed to convert debt owed to the related party vendor by the Company for transfer agent services and legal fees totaling $32,213, into 32,212,790 shares of the Company’s restricted common stock. A related party agreed to accept 25,000,000 shares of the Company’s restricted common stock in exchange for a magnetometer that the related party had previously agreed to purchase in order to rent to the Company for use in its operations. The Company believes that the offer and sale of these securities were exempt from the registration requirements of the Securities Act pursuant to Sections 3(a)(9) under the Securities Act of 1933, as amended
 
Item 3. Defaults Upon Senior Securities
 
The Company has several promissory notes that are currently in default to non-payment of principle and interest. See Part I, Item 2, notes payable and convertible notes payable, in default, for discussion of defaults on certain debt obligations of the Company
 
Item 4. Submission of Matters to a Vote of Security Holders
 
None.
 
Item 5. Other Information
 
None
 
 
 
35
 
 
Item 6. Exhibits
 
Set forth below is a list of the exhibits to this quarterly report on Form 10-Q.
 
  Exhibit Number
 Description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
**101.INS
 
XBRL Instance Document
 
 
 
**101.SCH
 
XBRL Taxonomy Extension Schema
 
 
 
**101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase
 
 
 
**101.DEF
 
XBRL Taxonomy Extension Definition Linkbase
 
 
 
**101.LAB
 
XBRL Taxonomy Extension Label Linkbase
 
 
 
**101.PRE
 
XBRL Extension Presentation Linkbase
 
 
 
 
* Filed herewith.
** To be furnished by amendment per Temporary Hardship Exemption under Regulation S-T.
 
       
 
 
 
 
 
   
 
  
 
 
 
 
 
 
 
 
 
 
36
 
 
SIGNATURE
 
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, 2016
By:
/s/ Kyle Kennedy
 
 
Kyle Kennedy
President, Chief Executive Officer, and Chairman of the Board
(Principal Executive Officer and Principal Accounting Officer)
 
 
Date: November 14, 2016
By:
/s/ Charles Branscum
 
 
Charles Branscum, Director
 
 
Date: November 14, 2016
By:
/s/ Robert L. Kennedy
 
 
Robert L. Kennedy, Director
 
 
 
 
 
 

 
 
 
 
 
 
 
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