UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549








FORM 10-Q








(Mark
One)


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





For the quarterly period ended September 30, 2016





or





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





For the transition period from _________ to
__________.





Commission File Number 000-29461











SEAFARER EXPLORATION CORP.





(Exact
name of registrant as specified in its charter)





Florida
90-0473054(State
or other jurisdiction of incorporation or
organization)
(I.R.S.
Employer Identification No.)





14497 N. Dale Mabry Highway, Suite 209-N, Tampa, Florida
33618





(Address of
principal executive offices)(Zip code)





(813) 448-3577





Registrant’s
telephone number





1





Indicate
by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements
for the past 90 days.





Yes
  ☑   No   ☐








Indicate
by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).





Yes
  ☑   No   ☐








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





Large
accelerated filer
☐

Accelerated
filer
☐Non-accelerated
filer
☐
(Do not
check if a smaller reporting company)
Smaller
reporting company
☑








Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act).





Yes
  ☐ No  ☑








As of
November 10, 2016, there were 2,052,576,784 shares of the
registrant’s common stock, $.0001 par value per share,
outstanding.





























2





SEAFARER EXPLORATION CORP.


Form 10-Q


For the Quarterly Period Ended September 30,
2016





TABLE OF CONTENTS








PART I:
FINANCIAL INFORMATION
4Item 1.
Financial Statements (unaudited)
5Condensed Balance
Sheets: September 30, 2016 and December 31, 2015
5Condensed
Statements of Operations: For the three and nine months ended
September 30, 2016 and 2015
6Condensed
Statements of Cash Flows: Nine months ended September 30, 2016
and 2015
7Notes
to Condensed Financial Statements
8Item 2.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
27Item 3.
Quantitative and Qualitative Disclosures About Market
Risk
32Item 4T.
Controls and Procedures
32PART
II: OTHER INFORMATION
34Item 1. Legal
Proceedings
34Item 1A. Risk
Factors
34Item 2.
Unregistered Sales of Equity Securities and Use of
Proceeds
35Item 3.
Defaults Upon Senior Securities
35Item 4.
Submission of Matters to a Vote of Security Holders
35Item 5. Other
Information
35Item 6.
Exhibits
36SIGNATURES
37





























3





Part 1: Financial Information





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





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































































































4





Item 1. Financial Statements





SEAFARER EXPLORATION CORP.


CONDENSED BALANCE SHEETS


(Unaudited)





September
30,
December
31,2016
2015AssetsCurrent
assets:Cash
$6,521
$5,097Prepaid
expenses
44,771
28,557Deposits
and other receivables
750
316Total
current assets
52,042
33,970Property
and equipment, net
62,788
63,276Total
assets
$114,830
$97,246Liabilities and Stockholders' DeficitCurrent
liabilities:Accounts
payable and accrued expense
$285,155
$244,678Convertible
notes payable, net of discounts of $36,482 and $17,295
23,268
45,705Convertible
notes payable, related parties, net of discounts of $4,717 and
$15,064
12,683
9,000Convertible
notes payable, in default
434,952
391,300Convertible
notes payable, in default - related parties
181,500
167,500Convertible
notes payable at fair value
-
311,076Shareholder
loan
29,270
32,703Notes
payable, in default
37,000
30,000Notes
payable, in default - related parties
17,500
17,500Total
current liabilities
1,021,328
1,249,462Commitments
and contingenciesStockholders'
deficit:Preferred
stock, $0.0001 par values - 50,000,000 shares authorized; 67 shares
issuedSeries
A - 7 shares issued and outstanding at September 30, 2016 and
December 31, 2015
-
-Series
B - 60 shares issued and outstanding at September 30, 2016 and
December 31, 2015
-
-Common
stock, $0.0001 par value - 2,300,000,000 shares authorized;
2,147,109,416 and1,332,102,348
shares issued and outstanding at September 30, 2016
andDecember
31, 2015, respectively
216,219
133,210Additional
paid-in capital
11,395,678
10,040,526Accumulated
deficit
(12,518,395)
(11,325,952)Total
stockholders' deficit
(906,498)
(1,152,216)Total
liabilities and stockholders' deficit
$114,830
$97,246





See notes to unaudited condensed financial
statements.





5





SEAFARER EXPLORATION CORP.


CONDENSED  STATEMENTS OF OPERATIONS


(Unaudited)





Three
months ended September 30,
Nine
months ended September 30,2016
2015
2016
2015Revenue
$-
$-
$-
$-Expenses:Consulting
and contractor expenses
166,803
125,787
338,144
479,834Professional
fees
30,521
12,375
78,191
62,754General
and administrative expense
12,675
3,290
42,101
109,093Depreciation
expense
8,496
8,496
25,488
25,488Rent
expense
10,517
12,799
26,577
40,901Vessel
expense
13,958
14,431
18,901
41,223Travel
and entertainment expense
27,662
13,711
44,949
50,044Total
operating expenses
270,632
190,889
574,351
809,337Loss
from operations
(270,632)
(190,889)
(574,351)
(809,337)Other
income (expense):Interest
income (expense)
(414,633)
(135,227)
(618,092)
72,559Loss
on impairment

-
-
-Total
other income (expense)
(414,633)
(135,227)
(618,092)
72,559Net
loss
$(685,265)
$(326,116)
$(1,192,443)
$(736,778)Net
loss per share - basic and diluted
$-
$-
$-
$-Weighted
average common shares outstanding - basic and diluted
2,005,911,180
1,193,601,601
1,633,729,734
1,120,925,906





See
notes to unaudited condensed financial
statements.





6





SEAFARER EXPLORATION CORP.


CONDENSED STATEMENTS OF CASH FLOWS


(Unaudited)





September
30,
September
30,2016
2015Operating
activitiesNet
loss
$(1,192,443)
$(736,738)Adjustments
to reconcile net income tonet
cash provided (used) by operating activitiesDepreciation
25,488
25,488Change
in allowance for uncollectible note receivableInterest
(income) expense on fair value adjustment
272,325
(170,844)Amortization
of beneficial conversion featureof
the notes payable
49,749
67,129Loss
on impairment
-
-Common
stock issued for services
406,802
243,976Common
stock issued for loan fees
81,874Decrease
(increase) in:Settlement
receivable
-
18,000Prepaid
expenses and deposits
(16,648)
(33,131)Decrease
in shareholder advanceIncrease
(decrease) in:Accounts
payable and accrued expenses
40,477
47,509Net
cash provided (used) by operating activities
(332,376)
(538,611)Cash
flows from investing activities
-
-Cash
flows from financing activities:Proceeds
from the issuance of common stock
192,720
331,368Proceeds
from the issuance convertible notes payable
121,700
202,000Proceeds
from the issuance convertible notes payable, relatedparty
22,400
9,000Payment
of Convertible note payable
-
(12,000)Advances
from shareholder
5,760
9,420Payments
to shareholders
(8,780)
(10,000)Net
cash provided by financing activities
333,800
529,788Net
increase (decrease) in cash
1,424
(8,823)Cash
- beginning
5,097
12,424Cash
- ending
$6,521
$3,601Supplemental
disclosure of cash flow information:Cash
paid for interest expense
$6,000
$6,000Cash
paid for income taxes
$-
$-Noncash
operating and financing activities:Common
stock issued to satisfy debt
$26,571
$26,571Convertible
debt converted and accrued interest to commonstock
$465,803
$465,803Common
stock issued for fixed asset purchase
$25,000
$-





See notes to unaudited condensed financial
statements.





7





SEAFARER EXPLORATION CORP.


NOTES TO CONDENSED FINANCIAL STATEMENTS


(Unaudited)





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





These
unaudited condensed financial statements should be read in
conjunction with the Company’s audited financial statements
and footnotes included in the Company’s Report on Form 10-K
for the twelve months ended December 31, 2015, filed with the
Securities and Exchange Commission (the “Commission”).
The results of operations for the nine months ended September 30,
2016 are not necessarily indicative of the results that may be
expected for the entire year ending December 31, 2016 or for
any future period.





NOTE 1 – DESCRIPTION OF BUSINESS





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





The
principal business of the Company is to develop the infrastructure
necessary to engage in the archaeologically-sensitive exploration
and recovery of historic shipwrecks. During 2008, the Company
changed its fiscal year end from April 30 to December
31.





NOTE 2 - GOING CONCERN





These
financial statements have been prepared on a going concern basis,
which assumes the Company will be able to realize its assets and
discharge its liabilities in the normal course of business for the
foreseeable future. The Company has incurred net losses since
inception, which raises substantial doubt about the Company’s
ability to continue as a going concern. Based on its historical
rate of expenditures, the Company expects to expend its available
cash in less than one month from November 14, 2016. Management's
plans include raising capital through the equity markets to fund
operations and, eventually, the generation of revenue through its
business. The Company does not expect to generate any revenues for
the foreseeable future.





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

















8





NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





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





Accounting Method





The
Company’s condensed financial statements are prepared using
the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of
America.





Cash and Cash Equivalents





For
purposes of the statement of cash flows, the Company considers all
highly liquid investments and short-term debt instruments with
original maturities of three months or less to be cash
equivalents.





Revenue Recognition





The
Company recognizes revenue on arrangements in accordance with
Securities and Exchange Commission Staff Accounting Bulletin No.
101, “Revenue Recognition in Financial Statements” and
No. 104, “Revenue Recognition”. In all cases, revenue
is recognized only when the price is fixed or determinable,
persuasive evidence of an arrangement exists, the service is
performed and collectability is reasonably assured. For the periods
ended September 30, 2016 and 2015, the Company did not report any
revenues.





Earnings Per Share





The
Company has adopted the Financial Accounting Standards
Board’s (“FASB”) Accounting Standards
Codification (“ASC”) 260-10 which provides for
calculation of "basic" and "diluted" earnings per
share.  Basic earnings per share includes no dilution and
is computed by dividing net income or loss available to common
stockholders by the weighted average common shares outstanding for
the period.  Diluted earnings per share reflect the
potential dilution of securities that could share in the earnings
of an entity.  Basic and diluted losses per share were
the same at the reporting dates as there were no common stock
equivalents outstanding at September 30, 2016 and
2015.





Fair Value of Financial Instruments





Effective
January 1, 2008, fair value measurements are determined by the
Company's adoption of authoritative guidance issued by the FASB,
with the exception of the application of the statement to
non-recurring, non-financial assets and liabilities, as permitted.
Fair value is defined in the authoritative guidance as the price
that would be received to sell an asset or paid to transfer a
liability in the principal or most advantageous market for the
asset or liability in an orderly transaction between market
participants at the measurement date. A fair value hierarchy was
established, which prioritizes the inputs used in measuring fair
value into three broad levels as follows:





Level 1
– Valuation based on unadjusted quoted market prices in
active markets for identical assets or liabilities.





Level 2
– Valuation based on, observable inputs (other than level one
prices), quoted market prices for similar assets such as at the
measurement date; quoted prices in the market that are not active;
or other inputs that are observable, either directly or
indirectly.





Level 3
– Valuation based on unobservable inputs that are supported
by little or no market activity, therefore requiring
management’s best estimate of what market participants would
use as fair value.





In
instances where the determination of the fair value measurement is
based on inputs from different levels of the fair value hierarchy,
the level in the fair value hierarchy within which the entire fair
value measurement falls is based on the lowest level input that is
significant to the fair value measurement in its entirety. The
Company’s assessment of the significance of a particular
input to the fair value measurement in its entirety requires
judgment, and considers factors specific to the asset or liability.
The valuation of the Company’s notes recorded at fair value
is determined using Level 3 inputs, which consider (i) time value,
(ii) current market and (iii) contractual prices.





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

















9








The
following table represents the Company’s assets and
liabilities by level measured at fair value on a recurring basis at
December 31, 2015:


Description
Level 1
Level 2
Level 3Notes payable at
fair value
$-
$-
$311,076





The
following table represents the Company’s assets and
liabilities by level measured at fair value on a recurring basis at
September 30, 2016:


Description
Level 1
Level 2
Level 3Notes payable at
fair value
$-
$-
$-





The
following assets and liabilities are measured on the balance sheets
at fair value on a recurring basis utilizing significant
unobservable inputs or Level 3 assumptions in their valuation. The
following tables provide a reconciliation of the beginning and
ending balances of the liabilities:





The
change in the notes payable at fair value for the nine month period
ended September 30, 2016 is as follows:





NewFair
Value
Change in
fair
Convertible

Fair
ValueJanuary 1,
2016
Value
Notes
Conversions
September 30,
2016Notes payable at
fair value
$311,074
$109,992
$135,884
$(556,950)
$-





The
change in the notes payable at fair value for the three months
ended September 30, 2016 are as follows:





Fair
Value
Change in
fair
Convertible

Fair
ValueJune 30,
2016
Value
Notes
Conversions
September 30,
2016Notes payable at
fair value
$186,605
$221,059
$-
$(407,664)
$-





All
gains and losses on assets and liabilities measured at fair value
on a recurring basis and classified as Level 3 within the fair
value hierarchy are recognized in interest income or expense in the
accompanying financial statements.





