UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





________________________





FORM 10-K


______________





(Mark
One)





☒
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934





For year ended December 31,
2017








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














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 209N, Tampa, Florida
33618





(Address of principal executive offices)(Zip code)





Registrant’s telephone number: (813) 448-3577





Securities registered pursuant to Section 12(g) of the
Act:


Common Stock, par value $0.0001 per
share





1





Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act.  Yes ☐ No  ☒





Indicate by check
mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the
Act.  Yes  ☐ No ☒





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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment
to this Form 10-K.  ☐





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   ☐

Smaller
reporting company   ☒(Do
not check if a 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 ☒





The aggregate
market value of the voting common equity held by non-affiliates of
the registrant was approximately $3,885,758 as of the last business
day of the registrant’s most recently completed second fiscal
quarter, based upon the closing sale price on the OTC:BB reported
for such date. Shares of common stock held by each officer and
director, and by each person who owns 10% or more of the
outstanding common stock, have been excluded in that such persons
may be deemed to be affiliates. This determination of affiliate
status is not necessarily a conclusive determination for other
purposes.





As of
March 14, 2018 the Registrant had 2,815,555,086 outstanding shares
of its common stock, $0.0001 par value.






























































2





SEAFARER EXPLORATION CORP.


ANNUAL REPORT ON FORM 10-K


TABLE OF CONTENTS





PagePART
IITEM
1.
BUSINESS
5ITEM
1A.
RISK
FACTORS
10ITEM
1B.
UNRESOLVED
STAFF COMMENTS
10ITEM
2.
PROPERTIES
10ITEM
3.
LEGAL
PROCEEDINGS
10ITEM
4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
11PART
IIITEM
5.
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
12ITEM
6.
SELECTED
FINANCIAL DATA
14ITEM
7.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
14ITEM
7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
19ITEM
8.
FINANCIAL
STATEMENTS
20ITEM
9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
21ITEM
9A.
CONTROLS
AND PROCEDURES
21ITEM
9B.
OTHER
INFORMATION
22PART
IIIITEM
10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
22ITEM
11.
EXECUTIVE
COMPENSATION
23ITEM
12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
25ITEM
13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
26ITEM
14.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
29PART
IVITEM
15.
EXHIBITS
30SIGNATURES
31












































3





SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND ASSOCIATED
RISKS





Statements in this Form 10-K under "Item 1. Business", "Item 2.
Properties", "Item 3. Legal Proceedings", "Item 7. Management's
Discussions and Analysis of Financial Condition and Results of
Operations" and elsewhere constitute "forward-looking
statements".  Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Seafarer
Exploration Corp., a company organized under the laws of Florida,
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. 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-K.





The use in this Form 10-K 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 success of the
Company is dependent on our efforts and many other factors
including, primarily, our ability to raise additional
capital.





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
based on 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 historic shipwreck
sites 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 or as a result of certain economic and
business factors, some of which may be beyond our
control.





We disclaim any obligation to subsequently 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.





As used in this Form 10-K, the terms “we,”
“us,” “our,” “Seafarer,” and
the “Company” mean Seafarer Exploration Corp. unless
otherwise indicated.




































































4





PART I





Item 1. Business.





Summary





Seafarer
Exploration Corp. ("the Company" or "Seafarer"), a Florida
Corporation, was incorporated on May 28, 2003. The Company formerly
operated under the name Organetix, Inc. (“Organetix”).
The Company's principal business plan is to develop the
infrastructure to engage in archaeological research,
archaeologically-sensitive exploration, recovery and conservation
of historic shipwrecks and to eventually monetize the recovery of
the shipwrecks without selling the treasure. The business plan also
includes in-depth archival research and translation of historical
documents from archives and repositories from around the world. In
addition to the research is ongoing education of all independent
contractors involved in operations with the Company. College level
courses in archaeology are periodically being taught by a Ph.D. to
all independent contractors in an ongoing program to help educate
the independent contractors in context, work methodology,
documentation, and conservation. The Company is also actively
developing, exploring and testing new technology to help more
accurately understand current and future wreck sites in an
unobtrusive manner. Up to the date of this filing, all tests of new
and unproven technology and methods have failed.





The
exploration and recovery of historic shipwrecks is by nature
speculative, and there is a high degree of risk inherent in this
type of business venture. The exploration and recovery of historic
shipwrecks involves a multi-year, multi-stage process and it may
take several years and/or be prohibitively expensive to locate and
recover valuable artifacts, if any are ever located at all, from
historic shipwreck sites. It is possible that the Company will
never locate any valuable artifacts from historic shipwreck
sites.





There
are a number of other significant challenges and risks regarding
this type of business venture that make it risky with potential
that the Company could fail. If the Company were to cease its
operations, it is likely that there would be complete loss of all
capital invested in and/or borrowed by the Company to
date.





No Revenue and Operating Losses





The
Company expects to continue to incur significant operating losses
and to generate negative cash flows from operating activities while
developing the necessary infrastructure and technology for the
actual investigation of historic shipwreck sites.





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.  Based on our historical rate of expenditures, the
Company expects to expend its available cash in less than one month
from April 2, 2018. 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 would materially and adversely affect
its 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 its operations.





General





It has
been estimated by the United Nations Educational, Scientific and
Cultural Organization (“UNESCO”) that there are over
three million undiscovered shipwrecks around the world and some 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, and furthermore, a high percentage of these
shipwrecks would not have been carrying valuable cargo including
artifacts or treasure.





The
Company’s principal business plan is to develop the
infrastructure and technology 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 may eventually be conducting archaeological
research around the world and potentially supporting governmental
or quasi-governmental organizations, universities and affiliated
research groups and private research entities in the documentation
of historic shipwrecks based on their discretion. 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 the country of origin, the State of Florida,
university researchers, 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 and
eventually have all divers certified. The Company has hired
additional archaeologists in addition to their current
archaeologists to further insure all sensitive archaeological
guidelines are met or exceeded.





The
Company in the past has constantly investigated various
technologies and non-scientific equipment to help better explore or
document our sites. To present date, nothing has been proven to
work. The Company will continue to experiment with unproven
technologies and will actively work with third parties or
independent contractors to develop its own proprietary technology
which will result in extra expense to the Company.








5





The
exploration and recovery of historic shipwrecks involves a
multi-year, multi-stage process. 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 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
difficult, expensive, and rare. If the Company is not able to
locate artifacts or treasure with 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
search and recovery operations.





In
addition to natural hazards there may be constant repair and
maintenance issues with historic shipwreck exploration and recovery
vessels, the Company’s primary exploration vessel is an older
vessel that was originally used in other capacities and has been
converted for use in historic shipwreck exploration and recovery
operations. The repairs, maintenance and upkeep of vessels, is time
consuming and has been 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.





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
enter into agreements with government agencies in order to explore
and salvage historic shipwrecks. There is a risk that government
entities may enact legislation that is so strict that any recovery
of artifacts and cargo from historic shipwrecks will be nearly
impossible. Additionally, permits and agreements with governmental
agencies to conduct historic shipwreck exploration and recovery
operations are expensive, in terms of both direct costs and ongoing
compliance costs. It is also entirely possible that the Company
will not be successful in obtaining title or permission to excavate
certain wrecks. It is 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
salvaged, may not be located, 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.





Moreover,
there is the possibility that should the Company be successful in
locating and recovering artifacts that have significant
archeological and/or monetary value, that a country whose ship was
salvaged may attempt to claim 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 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. The Company does have plans for security at sea, however
it may never implement such plans.





There
are a number of significant issues and challenges including, but
not limited to, government regulation and/or the Company’s
inability to secure permits and contracts, lack of financing, lack
of revenue and cash flow and continued losses from operations that
make the exploration and recovery of historic shipwrecks
a speculative business venture. There is also 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 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 debt, may cause a
significant drop in the market prices of the Company’s
securities. Also, because the Company primarily finances the
operations with the sale of securities, an increase to the
authorized shares may need to be done from time to
time.





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





6





Competition





There
are a number of competing entities who are engaged in various
aspects of the exploration and salvage of historic shipwrecks, and
in the future other competitors may emerge. Some of these companies
are publicly traded companies and there are a number of small
private companies, as well as some loosely affiliated groups and
individuals, who claim to be in this business as well. Many of
these entities may be better capitalized and may have greater
resources to devote to the pursuit of locating and salvaging
historic shipwrecks. Many of these competing entities may also have
significantly more experience than the Company in the exploration
and recovery of historic shipwrecks. The Company is at a material
competitive disadvantage as compared to competing entities that are
better capitalized, have more resources and/or who possess greater
experience in the business.





The
expenses associated with being a small publicly traded company
engaged in the historic shipwreck recovery business are
exorbitantly high. The cost of operations may include the cost of
buying or leasing a vessel, regular vessel maintenance and upkeep,
ongoing vessel repairs due to wear and tear and damage by natural
or human causes, docking fees, fuel, upgrades, equipment costs,
personnel costs, insurance, registration costs, permitting,
temporary lodging and provisions for divers and other personnel,
etc. In addition to the operations expenses, a publicly traded
company also incurs the significant recurring costs of maintaining
publicly traded status, which include, but are not limited to
administrative, accounting, audit, executive, legal, etc. These
combined expenses are particularly burdensome for a smaller public
company. The recurring expenses associated with being a publicly
traded company focused on the exploration and recovery of historic
shipwrecks may cause the Company to be at a significant competitive
disadvantage when compared to some of its competitors who are
private companies or public companies who are not fully
reporting.





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.





If the
Company is unable to secure additional financing, our business may
fail or our operating results and our stock price may be materially
adversely affected. The raising of additional financing would in
all likelihood result in dilution or reduction in the value of the
Company’s securities.





The
Company may not be able to continue as a going concern. If the
Company is not able to continue as a going concern, it is highly
likely that all capital invested in the Company or borrowed by the
Company will be lost. The report of our independent auditors for
the years ended December 31, 2017 and 2016 raises substantial doubt
as to our ability to continue as a going concern. As discussed in
Note 2 to our financial statements for the year ended December 31,
2017 and 2016, we have experienced operating losses in every year
since our inception resulting in an accumulated deficit. Our
independent auditors believe, based on our financial results as of
December 31, 2017, that such results raised substantial doubts
about the Company’s ability to continue as a going concern.
If the Company is not able to continue as a going concern, it is
likely that all capital invested in the Company or borrowed by the
Company will be lost.





The
Company has experienced a net loss in every fiscal year since
inception. The Company’s losses from operations were $999,847
for the year ended December 31, 2017 and $1,351,836 for the year
ended December 31, 2016. The Company believes that it will continue
to generate losses from its operations for the foreseeable future
and the Company may not be able to generate a profit in the
long-term, or ever.





Governmental Regulation





There
are very strict international, federal and state laws that govern
the exploration and recovery of historic shipwrecks. There is no
guarantee that the Company will be able to secure permits or enter
into agreements with government agencies in order to explore and
recover historic shipwrecks, although the Company has secured
permits in the past. There is a substantial risk that government
entities may enact legislation that is so strict that any recovery
of artifacts and cargo from historic shipwrecks will be nearly
impossible. Additionally, permits and agreements with governmental
agencies to conduct historic shipwreck exploration and recovery
operations are expensive, both in terms of direct and ongoing
compliance costs. It is 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.





The
laws and regulations regarding the exploration and recovery of
historic shipwrecks in waters controlled by the State of Florida
are complex. A large amount of time and expense is required to
comply with the existing laws and regulations. The State of Florida
has, in the past, proposed new rules and regulations regarding the
exploration and recovery of shipwrecks in Florida waters. The
Company believes any new rules and regulations that are implemented
into law would likely increase the cost of compliance and
potentially force the Company to cease its operations. It is
possible that the State of Florida may enact additional laws that
ultimately make it impossible to conduct business as a commercial
shipwreck exploration and recovery firm. It may also be possible
that the State of Florida attempts to enact legislation which
altogether bans the commercial exploration and recovery of historic
shipwrecks in State controlled waters.





There
is a possibility that new governmental regulations could be enacted
at any time at the international, federal or state level that would
make it impossible for the Company to continue to attempt to locate
and salvage historic shipwrecks. Governmental regulation at all
levels may substantially increase the costs and expenses incurred
by the Company to obtain permits and agreements and comply with the
regulations and represent a very significant risk to the Company
and all companies engaged in the commercial exploration and
recovery of historical shipwrecks. There is a possibility that
governmental regulation could be enacted that would make it
impossible for the Company to conduct commercial exploration and
recovery of historic shipwrecks anywhere in the world.





7





There
are also strict environmental regulations associated with the
exploration and recovery of historical shipwrecks. In order to
explore and salvage shipwrecks that are located in state controlled
waters, the Company must obtain permission from both federal
authorities and state environmental agencies in order to conduct
operations. There is always the possibility that the Company could
be denied access to a historic shipwreck site based on federal or
state environmental concerns





Litigation





The
Company has been engaged in various litigations (See “Legal
Proceedings” below). Although no negative outcomes are
expected by management, a negative outcome in these actions could
affect the Company’s business. We could be subject to future
litigations that could materially affect our ability to operate our
business, which would negatively impact our results of operations
and financial condition, which the Company does not foresee and
none currently exist.





Historic Shipwreck Exploration and Recovery in Florida





The
Company operates year-round, but the best diving for historic
shipwreck exploration and recovery in Florida waters is generally
considered to be the summer months, from approximately the middle
of April through October, although good weather conditions may
allow operations to extend into the fall and winter months at
certain historic shipwreck sites. Inclement weather and hazardous
ocean conditions may hamper year round historical shipwreck
exploration and recovery efforts in Florida waters. It is the
Company’s intention to work continuously all year, as in
years past.





Other
factors that may hinder the Company’s ability to conduct year
round operations include a lack of financing, the expiration of
permits and agreements or the need to renew or enter into permits
and agreements with various governmental or quasi-governmental
agencies, and the inability to locate and retain skilled, competent
and experienced personnel. During down times, the Company's
operations personnel may, among other duties, spend time
researching sites, reviewing site plans, maps, charts, and other
related information and performing maintenance, overhaul, cleaning,
etc.





Juno Beach Shipwreck Site





The
Company has previously performed exploration and recovery
operations at what it believes to be a shipwreck site located off
of the coast of Florida in northern Palm Beach County, more
specifically in an area known as “Juno Beach” (the
“Juno Beach Shipwreck”). The Company believes it is
possible the Juno Beach shipwreck site may potentially contain
remnants of a sunken 1500s ship; however, the Company does not have
definitive evidence of the ship’s country of origin. Due to
the fact that the Company does not currently have sufficient data
to positively identify the potential Juno Beach shipwreck, or its
country of origin, it is not possible to determine whether or not
the ship was originally carrying cargo of any significant value. To
date the Company has not located the main body of a shipwreck at
the Juno Beach site, only a lot of shipwreck material and remnants
including pottery, porcelain, cannon balls, musket balls, ballast
stones, nails, spikes, wood and scattered pieces of a sunken
ship. The Company has determined that a large part of the
magnetometer survey that was previously provided to the Company and
to the State of Florida by a previous partner has an area that was
intentionally deleted from the survey. The Company will complete a
magnetometer survey of the entire deleted area when certain
conditions are met.





The
Company had previously obtained a recovery permit for the Juno
Beach site from the State of Florida. The recovery permit expired
in April of 2014. On March 4, 2015, Seafarer was awarded full
rights to the Juno site pursuant to a court order, erasing all
rights of the Company’s previous partner with regards to the
site. The Juno site was arrested permanently to Seafarer by the
U.S. Marshal’s offices on July 7, 2017 and in November 2017
the Company was granted final judgment on its federal admiralty
claim for the Juno Beach shipwreck site. The Company is in the
process of renewing the recovery permit, as of the filing of this
report the permit has not been issued.





The
Company has recovered various artifacts it believes are
interesting. Seafarer has not located artifacts and/or treasure of
any significant value from the Juno Beach Shipwreck site, although
Seafarer has not searched in the deleted area. There is also
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 difficult 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, lack of the necessary equipment to be able to dig deep enough
into the sand, ongoing maintenance and repair issues with the
Company’s main salvage vessel, permitting issues and/or a
lack of financing, etc.





Furthermore,
many of the historical ships from the 1500s to the 1700s that sank
off of the coast of Florida were not carrying treasure or other
valuable cargo. It is possible that the cargo the ship was
originally carrying, if any, had little or no value at the time
that the ship sank. Many ships of this period were supply ships
that carried cargo such as food stores, water, supplies, etc., and
if found, this type of cargo would more than likely be completely
worthless in modern times.





It is
also a remote possibility 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 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.





8





Additionally,
there is a large amount of overburden covering portions of the Juno
Beach Shipwreck site, and in the unlikely scenario that there are
valuable artifacts located on the site, it may be
challenging to recover them due to the degree of difficulty in
being able to dig deep enough under the sand to access
them.





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 the
ship was originally carrying cargo of any significant value. Only
remnants including pottery, porcelain, cannon balls, musket balls,
ballast stones, nails, spikes, wood and scattered pieces of a
sunken ship have been located to date; no main shipwreck body has
been located, although, Seafarer has not searched in the deleted
area.





