SEAFARER EXPLORATION CORP - FORM 10-Q

Attached files

file	filename
EX-31.1 - CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) OR RULE - SEAFARER EXPLORATION CORP	exhibit_31-1.htm
EX-99.1 - TEMPORARY HARDSHIP EXEMPTION - SEAFARER EXPLORATION CORP	exhibit_99-1.htm
EX-32.1 - CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(B) OR RULE - SEAFARER EXPLORATION CORP	exhibit_32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2018


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

For the transition period from _________ to __________.

Commission File Number 000-29461

SEAFARER EXPLORATION CORP.

(Exact name of registrant as specified in its charter)

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

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

(Address of principal executive offices)(Zip code)

(813) 448-3577

Registrant’s telephone number

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

Yes ☑ No ☐

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

Yes ☑ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐

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

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

Yes ☐ No ☑

As of May 9, 2018, there were 3,010,388,086 shares of the registrant’s common stock, $.0001 par value per share, outstanding.

SEAFARER EXPLORATION CORP.

Form 10-Q

For the Quarterly Period Ended March 31, 2018

TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION	4

Item 1. Financial Statements (unaudited)	5

Unaudited Condensed Balance Sheets: March 31, 2018 and December 31, 2017	5

Unaudited Condensed Statements of Operations: Three months ended March 31, 2018 and 2017	6

Unaudited Condensed Statements of Cash Flows: Three months ended March 31, 2018 and 2017	7

Notes to Unaudited Condensed Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3. Quantitative and Qualitative Disclosures About Market Risk	27

Item 4T. Controls and Procedures	27

PART II: OTHER INFORMATION	29

Item 1. Legal Proceedings	29

Item 1A. Risk Factors	29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3. Defaults Upon Senior Securities	30

Item 4. Submission of Matters to a Vote of Security Holders	30

Item 5. Other Information	30

Item 6. Exhibits	31

SIGNATURES	32

Part 1: Financial Information

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

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

Item 1. Financial Statements

SEAFARER EXPLORATION CORP.

UNAUDITED CONDENSED BALANCE SHEETS

	March 31,	December 31,
	2018	2017
Assets

Current assets:
Cash	$-	$62,609
Prepaid expenses	7,850	32,227
Deposits	750	750
Total current assets	8,600	95,586

Property and equipment, net	11,812	20,308

Total assets	$20,412	$115,894

Liabilities and Stockholders' Deficit

Current liabilities:
Accounts payable and accrued expenses	$335,711	$279,288
Convertible notes payable, net of discounts of $5,012 and $35,844	6,988	144,156
Convertible notes payable, related parties, net of discounts of $10,357 and $-0-	26,643	-
Notes payable, net of discount of $32,537	172,463
Convertible notes payable, in default	445,300	470,300
Convertible notes payable, in default - related parties	234,500	234,500
Shareholder loan	21,523	20,023
Notes payable, in default	30,000	30,000
Notes payable, in default - related parties	42,500	43,750
Total current liabilities	1,315,628	1,222,017

Commitments and contingencies

Stockholders' deficit:
Preferred stock, $0.0001 par value - 50,000,000 shares authorized; 67 shares issued
Series A - 7 shares issued and outstanding at March 31, 2018 and December 31, 2017	-	-
Series B - 60 shares issued and outstanding at March 31, 2018 and December 31, 2017	-	-
Common stock, $0.0001 par value - 3,900,000,000 shares authorized;2,818,574,905 and
2,784,317,155 shares issued and outstanding at March 31, 2018 and December 31, 2017	281,858	278,432
Additional paid-in capital	12,361,825	12,293,080
Accumulated deficit	(13,938,899)	(13,677,635)
Total stockholders' deficit	(1,295,216)	(1,106,123)
Total liabilities and stockholders' deficit	$20,412	$115,894

See notes to unaudited condensed financial statements.

SEAFARER EXPLORATION CORP.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

	For the three months ended March 31,
	2018	2017
Revenue	$-	$-

Expenses:
Consulting and contractor expenses	146,776	121,113
Vessel Maintenance and Dockage	7,840	13,025
Professional fees	23,595	18,180
General and administrative expense	17,348	32,543
Depreciation expense	8,496	8,496
Rent expense	8,639	13,593
Surveying and site mapping	-	15,595
Travel and entertainment expense	17,430	10,444
Total operating expenses	230,124	232,989

Loss from operations	(230,124)	(232,989)

Other income (expense):
Interest (expense), net	(31,139)	(87,993)
Total other (expense)	(31,139)	(87,993)

Net loss before income taxes	(261,263)	(320,982)

Income taxes	-	-

Net loss	$(261,263)	$(320,982)

Net loss per share - basic and diluted	$-	$-
Weighted average common shares outstanding - basic and diluted	2,806,163,638	2,262,309,103

See notes to unaudited condensed financial statements.

SEAFARER EXPLORATION CORP.

