Warrants and Options
During
the three month period ended March 31, 2017, the Company issued the
following warrants in connection with the issuances of indebtedness
(see Note 8):
Term
|
Amount
|
Exercise Price
|
01/31/17 to 01/31/18
|
40,000,000
|
$0.0040
|
02/14/17 to 08/14/18
|
33,333,333
|
$0.0050
|
09/10/17 to 09/10/19
|
15,000,000
|
$0.0250
|
09/10/17 to 09/10/19
|
10,000,000
|
$0.0250
|
Total warrants issued
|
98,333,333
|
|
As of
March 31, 2017, the Company had a total of 220,515,151 warrants
outstanding to purchase common stock with exercise prices ranging
from $0.001 to $0.025 per share.
In
January of 2017, the Company entered into a subscription agreement
to sell 40,000,000 shares of restricted common stock at a price
$0.0005 share to an individual in exchange for proceeds of $20,000.
The Company also agreed that the purchaser will be entitled to
receive warrants to purchase 40,000,000 shares of the
Company’s restricted common stock. The warrants are
exercisable at a price of 0.004 per share for a period of one year
from January 31, 2017.
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 Three Months Ended March
31, 2017
|
For the Three Months Ended March
31, 2016
|
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
%
|
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
March 31, 2017 and December 31, 2016, the Company’s only
significant deferred income tax asset was an estimated net tax
operating loss of $12,600,000 and
$12,300,000
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 March 31, 2017 and December 31, 2016. The
Company is preparing and reviewing information
for tax returns for past years. Due to the Company’s lack of
revenue since inception, management does not anticipate 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
The
Company leases 823 square feet of office space located at 14497
North Dale Mabry Highway, Suite 209-N, Tampa, Florida 33618. The
lease expires on June 30, 2017, and calls for base monthly rent of
$1,251.
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 Company pays $1,300
per month to lease the operations house. The Company is leasing the
operations house on a month-to-month basis and anticipates
continuing to lease the house for the foreseeable
future.
NOTE 8 - CONVERTIBLE NOTES PAYABLE AND NOTES
PAYABLE
Upon
inception, the Company evaluates each financial instrument to
determine whether it meets the definition of “conventional
convertible” debt under ASC 470.
Convertible Notes Payable
The
following table reflects the convertible notes payable at March 31,
2017:
Issue Date:
|
Maturity Date
|
2017
|
Interest Rate
|
Conversion Rate
|
Convertible notes payable:
|
|
|
|
|
July 19, 2016
|
July 19, 2017
|
4,000
|
6.00%
|
0.0015
|
August 31, 2016
|
August 31, 2017
|
25,750
|
6.00%
|
0.0010
|
March 10, 2016
|
September 10, 2017
|
15,000
|
6.00%
|
0.0010
|
March 10, 2016
|
September 10, 2017
|
10,000
|
6.00%
|
0.0010
|
March 14, 2016
|
September 14, 2017
|
15,000
|
6.00%
|
0.0015
|
Unamortized
discounts
|
|
(48,352)
|
|
|
Balance
|
|
21,398
|
|
|
|
|
|
|
|
Convertible notes payable - related party:
|
|
|
|
|
February 24, 2017
|
August 24, 2017
|
25,000
|
6.00%
|
0.0075
|
Unamortized
discounts
|
|
(18,750)
|
|
|
Balance
|
|
6,250
|
|
|
|
|
|
|
|
Convertible notes payable, in default:
|
|
|
|
|
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 12, 2011
|
40,000
|
6.00%
|
0.0050
|
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
|
October 04, 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%
|
0.0030
|
September 18, 2015
|
March 18, 2016
|
25,000
|
6.00%
|
0.0020
|
April 04, 2016
|
October 4, 2016
|
10,000
|
6.00%
|
0.0010
|
August 24, 2016
|
February 24, 2017
|
20,000
|
6.00%
|
0.0010
|
Balance
|
|
441,300
|
|
|
|
|
|
|
|
Convertible notes payable - related parties, in
default:
|
|
|
|
|
January 09, 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
|
January 19, 2013
|
July 30, 2013
|
15,000
|
6.00%
|
0.0040
|
July 26, 2013
|