North Florida Shipwreck Site





There
is a purported historic shipwreck site in the waters off of Brevard
County Florida that the Company desires to investigate. In February
2013, the Company signed an agreement with a third party who has
previously explored this site for the right to investigate the
site. 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. Further actions toward expanding
the permitted area have been taken for such site and the Company
and partnership are awaiting the issuance of a permit by the State
of Florida. There are a significant number of challenges inherent
in the exploration and recovery of historic shipwrecks, including
the possibility that the Company will never find artifacts of value
at the 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 Cape Canaveral,
Florida. The Permit was active for three years from the date of
issuance. Seafarer has filed for the renewal of the 1A-31
Exploration Permit with a Dig and Identify Modification on Area 2
and is currently waiting on the State of Florida. Seafarer on
behalf of Seafarer’s Quest, LLC, has been primarily focusing
its operations on this site when the weather permits. In addition
to the Company’s main salvage vessel, the Company has
utilized additional owned and rented vessels in order to perform
search and identify operations at this site. Inclement weather and
difficult sea conditions have hampered the Company’s ability
to perform exploration operations at this site to date. An
archeologist with the technical skills, knowledge, and experience
from around the world was hired to help insure the integrity of the
work. The Company has applied for permits from the State of Florida
for two additional areas that were formerly permitted solely by an
affiliate of Marine Archeological Partners, LLC. The Permit (1A-31
Exploration Permit with a Dig and Identify Modification) for one of
the additional areas was given to the Company on July 6, 2016 and identified as Area
1.





The
Company regularly reviews opportunities to perform exploration and
recovery operations at purported historic shipwreck sites; however,
the Company does 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 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 recovery permits as well as environmental
permits.





Certain Agreements





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. Further actions toward the
permitting have been taken for such site and the Company and
partnership are awaiting the review of such permit request by the
State of Florida.  As of December 31, 2016, the
partnership has had no operations.





Florida Division of Historical Resources
Agreements/Permits





As
previously noted on its form 8-K filed on May 9, 2011, the Company
and Tulco received a 1A-31 Recovery Permit from the Florida
Division of Historical Resources. The Recovery Permit was active
through April 25, 2014. The Permit authorizes Seafarer to dig and
recover artifacts from the designated site at Juno Beach, Florida.
It will be necessary for the Company to obtain a renewal to the
Recovery Permit for the Juno Beach shipwreck site in order to
continue to perform exploration and recovery work at the site.
Currently the permit with the FBAR may eventually be renewed in the
name of Seafarer Exploration Corp. under a judge’s order,
however the Company is currently pursuing other projects and this
project is not the primary focus of the Company’s efforts at
this time. The renewal of the 1A-31 Recovery permit has not been
issued as of the filing of this report. Seafarer is actively
pursuing the permit and has already obtained the Federal Admiralty
Claim.





On July
6, 2016 the Company’s partnership with Marine Archeological
Partners, LLC, 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 off of Cape Canaveral, Florida as
Area 1. The Permit is active for three years from the date of
issuance. Seafarer is currently in the renewal phase with the FBAR
for Area 2.





Federal Admiralty Judgement





As
previously noted on its form 8-K filed on November 22, 2017,
Seafarer was granted, through the United States District Court for
the Southern District of Florida, a final judgment for its federal
admiralty claim on the Juno Beach shipwreck site.





9





Item 1A. Risk Factors.





Not
required for smaller reporting companies.





Item 1B. Unresolved Staff Comments.





Not
required for smaller reporting companies.








Item 2. Properties.





Corporate Office





The
Company leases 823 square feet of office space located at 14497
North Dale Mabry Highway, Suite 209-N, Tampa, Florida 33618. The
Company entered into an amended lease agreement commencing on July
20, 2017 through June 30, 2020 with base monthly rents of $1,252
from July 1, 2017 to June 30, 2018, $1,289 from July 1, 2018
to June 30, 2019, and $1,328 from July 1, 2019 to June 30,
2020. Under the terms of the lease there may be additional fees
charged above the base monthly rental fee.





As of
December 31, 2017, future minimum rental payments required under
this non-cancelable operating lease total $15,246 for the year
ending December 31, 2018, $15,703 for the year ending December 31,
2019, and $7,967 for the year ending December 31, 2020.





Operations House





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





Item 3. Legal Proceedings.





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





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





On June
18, 2013, Seafarer began litigation against Tulco Resources, LLC,
in a lawsuit filed in the Circuit Court in and for Hillsborough
County, Florida. Such suit was filed for against Tulco based
upon for breach of contract, equitable relief and injunctive
relief. Tulco was the party holding the rights under a permit to a
treasure cite at Juno Beach, Florida. Tulco and Seafarer had
entered into contracts in March 2008, and later renewed under
an amended agreement on June 11, 2010. Such permit was committed to
by Tulco to be an obligation and contractual duty to which they
would be responsible for payment of all costs in order for the
permit to be reissued. Such obligation is contained in the
agreement of March 2008 which was renewed in the June 2010
agreement between Seafarer and Tulco. Tulco made the commitment to
be responsible for payments of all necessary costs for the gaining
of the new permit. Tulco never performed on such obligation, and
Seafarer during the period of approximately March 2008 and April
2012 had endeavored and even had to commence a lawsuit to gain such
permit which was awarded in April 2012. Seafarer alleges in their
complaint the expenditure of large amounts of shares and monies for
financing and for delays due to Tulco’s non-performance.
Seafarer seeks monetary damages and injunctive relief for the award
of all rights held by Tulco to Seafarer Seafarer gained a default
and final Judgment on such matter on July 23, 2014. Seafarer is now
in position to receive the renewed permit to be in Seafarer’s
name and rights only, with Tulco removed per the Order of the
Court. On March 4, 2015, the Court awarded full rights to the Juno
sight to Seafarer Exploration, erasing all rights of Tulco
Resources. The company has currently filed an Admiralty Claim over
such sight in the United States District Court which is pending
final ruling. On October 21, 2016 a hearing on the Admiralty Claim
in the United States District Court for the Southern District of
Florida was held, where the Court Ordered actions to take place for
ongoing admiralty claim, which will occur during the month of
November 2016. The Court subsequently entered and Order directing
the arrest warrant for such site, and such arrest warrant has been
issued by the Clerk of Court. Such warrant entry is now in process
by the Company. Such arrest warrant was served by the United States
Marshalls Office in Palm Beach, Florida on July 7, 2017. The United
States District Court Judge ordered service on the claim on August
10, 2017. On November 14, 2017, Judge Kenneth Marra of the United
States District Court awarded Seafarer all rights as the sole owner
of the sunken vessel and any items on such site.





10





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. On
December 7, 2016, the Court held a hearing on the Defendant’s
motion for sanctions, and essentially attempting to rehear the
motion for contempt against the Defendant. The Court dismissed the
Defendant’s motions, and renewed the ability of the Company
to seek attorney’s fees on such matter, which hearing has not
been set at present. On February 28, 2017, the Court entered an
Order denying the Defendant’s motion for summary judgment.
The Company has a pending motion for sanctions related to the
Defendant’s filing of the motion for summary judgment which
has not been set for hearing. The Company will be attempting to set
such matter for trial during 2018.





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





None.












































11





PART
II





Item 5. Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities.





Market Information





Our
common stock is presently quoted on the Pink Sheets under the
symbol “SFRX”, as reflected below, though the current
trading volume is small. No assurance can be given that any market
for our common stock will continue in the future or be maintained.
If an “established trading market” ever develops in the
future, the sale of “restricted securities” (common
stock) pursuant to Rule 144 of the Securities and Exchange
Commission by members of management or others may have a
substantial adverse impact on any such market and the sale of
restricted securities by management or others may significantly
depress the market price of the Company’s
shares.





There
is currently a limited trading market for our securities on the
Pink Sheets. 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. If
an active public market should develop in the future, the sale of
unregistered and restricted securities by current shareholders may
have a substantial impact on any such market.





The
Company’s share price is quoted on the Pink Sheets.
Accordingly, an investment in our securities should only be
considered by those investors who do not require liquidity and can
afford to suffer a total loss of their investment. An investor
should consider consulting with professional advisers before making
such an investment.





Furthermore,
the price of our common stock may be subject to a very high degree
of volatility, which makes owning shares of our common stock highly
risky. Our stock price fluctuated between $0.0042 and $0.0008 for
the year ended December 31, 2017, and $0.0045 and $0.0006 for the
year ended December 31, 2016. The price of our shares may fluctuate
significantly despite the absence of any apparent reason. In
addition, our stock is thinly traded, leading to even greater
volatility. You should expect this volatility to continue into the
foreseeable future.





The
range of high and low bid prices for our common stock during each
quarter for 2016 and 201is shown below. The over-the-counter
quotations reflect inter-dealer prices, with retail mark-up,
mark-down or commission and may not necessarily represent actual
transactions. Such prices were determined from information derived
from www.nasdaq.com and do not necessarily reflect transactions,
retail markups, markdowns or commissions.





Quarter
Ended
High Price
Low PriceMarch 31,
2016
0.0034
0.0012June 30,
2016
0.0039
0.0006September 30,
2016
0.0045
0.0010December 31,
2016
0.0024
0.0024March 31,
2017
0.0042
0.0009June 30,
2017
0.0038
0.0014September 30,
2017
0.0022
0.0010December 31,
2017
0.0020
0.0008





Penny Stock





Our
stock is considered to be a penny stock.  Our stock is
subject to certain provisions of the Securities Exchange Act of
1934 (the “Exchange Act”), commonly referred to as the
“penny stock” rules as defined in Rule 3a51-1. A
penny stock is generally defined to be any equity security that has
a market price less than $5.00 per share, subject to certain
exceptions. Since our stock is deemed to be a penny stock,
trading is subject to additional sales practice requirements of
broker-dealers.





Consequently,
penny stock rules may restrict the ability or willingness of
broker-dealers to trade and/or maintain a market in our common
stock.  Also, prospective investors may not want to get
involved with the additional administrative requirements, which may
have a material adverse effect on the trading of our shares.





The SEC
has adopted rules that regulate broker-dealer practices in
connection with transactions in penny stocks. Penny stocks are
generally equity securities with a market price of less than $5.00,
other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current
price and volume information with respect to transactions in such
securities is provided by the exchange or system. The penny stock
rules require a broker-dealer, prior to a transaction in a penny
stock, to deliver a standardized risk disclosure document prepared
by the SEC, that: (a) contains a description of the nature and
level of risk in the market for penny stocks in both public
offerings and secondary trading; (b) contains a description of the
broker's or dealer's duties to the customer and of the rights and
remedies available to the customer with respect to a violation of
such duties or other requirements of the securities laws; (c)
contains a brief, clear, narrative description of a dealer market,
including bid and ask prices for penny stocks and the significance
of the spread between the bid and ask price; (d) contains a
toll-free telephone number for inquiries on disciplinary actions;
(e) defines significant terms in the disclosure document or in the
conduct of trading in penny stocks; and (f) contains such other
information and is in such form, including language, type size and
format, as the SEC shall require by rule or
regulation.





12





The
broker-dealer also must provide, prior to effecting any transaction
in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and
its salesperson in the transaction; (c) the number of shares to
which such bid and ask prices apply, or other comparable
information relating to the depth and liquidity of the market for
such stock; and (d) a monthly account statement showing the market
value of each penny stock held in the customer's
account.





In
addition to the “penny stock” rules described above,
FINRA has adopted rules that require that in recommending an
investment to a customer, a broker-dealer must have reasonable
grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities
to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's
financial status, tax status, investment objectives and other
information. Under interpretations of these rules, FINRA believes
that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. The
FINRA requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may
limit your ability to buy and sell our stock and have an adverse
effect on the market for our shares.





Approximate Number of Holders of Common Stock





The
approximate number of record holders of our common stock at March
14, 2018 was 1,824 shareholders of record holding 1,235,164,760
restricted shares in certificated securities and 1,580,390,326
non-restricted shares.





Transfer Agent





The
Company’s stock transfer agent is ClearTrust, LLC
(“ClearTrust”). ClearTrust’s address is 16540
Pointe Village Drive, Suite 205, Lutz, Florida 33558 and their
telephone number is (813) 235-4490. ClearTrust is owned and
controlled by a person who is related to the Company’s
CEO.





Dividend Policy





The
Company did not declare cash dividends during the years ended
December 31, 2017 and 2016. It is not anticipated that cash
dividends will be paid at any time in the foreseeable future as the
Company intends to retain earnings, if any, for use in the
development of its business. The payment of dividends is contingent
upon the Company's future earnings, if any, the Company's financial
condition and its capital requirements, general business conditions
and other factors.





Equity Compensation Plans





The
Company has not established any formal equity compensation plans as
of the date of this Annual Report on Form 10-K; however, the
Company reserves the right to do so at a later date.





Reports
to Security Holders





Seafarer
Exploration Corp. is a reporting company pursuant to the Securities
and Exchange Act of 1934. As such, the Company makes available its
annual report which includes audited financial statements, and its
quarterly reports which include unaudited financial
statements.





Recent
Sales of Unregistered Securities





During
the three month period ended December 31, 2017, the Company agreed
to issue 12,500,000 of its restricted shares of its common stock
for various consulting and business advisory services. During the
year ended December 31, 2017, the Company issued 90,500,008 of its
restricted shares of its common stock to various consultants. These
shares were issued for business advisory, board of directors,
executive, operations, corporate advisory, legal, financial,
corporate communications, and administrative consulting services.
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 such
securities were issued for services rendered to sophisticated
and/or accredited investors.





The
Company issued securities and reported these issuances, which were
not registered under the Securities Act of 1933, as amended (the
“Securities Act”) in our Forms 10-Q for the quarters
ended March 31, 2017, June 30, 2017, and
September 30, 2017. On various dates during the year ended
December 31, 2017, the Company entered into subscription agreements
to sell 371,588,889 shares of its restricted common stock and
receive proceeds of $393,540. The proceeds were used for general
corporate purposes, working capital and the repayment of debt. The
Company issued 500,000 shares of its restricted common stock to an
individual as compensation for damage done by the Company’s
vessel to the individual’s boat during a
storm.





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.





13





Issuance of Securities Due to Conversion of Notes and to Settle
Debt





During
the year ended December 31, 2017 the Company issued 38,950,000
shares of its restricted common stock for financing and loan
origination fees. During the year ended December 31, 2017 the
holders of various convertible promissory notes with an aggregate
face value of $65,132 elected to convert the principal balance of
their notes plus accrued interest into 83,483,587 shares of
the Company’s common stock. 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.





Repurchase of Securities





During
the years ended December 31, 2017 and 2016, the Company did not
purchase any shares of its common stock and the Company is not
likely to purchase any shares in the foreseeable
future. During the year ended December 31, 2016, 32,300,000
shares were returned to the treasury of the Corporation and
subsequently cancelled pursuant to a legal settlement.





Stock Option Grants





The
Company does not have any compensatory stock option grants
outstanding at this time.





Item 6. Selected Financial Data.





Not
required for smaller reporting companies.





Item 7. 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 Company’s actual
results or actions may differ materially from these forward-looking
statements for many reasons. This Item should be read in
conjunction with the financial statements and 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.





Overview





General





The
Company’s principal business plan is to develop the
infrastructure and technology to engage in the
archaeologically-sensitive exploration, recovery and conservation
of historic shipwrecks. Once artifacts have been properly
conserved, they may be made available for scientific research and
allowed to be displayed for the public.





The
Company believes it may eventually be conducting archaeological
research around the world and potentially supporting governmental
or quasi-governmental organizations, universities and affiliated
research groups and private research entities in the documentation
of historic shipwrecks based on their discretion. 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, and other
responsible academic parties upon reasonable request.





In
addition to the research, there is periodic ongoing education of
personnel involved in operations with the Company. Furthermore, the
Company has also hired additional archaeologists on a consulting
basis to further the Company’s depth in archaeology and to
further insure all sensitive archaeological guidelines are met or
exceeded.





The
Company in the past has constantly investigated various
technologies and non-scientific equipment to help better explore or
document our sites. To present date, nothing has been proven to
work. The Company will continue to experiment with unproven
technologies and will actively work with third parties or
independent contractors to develop its own proprietary
technology.





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 difficult, expensive, and
rare. If the Company is not able to successfully locate artifacts
or treasure with significant value, then there is a high
probability that the Company will face adverse consequences,
including a complete loss of all capital invested in or borrowed by
the Company,





Underwater
recovery operations are inherently difficult and dangerous and may
be delayed or suspended by inclement 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 search and recovery operations.





14





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





There
are very restrictive 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 recover 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 salvaging artifacts that have significant
archeological and/or monetary value, that a country whose ship was
salvaged may attempt to claim 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 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. The Company does have plans for security at sea, but may
never implement such plans.





There
are a number of significant issues and challenges including, but
not limited to, government regulation and/or the Company’s
inability to secure permits and contracts, lack of financing, lack
of revenue and cash flow and continued losses from operations that
make the exploration and recovery of historic shipwrecks
a speculative business venture that carries a high degree of
risk. There is also 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,
and not find or engage another business entity, 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
speculative and highly risky.





This
type of business venture is extremely speculative in nature and
carries a tremendous amount of risk. An investment in our
securities is speculative and 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.





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 or to settle other loans and debt, may
cause a significant decline in the market price of the
Company’s securities.





An
investor should consider consulting with professional financial
advisers before making an investment in our
securities.





15





Plan of Operation





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, recovering and conserving historic shipwrecks. The
Company has performed some research, exploration and recovery
activities.





●
Spent
considerable time and money researching potential shipwrecks
including obtaining 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, as well as with for
profit companies and a local university.





●
The
Company continues to review revenue producing opportunities
including joint ventures with other companies.●
The
Company has investigated various types of equipment and technology
to expedite the process of finding artifacts other than iron or
ferrous metals. Most have been of no help, but the Company
continues to explore new technology. The Company may develop its
own proprietary technology or work with 3rd parties to develop
technology to aid in its exploration and recovery operations, which
will require additional time and money.





