UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





________________________





FORM 10-K/A


Amendment No.
3


______________





(Mark
One)





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





For year ended December 31,
2016








☐
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 $2,617,368 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 24, 2017 the Registrant had 2,330,980,241 outstanding shares
of its common stock, $0.0001 par value.









































EXPLANATORY NOTE








This
Amendment No. 3 (the “Amendment”) to the Annual Report
on Form 10-K of Seafarer Exploration Corp. for the year ended
December 31, 2016, originally filed with the Securities and
Exchange Commission on April 4, 2017, is being filed solely to
amend Exhibit 32.1, Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.





No
other changes have been made to the Form 10-K except as described
above. This Amendment No. 3 to the Form 10-K speaks as of the
original filing date of the Form 10-K, does not reflect events that
may have occurred subsequent to the original filing date, and does
not modify or update in any way disclosures made in the original
Form 10-K.
























































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
23ITEM
11.
EXECUTIVE
COMPENSATION
24ITEM
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
31SIGNATURES
32



































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. 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
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 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 3, 2017. 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 to engage in the archaeologically-sensitive
exploration, recovery and conservation of historic shipwrecks. Once
artifacts have been properly conserved, they will be made available
for scientific research and allowed to be displayed for the public.
The Company believes it will eventually be conducting
archaeological research around the world and potentially supporting
organizations like UNESCO and The National Oceanic and Atmospheric
Administration (“NOAA”) in the documentation of
historic shipwrecks 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, NOAA,
UNESCO, and other responsible academic parties upon reasonable
request. In addition to the research, there is ongoing education of
personnel involved in operations with the Company. College level
courses in archaeology are being periodically taught by a Ph.D. in
a program to help educate the personnel in context, work
methodology, documentation, and conservation. It is the
Company’s intent to have the highest educated personnel
possible. The Company plans to hire additional archaeologists in
addition to their current archaeologists to further insure all
sensitive archaeological guidelines are met or
exceeded.





5





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 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.





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
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.





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. 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.





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.





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.





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.





6





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 involves 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 years before it is able
to generate any cash flow from its operations, if any are ever
generated at all. Without revenues and cash flow the Company does
not have any steady cash flow to rely on 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 the
Company or borrowed by the Company could be lost.





The
Company has experienced a net loss in every fiscal year since
inception. The Company’s losses from operations were $674,936
for the year ended December 31, 2016 and $1,057,364 for the year
ended December 31, 2015. The Company believes that it will continue
to generate losses from its operations for the foreseeable
future.





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.





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.





7





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 Tulco has an area that was intentionally
deleted. The Company will complete a magnetometer survey of the
entire deleted area when certain conditions are met.





It is
also possible 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. Currently the permit with the Florida
Bureau of Archaeological Research (“FBAR”) is being
renewed in the name of Seafarer Exploration Corp under a
judge’s order.





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.





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.





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 against Tulco for breach of
contract, equitable relief and injunctive relief. Tulco was the
party holding the rights under an admiralty claim to a shipwreck
site at Juno Beach, Florida. Tulco and Seafarer had entered into
contracts in March 2008, and later renewed under an amended
agreement on June 11, 2010. Such permit was committed to by Tulco
to be an obligation and contractual duty to which they would be
responsible for payment of all costs in order for the permit to be
reissued. Such obligation is contained in the agreement of March
2008 which was renewed in the June 2010 agreement between Seafarer
and Tulco. Tulco made the commitment to be responsible for payments
of all necessary costs for the gaining of the new permit. Tulco
never performed on such obligation, and Seafarer during the period
of approximately March 2008 through 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. As of March 24, 2014, Seafarer, through
Counsel with the assistance of a licensed investigator, established
there was no party or individual to be served from Tulco due to the
death of the former Manager, and having no other legal person or
entity to serve, has established that it will seek the entry of a
default judgment, and final judgment for award of all rights to
such site for contractual and other rights held by Tulco. Seafarer
gained a default and final Judgment on such matter on July 23,
2014, i.e. Seafarer won everything. Although there are no
guarantees that a new, updated permit will be issued, Seafarer is
now working with the State of Florida for the renewed permit to be
in Seafarer’s name only, with Tulco removed per the Order of
the Court. On March 4, 2015, the Court awarded full rights to the
Juno site to the Company, erasing all rights of Tulco Resources.
The U.S. Marshall's office has been ordered by the Federal Judge to
arrest the Juno site to Seafarer. The Federal Judge has also
granted both motions filed by Seafarer to assign the site to the
Company in perpetuity and have the Company act as custodian to all
artifacts recovered from the site.











8





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.





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 is active for three years from the date of
issuance. 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 6th, 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.





9





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 permit had not been issued as of the filing of this
report Seafarer is actively pursuing the permit and Admiralty
Claim.





On July
6th, 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.





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
1, 2015 through June 30, 2017. Under the amended lease agreement
the base monthly rent is $1,215 from July 1, 2015 through June 30,
2016 and $1,252 from July 1, 2016 to June 30,
2017.  There may be additional monthly charges for
pro-rated maintenance, late fees, etc.





As of
December 31, 2016, future minimum rental payments required under
this non-cancelable operating lease total $7,510 for the year
ending December 31, 2017.





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, stating they had no
knowledge of the suit or parties and had not agreed to sue
Seafarer, and is no longer a party in the Litigation.











10





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





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





On
September 3, 2014, the Company filed a lawsuit against Darrel
Volentine, of California. Mr. Volentine was sued in two counts of
libel per se under Florida law, as well as a count for injunction
against Volentine 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 of $10,300,000 agreed to
were questioned by the Court, and the Company proceeded to trial on
damages against Volentine in a non-jury trial on December 1, 2015.
Volentine 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 Volentine, and imposed other
matters of potential penalties against Volentine. The Court also
awarded attorney’s fees against Volentine on behalf of
Seafarer for such motion. Volentine subsequently attempted to have
such ruling, evidence and testimony attacked through a motion heard
before the Court on October 24, 2016. Volentine lost, The Court
dismissed Volentine’s motion after presentation of
Volentine’s case at the hearing. The Plaintiff has set the
matter for entry of the attorney’s fees amount due from
Volentine 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 was 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. Volentine had also filed a motion for summary judgment on
the matter of notice entitlement pre-suit, was denied by the Court
and Volentine lost again. The Plaintiff filed a motion for
sanctions against Volentine 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 Volentine’s
motion for sanctions, and essentially attempting to rehear the
motion for contempt against Volentine. The Court dismissed
Volentine’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 Volentine’s motion for summary judgment. The
Company has a pending motion for sanctions related to
Volentine’s filing of the motion for summary judgment which
has not been set for hearing. The Company will be attempting to set
such matter for trial during 2017.