January 26, 2014
|
10,000
|
6.00%
|
0.0100
|
January 01, 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%
|
0.0020
|
May 10, 2016
|
November 10, 2016
|
5,000
|
6.00%
|
0.0005
|
May 10, 2016
|
November 10, 2016
|
5,000
|
6.00%
|
0.0005
|
May 20, 2016
|
November 20, 2016
|
5,000
|
6.00%
|
0.0005
|
July 12, 2016
|
January 12, 2017
|
5,000
|
6.00%
|
0.0006
|
January 26, 2017
|
March 12, 2017
|
5,000
|
6.00%
|
|
Balance
|
|
206,500
|
|
|
|
|
|
|
|
Balance, convertible notes
payable
|
|
675,448
|
|
|
Notes Payable
The
following table reflects the notes payable at March 31,
2017:
Issue Date:
|
Maturity Date
|
2017
|
Interest Rate
|
Notes payable, in default:
|
|
|
|
April 27, 2011
|
April 27, 2012
|
5,000
|
6.00%
|
June 23, 2011
|
August 23, 2011
|
25,000
|
6.00%
|
Balance
|
|
30,000
|
|
|
|
|
|
Notes payable - related parties, in default:
|
|
|
|
February 24, 2010
|
February 24, 2011
|
7,500
|
6.00%
|
October 6, 2015
|
November 15, 2015
|
10,000
|
6.00%
|
Balance
|
|
17,500
|
|
|
|
|
|
Balance, notes payable
|
|
47,500
|
|
New Convertible Notes Payable and Notes Payable
During
the three month period ended March 31, 2017 the Company entered
into the following Convertible Notes Payable and Notes Payable
Agreements:
In
January of 2017, 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 principal and accrued interest was due
on or before March 12, 2017. The Company agreed to pay the related
party lender a loan origination fee of 1,000,000 shares of its
restricted common stock. 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. At March 31, 2017 the
loan was in default due to non-payment of principal and
interest.
In
February of 2017, the Company entered into a convertible promissory
note agreement in the amount of $25,000 with an individual who is
both related to the Company’s CEO and a member of the
Company’s Board of Directors. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest are due
on or before August 14, 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 $0.00075 per share. The
related party lender received 33,333,333 warrants to purchase
shares of the Company’s common stock at a price of
$0.005.
In
March of 2017, the Company entered into a convertible promissory
note agreement in the amount of $15,000 with a corporation. This
loan pays interest at a rate of 6% per annum and the principal and
accrued interest are due on or before September 10, 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 $0.001 per
share. The lender received 15,000,000 warrants to purchase shares
of the Company’s common stock at a price of
$0.025.
In
March of 2017, the Company entered into a convertible promissory
note agreement in the amount of $10,000 with a corporation. This
loan pays interest at a rate of 6% per annum and the principal and
accrued interest are due on or before September 10, 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 $0.001 per
share. The lender received 10,000,000 warrants to purchase shares
of the Company’s common stock at a price of
$0.025.
In
March of 2017, the Company entered into a convertible promissory
note agreement in the amount of $15,000 with a corporation. This
loan pays interest at a rate of 6% per annum and the principal and
accrued interest are due on or before September 14, 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 $0.0015 per
share.
Note Conversion
A
lender who had a convertible promissory note outstanding with a
remaining principal balance of $24,402 elected to convert the
principal balance of the note plus accrued interest and late fees
of $2,242 into 36,205,587 shares of the Company’s common
stock. The remaining principal balance of this note was $0 at March
31, 2017.
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
March 31, 2017 the Company had two loans outstanding to its CEO
totaling $17,483, consisting of a loan in the amount of $15,983
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.
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.
