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 year ended December 31, 2017, filed with the Securities and
Exchange Commission (the “Commission”). The results of
operations for the three month period ended March 31, 2018 are not
necessarily indicative of the results that may be expected for the
entire year ending December 31, 2018 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 engage in the
archaeologically-sensitive exploration, documentation, recovery,
and conservation of historic shipwrecks with the objective of
exploring and discovering Colonial-era shipwrecks for future
generations to be able to appreciate and
understand. Seafarer currently has two different wreck
sites under permit with the State of Florida, one wreck site in the
permit renewal process and one wreck site under contract with a
private party and is working closely with the Florida Department of
Historical Resources and the Florida Bureau of Archeological
Research to research and document these, and additional, wreck
sites.
NOTE 2 - GOING CONCERN
These
condensed 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 May 15, 2018.
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 condensed 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.
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 plans to recognize 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 will be 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 quarters ended March 31, 2018 and 2017, 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 March 31, 2018 and 2017.
Fair Value of Financial Instruments
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.
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 March 31, 2017 and December 31, 2016:
|
|
|
Diving
vessel
|
$
326,005
|
$
326,005
|
Equipment
|
32,420
|
32,420
|
Less accumulated
depreciation
|
(346,613
)
|
(338,117
)
|
|
$
11,812
|
$
20,308
|
Depreciation
expense for each of the three month periods ended March 31, 2018
and 2017 amounted to $8,496.
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 quarters ended March 31, 2018 and
2017.
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 March 31, 2018, 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
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.
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 the
determination of 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 from 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 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 March 31, 2018 and
2017 are as follows:
|
For the Three Months Ended
March 31, 2018
|
For the Three Months Ended
March 31, 2017
|
Net loss
attributable to common stockholders
|
$
(261,263
)
|
$
(320,982
)
|
|
|
|
Weighted average
shares outstanding:
|
|
|
Basic and
diluted
|
2,806,163,638
|
2,262,309,103
|
|
|
|
Loss per
share:
|
|
|
Basic and
diluted
|
$
(0.00
)
|
$
(0.00
)
|
NOTE 5 - CAPITAL STOCK
On
March 5, 2018 the Board of Directors, pursuant to Section 607.0704,
Florida Statutes, with the Board of Directors acting as
shareholders of the Preferred Shares and pursuant to their own
resolution, voted to increase the authorized shares of the
Corporation from 2,900,000,000 common shares to 3,900,000,000
common shares. Such filing was processed to be effective with the
State of Florida on March 9, 2018.
Preferred Stock
The
Company is authorized to sell or issue 50,000,000 shares of
preferred stock.
Series A Preferred Stock
At
March 31, 2018 and 2017, the Company had seven shares of Series A
preferred stock issued and outstanding. Each share of Series A
preferred stock has the right to convert into 214,289 shares of the
Company’s common stock.
Series B Preferred Stock
On
February 10, 2014, the Board of Directors of the Company under the
authority granted under Article V of the Articles of Incorporation,
defined and created a new preferred series of shares from the
50,000,000 authorized preferred shares. Pursuant to Article V, the
Board of Directors has the power to designate such shares and all
powers and matters concerning such shares. Such share class shall
be designated Preferred Class B. The preferred class was created
for 60 Preferred Class B shares. Such shares each have a voting
power equal to one percent of the outstanding shares issued
(totaling 60%) at the time of any vote action as necessary for
share votes under Florida law, with or without a shareholder
meeting. Such shares are non-convertible to common stock
of the Company and are not considered as convertible under any
accounting measure. Such shares shall only be held by the Board of
Directors as a Corporate body, and shall not be placed into any
individual name. Such shares were considered issued at the time of
this resolution’s adoption, and do not require a stock
certificate to exist, unless selected to do so by the Board for
representational purposes only. Such shares are
considered for voting as a whole amount, and shall be voted for any
matter by a majority vote of the Board of Directors. Such shares
shall not be divisible among the Board members, and shall be voted
as a whole either for or against such a vote upon the vote of the
majority of the Board of Directors. In the event that there is any
vote taken which results in a tie of a vote of the Board of
Directors, the vote of the Chairman of the Board shall control the
voting of such shares. Such shares are not transferable except in
the case of a change of control of the Corporation when such shares
shall continue to be held by the Board of Directors. Such shares
have the authority to vote for all matters that require a share
vote under Florida law and the Articles of
Incorporation.