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

	For the three months ended March 31,
	2018	2017
Operating activities
Net loss	$(261,263)	$(320,982)
Adjustments to reconcile net loss to
net cash (used in) operating activities
Depreciation	8,496	8,496
Amortization of debt discount and interest expense on
beneficial conversion feature of convertible notes	13,959
Interest income on fair value adjustment	-	(9,742)
Common stock issued for services	5,250	119,700
Common stock issued for closing cost	900	1,200
Decrease (increase) in:
Prepaid expenses	24,377	-
Increase (decrease) in:
Accounts payable and accrued expenses	56,422	9,257
Net cash (used in) operating activities	(151,859)	(192,071)

Cash flows from financing activities:
Proceeds from the issuance of common stock	25,000	160,000
Proceeds from the issuance convertible notes payable	12,000	40,000
Proceeds form convertible note payable - related party	37,000	30,000
Proceeds from notes payable	25,000
Proceeds from shareholder loan	1,500	-
Proceeds from note payable	25,000	-
Payments on convertible notes payable in default	(10,000)
Payments on notes payable forn related parties	(26,250)	-
Net cash provided by financing activities	89,250	230,000

Net (decrease) increase in cash	(62,609)	37,929

Cash - beginning of period	62,609	24,549
Cash - end of period	$-	$62,478

Supplemental disclosure of cash flow information:
Cash paid for interest expense	$2,711	$-
Cash paid for income taxes	$-	$-
Noncash operating and financing activities:
Convertible debt and accrued interest converted to common
stock	$15,000	$73,160

See notes to unaudited condensed financial statements.

SEAFARER EXPLORATION CORP. AND SUBSIDIARIES

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

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

These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in the Company’s Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission (the “Commission”). The results of operations for the three month period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2018 or for any future period.

NOTE 1 - DESCRIPTION OF BUSINESS

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

The principal business of the Company is to engage in the archaeologically-sensitive exploration, documentation, recovery, and conservation of historic shipwrecks with the objective of exploring and discovering Colonial-era shipwrecks for future generations to be able to appreciate and understand. Seafarer currently has two different wreck sites under permit with the State of Florida, one wreck site in the permit renewal process and one wreck site under contract with a private party and is working closely with the Florida Department of Historical Resources and the Florida Bureau of Archeological Research to research and document these, and additional, wreck sites.

NOTE 2 - GOING CONCERN

These condensed financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred net losses since inception, which raises substantial doubt about the Company’s ability to continue as a going concern. Based on its historical rate of expenditures, the Company expects to expend its available cash in less than one month from May 15, 2018. Management's plans include raising capital through the equity markets to fund operations and, eventually, the generation of revenue through its business. The Company does not expect to generate any revenues for the foreseeable future.

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

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Accounting Method

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

Cash and Cash Equivalents

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

Revenue Recognition

The Company plans to recognize revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and No. 104, “Revenue Recognition”. In all cases, revenue will be recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. For the quarters ended March 31, 2018 and 2017, the Company did not report any revenues.

Earnings Per Share

The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 260-10 which provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Basic and diluted losses per share were the same at the reporting dates as there were no common stock equivalents outstanding at March 31, 2018 and 2017.

Fair Value of Financial Instruments

Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

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

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

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

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

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

Property and Equipment and Depreciation

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

	March 31, 2018	December 31, 2017
Diving vessel	$326,005	$326,005
Equipment	32,420	32,420
Less accumulated depreciation	(346,613)	(338,117)
	$11,812	$20,308

Depreciation expense for each of the three month periods ended March 31, 2018 and 2017 amounted to $8,496.

Impairment of Long-Lived Assets

In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. There were no impairment charges recorded during the quarters ended March 31, 2018 and 2017.

Employee Stock Based Compensation

The FASB issued SFAS No.123 (revised 2004), Share-Based Payment, which was superseded by ASC 718-10. ASC 718-10 provides investors and other users of financial statements with more complete and neutral financial information, by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. SFAS 123(R) covers a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As of March 31, 2018, the Company has not implemented an employee stock based compensation plan.

Non-Employee Stock Based Compensation

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

Use of Estimates

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

Convertible Notes Payable

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

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

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

Convertible Notes Payable at Fair Value

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

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

NOTE 4 - LOSS PER SHARE

Components of loss per share for the three months ended March 31, 2018 and 2017 are as follows:

	For the Three Months Ended March 31, 2018	For the Three Months Ended March 31, 2017
Net loss attributable to common stockholders	$(261,263)	$(320,982)

Weighted average shares outstanding:
Basic and diluted	2,806,163,638	2,262,309,103

Loss per share:
Basic and diluted	$(0.00)	$(0.00)

NOTE 5 - CAPITAL STOCK

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

Preferred Stock

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

Series A Preferred Stock

At March 31, 2018 and 2017, the Company had seven shares of Series A preferred stock issued and outstanding. Each share of Series A preferred stock has the right to convert into 214,289 shares of the Company’s common stock.

Series B Preferred Stock

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

Warrants and Options

The Company did not issue any warrants or options during the three month period ended March 31, 2018.