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 $0.0045 and $0.0006 for
the year ended December 31, 2016, and $0.0085 and $0.0019 for the
year ended December 31, 2015. 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 2015 and 2016 is 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, 2015
0.0085
0.0036June
30, 2015
0.0064
0.0033September
30, 2015
0.0045
0.0020December
31, 2015
0.0040
0.0019March
31, 2016
0.0034
0.0012June
30, 2016
0.0039
0.0006September
30, 2016
0.0045
0.0010December
31, 2016
0.0024
0.0009





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
24, 2017 was 1,783 shareholders of record holding 1,008,588,821
restricted shares in certificated securities and 1,322,391,420 non
restricted shares.





Transfer Agent





The
Company’s stock transfer agent is ClearTrust, LLC
(“ClearTrust”). ClearTrust’s address is 16540
Pointe Village Drive, Suite 201 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, 2016 and 2015. 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, 2016, the Company agreed
to issue 2,000,000 of its restricted shares of its common stock to
a consultant for business advisory services. During the year ended
December 31, 2016, the Company agreed to issue 170,824,798 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, 2016, June 30, 2016, and
September 30, 2016. On various dates during the year ended
December 31, 2016, the Company entered into subscription agreements
to sell 276,267,533 shares of its restricted common stock and
receive proceeds of $235,220. The proceeds were used for general
corporate purposes, working capital and the repayment of debt. The
Company issued 16,100,000 in conjunction with repricing agreements.
The anti-dilution protection extends through the date upon which
all registration restrictions expires, typically one year from the
date the shares were issued, and is based upon the trading market
value at the end of that period.





13





Exemptions from Registration for Sales of Restricted
Securities.





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





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





During
the year ended December 31, 2016 a related party vendor agreed to
convert a portion of its debt, $32,213, into 32,212,790 shares of
the Company’s common stock.  During the year ended
December 31, 2016 the Company agreed to issue 25,000,000 shares of
restricted common stock to a related party for the purchase of a
magnetometer owned by the related party. During the year ended
December 31, 2016 the Company issued 7,633,333 shares of its
restricted common stock for financing and loan origination fees.
During the year ended December 31, 2016 the holders of various
convertible promissory notes with an aggregate face value of
$200,348 elected to convert the principal balance of their notes
plus accrued interest into 382,348,049 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, 2016 and 2015, 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





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 to engage in the archaeologically-sensitive
exploration, recovery and conservation of historic shipwrecks. Once
artifacts have been properly conserved, they will be made available
for scientific research and allowed to be displayed for the public.
The Company believes it will eventually be conducting
archaeological research around the world and potentially supporting
organizations like UNESCO and The National Oceanic and Atmospheric
Administration (“NOAA”) in the documentation of
historic shipwrecks 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, NOAA,
UNESCO, and other responsible academic parties upon reasonable
request. In addition to the research, there is ongoing education of
personnel involved in operations with the Company. College level
courses in archaeology are being periodically taught by a Ph.D. in
a program to help educate the personnel in context, work
methodology, documentation, and conservation. It is the
Company’s intent to have the highest educated personnel
possible. The Company plans to hire additional archaeologists in
addition to their current archaeologists to further insure all
sensitive archaeological guidelines are met or
exceeded.








14





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





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





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





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





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





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





Moreover,
there is the possibility that should the Company be successful in
locating and 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. 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 high risk.





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








15





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





Plan of Operation





During
the years ended December 31, 2016 and 2015, the Company has taken
the following steps to implement its business plan:





●
To
date, the Company has devoted its time towards establishing its
business to develop the infrastructure capable of researching,
exploring, 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.





●
The
Company continues to review revenue producing
opportunities.





●
The
Company has funded and helped create a non-profit organization
called the National Foundation for Marine Sciences and funded two
scholarships. The company believes two additional scholarships will
be awarded in 2017.●
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 scams or of no help, but the Company
continues to explore new technology.





The
Company has evaluated various opportunities to enter into
agreements or contracts to conduct exploration and recovery
operations at known historic shipwreck locations or potential
locations. The Company has previously spent some of its efforts
exploring what it believes is a historic shipwreck site located off
of Juno Beach, Florida. As previously noted on its form 8-K filed
on May 9, 2011, the Company and Tulco Resources received a 1A-31
Recovery Permit from the Florida Division of Historical Resources.
The Recovery Permit was active through April 25, 2014. The Permit
authorized 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 after April 25, 2014. Currently
Management believes that the permit with the Florida Division of
Historical Resources is in the renewal process and if renewed will
be solely in the name of Seafarer Exploration Corp. under a
judge’s order.  The potential renewal permit has
not been issued as of the filing of this report and cannot be
issued until certain legal requirements have been finalized and an
updated recovery application has been submitted. The U.S.
Marshall’s office has been ordered by the Federal Judge to
arrest the Juno site to Seafarer. The Federal Judge has also
granted both motions filed by Seafarer to assign the site to the
Company in perpetuity and have the Company act as custodian to all
artifacts recovered from the site.





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. Seafarer is also continuing
to build relationships in Cuba with its educational and
humanitarian efforts. Should the Company decide that it will pursue
exploration and recovery activities at other potential shipwreck
sites, it may be necessary to obtain various recovery permits as
well as environmental permits.





The
Company continually monitors media rights for potential revenue.
The Company has talked to multiple media entities to further
understand the advantages offered. Management believes media can
represent a 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, 2016, the Company had a working capital deficit of
$1,026,994. 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.





16





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 3, 2017.