The
Company has previously performed exploration and recovery
operations at what it believes to be a shipwreck site located off
of the coast of Florida in northern Palm Beach County, more
specifically in an area known as “Juno Beach” (the
“Juno Beach Shipwreck”). The Company believes it is
possible the Juno Beach shipwreck site may potentially contain
remnants of a sunken 1500s ship; however, the Company does not have
definitive evidence of the ship’s country of origin. Due to
the fact that the Company does not currently have sufficient data
to positively identify the potential Juno Beach shipwreck, or its
country of origin, it is not possible to determine whether or not
the ship was originally carrying cargo of any significant value. To
date the Company has not located the main body of a shipwreck at
the Juno Beach site, only a lot of shipwreck material and remnants
including pottery, porcelain, cannon balls, musket balls, ballast
stones, nails, spikes, wood and scattered pieces of a sunken
ship. The Company has determined that a large part of the
magnetometer survey that was previously provided to the Company and
to the State of Florida by a previous partner has an area that was
intentionally deleted from the survey. The Company will complete a
magnetometer survey of the entire deleted area when certain
conditions are met.





The
Company had previously obtained a recovery permit for the Juno
Beach site from the State of Florida. The recovery permit expired
in April of 2014. On March 4, 2015, Seafarer was awarded full
rights to the Juno site pursuant to a court order, erasing all
rights of the Company’s previous partner with regards to the
site. The Juno site was arrested permanently to Seafarer by the
U.S. Marshal’s offices on July 7, 2017 and in November 2017
the Company was granted final judgment on its federal admiralty
claim for the Juno Beach shipwreck site. The Company is in the
process of renewing the recovery permit, as of the filing of this
report the permit has not been issued.





There
is a purported historic shipwreck site in the waters off of
Melbourne Beach Florida that the Company has been investigating. In
February 2013, the Company signed an agreement with a third party
who had previously explored this site for the right to investigate
the site. 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. Further actions toward expanding
the permitted area have been taken for such site. There are a
significant number of challenges inherent in the exploration and
recovery of historic shipwrecks, including the possibility that the
Company will never find artifacts of value at this particular
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 Cape Canaveral,
Florida. The Permit was active for three years from the date of
issuance and is currently in a renewal stage. Seafarer on behalf of
Seafarer’s Quest, LLC, has been primarily focusing its
operations on this site when the weather permits. In addition to
the Company’s main salvage vessel, the Company has utilized
additional owned and rented vessels in order to perform search and
identify operations at this site. Inclement weather and difficult
sea conditions have hampered the Company’s ability to perform
exploration operations at this site and will likely continue to
hamper operations in the future. An archeologist with the technical
skills, knowledge, and experience from around the world was hired
to help insure the integrity of the work. The Company has applied
for permits from the State of Florida for additional areas that
were formerly permitted solely by an affiliate of Marine
Archeological Partners, LLC. A Permit for one of the additional
areas was given to the Company on July 6th, 2016 and identified as
Area 1. Area 1 has become the Company’s primary focus because
of mag survey work and the amount of shipwreck material found
there.





The
Company regularly reviews opportunities to perform exploration and
recovery operations at purported historic shipwreck sites. The
Company currently does have some specific plans to perform
exploration and recovery operations at other shipwreck sites in the
future, however these plans are subject to change based on a number
of factors. 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 as well as environmental permits.





16





The
Company continually monitors media rights for potential revenue
opportunities. The Company has talked to multiple media entities to
further understand the advantages offered. Management believes
media can represent a potential future revenue opportunity for the
Company, if the right circumstances arise.








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
December 31, 2017, the Company had a working capital deficit of
$1,126,431. 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.





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 April 2, 2018.





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 common 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 the Year Ended December 31, 2017 Results of
Operations





The
Company’s net loss for the year ended December 31, 2017 was
$999,847 as compared to a net loss of $1,351,836 for the year ended
December 31, 2016, a decrease of approximately 26% year-over-year.
The 26% decrease in the net loss for the year ended December 31,
2017 was primarily attributable to a significant decrease in
interest expense. Interest expense for the year ended December 31,
2017 was $264,025 versus $676,900 for the same period in 2016.
Interest expense decreased by approximately 61% in 2017 due to the
impact of fair value measurement of various convertible notes. The
Company incurred consulting and contractor expenses of $404,072
during the year ended December 31, 2017 versus $397,468 for the
year ended December 31, 2016, a year-over-year increase of
approximately 2%. For the year ended December 31, 2017, the Company
incurred professional fees of $64,552 as compared to $85,452 for
theyear ended December 31, 2016, a 24% decrease in 2017. The
decrease in professional fees in 2017 was primarily due to the
Company paying less in legal fees due to the settlement of a
lawsuit in 2016. The Company incurred vessel related expenses of
$70,784 during the year ended December 31, 2017 versus $22,424
during the year ended December 31, 2016, an increase of
approximately 216%. During 2017 the Company’s main salvage
vessel required extensive repairs and increased maintenance, while
there were not any major maintenance issues or repairs to its main
salvage vessel in 2016. 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 instances, major unforeseen repairs. Travel and
entertainment expenses decreased approximately 19%, from $49,152
for the period ended December 31, 2016 to $40,002 for the year
ended December 31, 2017. 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 contractor divers and operations personnel as a result
of renting an operations house where certain operations personnel
are able to stay while performing services for the Company. During
the year ended December 31, 2017, the Company general and
administrative expenses were $62,960 as compared to $50,450 during
the year ended December 31, 2016, an increase of approximately 25%.
Rent expense was $41,170 for the year ended December 31, 2017
versus $36,006 for the same period in 2016, an increase of 14%. The
increase in rent expense during 2017 was mostly due to the Company
paying lot rental fees for independent contractors working in the
Company’s diving operations in lieu of hotel rooms. Surveying
and site mapping expense was $15,660 during the year ended December
31, 2017 as compared to $0 during the same period in 2016. In 2017
the Company paid a third party to provide proprietary information
regarding locations of potential shipwreck material utilizing a
satellite based technology.





Liquidity and Capital Resources





At
December 31, 2017, the Company had $62,609 cash in the
bank.   During the year ended December 31, 2017 and the
year ended December 31, 2016, the Company incurred net losses of
$999,847 and $1,351,836, respectively. At December 31, 2016,
Seafarer had $95,586 in current assets and $1,222,017 in current
liabilities, leaving the Company a working capital deficit of
$1,126,431.





17





Lack of Liquidity





A major
financial challenge and significant risk facing the Company is a
lack of positive cash flow and liquidity. The Company continued to
operate with significant debt and a working capital deficit during
the year ended December 31, 2017. 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 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 salvage
historic shipwrecks recovery 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 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. Management anticipates the
Company may need to put the vessel in dry dock in order for
additional repairs to be made. These repairs and maintenance are
expensive and have a negative impact on the Company’s cash
position.





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, telephones, 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 common 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.





If we
are unable to secure additional financing, our business may fail
and our stock price will likely be materially adversely
affected.





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.





If the
Company is unable to secure additional financing, our business may
fail or our operating results and our stock price may be materially
adversely affected. The raising of additional financing would in
all likelihood result in dilution or reduction in the value of the
Company’s securities.





The
Company may not be able to continue as a going concern. If the
Company is not able to continue as a going concern, it is highly
likely that all capital invested in the Company or borrowed by the
Company will be lost. The report of our independent auditors for
the years ended December 31, 2017 and 2016 raises substantial doubt
as to our ability to continue as a going concern. As discussed in
Note 2 to our financial statements for the year ended December 31,
2017 and 2016, we have experienced operating losses in every year
since our inception resulting in an accumulated deficit. Our
independent auditors believe, based on our financial results as of
December 31, 2017, that such results raised substantial doubts
about the Company’s ability to continue as a going concern.
If the Company is not able to continue as a going concern, it is
highly likely that all capital invested in the Company or borrowed
by the Company will be lost.





The
Company has experienced a net loss in every fiscal year since
inception. The Company’s losses from operations were $733,184
for the year ended December 31, 2017 and $674,936 for the year
ended December 31, 2016. The Company believes that it will continue
to generate losses from its operations for the foreseeable future
and the Company may not be able to generate a profit in the
long-term, or ever.





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 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.





18





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 notes 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, Significant
Accounting Policies, contained in the notes to the Company’s
financial statements for the years ended December 31, 2017 and 2016
contained in this filing).  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 the Company has
made any such changes in accounting estimates.





Off-balance Sheet Arrangements





None.





Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.





Not
required.




































































19








Item 8. Financial Statements.




















SEAFARER EXPLORATION CORP.


FINANCIAL STATEMENTS


DECEMBER 31, 2017 AND 2016














TABLE OF CONTENTS











Page
No.Report
of Independent Registered Public Accounting Firm
F-1Balance
Sheets
F-2Statements
of Operations
F-3Statements
of Changes in Stockholders’ Deficit
F-4Statements
of Cash Flows
F-5Notes
to Financial Statements
F-6
- F-26





























20








REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM








To the
Board of Directors and


Stockholders
of Seafarer Exploration Corp.


Tampa,
Florida








Opinion on the Financial Statements


We have
audited the accompanying balance sheets of Seafarer Exploration
Corp. (the “Company”) at December 31, 2017 and 2016,
and the related statements of operations, changes in
stockholders’ deficit, and cash flows for each of the years
in the two-year period ended December 31, 2017, and the related
notes (collectively referred to as the financial statements). In
our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of
December 31, 2017 and 2016, and the results of its operations and
its cash flows for each of the years in the two-year period ended
December 31, 2017, in conformity with accounting principles
generally accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As described in Note
2 to the financial statements, the Company has incurred net losses
since inception, which raises substantial doubt about its ability
to continue as a going concern. Management’s plans in regard
to these matters are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome
of this uncertainty. Our opinion is not modified with respect to
this matter.





Basis for Opinion


These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a
public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the
PCAOB.





We
conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.
As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the
purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting.
Accordingly, we express no such opinion.





Our
audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis
for our opinion.








/s/
Daszkal Bolton LLPWe have
served as the Company’s auditor since 2016.

Fort
Lauderdale, Florida
April
2, 2018





F-1








SEAFARER EXPLORATION CORP.


BALANCE SHEETS


DECEMBER 31, 2017
AND 2016


2017
2016AssetsCurrent
assets:Cash
$62,609
$24,549Prepaid
expenses
32,227
20,606Deposits
750
750Total
current assets
95,586
45,905Property
and equipment, net
20,308
54,292Total
assets
$115,894
$100,197Liabilities and Stockholders' DeficitCurrent
liabilities:Accounts
payable and accrued expense
$279,288
$332,106Convertible
notes payable, net of discounts of $35,844 and $22,423
144,156
27,327Convertible
notes payable, related parties, net of discounts of $-0- and
$156
-
2,244Convertible
notes payable, in default
470,300
444,952Convertible
notes payable, in default - related parties
234,500
196,500Shareholder
loan
20,023
22,270Notes
payable, in default
30,000
30,000Notes
payable, in default - related parties
43,750
17,500Total
current liabilities
1,222,017
1,072,899Commitments
and contingenciesStockholders'
deficit:Preferred
stock, $0.0001 par value - 50,000,000 shares authorized; 67 shares
issuedSeries
A - 7 shares issued and outstanding at December 31, 2017 and
2016
-
-Series
B - 60 shares issued and outstanding at December 31, 2017 and
2016
-
-Common
stock, $0.0001 par value - 2,900,000,000 shares authorized;
2,784,317,155 and2,194,976,061shares
issued and outstanding at December 31, 2017 and 2016
278,432
219,498Additional
paid-in capital
12,293,080
11,485,588Accumulated
deficit
(13,677,635)
(12,677,788)Total
stockholders' deficit
(1,106,123)
(972,702)Total
liabilities and stockholders' deficit
$115,894
$100,197





See accompanying notes to the financial
statements.





F-2





SEAFARER EXPLORATION CORP.


STATEMENTS OF OPERATIONS


FOR THE YEARS
ENDED DECEMBER 31, 2017 AND 2016





2017
2016Revenue
$-
$-Expenses:Consulting
and contractor expenses
404,072
397,468Professional
fees
64,552
85,452General
and administrative expense
62,960
50,450Depreciation
expense
33,984
33,984Rent
expense
41,170
36,006Surveying
and site mapping
15,660
-Vessel
expense
70,784
22,424Travel
expense
40,002
49,152Total
operating expenses
733,184
674,936Loss
from operations
(733,184)
(674,936)Other
expense:Loss
on debt extinguishment
(2,638)
-Interest
expense, net
(264,025)
(676,900)Total
other expense
(266,663)
(676,900)Net
loss before income taxes
$(999,847)
$(1,351,836)Income
taxes
-
-Net
loss
$(999,847)
$(1,351,836)Net
loss per share - basic and diluted
$-
$-Weighted
average common shares outstanding - basic and diluted
2,551,178,960
1,748,983,063





See accompanying notes to the financial
statements.





F-3





SEAFARER EXPLPLORATION CORP.


STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT


FOR THE YEARS
ENDED DECEMBER 31, 2017 AND 2016





AdditionalSeries A Preferred Stock
Series B Preferred Stock
Common
Paid-in
AccumulatedShares
Value
Shares
Value
Shares
Stock
value
Capital
Deficit
TotalBalance
December 31, 2015
7
$-
60
$-
1,332,102,348
$133,210
$10,040,526
$(11,325,952)
$(1,152,216)Stock
issued for cash
-
-
-
-
276,267,533
27,627
207,593
-
235,220Stock
issued for services
-
-
-
-
170,824,798
17,083
194,601
-
211,684Stock
issued for loan fees
-
-
-
-
7,633,333
763
10,094
-
10,857Stock
issued upon conversion of notes payable and accrued
interest
-
-
-
-
382,348,049
38,235
829,970
-
868,205Additional
shares issued under repricing agreements
-
-
-
-
16,100,000
1,610
(1,610)
-
-To
record the BCF and warrants associated with the issuance of new
notes
-
-
-
-
-
-
80,600
-
80,600Additional
financing fees related to Westfield & Greentree
-
-
-
-
-
-
73,484
-
73,484Stock
issued for purchase of equipment
-
-
-
-
25,000,000
2,500
22,500
-
25,000Stock
issued for settlement of notes payable
-
-
-
-
17,000,000
1,700
24,600
-
26,300Common
stock returned and cancelled in settlement of lawsuit
-
-
-
-
(32,300,000)
(3,230)
3,230

-Net
loss
-
-
-
-
-
-
-
(1,351,836)
(1,351,836)Balance
December 31, 2016
7
-
60
-
2,194,976,061
219,498
11,485,588
(12,677,788)
(972,702)Common
stock issued for cash
-
-
-
-
371,588,889
37,159
356,381
-
393,540Stock
issued to convert notes payable and accrued interest
-
-
-
-
73,802,197
7,380
159,091
-
166,471Warrants
issued for loan fees
-
-
-
-
-
-
32,641
-
32,641Beneficial
conversion rights in notes payable
-
-
-
-
-
-
34,984
-
34,984Stock
issued for services
-
-
-
-
143,950,008
14,395
224,395
-
238,790Net
loss
-
-
-
-
-
-
-
(999,847)
(999,847)Balance
December 31, 2017
7
$-
60
$-
2,784,317,155
$278,432
$12,293,080
$(13,677,635)
$(1,106,123)





See accompanying
notes to the financial
statements.





F-4





SEAFARER EXPLORATION CORP.


STATEMENTS OF CASH FLOWS


FOR THE YEARS
ENDED DECEMBER 31, 2017 AND 2016





2017
2016Operating
activitiesNet
loss
$(999,847)
$(1,351,836)Adjustments
to reconcile net loss tonet
cash used in operating activitiesDepreciation
33,984
33,984Amortization
of debt discount
5,812
80,600Loss
(gain) on change in fair value of derivative
-
476,154Common
stock issued for services
191,950
211,684Common
stock issued for financing fees
2,900
84,341Decrease
(increase) in:Prepaid
expenses
87,569
7,951Deposits
-
(434)Increase
in:Accounts
payable and accrued expenses
40,062
87,428Net
cash used in operating activities
(637,570)
(370,128)Cash
flows from investing activities
-
-Cash
flows from financing activities:Proceeds
from the issuance of common stock
393,540
235,220Proceeds
from the issuance of convertible notes payable
265,000
131,700Proceeds
from the issuance of convertible notes payable,
relatedparties
28,000
23,400Payment
on convertible notes payable
(45,000)
-Proceeds
from loans from stockholders
43,090
7,260Payments
on loans from stockholders
(9,000)
(8,500)Net
cash provided by financing activities
675,630
389,580Net
increase (decrease) in cash
38,060
19,452Cash
- beginning of year
24,549
5,097Cash
- end of year
$62,609
$24,559Supplemental
disclosure of cash flow information:Cash
paid for interest expense
$-
$-Cash
paid for income taxes
$-
$-Noncash
operating and financing activities:Common
stock issued for equipment
$-
$25,000Convertible
debt converted and accrued interest to commonstock
$68,722
$868,000





See
accompanying notes to the financial
statements.





F-5





SEAFARER EXPLORATION CORP.


(A Development Stage Company)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS





NOTE 1 – DESCRIPTION OF BUSINESS





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





The
principal business of the Company is to engage in the
archaeologically-sensitive exploration, documentation, and recovery
of historic shipwrecks with the objective of exploring and
discovering Colonial-era shipwrecks for future generations to be
able to appreciate and understand.





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 April 2, 2018. Management's plans
include raising capital through the equity markets to fund
operations and, eventually, the generation of revenue through its
business. The Company does not expect to generate any revenues for
the foreseeable future.





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





NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES





This summary of significant accounting policies of the Company is
presented to assist in understanding the Company’s financial
statements. The 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 financial statements.





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.
There are no cash equivalents at December 31, 2017 and
2016.