At March 31, 2018 the Company had warrants to purchase a total of 105,333,333 shares of its restricted common stock outstanding:

Term	Amount	Exercise Price

11/20/12 to 11/20/22	4,000,000	$0.0050
09/18/15 to 09/18/20	4,000,000	$0.0030
04/04/16 to 04/04/18	10,000,000	$0.0020
07/12/16 to 01/12/18	4,000,000	$0.0020
08/31/16 to 08/31/18	25,000,000	$0.0010
02/14/17 to 08/14/18	33,333,333	$0.0050
09/10/17 to 09/10/19	15,000,000	$0.0250
09/10/17 to 09/10/19	10,000,000	$0.0250
	105,333,333

NOTE 6 - INCOME TAXES

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

	For the Three Months Ended March 31, 2018	For the Three Months Ended March 31, 2017
Income tax at federal statutory rate	(34.00)%	(34.00)%
State tax, net of federal effect	(3.96)%	(3.96)%
	37.96%	37.96%
Valuation allowance	(37.96)%	(37.96)%
Effective rate	0.00%	0.00%

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

On March 31, 2018 and December 31, 2017, the Company’s only significant deferred income tax asset was an estimated net tax operating loss of $13,560,000 and $13,300,000 respectively that is available to offset future taxable income, if any, in future periods, subject to expiration and other limitations imposed by the Internal Revenue Service. Management has considered the Company's operating losses incurred to date and believes that a full valuation allowance against the deferred tax assets is required as of March 31, 2018 and December 31, 2017. The Company is preparing and reviewing information for tax returns for past years. Due to the Company’s lack of revenue since inception, management does not anticipate that there is any income tax liability for past years. Management has evaluated tax positions in accordance with ASC 740 and has not identified any tax positions, other than those discussed above, that require disclosure.

NOTE 7 - LEASE OBLIGATION

Corporate Office

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

Operations House

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

NOTE 8 - CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE

Upon inception, the Company evaluates each financial instrument to determine whether it meets the definition of “conventional convertible” debt under ASC 470.

Convertible Notes Payable

The following table reflects the convertible notes payable at March 31, 2018:

Issue Date:	Maturity Date	Principal Balance	Interest Rate	Conversion Rate
Convertible notes payable:
February 6, 2018	November 7, 2018	$6,000	6.00%	0.0006
March 6, 2018	September 6, 2018	$6,000	6.00%	0.0006
Unamortized discounts		$(5,012)
Balance		$6,988

Convertible notes payable, related parties:
January 9, 2018	January 9, 2019	$12,000	6.00%	0.0006
March 14, 2018	May 14, 2018	$25,000	6.00%	0.0006
Unamortized discounts		$(10,357)
Balance		$26,643

Convertible notes payable, in default:
August 28, 2009	November 1, 2009	$4,300	10.00%	0.0150
April 7, 2010	November 7, 2010	$70,000	6.00%	0.0080
November 12, 2010	November 12, 2011	$40,000	6.00%	0.0050
October 31, 2012	April 30, 2013	$8,000	6.00%	0.0040
November 20, 2012	May 20, 2013	$50,000	6.00%	0.0050
January 19, 2013	July 30, 2013	$5,000	6.00%	0.0040
February 11, 2013	August 11, 2013	$9,000	6.00%	0.0060
September 25, 2013	March 25, 2014	$10,000	6.00%	0.0125
October 04, 2013	April 4, 2014	$50,000	6.00%	0.0125
October 30, 2013	October 30, 2014	$50,000	6.00%	0.0125
May 15, 2014	November 15, 2014	$40,000	6.00%	0.0070
October 13, 2014	April 13, 2015	$25,000	6.00%	0.0050
June 29, 2015	December 29, 2015	$25,000	6.00%	0.0030

September 18, 2015	March 18, 2016	$25,000	6.00%	0.0020
April 04, 2016	October 4, 2016	$10,000	6.00%	0.0010
July 19, 2016	July 19, 2017	$4,000	6.00%	0.0015
August 24, 2016	February 24, 2017	$20,000	6.00%	0.0010
Balance		$445,300

Convertible notes payable - related parties, in default:
January 09, 2009	January 9, 2010	$10,000	10.00%	0.0150
January 25, 2010	January 25, 2011	$6,000	6.00%	0.0050
January 18, 2012	July 18, 2012	$50,000	8.00%	0.0040
January 19, 2013	July 30, 2013	$15,000	6.00%	0.0040
July 26, 2013	January 26, 2014	$10,000	6.00%	0.0100
January 01, 2014	July 17, 2014	$31,500	6.00%	0.0060
May 27, 2014	November 27, 2014	$7,000	6.00%	0.0070
July 21, 2014	January 25, 2015	$17,000	6.00%	0.0080
October 16, 2014	April 16, 2015	$21,000	6.00%	0.0045
July 14, 2015	January 14, 2016	$9,000	6.00%	0.0030
January 12, 2016	July 12, 2016	$5,000	6.00%	0.0020
May 10, 2016	November 10, 2016	$5,000	6.00%	0.0005
May 10, 2016	November 10, 2016	$5,000	6.00%	0.0005
May 20, 2016	November 20, 2016	$5,000	6.00%	0.0005
July 12, 2016	January 12, 2017	$5,000	6.00%	0.0006
January 26, 2017	March 12, 2017	$5,000	6.00%	0.0005
February 24, 2017	August 24, 2017	$25,000	6.00%	0.0075
August 16, 2017	September 16, 2017	$3,000	6.00%	0.0008
Balance		$234,500