The
significant unobservable inputs used in the fair value measurement
of the liabilities described above present value of the future
interest payments.





10


Property and Equipment and Depreciation





Fixed
assets are recorded at historical cost. Depreciation is computed on
the straight-line method over the estimated useful lives of the
respective assets. Property and equipment, net consist of the
following at September 30, 2016 and December 31, 2015:





September 30,
2016
December 31,
2015Diving
vessel
$326,005
$326,005Equipment
32,420
7,420Less accumulated
depreciation
(295,637)
(270,149)$62,788
$63,276





Depreciation
expense for the nine month periods ended September 30, 2016 and
2015 amounted to $25,488.





Impairment of Long-Lived Assets





In
accordance with ASC 360-10, the Company, on a regular basis,
reviews the carrying amount of long-lived assets for the existence
of facts or circumstances, both internally and externally, that
suggest impairment. The Company determines if the carrying amount
of a long-lived asset is impaired based on anticipated undiscounted
cash flows, before interest, from the use of the asset. In the
event of impairment, a loss is recognized based on the amount by
which the carrying amount exceeds the fair value of the asset. Fair
value is determined based on appraised value of the assets or the
anticipated cash flows from the use of the asset, discounted at a
rate commensurate with the risk involved. There were no impairment
charges recorded during the periods ended September 30, 2016 and
2015.





Employee Stock Based Compensation





The
FASB issued SFAS No.123 (revised 2004), Share-Based Payment , which was
superseded by ASC 718-10. ASC 718-10 provides investors and other
users of financial statements with more complete and
neutral financial information, by requiring that the
compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured
based on the fair value of the equity or liability instruments
issued. SFAS 123(R) covers a wide range of share-based compensation
arrangements, including share options, restricted share plans,
performance-based awards, share appreciation rights and employee
share purchase plans. As of September 30, 2016, the Company has not
implemented an employee stock based compensation plan.





Non-Employee Stock Based Compensation





The
Company accounts for stock based compensation awards issued to
non-employees for services, as prescribed by ASC 718-10, at either
the fair value of the services rendered or the instruments issued
in exchange for such services, whichever is more readily
determinable, using the measurement date guidelines enumerated in
EITF 96-18,  Accounting for
Equity Instruments That Are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services
, which was superseded by ASC 505-50.  The Company has
previously issued compensatory shares for various services
including, but not limited to, executive, board of directors,
business consulting, corporate advisory, accounting, research,
archeological, operations, strategic planning, corporate
communications, financial, legal and administrative consulting
services. As determined by Management the Company may issue
compensatory shares in the future for these or other services.





Use of Estimates





The
process of preparing condensed financial statements in conformity
with accounting principles generally accepted in the United States
of America requires the use of estimates and assumptions regarding
certain types of assets, liabilities, revenues, and
expenses.  Such estimates primarily relate to unsettled
transactions and events as of the date of the condensed financial
statements.  Accordingly, upon settlement, actual results
may differ from estimated amounts.








11


Convertible Notes Payable





The
Company accounts for conversion options embedded in convertible
notes in accordance with ASC 815. ASC 815 generally requires
companies to bifurcate conversion options embedded in convertible
notes from their host instruments and to account for them as free
standing derivative financial instruments. ASC 815 provides for an
exception to this rule when convertible notes, as host instruments,
are deemed to be conventional, as defined by ASC
815-40.





The
Company accounts for convertible notes deemed conventional and
conversion options embedded in non-conventional convertible notes
which qualify as equity under ASC 815, in accordance with the
provisions of ASC 470-20, which provides guidance on accounting for
convertible securities with beneficial conversion features.
Accordingly, the Company records, as a discount to convertible
notes, the intrinsic value of such conversion options based upon
the differences between the fair value of the underlying common
stock at the commitment date of the note transaction and the
effective conversion price embedded in the note. Debt discounts
under these arrangements are amortized over the term of the related
debt.





The
classification of derivative instruments, including whether such
instruments should be recorded as liabilities or as equity, is
evaluated at the end of each reporting
period.  Derivative instrument liabilities are classified
in the balance sheet as current or non-current based on whether or
not net-cash settlement of the derivative instrument could be
required within 12 months of the balance sheet
date.





Convertible Notes Payable at Fair Value





The
  Company   elected   to   account   for
  this   hybrid   contract   under   the
  guidance   of   ASC  
815-15-25-4.  This guidance allows an entity that
initially recognizes a hybrid financial instrument that under
paragraph   ASC 815-15-25-1 would be required to be
separated into a host contract and a derivative instrument may
irrevocably elect to initially and subsequently measure that hybrid
financial instrument in its entirety at fair value (with changes in
fair value recognized in earnings).





The
fair value election is also available when a previously recognized
financial instrument subject to a re-measurement event and the
separate recognition of an embedded derivative. The fair value
election may be made instrument by instrument. For purposes of this
paragraph, a re-measurement event (new basis event) is an event
identified in generally accepted accounting principles, other than
the recognition of an other-than-temporary impairment, that
requires a financial instrument to be re-measured to its fair value
at the time of the event but does not require that instrument to be
reported at fair value on a continuous basis with the change in
fair value recognized in earnings. Examples of re-measurement
events are business combinations and significant modifications of
debt as defined in Subtopic 470-50.





NOTE 4 - LOSS PER SHARE





Components
of loss per share for the three months ended September 30, 2016 and
2015 are as follows:





For the Three Months Ended
September 30, 2016
For the Three Months Ended
September 30, 2015Net loss
attributable to common stockholders
$(685,265)
$(326,116)Weighted average
shares outstanding:Basic and
diluted
2,005,911,180
1,193,601,601Loss per
share:Basic and
diluted
$(0.00)
$(0.00)





Components
of loss per share for the nine months ended September 30, 2016 and
2015 are as follows:





For the Nine Months Ended
September 30, 2016
For the Nine Months Ended
September 30, 2015Net loss
attributable to common stockholders
$(1,192,443)
$(736,738)Weighted average
shares outstanding:Basic and
diluted
1,633,729,734
1,120,925,906Loss per
share:Basic and
diluted
$(0.00)
$(0.00)





12


NOTE 5 – CAPITAL STOCK





At
September 30, 2016 the Company was authorized to issue
2,300,000,000 shares of $0.0001 par value common
stock.





Preferred Stock





The
Company is authorized to sell or issue 50,000,000 shares of
preferred stock.





Series A Preferred Stock





At
September 30, 2016, the Company had seven shares of Series A
preferred stock issued and outstanding. Each share of Series A
preferred stock has the right to convert into 214,289 shares of the
Company’s common stock.  As of September 30, 2016
and 2015, no shares of preferred stock had been converted into
shares of the Company’s common stock.





Series B Preferred Stock





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





Warrants and Options





During
the three month period ended September 30, 2016, the Company issued
the following warrants:





Term
Amount
Exercise Price07/12/16 to 01/12/18
4,000,000
$0.002007/20/16 to 08/26/17
18,181,818
$0.003308/26/16 to 08/26/17
7,000,000
$0.005008/31/16 to 08/31/18
25,000,000
$0.001054,181,818





As of
September 30, 2016, the Company had a total of 143,531,818 warrants
outstanding with exercise prices ranging from $0.0005 to $0.01 per
share.





NOTE 6 - INCOME TAXES





The
items accounting for the difference between income taxes computed
at the federal statutory rate and the provision for income taxes
are as follows:





For the Nine Months Ended September 30, 2016
For the Nine Months Ended September 30, 2015Income tax at
federal statutory rate
(34.00)%
(34.00)%State tax, net of
federal effect
(3.96)%
(3.96)%37.96%
37.96%Valuation
allowance
(37.96)%
(37.96)%Effective
rate
0.00%
0.00%





13


Deferred
income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax
purposes.





As of
September 30, 2016 and December 31, 2015, the Company’s only
significant deferred income tax asset was an estimated net tax
operating loss of $12,518,000 and
$11,326,000 respectively that is available to offset future
taxable income, if any, in future periods, subject to expiration
and other limitations imposed by the Internal Revenue
Service. Management has considered the Company's operating
losses incurred to date and believes that a full valuation
allowance against the deferred tax assets is required as of
September 30, 2016 and December 31, 2015. Company is preparing
information for tax returns for past years. Due to the
Company’s lack of revenue since inception, management does
not believe that there is any income tax liability for past years.
Management has evaluated tax positions in accordance with ASC 740
and has not identified any tax positions, other than those
discussed above, that require disclosure.





NOTE 7 - LEASE OBLIGATION





Corporate Office





The
Company leases 823 square feet of office space located at 14497
North Dale Mabry Highway, Suite 209-N, Tampa, Florida 33618. The
Company entered into an amended lease agreement commencing on July
1, 2015 through June 30, 2017. Under the amended lease agreement
the base monthly rent is $1,215 from July 1, 2015 through June 30,
2016 and $1,251 from July 1, 2016 to June 30,
2017.  There may be additional monthly charges for
pro-rated maintenance, late fees, etc.





Diving Operations House





The
Company has an operating lease for a house located in Palm Bay,
Florida. The Company uses the house to store equipment and gear and
to provide temporary work-related living quarters for its divers,
personnel, consultants and independent contractors involved in its
exploration and recovery operations. The term of the lease
agreement commenced on October 1, 2015 and expired on October 31,
2016. The Company is leasing the property on a month to month basis
subsequent to October 31, 2016 under the same terms. The Company
pays $1,300 per month to lease the operations house.





NOTE 8 - CONVERTIBLE NOTES PAYABLE AND NOTES
PAYABLE





The
Company evaluates each financial instrument to determine whether it
meets the definition of “conventional convertible” debt
under ASC 815-40.  The note payable conversion feature of
the outstanding convertible debt met the definition of conventional
convertible for purposes of applying the conventional convertible
exemption. The definition of conventional contemplates a limitation
on the number of shares issuable under the arrangement. Since the
convertible notes achieved the conventional convertible exemption,
the Company was required to consider whether the hybrid contracts
embody a beneficial conversion feature. The calculation of the
effective conversion amount did result in a beneficial conversion
feature.





Convertible Notes Payable





The
following table reflects the convertible notes payable, other than
five notes that have been remeasured to fair value which are
discussed later in Note 8, as of September 30, 2016:





Issue
Maturity
September
30,
Interest
ConversionDate
Date
2016
Rate
RateConvertible notes
payable:April 4,
2016
November 4,
2016
$10,000
6.00%
0.0010July 19,
2016
July 19,
2017
4,000
6.00%
0.0015August 24,
2016
February 24,
2017
20,000
6.00%
0.0010August 31,
2016
August 31,
2017
25,750
6.00%
0.0010Unamortized
discount

(36,482)Balance

$23,268


Convertible notes
payable – related partiesMay 10,
2016
November 10,
2016
$5,000
6.00%
0.00050May
10,2016
November
10,2016
5,000
6.00%
0.00050May 20,
2016
November
20,2016
5,000
6.00%
0.00050July 12,
2016
January
12,2016
2,400
6.00%
0.00060Unamortized
discount

(4,717)$12,683








14





Convertible notes
payable, in defaultOctober 31,
2012
April 30,
2013
$8,000
6.00%
0.0040November 20,
2012
May 20,
2013
50,000
6.00%
0.0050January 19,
2013
July 30,
2013
5,000
6.00%
0.0040February 11,
2013
August 11,
2013
9,000
6.00%
0.0060September 25,
2013
March 25,
2014
10,000
6.00%
0.0125August 28,
2009
November 1,
2009
4,300
10.00%
0.0150April 7,
2010
November 7,
2010
70,000
6.00%
0.0080November 12,
2010
November 7,
2011
40,000
6.00%
0.0050October 4,
2013
April 4,
2014
50,000
6.00%
0.0125October 30,
2013
October 30,
2014
50,000
6.00%
0.0125May 15,
2014
November 15,
2014
40,000
6.00%
0.0070October 13,
2014
April 13,
2015
25,000
6.00%
0.0050June 29,
2015
December 29,
2015
25,000
6.00%
0.0050September 18,
2015
March 18,
2016
25,000
6.00%
0.0020April
20,2015
April 20,
2016
23,652
6.00%
0.0032Balance

$434,952





Convertible notes
payable - related party, in defaultJanuary 19,
2013
July 30,
2013
$15,000
6.00%
0.0040January 9,
2009
January 9,
2010
10,000
10.00%
0.0150January 25,
2010
January 25,
2011
6,000
6.00%
0.0050January 18,
2012
July 18,
2012
50,000
8.00%
0.0040July 26,
2013
January 26,
2014
10,000
6.00%
0.0100January 17,
2014
July 17,
2014
31,500
6.00%
0.0060May 27,
2014
November 27,
2014
7,000
6.00%
0.0070July 21,
2014
January 25,
2015
17,000
6.00%
0.0080October 16,
2014
April 16,
2015
21,000
6.00%
0.0045July 14,
2015
January 14,
2016
9,000
6.00%
0.0030January 12,
2016
July 12,
2016
$5,000
6.00%
0.00200Balance

$181,500





Notes Payable





The
following table reflects the notes payable as of September 30,
2016:





Issue
Date
Maturity Date
2016
Interest RateNotes
payable, in default –related parties:February 24,
2010
February 24,
2011
$7,500
6.00%October 6,
2015
November 11,
2015
10,000
6.00%$17,500


15





Notes
payable, in default:June 23,
2011
August 23,
2011
25,000
6.00%April 27,
2011
April 27,
2012
5,000
6.00%March 05,
2016
June 16,
2016
7,000
6.00%$37,000





Note
Conversions





A
lender who had a convertible promissory note outstanding with a
remaining principal balance of $38,000 elected to convert a portion
of the principal balance of $13,348 of the note plus accrued
interest and late fees of $6,652 into 12,750,000 shares of the
Company’s common stock. The remaining principal balance of
this note was $23,652 at September 30, 2016





A
lender elected to convert the entire principal balance of $15,000
of a convertible promissory note into 30,000,000 shares of the
Company’s common stock. The remaining principal balance of
this note was $0 at September 30, 2016.