Warrants and Options
The
Company did not issue any warrants or options during the three
month period ended March 31, 2018.
At
March 31, 2018 the Company had warrants to purchase a total of
105,333,333 shares of its restricted common stock
outstanding:
Term
|
|
|
|
|
|
11/20/12 to
11/20/22
|
4,000,000
|
$
0.0050
|
09/18/15 to
09/18/20
|
4,000,000
|
$
0.0030
|
04/04/16 to
04/04/18
|
10,000,000
|
$
0.0020
|
07/12/16 to
01/12/18
|
4,000,000
|
$
0.0020
|
08/31/16 to
08/31/18
|
25,000,000
|
$
0.0010
|
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
|
|
105,333,333
|
|
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, 2018
|
For the Three Months Ended March 31, 2017
|
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.
On
March 31, 2018 and December 31, 2017, the Company’s only
significant deferred income tax asset was an estimated net tax
operating loss of $13,560,000 and $13,300,000 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, 2018 and December 31, 2017. 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
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
20, 2017 through June 30, 2020 with base monthly rents of $1,252
from July 1, 2017 to June 30, 2018, $1,289 from July 1, 2018
to June 30, 2019, and $1,328 from July 1, 2019 to June 30,
2020. Under the terms of the lease there may be additional fees
charged above the base monthly rental fee.
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 pays $1,300 per month to lease the
operations house. The term of the lease expired in October 2016,
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,
2018:
Issue Date:
|
Maturity Date
|
|
|
|
Convertible
notes payable:
|
|
|
|
|
February
6, 2018
|
November
7, 2018
|
$
6,000
|
6.00
%
|
0.0006
|
March
6, 2018
|
September 6, 2018
|
$
6,000
|
6.00
%
|
0.0006
|
Unamortized discounts
|
|
$
(5,012
)
|
|
|
Balance
|
|
$
6,988
|
|
|
|
|
|
|
Convertible
notes payable, related parties:
|
|
|
|
|
January
9, 2018
|
January
9, 2019
|
$
12,000
|
6.00
%
|
0.0006
|
March
14, 2018
|
May 14, 2018
|
$
25,000
|
6.00
%
|
0.0006
|
Unamortized discounts
|
|
$
(10,357
)
|
|
|
Balance
|
|
$
26,643
|
|
|
|
|
|
|
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
|
July
19, 2016
|
July
19, 2017
|
$
4,000
|
6.00
%
|
0.0015
|
August
24, 2016
|
February
24, 2017
|
$
20,000
|
6.00
%
|
0.0010
|
Balance
|
|
$
445,300
|
|
|
|
|
|
|
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
%
|
0.0005
|
February
24, 2017
|
August
24, 2017
|
$
25,000
|
6.00
%
|
0.0075
|
August
16, 2017
|
September
16, 2017
|
$
3,000
|
6.00
%
|
0.0008
|
Balance
|
|
$
234,500
|
|
|
|
|
|
|
|
|
|
|
Balance,
convertible notes payable
|
|
$
713,431
|
|
|
Notes Payable
The
following table reflects the notes payable at March 31,
2017:
Issue
Date:
|
Maturity
Date
|
|
|
Notes
payable:
|
|
|
|
November
29, 2017
|
November
29, 2019
|
$
105,000
|
2.06
%
|
December
14, 2017
|
December
14, 2018
|
$
75,000
|
6.00
%
|
March
7, 2018
|
April
15, 2018
|
$
25,000
|
6.00
%
|
Unamortized discount for loan fees
|
|
$
(32,537
)
|
|
Balance
|
|
$
172,463
|
|
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
%
|
January
31, 2018
|
March
2, 2018
|
$
25,000
|
6.00
%
|
Balance
|
|
$
42,500
|
|
|
|
|
|
|
|
Balance,
notes payable
|
|
$
244,963
|
|
New Convertible Notes Payable and Notes Payable
During
the three month period ended March 31, 2018 the Company entered
into the following Convertible Notes Payable and Notes Payable
Agreements:
In
January of 2018, the Company entered into a convertible promissory
note agreement in the amount of $12,000 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 was due
on or before January 9, 2019. The note is unsecured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.0006 per
share.