Balance, convertible notes payable		$713,431

Notes Payable

The following table reflects the notes payable at March 31, 2017:

Issue Date:	Maturity Date	Principal Balance	Interest Rate
Notes payable:
November 29, 2017	November 29, 2019	$105,000	2.06%
December 14, 2017	December 14, 2018	$75,000	6.00%
March 7, 2018	April 15, 2018	$25,000	6.00%
Unamortized discount for loan fees		$(32,537)
Balance		$172,463

Notes payable, in default:
April 27, 2011	April 27, 2012	$5,000	6.00%
June 23, 2011	August 23, 2011	$25,000	6.00%
Balance		$30,000

Notes payable - related parties, in default:
February 24, 2010	February 24, 2011	$7,500	6.00%
October 6, 2015	November 15, 2015	$10,000	6.00%
January 31, 2018	March 2, 2018	$25,000	6.00%
Balance		$42,500


Balance, notes payable		$244,963

New Convertible Notes Payable and Notes Payable

During the three month period ended March 31, 2018 the Company entered into the following Convertible Notes Payable and Notes Payable Agreements:

In January of 2018, the Company entered into a convertible promissory note agreement in the amount of $12,000 with an individual who is both related to the Company’s CEO and a member of the Company’s Board of Directors. This loan pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before January 9, 2019. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0006 per share.

In January of 2018, the Company entered into a promissory note agreement in the amount of $25,000 with a related party. This note pays interest at a rate of 6% per annum and the principal and accrued interest were due on or before March 2, 2018. The related party lender received 2,000,000 shares of the Company’s restricted common stock as a loan origination fee. The Company agreed that if the note was not repaid in full by March 2, 2018 then the interest rate on the note would increase to 10% after that date until the note is paid in full and the Company would be obligated to pay an additional 1,000,000 shares of the Company restricted common stock to the related party lender. This note is currently in default due to non payment of principal and interest. The note is unsecured.

In February of 2017, the Company entered into a convertible promissory note agreement in the amount of $6,000 with an individual. This loan pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before November 7, 2018. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0006 per share.

In February of 2018, the Company entered into a promissory note agreement in the amount of $1,000 with an individual who is both related to the Company’s CEO and a member of the Company’s Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before April 9, 2018. This note is currently in default due to non payment of principal and interest. The note is unsecured.

In March of 2018, the Company entered into a convertible promissory note agreement in the amount of $6,000 with an individual. This note pays interest at a rate of 6% per annum and the principal and accrued interest isdue on or before September 6, 2018. The lender received 500,000 shares of the Company’s restricted common stock as a loan origination fee. The note is unsecured.

In March of 2018, the Company entered into a promissory note agreement in the amount of $25,000 with an individual. This note pays interest at a rate of 6% per annum and the principal and accrued interest were due on or before April 15, 2018. The related party lender received 5,000,000 shares of the Company’s restricted common stock as a loan origination fee. This note is currently in default due to non payment of principal and interest The note is unsecured.

In March of 2018, the Company entered into a convertible promissory note agreement in the amount of $25,000 with an individual who is both related to the Company’s CEO and a member of the Company’s Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before May14, 2018. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0006 per share. This note is currently in default due to non payment of principal and interest.

Note Conversion

A lender who had a convertible promissory note outstanding with a principal balance of $15,000 elected to convert the principal balance of the note plus accrued interest into 10,507,947 shares of the Company’s common stock. The remaining principal balance of this note was $0 at March 31, 2018.

Shareholder Loans

At March 31, 2018 the Company had six loans outstanding to its CEO totaling $20,523, consisting of a loan in the amount of $11,983 with a 6% annual rate of interest, a loan in the amount of $1,500 at 6% rate of interest and an option to convert the loan into restricted shares of the Company’s common stock at $0.002, a loan in the amount of $2,600 at 1% rate of interest, a loan in the amount of $3,000 at 1% rate of interest, a loan in the amount of $500 at 1% rate of interest, a second loan in the amount of $500 at 1% rate of interest and a loan in the amount of $440 at 1% rate of interest.