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, 2016 Results of
Operations





The
Company’s net loss for the year ended December 31, 2016 was
$1,351,836 as compared to a net loss of $1,151,331 for the year
ended December 31, 2015, an increase of approximately 17%
year-over-year. The increase in net
losses of approximately 17% in 2016 was primarily due to the impact
of the fair value measurement adjustments on several convertible
promissory notes that resulted in an interest expense of $676,900
in 2016 as compared to $93,967 in 2015. The significant increase to
interest expense in 2016 was due to the fair value measurement of
several convertible notes. Interest expense for the twelve
month period ended December 31, 2016 was $676,900 versus an expense of $93,967 for
the twelve month period ended December 31, 2015. The approximate
620% increase in interest expense in 2016 was due to the fair value
measurement of several convertible notes.  The Company
incurred consulting and contractor expenses of $397,468 during the
year ended December 31, 2016 versus $624,412 for the year ended
December 31, 2015, a 36% decrease in consulting related expenses in
2016. The decrease in consulting and
contractor expenses was largely due to a lull in operations during
the first half of 2016 and significantly less stock based
compensation being paid for services. For the year ended
December 31, 2016, the Company incurred professional fees of
$85,452 as compared to $118,059 for the year ended December 31,
2015, a 28% decrease in 2016. The Company incurred vessel related
expenses of $22,424 during the year ended December 31, 2016 versus
$46,355 during the year ended December 31, 2015, a decrease of
approximately 52%. The 52% decrease in vessel expense was due
was due to fewer overall significant
maintenance issues with the Company’s primary salvage vessel
in 2016 as compared to some prior years. The Company has tried to
keep repair costs lower for its main salvage vessel by being more
proactive with vessel maintenance, however due to the advancing age
of the vessel the Company anticipates that it will continue to
require repairs and in some cases major unforeseen repairs. The
Company has also utilized a few newer and smaller vessels in its
operations and these vessels do not require as much maintenance and
upkeep which Management believes helps to control vessel related
expenses. Travel and entertainment expenses decreased
approximately 31%, from $70,800 for the twelve month period ended
December 31, 2015 to $49,152 for the twelve month period ended
December 31, 2016. The decrease in
travel and entertainment expenses was generally due to the Company
not having to pay for hotel lodging expenses on a regular basis for
several of its independent contract divers and operations personnel
as a result of renting an operations house in late 2015 where
certain operations personnel are able to stay while performing
services for the Company. During the twelve month period
ended December 31, 2016, the Company general and administrative
expenses were $50,450 as compared to $117,897 during the twelve
month period ended December 31, 2015, a decrease of approximately
57%.  Rent expense was $36,006 for the twelve month period
ended December 31, 2016 versus $45,857 for the same period in 2015,
a decrease of nearly 21.5%.





Liquidity and Capital Resources





At
December 31, 2016, the Company had $24,549 cash in the
bank.   During the year ended December 31, 2016 and the
year ended December 31, 2015, the Company incurred net losses of
$1,351,836 and $1,151,331, respectively. At December 31, 2016,
Seafarer had $45,905 in current assets and $1,072,899 in current
liabilities, leaving the Company a working capital deficit of
$1,026,994.





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, 2016. This working capital deficit
indicates that the Company is unable to meet its
short-term liabilities with its current assets. This working
capital deficit is extremely risky for the Company as it may be
forced to cease its operations due to its inability to meet 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.








17





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, 2016 and 2015 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,
2016 and 2015, 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, 2016, 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 $674,936
for the year ended December 31, 2016 and $1,057,364 for the year
ended December 31, 2015. 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.





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.








18





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, 2016 and 2015
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, 2016 AND 2015








TABLE OF CONTENTS











Page
No.Report
of Independent Registered Public Accounting Firm
F-1Report
of Independent Registered Public Accounting Firm
F-2Balance
Sheets
F-3Statements
of Operations
F-4Statements
of Changes in Stockholders’ Deficit
F-5Statements
of Cash Flows
F-6Notes
to Financial Statements
F-7 -
F-26









































20





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the
Board of Directors and


Shareholders
of Seafarer Exploration Corp.








We have
audited the accompanying balance sheet of Seafarer Exploration
Corp. as of December 31, 2015, and the related statements of
operations, stockholders’ deficit, and cash flows for the
year then ended. Seafarer Exploration Corp.’s management is
responsible for these financial statements. Our responsibility is
to express an opinion on these financial statements based on our
audit.





We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about
whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.
Our audit  included consideration of internal control over
financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, 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. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Seafarer Exploration Corp. as of December 31, 2015, and the results
of its operations and its cash flows for the year then ended, 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 discussed in Note
2 to the financial statements, the Company has incurred net losses
and negative cash flows since inception. These conditions raise
substantial doubt about its ability to continue as a going concern.
Management’s plans regarding those matters also are described
in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty. Our opinion
on the financial statements is not modified with respect to this
matter.








/s/
Accell Audit & Compliance, P.A.





Tampa,
Florida


April
7, 2016











F-1








REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM











To the
Board of Directors and


Stockholders
of Seafarer Exploration Corp.


Tampa,
Florida





We have
audited the accompanying balance sheet of Seafarer Exploration
Corp. (the “Company”) at December 31, 2016, and the
related statements of operations, changes in stockholders’
equity and cash flows for the year ended December 31, 2016. The
Company’s management is responsible for these financial
statements. Our responsibility is to express an opinion on these
financial statements based on our audit.





We
conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.





In our
opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Seafarer Exploration Corp. at December 31, 2016, and the results of
its operations and its cash flows for the year ended December 31,
2016, 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 sustained recurring
losses from operations and has working capital and accumulated
deficits that raise 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 consolidated 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.





/s/
Daszkal Bolton LLPFort
Lauderdale, Florida
March
31, 2017

















F-2





SEAFARER EXPLORATION
CORP.