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
shareholders 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 the inclusion of outstanding
common stock equivalents would have been anti-dilutive, as of
December 31, 2017 and 2016.



































F-6





Components
of loss per share for the respective years are as follows:


For
the Year Ended

December 31,
2017
For
the Year Ended

December 31,
2016Net loss
attributable to common shareholders
$(999,847
)
$(1,351,836
)Weighted average
shares outstanding:Basic and
diluted
2,551,178,960
1,774,115,117Loss per
share:Basic and
diluted
$(0.00
)
$(0.00
)





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
derivative liability is determined using Level 1 inputs, which
consider (i) time value, (ii) current market and (iii)
contractual prices.





F-7





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





Property and Equipment and Depreciation





Fixed
assets are recorded at historical cost. Depreciation is computed on
the straight-line method over the estimated useful lives of the
respective assets. Property and equipment, net consist of the
following at December 31 2017 and 2016, respectively:


2017
2016Diving
vessel
$326,005
$326,005Generator
7,420
7,420Magnetometer
25,000
25,000Less accumulated
depreciation
(338,117
)
(304,133
)$20,308
$54,292





Depreciation expense was $33,984 for each of the years ended
December 31, 2017 and 2016.





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. ASC 360-10 provides guidance on accounting for
property, plant, and equipment, and the related accumulated
depreciation on those assets. ASC 360-10 also includes guidance on
the impairment or disposal of long-lived assets. ASC 360-10 notes
that long-lived tangible assets include land and land improvements,
buildings, machinery and equipment, and furniture and fixtures. 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. The Company has determined there has been no
impairment in the carrying value of its long-lived assets at
December 31, 2017 and 2016, respectively.





Use of Estimates





The
process of preparing 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 financial
statements.  Accordingly, upon settlement, actual results
may differ from estimated amounts.





Revenue Recognition





The
Company plans to recognize revenue on arrangements in accordance
with Securities and Exchange Commission Staff Accounting Bulletin
No. 101, “Revenue Recognition in Financial Statements”
and No. 104, “Revenue Recognition”. In all cases,
revenue will be recognized only when the price is fixed or
determinable, persuasive evidence of an arrangement exists, the
service is performed and collectability is reasonably assured. For
the years ended December 31, 2017 and 2016, the Company did not
report any revenues.





F-8





Convertible Notes Payable





The
Company accounts for conversion options embedded in convertible
notes in accordance with ASC 815. ASC 815 provides comprehensive
guidance on derivative and hedging transactions. It sets forth the
definition of a derivative instrument and specifies how to account
for such instruments, including derivatives embedded in hybrid
instruments. In addition, ASC 815 establishes when reporting
entities, in certain limited, well-defined circumstances, may apply
hedge accounting to a relationship involving a designated hedging
instrument and hedged exposure. Hedge accounting provides an
alternative, special way of accounting for such relationships. ASC
815 also provides guidance on how reporting entities determine
whether an instrument is (1) indexed to the reporting
entity’s own stock and (2) considered to be settled in the
reporting entity’s own stock. Such a determination will
dictate whether an instrument should be accounted for as debt
or equity and the appropriate accounting for the instrument.
Finally, ASC 815 addresses the accounting for non-exchange-traded
weather derivatives. 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. As of December
31, 2017, all of the Company’s convertible notes payable were
classified as conventional instruments.





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. ASC
470-10 addresses classification determination for specific
obligations, such as short-term obligations expected to be
refinanced on a long-term basis, due-on-demand loan arrangements,
callable debt, sales of future revenue, increasing rate debt, debt
that includes covenants, revolving credit agreements subject to
lock-box arrangements and subjective acceleration clauses, indexed
debt. 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.





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.





Recent Accounting Pronouncements





Recent
accounting pronouncements issued by the FASB, including its
Emerging Issues Task Force, the American Institute of Certified
Public Accountants, and the Securities and Exchange Commission did
not or are not believed by management to have a material impact on
the Company's present or future consolidated financial
statements.





NOTE 4 – CAPITAL STOCK





At December 31, 2017 the Company’s total authorized capital
stock consists of 2,900,000,000 shares of common stock, $0.0001 par
value per share.





Preferred Stock





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





F-9





Series A Preferred Stock





At
December 31, 2017 and 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.





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





At
December 31, 2017 the Company had warrants to purchase a total of
145,333,333 shares of its restricted common stock
outstanding:





Term
Amount
Exercise Price11/20/12
to 11/20/22
4,000,000
$0.005009/18/15
to 09/18/20
4,000,000
$0.003004/04/16
to 04/04/18
10,000,000
$0.002007/12/16
to 01/12/18
4,000,000
$0.002008/31/16
to 08/31/18
25,000,000
$0.001001/31/17
to 01/31/18
40,000,000
$0.004002/14/17
to 08/14/18
33,333,333
$0.005009/10/17
to 09/10/19
15,000,000
$0.025009/10/17
to 09/10/19
10,000,000
$0.0250145,333,333





Warrants Issued During the Year Ended December 31,
2016





During the year ended December 31, 2016 the Company issued a total
of 97,681,818 warrants to purchase shares of restricted common
stock at prices ranging from $0.002 to $0.005, 44,681,818 warrants
were issued under equity subscription agreements and 54,000,000
under convertible promissory notes. The warrants issued under
convertible promissory note agreements were valued using the
Black-Scholes model with the following
asumptions...





Year
ended December 31,2016Expected
life in years
1 to 6 yearsStock
price Volatility
229.73%Risk
free interest rates
.69%
to .80%Expected
dividends
-Forfeiture
rate
-





F-10





Warrants Issued During the Year Ended December 31,
2017
 
 During
the year ended December 31, 2016 the Company issued a total of
98,333,333 warrants to purchase shares of restricted common stock
at prices ranging from $0.004 to $0.025, 40,00,000 warrants were
issued under equity subscription agreements and 58,333,333 under
convertible promissory notes. The warrants issued under convertible
promissory note agreements were valued using the Black-Scholes
model with the following
assumptions...
 
 Year
ended December 31,2017Expected
life in years
1 to 5 yearsStock
price Volatility
205.80%Risk
free interest rates
1.36%Expected
dividends
-Forfeiture
rate
-


The following table summarizes common stock warrants
activity:





Weighted
averageWarrants
Exercise PriceDecember
31, 2015
49,412,500
0.006Granted
98,618,818
0.002Exercised
-Forfeited
(21,399,500)
0.006Outstanding,
December 31, 2016
126,631,818Granted
98,333,333
0.01Exercised
-Forfeited
(79,631,818)
0.003Outstanding,
December 31, 2017
145,333,333





NOTE 5 - INCOME TAXES





At
December 31, 2017 and 2016, the Company had available Federal and
state net operating loss carry forwards to reduce future taxable
income. The amounts available were approximately $13,300,000 and
$12,300,000 for Federal purposes. The Federal carry forwards begin
to expire in 2033. Given the Company’s history of net
operating losses, management has determined that it is more likely
than not that the Company will not be able to realize the tax
benefit of the carryforwards. Accordingly, the Company has not
recognized a deferred tax asset for this benefit.





The
Company adopted FASB guidelines that address the determination of
whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under this
guidance, the Company may recognize the tax benefit from an
uncertain tax position only if it is more likely than not that the
tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax
benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a
greater than fifty percent likelihood of being realized upon
ultimate settlement. This guidance also provides guidance on
derecognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased
disclosures. As of December 31, 2017 and 2016, the Company did not
have a liability for unrecognized tax benefits.





The
Company’s policy is to record interest and penalties on
uncertain tax provisions as income tax expense. As of December 31,
2017 and 2016, the Company has not accrued interest or penalties
related to uncertain tax positions. Additionally, tax years 2011
through 2017 remain open to examination by the major taxing
jurisdictions to which the Company is subject. The Company is
currently in the process of filing 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. There are currently no open federal or state tax years under
audit.





Upon
the attainment of taxable income by the Company, management will
assess the likelihood of realizing the tax benefit associated with
the use of the carry forwards and will recognize a deferred tax
asset at that time.





F-11





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 Year Ended
December
31, 2017
For
the Year Ended
December
31,  2016Income tax at
federal statutory rate
(34.00%)
(34.00%)State tax, net of
federal effect
(3.96%)
(3.96%)37.96%
37.96%Valuation
allowance
(37.96 )
(37.96%)Effective
rate
0.00%
0.00%
 
 Deferred
income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax
purposes.
 
 As of
December 31, 2017 and 2016, the Company’s only significant
deferred income tax asset was a cumulative estimated net tax
operating loss of approximately $13,300,000 and $12,300,000,
respectively that is available to offset future taxable income, if
any, in future periods, subject to expiration and other limitations
imposed by the Internal Revenue Service.  Management has
considered the Company's operating losses incurred to date and
believes that a full valuation allowance against the deferred tax
assets is required as of December 31, 2017 and 2016.


NOTE 6 – LEASE OBLIGATION





Corporate Office





The
Company leases 823 square feet of office space located at 14497
North Dale Mabry Highway, Suite 209-N, Tampa, Florida 33618. The
Company entered into an amended lease agreement commencing on July
20, 2017 through June 30, 2020 with base monthly rents of $1,252
from July 1, 2017 to June 30, 2018, $1,289 from July 1, 2018
to June 30, 2019, and $1,328 from July 1, 2019 to June 30,
2020. Under the terms of the lease there may be additional fees
charged above the base monthly rental fee.





As of
December 31, 2017, future minimum rental payments required under
this non-cancelable operating lease total $15,246 for the year
ending December 31, 2018, $15,703 for the year ending December 31,
2019, and $7,967 for the year ending December 31, 2020.





Operations House





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





NOTE 7 - CONVERTIBLE NOTES PAYABLE AND NOTES
PAYABLE





Upon
inception, the Company evaluates each financial instrument to
determine whether it meets the definition of “conventional
convertible” debt under paragraph 4 of EITF 00-19, which was
superseded by ASC 815, and EITF 05-02, which was superseded by ASC
470.





F-12





Convertible Notes Payable
 
 The following table reflects the convertible notes payable as of
December 31, 2017 and 2016,
 
 Issue Date:
Maturity Date
2017
2016
Interest RateConvertible
notes payable, in default:August
28, 2009
November
1, 2009
$4,300
$4,300
10.00%April
7, 2010
November
7, 2010
70,000
70,000
6.00%November
12, 2010
November
12, 2011
40,000
40,000
6.00%October
31, 2012
April
30, 2013
8,000
8,000
6.00%November
20, 2012
May
20, 2013
50,000
50,000
6.00%January
19, 2013
July
30, 2013
5,000
5,000
6.00%February
11, 2013
August
11, 2013
9,000
9,000
6.00%September
25, 2013
March
25, 2014
10,000
10,000
6.00%October
04, 2013
April
4, 2014
50,000
50,000
6.00%October
30, 2013
October
30, 2014
50,000
50,000
6.00%May
15, 2014
November
15, 2014
40,000
40,000
6.00%October
13, 2014
April
13, 2015
25,000
25,000
6.00%April
4, 2015
April
20, 2016
--
23,652
6.00%June
29, 2015
December
29, 2015
25,000
25,000
6.00%September
18, 2015
March
18, 2016
25,000
25,000
6.00%April
04, 2016
October
4, 2016
10,000
10,000
6.00%July
19, 2016
July
19, 2017
4,000
--
6.00%August
24, 2016
February
24, 2017
20,000
--
6.00%March
10, 2017
September
10, 2017
10,000
--
6.00%March
14, 2017
September
14, 2017
15,000
--
6.00%Balance

$470,300
$444,952


Convertible
notes payable - related parties, in default:January
09, 2009
January
9, 2010
$10,000
$10,000
10.00%January
25, 2010
January
25, 2011
6,000
6,000
6.00%January
18, 2012
July
18, 2012
50,000
50,000
8.00%January
19, 2013
July
30, 2013
15,000
15,000
6.00%July
26, 2013
January
26, 2014
10,000
10,000
6.00%January
01, 2014
July
17, 2014
31,500
31,500
6.00%May
27, 2014
November
27, 2014
7,000
7,000
6.00%July
21, 2014
January
25, 2015
17,000
17,000
6.00%October
16, 2014
April
16, 2015
21,000
21,000
6.00%July
14, 2015
January
14, 2016
9,000
9,000
6.00%January
12, 2016
July
12, 2016
5,000
5,000
6.00%May
10, 2016
November
10, 2016
5,000
5,000
6.00%May
10, 2016
November
10, 2016
5,000
5,000
6.00%May
20, 2016
November
20, 2016
5,000
5,000
6.00%July
12, 2016
January
12, 2017
5,000
--
6.00%January
26, 2017
March
12, 2017
5,000
--
6.00%February
24, 2017
August
24, 2017
25,000
--
6.00%August
16, 2017
September
16, 2017
3,000
--
6.00%Balance

$234,500
$196,500Balance,
convertible notes payable

$704,800
$641,452





F-13





Notes Payable
 
 The
following table reflects the notes payable as of December 31, 2017
and 2016 :
 
 Issue
Date:
Maturity
Date
2017
2016
Interest
RateConvertible
notes payable:November
29, 2017
November
29, 2019
$105,000
$-
2.06%December
14, 2017
December
14, 2018
75,000
-
6.00%Unamortized
discount

(35,844)
-Balance
$144,156
$-Notes
payable, in default:April
27, 2011
April
27, 2012
$5,000
$5,000
6.00%June
23, 2011
August
23, 2011
25,000
25,000
6.00%Balance

$30,000
$30,000Notes
payable - related parties, in default:February
24, 2010
February
24, 2011
$7,500
$7,500
6.00%October
6, 2015
November
15, 2015
10,000
10,000
6.00%November
2, 2017
December
2, 2017
26,250
-
6.00%Balance

$43,750
$17,500





Issue
Date
Maturity
Date
December
31,
2016
Interest
RateConvertible notes
payable:July 19,
2016
July 19,
2017
$4,000
6.00%August 24,
2016
February 24,
2017
20,000
6.00%August 31,
2016
August 31,
2017
25,750
6.00%Unamortized
discount

(22,423)Balance

$27,327Convertible notes
payable – related partiesJuly 12,
2016
January
12,2017
$2,400
6.00%Unamortized
discount

(156)$2,244





Notes Payable and Convertible Notes Payable





Between
January 1, 2017 and December 31, 2017, the Company issued notes
payable and convertible notes payable totaling $331,923. The notes
include interest at 6%. The principal amount of the notes and
interest is payable on the maturity date. The notes and accrued
interest are convertible into common stock at fixed conversion
prices. The conversion prices and maturity dates of these notes are
detailed in the table in the preceding page.





The
Company has evaluated the terms and conditions of the convertible
notes under the guidance of ASC 815 and other applicable guidance.
The conversion feature of four of the notes 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. The note is convertible into a fixed number of shares
and there are no down round protection features contained in the
contracts. 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.





The
following tables reflect the aggregate allocation as of December
31:





2017
2016Face value of convertible notes
payable
$180,000
$49,750Beneficial conversion
feature
(35,844)
(22,423)Carrying
value
$144,156
$27,327





F-14








The
discounts on the convertible notes arose from the allocation of
basis to the beneficial conversion feature. The discount is
amortized through charges to interest expense over the term of the
debt agreement. For the twelve months ended December 31, 2017 and
2016, the Company recorded interest expense related to the
amortization of debt discounts in the amount of approximately
$80,600 and $80,600, respectively.
 
 At
December 31, 2017 and 2016, combined accrued interest on the
convertible notes payable, notes payable and stockholder loans was
$220,732 and $154,790, respectively, and included in accounts
payable and accrued expenses on the accompanying balance
sheets.
 
 New Convertible Notes Payable and Notes Payable
 
 During the year ended December 31, 2017
the Company entered into the following Convertible Notes Payable
and Notes Payable Agreements:
 
 In
January of 2017, the Company entered into a convertible promissory
note agreement in the amount of $5,000 with an individual who is
related to the Company’s CEO. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before March 12, 2017. The Company agreed to pay the related
party lender a loan origination fee of 1,000,000 shares of its
restricted common stock. The note is unsecured and is convertible
at the lender’s option into shares of the Company’s
common stock at a rate of $0.0005 per share. At December 31, 2017,
the loan was in default due to non-payment of principal and
interest. The Company recorded a debt discount of
$5,000.
 
 In
February of 2017, the Company entered into a convertible promissory
note agreement in the amount of $25,000 with an individual who is
both related to the Company’s CEO and a member of the
Company’s Board of Directors. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before August 14, 2017. The note is unsecured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.00075 per share. The
related party lender received 33,333,333 warrants to purchase
shares of the Company’s common stock at a price of $0.005.
The Company recorded a debt discount of $25,000.


In
March of 2017, the Company entered into a convertible promissory
note agreement in the amount of $15,000 with a corporation. This
loan pays interest at a rate of 6% per annum and the principal and
accrued interest was due on or before September 10, 2017. The note
is unsecured and is convertible at the lender’s option into
shares of the Company’s common stock at a rate of $0.001 per
share. The lender received 15,000,000 warrants to purchase shares
of the Company’s common stock at a price of $0.025. The
Company recorded a debt discount of $15,000.





In
March of 2017, the Company entered into a convertible promissory
note agreement in the amount of $10,000 with a corporation. This
loan pays interest at a rate of 6% per annum and the principal and
accrued interest was due on or before September 10, 2017. The note
is unsecured and is convertible at the lender’s option into
shares of the Company’s common stock at a rate of $0.001 per
share. The lender received 10,000,000 warrants to purchase shares
of the Company’s common stock at a price of $0.025. The
Company recorded a debt discount of $10,000.