Convertible Notes Payable and Notes Payable, in Default

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

NOTE 9 – MATERIAL AGREEMENTS

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

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

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

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

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

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

Certain Other Agreements

In February of 2018, the Company entered into an agreement with an individual to join the Company’s advisory council. Under the terms of the advisory council agreement the advisor agreed to provide various advisory services to the Company, including making recommendations for both the short term and the long term business strategies to be employed by the Company, monitoring and assessing the Company's business and to advise the Company’s Board of Directors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of action, making suggestions to strengthen the Company's operations, identifying and evaluating external threats and opportunities to the Company, evaluating and making ongoing recommendations to theBoard with respect to the Company's business, and providing such other advisory or consulting services as may be appropriate from time to time. The term of the advisory council agreements is for one year. In consideration for the performance of the advisory services, the Company agreed to issue the advisor 4,250,000 shares of the Company’s restricted common stock valued at approximately $4,250. Per the terms of the agreement the shares vest at a rate of 1/12th of the amount per month over the term of the agreement. If the advisor or the Company terminates the advisory council agreement prior to the expiration of the one year term, then the advisor has agreed to return to the Company for cancellation any portion of the shares that have not vested. Under the advisory council agreements, the Company has agreed to reimburse the advisor for preapproved expenses.

In February of 2018, the Company entered into a consulting agreement with a consultant to advise the Company regarding certain technologies. The Company issued 1,000,000 shares of its restricted common stock to the consultant for the services. The consultant agreed that all work performed under the agreement including business and strategic plans and proposals works-made-for-hire under U.S. copyright law and such works shall be the property of the Company.

In February of 2018, the Company entered into a subscription agreement to sell 10,000,000 shares of restricted common stock to two individuals in exchange for proceeds of $25,000. The Company also agreed that the purchaser will be entitled to receive $125,000 of treasure of their choice after both the Company has recovered a minimum of $1,750,000 of artifacts/treasure and the State of Florida has received its full share of treasure per any permits or agreements. The purchaser will have the right to convert up to a maximum of $125,000 worth of treasure that they have received into shares of the Company’s restricted common stock at a discount of 10% of the average trading price of the Company’s common stock of the previous five days closing price provided that the Company’s common stock is trading at or above $0.04 by providing a written notice to the Company. The conversion option will expire eighteen months after the Company first locates a minimum of $1,750,000 worth of treasure. The value of any treasure recovered will be determined by a mutually agreed upon third party who is a recognized expert in the valuation of historic artifacts.

The Company has a verbal consulting agreement with a limited liability company that is owned and controlled by a person who is related to the Company’s CEO to pay the related party consultant a minimum of $3,000 per month to provide general business consulting and assessing the Company's business and to advise management with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions, perform period background research including background checks and provide investigative information on individuals and companies and to assist, when needed, as an administrative specialist to perform various administrative duties and clerical services including reviewing the Company’s agreements and books and records. At March 31, 2018 the Company owed the related party consultant $4,000 for services rendered. The consultant provides the services under the direction and supervision of the Company’s CEO

The Company has an ongoing agreement with a limited liability company that is owned and controlled by a person who is related to the Company’s CEO to provide stock transfer agency services. At March 31, 2018 the Company owed the related party limited liability company $435 for services rendered.

The Company has an agreement to pay an individual a minimum monthly fee of $2,500 per month for archeological consulting services.

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

NOTE 10 – LEGAL PROCEEDINGS

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

On September 3, 2014, the Company filed a lawsuit against Darrel Volentine, of California. Mr. Volentine was sued in two counts of libel per se under Florida law, as well as a count for injunction against the Defendant to exclude and prohibit internet postings. Such lawsuit was filed in the Circuit Court in Hillsborough County, Florida. Such suit is based upon internet postings on www.investorshub.com . On or about October 15, 2015, the Company and Volentine entered into a stipulation whereby Volentine admitted to his tortious conduct, however the stipulated damages agreed to were rejected by the Court, and the Company is proceeding to trial on damages against Volentine in a non-jury trial on December 1, 2015. The Defendant is the subject of a contempt of court motion which was heard on April 7, 2016, whereby the Court found a violation and modified the injunction against the Defendant, and imposed other matters of potential penalties against the Defendant. The Court also awarded attorney’s fees against the Defendant on behalf of Seafarer for such motion. The Defendant subsequently attempted to have such ruling, evidence and testimony attacked through a motion heard before the Court on October 24, 2016. The Court dismissed the Defendant’s motion after presentation of the Defendant’s case at the hearing. The Plaintiff has set the matter for entry of the attorney’s fees amount due from the Defendant for hearing in December 2016. As well the Plaintiff has set for hearing its motion for sanctions in the form of attorney’s fees for frivolous filing of the October 24 th motion, which motion is also set for hearing in December 2016. The Plaintiff filed a renewed and amended motion for punitive damages in the case on September 11, 2016, which has not been set for hearing. The Defendant had also filed a motion for summary judgment on the matter of notice entitlement pre-suit, which motion is pending before the Court. The Plaintiff filed a motion for sanctions against the Defendant for the motion for summary judgment being frivolous under existing law, and such motion is pending ruling on the motion. Discovery is ongoing on such case. On December 7, 2016, the Court held a hearing on the Defendant’s motion for sanctions, and essentially attempting to rehear the motion for contempt against the Defendant. The Court dismissed the Defendant’s motions, and renewed the ability of the Company to seek attorney’s fees on such matter, which hearing has not been set at present. On February 28, 2017, the Court entered an Order denying the Defendant’s motion for summary judgment. The Company has a pending motion for sanctions related to the Defendant’s filing of the motion for summary judgment which has not been set for hearing. The Company will be attempting to set such matter for trial during 2018.