BALANCE
SHEETS


DECEMBER
31, 2016 AND 2015





2016
2015AssetsCurrent
assets:Cash
$24,549
$5,097Prepaid
expenses
20,606
28,557Deposits
750
316Total
current assets
45,905
33,970Property
and equipment, net
54,292
63,276Total
assets
$100,197
$97,246Liabilities and Stockholders' DeficitCurrent
liabilities:Accounts
payable and accrued expense
$332,106
$244,678Convertible
notes payable, net of discounts of $22,423 and $17,295
27,327
45,705Convertible
notes payable, related parties, net of discounts of $156 and
$-0-
2,244
9,000Convertible
notes payable, in default
444,952
391,300Convertible
notes payable, in default - related parties
196,500
167,500Convertible
notes payable, at fair value
-
311,076Shareholder
loan
22,270
32,703Notes
payable, in default
30,000
30,000Notes
payable, in default - related parties
17,500
17,500Total
current liabilities
1,072,899
1,249,462Commitments
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, 2016 and
2015
-
-Series
B - 60 shares issued and outstanding at December 31, 2016 and
2015
-
-Common
stock, $0.0001 par value - 2,500,000,000 shares authorized;
2,194,976,061 and1,332,102,348
shares issued and outstanding at December 31, 2016 and
2015
219,498
133,210Additional
paid-in capital
11,485,588
10,040,526Accumulated
deficit
(12,677,788)
(11,325,952)Total
stockholders' deficit
(972,702)
(1,152,216)Total
liabilities and stockholders' deficit
$100,197
$97,246





See accompanying
notes to the financial statements.











F-3





SEAFARER EXPLORATION
CORP.


STATEMENTS OF
OPERATIONS


FOR THE
YEARS ENDED DECEMBER 31, 2016 AND
2015





2016
2015Revenue
$-
$-Expenses:Consulting
and contractor expenses
397,468
624,412Professional
fees
85,452
118,059General
and administrative expense
50,450
117,897Depreciation
expense
33,984
33,984Rent
expense
36,006
45,857Vessel
expense
22,424
46,355Travel
and entertainment expense
49,152
70,800Total
operating expenses
674,936
1,057,364Loss
from operations
(674,936)
(1,057,364)Other
(expense):Interest
expense, net
(676,900)
(93,967)Total
other (expense)
(676,900)
(93,967)Net
loss
$(1,351,836)
$(1,151,331)Net
loss per share - basic and diluted
$-
$-Weighted
average common shares outstanding - basic and diluted
1,774,115,117
1,187,757,189











See accompanying
notes to the financial statements.




















F-4





SEAFARER EXPLPLORATION
CORP.


STATEMENTS OF CHANGES
IN STOCKHOLDERS’ DEFICIT


FOR THE
YEARS ENDED DECEMBER 31, 2016 AND
2015








AdditionalCommon
Common
Paid-in
AccumulatedStock
Stock
value
Capital
Deficit
TotalBalance,
December 31, 2014
986,356,130
$98,636
$8,734,606
$(10,174,621)
$(1,341,379)Stock
issued to settle accounts payable
15,734,068
1,573
61,363
-
62,936Conversion
of notes payable and accrued interest
103,413,609
10,341
465,823
-
476,164Stock
issued for cash
158,098,541
15,810
418,359
-
434,169Stock
issued for services
53,250,000
5,325
222,725
-
228,050Stock
issued for financing fees
7,750,000
775
18,400
-
19,175Increase
in Additional paid in capital relating to thebeneficial
conversion feature of notes payable
-
-
120,000
-
120,000Shares
issued for repricing
7,500,000
750
(750)

-Net
loss
-
-
-
(1,151,331)
(1,151,331)Balance
December 31, 2015
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 lawsuite
(32,300,000)
(3,230)
3,230

-Net
loss
-
-
-
(1,351,836)
(1,351,836)Balance
December 31, 2016
2,194,976,061
$219,498
$11,485,588
$(12,677,788)
$(972,702)








See accompanying
notes to the financial statements.








F-5





SEAFARER
EXPLORATION CORP.


STATEMENTS OF CASH
FLOWS


FOR THE
YEARS ENDED DECEMBER 31, 2016 AND
2015





2016
2015Operating
activitiesNet
loss
$(1,351,836)
$(1,151,331)Adjustments
to reconcile net loss tonet
cash used in operating activitiesDepreciation
33,984
33,984Amortization
of debt discount
80,600
116,152Loss
(gain) on change in fair value of derivative
476,154
(88,175)Common
stock issued for services
211,684
255,676Common
stock issued for financing fees
84,341
11,675Decrease
(increase) in:Settlement
receivable
-
18,000Prepaid
expenses
7,951
2,301Deposits
(434)Increase
in:Accounts
payable and accrued expenses
87,428
88,021Net
cash used in operating activities
(370,128)
(713,697)Cash
flows from investing activitiesPurchase
of equipment
-
(1,005)Net
cash used in investing activities
-
(1,005)Cash
flows from financing activities:Proceeds
from the issuance of common stock
235,220
434,169Proceeds
from the issuance of convertible notes payable
131,700
237,000Proceeds
from the issuance of convertible notes payable,
relatedparties
23,900
9,000Payment
on convertible notes payable
-
(12,000)Proceeds
for the issuance of notes payable
-
65,000Payments
on notes payable
-
(55,100)Proceeds
from loans from stockholders
7,260
39,406Payments
on loans from stockholders
(8,500)
(10,100)Net
cash provided by financing activities
389,580
707,375Net
increase (decrease) in cash
19,452
(7,327)Cash
- beginning of year
5,097
12,424Cash
- end of year
$24,549
$5,097Supplemental
disclosure of cash flow information:Cash
paid for interest expense
$-
$6,000Cash
paid for income taxes
$-
$-Noncash
operating and financing activities:Common
stock issued to satisfy outstanding invoices
$-
$35,309Common
stock issued for equipment
$25,000
$-Convertible
debt converted and accrued interest to commonstock
$868,000
$476,164





See accompanying
notes to the financial statements.








F-6





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 3, 2017. 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.





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.





NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES





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, 2016 and
2015.





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, 2016 and 2015.





























F-7





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





For the Year
Ended
December 31,
2016
For the Year
Ended
December 31,
2015Net loss
attributable to common shareholders
$(1,351,836)
$(1,151,331)Weighted average
shares outstanding:Basic and
diluted
1,774,115,117
1,187,757,189Loss 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.





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:





2016
2015Diving
vessel
$326,005
$326,005Generator
7,420
7,420Magnetometer
25,000
-Less accumulated
depreciation
(304,133)
(270,149)$54,292
$63,276





Depreciation
expense for the years ended December 31, 2016 and 2015 amounted to
$33,984.





