OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires a companys directors, officers and stockholders who beneficially own more than 10% of any class of equity securities of the Company registered pursuant to Section 12 of the Exchange Act, collectively referred to herein as the Reporting Persons, to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to the companys equity securities with the SEC. All Reporting Persons are required by SEC regulation to furnish us with copies of all reports that such Reporting Persons file with the SEC pursuant to Section 16(a).
Based solely upon a review of Forms 3, 4 and 5 furnished to us and written representations that no other reports were required, we determined that our officers and directors complied during fiscal year 2014 with the reporting requirements of Section 16(a) of the Exchange Act. In addition, we believe that each of our beneficial owners of greater than 10% of our stock complied during fiscal year ending December 31, 2014 with the reporting requirements of Section 16(a) of the Exchange Act.
Related Persons Transactions Policies and Procedures
Policy
It is the policy of the Board of Directors (the
Board
) of Endurance Exploration Group, Inc. (the
Company
) that all Related Party Transactions, as that term is defined in this policy, shall be subject to review in accordance with the procedures set forth below. The Board has determined that it is best suited to review all Related Party Transactions.
Procedures
The Board shall review the material facts of all Related Party Transactions and may also approve or disapprove of the entry into the Related Party Transaction, subject to the exceptions described below. Where advance Board review of a Related Party Transaction is not feasible or has otherwise not been obtained, then the Related Party Transaction shall be reviewed subsequently by the Board (and such transaction may be ratified subsequently by the Board). The Board may also disapprove of a previously entered into Related Party Transaction and may require that management of the Company take all reasonable efforts to terminate, unwind, cancel the Related Party Transaction. In connection with its review of a Related Party Transaction, the Board will take into account, among other factors it deems appropriate, whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the Related Partys interest in the Related Party Transaction.
17
Management shall present to the Board of Directors the following information, to the extent relevant, with respect to actual or potential Related Party Transactions:
1. A general description of the transaction(s), including the material terms and conditions.
2. The name of the Related Party and the basis on which such person or entity is a Related Party.
3. The Related Partys interest in the transaction(s), including the Related Partys position or relationship with, or ownership of, any entity that is a party to or has an interest in the transaction(s).
4. The approximate dollar value of the transaction(s), and the approximate dollar value of the Related Partys interest in the transaction(s) without regard to amount of profit or loss.
5. In the case of a lease or other transaction providing for periodic payments or installments, the aggregate amount of all periodic payments or installments expected to be made.
6. In the case of indebtedness, the aggregate amount of principal to be outstanding and the rate or amount of interest to be payable on such indebtedness.
7. Any other material information regarding the transaction(s) or the Related Partys interest in the transaction(s).
The Board shall be authorized to review in advance and provide standing pre-approval in advance for certain Related Party Transactions or categories of Related Party Transactions. The Board has reviewed the Related Party Transactions described below in Standing Pre-Approval for Certain Related Party Transactions and determined that each of the Related Party Transactions described therein shall be deemed to have been reviewed and approved in advance by the Board under the terms of this Policy.
Each director who is a Related Party with respect to a particular Related Party Transaction shall disclose all material information to the Committee concerning such Related Party Transaction and his or her interest in such transaction. The Board of Directors may recommend the creation of a special committee to review any Related Party Transaction.
If a Related Party Transaction will be ongoing, the Committee may establish guidelines for the Companys management to follow in its ongoing dealings with the Related Party. Thereafter, the Committee shall periodically review and assess ongoing relationships with the Related Party. Any material amendment, renewal or extension of a transaction, arrangement or relationship previously reviewed under this Policy shall also be subject to subsequent review under this Policy.
This Policy is intended to augment and work in conjunction with other Company policies having any code of conduct, code of ethics and/or conflict of interest provisions.
The Board of Directors shall review this Policy and may recommend amendments to this Policy from time to time as it deems appropriate. In addition to guidelines for ongoing Related Party Transactions, the Board may, as it deems appropriate and reasonable, establish from time to time guidelines regarding the review of other Related Party Transactions including those that (i) involve
de minimus
amounts, (ii) do not require public disclosure, or (iii) involve transactions that have primarily a charitable purpose.