NOTE 11 – RELATED PARTY TRANSACTIONS

During the three month period ended March 31, 2018 the Company has had extensive dealings with related parties including the following:

In January of 2018, the Company entered into a convertible promissory note agreement in the amount of $12,000 with an individual who is both related to the Company’s CEO and a member of the Company’s Board of Directors. This loan pays interest at a rate of 6% per annum and the principal and accrued interest is due on or before January 9, 2019. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0006 per share.

In January of 2018 the Company repaid $26,250 or principal and $505 of accrued interest to a related party lender in order to satisfy a convertible promissory note. As of March 31, 2018 the principal balance of the note was $0.

In March of 2018, the Company’s CEO provided a loan to the Company in the amount of $500. The loan pays interest at the rate of 1% per annum. The loan was due on or before April 6, 2018. This loan is currently in default due to non payment of principal and interest.

At March 31, 2018 the following promissory notes and shareholder loans were outstanding to related parties:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A convertible promissory note payable dated January 9, 2018, in the principal amount of $12,000 with an individual who is both related to the Company’s CEO and a member of the Company’s Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before January 9, 2019. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0006 per share.

A convertible promissory note payable dated January 31, 2018 in the principal amount of $25,000 with a related party. This note pays interest at a rate of 6% per annum and the principal and accrued interest were due on or before December 2, 2017. This note pays interest at a rate of 6% per annum and the principal and accrued interest were due on or before March 2, 2018. The related party lender received 2,000,000 shares of the Company’s restricted common stock as a loan origination fee. The note is unsecured. This note is currently in default due to non payment of principal and interest.

A promissory note dated February 8, 2018, in the principal amount of $1,000 with an individual who is both related to the Company’s CEO and a member of the Company’s Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before April 9, 2018. This note is currently in default due to non payment of principal and interest. The note is unsecured.

A loan to the Company in the amount of $500 due to the Company’s CEO. The loan pays interest at the rate of 1% per annum. The loan was due on or before April 6, 2018. This loan is currently in default due to non payment of principal and interest.

A convertible promissory note payable dated March 14, 2018, in the amount of $25,000 with an individual who is both related to the Company’s CEO and a member of the Company’s Board of Directors. This note pays interest at a rate of 6% per annum and the principal and accrued interest was due on or before May14, 2018. The note is unsecured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.0006 per share. This note is currently in default due to non payment of principal and interest.

NOTE 12 – SUBSEQUENT EVENTS

Subsequent to March 31, 2018:

Subsequent to March 31, 2018 the Company sold or issued shares of its common stock as follows (unaudited):

(i)

sales of 60,000,000 shares of common stock for proceeds of $35,000, used for general working capital purposes;

(ii)

issuance of 134,833 shares of common stock for services;

(iii)

issuance of 5,000,000 shares of common stock for loan financing fees.

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

FORWARD LOOKING STATEMENTS

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

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

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

Overview

General

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

The Company believes it may eventually be conducting archaeological research around the world and potentially supporting governmental or quasi-governmental organizations, universities and affiliated research groups and private research entities in the documentation of historic shipwrecks based on their discretion. The business plan also includes in-depth archival research and translation of historical documents from various international archives and repositories. These translations of archival research will be made available to government states, university researchers, and other responsible academic parties upon reasonable request.

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

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

The exploration and recovery of historic shipwrecks involves a multi-year, multi-stage process. It may take many years and/or be prohibitively expensive to locate, if any are ever located at all, and recover valuable artifacts from historic shipwrecks. Locating and recovering valuable artifacts is very difficult, expensive, and rare. If the Company is not able to successfully locate artifacts or treasure with significant value, then there is a high probability that the Company will face adverse consequences, including a complete loss of all capital invested in or borrowed by the Company.

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

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

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

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

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

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

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

Moreover, there is the possibility that should the Company be successful in locating and salvaging artifacts that have significant archeological and/or monetary value, that a country whose ship was salvaged may attempt to claim ownership of the artifacts by pursuing litigation. In the event that the Company is able to make a valid claim to artifacts or other items at a shipwreck site, there is a risk of theft of such items at sea, both before or after the recovery or while the artifacts are in transit to a safe destination, as well as when stored in a secured location. Such thefts may not be adequately covered by insurance. Based on a number of these and other potential issues the Company could spend a great deal of time and invest a large sum in a specific shipwreck project and receive very little or no salvage claim or revenue for its work. The Company does have plans for security at sea, but may never implement such plans.

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

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

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

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

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

Plan of Operation

The Company has taken the following steps to implement its business plan:

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

●	Spent considerable time and money researching potential shipwrecks including obtaining information from foreign archives.

●	Although the Company has not generated revenues to date, our business goals continue to evolve. Relationships are being developed with foreign dignitaries and scientists around the world, as well as with for profit companies and a local university.