A
lender elected to receive 10,000,000 shares of the Company’s
common stock to pay down $10,000 of the principle balance of a
promissory note. The remaining principal balance of this note was
$7,000 at September 30, 2016.





At
September 30, 2016 and December 31, 2015, combined accrued interest
on the convertible notes payable, notes payable and stockholder
loans was $154,790 and $135,581 respectively, and is included in
accounts payable and accrued liabilities on the accompanying
balance sheets.





Convertible Notes Payable and Notes Payable, in
Default





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





The
convertible notes that have been issued by the Company are
convertible at the lender’s option. These convertible notes
represent significant potential dilution to the Company’s
current shareholders as the convertible price of these notes is
generally lower than the current market price of the
Company’s shares. As such when these notes are converted into
shares of the Company’s common stock there is typically a
highly dilutive effect on current shareholders and very possible
that such dilution may significantly negatively affect the trading
price of the Company’s common stock.





Shareholder Loans





At September 30, 2016 the Company had two loans outstanding to its
CEO totaling $29,270, consisting of a loan in the amount of $28,070
with a 6% annual rate of interest and a loan in the amount of
$1,200 at 6% rate of interest and an option to convert the loan
into restricted shares of the Company’s common stock at
$0.002, and, a loan in the amount of $1,200 at a rate of 0%
interest.











16





Convertible Notes Payable at Fair Value





Convertible Note Payable Dated August 28, 2015 at Fair
Value





On
August 28, 2015 the Company entered into a convertible note payable
with a corporation.  The note payable, with a face value
of $44,000, including a $4,000 of original issue discount, bears
interest at 12.0% per annum and is due on August 28, 2016. The
convertible note payable is convertible, at the holder’s
option, into the Company’s common shares at the Variable
Conversion Price. The Variable Conversion Price is defined as 62%
multiplied by the lowest closing bid price for the Company’s
common stock during the twenty (20) trading day period including
the day the notice of conversion is received by the Company. If the
Company’s market capitalization is less than $1,000,000 on
the day immediately prior to the date of the notice of conversion,
then the conversion price shall be 25% multiplied by the lowest
closing price as of the date notice of conversion is given and if
the closing price of the Company’s common stock on the day
immediately prior to the date of the notice of conversion is less
than $0.00075 then the conversion price shall be 25% multiplied by
the lowest closing price as of the date a notice of conversion is
given. The conversion feature is subject to full-ratchet,
anti-dilution protection if the Company sells shares or
share-indexed financing instruments at less than the conversion
price.





In the
evaluation of the financing arrangement, the Company concluded that
the conversion feature did not meet the conditions set forth in
current accounting standards for equity classification. Since
equity classification is not available for the conversion feature,
it requires bifurcation and liability classification, at fair
value. The Company elected to account for this hybrid contract
under the guidance of ASC 815-15-25-4.





In
connection with the issuance of the convertible note payable, the
Company recognized day-one derivative loss totaling $76,210 related
to the recognition of (i) the hybrid note and (ii) the derivative
instrument arising from the fair value measurement due to the fair
value of the hybrid note and embedded derivative exceeding the
proceeds that the Company received from the arrangement. Therefore,
the Company was required to record a $76,210 loss on the derivative
financial instrument. In addition, the fair value will change in
future periods, based upon changes in the Company’s common
stock price and changes in other assumptions and market indicators
used in the valuation techniques. These future changes will be
currently recognized in interest expense or interest income on the
Company’s statement of operations.





The
conversion of the note into shares of the Company’s common
stock is potentially highly dilutive to current shareholders. If
the note holder elects to sell the shares that it has acquired as a
result of converting the note into shares of common stock, then any
such sales may result in a significant decrease in the market price
of the Company’s shares.





During
the nine month period ended September 30, 2016, the principle
balance and accrued interest was converted into 54,561,311 shares
of common stock.





Convertible Note Payable Dated September 3, 2015 at Fair
Value





On
September 3, 2015 the Company entered into a convertible note
payable with a corporation.  The note payable in the
amount of $38,500, including a $3,500 original issue discount, and
bears interest at 12.0% per annum and is due on September 3, 2017.
According to the terms of the note, the Company was eligible to
utilize up to $200,000 of credit under the note, with potential
proceeds received of $180,000, however at the time the Company
elected to borrow only the $38,500.  Any additional
amount borrowed under this note would require approval of both the
Company and the lender. The convertible note payable is
convertible, at the holder’s option, into the Company’s
common shares at the Variable Conversion Price. The Variable
Conversion Price is defined as 65% multiplied by the lowest trade
price for the Company’s common stock in the twenty-five (25)
trading day period previous to the conversion. The conversion
feature is subject to full-ratchet, anti-dilution protection if the
Company sells shares or share-indexed financing instruments at less
than the conversion price.





In the
evaluation of the financing arrangement, the Company concluded that
the conversion feature did not meet the conditions set forth in
current accounting standards for equity classification. Since
equity classification is not available for the conversion feature,
it requires bifurcation and liability classification, at fair
value. The Company elected to account for this hybrid contract
under the guidance of ASC 815-15-25-4.





In
connection with the issuance of the convertible note payable, the
Company recognized day-one derivative loss totaling $42,308 related
to the recognition of (i) the hybrid note and (ii) the derivative
instrument arising from the fair value measurement due to the fair
value of the hybrid note and embedded derivative exceeding the
proceeds that the Company received from the arrangement. Therefore,
the Company was required to record a $29,789 loss on the derivative
financial instrument. In addition, the fair value will change in
future periods, based upon changes in the Company’s common
stock price and changes in other assumptions and market indicators
used in the valuation techniques. These future changes will be
currently recognized in interest expense or interest income on the
Company’s statement of operations.





The
conversion of the note into shares of the Company’s common
stock is potentially highly dilutive to current shareholders. If
the note holder elects to sell the shares that it has acquired as a
result of converting the note into shares of common stock, then any
such sales may result in a significant decrease in the market price
of the Company’s shares.





During
the nine month period ended September 30, 2016, the principle
balance and accrued interest was converted into 86,597,589 shares
of common stock.











17





Convertible Note Payable Dated September 8, 2015 at Fair
Value





On
September 8, 2015, the Company entered into a convertible note
payable with a corporation.  The convertible note
payable, with a face value of $27,000, bears interest at 8.0% per
annum and is due on September 8, 2016. The note payable is
convertible, at the holder’s option, into the Company’s
common shares at the Variable Conversion Price. The Variable
Conversion Price is defined as 65% multiplied by the lowest closing
bid price   for the Company’s common stock during
the fifteen (15) trading day period including the day the notice of
conversion is received by the Company. The conversion feature is
subject to full-ratchet, anti-dilution protection if the Company
sells shares or share-indexed financing instruments at less than
the conversion price.





In the
evaluation of the financing arrangement, the Company concluded that
the conversion feature did not meet the conditions set forth in
current accounting standards for equity classification. Since
equity classification is not available for the conversion feature,
it requires bifurcation and liability classification, at fair
value. The Company elected to account for this hybrid contract
under the guidance of ASC 815-15-25-4.





In
connection with the issuance of the convertible note payable, the
Company recognized day-one derivative loss totaling $16,690 related
to the recognition of (i) the hybrid note and (ii) the derivative
instrument arising from the fair value measurement due to the fair
value of the hybrid note and embedded derivative exceeding the
proceeds that the Company received from the arrangement. Therefore,
Company was required to record a $16,690 loss on the derivative
financial instrument. In addition, the fair value will change in
future periods, based upon changes in the Company’s common
stock price and changes in other assumptions and market indicators
used in the valuation techniques. These future changes will be
currently recognized in interest expense or interest income on the
Company’s statement of operations.





The
conversion of the note into shares of the Company’s common
stock is potentially highly dilutive to current shareholders. If
the note holder elects to sell the shares that it has acquired as a
result of converting the note into shares of common stock, then any
such sales may result in a significant decrease in the market price
of the Company’s shares.





During
the nine month period ended September 30, 2016, the principle
balance and accrued interest was converted into 50,268,153 shares
of common stock.





Convertible Note Payable Dated December 15, 2015 at Fair
Value





On
December 15, 2015 the Company entered into a convertible note
payable with a corporation.  The note
payable  in the amount of $27,500, including a $2,500
original issue discount, and bears interest at 12.0% per annum and
is due on September 3, 2017. The convertible note payable is
convertible, at the holder’s option, into the Company’s
common shares at the Variable Conversion Price. The Variable
Conversion Price is defined as 65% multiplied by the lowest trade
price for the Company’s common stock in the twenty-five (25)
trading day period previous to the conversion. The conversion
feature is subject to full-ratchet, anti-dilution protection if the
Company sells shares or share-indexed financing instruments at less
than the conversion price.





In the
evaluation of the financing arrangement, the Company concluded that
the conversion feature did not meet the conditions set forth in
current accounting standards for equity classification. Since
equity classification is not available for the conversion feature,
it requires bifurcation and liability classification, at fair
value. The Company elected to account for this hybrid contract
under the guidance of ASC 815-15-25-4.





In
connection with the issuance of the convertible note payable, the
Company recognized day-one derivative loss totaling $29,789 related
to the recognition of (i) the hybrid note and (ii) the derivative
instrument arising from the fair value measurement due to the fair
value of the hybrid note and embedded derivative exceeding the
proceeds that the Company received from the arrangement. Therefore,
the Company was required to record a $29,789 loss on the derivative
financial instrument. In addition, the fair value will change in
future periods, based upon changes in the Company’s common
stock price and changes in other assumptions and market indicators
used in the valuation techniques. These future changes will be
currently recognized in interest expense or interest income on the
Company’s statement of operations.





The
conversion of the note into shares of the Company’s common
stock is potentially highly dilutive to current shareholders. If
the note holder elects to sell the shares that it has acquired as a
result of converting the note into shares of common stock, then any
such sales may result in a significant decrease in the market price
of the Company’s shares.





During
the nine month period ended September 30, 2016, the principle
balance and accrued interest was converted into 53,181,384 shares
of common stock.











18





Convertible Note Payable Dated March 24, 2016 at Fair
Value





On
March 24, 2016 the Company entered into a convertible note payable
with a corporation.  The note payable, with a face value
of $33,000, including a $3,000 of original issue discount, bears
interest at 12.0% per annum and is due on March 24, 2017. The
convertible note payable is convertible, at the holder’s
option, into the Company’s common shares at the Variable
Conversion Price. The Variable Conversion Price is defined as 62%
multiplied by the lowest closing bid price for the Company’s
common stock during the twenty-five (25) trading day period
including the day the notice of conversion is received by the
Company. If the Company’s market capitalization is less than
$1,000,000 on the day immediately prior to the date of the notice
of conversion, then the conversion price shall be 25% multiplied by
the lowest closing price as of the date notice of conversion is
given and if the closing price of the Company’s common stock
on the day immediately prior to the date of the notice of
conversion is less than $0.0009 then the conversion price shall be
25% multiplied by the lowest closing price as of the date a notice
of conversion is given. The conversion feature is subject to
full-ratchet, anti-dilution protection if the Company sells shares
or share-indexed financing instruments at less than the conversion
price.





In the
evaluation of the financing arrangement, the Company concluded that
the conversion feature did not meet the conditions set forth in
current accounting standards for equity classification. Since
equity classification is not available for the conversion feature,
it requires bifurcation and liability classification, at fair
value. The Company elected to account for this hybrid contract
under the guidance of ASC 815-15-25-4.