F-8





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, 2016 and 2015, 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, 2016 and 2015, the Company did not
report any revenues.





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, 2016, 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.





F-9





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.





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





Description
Level
1
Level
2
Level
3Notes payable at
fair value
$-
$-
$311,074





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





The
change in the notes payable at fair value for the year ended
December 31, 2016 is as follows:





NewFair
Value
Change in
fair
Convertible

Fair
ValueJanuary 1,
2016
Value
Notes
Conversions
December 31,
2016Notes payable at
fair value
$311,074
$109,992
$135,884
$(556,950)
$-





The
change in the notes payable at fair value for the year ended
December 31, 2015 is as follows:





Fair
Value
Change in
fair
Convertible

Fair
ValueJanuary 1,
2015
Value
Notes
Conversions
December 31,
2015Notes payable at
fair value
$186,605
$221,059
$-
$(96,590)
$311,074





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





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








F-10





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





Our 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.





Series A Preferred Stock





At
December 31, 2016 and 2015, 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, 2016 the Company had warrants to purchase a total of
126,631,818 shares of its restricted common stock
outstanding:





Term
Amount
Exercise PriceNovember 20, 2012 to November 20, 2022
4,000,000
$0.0050July 8, 2015 to January 8, 2017
700,000
$0.0050July 14, 2015 to January 14, 2017
3,000,000
$0.0050August 19, 2015 to February 19, 2017
750,000
$0.0100September 18, 2015 to September 18, 2020
4,000,000
$0.0030December 03, 2015 to June 03, 2017
2,000,000
$0.0040December 24, 2015 to June 24, 2017
12,500,000
$0.0040December 29, 2015 to June 29, 2017
1,000,000
$0.0040February 3, 2016 to August 3, 2017
1,000,000
$0.0050February 18, 2016 to August 18, 2017
1,500,000
$0.0040February 19, 2016 to August 19, 2017
5,000,000
$0.0040March 3, 2016 to September 3, 2017
1,000,000
$0.0040April 14, 2016 to April 14, 2018
10,000,000
$0.0020May 2, 2016 to November 2, 2017
3,000,000
$0.0020May 6, 2016 to November 6, 2017
4,000,000
$0.0020May 6, 2016 to November 6, 2017
3,000,000
$0.0020May 10, 2016 to November 10, 2017
2,500,000
$0.0020May 10, 2016 to November 10, 2017
2,500,000
$0.0020May 20, 2016 to November 20, 2017
10,000,000
$0.002007/12/16 to 01/12/18
4,000,000
$0.002007/20/16 to 08/26/17
18,181,818
$0.003308/26/16 to 08/26/17
7,000,000
$0.005008/31/16 to 08/31/18
25,000,000
$0.001012/28/16 to 12/28/2017
1,000,000
$0.0020Total Warrants Outstanding at 12/31/16
126,631,818





F-11





Warrants Issued During the Year Ended December 31,
2015





During
the year ended December 31, 2015 the Company issued a total of
63,745,834 warrants to purchase shares of restricted common stock
at prices ranging from $0.0030 to $0.01, 38,412,500 warrants were
issued under equity subscription agreements and 25,333,334 under
convertible promissory notes. The warrants issued under equity
subscription agreements were valued using the Black-Scholes
model.





Warrants Issued During the Year Ended December 31,
2016





During
the year ended December 31, 2016 the Company issued a total of
98,681,818 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.





NOTE 5 - INCOME TAXES





At
December 31, 2016 and 2015, the Company had available Federal and
state net operating loss carry forwards to reduce future taxable
income. The amounts available were approximately $12,300,000 and
$11,000,000 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, 2016 and 2015, 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,
2016 and 2015, the Company has not accrued interest or penalties
related to uncertain tax positions. Additionally, tax years 2010
through 2016 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.





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, 2016
For the Year Ended
December 31,  2015Income tax at
federal statutory rate
(34.00%)
(34.00%)State tax, net of
federal effect
(3.96%)
(3.96%)37.96%
37.96%Valuation
allowance
(37.96%)
(37.96%)Effective
rate
0.00%
0.00%





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.





F-12





As of
December 31, 2016 and 2015, the Company’s only significant
deferred income tax asset was a cumulative estimated net tax
operating loss of $12,300,000 and $11,000,000, 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, 2016 and 2015.





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
1, 2015 through June 30, 2017. Under the amended lease agreement
the base monthly rent is $1,215 from July 1, 2015 through June 30,
2016 and $1,251 from July 1, 2016 to June 30,
2017.  There may be additional monthly charges for
pro-rated maintenance, late fees, etc.





As of
December 31, 2016, future minimum rental payments required under
this non-cancelable operating lease total $7,510 for the year for
the year ending December 31, 2017.





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 expires 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.





Convertible Notes Payable





The
following table reflects the convertible notes payable as of
December 31, 2016, other than the notes that have been remeasured
to fair value which are discussed later in Note 7:





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

(22,423)Balance

$27,327Convertible notes
payable – related partiesJuly 12,
2016
January
12,2017
2,400
6.00%
0.00060Unamortized
discount

(156)$2,244Convertible notes
payable, in defaultOctober 31,
2012
April 30,
2013
$8,000
6.00%
0.0040November 20,
2012
May 20,
2013
50,000
6.00%
0.0050January 19,
2013
July 30,
2013
5,000
6.00%
0.0040February 11,
2013
August 11,
2013
9,000
6.00%
0.0060





F-13





September 25,
2013
March 25,
2014
10,000
6.00%
0.0125August 28,
2009
November 1,
2009
4,300
10.00%
0.0150April 7,
2010
November 7,
2010
70,000
6.00%
0.0080November 12,
2010
November 7,
2011
40,000
6.00%
0.0050October 4,
2013
April 4,
2014
50,000
6.00%
0.0125October 30,
2013
October 30,
2014
50,000
6.00%
0.0125May 15,
2014
November 15,
2014
40,000
6.00%
0.0070October 13,
2014
April 13,
2015
25,000
6.00%
0.0050June 29,
2015
December 29,
2015
25,000
6.00%
0.0050September 18,
2015
March 18,
2016
25,000
6.00%
0.0020April
20,2015
April 20,
2016
23,652
6.00%
0.0032April
14,2016
October 14,
2016
10,000
6.00%
0.0010Balance