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 2017, the Company entered into a subscription agreement
to sell 17,000,000 shares of restricted common stock to two
individuals in exchange for proceeds of $75,000. The Company also
agreed that the purchaser will be entitled to receive $500,000 of
treasure of their choice after both the Company has recovered a
minimum of $1,200,000 of artifacts/treasure and the State of
Florida has received its full share of treasure per any permits or
agreements. The purchaser will have the right to convert up to a
maximum of $500,000 worth of treasure that they have received into
shares of the Company’s restricted common stock at a discount
of 10% of the average trading price of the Company’s common
stock of the previous five days closing price provided that the
Company’s common stock is trading at or above $0.04 by
providing a written notice to the Company. The conversion option
will expire eighteen months after the Company first locates a
minimum of $1,200,000 worth of treasure. The value of the treasure
will be determined by a mutually agreed upon third party who is a
recognized expert in the valuation of historic
artifacts.
In
January of 2017, 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 principal and accrued interest was due
on or before March 12, 2017. The Company agreed to pay the related
party lender a loan origination fee of 1,000,000 shares of its
restricted common stock. 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. At March
31, 2017 the loan was in default due to non-payment of principal
and interest.
In
January of 2017, the Company entered into a subscription agreement
to sell 40,000,000 shares of restricted common stock at a price
$0.0005 share to an individual in exchange for proceeds of $20,000.
The Company also agreed that the purchaser will be entitled to
receive warrants to purchase 40,000,000 shares of the
Company’s restricted common stock. The warrants are
exercisable at a price of 0.004 per share for a period of one year
from January 31, 2017.
In
January of 2017, the Company amended agreement with an individual
who had previously joined the Company’s advisory council in
2016. Under the amended advisory council agreement the Company
agreed to pay the advisor an additional 2,000,000 shares of
restricted common stock for efforts above and beyond the services
agreed to in the original advisory council agreement, in particular
advice and expertise pertaining to a certain technology that the
Company desired to utilize in its exploration operations. The
2,000,000 were issued to the advisor during the three month period
ended March 31, 2017.
In
February of 2017, the Company entered into a convertible promissory
note agreement in the amount of $25,000 with an individual who is
both related to the Company’s CEO and a member of the
Company’s Board of Directors. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest are due
on or before August 14, 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 $0.00075 per
share. The related party lender received 33,333,333
warrants to purchase shares of the Company’s common stock at
a price of $0.005.
In
February of 2017, the Company entered into an agreement with a
corporation under which the corporation agreed to provide
consulting services utilizing a technology to assist the Company
with shipwreck site and artifact location and identification. The
consultant agrees to utilize the technology system at a designated
shipwreck site to ascertain and/or verify the presence of valuable
artifacts in a specific area. The Company agreed to pay the
consultant 5% royalty with a cap of $1,500,000 for anything of
value located at the site. The Company also agreed to pay the
consultant a 20% royalty from the recovery of materials located and
verified by the technology in the areas surrounding the designated
site. The Company also paid the consultant of $30,000 for the
utilization of the technology to provide the Company with specific
data under a trial survey as to the approximate location of various
items of value.
In
February of 2017, 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 preapproved expenses.
In
February of 2017, the Company extended the term of a previous
agreement with a second 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
preapproved expenses.
In
February of 2017, 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 5,000,000 shares each to two of the advisors,
4,000,000 shares each to four of the advisors and 3,000,000 shares
to one of the advisors, an aggregate total of 22,000,000 restricted
shares. According to the agreements each of the advisors’
shares vest at a rate of 1/12th 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 preapproved expenses.