In
connection with the issuance of the convertible note payable,
during the three month period ended March 31, 2016 the Company
recognized day-one derivative loss totaling $32,210 related to the
recognition of (i) the hybrid note and (ii) the derivative
instrument arising from the fair value measurement due to the fair
value of the hybrid note and embedded derivative exceeding the
proceeds that the Company received from the arrangement. Therefore,
during the three month period ended March 31, 2016 the Company was
required to record a $102,882 loss on the derivative financial
instrument and is included in interest expense. In addition, the
fair value will change in future periods, based upon changes in the
Company’s common stock price and changes in other assumptions
and market indicators used in the valuation techniques. These
future changes will be currently recognized in interest expense or
interest income on the Company’s statement of
operations.





The
conversion of the note into shares of the Company’s common
stock is potentially highly dilutive to current shareholders. If
the note holder elects to sell the shares that it has acquired as a
result of converting the note into shares of common stock, then any
such sales may result in a significant decrease in the market price
of the Company’s shares.





During
the nine month period ended September 30, 2016, the principle
balance and accrued interest was converted into 69,091,471 shares
of common stock.





NOTE 9 – MATERIAL AGREEMENTS





Agreement to Explore a Shipwreck Site Located off of Brevard
County, Florida





On
March 1, 2014, Seafarer entered into a partnership and ownership
with Marine Archaeology Partners, LLC, with the formation of
Seafarer’s Quest, LLC. Such LLC was formed in the State of
Florida for the purpose of permitting, exploration and recovery of
artifacts from a designated area on the east coast of Florida. Such
site area is from a defined, contracted area by a separate entity,
which a portion of such site is designated from a previous
contracted holding through the State of Florida. Under such
agreement, Seafarer is responsible for costs of permitting,
exploration and recovery, and is entitled to 60% of such artifact
recovery. Seafarer has a 50% ownership, with designated management
of the LLC coming from Seafarer.





Exploration Permit with the Florida Division of Historical
Resources for an Area off of Melbourne Beach, Florida





On July
28, 2014, Seafarer’s Quest, LLC, received a 1A-31 Permit (the
“Permit”) from the Florida Division of Historical
Resources for an area identified off of Melbourne Beach, Florida.
The Permit is active for three years from the date of
issuance.





19





Exploration Permit with the Florida Division of Historical
Resources for an Area off of Melbourne Beach, Florida





On July
6, 2016, Seafarer’s Quest, LLC, received a 1A-31 Permit (the
“Permit”) from the Florida Division of Historical
Resources for a second area identified off of Melbourne Beach,
Florida. The Permit is active for three years from the date of
issuance.





Certain Other Agreements





In
January of 2016 the Company entered into a consulting agreement
with an individual under which the individual agreed to provide
corporate communications services and shareholder notification and
awareness services. The term of the agreements is for twelve months
and the Company agreed to pay the consultant 4,000,000 shares of
restricted common stock to perform the services.





In
April of 2016, the Company entered into agreements with seven
separate individuals to either join or rejoin the Company’s
advisory council. Under the advisory council agreements all of the
advisors agreed to provide various advisory services to the
Company, including making recommendations for both the short term
and the long term business strategies to be employed by the
Company, monitoring and assessing the Company's business and to
advise the Company’s Board of Directors with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions and identifying and evaluating
alternative courses of action, making suggestions to strengthen the
Company's operations, identifying and evaluating external threats
and opportunities to the Company, evaluating and making ongoing
recommendations to the Board with respect to the Company's
business, and providing such other advisory or consulting services
as may be appropriate from time to time. The term of each of the
advisory council agreements is for one year. In consideration for
the performance of the advisory services, the Company agreed to
issue the advisors shares of the Company’s restricted common
stock including 4,000,000 shares each to three of the advisors,
3,000,000 shares each to three of the advisors and 2,000,000 shares
to one of the advisors, an aggregate total of 23,000,000 restricted
shares. According to the agreements each of the advisors’
shares vest at a rate of 1/12 th of the amount per month over the
term of the agreement.  If any of the advisors or the
Company terminates the advisory council agreements prior to the
expiration of the one year terms, then each of the advisors whose
agreement has been terminated has agreed to return to the Company
for cancellation any portion of their shares that have not vested.
Under the advisory council agreements, the Company has agreed to
reimburse the advisors for pre approved expenses.





In
April of 2016, the Company entered into a consulting agreement with
a limited liability company under which the consultant agreed to
provide diving services, assist in maintaining Seafarer’s
vessels and equipment, and provide operational and project
management services for Seafarer’s exploration and recovery
diving operations. The term of the consulting agreement is from
April 1, 2016 to March 31, 2017 and at the end of the term the
consulting agreement may be renegotiated. The consultant reports
directly to the CEO of Seafarer. The Company agreed to pay $125 per
day to the consultant plus an initial $25 per day for operational
and site management services. The Company also agreed to pay $700
per month to the consultant for campground and electrical services
while the consultant is on site providing services to the Company..
The Company also agreed to pay 4,000,008 shares of restricted
common stock to the consultant for the services. The shares vest at
a rate of 333,334 shares per month over a twelve month period. If
the Company or the consultant terminates the agreement prior to the
end of the term of the agreement then any of the shares that have
not yet vested will be cancelled. The Company, in its sole
discretion, may pay the consultant additional compensation or
bonuses.





In
April of 2016, the Company paid 2,880,000 shares of restricted
common stock to an individual for providing past project management
services related to the Company’s dive
operations.





In
April of 2016 the Company entered into a consulting agreement with
a corporation under which the corporation agreed to provide various
services including business development, mergers and acquisitions,
business strategy and analysis of business opportunities in the
historic shipwreck exploration business in Panama. The consultant
will not negotiate on behalf of the Company or provide any market
making or listing services. The term of the agreement is open ended
and will continue until the completion of the consulting services.
The Company agreed to pay the consultant a total of 2,000,000
shares of restricted common stock.





In
April of 2016 the Company entered into a consulting agreement with
a corporation under which the corporation agreed to provide various
services including business development, mergers and acquisitions
and business. The consultant will not negotiate on behalf of the
Company or provide any market making or listing services. The term
of the agreement is open ended and will continue until the
completion of the consulting services. The Company agreed to pay
the consultant a total of 1,000,000 shares of restricted common
stock.





In May
of 2016, the Company entered into an agreement with an individual
to rejoin the Company’s advisory council. Under the advisory
council agreement the advisor agreed to provide various advisory
services to the Company, including making recommendations for both
the short term and the long term business strategies to be employed
by the Company, monitoring and assessing the Company's business and
to advise the Company’s Board of Directors with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions and identifying and evaluating
alternative courses of action, making suggestions to strengthen the
Company's operations, identifying and evaluating external threats
and opportunities to the Company, evaluating and making ongoing
recommendations to the Board with respect to the Company's
business, and providing such other advisory or consulting services
as may be appropriate from time to time. The term of each of the
advisory council agreement is for one year. In consideration for
the performance of the advisory services, the Company agreed to
issue the advisor 2,000,000 shares of restricted common stock.
According to the agreements the advisor’s shares vest at a
rate of 1/12 th of the amount per month over the term of the
agreement.  If the advisor or the Company terminates the
advisory council agreement prior to the expiration of the one year
term, the advisor has agreed to return to the Company for
cancellation any portion of the shares that have not vested. Under
the advisory council agreement, the Company has agreed to reimburse
the advisor for pre approved expenses.





20





In May
of 2016, the Company extended the term of a previous agreement with
an individual who is related to the Company’s CEO to continue
serving as a member of the Company’s Board of Directors.
Under the  agreement, the Director agreed to provide
various services to the Company including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect for one
year and may be terminated by either the Company or the Director by
providing written notice to the other party. The agreement also
terminates automatically upon the death, resignation or removal of
the Director.  Under the terms of the agreement, the
Company agreed to pay the Director 20,000,000 shares of restricted
common stock and to negotiate future compensation on a year-by-year
basis. The Company also agreed to reimburse the Director for
pre-approved expenses.





In May
of 2016, the Company extended the term of a previous agreement with
an individual who is related to the Company’s CEO to continue
serving as a member of the Company’s Board of Directors.
Under the  agreement, the Director agreed to provide
various services to the Company including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect for one
year and may be terminated by either the Company or the Director by
providing written notice to the other party. The agreement also
terminates automatically upon the death, resignation or removal of
the Director.  Under the terms of the agreement, the
Company agreed to pay the Director 20,000,000 shares of restricted
common stock and to negotiate future compensation on a year-by-year
basis. The Company also agreed to reimburse the Director for
pre-approved expenses.





In May
of 2016, the Company issued a consultant 5,000,000 shares of
restricted common stock for providing various project management
services related to the Company’s shipwreck exploration and
recovery services. The Company believes that the consultant has
provided services at below market rates of compensation and the
shares were paid both to more fairly compensate the consultant and
as a bonus and inducement for the consultant to continue to provide
services to the Company.





In June
of 2016, the Company entered into a consulting agreement with two
individuals under which the individuals agreed to provide various
consulting services including website development to include a
storefront, and business strategy relating to business development
for the Company’s digital storefront and Internet
merchandising site. The term of the agreement is open ended and
will continue until the completion of the services. The Company
agreed to pay each consultant 2,000,000 shares of its restricted
common stock, a total of 4,000,000 shares of restricted common
stock.





In June
of 2016, the Company entered into a consulting agreement with an
individual who is related to the Company’s CEO under which
the individual agreed to provide various consulting services
including business development, photography, custom logo design and
development, developing corporate identity materials such as
business cards, editing, art illustrations, and working with the
Company and other consultants to develop its future digital
storefront and Internet merchandise site. The term of the agreement
is open ended and will continue until the completion of the
services. The Company agreed to pay the consultant a total of
5,000,000 shares of restricted common stock.





In July
of 2016 the Company entered into a consulting agreement with a
corporation under which the corporation agreed to provide various
services including business development, mergers and acquisitions
and business. The consultant will not negotiate on behalf of the
Company or provide any market making or listing services. The term
of the agreement is open ended and will continue until the
completion of the consulting services. The Company agreed to pay
the consultant a total of 5,000,000 shares of restricted common
stock.





In July
of 2016 the Company issued 4,732,000 shares of restricted common
stock to a consultant to reimburse the consultant for travel
expenses and time incurred for setting up various
meetings.





In July
of 2016, the Company entered into a consulting agreement with an
individual under which the individual agreed to provide various
consulting services including website development to include
business development, assistance with other consultants in
developing and maintaining a digital store front, film editing, and
for other Web based consulting relating to the Company’s
efforts to develop Internet merchandising opportunities. The term
of the agreement is open ended and will continue until the
completion of the services. The Company agreed to pay the
consultant 2,500,000 shares of its restricted common
stock.





In July
of 2016, the Company entered into a consulting agreement with an
individual under which the individual agreed to provide various
consulting services including media, business development related
to television and motion pictures, and general consulting related
to media and entertainment. The term of the agreement is open ended
and will continue until the completion of the services. The Company
agreed to pay the consultant 2,000,000 shares of its restricted
common stock.





In
September of 2016 the Company issued 5,000,000 shares of restricted
common stock to one of its legal advisors. The shares were issued
as retention bonus for the advisor’s willingness to forego
receiving payment for services rendered for lengthy time periods,
appreciation for past legal services rendered, as well to induce
the advisor to continue to provide services on favorable terms to
the Company.





In
September of 2016 the Company issued 1,500,000 shares of restricted
common stock to one of its consultants. The shares were issued as
retention bonus for the consultant’s willingness to forego
receiving payment for services rendered for lengthy time periods,
appreciation for past administrative and clerical services
rendered, as well to induce the consultant to continue to provide
services on favorable terms to the Company.





21





In
September of 2016 the Company issued 15,000,000 shares of
restricted common stock to one of its business advisory
consultants. The shares were issued as retention bonus for the
consultant’s willingness to forego receiving payment for
services rendered for lengthy time periods, appreciation for past
business advisory, strategic planning, assistance with financial
reporting, administrative and IT services, as well to induce the
consultant to continue to provide services on favorable terms to
the Company.





In
September of 2016 the Company issued a total of 13,000,000 shares
of restricted common stock to nine independent contractor
consultants who provide various services relating to the
Company’s diving operations. The shares were issued were
issued as retention bonus for the consultants’ willingness to
forego receiving payments for services rendered for lengthy time
periods, appreciation for past services rendered, as well to induce
the consultants to continue to provide services on favorable terms
to the Company.





The
Company has an ongoing verbal agreement with a limited liability
company that is controlled by a person who is related to the
Company’s CEO to pay the related party consultant $3,000 per
month to provide general business consulting and assessing the
Company's business and to advise management with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions, perform period background research
including background checks and provide investigative information
on individuals and companies and to occasional assist as an
administrative specialist to perform various administrative duties
and clerical services including reviewing the Company’s
agreements and books and records. The consultant provides the
services under the direction and supervision of the Company’s
CEO.