$444,952





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





May 10,
2016
November 10,
2016
5,000
6.00%
0.0005May 10,
2016
November 10,
2016
5,000
6.00%
0.0005


May 20,
2016
November 20,
2016
5,000
6.00%
0.0005Balance

$196,500











F-14





Notes Payable





The
following table reflects the notes payable as of December 31, 2015
and 2014:





Issue
Date
Maturity Date
2016
2015
Interest RateNotes
payable, in default –related parties:February 24,
2010
February 24,
2011
$7,500
$7,500
6.00%October 6,
2015
November 11,
2015
10,000
10,000
6.00%17,500
17,500Notes
payable, in default:June 23,
2011
August 23,
2011
25,000
25,000
6.00%April 27,
2011
April 27,
2012
5,000
5,000
6.00%30,000
30,000$47,500
$47,500





Convertible Notes Payable





Between
January 1, 2015 and December 31, 2015, the Company issued four (4)
convertible notes payable totaling $109,000. The notes include
interest at 6%. Between January 1, 2016 and December 31, 2016, the
Company issued 12 convertible notes payable totaling $104,150. 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:





2016
2015Face value of
convertible notes payable
$49,750
$63,000Beneficial
conversion feature
(22,423)
(17,295)Carrying
value
$27,327
$45,705





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, 2016 and
2015, the Company recorded interest expense related to the
amortization of debt discounts in the amount of approximately
$80,600 and $116,000, respectively.





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





Note
Conversions





A
lender who had a convertible promissory note outstanding with a
remaining principal balance of $38,000 elected to convert a portion
of the principal balance of $14,348 of the note plus accrued
interest and late fees of $6,652 into 12,750,000 shares of the
Company’s common stock. The remaining principal balance of
this note was $23,652 at December 31, 2016.





F-15





A
lender elected to convert the entire principal balance of $15,000
of a convertible promissory note into 30,000,000 shares of the
Company’s common stock. The remaining principal balance of
this note was $0 at December 31, 2016.





A
lender agreed to accept 7,000,000 shares of common stock to settle
the remaining principal balance of $7,000 of a promissory note. As
of December 31, 2016 the remaining principal balance of this note
was $0 and no accrued interest was due to the lender.





Convertible Notes Payable and Notes Payable, in
Default





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





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





Shareholder Loans





At
December 31, 2016 the Company had three loans outstanding to its
CEO totaling $22,683, consisting of a loan with a remaining
principal balance of 19,983 with a 6% annual rate of interest, a
loan in the amount of $1,200 at 6% rate of interest and an option
to convert the loan into restricted shares of the Company’s
common stock at $0.002, and a loan in the amount of $1,500 at a
rate of 2% interest.





Convertible Notes Payable and Notes Payable, in
Default





Convertible Notes Payable at Fair Value





Convertible Note Payable Dated August 28, 2015 at Fair
Value





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





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


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





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





During
the period ended December 31, 2016, the principal balance and
accrued interest was converted into 54,561,311 shares of common
stock.





F-16





Convertible Note Payable Dated September 3, 2015 at Fair
Value





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





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





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





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





During
the period ended December 31, 2016, the principal balance and
accrued interest was converted into 86,597,589 shares of common
stock.





Convertible Note Payable Dated September 8, 2015 at Fair
Value





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





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





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





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





During
the period ended December 31, 2016, the principal balance and
accrued interest was converted into 50,268,153 shares of common
stock.





Convertible Note Payable Dated December 15, 2015 at Fair
Value





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





F-17





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





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





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





During
the period ended December 31, 2016, the principal balance and
accrued interest was converted into 53,181,384 shares of common
stock.





Convertible Note Payable Dated March 24, 2016 at Fair
Value





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





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


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





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





During
the period ended December 31, 2016, the principal balance and
accrued interest was converted into 69,091,471 shares of common
stock.





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.
The Permit is active for three years from the date of
issuance.





F-18





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





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





Certain Other Agreements





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





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





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





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





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





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





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





F-19





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





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





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





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





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





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





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





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





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





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





In
September of 2016 the Company issued 1,500,000 shares of restricted
common stock to one of its consultants. The shares were issued as
retention bonus as well to induce the consultant to continue to
provide services on favorable terms to the Company.





F-20





In
September of 2016 the Company issued 15,000,000 shares of
restricted common stock to one of its business advisory
consultants. The shares were issued as retention bonus as well to
induce the consultant to continue to provide services on favorable
terms to the Company.





In
September of 2016 the Company issued a total of 13,000,000 shares
of restricted common stock to nine independent contractor
consultants who provide various services relating to the
Company’s diving operations. The shares were issued as
retention bonus as well to induce the consultant to continue to
provide services on favorable terms to the Company.





In
December of 2016, the Company entered into an agreement with an
individual to join the Company’s advisory council. Under the
advisory council agreement the advisor agreed to provide various
advisory services to the Company, including making recommendations
for both the short term and the long term business strategies to be
employed by the Company, monitoring and assessing the Company's
business and to advise the Company’s Board of Directors with
respect to an appropriate business strategy on an ongoing basis,
commenting on proposed corporate decisions and identifying and
evaluating alternative courses of action, making suggestions to
strengthen the Company's operations, identifying and evaluating
external threats and opportunities to the Company, evaluating and
making ongoing recommendations to the Board with respect to the
Company's business, and providing such other advisory or consulting
services as may be appropriate from time to time. The term of each
of the advisory council agreement is for one year. In consideration
for the performance of the advisory services, the Company agreed to
issue the advisor 2,000,000 shares of restricted common stock.
According to the agreements the advisor’s shares vest at a
rate of 333,333 shares per month over the term of the
agreement.  If the advisor or the Company terminates the
advisory council agreement prior to the expiration of the one year
term, the advisor has agreed to return to the Company for
cancellation any portion of the shares that have not vested. Under
the advisory council agreement, the Company has agreed to reimburse
the advisor for preapproved expenses.