In January of 2018, the Company entered into a promissory note
agreement in the amount of $25,000 with a related party. This note
pays interest at a rate of 6% per annum and the principal and
accrued interest were due on or before March 2, 2018. The related
party lender received 2,000,000 shares of the Company’s
restricted common stock as a loan origination fee. The Company
agreed that if the note was not repaid in full by March 2, 2018
then the interest rate on the note would increase to 10% after that
date until the note is paid in full and the Company would be
obligated to pay an additional 1,000,000 shares of the Company
restricted common stock to the related party lender. This note is
currently in default due to non payment of principal and interest.
The note is unsecured.
In
February of 2017, the Company entered into a convertible promissory
note agreement in the amount of $6,000 with an individual. This
loan pays interest at a rate of 6% per annum and the principal and
accrued interest was due on or before November 7, 2018. The note is
unsecured and is convertible at the lender’s option into
shares of the Company’s common stock at a rate of $0.0006 per
share.
In
February of 2018, the Company entered into a promissory note
agreement in the amount of $1,000 with an individual who is both
related to the Company’s CEO and a member of the
Company’s Board of Directors. This note pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before April 9, 2018. This note is currently in default due
to non payment of principal and interest. The note is
unsecured.
In
March of 2018, the Company entered into a convertible promissory
note agreement in the amount of $6,000 with an individual. This
note pays interest at a rate of 6% per annum and the principal and
accrued interest isdue on or before September 6, 2018. The lender
received 500,000 shares of the Company’s restricted common
stock as a loan origination fee. The note is
unsecured.
In
March of 2018, the Company entered into a promissory note agreement
in the amount of $25,000 with an individual. This note pays
interest at a rate of 6% per annum and the principal and accrued
interest were due on or before April 15, 2018. The related party
lender received 5,000,000 shares of the Company’s restricted
common stock as a loan origination fee. This note is currently in
default due to non payment of principal and interest The note is
unsecured.
In
March of 2018, 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 note pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before May14, 2018. The note is unsecured and is convertible
at the lender’s option into shares of the Company’s
common stock at a rate of $0.0006 per share. This note is currently
in default due to non payment of principal and
interest.
Note Conversion
A
lender who had a convertible promissory note outstanding with a
principal balance of $15,000 elected to convert the principal
balance of the note plus accrued interest into 10,507,947 shares of
the Company’s common stock. The remaining principal balance
of this note was $0 at March 31, 2018.
Shareholder Loans
At
March 31, 2018 the Company had six loans outstanding to its CEO
totaling $20,523, consisting of a loan in the amount of $11,983
with a 6% annual rate of interest, a loan in the amount of $1,500
at 6% rate of interest and an option to convert the loan into
restricted shares of the Company’s common stock at $0.002, a
loan in the amount of $2,600 at 1% rate of interest, a loan in the
amount of $3,000 at 1% rate of interest, a loan in the amount of
$500 at 1% rate of interest, a second loan in the amount of $500 at
1% rate of interest and a loan in the amount of $440 at 1% rate of
interest.
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.
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
February of 2018, the Company entered into an agreement with an
individual to join the Company’s advisory council. Under the
terms of 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 theBoard 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 the advisory council agreements is for one year.
In consideration for the performance of the advisory services, the
Company agreed to issue the advisor 4,250,000 shares of the
Company’s restricted common stock valued at approximately
$4,250. Per the terms of the agreement the shares vest at a rate of
1/12th 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, then the advisor has agreed to return to the Company for
cancellation any portion of the shares that have not vested. Under
the advisory council agreements, the Company has agreed to
reimburse the advisor for preapproved expenses.