The
Company has an ongoing agreement with a limited liability company
that is owned and controlled by a person who is related to the
Company’s CEO to provide stock transfer agency
services. At September 30, 2016, the Company owed the related
party limited liability company $1,195.





The
Company has an ongoing agreement to pay a limited liability company
a monthly fee of $3,500 in cash or $5,000 per month in restricted
stock for archeological services and the review of historic
shipwreck research consulting services.





The
Company has an ongoing agreement to pay an individual a monthly fee
of $1,500 per month for archeological consulting
services.





The
Company has an ongoing consulting agreement to pay a limited
liability company a minimum of $5,000 per month for business
advisory, strategic planning and consulting services, assistance
with financial reporting, IT management, and administrative
services. The Company also agreed to reimburse the consultant for
expenses. The agreement is verbal and may be terminated by the
Company or the consultant at any time.





NOTE 10 – LEGAL PROCEEDINGS





On
March 23, 2016 the Board of Directors signed a universal settlement
agreement with the Plaintiffs in the litigation matters of
Micah Eldred, et al., v. Seafarer
Exploration, et al., Hillsborough County, Florida, Case No.
09-CA-30763, and Micah Eldred v.
Seafarer Exploration Corp., et al., Hillsborough County,
Florida, Case No. 14-CA-5360, and in the matter of
Seafarer Exploration, et al. v.
Micah Eldred, et al., Hillsborough County, Florida, Court of
Appeals Case No. 14-2884, specifically: Micah Eldred, Michael
Daniels, Diane J. Harrison, James Eldred, Mary R. Eldred, Michole
Eldred, Nathan Eldred, Toni A. Eldred, Toni A. Eldred FBO Jordan
Gratton, Toni A. Eldred FBO Justin Gratton, Vanessa A Verbosh,
Oksana Savchenko, Matthew J. Presy, Olessia Kritskaia, Ekaterina
Messinger, Abby Lord, Ioulia Hess, Anna Krokhina, George Linder,
Christine Zitman, Carl Dilley, Heather Dilley, Robert Lizzano,
Elizabeth Lizzano, Karen Lizzano, Susan Miller, Jillian Mally,
Michael Mona, Alan Wolper, Sarah Wolper, Alan Wolper FBO Michael
Wolper, Spartan Securities Group, Ltd., and Am Asia Consulting
entered into the settlement agreement with Seafarer. An earlier
named party, CADEF, The Childhood Autism Foundation, Inc., had
previously entered into a settlement agreement and is no longer a
party in the Litigation.





The
settlement called for both cases to be dismissed, with prejudice,
and the Plaintiffs in case number 09-CA-30763 agreed to surrender
and cancel all of their 32,300,000 shares of restricted common
stock which were returned to the treasury of the Corporation. All
such shares have been returned for cancellation. On March 23, 2016
Seafarer CEO signed the resolution to cancel the 32,300,000 shares
and instructed the transfer agent ClearTrust LLC to cancel the
shares and return them to treasury for the benefit of Seafarer thus
reducing the number of outstanding shares by 32,300,000 shares. At
the present time the dismissal has been filed and the case closed,
with all shares cancelled.





On June
18, 2013, Seafarer began litigation against Tulco Resources, LLC,
in a lawsuit filed in the Circuit Court in and for Hillsborough
County, Florida. Such suit was filed for against Tulco based
upon  for breach of contract, equitable relief and
injunctive relief. Tulco was the party holding the rights under a
permit to a treasure site at Juno Beach, Florida. Tulco and
Seafarer had entered into contracts  in March 2008, and
later renewed under an amended agreement on June 11, 2010. Such
permit was committed to by Tulco to be an obligation and
contractual duty to which they would be responsible for payment of
all costs in order for the permit to be reissued. Such obligation
is contained in the agreement of March 2008 which was renewed in
the June 2010 agreement between Seafarer and Tulco. Tulco made the
commitment to be responsible for payments of all necessary costs
for the gaining of the new permit. Tulco never performed on such
obligation, and Seafarer during the period of approximately March
2008 and April 2012 had endeavored and even had to commence a
lawsuit to gain such permit which was awarded in April 2012.
Seafarer alleges in their complaint the expenditure of large
amounts of shares and monies for financing and for delays due to
Tulco’s non-performance. Seafarer seeks monetary damages and
injunctive relief for the award of all rights held by Tulco to
Seafarer Seafarer gained a default and final Judgment on such
matter on July 23, 2014. Seafarer is now working with the State for
the renewed permit to be in Seafarer’s name and rights only,
with Tulco removed per the Order of the Court. On March 4, 2015,
the Court awarded full rights to the Juno sight to Seafarer
Exploration, erasing all rights of Tulco Resources. The company has
currently filed an Admiralty Claim over such sight in the United
States District Court which is pending final ruling. On October 21,
2016 a hearing on the Admiralty Claim in the United States District
Court for the Southern District of Florida was held, where the
Court Ordered actions to take place for ongoing admiralty claim,
which will occur during the month of November 2016. The Company
expects to complete such claim within a few months.





22





On
September 3, 2014, the Company filed a lawsuit against Darrel
Volentine, of California. Mr. Volentine was sued in two counts of
libel per se under Florida law, as well as a count for injunction
against the Defendant to exclude and prohibit internet postings.
Such lawsuit was filed in the Circuit Court in Hillsborough County,
Florida. Such suit is based upon internet postings on www.investorshub.com.
On or about October 15, 2015, the Company and Volentine entered
into a stipulation whereby Volentine admitted to his tortious
conduct, however the stipulated damages agreed to were rejected by
the Court, and the Company is proceeding to trial on damages
against Volentine in a non-jury trial on December 1, 2015. The
Defendant is the subject of a contempt of court motion which was
heard on April 7, 2016, whereby the Court found a violation and
modified the injunction against the Defendant, and imposed other
matters of potential penalties against the Defendant. The Court
also awarded attorney’s fees against the Defendant on behalf
of Seafarer for such motion. The Defendant subsequently attempted
to have such ruling, evidence and testimony attacked through a
motion heard before the Court on October 24, 2016. The Court
dismissed the Defendant’s motion after presentation of the
Defendant’s case at the hearing. The Plaintiff has set the
matter for entry of the attorney’s fees amount due from the
Defendant for hearing in December 2016. As well the Plaintiff has
set for hearing its motion for sanctions in the form of
attorney’s fees for frivolous filing of the October
24th
motion, which motion is also set for hearing in December 2016. The
Plaintiff filed a renewed and amended motion for punitive damages
in the case on September 11, 2016, which has not been set for
hearing. The Defendant had also filed a motion for summary judgment
on the matter of notice entitlement pre-suit, which motion is
pending before the Court. The Plaintiff filed a motion for
sanctions against the Defendant for the motion for summary judgment
being frivolous under existing law, and such motion is pending
ruling on the motion. Discovery is ongoing on such
case.





NOTE 12 – RELATED PARTY TRANSACTIONS





During
the nine month period ended September 30, 2016:





In
January of 2016, the Company entered into a convertible promissory
note agreement in the amount of $5,000 with an individual who is
related to the Company’s CEO. This loan pays interest at a
rate of 6% per annum and the principle and accrued interest was due
on or before July 12, 2016. The note is not secured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.002 per
share.





In
January of 2016 a shareholder who is related to the Company’s
CEO provided a loan in the amount of $260 to the Company. This loan
pays 0% interest.





In February 2016, the Company’s CEO provided a loan to the
Company in the amount of $4,000. This loan pays interest at a rate
of 6% per annum and if the loan and accrued interest are not repaid
within 90 days from February 10, 2016 then the lender is entitled
to receive 500,000 shares of the Company’s restricted common
stock which has not been issued. The note is not secured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.002 per
share.





In May
of 2016, the Company’s CEO provided a loan to the Company in
the amount of $1,200. This loan was repaid during the nine month
period ended September 30, 2016, no interest was paid.





In May
of 2016, the Company extended the term of a previous agreement with
an individual who is related to the Company’s CEO to continue
serving as a member of the Company’s Board of Directors.
Under the  agreement, the Director agreed to provide
various services to the Company including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect for one
year and may be terminated by either the Company or the Director by
providing written notice to the other party. The agreement also
terminates automatically upon the death, resignation or removal of
the Director.  Under the terms of the agreement, the
Company agreed to pay the Director 20,000,000 restricted shares of
its common stock and to negotiate future compensation on a
year-by-year basis. The Company also agreed to reimburse the
Director for pre-approved expenses.





In May
of 2016, the Company extended the term of a previous agreement with
an individual who is related to the Company’s CEO to continue
serving as a member of the Company’s Board of Directors.
Under the  agreement, the Director agreed to provide
various services to the Company including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect for one
year and may be terminated by either the Company or the Director by
providing written notice to the other party. The agreement also
terminates automatically upon the death, resignation or removal of
the Director.  Under the terms of the agreement, the
Company agreed to pay the Director 20,000,000 restricted shares of
its common stock and to negotiate future compensation on a
year-by-year basis. The Company also agreed to reimburse the
Director for pre-approved expenses.





In May
of 2016, the Company entered into a convertible promissory note
agreement in the amount of $5,000 with an individual who is related
to the Company’s CEO. This loan pays interest at a rate of 6%
per annum and the principle and accrued interest are due on or
before November 10, 2016. The note is not secured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.0005 per
share.  The related party lender received 2,500,000
warrants to purchase shares of the Company’s common stock at
a price of $0.002. This note remains
unpaid.





23





In May
of 2016, the Company entered into a convertible promissory note
agreement in the amount of $5,000 with an individual who is related
to the Company’s CEO. This loan pays interest at a rate of 6%
per annum and the principle and accrued interest are due on or
before November 10, 2016. The note is not secured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.0005 per
share.  The related party lender received 2,500,000
warrants to purchase shares of the Company’s common stock at
a price of $0.002. This note remains
unpaid.





In May
of 2016, the Company entered into a convertible promissory note
agreement in the amount of $5,000 with an individual who is related
to the Company’s CEO. This loan pays interest at a rate of 6%
per annum and the principle and accrued interest are due on or
before November 20, 2016. The note is not secured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.0005 per
share.  The related party lender received 10,000,000
warrants to purchase shares of the Company’s common stock at
a price of $0.002.  This note remains
unpaid.





In June
of, 2016, the Company entered into a consulting agreement with an
individual who is related to the Company’s CEO under which
the individual agreed to provide various consulting services
including business development, photography, custom logo design and
development, developing corporate identity materials such as
business cards, editing, art illustrations, and working with the
Company to develop its future digital storefront and Internet
merchandise site. The term of the agreement is open ended and will
continue until the completion of the services. The Company agreed
to pay the consultant a total of 5,000,000 million shares of its
restricted common stock.





On
various dates in July of 2016 the Company repaid a total of $4,100
of the principal balance of loans owed to its CEO. No interest or
financing fees were paid to the Company’s CEO in conjunction
with the repayment of the loans.





On
various dates in July of 2016 the Company repaid a total of $3,180
of the principal balance of several loans owed to a related party.
No interest or financing fees were paid to the related party in
conjunction with the repayment of the loans.





In July
of 2016, the Company entered into a convertible promissory note
agreement in the amount of $2,400 with an individual who is related
to the Company’s CEO. This loan pays interest at a rate of 6%
per annum and the principle and accrued interest are due on or
before January 12, 2017. The note is not secured and is convertible
at the lender’s option into shares of the Company’s
common stock at a rate of $0.0006 per share.  The related
party lender received 4,000,000 warrants to purchase shares of the
Company’s common stock at a price of $0.002.





In
August of 2016, the Company entered into a debt settlement
agreement with a related party vendor to settle a total of $32,213
of outstanding debt related to transfer agent fees and legal fees
incurred by the related party vendor due to a lawsuit against the
Company in which suit the related party vendor was also named as a
defendant due to its position as the Company’s stock transfer
agency. The Company issued 32,212,790 shares of its restricted
common stock to this vendor as satisfaction for the outstanding
debt. The agreement between the Company and the vendor stipulated
that should the transfer agency realize less than $32,213from the
sale of the stock, then the consultant is entitled to receive up to
an additional 11,000,000 shares of common stock or a cash payment
until the balance is paid in full.





In
September of 2016, the Company agreed to pay a related party who is
related to the Company’s CEO, 25,000,000 shares of its
restricted common stock for the purchase of a magnetometer owned by
the related party. The related party had previously purchased the
magnetometer and agreed to rent the equipment to the Company in
2015, however the Company and the related party never agreed to a
specific rental price and the Company never made any rental
payments or paid any fees for use of the equipment. The agreement
specifically states that the Company does not owe the related party
any past fees for rental or equipment charges for use of the
magnetometer.