The Company has a verbal agreement with a limited liability company
that is controlled by a person who is related to the
Company’s CEO to pay the related party consultant $3,000 per
month to provide general business consulting and assessing the
Company's business and to advise management with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions, perform period background research
including background checks and provide investigative information
on individuals and companies and to occasional assist as an
administrative specialist to perform various administrative duties
and clerical services including reviewing the Company’s
agreements and books and records During the year ended December 31,
2016 the company paid the related party consultant a total of
$32,950 for consulting services. The consultant provides the
services under the direction and supervision of the Company’s
CEO. At December 31, 2016, the Company owed the related party
limited liability company $2,736.





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 period ended December 31, 2016 the
Company paid the related party consultant $12,000 in fees for
transfer agency services and entered into a debt settlement
agreement with a related party vendor to settle a total of $32,213
of outstanding debt related to transfer agent fees and legal fees
incurred by the related party vendor due to a lawsuit against the
Company in which suit the related party vendor was also named as a
defendant due to its position as the Company’s stock transfer
agency. The Company issued 32,212,790 shares of its restricted
common stock to this vendor as satisfaction for the outstanding
debt. The agreement between the Company and the vendor stipulated
that should the transfer agency realize less than $32,213from the
sale of the stock, then the consultant is entitled to receive up to
an additional 11,000,000 shares of common stock or a cash payment
until the balance is paid in full. At
December 31, 2016, the Company owed the related party limited
liability company $2,736.





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





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





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





NOTE 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, stating they had no
knowledge of the suit or parties and had not agreed to sue
Seafarer, and is no longer a party in the Litigation.





F-21





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





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





On
September 3, 2014, the Company filed a lawsuit against Darrel
Volentine, of California. Mr. Volentine was sued in two counts of
libel per se under Florida law, as well as a count for injunction
against Volentine 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 of 10,300,000 agreed to
were questioned by the Court, and the Company proceeded to trial on
damages against Volentine in a non-jury trial on December 1, 2015.
Volentine 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 Volentine, and imposed other
matters of potential penalties against Volentine. The Court also
awarded attorney’s fees against Volentine on behalf of
Seafarer for such motion. Volentine subsequently attempted to have
such ruling, evidence and testimony attacked through a motion heard
before the Court on October 24, 2016. Volentine lost, The Court
dismissed Volentine’s motion after presentation of
Volentine’s case at the hearing. The Plaintiff has set the
matter for entry of the attorney’s fees amount due from
Volentine 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 was 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. Volentine had also filed a motion for summary judgment on
the matter of notice entitlement pre-suit, was denied by the Court
and Volentine lost again. The Plaintiff filed a motion for
sanctions against Volentine 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 Volentine’s
motion for sanctions, and essentially attempting to rehear the
motion for contempt against Volentine. The Court dismissed
Volentine’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 Volentine’s motion for summary judgment. The
Company has a pending motion for sanctions related to
Volentine’s filing of the motion for summary judgment which
has not been set for hearing. The Company will be attempting to set
such matter for trial during 2017.





NOTE 10 – RELATED PARTY TRANSACTIONS





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





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





F-22





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





In May
of 2016, the Company’s CEO provided a loan to the Company in
the amount of $1,200. This loan was repaid during the year ended
December 31, 2016, no interest was paid.





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





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





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





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





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





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





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





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





F-23





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





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





In
December of 2016, the Company’s CEO provided a loan to the
Company in the amount of $1,500. This loan has an interest rate 2%.
After six months from December 16, 2016 the lender has the right to
convert the loan in to shares of the Company’s common stock
at a rate of $0.005 per share. On various dates during the
period ended December 31, 2016 the Company repaid a total of $8,500
to its CEO in order to repay loans the CEO had previously provided
to the Company.





The
Company has a verbal agreement with a limited liability company
that is controlled by a person who is related to the
Company’s CEO to pay the related party consultant $3,000 per
month to provide general business consulting and assessing the
Company's business and to advise management with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions, perform period background research
including background checks and provide investigative information
on individuals and companies and to occasional assist as an
administrative specialist to perform various administrative duties
and clerical services including reviewing the Company’s
agreements and books and records. During the year ended December
31, 2016 the company paid the related party consultant a total of
$32,950 for consulting services. At December 31, 2016 the Company
owed the consultant a total of $5,950. The consultant provides the
services under the direction and supervision of the Company’s
CEO.





The
Company has an 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, 2016 the company paid the
related party consultant a total of $2,000 for consulting services.
At December 31, 2016, the Company owed the related party limited
liability company $2,736 for transfer agency services rendered and
for the reimbursement of legal fees.





At December 31, 2016 the following promissory notes and shareholder
loans were outstanding to related parties:





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





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





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





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





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





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








F-24





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





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





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





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





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





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





A loan
in the amount of $19,983 due to the Company’s CEO. The loan
is not secured and pays interest at a 6% per annum and the
principal and accrued interest and was due on or before June 14,
2016. The note is currently in default due to non-payment of
principal and interest.





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





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





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





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





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





F-25





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





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.





NOTE 11 - SUBSEQUENT EVENTS





Per the
Company’s filing on Form 8-K filed on March 10, 2017,
on February 24, 2017 the Board
of Directors, pursuant to Section 607.0704, Florida Statutes, 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 2,500,000,000 common
shares to 2,900,000,000 common shares. Such filing was processed to
be effective with the State of Florida on March 2,
2017.





Subsequent
to December 31, 2016, through March 31, 2017, the Company sold or
issued shares of its common stock as follows (unaudited):





(i)
 sales of 57,000,000
shares of common stock for proceeds of $80,000, used for general
working capital purposes.


(ii)
 issuance of
51,524,000 shares of common stock for services valued in the
aggregate amount of $175,800.


(iii)
 issuance of
26,524,000 shares of common stock for conversion and satisfaction
of debt in the amount of $26,524; and


(iv)
 issuance of
89,212,790 shares not previously issued due to an administrative
time lag.























F-26





Item 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.