18
Definitions
A
Related Party Transaction
is any financial transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which:
(1) the aggregate amount involved will or may be expected to exceed $120,000 since the beginning of the Companys last completed fiscal year,
(2) the Company or any of its subsidiaries is a participant, and
(3) any Related Party has or will have a direct or indirect interest.
A
Related Party
is any:
(a) person who is or was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director,
(b) greater than 5% beneficial owner of our common stock, or
(c) Immediate Family Member of any of the foregoing. An
Immediate Family Member
includes a persons spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such persons home (other than a tenant or employee).
Standing Pre-Approval for Certain Related Party Transactions
The Board has reviewed the types of Related Party Transactions described below and determined that each of the following Related Party Transactions shall be deemed to have been reviewed in advance and pre-approved by the Committee, even if the aggregate amount involved will exceed $120,000.
1.
Employment of executive officers
. Any employment by the Company of, or compensation of, an executive officer of the Company if (i) the executive officer is not an immediate family member of another executive officer or director of the Company, (ii) the executive officer was not otherwise a Related Party of the Company prior to becoming an employee of the Company and (iii) the Companys Compensation Committee has approved (or recommended that the Board approve) the compensation of such executive officer.
2.
Director compensation
. Any compensation paid to a director if the compensation is required to be reported in the Companys proxy statement under Item 402 of Regulation S-K.
3.
Certain transactions with other companies
. Any transactions, arrangements or relationships with another company at which a Related Partys only relationship is as a director and/or beneficial owner of less than 10% of that companys equity interests.
4.
Transactions where all shareholders receive proportional benefits
. Any transactions, arrangements or relationships where the Related Partys interest arises solely from the ownership of the Companys common stock and all holders of the Companys common stock received the same benefit on a pro rata basis (e.g., dividends or stock splits).
5.
Regulated transactions
. Any transactions, arrangements or relationships with a Related Party involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority.
6.
Certain banking-related services
. Any transactions, arrangements or relationships with a Related Party involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.
19
Disclosure
All Related Party Transactions that are required to be disclosed in the Companys filings with the SEC, as required by the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and related rules and regulations, shall be so disclosed in accordance with such laws, rules and regulations. The material features of these Policies and Procedures shall be disclosed in the Companys Annual Report on Form 10-K or in the Companys proxy statement, as required by applicable laws, rules and regulations.
Administrative Measures
Management shall institute appropriate administrative measures to provide that all Related Party Transactions are not in violation of, and are reviewed in accordance with, these Policies and Procedures.
Interpretation
In any circumstance where the terms of these Policies and Procedures differ from any existing or newly enacted law, rule, regulation or standard governing the Company, the law, rule, regulation or standard will take precedence over these policies and procedures until such time as these Policies and Procedures are changed to conform to the law, rule, regulation or standard
.
Related Person Transactions
The Company has entered into a contract with Island Capital Management, LLC, which is related through common stockholders, to serve as its transfer agent. It did not charge the Company for its services during 2015.
The Company has entered into a contract with Proxy & Printing, LLC, which is related through common stockholders, to provide the Company with printing and other services relating to its filings with the SEC. It did not charge the Company for its services during 2015.
On April 7, 2014, the Company entered into a Debt Conversion Agreement with Endeavour relating to the conversion of indebtedness to Endeavour in the amount of $35,000. This amount represents advances received from Endeavour during 2014 and constitutes the balance of the related party debt payable to Endeavour as of that date. The terms of the agreement allowed for Endeavour to convert this debt into common stock at $0.25 per share. Endeavour converted all of such debt into shares, as a result of which the Company issued 140,000 shares to Endeavour.
On April 7, 2014, the Company entered into a Debt Conversion Agreement with Island, a company owned and controlled by Endeavour, relating to the conversion of indebtedness to Island in the amount of $70,000. This amount represents advances received from Island during 2014 and constitutes the balance of the related party debt payable to Island as of that date. The terms of the agreement allowed for Island to convert this debt into common stock at $0.25 per share. Island converted all of such debt into shares, as a result of which the Company issued 280,000 shares to Island.