The
Company has an ongoing verbal agreement with a limited liability
company that is controlled by a person who is related to the
Company’s CEO to pay the related party consultant $3,000 per
month to provide general business consulting and assessing the
Company's business and to advise management with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions, perform period background research
including background checks and provide investigative information
on individuals and companies and to occasional assist as an
administrative specialist to perform various administrative duties
and clerical services including reviewing the Company’s
agreements and books and records. The consultant provides the
services under the direction and supervision of the Company’s
CEO.





The
Company has an ongoing agreement with a limited liability company
that is owned and controlled by a person who is related to the
Company’s CEO to provide stock transfer agency
services. At September 30, 2016, the Company owed the related
party limited liability company $1,195 for transfer agency services
rendered and for the reimbursement of legal fees





At September 30, 2016 the following promissory notes and
shareholder loans were outstanding to related parties:





A
convertible note payable dated January 9, 2009 due to a person
related to the Company’s CEO with a face amount of $10,000.
This note bears interest at a rate of 10% per annum with interest
payments to be paid monthly and is convertible at the note
holder’s option into the Company’s common stock at
$0.015 per share.  The convertible note payable was due
on or before January 9, 2010 and is secured.  This note
is currently in default due to non-payment of principal and
interest.





A
convertible note payable dated January 25, 2010 in the principal
amount of $6,000 with a person who is related to the
Company’s CEO. This loan pays interest at a rate of 6% per
annum and the principle and accrued interest were due on or before
January 25, 2011. The note is not secured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.005 per share. This note is currently in
default due to non-payment of principal and interest.





24





A note
payable dated February 24, 2010 in the principal amount of $7,500
with a corporation. The Company’s CEO was a director of
the corporation. The loan is not secured and pays interest at a
rate of 6% per annum and the principle and accrued interest were
due on or before February 24, 2011. This note is currently in
default due to non-payment of principal and interest.





A
convertible note payable dated January 18, 2012 in the amount of
$50,000 with two individuals who are related to the Company’s
CEO. This loan pays interest at a rate of 8% per annum and the
principle and accrued interest were due on or before July 18, 2012.
The note is secured and is convertible at the lender’s option
into shares of the Company’s common stock at a rate of $0.004
per share. The note is currently in default due to non-payment of
principal and interest.





A
convertible note payable dated January 19, 2013 due to a person
related to the Company’s CEO with a face amount of $15,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.004 per
share.  The convertible note payable was due on or before
July 30, 2013 and is not secured.  The note is currently
in default due to non-payment of principal and
interest.





A
convertible note payable dated July 26, 2013 due to a person
related to the Company’s CEO with a face amount of $10,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.01 per
share.  The convertible note payable was due on or before
January 26, 2014 and is not secured.  The note is
currently in default due to non-payment of principal and
interest.





A
convertible note payable dated January 17, 2014 due to a person
related to the Company’s CEO with a face amount of $31,500.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.006 per
share.  The convertible note payable is due on or before
July 17, 2015 and is not secured. The note is currently in
default due to non-payment of principal and interest.





A
convertible note payable dated May 27, 2014 due to a person related
to the Company’s CEO with a face amount of $7,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.007 per share.  The
convertible note payable was due on or before November 27, 2014 and
is not secured. The note is currently in default due to
non-payment of principal and interest.





A
convertible note payable dated July 21, 2014 due to a person
related to the Company’s CEO with a face amount of $17,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.008 per share.
The convertible note payable was due on or before January 25, 2015
and is not secured. The note is currently in default due to
non-payment of principal and interest.





A
convertible note payable dated October 16, 2014 due to a person
related to the Company’s CEO with a face amount of $21,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0045 per
share.  The convertible note payable was due on or before
April 16, 2015 and is not secured.  The note is currently
in default due to non-payment of principal and
interest.





A
convertible note payable dated July 14, 2015 due to a person
related to the Company’s CEO with a face amount of $9,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0030 per
share.  The convertible note payable was due on or before
January 14, 2016 and is not secured.  The note is
currently in default due to non-payment of principal and
interest.





A note
payable dated October 6, 2015 in the principal amount of $10,000
due to one of the Company’s Directors. The loan is not
secured and pays interest at a rate of 6% per annum and the
principle and accrued interest was due on or before November 11,
2015. This note is currently in default due to non-payment of
principal and interest.





A loan
in the amount of $28,070 due to the Company’s CEO. The loan
is not secured and pays interest at a 6% per annum and the
principal and accrued interest and was due on or before June 14,
2016. The note is currently in default due to non-payment of
principal and interest.





A
convertible note payable dated January 12, 2016 due to a person
related to the Company’s CEO with a face amount of $5,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0020 per
share.  The convertible note payable was due on or before
July 12, 2016 and is not secured.  The note is currently
in default due to non-payment of principal and
interest.





A loan
in the amount with the remaining principal balance of $1,200 due to
the Company’s CEO. The loan is not secured and pays interest
at a 6% per annum. The lender is entitled to receive 500,000 shares
of the Company’s restricted common stock due to the loan not
being repaid within 90 days from February 10, 2016.





25





A
convertible note payable dated May 10, 2016 due to a person related
to the Company’s CEO with a face amount of $5,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.0005 per share.  The
convertible note payable is due on or before November 10, 2016 and
is not secured.





A
convertible note payable dated May 10, 2016 due to a person related
to the Company’s CEO with a face amount of $5,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.0005 per share.  The
convertible note payable is due on or before November 10, 2016 and
is not secured.





A
convertible note payable dated May 20, 2016 due to a person related
to the Company’s CEO with a face amount of $5,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.0005 per share.  The
convertible note payable is due on or before November 20, 2016 and
is not secured.





A
convertible note payable dated July 12, 2016 due to a person
related to the Company’s CEO with a face amount of $2,400.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0006 per
share.  The convertible note payable is due on or before
January 12, 2017 and is not secured.


















































26


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





FORWARD LOOKING STATEMENTS





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





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





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





Overview





General





It has
been estimated, but not verified, by the United Nations
Educational, Scientific and Cultural Organization
(“UNESCO”) that there are over three million
undiscovered shipwrecks around the world and a few of these
shipwrecks were lost with verifiable cargoes that contained
valuable materials, including artifacts and treasure. However, many
of these shipwrecks may have very little archaeological or
historical value.





The
Company’s principal business plan is to develop the
infrastructure to engage in the archaeologically-sensitive
exploration, recovery and conservation of historic shipwrecks. Once
artifacts have been properly conserved, they will be made available
for scientific research and allowed to be displayed for the public.
The Company believes it will eventually be conducting
archaeological research around the world and potentially supporting
organizations like UNESCO and The National Oceanic and Atmospheric
Administration (“NOAA”) in the documentation of
historic shipwrecks. The business plan also includes in-depth
archival research and translation of historical documents from
various international archives and repositories. These translations
of archival research will be made available to government states,
university researchers, NOAA, UNESCO, and other responsible
academic parties upon reasonable request. In addition to the
research, there is ongoing education of personnel involved in
operations with the Company. College level courses in archaeology
are being periodically taught by a Ph.D. in a program to help
educate the personnel in context, work methodology, documentation,
and conservation. It is the Company’s intent to have the
highest educated personnel possible.





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





The
exploration and recovery of historic shipwrecks involves a
multi-year, multi stage process. It may take many years and/or be
prohibitively expensive to locate, if any are ever located at all,
and recover valuable artifacts from historic shipwrecks. Locating
and recovering valuable artifacts is very challenging and the
probability that the Company will locate and recover valuable
artifacts or treasure is remote. If the Company is able to recover
valuable artifacts, the artifacts will be very expensive to
conserve and store. If the Company is not able to locate and
recover artifacts or treasure that are of significant value, then
there is high probability that the Company will face adverse
consequences.





Underwater
recovery operations are inherently difficult and dangerous and may
be delayed or suspended by weather, sea conditions or other natural
hazards. In addition, even though sea conditions in a particular
search location may be somewhat predictable, the possibility exists
that unexpected conditions may occur, and already have occurred,
that adversely affect the Company’s operations. It is also
possible that natural hazards may prevent or significantly delay
exploration and recovery operations.





In
addition to natural hazards there are constant repair and
maintenance issues with historic shipwreck exploration and recovery
vessels, which tend to be older vessels that were originally used
in other capacities that have been converted for use in historic
shipwreck exploration and recovery operations. The repairs,
maintenance and upkeep of this type of vessel, and in particular
the Company’s main vessel, is time consuming and can be very
expensive and there may be significant periods of vessel down time
that results from needed repairs being made or a lack of current
financing to make repairs to the vessel.





27





Furthermore,
there are very strict international, federal and state laws that
govern the exploration and recovery of historic shipwrecks. While
the Company has been able to obtain some permits, there is no
guarantee that the Company will be able to secure future permits or
be able to enter into agreements with government agencies in order
to explore and salvage historic shipwrecks.





Obtaining
permits and entering into agreements with governmental and
quasi-governmental agencies to conduct historic shipwreck
exploration and recovery operations is generally a very complex,
time consuming, and expensive process. Furthermore, the process of
entering into agreements and/or obtaining permits may be subject to
lengthy delays, possibly in excess of a year.





The
reasons for a lengthy permitting process may be due to a number of
potential factors including but not limited to requests by
permitting agencies for additional information, submitted
applications that need to be revised or updated, newly discovered
information that needs to be added to an application or agreement,
changes to either the agreement or permit terms or revisions to
other information contained in the permit, excessive administrative
time lags at permitting agencies, etc. The length of time it takes
to obtain permits or enter into agreements may cause the Company to
expend significant resources while gearing up to do work with
little or no visibility as to the timing of receiving a
permit.





It is
also possible that permits that are sought for potential future
international projects may never be issued, and if issued, may not
be legal or honored by the entities that issued them. Even if the
Company is able to obtain permits for shipwreck projects there is a
possibility that the shipwrecks may have already been recovered or
may not be found, or may not have had anything valuable on board at
the time that they sank.





It is
the Company’s intent to find shipwrecks where available
research suggests there were not any previous recovery efforts or
past recovery efforts failed or were not completed. In the event
that valuable artifacts are located and recovered, it is possible
that the cost of recovery will exceed the value of the artifacts
recovered. It is also possible that other entities, including both
private parties and governmental entities, will assert conflicting
claims and challenge the Company’s rights to the recovered
artifacts which could lead to lengthy and expensive legal
issues.





Moreover,
there is the possibility that should the Company be successful in
locating and recovering artifacts that have significant
archeological, historical and/or monetary value that a country
whose ship was recovered may attempt to assert ownership of the
artifacts by pursuing litigation. In the event that the Company is
able to make a valid claim to artifacts or other items at a
shipwreck site there is a risk of theft of such items at sea, both
before or after the recovery or while the artifacts are in transit
to a designated and safe destination, as well as when stored in a
secured location. Such thefts may not be adequately covered by
insurance. Based on a number of these and other potential issues
the Company could spend a great deal of time and invest a large sum
in a specific shipwreck project and receive very little or no
salvage claim or revenue for its work.





There
are a number significant issues and challenges that make the
exploration and recovery of historic shipwrecks a speculative
and highly risky business venture including, but not limited to,
government regulation, the Company’s inability to secure
permits and contracts or lengthy delays in obtaining permits or
entering into agreements, periodic lack of financing, lack of
revenue and cash flow and continued losses from
operations. There is also a significant expense involved in
research and ongoing educational programs. Research expenses
involve paying scientists for translations, dues and fees for
various historical entities such as archives, travel and
accommodations, and research materials.





There
is a possibility that the Company will be forced to cease its
operations if it is not successful in eventually locating valuable
artifacts or treasure. If the Company were to cease its operations,
then it is likely that there would be complete loss of all capital
invested in or borrowed by the Company. As such, an investment in
Seafarer is extremely speculative and of exceptionally high
risk.





There
is currently a limited trading market for our securities. We cannot
assure when and if an active-trading market in our shares will be
established, or whether any such market will be sustained or
sufficiently liquid to enable holders of shares of our common stock
to liquidate their investment in our company. The sale of
unregistered and restricted securities by current shareholders,
including shares issued to consultants and shares issued to settle
convertible promissory notes and to settle other loans and debt,
may cause a significant decline in the market price of the
Company’s securities.





Accordingly,
an investment in our securities is highly speculative and extremely
risky and should only be considered by those investors who do not
require liquidity and who can afford to suffer a complete and total
loss of their investment. An investor should consider consulting
with professional financial advisers before making an investment in
our securities.





Plan of Operation





During
the periods ended September 30, 2016 and 2015, the Company has
taken the following steps to implement its business
plan:





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





●
Spent
considerable time and money researching potential shipwrecks,
including past physical visits to obtain information from foreign
archives.





●
Although
the Company has not generated revenues to date our business goals
continue to evolve. Relationships are being developed with foreign
dignitaries and scientists around the world for the purpose of
identifying, researching, locating and obtaining the exploration
rights to historic shipwrecks.