Item 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,
2016.   Based on this evaluation, management
concluded that our financial disclosure controls and procedures
were not effective so as to timely record, process, summarize and
report financial information required to be included on our
Securities and Exchange Commission (“SEC”) reports due
to the Company’s limited internal resources and lack of
ability to have multiple levels of transaction
review.  However, as a result of our evaluation and
review process, management believes that the financial statements
and other information presented herewith are materially
correct.





Internal Control Over Financial Reporting





As of
December 31, 2016, 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 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.





21





*
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.





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,
2016 we did not have sufficient capital and/or operations to
implement any of the remedial measures described
below.





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





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





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





*
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,
2016.





Item 9B. Other Information.





None.



































22





PART III





Item 10. Directors, Executive Officers and Corporate
Governance.





Name
Age
PositionKyle
Kennedy
56
President,
Chief Executive Officer, Chairman of the BoardCharles
Branscumb
54
DirectorRobert
L. Kennedy
65
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, 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.





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.

















23





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)
12/31/16
--
--
--
--
--
--
$4,149
$4,14912/31/15
--
--
--
--
--
--
$4,126
$4,12612/31/14
--
--
--
--
--
--
$417
$417





(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, 2016 and 2015. 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, 2016 and 2015 the
Company paid $4,149 and $4.126 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 dive operations are 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 $4,213 in 2016 and $5,447 in 2015
for Mr. Kennedy’s cellular telephone, text, and wireless data
plan.





Officer Compensation





All
compensation paid to executives who were officers of the Company
for the years ending December 31, 2016, 2015 and 2014, is reflected
in the Officers Summary Compensation Table.














24





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)
12/31/16
--
--
$18,000
--
--
--
--
$18,00012/31/15
--
--
$48,000
--
--
--
--
$48,00012/31/14
--
--
--
--
--
--
--
--Dr.
Robert Kennedy (3)
12/31/16
--
--
$18,000
--
--
--
--
$18,00012/31/15
--
--
$36,000
--
--
--
--
$36,00012/31/14
--
--
$29,000
--
--
--
--
$29,000





(1)
During
the years ended December 31, 2016 and 2015 the Company did not pay
any Director’s fees to Kyle Kennedy.(2)
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. During the year ended December 31, 2015 the
Company paid a fee of 8,000,000 shares of restricted common stock
to Mr. Branscum, valued at $48,000, in exchange for his
participation as a member of the Board of Directors..(3)
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. During the year ended December 31, 2015, the
Company paid a fee of 6,000,000 shares of restricted common stock
to Dr. Robert Kennedy, valued at $36,000, 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, 2016, 2015 and 2014
is reflected in the Directors Summary Compensation
Table.





Employment Agreements





None.





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 24, 2017,
there were 2,330,980,241 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.





25





This
table reflects shares that were issued and outstanding as of March
24, 2017.





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)
1.51%Charles Branscum
– Director
55,000,000

2.36%All directors and
officers as a group (2 persons)
149,240,867

4.84%Credo Argentarius,
LLC
35,500,000
(3)
1.51%Robert L.
Kennedy
59,340,267

2.55%





(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  33618.(2)
Percentages
are based on 2,330,980,241 shares of common stock issued and
outstanding at March 24, 2017.(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 wife. 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.





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





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





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





In May
of 2016, the Company’s CEO provided a loan to the Company in
the amount of $1,200. This loan was repaid during the year ended
December 31, 2016, no interest was paid.





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





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





26





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





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





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





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





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





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





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





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





In
December of 2016, the Company’s CEO provided a loan to the
Company in the amount of $1,500. This loan has an interest rate 2%.
After six months from December 16, 2016 the lender has the right to
convert the loan in to shares of the Company’s common stock
at a rate of $0.005 per share.





On
various dates during the year ended December 31, 2016 the Company
repaid a total of $8,500 to its CEO in order to repay loans the CEO
had previously provided to the Company.





The Company has a verbal agreement with a limited liability company
that is controlled by a person who is related to the
Company’s CEO to pay the related party consultant $3,000 per
month to provide general business consulting and assessing the
Company's business and to advise management with respect to an
appropriate business strategy on an ongoing basis, commenting on
proposed corporate decisions, perform period background research
including background checks and provide investigative information
on individuals and companies and to occasional assist as an
administrative specialist to perform various administrative duties
and clerical services including reviewing the Company’s
agreements and books and records. During the year ended December
31, 2016 the company paid the related party consultant a total of
$32,950 for consulting services. At December 31, 2016 the Company
owed the consultant a total of $5,950. The consultant provides the
services under the direction and supervision of the Company’s
CEO.





The
Company has an 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 period ended December 31, 2016 the company paid the
related party consultant a total of $2,000 for consulting services.
At December 31, 2016, the Company owed the related party limited
liability company $2,736 for transfer agency services rendered and
for the reimbursement of legal fees.








27








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





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





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





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





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





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





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





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





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





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








28





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





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





A loan
in the amount of $19,983 due to the Company’s CEO. The loan
is not secured and pays interest at a 6% per annum and the
principal and accrued interest and was due on or before June 14,
2016. The note is currently in default due to non-payment of
principal and interest.





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





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





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





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





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





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





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.





Item 14. Principal Accounting Fees and Services





Audit Related Fees





For the
years ended December 31, 2016 and 2015, the Company paid $0 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, 2016 and
2015, the Company paid $26,000 and $28,000 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.








29





Tax Fees





For the
years ended December 31, 2016 and 2015, 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. For the years ended December 31, 2016 and
2015, the Company paid $0 in fees for professional services
rendered fees related to services rendered by our previous
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, 2016
and 2015.
















































































30





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, 2015.10.4
Fee Settlement
Agreement by and between ClearTrust, LLC and Seafarer Exploration
Corp. dated August 9, 2016.10.5
Contract for Purchase and Sale of
Magnetometer by and between RDK Family Trust and Seafarer
Exploration Corp. dated September 2,
2016.31.1
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.











31








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:
September 20, 2017
By:
/s/ Kyle KennedyKyle
Kennedy
President,
Chief Executive Officer, and Chairman of the Board
(Principal
Executive Officer and Principal Accounting Officer)








Date:
September 20, 2017
By:
/s/ Charles BranscumCharles
Branscum, Director








Date:
September 20, 2017
By:
/s/ Robert L. KennedyRobert
L. Kennedy, Director












































32