In
March of 2017, the Company entered into a Financing and Rights
agreement with a limited liability company. Under the terms of the
agreement the limited liability company agreed to provide financing
for the Company for the exploration, recovery and all other related
requirements necessary for the related permitted offshore
underwater search and recovery for a site located off of Juno
Beach, Florida and several additional sites that have been
identified by a third party to Seafarer as being located off of the
East Coast of Florida in areas that would be subject to Federal
Admiralty claims should opportunities arise for the exploration and
recovery of historic shipwrecks at these sites. The Company has
agreed to enter into a separate agreement with the third party for
the specific location of the potential additional shipwreck sites
and as such the rights to these sites that the Company may receive
due its agreement with the third party are included as a part of
the Financing and Rights agreement. In exchange for the services
and rights to be provided by the Company under its core business
and such applicable rights under such judgments and permits, the
limited liability company agreed to provide project capital for the
Juno Site project in the amount of up to $800,000, within ninety
days of the approval of the recovery permit necessary for such
site. In return for such capital contribution, the Company agreed
to pay to the limited liability company a portion of such division
of artifacts, revenue. In the event that the limited liability
company has contributed capital toward the enterprise in any amount
and treasure and artifacts are found at any time in the future
under the Company or any related party, then the limited liability
company shall be entitled to a percentage of its share of such
artifacts or revenue created from such site, so long as a minimum
funding of $100,000 has been committed in the furtherance of the
recovery effort. In its sole discretion, the limited liability
company may, if it chooses to do so, contribute such necessary
capital for the necessary actions to gain such permit for such
recovery operations on such Juno Site. The limited liability
company agreed to provide the funding in exchange for exclusive
rights to portions of artifacts recovered from such site, or
revenues created from such. The agreement further states that
capital provided to the Company by the limited liability Company
shall be sued exclusively for actions or operations on the Juno
Site, unless another site is mutually agreed upon, for dive
operations, surveys and scanning as necessary, boat and vessel
expenses, compensation and site management expenses, fuel and other
related costs to the Juno Site project. The limited liability
company will have the right to withhold and approve funding if the
funding is not required for recovery operations on the Juno Site.
After a the State of Florida has taken its share of any artifacts
and treasure per any future permits or agreements for the Juno
Site, the limited liability Company will be entitled to receive 20%
of the first $10,000,000 of artifacts/treasure recovered, 15% of
the amount of any artifacts/treasure recovered with a value greater
than $10,000,000 to $50,000,000, 10% of the amount of any
artifacts/treasure recovered with a value greater than $50,000,000
for a period of three years, and 5% of the amount of any
treasure/artifacts recovered with a value greater than $50,000,000
for five years. Additionally, the limited liability company has
been made aware that Seafarer has had negotiations with a separate
third party for the location of several additional shipwreck sites.
The limited liability company will be given exclusive rights to any
sites that the Company gains from the third party with the sites
becoming a part of this agreement. Per the agreement the sites are
unproven, never scanned and presumed to be unsearched and highly
speculative as to whether there are any shipwrecks or shipwreck
material on the sites however such sites are included in the
Financing and Rights agreement. For any of the sites that Seafarer
acquires the rights to from the third party, the limited liability
Company will be entitled to receive 20% of the first $10,000,000 of
artifacts/treasure recovered, 15% of the amount of any
artifacts/treasure recovered with a value greater than $10,000,000
to $50,000,000, 10% of the amount of any artifacts/treasure
recovered with a value greater than $50,000,000 for a period of
three years, and 5% of the amount of any treasure/artifacts
recovered with a value greater than $50,000,000 for five years.
Seafarer and the limited liability company may also agree to
revenue sharing from the sales of artifacts/treasure. If Seafarer
has not previously contracted with any party as to media rights,
then the Company and the limited liability company agreed that the
limited liability company will be allowed to make or cause a media
venture at its own expense. Each party will have portion of the
revenues from such venture from whatever source. Such media rights
are only applicable to the Juno Site and the potential third party
site projects that are subject to the Financing and Rights
agreement.
The
Company has a 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. At March 31, 2017, the Company owed the related party limited
liability company $3,000 for services rendered.
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 March 31, 2017, the Company owed the related
party limited liability company $4,226 for transfer agency services
rendered and fees.
The
Company has an agreement to pay an individual a monthly fee of
$1,500 per month for archeological consulting
services.
The
Company has a verbal 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 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 cite 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 Court subsequently entered
and Order directing the arrest warrant for such site, and such
arrest warrant has been issued by the Clerk of Court. Such warrant
entry is now in process by the Company.