In
February of 2018, the Company entered into a consulting agreement
with a consultant to advise the Company regarding certain
technologies. The Company issued 1,000,000 shares of its restricted
common stock to the consultant for the services. The consultant
agreed that all work performed under the agreement including
business and strategic plans and proposals works-made-for-hire
under U.S. copyright law and such works shall be the property of
the Company.
In
February of 2018, the Company entered into a subscription agreement
to sell 10,000,000 shares of restricted common stock to two
individuals in exchange for proceeds of $25,000. The Company also
agreed that the purchaser will be entitled to receive $125,000 of
treasure of their choice after both the Company has recovered a
minimum of $1,750,000 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 $125,000 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 $1,750,000 worth of treasure. The value of any treasure
recovered will be determined by a mutually agreed upon third party
who is a recognized expert in the valuation of historic
artifacts.
The
Company has a verbal consulting agreement with a limited liability
company that is owned and controlled by a person who is related to
the Company’s CEO to pay the related party consultant a
minimum of $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
assist, when needed, as an administrative specialist to perform
various administrative duties and clerical services including
reviewing the Company’s agreements and books and records. At
March 31, 2018 the Company owed the related party consultant $4,000
for services rendered. 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
March 31, 2018 the Company owed the related party limited liability
company $435 for services rendered.
The
Company has an agreement to pay an individual a minimum monthly fee
of $2,500 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 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
in position to receive 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 UnitedStates 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. Such arrest warrant was served by the United States
Marshalls Office in Palm Beach, Florida on July 7, 2017. The United
States District Court Judge ordered service on the claim on August
10, 2017. On November 14, 2017, Judge Kenneth Marra of the United
States District Court awarded Seafarer all rights as the sole owner
of the sunken vessel and any items on such site.
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 2018.
NOTE 11 – RELATED PARTY TRANSACTIONS
During
the three month period ended March 31, 2018 the Company has had
extensive dealings with related parties including the
following:
In
January of 2018, the Company entered into a convertible promissory
note agreement in the amount of $12,000 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 is due
on or before January 9, 2019. The note is unsecured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.0006 per
share.
In
January of 2018 the Company repaid $26,250 or principal and $505 of
accrued interest to a related party lender in order to satisfy a
convertible promissory note. As of March 31, 2018 the principal
balance of the note was $0.
In
January of 2018, the Company entered into a promissory note
agreement in the amount of $25,000 with a related party. This note
pays interest at a rate of 6% per annum and the principal and
accrued interest were due on or before March 2, 2018. The related
party lender received 2,000,000 shares of the Company’s
restricted common stock as a loan origination fee. The Company
agreed that if the note was not repaid in full by March 2, 2018
then the interest rate on the note would increase to 10% after that
date until the note is paid in full and the Company would be
obligated to pay an additional 1,000,000 shares of the Company
restricted common stock to the related party lender. This note is
currently in default due to non payment of principal and interest.
The note is unsecured.
In
February of 2018, the Company entered into a promissory note
agreement in the amount of $1,000 with an individual who is both
related to the Company’s CEO and a member of the
Company’s Board of Directors. This note pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before April 9, 2018. This note is currently in default due
to non payment of principal and interest The note is
unsecured.
In
March of 2018, the Company’s CEO provided a loan to the
Company in the amount of $500. The loan pays interest at the rate
of 1% per annum. The loan was due on or before April 6,
2018.
This loan is
currently in default due to non payment of principal and
interest.
In
March of 2018, 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 note pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before May14, 2018. The note is unsecured and is convertible
at the lender’s option into shares of the Company’s
common stock at a rate of $0.0006 per share. This note is currently
in default due to non payment of principal and
interest.