On June 24, 2014, the Company entered into a contract with Eclipse Group Inc. (Eclipse) for Eclipse to provide personnel and services to the Company in connection with the operation and monitoring of a remotely operated vehicle (ROV) in connection with our investigation of a suspected shipwreck located off the coast of New England. Steven Saint Amour, who serves as a member of the Companys Board of Directors, and Joan Saint Amour are the principal stockholders and officers of Eclipse. The contract provides that Eclipse will provide 2 people, including Mr. Saint Amour, for approximately four 12-hour days to operate and monitor the ROV, which will be provided by the Company. The Company will issue 100,000 shares of common stock to Mr. Saint Amour, with an agreed value of $25,000, under the contract, and reimburse Eclipse in cash for its cost for the second ROV technician. The Company will also pay Eclipse in cash its cost plus 15% for all third party costs incurred by Eclipse, and provide Mr. Saint Amour and the second technician with food and lodging during the assignment.
20
On September 3, 2014, the Company entered into a contract with Overseas Marine Vessel Corp, LLC (OMVC) pursuant to which it will provide the Marine Vessel Manisee in support of an estimated 10-day mission to investigate, identify and recovery artifacts from one or more shipwrecks located in our search area off the coast of New England. We will reimburse OMVC in cash for all its out-of-pocket expenses only, including but not limited to, mooring, food, fuel, lube, satellite communications and crew costs. Toni Eldred, the spouse of Micah Eldred, is a fifty percent owner of OMVC, and Micah Eldred is the co-manager of OMVC.
On February 12, 2015, the Company entered into a Debt Conversion Agreement with Endeavour Cooperative Partners, LLC (Endeavour) relating to the conversion of indebtedness to Endeavour in the amount of $85,000. This amount represents the related party debt payable to Endeavour as of that date. The terms of the agreement allowed for Endeavour to convert this debt into common stock at $0.25 per share. Endeavour converted all of such debt into shares, as a result of which we issued 340,000 shares to Endeavour.
On February 12, 2015, the Company entered into a Debt Conversion Agreement with Micah Eldred relating to the conversion of indebtedness to Micah Eldred in the amount of $143,333. This amount represents the related party debt payable to Micah Eldred as of that date. The terms of the agreement allowed for Micah Eldred to convert this debt into common stock at $0.25 per share. Micah Eldred converted all of such debt into shares, as a result of which we issued 573,333 shares to Micah Eldred.
On February 12, 2015, the Company entered into a Debt Conversion Agreement with Carl & Heather Dilley relating to the conversion of indebtedness to Carl & Heather Dilley in the amount of $45,867 and $25,800 respectively. This amount represents the related party debt payable to Carl & Heather Dilley as of that date. The terms of the agreement allowed for Carl & Heather Dilley to convert this debt into common stock at $0.25 per share. Carl & Heather Dilley converted all of such debt into shares, as a result of which we issued 183,467 and 103,200 shares to Carl & Heather Dilley respectively.
During the six months ended June 30, 2016, Endeavour Cooperative Partners, LLC made advances to the Company in the aggregate amount of $140,000, in order to provide the Company with funds to carry on its operations. These advances do not bear interest, are unsecured and have no specific terms of repayment. As of June 30, 2016, the aggregate amount of such advances outstanding was $235,500. Interest has not been imputed on this balance as management has deemed it to be immaterial.
Independent Public Accountants
On January 15, 2015, the Company engaged Green & Company CPAs (Green) of Tampa, Florida, as its new registered independent public accountant
The following table sets forth the aggregate fees billed by Green for the fiscal year ended December 31, 2015 and fiscal year ended December 31, 2014:
Accounting Fees and Services
|
|
|
|
|
|
Year
|
Audit Fees
|
Audit Related Fees
|
Tax Fees
|
All Other Fees
|
Total Fees
|
2015
|
$15,500
|
$ 0
|
$ 0.0
|
$ 0
|
$ 15,500
|
2014
|
$15,500
|
$ 0
|
$ 0.0
|
$ 0
|
$ 15,500
|