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
24
th
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. On December 7, 2016, the Court held a hearing on the
Defendant’s motion for sanctions, and essentially attempting
to rehear the motion for contempt against the Defendant. The Court
dismissed the Defendant’s motions, and renewed the ability of
the Company to seek attorney’s fees on such matter, which
hearing has not been set at present. On February 28, 2017, the
Court entered an Order denying the Defendant’s motion for
summary judgment. The Company has a pending motion for sanctions
related to the Defendant’s filing of the motion for summary
judgment which has not been set for hearing. The Company will be
attempting to set such matter for trial during
2017.
NOTE 11 – RELATED PARTY TRANSACTIONS
During
the three month period ended March 31, 2017:
In
January of 2017, 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 principal and accrued interest was due
on or before March 12, 2017. The Company agreed to pay the related
party lender a loan origination fee of 1,000,000 shares of its
restricted common stock. 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. At March
31, 2017 the loan was in default due to non-payment of principal
and interest.
In
February of 2017, the Company entered into a convertible promissory
note agreement in the amount of $25,000 with an individual who is
both related to the Company’s CEO and a member of the
Company’s Board of Directors. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest are due
on or before August 14, 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 $0.00075 per
share. The related party lender received 33,333,333
warrants to purchase shares of the Company’s common stock at
a price of $0.005.
In
February of 2017, 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 preapproved expenses.
In
February of 2017, 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 preapproved expenses.
In
March of 2017, the Company repaid $4,000 to its CEO in order to
repay a portion of the principal balance of a loan the CEO had
previously provided to the Company.
The
Company has a 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. At March 31, 2017, the Company owed the related party limited
liability company $3,000 for services rendered.
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 March 31, 2017, the Company owed the related
party limited liability company $4,226 for transfer agency services
rendered and fees.
At March 31, 2017 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 principal 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.
A note
payable dated February 24, 2010 in the principal amount of $7,500
with a corporation. The Company’s CEO was previously a
director of the corporation. The loan is not secured and pays
interest at a rate of 6% per annum and the principal 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
principal 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 and a member of the
Company’s Board of Directors 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 a person who is related to the Company’s CEO and a
member of the Company’s Board of Directors. The loan is not
secured and pays interest at a rate of 6% per annum and the
principal 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 $19,983 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.
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 was due on or before November 10, 2016 and
is not secured. The note is currently in default due to
non-payment of principal and interest.
A
convertible note payable dated May 10, 2016 due to a person who is
related to the Company’s CEO and a member of the
Company’s Board of Directors 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 was due on or before
November 10, 2016 and is not secured. The note is
currently in default due to non-payment of principal and
interest.
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 was due on or before November 20, 2016 and
is not secured. The note is currently in default due to
non-payment of principal and interest.
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 was due on or before
January 12, 2017 and is not secured. The note is currently in
default due to non-payment of principal and interest.
A loan
in the amount of $15,983 due to the Company’s CEO. The loan
is not secured and pays interest at a 6% per annum.
A loan
in the amount of $1,200 due to the Company’s CEO. The loan is
not secured and pays interest at a 2% per annum. After the loan has
aged for six months from December 16, 2016 the lender has the right
to convert the loan into shares of the Company’s restricted
common shares at a rate of $0.005 per share.
A
convertible loan dated January 26, 2017 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 was due on or before March 12, 2017 and is
not secured. The note is currently in default due to
non-payment of principal and interest.
A
convertible note payable dated February 14, 2017 in the principal
amount of $25,000 due to a person who is related to the
Company’s CEO and a member of the Company’s Board of
Directors. This loan pays interest at a rate of 6% per annum and
the principal and accrued interest are due on or before August 14,
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 $0.00075 per share.
NOTE 12 – SUBSEQUENT EVENTS
Subsequent
to March 31, 2017:
The
Company sold 39,000,000 shares of restricted common stock for
proceeds of $68,000, used for general working capital purposes and
repayment of debt.