The
Company has a verbal consulting agreement with a limited liability
company that is owned and controlled by a person who is related to
the Company’s CEO to pay the related party consultant a
minimum of $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
assist, when needed, as an administrative specialist to perform
various administrative duties and clerical services including
reviewing the Company’s agreements and books and records. At
March 31, 2018 the Company owed the related party consultant $4,000
for services rendered. 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
March 31, 2018 the Company owed the related party limited liability
company $435 for services rendered.
At March 31, 2018 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 unsecured. 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 unsecured. 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 unsecured. 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 unsecured. 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 unsecured. 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
unsecured 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
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 unsecured. 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 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 unsecured. 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 unsecured. 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 unsecured. 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 unsecured. The note is currently in default
due to non-payment of principal and interest.
A loan
in the amount of $11,983 due to the Company’s CEO. The loan
is unsecured and pays interest at a 6% per annum.
A loan
in the amount of $1,500 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
unsecured. 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 were due on or before August 14,
2017. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.00075 per share. The note is
currently in default due to non-payment of principal and
interest.
A loan
in the amount of $2,600 due to the Company’s CEO. The loan
pays interest at the rate of 1% per annum. The loan was due on or
before October 12, 2017. The loan is currently in
default.
A loan
in the amount of $3,000 due to the Company’s CEO. The loan
pays interest at the rate of 1% per annum. The loan was due on or
before July 13, 2017. The loan is currently in
default.
A loan
to the Company in the amount of $500 due to the Company’s
CEO. The loan pays interest at the rate of 1% per annum. The loan
was due on or before August 25, 2017. The loan is currently in
default.
A loan
to the Company in the amount of $400 due to the Company’s
CEO. The loan pays interest at the rate of 1% per annum. The loan
was due on or before August 25, 2017. The loan is currently in
default.
A
convertible promissory note payable dated August 16, 2017 in the
principal amount of $3,000 due to a person who is related to the
Company’s CEO and a member of the Company’s Board of
Directors. This note pays interest at a rate of 6% per annum and
the principal and accrued interest were due on or before September
16, 2017. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.008 per share. The note is
currently in default due to non-payment of principal and
interest.
A
convertible promissory note payable dated January 9, 2018, in the
principal amount of $12,000 with an individual who is both related
to the Company’s CEO and a member of the Company’s
Board of Directors. This note pays interest at a rate of 6% per
annum and the principal and accrued interest was due on or before
January 9, 2019. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.0006 per share.
A
convertible promissory note payable dated January 31, 2018 in the
principal amount of $25,000 with a related party. This note pays
interest at a rate of 6% per annum and the principal and accrued
interest were due on or before December 2, 2017. This note pays
interest at a rate of 6% per annum and the principal and accrued
interest were due on or before March 2, 2018. The related party
lender received 2,000,000 shares of the Company’s restricted
common stock as a loan origination fee. The note is unsecured. This
note is currently in default due to non payment of principal and
interest.
A
promissory note dated February 8, 2018, in the principal amount of
$1,000 with an individual who is both related to the
Company’s CEO and a member of the Company’s Board of
Directors. This note pays interest at a rate of 6% per annum and
the principal and accrued interest was due on or before April 9,
2018. This note is currently in default due to non payment of
principal and interest. The note is unsecured.
A loan
to the Company in the amount of $500 due to the Company’s
CEO. The loan pays interest at the rate of 1% per annum. The loan
was due on or before April 6, 2018.
This loan is
currently in default due to non payment of principal and
interest.
A
convertible promissory note payable dated March 14, 2018, 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 note pays interest at a rate of 6% per annum and
the principal and accrued interest was due on or before May14,
2018. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.0006 per share. This note is currently in
default due to non payment of principal and interest.
NOTE 12 – SUBSEQUENT EVENTS
Subsequent
to March 31, 2018:
Subsequent
to March 31, 2018 the Company sold or issued shares of its common
stock as follows (unaudited):
(i)
sales
of 60,000,000 shares of common stock for proceeds of $35,000, used
for general working capital purposes;
(ii)
issuance of 134,833
shares of common stock for services;
(iii)
issuance of
5,000,000 shares of common stock for loan financing
fees.