In
March of 2017, the Company entered into a convertible promissory
note agreement in the amount of $15,000 with a corporation. This
loan pays interest at a rate of 6% per annum and the principal and
accrued interest was due on or before September 14, 2017. The note
is unsecured and is convertible at the lender’s option into
shares of the Company’s common stock at a rate of $0.0015 per
share. The Company recorded a debt discount of
$15,000.





In
August of 2017, the Company entered into a promissory note
agreement in the amount of $2,500 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before August 16, 2017. The related
party lender received 250,000 shares of the Company’s
restricted common stock as a loan origination fee. The principal
balance of the note of $2,500 plus $9 of accrued interest was
repaid and the remaining balance of the note at December 31, 2017
was $0. The Company recorded a debt discount of $300.





In
August of 2017, the Company entered into a promissory note
agreement in the amount of $2,673. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before August 31, 2017. The lender received 1,000,000 shares
of the Company’s restricted common stock as a loan
origination fee. The note is unsecured. The Company recorded a debt discount
of $1,400.





In
August of 2017, the Company entered into a convertible promissory
note agreement in the amount of $3,000 with an individual who is
both a related party and a member of the Company’s Board of
Directors. This loan pays interest at a rate of 6% per annum and
the principal and accrued interest were due on or before September
16, 2017. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.0008 per share.





In
October of 2017, the Company entered into a promissory note
agreement in the amount of $25,000. This loan is non-interest
bearing and the principal was due on or before November 3, 2017.
The lender received 4,000,000 shares of the Company’s
restricted common stock as a loan origination fee and a $1,250
financing fee. The principal balance of the note plus accrued
interest was repaid prior to December 31, 2017. The Company recorded a debt discount
of $4,000.





F-15


In
October of 2017, the Company entered into a promissory note
agreement in the amount of $2,500 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before October 23, 2017. The
related party lender received 200,000 shares of the Company’s
restricted common stock as a loan origination fee. The principal
balance of the note of $2,500 plus $23 of accrued interest was
repaid and the remaining balance of the note at December 3`, 2017
was $0. The Company recorded a debt discount of $240.
 
 In
October of 2017, the Company entered into a promissory note
agreement in the amount of $20,000. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before November 3, 2017. The lender received a loan
origination fee of $1,000. The principal balance of the note plus
accrued interest was repaid prior to December 31,
2017.
 
 In
November of 2017, the Company entered into a promissory note
agreement in the amount of $26,250 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before December 2, 2017. The
related party lender received 2,000,000 shares of the
Company’s restricted common stock as a loan origination fee.
At December 31, 2017 the loan was in default due to non-payment of
principal and interest. The Company recorded a debt discount of
$2,200.
 
 In
November of 2017, the Company entered into a participating
promissory note agreement in the amount of $105,000 with a limited
liability company. This loan pays interest at a rate of 2.06% per
annum and the principal and accrued interest are due on or before
November 29, 2019. The lender received 25,000,000 shares of the
Company’s restricted common stock as a loan origination fee.
The lender is also entitled to receive a total of $840,000 worth of
treasure or artifacts located by Seafarer at any of
Seafarer’s shipwreck sites after the State of Florida and/or
other permitting agencies have received their share and after any
other parties who have previously entered into any agreement to
receive treasure or artifacts prior to the execution of the
promissory note. The
Company recorded a debt discount of $32,500.
 
 In
December of 2017, the Company entered into a promissory note
agreement in the amount of $75,000. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest are due
on or before December 14, 2018. The lender received 5,000,000
shares of the Company’s restricted common stock as a loan
origination fee. The lender is also entitled to receive a total of
$450,000 worth of treasure located by Seafarer at any of
Seafarer’s shipwreck sites after the State of Florida and/or
other permitting agencies have received their share and after any
other parties who have previously entered into any agreement to
receive treasure or artifacts prior to the execution of the
promissory note. The
Company recorded a debt discount of $5,000.


Note Conversions





During
the year ended December 31, 2017 the following notes were converted
into shares of the Company’s common stock:





A
lender who had a convertible promissory note outstanding with a
remaining principal balance of $24,402 elected to convert the
principal balance of the note plus accrued interest and late fees
of $2,242 into 36,205,587 shares of the Company’s common
stock. The remaining principal balance of this note was $0 at
December 31, 2017.





A
lender who had a convertible promissory note outstanding with a
remaining principal balance of $25,750 elected to convert the
principal balance of the note plus accrued interest and late into
30,950,000 shares of the Company’s common stock. The
remaining principal balance of this note was $0 at December 31,
2017.





A
lender who had a convertible promissory note outstanding with a
remaining principal balance of $15,000 elected to convert the
principal balance of the note plus accrued interest of $1,328 into
15,000,000 shares of the Company’s common stock. The
remaining principal balance of this note was $0 December 31,
2017.





Shareholder Loans





At December 31,
2017 the Company had six loans outstanding to its CEO totaling
$20,023, consisting of a loan in the amount of $11,983 with a 6%
annual rate of interest, a loan in the amount of $1,500 at 6% rate
of interest and an option to convert the loan into restricted
shares of the Company’s common stock at $0.002, a loan in the
amount of $2,600 at 1% rate of interest, a loan in the amount of
$3,000 at 1% rate of interest, a loan in the amount of $500 at 1%
rate of interest, and a loan in the amount of $400 at 1% rate of
interest.





Convertible Notes Payable and Notes Payable, in
Default





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





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





F-16





NOTE 8 – 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. This Permit became inactive on July 28, 2017 and there is
no guarantee that the permit will be renewed or expanded however
the Company has been working with the Florida Division of
Historical Resources on the renewal of the
permit.
 
 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.
 
 Federal Admiralty Judgement
 
 As
previously noted on its form 8-K filed on November 22, 2017,
Seafarer was granted, through the United States District Court for
the Southern District of Florida, a final judgment for its federal
admiralty claim on the Juno Beach shipwreck site.


Certain Other Agreements





In
January of 2017, the Company entered into a subscription agreement
to sell 17,000,000 shares of restricted common stock to two
individuals in exchange for proceeds of $75,000. The Company also
agreed that the purchaser will be entitled to receive $500,000 of
treasure of their choice after both the Company has recovered a
minimum of $1,200,000 of artifacts/treasure and the State of
Florida has received its full share of treasure per any permits or
agreements. The purchaser will have the right to convert up to a
maximum of $500,000 worth of treasure that they have received into
shares of the Company’s restricted common stock at a discount
of 10% of the average trading price of the Company’s common
stock of the previous five days closing price provided that the
Company’s common stock is trading at or above $0.04 by
providing a written notice to the Company. The conversion option
will expire eighteen months after the Company first locates a
minimum of $1,200,000 worth of treasure. The value of any treasure
recovered will be determined by a mutually agreed upon third party
who is a recognized expert in the valuation of historic
artifacts.





In
January of 2017, the Company entered into a convertible promissory
note agreement in the amount of $5,000 with an individual who is
related to the Company’s CEO. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before March 12, 2017. The Company agreed to pay the related
party lender a loan origination fee of 1,000,000 shares of its
restricted common stock. The note is not secured and is convertible
at the lender’s option into shares of the Company’s
common stock at a rate of $0.0005 per share.  At December
31, 2017, the loan was in default due to non-payment of principal
and interest.





In
January of 2017, the Company entered into a stock subscription
agreement to sell 40,000,000 shares of restricted common stock at a
price $0.0005 share to an individual in exchange for proceeds of
$20,000. The Company also agreed that the purchaser will be
entitled to receive warrants to purchase 40,000,000 shares of the
Company’s restricted common stock. The warrants are
exercisable at a price of 0.004 per share for a period of one year
from January 31, 2017.





In
January of 2017, the Company amended an agreement with an
individual who had previously joined the Company’s advisory
council in 2016. Under the amended advisory council agreement, the
Company agreed to pay the advisor an additional 2,000,000 shares of
restricted common stock for efforts above and beyond the services
agreed to in the original advisory council agreement, in particular
advice and expertise pertaining to a certain technology that the
Company desired to utilize in its exploration operations. The
2,000,000 shares were issued to the advisor during the year ended
December 31, 2017.





In
February of 2017, the Company entered into a convertible promissory
note agreement in the amount of $25,000 with an individual who is
both related to the Company’s CEO and a member of the
Company’s Board of Directors. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest are due
on or before August 14, 2017. The note is not secured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.00075 per
share.  The related party lender received 33,333,333
warrants to purchase shares of the Company’s common stock at
a price of $0.005.





F-17





In
February of 2017, the Company entered into an agreement with a
corporation under which the corporation agreed to provide
consulting services utilizing a technology to assist the Company
with shipwreck site and artifact location and identification. The
consultant agreed to utilize the technology system at a designated
shipwreck site to ascertain and/or verify the presence of valuable
artifacts in a specific area. The Company agreed to pay the
consultant 5% royalty with a cap of $1,500,000 for anything of
value located at the site. The Company also agreed to pay the
consultant a 20% royalty from the recovery of materials located and
verified by the technology in the areas surrounding the designated
site. The Company also paid the consultant of $30,000 for the
utilization of the technology to provide the Company with specific
data under a trial survey as to the approximate location of various
items of value.
 
 In
February of 2017, the Company extended the term of a previous
agreement with an individual who is related to the Company’s
CEO to continue serving as a member of the Company’s Board of
Directors. Under the  agreement, the Director agreed to
provide various services to the Company including making
recommendations for both the short term and the long term business
strategies to be employed by the Company, monitoring and assessing
the Company's business and to advise the Company’s Board of
Directors with respect to an appropriate business strategy on an
ongoing basis, commenting on proposed corporate decisions and
identifying and evaluating alternative courses of action, making
suggestions to strengthen the Company's operations, identifying and
evaluating external threats and opportunities to the Company,
evaluating and making ongoing recommendations to the Board with
respect for one year and may be terminated by either the Company or
the Director by providing written notice to the other party. The
agreement also terminates automatically upon the death, resignation
or removal of the Director.  Under the terms of the
agreement, the Company agreed to pay the Director 20,000,000
restricted shares of its common stock and to negotiate future
compensation on a year-by-year basis. The Company also agreed to
reimburse the Director for preapproved expenses.
 
 In
February of 2017, the Company extended the term of a previous
agreement with a second individual who is related to the
Company’s CEO to continue serving as a member of the
Company’s Board of Directors. Under the  agreement,
the Director agreed to provide various services to the Company
including making recommendations for both the short term and the
long term business strategies to be employed by the Company,
monitoring and assessing the Company's business and to advise the
Company’s Board of Directors with respect to an appropriate
business strategy on an ongoing basis, commenting on proposed
corporate decisions and identifying and evaluating alternative
courses of action, making suggestions to strengthen the Company's
operations, identifying and evaluating external threats and
opportunities to the Company, evaluating and making ongoing
recommendations to the Board with respect for one year and may be
terminated by either the Company or the Director by providing
written notice to the other party. The agreement also terminates
automatically upon the death, resignation or removal of the
Director.  Under the terms of the agreement, the Company
agreed to pay the Director 20,000,000 restricted shares of its
common stock and to negotiate future compensation on a year-by-year
basis. The Company also agreed to reimburse the Director for
preapproved expenses.


In
February of 2017, the Company entered into agreements with seven
separate individuals to either join or rejoin the Company’s
advisory council. Under the advisory council agreements all of the
advisors agreed to provide various advisory services to the
Company, including making recommendations for both the short term
and the long term business strategies to be employed by the
Company, monitoring and assessing the Company's business and to
advise the Company’s Board of Directors with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions and identifying and evaluating
alternative courses of action, making suggestions to strengthen the
Company's operations, identifying and evaluating external threats
and opportunities to the Company, evaluating and making ongoing
recommendations to the Board with respect to the Company's
business, and providing such other advisory or consulting services
as may be appropriate from time to time. The term of each of the
advisory council agreements is for one year. In consideration for
the performance of the advisory services, the Company agreed to
issue the advisors shares of the Company’s restricted common
stock including 5,000,000 shares each to two of the advisors,
4,000,000 shares each to four of the advisors and 3,000,000 shares
to one of the advisors, an aggregate total of 22,000,000 restricted
shares. According to the agreements each of the advisors’
shares vest at a rate of 1/12th of the amount per month over the
term of the agreement.  If any of the advisors or the
Company terminates the advisory council agreements prior to the
expiration of the one year terms, then each of the advisors whose
agreement has been terminated has agreed to return to the Company
for cancellation any portion of their shares that have not vested.
Under the advisory council agreements, the Company has agreed to
reimburse the advisors for preapproved expenses.





F-18


In
March of 2017, the Company entered into a Financing and Rights
agreement with a limited liability company. The Financing and
Rights agreement contains certain conditions and contingencies that
must be met prior to the Company receiving any financing. As of the
filing date of this report the Company has not received any
financing under the agreement and it is possible that the Company
will never receive any financing under the terms of the agreement.
Under the terms of the agreement the limited liability company
agreed to provide financing for the Company for the exploration,
recovery and all other related requirements necessary for the
related permitted offshore underwater search and recovery for a
site located off of Juno Beach, Florida and several additional
sites that have been identified by a third party to Seafarer as
being located off of the East Coast of Florida in areas that would
be subject to Federal Admiralty claims should opportunities arise
for the exploration and recovery of historic shipwrecks at these
sites. The Company has agreed to enter into a separate agreement
with the third party for the specific location of the potential
additional shipwreck sites and as such the rights to these sites
that the Company may receive due its agreement with the third party
are included as a part of the Financing and Rights agreement. In
exchange for the services and rights to be provided by the Company
under its core business and such applicable rights under such
judgments and permits, the limited liability company agreed to
provide project capital for the Juno Site project in the amount of
up to $800,000, within ninety days of the approval of the recovery
permit necessary for such site. In return for such capital
contribution, the Company agreed to pay to the limited liability
company a portion of such division of artifacts, revenue. In the
event that the limited liability company has contributed capital
toward the enterprise in any amount and treasure and artifacts are
found at any time in the future under the Company or any related
party, then the limited liability company shall be entitled to a
percentage of its share of such artifacts or revenue created from
such site, so long as a minimum funding of $100,000 has been
committed in the furtherance of the recovery effort. In its sole
discretion, the limited liability company may, if it chooses to do
so, contribute such necessary capital for the necessary actions to
gain such permit for such recovery operations on such Juno Site.
The limited liability company agreed to provide the funding in
exchange for exclusive rights to portions of artifacts recovered
from such site, or revenues created from such. The agreement
further states that capital provided to the Company by the limited
liability Company shall be sued exclusively for actions or
operations on the Juno Site, unless another site is mutually agreed
upon, for dive operations, surveys and scanning as necessary, boat
and vessel expenses, compensation and site management expenses,
fuel and other related costs to the Juno Site project. The limited
liability company will have the right to withhold and approve
funding if the funding is not required for recovery operations on
the Juno Site. After a the State of Florida has taken its share of
any artifacts and treasure per any future permits or agreements for
the Juno Site, the limited liability Company will be entitled to
receive 20% of the first $10,000,000 of artifacts/treasure
recovered, 15% of the amount of any artifacts/treasure recovered
with a value greater than $10,000,000 to $50,000,000, 10% of the
amount of any artifacts/treasure recovered with a value greater
than $50,000,000 for a period of three years, and 5% of the amount
of any treasure/artifacts recovered with a value greater than
$50,000,000 for five years. Additionally, the limited liability
company has been made aware that Seafarer has had negotiations with
a separate third party for the location of several additional
shipwreck sites. The limited liability company will be given
exclusive rights to any sites that the Company gains from the third
party with the sites becoming a part of this agreement. Per the
agreement the sites are unproven, never scanned and presumed to be
unsearched and highly speculative as to whether there are any
shipwrecks or shipwreck material on the sites however such sites
are included in the Financing and Rights agreement. For any of the
sites that Seafarer acquires the rights to from the third party,
the limited liability Company will be entitled to receive 20% of
the first $10,000,000 of artifacts/treasure recovered, 15% of the
amount of any artifacts/treasure recovered with a value greater
than $10,000,000 to $50,000,000, 10% of the amount of any
artifacts/treasure recovered with a value greater than $50,000,000
for a period of three years, and 5% of the amount of any
treasure/artifacts recovered with a value greater than $50,000,000
for five years. Seafarer and the limited liability company may also
agree to revenue sharing from the sales of artifacts/treasure. If
Seafarer has not previously contracted with any party as to media
rights, then the Company and the limited liability company agreed
that the limited liability company will be allowed to make or cause
a media venture at its own expense. Each party will have portion of
the revenues from such venture from whatever source. Such media
rights are only applicable to the Juno Site and the potential third
party site projects that are subject to the Financing and Rights
agreement.


In
April of 2017, the Company entered into a one-year consulting
agreement with a limited liability company for exploration and
diving services, maintaining vessels and equipment, and providing
operational management services. The Company has agreed to issue
4,000,008 million shares valued at approximately $13,600 to the
consultant for the services. The shares vest over a one year
period. The Company also agreed to pay for the consultants'
campground and electrical services while the consultant is
performing services for the Company.
 
 In
April of 2017, the Company entered into a consulting agreement with
an individual. Under the terms of the consulting agreement the
individual agreed to provide advice to the Company with regards to
its diving operations, for the purpose of exploring shipwrecks and
recovering artifacts and any other services that are reasonably
requested by the Company. The Company agreed to issue the
consultant 2,000,000 shares of its restricted common stock valued
at approximately $7,200.