28





●
The
Company is discussing and reviewing revenue producing opportunities
at this time.





The
Company has evaluated various opportunities to enter into
agreements or contracts to conduct exploration and recovery
operations at known historic shipwreck locations or potential
locations. The Company has previously spent some of its efforts
exploring what it believes may be a historic shipwreck site located
off of Juno Beach, Florida. As previously noted on its form 8-K
filed on May 9, 2011, the Company and Tulco Resources received a
1A-31 Recovery Permit from the Florida Division of Historical
Resources. The Recovery Permit was previously active through April
25, 2014. It is necessary for the Company to obtain a renewal to
the Recovery Permit for the Juno Beach shipwreck site in order to
continue to perform work at the site after April 25, 2014.
Management is pursuing the renewal of the permit, however the
renewal process is anticipated to be a very slow, complex and
complicated process. The potential renewal and name change will
eventually involve a State Judge, Federal Judge, the U.S.
Marshall’s Service and the Florida Division of Historical
Resources. Due to these multiple additional steps, the renewal of
the permit has not been issued as of the filing of this report and
Management is not able to predict the timing or success of any such
renewal. The Company met with a Federal Judge in of October 2016,
and is moving forward as instructed.





The
Juno Beach Shipwreck site is a speculative project as far as the
potential for the Company to ever locate valuable artifacts or
treasure. Although the Company has recovered various artifacts that
it believes are interesting, it has not located artifacts and/or
treasure of any significant value from the Juno Beach Shipwreck
site. There is also the possibility that there are no artifacts of
significant value located at the Juno Beach shipwreck site. Even if
there are valuable artifacts and/or treasure located at the site,
recovering them may be extremely difficult or impossible due to a
variety of challenges that include, but are not limited to;
inclement weather, hazardous ocean conditions, large amounts of
sand that cover large areas of the site, ongoing maintenance and
repair issues with the Company’s main salvage vessel,
permitting issues and/or a lack of financing,
etc. Additionally, Management believes the previous partner,
Tulco Resources, deleted a significant portion of the 2003
magnetometer survey which may contain portions of the wreck itself.
The Company is planning the process to perform additional research
and a cesium vapor magnetometer survey of the deleted area. This
survey has not been completed as of the filings of this
report.





Moreover,
the Company does not currently have sufficient data to positively
identify the potential Juno Beach shipwreck, or its country of
origin, and it is therefore not possible to determine whether or
not the ship was originally carrying cargo of any significant
value. Only remnants and scattered pieces of a sunken ship have
been located to date; no main shipwreck body has been located,
although there is a large deleted area which has not been searched.
It is also possible, although there is no proof suggesting this,
that a ship began to break up on the site but the body of the ship
actually sank in another area that is outside of the designated
Juno Beach site area and all that was left on the Juno Beach site
were scattered remnants of the original ship that have little or no
archeological or actual value. There is a possibility that there
are no artifacts of significant value located on the Juno Beach
shipwreck site.





On July
28, 2014, Seafarer’s Quest, LLC received a 1A-31 Exploration
Permit with a Dig and Identify modification (the
“Permit”) from the Florida Division of Historical
Resources for an area identified as area 2 off of Melbourne Beach,
Florida. The Permit is active for three years from the date of
issuance. In the past in addition to the Company’s main
salvage vessel, the Company has utilized additional vessels in
order to perform operations. On occasion, inclement weather and
difficult sea conditions have hampered the Company’s ability
to perform exploration operations at this site. An archeologist
with the technical skills, knowledge, and experience from around
the world was hired to help insure the integrity of the work. On
July 6, 2016 Seafarer’s Quest, LLC received a 1A-31
Exploration Permit with a Dig and Identify modification (the
“Second Melbourne Permit”) from the Florida Division of
Historical Resources for an area identified as area 1 located off
of Melbourne Beach, Florida. The Second Melbourne Permit is active
for three years from the date of issuance.





The
Company regularly reviews opportunities to perform exploration and
recovery operations at purported historic shipwreck sites; however,
the Company does not have specific plans to perform exploration and
recovery operations at other shipwreck sites at the present time.
The Company is actively reviewing other potential historic
shipwreck sites, including sites located internationally, for
possible exploration and recovery. Should the Company decide that
it will pursue exploration and recovery activities at other
potential shipwreck sites, it may be necessary to obtain various
permits.





If the
Company is not able to perform any exploration or recovery
operations, then it may have to suspend or cease its operations. If
the Company ceases its previously stated efforts, there are
currently no plans to pursue other business opportunities.





Limited Operating History





The
Company has not currently generated any revenue from operations and
does not expect to report any significant revenue from operations
for the foreseeable future.





At
September 30, 2016, the Company had a working capital deficit of
$969,286. The Company is in immediate need of further working
capital and is seeking options, with respect to financing, in the
form of debt, equity or a combination thereof.





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








29





The
Company expects to continue to incur significant operating losses
and to generate negative cash flow from operating activities, while
building out its infrastructure in order to explore and salvage
historic shipwreck sites and establishing itself in the
marketplace. Based on our historical rate of expenditures, the
Company expects to expend its available cash in less than one
month from November 14, 2016.





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





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





Summary of Nine Months Ended September 30, 2016 Results of
Operations





The
Company’s net loss for the nine month period ended September
30, 2016 was $1,192,443 as compared to a net loss of $736,778
during the nine month period ended September 30, 2015. The increase in net losses of approximately 62%
in 2016 was primarily due to the impact of the fair value
measurement adjustments on several convertible promissory notes
that resulted in an interest expense of $618,092 in 2016 as
compared to interest income of $72,559 in 2015. The swing from
interest income in 2015 to an interest expense in 2016 was due to
the fair value measurement of several convertible notes.
During the nine month period ended September 30, 2016, the Company
incurred consulting related expenses of $338,144 versus $479,834
during the nine month period ended September 30, 2015, a decrease
of 29.5%. The decrease in consulting and contractor expenses
was largely due to a lull in
operations during the first half of 2016 and significantly less
stock based compensation being paid for services. During the
nine month period ended September 30, 2016, the Company incurred
professional fees of $78,191 as compared to $62,754 during the nine
month period ended September 30, 2015, an increase of approximately
25%. During the nine month period ended September 30, 2016, the
Company’s general and administrative expenses were $42,101 as
compared to $109,093 during the nine month period ended September
30, 2015, an decrease of approximately 61.4%.  During the
nine month period ended September 30, 2016, the Company incurred
vessel related expenses of $18,901 versus $41,223 during the nine
month period ended September 30, 2015, a decrease of approximately
54%. The 54% decrease in vessel expenses was due to fewer overall
significant maintenance issues with the Company’s primary
salvage vessel in 2016 as compared to some prior years. The Company
has tried to keep repair costs lower for its main salvage vessel by
being more proactive with vessel maintenance, however due to the
advancing age of the vessel the Company anticipates that it will
continue to require repairs and in some cases major unforeseen
repairs. The Company has also utilized a few newer and smaller
vessels in its operations and these vessels do not require as much
maintenance and upkeep which helps to keep costs down. Travel and
entertainment expenses decreased approximately 10.1%, from $50,044
for the nine month period ended September 30, 2015 to $44,949 for
the nine month period ended September 30, 2016. The decrease in
travel and entertainment expenses was generally due to the Company
not having to pay for hotel lodging expenses on a regular basis for
several of its independent contract divers and operations personnel
as a result of renting an operations house where personnel are able
to stay while performing services for the Company. Rent expense was
$26,577 for the nine month period ended September 30, 2016 versus
$40,901for the same period in 2015, a decrease of nearly
35%.





Summary of Three Months Ended September 30, 2016 Results of
Operations





The
Company’s net loss for the three month period ended September
30, 2016 was $685,265 as compared to a net loss of $326,116 during
the three month period ended September 30, 2015. The 110% increase
in the net loss for the three month period ended September 30, 2016
was primarily attributable to 207% increase in interest expense and
a 41.8% increase in losses from operations. Interest expense for
the three month period ended September 30, 2016 was $414,633 versus
$135,227 for the three month period ended September 30, 2015.
 The approximate 207% increase in interest expense was due to
the fair value measurement adjustments on several convertible
promissory notes.  During the three month period ended
September 30, 2016, the Company incurred consulting and independent
contractor related expenses of $166,803 versus $125,787 during the
three month period ended September 30, 2015, an increase of 32.6%.
The 32.6% decrease in consulting and independent contractor related
expenses was due to a ramping up of operations during the period
and increased stock based compensations paid to several consultants
and independent contractors for various services including business
advisory, legal, operations, administrative, media consulting,
digital storefront development, strategic planning, etc. The
Company issued shares to several consultants as a retention bonus
and inducement for the consultants to continue to provide services
under terms that are favorable to the Company. During the three
month period ended September 30, 2016, the Company incurred
professional fees of $30,521 as compared to $12,375 during the
three month period ended September 30, 2015, an increase of 146.6%.
The increase in professional fees paid during 2016 was due stock
based compensation paid to one of the Company’s legal
advisors. During the three month period ended September 30, 2016,
the Company incurred travel and entertainment expenses of $27,662
versus $13,711 during the three month period ended September 30,
2015, increase of approximately102%. During the three month period
ended September 30, 2016, the Company’s general and
administrative expenses were $12,675 as compared to $3,290 during
the three month period ended September 30, 2015, an increase of
285%. During the three month period ended September 30, 2016, the
Company incurred vessel related expenses of $13,958 versus $14,431
during the three month period ended September 30, 2015, a decrease
of approximately 3.2%. The decrease in vessel expenses was due to
fewer overall maintenance issues with the Company’s primary
salvage vessel, however as the vessel is an older ship it continues
to require constant maintenance and upkeep that may be very
expensive.





30





Lack of Revenues and Cash Flow/Significant Losses from
Operations





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





The
Company has experienced a net loss in every fiscal year since the
reverse merger in 2008. The Company’s losses from operations
were $574,351 for the nine months ended September 30, 2016 and
$809,337 for the nine months ended September 30, 2015. The Company
believes that it will continue to generate losses from its
operation for the foreseeable future and the Company may not be
able to generate a profit in the long-term, or ever.





Liquidity and Capital Resources





At
September 30, 2016, the Company had cash in the bank of
$6,521.  During the nine month period ended September 30,
2016 the Company incurred net losses of $1,192,443. At September
30, 2016, the Company had $52,042 in current assets and $1,021,328
in current liabilities, leaving the Company with a working capital
deficit of $969,286.





Lack of Liquidity





A major
financial challenge and significant risk facing the Company is a
lack of liquidity. The company continued to operate with
significant debt and a working capital deficit during the three and
nine month periods ended September 30, 2016. This working capital
deficit indicates that the Company is unable to meet its
short-term liabilities with its current assets. This working
capital deficit is extremely risky for the Company as it may be
forced to cease its operations due to its inability to meet all of
its current obligations. If the Company is forced to cease its
operations then it is highly likely that all capital invested in
and/or borrowed by the Company will be lost.





The
expenses associated with being a small publicly traded company
attempting to develop the infrastructure to explore and recover
historic shipwrecks are extremely prohibitive, especially given
that the Company does not currently generate any revenues and does
not expect to generate any revenues in the near future. There are
ongoing expenses associated with operations that are incurred
whether the Company is conducting shipwreck exploration and
recovery operations or not. Vessel maintenance, particularly for an
older vessel such as the Company’s main salvage vessel,
upkeep expenses and docking fees are continuous and unavoidable
regardless of the Company’s operational status. These repairs
and maintenance are expensive and a drain on the Company’s
cash.





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





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





Lack of Revenues and Cash Flow/Significant Losses from
Operations





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





31





Convertible Notes Payable and Notes Payable, in
Default





At
September 30, 2016, the Company had convertible notes
payable and notes payable with a face value of $748,102 of
which $670,952 were in default.





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





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





Critical Accounting Policies





Our
discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally
accepted in the United States of America.  The
preparation of these financial statements requires us to make
estimates and judgments which affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosures
of contingent assets and liabilities (see Note 3, Summary of
Significant Accounting Policies, contained in the notes to the
Company’s financial statements for the periods ended
September 30, 2016 and 2015.)  On an ongoing basis, we
evaluate our estimates.  We base our estimates on
historical experience and on various other assumptions which we
believe to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying value
of assets and liabilities which are not readily apparent from other
sources.  Actual results may differ from these estimates
based upon different assumptions or conditions; however, we believe
that our estimates are reasonable.





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





Off-Balance Sheet Arrangements





None.





Item 3. Quantitative and Qualitative Disclosures About Market
Risk





Not
required for smaller reporting companies.