●	The Company continues to review revenue producing opportunities including joint ventures with other companies.

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

●	The Company has investigated media opportunities and will continue to evaluate different media strategies.

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

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

There is a purported historic shipwreck site in the waters off of Melbourne Beach Florida that the Company has been investigating. In February 2013, the Company signed an agreement with a third party who had previously explored this site for the right to investigate the site. On March 1, 2014, Seafarer entered into a partnership and ownership with Marine Archaeology Partners, LLC, with the formation of Seafarer’s Quest, LLC. Such LLC was formed in the State of Florida for the purpose of permitting, exploration and recovery of artifacts from a designated area on the east coast of Florida. Such site area is from a defined, contracted area by a separate entity, which a portion of such site is designated from a previous contracted holding through the State of Florida. Under such agreement, Seafarer is responsible for costs of permitting, exploration and recovery, and is entitled to 60% of such artifact recovery. Seafarer has a 50% ownership, with designated management of the LLC coming from Seafarer. Further actions toward expanding the permitted area have been taken for such site. There are a significant number of challenges inherent in the exploration and recovery of historic shipwrecks, including the possibility that the Company will never find artifacts of value at this particular site.

On July 28, 2014, Seafarer’s Quest, LLC received a 1A-31 Exploration Permit with a Dig and Identify modification (the “Permit”) from the Florida Division of Historical Resources for an area identified as Area 2 off of Cape Canaveral, Florida. The Permit was active for three years from the date of issuance and is currently in a renewal stage. Seafarer on behalf of Seafarer’s Quest, LLC, has been primarily focusing its operations on this site when the weather permits. In addition to the Company’s main salvage vessel, the Company has utilized additional owned and rented vessels in order to perform search and identify operations at this site. Inclement weather and difficult sea conditions have hampered the Company’s ability to perform exploration operations at this site and will likely continue to hamper operations in the future. An archeologist with the technical skills, knowledge, and experience from around the world was hired to help insure the integrity of the work. The Company has applied for permits from the State of Florida for additional areas that were formerly permitted solely by an affiliate of Marine Archeological Partners, LLC. A Permit for one of the additional areas was given to the Company on July 6th, 2016 and identified as Area 1. Area 1 has become the Company’s primary focus because of mag survey work and the amount of shipwreck material found there.

The Company regularly reviews opportunities to perform exploration and recovery operations at purported historic shipwreck sites. The Company currently does have some specific plans to perform exploration and recovery operations at other shipwreck sites in the future, however these plans are subject to change based on a number of factors. The Company is actively reviewing other potential historic shipwreck sites, including sites located internationally, for possible exploration and recovery. Should the Company decide that it will pursue exploration and recovery activities at other potential shipwreck sites, it may be necessary to obtain various permits as well as environmental permits.

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

Limited Operating History

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

At March 31, 2018, the Company had a working capital deficit of $1,307,028. The Company is in immediate need of further working capital and is seeking options, with respect to financing, in the form of debt, equity or a combination thereof.

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

The Company expects to continue to incur significant operating losses and to generate negative cash flow from operating activities, while building out its infrastructure in order to explore and salvage historic shipwreck sites and establishing itself in the marketplace. Based on our historical rate of expenditures, the Company expects to expend its available cash in less than one month from May 15, 2018.

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

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

Results of Operations

The Company’s net loss for the three month period ended March 31, 2018 was $261,263 as compared to a net loss of $320,982 during the three month period ended March 31, 2017, a decrease of approximately 18.6%. The decrease in the net loss for the three month period ended March 31, 2018 was primarily due to a decrease in interest expense in 2018. Interest expense decreased to $31,139 during the three month period ended March 31, 2018 from $87,993 during the three month period ended March 31, 2017, a decrease of approximately 65%. During the three month period ended March 31, 2018 consulting and contractor fees were $146,776 as compared to $121,113 for the three month period ended March 31, 2017. The approximate 21% increase in consulting and contractor fees in 2018 was largely a result of increased operating activity as the Company gears up for the summer diving season. During the three month period ended March 31, 2018, professional fees were $23,595 as compared to $18,180 during the three month period ended March 31, 2017, an increase of nearly 30%. Surveying and site mapping expense was $0 during the three month period ended March 31, 2018 as compared to $15,595 during the same period in 2017. The Company previously paid for a long range scan survey during the three month period ended March 31, 2017 however elected not to utilize the same methodology in 2018. The Company incurred travel and entertainment expenses of $17,430 during the three month period ended March 31, 2018 as compared to $10,444 during the three month period ended March 31, 2017, an approximate 67% increase on a quarter-over-quarter basis. The increase in travel expenses is partially due to an increase of travel expenses for several independent contractors involved in the Company’s dive operations. The general and administrative expenses for the period ended March 31, 2018 were $17,348 compared to $32,543 for the period ended March 31, 2017, a quarter-over-quarter decrease of approximately 47%. Vessel maintenance and dockage was $7,840 during the three month period ended March 31, 2018 as compared to $13,025 during the same period in 2017, a decrease or approximately 40%. The Company did not incur any significant fees for repairs to the main salvage vessel during the three month period ended March 31, 2018, there was some maintenance and light repair work completed however the Company believes more extensive repairs will be needed in the foreseeable future on both the main salvage vessel and other vessels that the Company intends to utilize in its exploration efforts.