In May
of 2017, the Company entered into an agreement with an individual
who possesses an archeological background to join the
Company’s advisory council. Under the terms of the advisory
council agreement the advisor agreed to provide various advisory
services to the Company, including making recommendations for both
the short term and the long term business strategies to be employed
by the Company, monitoring and assessing the Company's business and
to advise the Company’s Board of Directors with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions and identifying and evaluating
alternative courses of action, making suggestions to strengthen the
Company's operations, identifying and evaluating external threats
and opportunities to the Company, evaluating and making ongoing
recommendations to 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 the advisory
council agreements 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 the Company’s restricted
common stock valued at approximately $5,000. Per the terms of the
agreement the shares vest at a rate of 1/12th of the amount per
month over the term of the agreement.  If the advisor or
the Company terminates the advisory council agreement prior to the
expiration of the one year terms, then the advisor has agreed to
return to the Company for cancellation any portion of the shares
that have not vested. Under the advisory council agreements, the
Company has agreed to reimburse the advisor for preapproved
expenses.





F-19





In May
of 2017 the Company agreed to issue one of its legal advisors
7,500,000 shares of restricted common stock for the performance of
legal and consulting services.
 
 In July
of 2017, the Company entered into a consulting agreement with an
individual. Under the terms of the consulting agreement the
individual agreed to provide services to the Company with regards
to motivational speeches to shareholders, officers, and independent
contractors. The term of the agreement is open ended and the
Company agreed to issue the consultant 1,000,000 shares of its
restricted common stock valued at approximately
$1,600.
 
 In July
of 2017, the Company entered into a consulting agreement with an
individual. Under the terms of the consulting agreement the
individual agreed to provide web development services to the
Company. The term of the agreement is for 45 days and the Company
agreed to issue the consultant 2,000,000 shares of its restricted
common stock valued at approximately $3,200.


In
August of 2017, the Company entered into an agreement with an
individual to join the Company’s advisory council. Under the
terms of the advisory council agreement the advisor agreed to
provide various advisory services to the Company, including making
recommendations for both the short term and the long term business
strategies to be employed by the Company, monitoring and assessing
the Company's business and to advise the Company’s Board of
Directors with respect to an appropriate business strategy on an
ongoing basis, commenting on proposed corporate decisions and
identifying and evaluating alternative courses of action, making
suggestions to strengthen the Company's operations, identifying and
evaluating external threats and opportunities to the Company,
evaluating and making ongoing recommendations to 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 the advisory council agreements 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 the
Company’s restricted common stock valued at approximately
$3,800 upon execution of the agreement and an additional 2,000,000
shares of common stock 30 days after the execution of the
agreement. Under the advisory council agreements, the Company has
agreed to reimburse the advisor for preapproved
expenses.
 
 In
August of 2017, the Company agreed to issue 500,000 shares of its
restricted common stock valued at approximately $550 to an
individual as compensation for damage done to the
individual’s vessel by one of the Company’s vessels
during a storm.
 
 In
September of 2017, the Company entered into an agreement with an
individual to join the Company’s advisory council. Under the
terms of the advisory council agreement the advisor agreed to
provide various advisory services to the Company, including making
recommendations for both the short term and the long term business
strategies to be employed by the Company, monitoring and assessing
the Company's business and to advise the Company’s Board of
Directors with respect to an appropriate business strategy on an
ongoing basis, commenting on proposed corporate decisions and
identifying and evaluating alternative courses of action, making
suggestions to strengthen the Company's operations, identifying and
evaluating external threats and opportunities to the Company,
evaluating and making ongoing recommendations to 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 the advisory council agreements is for one year.
In consideration for the performance of the advisory services, the
Company agreed to issue the advisor 1,000,000 shares of the
Company’s restricted common stock valued at approximately
$1,800. Per the terms of the agreement the shares vest at a rate of
1/12th of the amount per month over the term of the
agreement.  If the advisor or the Company terminates the
advisory council agreement prior to the expiration of the one year
terms, then the advisor has agreed to return to the Company for
cancellation any portion of the shares that have not vested. Under
the advisory council agreements, the Company has agreed to
reimburse the advisor for preapproved expenses.
 
 In October of
2017, the Company entered into a consulting agreement with a
consultant for business advisory services with regards corporate
communications. The Company issued 1,000,000 shares of its
restricted common stock to the consultant for the services. The
consultant agreed that all work performed under the agreement
including business and strategic plans and proposals
works-made-for-hire under U.S. copyright law and such works shall
be the property of the Company.
 
 In
October of 2017, the Company entered into a consulting agreement
with a consultant to advise the Company regarding certain
technologies. The Company issued 1,000,000 shares of its restricted
common stock to the consultant for the services. The consultant
agreed that all work performed under the agreement including
business and strategic plans and proposals works-made-for-hire
under U.S. copyright law and such works shall be the property of
the Company.


In
October of 2017, the Company entered into a consulting agreement
with a consultant for to provide general business advisory
services. The Company issued 1,000,000 shares of its restricted
common stock to the consultant for the services. The consultant
agreed that all work performed under the agreement including
business and strategic plans and proposals works-made-for-hire
under U.S. copyright law and such works shall be the property of
the Company.





F-20


In
November of 2017, the Company entered into a promissory note
agreement in the amount of $105,000 with a limited liability
company. This loan pays interest at a rate of 2.06% per annum and
the principal and accrued interest are due on or before November
29, 2019. The
lender received 25,000,000 shares of the Company’s restricted
common stock as a loan origination fee. The lender is also entitled
to receive a total of $840,000 worth of treasure or artifacts
located by Seafarer at any of Seafarer’s shipwreck sites
after the State of Florida and/or other permitting agencies have
received their share and after any other parties who have entered
into any agreement to receive treasure or artifacts prior to the
execution of the promissory note agreement with the lender was
executed.
 
 In
November of 2017, the Company entered into a consulting agreement
with a limited liability company for business advisory services
with regards to artifact valuation, strategies on how to best
capitalize on the use of artifacts and treasure, advice and
consultation on appropriate media, and general business strategies
with regards to shipwrecks and treasure. Under the terms of the
agreement the Company issued 5,000,000 million shares of its
restricted common stock to the consultant for the services and the
Company agreed to issue an issue 5,000,000 shares of its restricted
common stock to the consultant. The consultant agreed that all work
performed under the agreement including business and strategic
plans and proposals works-made-for-hire under U.S. copyright law
and such works shall be the property of the Company.
 
 In December of 2017, the Company entered into a consulting
agreement with an individual for as an advisor and for
introductions for public relations purposes to print and television
media. Under the terms of the agreement the Company issued
2,500,000 million shares of its restricted common stock to the
consultant for services and the Company agreed to pay the
consultant $2,500. The Company also agreed to reimburse the
consultant for pre-approved expenses incurred in conjunction with
the performance of the services.
 
 In December of 2017, the Company entered into a promissory note
agreement in the amount of $75,000. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest are due
on or before December 14, 2018. The lender received 5,000,000 shares of the
Company’s restricted common stock as a loan origination fee.
The lender is also entitled to receive a total of $450,000 worth of
treasure located by Seafarer at any of Seafarer’s shipwreck
sites after the State of Florida and/or other permitting agencies
have received their share and after any other parties who have
entered into any agreement to receive treasure or artifacts prior
to the execution of the promissory note agreement with the lender
was executed.


The
Company has a verbal agreement with a limited liability company
that is owned and controlled by a person who is related to the
Company’s CEO to pay the related party consultant a minimum
of $3,000 per month to provide general business consulting and
assessing the Company's business and to advise management with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions, perform period
background research including background checks and provide
investigative information on individuals and companies and to
assist, when needed, as an administrative specialist to perform
various administrative duties and clerical services including
reviewing the Company’s agreements and books and records.
During the year ended December 31, 2017 the Company paid related
party limited liability Company $46,000. 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. During the year ended December 31, 2017 the Company
paid the related party transfer agency $8,561.
 
 The
Company has an agreement to pay an individual a minimum monthly fee
of $2,500 per month for archeological consulting
services.
 
 The
Company has a verbal consulting agreement to pay a limited
liability company a minimum of $5,000 per month for business
advisory, strategic planning and consulting services, assistance
with financial reporting, IT management, and administrative
services. The Company also agreed to reimburse the consultant for
expenses. The agreement may be terminated by the Company or the
consultant at any time.
 
 NOTE 9 – 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.





F-21





On June
18, 2013, Seafarer began litigation against Tulco Resources, LLC,
in a lawsuit filed in the Circuit Court in and for Hillsborough
County, Florida. Such suit was filed for against Tulco based
upon for breach of contract, equitable relief and injunctive
relief. Tulco was the party holding the rights under a permit to a
treasure cite at Juno Beach, Florida. Tulco and Seafarer had
entered into contracts in March 2008, and later renewed under
an amended agreement on June 11, 2010. Such permit was committed to
by Tulco to be an obligation and contractual duty to which they
would be responsible for payment of all costs in order for the
permit to be reissued. Such obligation is contained in the
agreement of March 2008 which was renewed in the June 2010
agreement between Seafarer and Tulco. Tulco made the commitment to
be responsible for payments of all necessary costs for the gaining
of the new permit. Tulco never performed on such obligation, and
Seafarer during the period of approximately March 2008 and April
2012 had endeavored and even had to commence a lawsuit to gain such
permit which was awarded in April 2012. Seafarer alleges in their
complaint the expenditure of large amounts of shares and monies for
financing and for delays due to Tulco’s non-performance.
Seafarer seeks monetary damages and injunctive relief for the award
of all rights held by Tulco to Seafarer Seafarer gained a default
and final Judgment on such matter on July 23, 2014. Seafarer is now
in position to receive the renewed permit to be in Seafarer’s
name and rights only, with Tulco removed per the Order of the
Court. On March 4, 2015, the Court awarded full rights to the Juno
sight to Seafarer Exploration, erasing all rights of Tulco
Resources. The company has currently filed an Admiralty Claim over
such sight in the United States District Court which is pending
final ruling. On October 21, 2016 a hearing on the Admiralty Claim
in the United States District Court for the Southern District of
Florida was held, where the Court Ordered actions to take place for
ongoing admiralty claim, which will occur during the month of
November 2016. The Court subsequently entered and Order directing
the arrest warrant for such site, and such arrest warrant has been
issued by the Clerk of Court. Such warrant entry is now in process
by the Company. Such arrest warrant was served by the United States
Marshalls Office in Palm Beach, Florida on July 7, 2017. The United
States District Court Judge ordered service on the claim on August
10, 2017. On November 14, 2017, Judge Kenneth Marra of the United
States District Court awarded Seafarer all rights as the sole owner
of the sunken vessel and any items on such site.





On
September 3, 2014, the Company filed a lawsuit against Darrel
Volentine, of California. Mr. Volentine was sued in two counts of
libel per se under Florida law, as well as a count for injunction
against the Defendant to exclude and prohibit internet postings.
Such lawsuit was filed in the Circuit Court in Hillsborough County,
Florida. Such suit is based upon internet postings on www.investorshub.com.
On or about October 15, 2015, the Company and Volentine entered
into a stipulation whereby Volentine admitted to his tortious
conduct, however the stipulated damages agreed to were rejected by
the Court, and the Company is proceeding to trial on damages
against Volentine in a non-jury trial on December 1, 2015. The
Defendant is the subject of a contempt of court motion which was
heard on April 7, 2016, whereby the Court found a violation and
modified the injunction against the Defendant, and imposed other
matters of potential penalties against the Defendant. The Court
also awarded attorney’s fees against the Defendant on behalf
of Seafarer for such motion. The Defendant subsequently attempted
to have such ruling, evidence and testimony attacked through a
motion heard before the Court on
 
 October
24, 2016. The Court dismissed the Defendant’s motion after
presentation of the Defendant’s case at the hearing. The
Plaintiff has set the matter for entry of the attorney’s fees
amount due from the Defendant for hearing in December 2016. As well
the Plaintiff has set for hearing its motion for sanctions in the
form of attorney’s fees for frivolous filing of the October
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. On
December 7, 2016, the Court held a hearing on the Defendant’s
motion for sanctions, and essentially attempting to rehear the
motion for contempt against the Defendant. The Court dismissed the
Defendant’s motions, and renewed the ability of the Company
to seek attorney’s fees on such matter, which hearing has not
been set at present. On February 28, 2017, the Court entered an
Order denying the Defendant’s motion for summary judgment.
The Company has a pending motion for sanctions related to the
Defendant’s filing of the motion for summary judgment which
has not been set for hearing. The Company will be attempting to set
such matter for trial during 2018.
 
 NOTE 10 – RELATED PARTY TRANSACTIONS
 
 During
the year ended December 31, 2017 the Company has had extensive
dealings with related parties including the following:
 
 In
January of 2017, the Company entered into a convertible promissory
note agreement in the amount of $5,000 with an individual who is
related to the Company’s CEO. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before March 12, 2017. The Company paid the related party
lender a loan origination fee of 1,000,000 shares of its restricted
common stock. The note is not secured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.0005 per share.  At December 31,
2017 the loan was in default due to non-payment of principal and
interest.
 
 In
February of 2017, the Company entered into a convertible promissory
note agreement in the amount of $25,000 with an individual who is
both related to the Company’s CEO and a member of the
Company’s Board of Directors. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before August 14, 2017. The note is not secured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.00075 per
share.  The related party lender received 33,333,333
warrants to purchase shares of the Company’s common stock at
a price of $0.005. At December 31, 2017 the loan was in default due
to non-payment of principal and interest.





F-22





In
February of 2017, the Company extended the term of a previous
agreement with an individual who is related to the Company’s
CEO to continue serving as a member of the Company’s Board of
Directors. Under the agreement, the Director agreed to provide
various services to the Company including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect for one
year and may be terminated by either the Company or the Director by
providing written notice to the other party. The agreement also
terminates automatically upon the death, resignation or removal of
the Director. Under the terms of the agreement, the Company agreed
to pay the Director 20,000,000 restricted shares of its common
stock and to negotiate future compensation on a year-by-year basis.
The Company also agreed to reimburse the Director for preapproved
expenses.
 
 In
February of 2017, the Company extended the term of a previous
agreement with an individual who is related to the Company’s
CEO to continue serving as a member of the Company’s Board of
Directors. Under the agreement, the Director agreed to provide
various services to the Company including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect for one
year and may be terminated by either the Company or the Director by
providing written notice to the other party. The agreement also
terminates automatically upon the death, resignation or removal of
the Director. Under the terms of the agreement, the Company agreed
to pay the Director 20,000,000 restricted shares of its common
stock and to negotiate future compensation on a year-by-year basis.
The Company also agreed to reimburse the Director for preapproved
expenses.


In
March of 2017, the Company repaid $4,000 to its CEO in order to
repay a portion of the principal balance of a loan the CEO had
previously provided to the Company.
 
 In
April of 2017, the Company repaid $2,000 to its CEO in order to
repay a portion of the principal balance of a loan the CEO had
previously provided to the Company.
 
 In May
of 2017, the Company repaid $2,000 to its CEO in order to repay a
portion of the principal balance of a loan the CEO had previously
provided to the Company.
 
 In July
of 2017, the Company’s CEO provided a loan to the Company in
the amount of $2,600. The loan pays interest at the rate of 1% per
annum. The loan was due on or before October 12, 2017.
 
 In July
of 2017, the Company’s CEO provided a loan to the Company in
the amount of $3,000. The loan pays interest at the rate of 1% per
annum. The loan was due on or before July 13, 2017.
 
 In
August of 2017, the Company’s CEO provided a loan to the
Company in the amount of $500. The loan pays interest at the rate
of 1% per annum. The loan was due on or before August 25,
2017.
 
 In
August of 2017, the Company’s CEO provided a loan to the
Company in the amount of $400. The loan pays interest at the rate
of 1% per annum. The loan was due on or before August 25,
2017.
 
 In
August of 2017, the Company entered into a promissory note
agreement in the amount of $2,500 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before August 16, 2017. The related
party lender received 250,000 shares of the Company’s
restricted common stock as a loan origination fee. The principal
balance of the note of $2,500 plus $9 of accrued interest was
repaid and the balance of the note at December 31, 2017 was
$0.
 
 In
August of 2017, the Company entered into a convertible promissory
note agreement in the amount of $3,000 with an individual who is
both a related to party and a member of the Company’s Board
of Directors. This loan pays interest at a rate of 6% per annum and
the principal and accrued interest was due on or before September
16, 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 $0.0008 per share. At December 31, 2017 the loan
was in default due to non-payment of principal and
interest.
 
 In
October of 2017, the Company entered into a promissory note
agreement in the amount of $2,500 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before October 23,, 2017. The
related party lender received 200,000 shares of the Company’s
restricted common stock as a loan origination fee. The principal
balance of the note of $2,500 plus $23 of accrued interest was
repaid and the balance of the note at December 31, 2017 was
$0.
 
 In
November of 2017, the Company entered into a promissory note
agreement in the amount of $26,250 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before December 2, 2017. The
related party lender received 2,000,000 shares of the
Company’s restricted common stock as a loan origination fee.
At December 31, 2017 the loan was in default due to non-payment of
principal and interest.


F-23





The Company has a verbal agreement with a limited liability company
that is owned and controlled by a person who is related to the
Company’s CEO to pay the related party consultant a minimum
of $3,000 per month to provide general business consulting and
assessing the Company's business and to advise management with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions, perform period
background research including background checks and provide
investigative information on individuals and companies and to
assist, when needed, as an administrative specialist to perform
various administrative duties and clerical services including
reviewing the Company’s agreements and books and records.
During the year ended December 31, 2017 the Company paid related
party limited liability Company $46,000. 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. During the year ended December 31, 2017 the Company
paid the related party transfer agency $8,561.
 
 At December 31, 2017 the following promissory notes and loans were
outstanding to related parties:
 
 A
convertible note payable dated January 9, 2009 due to a person
related to the Company’s CEO with a face amount of $10,000.
This note bears interest at a rate of 10% per annum with interest
payments to be paid monthly and is convertible at the note
holder’s option into the Company’s common stock at
$0.015 per share.  The convertible note payable was due
on or before January 9, 2010 and is secured.  This note
is currently in default due to non-payment of principal and
interest.
 