Item 4T. Controls and Procedures





Management’s Responsibility for Controls and
Procedures





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








32








Evaluation of Disclosure Controls and Procedures





Under
the supervision and with the participation of our principal
executive officer, the Company conducted an evaluation of the
effectiveness of the design and operation of its disclosure
controls and procedures, as such term is defined under Rule
13a-15(e) and 15d-15(e) promulgated under the Exchange Act, as of
September 30, 2016.  Based on this evaluation, management
concluded that our financial disclosure controls and procedures
were not effective so as to timely record, process, summarize and
report financial information required to be included on our
Securities and Exchange Commission (“SEC”) reports due
to the Company’s limited internal resources and lack of
ability to have multiple levels of transaction
review.  However, as a result of our evaluation and
review process, management believes that the financial statements
and other information presented herewith are materially
correct.





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





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





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





*
The
Company has an insufficient quantity of dedicated resources and
experienced personnel involved in reviewing and designing internal
controls. As a result, a material misstatement of the interim and
annual financial statements could occur and not be prevented or
detected on a timely basis.





*
We have
not achieved the optimal level of segregation of duties relative to
key financial reporting functions.





*
We do
not have an audit committee or an independent audit committee
financial expert. While not being legally obligated to have an
audit committee or independent audit committee financial expert, it
is the managements view that to have audit committee, comprised of
independent board members, and an independent audit committee
financial expert is an important entity-level control over the
Company's financial statements.*
We have
not achieved an optimal segregation of duties for executive
officers of the Company.





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





Remediation Efforts to Address Deficiencies in Disclosure Controls
and Procedures





As a
result of these findings, management, upon obtaining sufficient
capital and operations, intends to take practical, cost-effective
steps in implementing internal controls, including the possible
remedial measures set forth below.  As of September 30,
2016 we did not have sufficient capital and/or operations to
implement any of the remedial measures described
below.





*
Assessing
the current duties of existing personnel and consultants, assigning
additional duties to existing personnel and consultants, and, in a
cost effective manner, potentially hiring additional personnel to
assist with the preparation of the Company's financial statements
to allow for proper segregation of duties, as well as additional
resources for control documentation.





*
Assessing
the duties of the existing officers of the Company and, in a cost
effective manner, possibly promote or hire additional personnel to
diversify duties and responsibilities of such executive
officers.





*
Board
to review and make recommendations to shareholders concerning the
composition of the Board of Directors, with particular focus on
issues of independence. The Board of Directors will consider
nominating an audit committee and audit committee financial expert,
which may or may not consist of independent members.





(b) Change in Internal Control Over Financial
Reporting





The
Company has not made any change in our internal control over
financial reporting during the period ended September 30,
2016.











33





Part II. Other
Information





Item 1. Legal Proceedings





On
March 23, 2016 the Board of Directors signed a universal settlement
agreement with the Plaintiffs in the litigation matters of
Micah Eldred, et al., v. Seafarer
Exploration, et al., Hillsborough County, Florida, Case No.
09-CA-30763, and Micah Eldred v.
Seafarer Exploration Corp., et al., Hillsborough County,
Florida, Case No. 14-CA-5360, and in the matter of
Seafarer Exploration, et al. v.
Micah Eldred, et al., Hillsborough County, Florida, Court of
Appeals Case No. 14-2884, specifically: Micah Eldred, Michael
Daniels, Diane J. Harrison, James Eldred, Mary R. Eldred, Michole
Eldred, Nathan Eldred, Toni A. Eldred, Toni A. Eldred FBO Jordan
Gratton, Toni A. Eldred FBO Justin Gratton, Vanessa A Verbosh,
Oksana Savchenko, Matthew J. Presy, Olessia Kritskaia, Ekaterina
Messinger, Abby Lord, Ioulia Hess, Anna Krokhina, George Linder,
Christine Zitman, Carl Dilley, Heather Dilley, Robert Lizzano,
Elizabeth Lizzano, Karen Lizzano, Susan Miller, Jillian Mally,
Michael Mona, Alan Wolper, Sarah Wolper, Alan Wolper FBO Michael
Wolper, Spartan Securities Group, Ltd., and Am Asia Consulting
entered into the settlement agreement with Seafarer. An earlier
named party, CADEF, The Childhood Autism Foundation, Inc., had
previously entered into a settlement agreement and is no longer a
party in the Litigation.





The
settlement called for both cases to be dismissed, with prejudice,
and the Plaintiffs in case number 09-CA-30763 agreed to surrender
and cancel all of their 32,300,000 shares of restricted common
stock which were returned to the treasury of the Corporation. All
such shares have been returned for cancellation. On March 23, 2016
Seafarer CEO signed the resolution to cancel the 32,300,000 shares
and instructed the transfer agent ClearTrust LLC to cancel the
shares and return them to treasury for the benefit of Seafarer thus
reducing the number of outstanding shares by 32,300,000 shares. At
the present time the dismissal has been filed and the case closed,
with all shares cancelled.





On June
18, 2013, Seafarer began litigation against Tulco Resources, LLC,
in a lawsuit filed in the Circuit Court in and for Hillsborough
County, Florida. Such suit was filed for against Tulco based
upon  for breach of contract, equitable relief and
injunctive relief. Tulco was the party holding the rights under a
permit to a treasure site at Juno Beach, Florida. Tulco and
Seafarer had entered into contracts  in March 2008, and
later renewed under an amended agreement on June 11, 2010. Such
permit was committed to by Tulco to be an obligation and
contractual duty to which they would be responsible for payment of
all costs in order for the permit to be reissued. Such obligation
is contained in the agreement of March 2008 which was renewed in
the June 2010 agreement between Seafarer and Tulco. Tulco made the
commitment to be responsible for payments of all necessary costs
for the gaining of the new permit. Tulco never performed on such
obligation, and Seafarer during the period of approximately March
2008 and April 2012 had endeavored and even had to commence a
lawsuit to gain such permit which was awarded in April 2012.
Seafarer alleges in their complaint the expenditure of large
amounts of shares and monies for financing and for delays due to
Tulco’s non-performance. Seafarer seeks monetary damages and
injunctive relief for the award of all rights held by Tulco to
Seafarer Seafarer gained a default and final Judgment on such
matter on July 23, 2014. Seafarer is now working with the State for
the renewed permit to be in Seafarer’s name and rights only,
with Tulco removed per the Order of the Court. On March 4, 2015,
the Court awarded full rights to the Juno sight to Seafarer
Exploration, erasing all rights of Tulco Resources. The company has
currently filed an Admiralty Claim over such sight in the United
States District Court which is pending final ruling. On October 21,
2016 a hearing on the Admiralty Claim in the United States District
Court for the Southern District of Florida was held, where the
Court Ordered actions to take place for ongoing admiralty claim,
which will occur during the month of November 2016. The Company
expects to complete such claim within a few months.





On
September 3, 2014, the Company filed a lawsuit against Darrel
Volentine, of California. Mr. Volentine was sued in two counts of
libel per se under Florida law, as well as a count for injunction
against the Defendant to exclude and prohibit internet postings.
Such lawsuit was filed in the Circuit Court in Hillsborough County,
Florida. Such suit is based upon internet postings on www.investorshub.com.
On or about October 15, 2015, the Company and Volentine entered
into a stipulation whereby Volentine admitted to his tortious
conduct, however the stipulated damages agreed to were rejected by
the Court, and the Company is proceeding to trial on damages
against Volentine in a non-jury trial on December 1, 2015. The
Defendant is the subject of a contempt of court motion which was
heard on April 7, 2016, whereby the Court found a violation and
modified the injunction against the Defendant, and imposed other
matters of potential penalties against the Defendant. The Court
also awarded attorney’s fees against the Defendant on behalf
of Seafarer for such motion. The Defendant subsequently attempted
to have such ruling, evidence and testimony attacked through a
motion heard before the Court on October 24, 2016. The Court
dismissed the Defendant’s motion after presentation of the
Defendant’s case at the hearing. The Plaintiff has set the
matter for entry of the attorney’s fees amount due from the
Defendant for hearing in December 2016. As well the Plaintiff has
set for hearing its motion for sanctions in the form of
attorney’s fees for frivolous filing of the October
24th
motion, which motion is also set for hearing in December 2016. The
Plaintiff filed a renewed and amended motion for punitive damages
in the case on September 11, 2016, which has not been set for
hearing. The Defendant had also filed a motion for summary judgment
on the matter of notice entitlement pre-suit, which motion is
pending before the Court. The Plaintiff filed a motion for
sanctions against the Defendant for the motion for summary judgment
being frivolous under existing law, and such motion is pending
ruling on the motion. Discovery is ongoing on such
case.





Item 1A.  Risk
Factors





Not
required for smaller reporting companies.





34





Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds





During
the three month period ended September 30, 2016, the Company issued
58,732,000 restricted common shares of its common stock to various
consultants for services including business advisory, legal,
administrative, operations, diving and exploration, media and
entertainment, website development and editing, consulting, as
retention bonuses and bonuses to several independent contractors,
other services. From time to time in the regular course of its
business the Company issues shares of its restricted common stock
to consultants and other vendors for a variety of services rendered
including, but not limited to, legal, financial, accounting,
administrative, archeological, executive, corporate communications,
operations, diving, etc. The Company issued 13,100,000 shares to
two shareholders in conjunction with repricing agreements. The
anti-dilution protection extends through the date upon which all
registration restrictions expires, typically one year from the date
the shares were issued, and is based upon the trading market value
at the end of that period. The Company issued 2,500,000 shares of
its restricted common stock as financing fees to a lender in
exchange for the lender extending the term of a loan. The Company
believes that the issuance of the securities was exempt from
registration under the Securities Act of 1933, as amended, in
reliance on Section 4(2) of the Securities Act as a
transaction by an issuer not involving any public offering and
based on the fact that such securities were issued for services to
sophisticated or accredited investors and persons who are
thoroughly familiar with the Company’s proposed business by
virtue of their affiliation with the Company.





On
various dates during the three month period ended September 30,
2016, the Company entered into subscription agreements to sell
142,834,199 shares of its restricted common stock to nine investors
and receive proceeds of $129,200. The proceeds were used for
general corporate purposes, working capital and the repayment of
some debt.





Exemptions from Registration for Sales of Restricted
Securities.





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





Issuance of Securities Due to Conversion of Notes and
Debt





During the three month period ended September 30, 2016 the holder
of a convertible promissory notes with a remaining principal
balance of $87,348 elected to convert the principal balance of
their notes plus accrued interest into 165,022,855 shares of the
Company’s common stock.. A holder of a convertible
promissory note elected to convert a portion of the principal
balance of $13,348 of the note plus accrued interest and late fees
of $6,652 into 12,750,000 shares of the Company’s common
stock. A holder of a convertible promissory note elected to convert
the remaining principal balance of its note totaling $15,000 into
30,000,000 shares of the Company’s common stock. The Company settled $10,000 of the principal
balance of a note payable by issuing 20,000,000 shares of its
restricted common stock to the note holder. A related party vendor agreed to convert debt
owed to the related party vendor by the Company for transfer agent
services and legal fees totaling $32,213, into 32,212,790 shares of
the Company’s restricted common stock. A related party agreed
to accept 25,000,000 shares of the Company’s restricted
common stock in exchange for a magnetometer that the related party
had previously agreed to purchase in order to rent to the Company
for use in its operations. The Company believes that the offer and
sale of these securities were exempt from the registration
requirements of the Securities Act pursuant to Sections 3(a)(9)
under the Securities Act of 1933, as amended





Item 3. Defaults Upon Senior Securities





The
Company has several promissory notes that are currently in default
to non-payment of principle and interest. See Part I, Item 2, notes
payable and convertible notes payable, in default, for discussion
of defaults on certain debt obligations of the Company





Item 4. Submission of Matters to a Vote of Security
Holders





None.





Item 5. Other Information





None








35





Item 6. Exhibits





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





Exhibit Number
Description*31.1

Certification of the Chief Executive Officer
pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities
and Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of
2002.*32.1

Certification of
the Chief Executive Officer pursuant to Rule 13a-14(b) or Rule
15d-14(b) of the Securities and  Exchange Act
of 1934, as amended, and 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the  Sarbanes-Oxley Act of
2002.*99.1

Temporary Hardship
Exemption**101.INS

XBRL
Instance Document**101.SCH

XBRL
Taxonomy Extension Schema**101.CAL

XBRL
Taxonomy Extension Calculation Linkbase**101.DEF

XBRL
Taxonomy Extension Definition Linkbase**101.LAB

XBRL
Taxonomy Extension Label Linkbase**101.PRE

XBRL
Extension Presentation Linkbase





* Filed
herewith.


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



























































36





SIGNATURE





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








Seafarer
Exploration Corp.Date:
November 14, 2016
By:
/s/ Kyle KennedyKyle
Kennedy
President,
Chief Executive Officer, and Chairman of the Board
(Principal
Executive Officer and Principal Accounting Officer)








Date:
November 14, 2016
By:
/s/ Charles BranscumCharles
Branscum, Director








Date:
November 14, 2016
By:
/s/ Robert L. KennedyRobert
L. Kennedy, Director









































37