 A
convertible note payable dated January 25, 2010 in the principal
amount of $6,000 with a person who is related to the
Company’s CEO. This loan pays interest at a rate of 6% per
annum and the principal and accrued interest were due on or before
January 25, 2011. The note is not secured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.005 per share. This note is currently in
default due to non-payment of principal and interest.
 
 A note
payable dated February 24, 2010 in the principal amount of $7,500
with a corporation. The Company’s CEO was previously a
director of the corporation. The loan is not secured and pays
interest at a rate of 6% per annum and the principal and accrued
interest were due on or before February 24, 2011. This note is
currently in default due to non-payment of principal and
interest.


A
convertible note payable dated January 18, 2012 in the amount of
$50,000 with two individuals who are related to the Company’s
CEO. This loan pays interest at a rate of 8% per annum and the
principal and accrued interest were due on or before July 18, 2012.
The note is secured and is convertible at the lender’s option
into shares of the Company’s common stock at a rate of $0.004
per share. The note is currently in default due to non-payment of
principal and interest.
 
 A
convertible note payable dated January 19, 2013 due to a person
related to the Company’s CEO with a face amount of $15,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.004 per
share.  The convertible note payable was due on or before
July 30, 2013 and is not secured.  The note is currently
in default due to non-payment of principal and
interest.
 
 A
convertible note payable dated July 26, 2013 due to a person
related to the Company’s CEO and a member of the
Company’s Board of Directors with a face amount of $10,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.01 per
share.  The convertible note payable was due on or before
January 26, 2014 and is not secured.  The note is
currently in default due to non-payment of principal and
interest.
 
 A
convertible note payable dated January 17, 2014 due to a person
related to the Company’s CEO with a face amount of $31,500.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.006 per
share.  The convertible note payable is due on or before
July 17, 2015 and is unsecured. The note is currently in
default due to non-payment of principal and interest.
 
 A
convertible note payable dated May 27, 2014 due to a person related
to the Company’s CEO with a face amount of $7,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.007 per share.  The
convertible note payable was due on or before November 27, 2014 and
is unsecured. The note is currently in default due to
non-payment of principal and interest.
 
 A
convertible note payable dated July 21, 2014 due to a person
related to the Company’s CEO with a face amount of $17,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.008 per share.
The convertible note payable was due on or before January 25, 2015
and is unsecured. The note is currently in default due to
non-payment of principal and interest.
 
 A
convertible note payable dated October 16, 2014 due to a person
related to the Company’s CEO with a face amount of $21,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0045 per
share.  The convertible note payable was due on or before
April 16, 2015 and is unsecured.  The note is currently
in default due to non-payment of principal and
interest.


F-24


A
convertible note payable dated July 14, 2015 due to a person
related to the Company’s CEO with a face amount of $9,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0030 per
share.  The convertible note payable was due on or before
January 14, 2016 and is unsecured.  The note is currently
in default due to non-payment of principal and
interest.
 
 A note
payable dated October 6, 2015 in the principal amount of $10,000
due to a person who is related to the Company’s CEO and a
member of the Company’s Board of Directors. The loan is
unsecured and pays interest at a rate of 6% per annum and the
principal and accrued interest was due on or before November 11,
2015. This note is currently in default due to non-payment of
principal and interest.
 
 A
convertible note payable dated January 12, 2016 due to a person
related to the Company’s CEO with a face amount of $5,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0020 per
share.  The convertible note payable was due on or before
July 12, 2016 and is unsecured.  The note is currently in
default due to non-payment of principal and interest.
 
 A
convertible note payable dated May 10, 2016 due to a person related
to the Company’s CEO with a face amount of $5,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.0005 per share.  The
convertible note payable was due on or before November 10, 2016 and
is unsecured.  The note is currently in default due to
non-payment of principal and interest.
 
 A
convertible note payable dated May 10, 2016 due to a person who is
related to the Company’s CEO and a member of the
Company’s Board of Directors with a face amount of $5,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0005 per
share.  The convertible note payable was due on or before
November 10, 2016 and is unsecured.  The note is
currently in default due to non-payment of principal and
interest.
 A
convertible note payable dated May 20, 2016 due to a person related
to the Company’s CEO with a face amount of $5,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.0005 per share.  The
convertible note payable was due on or before November 20, 2016 and
is unsecured.  The note is currently in default due to
non-payment of principal and interest.
 
 A
convertible note payable dated July 12, 2016 due to a person
related to the Company’s CEO with a face amount of $2,400.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0006 per
share.  The convertible note payable was due on or before
January 12, 2017 and is unsecured. The note is currently in default
due to non-payment of principal and interest.
 
 A loan
in the amount of $11,983 due to the Company’s CEO. The loan
is unsecured and pays interest at a 6% per annum.
 
 A loan
in the amount of $1,500 due to the Company’s CEO. The loan is
not secured and pays interest at a 2% per annum. After the loan has
aged for six months from December 16, 2016 the lender has the right
to convert the loan into shares of the Company’s restricted
common shares at a rate of $0.005 per share.
 
 A
convertible loan dated January 26, 2017 due to a person related to
the Company’s CEO with a face amount of $5,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.0005 per share.  The
convertible note payable was due on or before March 12, 2017 and is
unsecured.  The note is currently in default due to
non-payment of principal and interest.
 
 A
convertible note payable dated February 14, 2017 in the principal
amount of $25,000 due to a person who is related to the
Company’s CEO and a member of the Company’s Board of
Directors. This loan pays interest at a rate of 6% per annum and
the principal and accrued interest were due on or before August 14,
2017. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.00075 per share.  The note is
currently in default due to non-payment of principal and
interest.
 
 A loan
in the amount of $2,600 due to the Company’s CEO. The loan
pays interest at the rate of 1% per annum. The loan was due on or
before October 12, 2017. The loan is currently in
default.
 
 A loan
in the amount of $3,000 due to the Company’s CEO. The loan
pays interest at the rate of 1% per annum. The loan was due on or
before July 13, 2017. The loan is currently in
default.
  F-25
 A loan
to the Company in the amount of $500 due to the Company’s
CEO. The loan pays interest at the rate of 1% per annum. The loan
was due on or before August 25, 2017. The loan is currently in
default.





A loan
to the Company in the amount of $400 due to the Company’s
CEO. The loan pays interest at the rate of 1% per annum. The loan
was due on or before August 25, 2017. The loan is currently in
default.





A
convertible note payable dated August 16, 2017 in the principal
amount of $3,000 due to a person who is related to the
Company’s CEO and a member of the Company’s Board of
Directors. This loan pays interest at a rate of 6% per annum and
the principal and accrued interest were due on or before September
16, 2017. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.008 per share.  The note is
currently in default due to non-payment of principal and
interest.





A
convertible note payable dated November 2, 2017 in the principal
amount of $26,250 with a related party. This note pays interest at
a rate of 6% per annum and the principal and accrued interest were
due on or before December 2, 2017. The note is
unsecured.  The related party lender received 2,000,000
shares of the Company’s restricted common stock as a loan
origination fee. At December 31, 2017 the note was in default due
to non-payment of principal and interest.





NOTE 11 - SUBSEQUENT EVENTS





Per the Company’s form 8-K filed on March 19, 2018, on March
5, 2018 the Board of Directors, pursuant to Section 607.0704,
Florida Statutes, with the Board of Directors acting as
shareholders of the Preferred Shares and pursuant to their own
resolution, voted to increase the authorized shares of the
Corporation from 2,900,000,000 common shares to 3,900,000,000
common shares. Such filing was processed to be effective with the
State of Florida on March 9, 2018.





Subsequent
to December 31, 2017the Company sold or issued shares of its common
stock as follows (unaudited):





(i)
sales
of 12,500,000 shares of common stock for proceeds of $27,500, used
for general working capital purposes;(ii)
issuance
of 5,250,000 shares of common stock for services valued in the
aggregate amount of $5,250;(iii)
issuance
of 10,507,947 shares of common stock for conversion and
satisfaction of debt in the amount of $15,762; and (iv) issuance of
8,000,000 shares of common stock for loan financing fees in the
amount of $7,000.






































F-26





I tem
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures.





On
September 2, 2016 Seafarer Exploration Corp. (the Company) notified
Accell Audit and Compliance, LLC (“Accell”), the
Company's independent accounting firm, that it had elected to
change accounting firms and, therefore, was dismissing Accell. On
September 2, 2016, the Company engaged Daszkal Bolton LLP
(“Daszkal Bolton”) as its new independent accounting
firm. The decision to change accountants was made by the
Company's board of directors.








I tem
9A. Controls and Procedures.





(a)  Management’s Annual Report on Internal Control
over Financial Reporting.





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 and 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 and
principal financial officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding
required disclosure.





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) promulgated under the Exchange Act, as of December 31,
2017.   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.





Internal Control Over Financial Reporting





As of
December 31, 2017, under the supervision and with the participation
of our management, we conducted an evaluation of the effectiveness
of the design and operations of our internal control over financial
reporting, as defined in Rules 13a-15(f) or 15d-15(f) promulgated
under the Securities Exchange Act of 1934 and based on the criteria
for effective internal control described in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission (as revised).  Based on our evaluation,
management concluded that our internal control over financial
reporting was 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.





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.





21





Remediation Efforts to Address Deficiencies in Internal Control
Over Financial Reporting





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 December 31,
2017 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.





*
Interviewing
and potentially hiring outside consultants that are experts in
designing internal controls over financial reporting based on
criteria established in Internal Control Integrated Framework
issued by Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission
(“COSO”) (as revised).





This
annual report does not include an attestation report of our
registered public accounting firm regarding internal control over
financial reporting. Management’s report was not subject to
attestation by our registered public accounting firm pursuant to
temporary rules of the SEC that permit us to provide only
management’s report in this annual report.





(b) Change in Internal Control Over Financial
Reporting





The
Company has not made any change in our internal control over
financial reporting during the year ended December 31,
2017.





Item 9B. Other Information.





None.





PART III





Item 10. Directors, Executive Officers and Corporate
Governance.





Name
Age
PositionKyle
Kennedy
58
President,
Chief Executive Officer, Chairman of the BoardCharles
Branscumb
55
DirectorRobert
L. Kennedy
66
Director





Kyle Kennedy


President, Chief Executive Officer, Chairman of the
Board





In
2001, Kyle Kennedy co-founded Spartan Group Holdings, Inc., a group
of companies offering security sales and trading and investment
banking services. In 2003, Mr. Kennedy was also one of the founders
of Island Stock Transfer, a securities transfer and processing
company. Prior experience includes: August 1995 to Present –
President of Kennedy and Associates, Business Consultants; March
1998 to December 1998 – Vice President Corporate Finance,
Palm State Equities, Inc.; January 1999 to September 1999 –
Vice President Investment Banking, 1st American Investment Banking;
September 1999 to May 2000 – President and CEO, Nowtrade
Corp. Mr. Kennedy is a senior financial executive, CEO, and
President, with over 28 years experience in the brokerage business.
He has held the following licenses: Series 3, 4, 5, 7, 52, 63, 24
and 55. He created, built and co-managed over $400 million of
assets in money management, with specific focus in equity analysis.
Mr. Kennedy’s public company experience includes his position
as Executive Vice President and ultimately, acting President, of a
public holding company with four diverse operating entities. He
performed the day to day operations of the company and management.
He was directly responsible for the turnaround of this complex,
diverse holding company and successfully developed and implemented
a creditor workout plan, negotiating with over 100 creditors,
collection agencies and attorneys.





Charles Branscum


Director





Mr.
Branscum has spent most of his professional career working for
Arkansas Steel Associates, LLC (“ASA”). Mr. Branscum is
currently the rolling mill foreman for ASA.





22





Robert L. Kennedy





Dr.
Robert L. “Rob” Kennedy is a Professor (ret.) in the
Office of Educational Development of the University of Arkansas for
Medical Sciences (UAMS) in Little Rock, Arkansas. Prior to that, he
was Clinical Professor and Chair of the Department of Nursing
Science, and Director of the Scholarship and Research Center, all
in the UAMS. He has worked in the areas of evaluation, research,
statistics, and technology in several universities, including the
University of Arkansas at Little Rock, Western Kentucky University,
the University of Central Arkansas, and was an adjunct with the
University of Central Michigan and the University of Memphis. His
Ph.D. was awarded from the University of Missouri, Columbia, in
Higher Education with majors in Educational Psychology and
Mathematical Statistics. He has consulted with numerous school
districts and businesses, done extensive research and
documentation, and is a past-president of both the Mid-South
Educational Research Foundation and the Mid-South Educational
Research Association (MSERA). He also reviews for the MSERA
journal, Research in the
Schools .





Family Relationships





Charles
Branscum and Robert L. Kennedy are both related to Seafarer’s
CEO, Kyle Kennedy.





Director Positions in Other Public Companies





No
director holds any directorship in a company with a class of
securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934 or subject to the requirements of Section
15(d) of such Act. No director holds any directorship in a company
registered as an investment company under the Investment Company
Act of 1940.





Code of Conduct





As the
Board of Directors only has three directors, no Audit or Strategy
Committee has been established. The Company does not have a
standing nominating committee or any committee performing a similar
function. For the above reasons, the Company has not adopted a code
of ethics although the Company intends to adopt a code of
ethics.





The
Company believes that its future success will depend on the
abilities and continued service of its CEO, Kyle Kennedy, and some
of its consultants. If the Company were to lose the services of Mr.
Kennedy it may be very likely that the Company would be severely
harmed and its business adversely affected. The Company also has
several key consultants who have been very instrumental in the
growth and development of the Company, particularly in the areas of
archeological research and diving operations, corporate financial
consulting, strategic planning and corporate advisory services and
the Company believes that it is very important to its long-term
success to retain the services of these consultants.





Item 11. Executive Compensation.





Officers Summary Compensation Table


Name
and Principal Position
Period End
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive
Plan
Compensation
($)
Non-qualified
Deferred
Compensation Earnings
($)
All
Other Compensation
($)
Total
($)Kyle Kennedy
(1)
12/31/17
--
--
--
--
--
--
$4,404
$4,40412/31/16
--
--
--
--
--
--
$4,149
$4,14912/31/15
--
--
--
--
--
--
$4,126
$4,126





(1)
The
Company does not pay a salary, bonus or stock compensation to Mr.
Kennedy. The Company does not accrue any salary, stock based
compensation, benefits or other compensation on behalf of Mr.
Kennedy. Mr. Kennedy did not receive any stock based compensation
during the years ended December 31, 2017 and 2016. The
Company’s Board of Directors has agreed that the Company
provide compensation to Mr. Kennedy beginning in 2015, however the
amount of compensation has yet to be determined except for health
insurance. During the years ended December 31, 2017 and 2016 the
Company paid $4,404 and $4.149 respectively in health insurance
premiums for Mr. Kennedy. As a part of his duties as CEO, Mr.
Kennedy is required to travel extensively on Company business as
the Company’s diving operations are located on the east coast
of Florida and the Company’s headquarters are located on the
west coast of Florida. The Company decided that it would be less
expensive for Mr. Kennedy to use his personal vehicle than to lease
him a car. In lieu of leasing a car for Mr. Kennedy to use for
Company business, Mr. Kennedy uses his vehicle for Company
business. The Company provides Mr. Kennedy with periodic expense
advances and reimbursements, including travel reimbursements for
mileage and fuel for the use of his vehicle for Company business
and reimburses him for various other Company business related
expenses. The Company also paid $4,037 in 2017 and $4,213 in 2016
for Mr. Kennedy’s cellular telephone, text, and wireless data
plan.











23





Officer Compensation





All
compensation paid to executives who were officers of the Company
for the years ending December 31, 2017, 2016 and 2015, is reflected
in the Officers Summary Compensation Table.





Directors Summary Compensation Table


Name and Principal Position
Period End
Salary
($)
Bonus ($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive
Plan
Compensation
($)
Non-qualified
Deferred Compensation Earnings
($)
All Other Compensation
($)
Total
($)Kyle Kennedy
(1)
12/31/16
--
--
--
--
--
--
--
--12/31/15
--
--
--
--
--
--
--
--12/31/14
--
--
--
--
--
--
--
--Charles Branscum
(2)
12/31/17
--
--
$34,000
--
--
--
--
$34,00012/31/16
--
--
$18,000
--
--
--
--
$18,00012/31/15
--
--
$48,000
--
--
--
--
48,000Dr. Robert
Kennedy (3)
12/31/17
--
--
$34,000
--
--
--
--
$34,00012/31/16
--
--
$18,000
--
--
--
--
$18,00012/31/15
--
--
$36,000
--
--
--
--
$36,000





(1)
During
the years ended December 31, 2017 and 2016 the Company did not pay
any Director’s fees to Kyle Kennedy.(2)
During
the year ended December 31, 2017 the Company paid a fee of
20,000,000 shares of restricted common stock to Mr. Branscum,
valued at $34,000, in exchange for his participation as a member of
the Board of Directors. During the year ended December 31, 2016 the
Company paid a fee of 20,000,000 shares of restricted common stock
to Mr. Branscum, valued at $18,000, in exchange for his
participation as a member of the Board of Directors.(3)
During
the year ended December 31, 2017 the Company paid a fee of
20,000,000 shares of restricted common stock to Dr. Kennedy, valued
at $34,000, in exchange for his participation as a member of the
Board of Directors. During the year ended December 31, 2016 the
Company paid a fee of 20,000,000 shares of restricted common stock
to Dr. Kennedy, valued at $18,000, in exchange for his
participation as a member of the Board of Directors.





Director Compensation





The
Company does not have a formal compensation plan in place for its
directors. All compensation paid to directors who were directors of
the Company during the years ended December 31, 2017, 2016 and 2015
is reflected in the Directors Summary Compensation
Table.





Employment Agreements





None.





24





Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.





The
following tables set forth certain information regarding beneficial
ownership of our capital stock as of the date hereof by (i) each
person whom we know to beneficially own more than five percent (5%)
of any class of our common stock, (ii) each of our directors, (iii)
each of the executive officers and (iv) all our directors and
executive officers as a group. Unless otherwise indicated, each of
the persons listed below has sole voting and investment power with
respect to the shares beneficially owned.





Our
total authorized capital stock consists of 2,900,000,000 shares of
common stock, $0.0001 par value per share. As of March 14, 2018,
there were 2,815,555,086 shares of our common stock outstanding,
all of which were fully paid, non-assessable and entitled to vote.
Each share of our common stock entitles its holder to one vote on
each matter submitted to our stockholders.





This
table reflects shares that were issued and outstanding as of March
14, 2018.





Shares

Percentageof
Common

Of CommonStock

SharesBeneficially

BeneficiallyName and Address of Beneficial Owner (1)
Owned

Owned (2)Kyle Kennedy
– President, CEO and Chairman of the Board
35,500,000
(3)
1.26%Charles Branscum
– Director
55,000,000

1.95%All directors and
officers as a group (3 persons)
149,240,867

5.32%Credo
Argentarius, LLC
35,500,000
(3)
1.26%Robert L.
Kennedy-Director
59,340,267

2.11%





(1)
Unless
otherwise indicated, the address of each person listed below is c/o
Seafarer Exploration Corp, 14497 North Dale Mabry Highway, Suite
209-N, Tampa, Florida 3618.(2)
Percentages
are based on 2,815,555,086 shares of common stock issued and
outstanding at March 14, 2018.(3)
For the
purposes of this table, the share amounts being shown as
beneficially owned by Mr. Kennedy include:  35,500,000
shares legally owned by Credo Argentarius, LLC
(“Credo”), an entity controlled by  Mr.
Kennedy’s spouse. This statement shall not be construed as an
admission that Mr. Kennedy is, for the purposes of Section 13(d) or
Section 16 of the Securities Exchange Act of 1934, the beneficial
owner of any of the securities set forth in the preceding
sentence.





Item 13. Certain Relationships and Related Transactions, and
Director Independence.





During the year ended December 31, 2017 the Company has had
extensive dealings with related parties including the
following:





In January of 2017, the Company entered into a convertible
promissory note agreement in the amount of $5,000 with an
individual who is related to the Company’s CEO. This loan
pays interest at a rate of 6% per annum and the principal and
accrued interest was due on or before March 12, 2017. The Company
paid the related party lender a loan origination fee of 1,000,000
shares of its restricted common stock. The note is not secured and
is convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.0005 per share. At
December 31, 2017 the loan was in default due to non-payment of
principal and interest.





In February of 2017, the Company entered into a convertible
promissory note agreement in the amount of $25,000 with an
individual who is both related to the Company’s CEO and a
member of the Company’s Board of Directors. This loan pays
interest at a rate of 6% per annum and the principal and accrued
interest was due on or before August 14, 2017. The note is
unsecured and is convertible at the lender’s option into
shares of the Company’s common stock at a rate of $0.00075
per share. The related party lender received 33,333,333 warrants to
purchase shares of the Company’s common stock at a price of
$0.005. At December 31, 2017 the loan was in default due to
non-payment of principal and interest.





In February of 2017, the Company extended the term of a previous
agreement with an individual who is related to the Company’s
CEO to continue serving as a member of the Company’s Board of
Directors. Under the agreement, the Director agreed to provide
various services to the Company including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect for one
year and may be terminated by either the Company or the Director by
providing written notice to the other party. The agreement also
terminates automatically upon the death, resignation or removal of
the Director. Under the terms of the agreement, the Company agreed
to pay the Director 20,000,000 restricted shares of its common
stock and to negotiate future compensation on a year-by-year basis.
The Company also agreed to reimburse the Director for preapproved
expenses.





25





In February of 2017, the Company extended the term of a previous
agreement with an individual who is related to the Company’s
CEO to continue serving as a member of the Company’s Board of
Directors. Under the agreement, the Director agreed to provide
various services to the Company including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect for one
year and may be terminated by either the Company or the Director by
providing written notice to the other party. The agreement also
terminates automatically upon the death, resignation or removal of
the Director. Under the terms of the agreement, the Company agreed
to pay the Director 20,000,000 restricted shares of its common
stock and to negotiate future compensation on a year-by-year basis.
The Company also agreed to reimburse the Director for preapproved
expenses.


In March of 2017, the Company repaid $4,000 to its CEO in order to
repay a portion of the principal balance of a loan the CEO had
previously provided to the Company.





In April of 2017, the Company repaid $2,000 to its CEO in order to
repay a portion of the principal balance of a loan the CEO had
previously provided to the Company.





In May of 2017, the Company repaid $2,000 to its CEO in order to
repay a portion of the principal balance of a loan the CEO had
previously provided to the Company.





In July of 2017, the Company’s CEO provided a loan to the
Company in the amount of $2,600. The loan pays interest at the rate
of 1% per annum. The loan was due on or before October 12,
2017.





In July of 2017, the Company’s CEO provided a loan to the
Company in the amount of $3,000. The loan pays interest at the rate
of 1% per annum. The loan was due on or before July 13,
2017.





In August of 2017, the Company’s CEO provided a loan to the
Company in the amount of $500. The loan pays interest at the rate
of 1% per annum. The loan was due on or before August 25,
2017.





In August of 2017, the Company’s CEO provided a loan to the
Company in the amount of $400. The loan pays interest at the rate
of 1% per annum. The loan was due on or before August 25,
2017.





In August of 2017, the Company entered into a promissory note
agreement in the amount of $2,500 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before August 16, 2017. The related
party lender received 250,000 shares of the Company’s
restricted common stock as a loan origination fee. The principal
balance of the note of $2,500 plus $9 of accrued interest was
repaid and the balance of the note at December 31, 2017 was
$0.





In August of 2017, the Company entered into a convertible
promissory note agreement in the amount of $3,000 with an
individual who is both a related to party and a member of the
Company’s Board of Directors. This loan pays interest at a
rate of 6% per annum and the principal and accrued interest was due
on or before September 16, 2017. The note is unsecured and is
convertible at the lender’s option into shares of the
Company’s common stock at a rate of $0.0008 per share. At
December 31, 2017 the loan was in default due to non-payment of
principal and interest.





In October of 2017, the Company entered into a promissory note
agreement in the amount of $2,500 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before October 23, 2017. The
related party lender received 200,000 shares of the Company’s
restricted common stock as a loan origination fee. The principal
balance of the note of $2,500 plus $23 of accrued interest was
repaid and the balance of the note at December 31, 2017 was
$0.





In November of 2017, the Company entered into a promissory note
agreement in the amount of $26,250 with a related party. This loan
paid interest at a rate of 6% per annum and the principal and
accrued interest were due on or before December 2, 2017. The
related party lender received 2,000,000 shares of the
Company’s restricted common stock as a loan origination fee.
At December 31, 2017 the loan was in default due to non-payment of
principal and interest.





The Company has a verbal agreement with a limited liability company
that is owned and controlled by a person who is related to the
Company’s CEO to pay the related party consultant a minimum
of $3,000 per month to provide general business consulting and
assessing the Company's business and to advise management with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions, perform period
background research including background checks and provide
investigative information on individuals and companies and to
assist, when needed, as an administrative specialist to perform
various administrative duties and clerical services including
reviewing the Company’s agreements and books and records.
During the year ended December 31, 2017 the Company paid related
party limited liability Company $46,000. The consultant providesthe
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.
During the year ended December 31, 2017 the Company paid the
related party transfer agency $8,561.





26





At December 31, 2017 the following promissory notes and loans were
outstanding to related parties:
 
 A convertible note payable dated January 9, 2009 due to a person
related to the Company’s CEO with a face amount of $10,000.
This note bears interest at a rate of 10% per annum with interest
payments to be paid monthly and is convertible at the note
holder’s option into the Company’s common stock at
$0.015 per share. The convertible note payable was due on or before
January 9, 2010 and is secured. This note is currently in default
due to non-payment of principal and interest.


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





A note payable dated February 24, 2010 in the principal amount of
$7,500 with a corporation. The Company’s CEO was previously a
director of the corporation. The loan is unsecured and pays
interest at a rate of 6% per annum and the principal and accrued
interest were due on or before February 24, 2011. This note is
currently in default due to non-payment of principal and
interest.





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





A convertible note payable dated January 19, 2013 due to a person
related to the Company’s CEO with a face amount of $15,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.004 per share.
The convertible note payable was due on or before July 30, 2013 and
is unsecured. The note is currently in default due to non-payment
of principal and interest.





A convertible note payable dated July 26, 2013 due to a person
related to the Company’s CEO and a member of the
Company’s Board of Directors with a face amount of $10,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.01 per share.
The convertible note payable was due on or before January 26, 2014
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A convertible note payable dated January 17, 2014 due to a person
related to the Company’s CEO with a face amount of $31,500.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.006 per share.
The convertible note payable is due on or before July 17, 2015 and
is unsecured. The note is currently in default due to non-payment
of principal and interest.





A convertible note payable dated May 27, 2014 due to a person
related to the Company’s CEO with a face amount of $7,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.007 per share.
The convertible note payable was due on or before November 27, 2014
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A convertible note payable dated July 21, 2014 due to a person
related to the Company’s CEO with a face amount of $17,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.008 per share.
The convertible note payable was due on or before January 25, 2015
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A convertible note payable dated October 16, 2014 due to a person
related to the Company’s CEO with a face amount of $21,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0045 per share.
The convertible note payable was due on or before April 16, 2015
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A convertible note payable dated July 14, 2015 due to a person
related to the Company’s CEO with a face amount of $9,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0030 per share.
The convertible note payable was due on or before January 14, 2016
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A note payable dated October 6, 2015 in the principal amount of
$10,000 due to a person who is related to the Company’s CEO
and a member of the Company’s Board of Directors. The loan is
unsecured and pays interest at a rate of 6% per annum and the
principal and accrued interest was due on or before November 11,
2015. This note is currently in default due to non-payment of
principal and interest.





27





A convertible note payable dated January 12, 2016 due to a person
related to the Company’s CEO with a face amount of $5,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0020 per share.
The convertible note payable was due on or before July 12, 2016 and
is unsecured. The note is currently in default due to non-payment
of principal and interest.


A convertible note payable dated May 10, 2016 due to a person
related to the Company’s CEO with a face amount of $5,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0005 per share.
The convertible note payable was due on or before November 10, 2016
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A convertible note payable dated May 10, 2016 due to a person who
is related to the Company’s CEO and a member of the
Company’s Board of Directors with a face amount of $5,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0005 per share.
The convertible note payable was due on or before November 10, 2016
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A convertible note payable dated May 20, 2016 due to a person
related to the Company’s CEO with a face amount of $5,000.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0005 per share.
The convertible note payable was due on or before November 20, 2016
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A convertible note payable dated July 12, 2016 due to a person
related to the Company’s CEO with a face amount of $2,400.
This note bears interest at a rate of 6% per annum with accrued
interest to be paid at the time that the principal balance is
repaid or the note is converted into shares of the Company’s
common stock. The note is convertible at the note holder’s
option into the Company’s common stock at $0.0006 per share.
The convertible note payable was due on or before January 12, 2017
and is unsecured. The note is currently in default due to
non-payment of principal and interest.





A loan in the amount of $11,983 due to the Company’s CEO. The
loan is unsecured and pays interest at a 6% per annum.





A loan in the amount of $1,500 due to the Company’s CEO. The
loan is not secured and pays interest at a 2% per annum. After the
loan has aged for six months from December 16, 2016 the lender has
the right to convert the loan into shares of the Company’s
restricted common shares at a rate of $0.005 per
share.





A convertible loan dated January 26, 2017 due to a person related
to the Company’s CEO with a face amount of $5,000. This note
bears interest at a rate of 6% per annum with accrued interest to
be paid at the time that the principal balance is repaid or the
note is converted into shares of the Company’s common stock.
The note is convertible at the note holder’s option into the
Company’s common stock at $0.0005 per share. The convertible
note payable was due on or before March 12, 2017 and is unsecured.
The note is currently in default due to non-payment of principal
and interest.





A convertible note payable dated February 14, 2017 in the principal
amount of $25,000 due to a person who is related to the
Company’s CEO and a member of the Company’s Board of
Directors. This loan pays interest at a rate of 6% per annum and
the principal and accrued interest were due on or before August 14,
2017. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.00075 per share. The note is currently in
default due to non-payment of principal and interest.





A loan in the amount of $2,600 due to the Company’s CEO. The
loan pays interest at the rate of 1% per annum. The loan was due on
or before October 12, 2017. The loan is currently in
default.





A loan in the amount of $3,000 due to the Company’s CEO. The
loan pays interest at the rate of 1% per annum. The loan was due on
or before July 13, 2017. The loan is currently in
default.








A loan to the Company in the amount of $500 due to the
Company’s CEO. The loan pays interest at the rate of 1% per
annum. The loan was due on or before August 25, 2017. The loan is
currently in default.





A loan to the Company in the amount of $400 due to the
Company’s CEO. The loan pays interest at the rate of 1% per
annum. The loan was due on or before August 25, 2017. The loan is
currently in default.





28





A convertible note payable dated August 16, 2017 in the principal
amount of $3,000 due to a person who is related to the
Company’s CEO and a member of the Company’s Board of
Directors. This loan pays interest at a rate of 6% per annum and
the principal and accrued interest were due on or before September
16, 2017. The note is unsecured and is convertible at the
lender’s option into shares of the Company’s common
stock at a rate of $0.008 per share. The note is currently in
default due to non-payment of principal and interest.
 
 A convertible note payable dated November 2, 2017 in the principal
amount of $26,250 with a related party. This note pays interest at
a rate of 6% per annum and the principal and accrued interest were
due on or before December 2, 2017. The note is unsecured. The
related party lender received 2,000,000 shares of the
Company’s restricted common stock as a loan origination fee.
At December 31, 2017 the note was in default due to non-payment of
principal and interest.


Item 14. Principal Accounting Fees and Services





Audit Related Fees





For the
years ended December 31, 2017 and 2016, the Company paid $33,000
and $0 respectively, in fees related to services rendered by our
principal accountant for professional services rendered for the
audit and review of our financial statements. For the years ended
December 31, 2017 and 2016, the Company paid $0 and $26,000
respectively, in fees related to services rendered by our previous
principal accountant for professional services rendered for the
audit and review of our financial statements.





Tax Fees





For the
years ended December 31, 2017 and 2016, the Company paid $0 in fees
for professional services rendered fees related to services
rendered by our principal accountant for tax compliance, tax
advice, and tax planning.





All Other Fees





The
Company did not incur any other fees related to services rendered
by our principal accountant for the years ended December 31, 2017
and 2016.
























































29





PART IV





Item 15. Exhibits





(2)
Plan of
Acquisition, Reorganization, Arrangement, Liquidation or
Succession2.1
Form of
Share Exchange Agreement dated June 4, 2008 by and among
Organetix, Inc., Seafarer Exploration, Inc. and each of the
shareholders of Seafarer Exploration incorporated by reference to
Form 8-K filed with the Commission on June 10,
2008.(3)
Articles
of Incorporation and By-laws3.1
Amended
and Restated Certificate of Incorporation of Organetix, Inc.
incorporated by reference to Organetix, Inc.’s Schedule 14C
Definitive Information Statement filed with the Commission on May
6, 2008.3.2
Certificate of
Amendment to the Certificate of Incorporation to merge Seafarer
Exploration Corp., a wholly-owned subsidiary of the Company into
the Company with the Secretary of State of the State of
Delaware.  Pursuant to the Certificate of Amendment, the
Company’s Articles of Incorporation were amended to change
its name from Organetix, Inc. to Seafarer Exploration Corp. dated
July 17, 2008, incorporated by reference to Form 8-K filed
with the Commission on July 24, 2008.(10)
Material
Contracts10.1
Agreement by and
between Tulco Resources, Ltd., and Seafarer Exploration, Inc. dated
February 2007, incorporated by reference to Form 8-K filed with the
Commission on June 8, 2010.10.2
Agreement by and
between Heartland Treasure Quest and Seafarer Exploration Corp.
dated February 1, 2013, incorporated by reference to Form 10-K
filed with the Commission on April 14, 2014.10.3
Seafarers Quest,
LLC Operating Agreement dated March 03,
2014,  incorporated by reference to Form 10-K filed with
the Commission on March 31, 2015.31.1
Certification of
Chief Executive Officer and Principal Accounting Officer Pursuant
to the Securities Exchange Act of 1934, Rules 13a-14 and 15d-14.
Filed with this Form 10-K.32.1
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. Filed with this Form
10-K.99.1
Temporary Hardship
Exemption101.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
Taxonomy Extension Presentation Linkbase. *





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




















30








SIGNATURES








Pursuant
to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.





Seafarer
Exploration Corp.Date:
April 2, 2018
By:
/s/ Kyle KennedyKyle
Kennedy
President,
Chief Executive Officer, and Chairman of the Board
(Principal
Executive Officer and Principal Accounting Officer)








Date:
April 2, 2018
By:
/s/ Charles BranscumCharles
Branscum, Director








Date:
April 2, 2018
By:
/s/ Robert L. KennedyRobert
L. Kennedy, Director



































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