Liquidity and Capital Resources

At March 31, 2018, we had cash in the bank of $0. During the period ended March 31, 2018 we incurred a net loss of $261,263. At March 31, 2018, we had $8,600 in current assets and $1,315,628 in current liabilities, leaving us a working capital deficit of $1,307,028.

Lack of Liquidity

A major financial challenge and significant risk facing the Company is a lack of liquidity. The Company continued to operate with significant debt and a working capital deficit during the period ended March 31, 2018. 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 loaned to 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 onerous, especially given that the Company does not currently generate any revenues and does not expect to generate any revenues in the near future. There are ongoing expenses associated with operations that are incurred whether the Company is conducting shipwreck exploration and recovery operations or not. Vessel maintenance, particularly for an older vessel such as the Company’s main salvage vessel, upkeep expenses and docking fees are continuous and unavoidable regardless of the Company’s operational status. Management anticipates the Company may need to put the vessel in dry dock in order for additional repairs to be made. These repairs and maintenance are expensive and have a negative impact on the Company’s cash position.

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

Due to the fact that the Company does not generate any revenues and does not expect to generate revenues for the foreseeable future the Company must rely on outside equity and debt funding. The combination of the ongoing operational, even during times when there is little to no exploration or recovery 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, the Company's business may fail and our stock price will likely be materially adversely affected and all capital invested in or borrowed by the Company will likely be lost.

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 significant reduction in the value of the Company’s securities.

The Company may not be able to continue as a going concern. If the Company is not able to continue as a going concern, it is highly likely that all capital invested in the Company or borrowed by the Company will be lost. The report of our independent auditors for the years ended December 31, 2017 and 2016 raises substantial doubt as to our ability to continue as a going concern. As discussed in Note 2 to our financial statements for the three month periods ended March 31, 2018 and 2017, we have experienced operating losses in every year since our inception resulting in an accumulated deficit. Our financial results as of March 31, 2018 raise 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 $230,124 for the three month period ended March 31, 2018 and $232,989 for the three month period ended March 31, 2017. The Company believes that it will continue to generate losses from its operation for the foreseeable future and the Company may not be able to generate a profit in the long-term, or ever. Due to the significance of these of these matters there is substantial doubt about the Company’s ability to continue as a going concern. Any investment in the Company’s securities is very speculative with a very high chance of a total loss of all invested capital.

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.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments which affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities (see Note 3, Summary of Significant Accounting Policies, contained in the notes to the Company’s financial statements for the periods ended March 31, 2018 and 2017). On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions which we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities which are not readily apparent from other sources. Actual results may differ from these estimates based upon different assumptions or conditions; however, we believe that our estimates are reasonable.

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

Off-balance Sheet Arrangements

None.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4T. Controls and Procedures

Management’s Responsibility for Controls and Procedures

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

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our principal executive officer, the Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, as of March 31, 2018. Based on this evaluation, management concluded that our financial disclosure controls and procedures were not effective so as to timely record, process, summarize and report financial information required to be included on our Securities and Exchange Commission (“SEC”) reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. However, as a result of our evaluation and review process, management believes that the financial statements and other information presented herewith are materially correct.

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

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

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

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

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

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

*	We have not achieved an optimal segregation of duties for executive officers of the Company.

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

Remediation Efforts to Address Deficiencies in Disclosure Controls and Procedures

As a result of these findings, management, upon obtaining sufficient capital and operations, intends to take practical, cost-effective steps in implementing internal controls, including the possible remedial measures set forth below. As of March 31, 2018 we did not have sufficient capital and/or operations to implement any of the remedial measures described below.

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

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

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

(b) Change in Internal Control Over Financial Reporting

The Company has not made any change in our internal control over financial reporting during the period ended March 31, 2018.

Part II. Other Information

Item 1. Legal Proceedings

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

October 24, 2016. The Court dismissed the Defendant’s motion after presentation of the Defendant’s case at the hearing. The Plaintiff has set the matter for entry of the attorney’s fees amount due from the Defendant for hearing in December 2016. As well the Plaintiff has set for hearing its motion for sanctions in the form of attorney’s fees for frivolous filing of the October 24 th motion, which motion is also set for hearing in December 2016. The Plaintiff filed a renewed and amended motion for punitive damages in the case on September 11, 2016, which has not been set for hearing. The Defendant had also filed a motion for summary judgment on the matter of notice entitlement pre-suit, which motion is pending before the Court. ThePlaintiff filed a motion for sanctions against the Defendant for the motion for summary judgment being frivolous under existing law, and such motion is pending ruling on the motion. Discovery is ongoing on such case. On December 7, 2016, the Court held a hearing on the Defendant’s motion for sanctions, and essentially attempting to rehear the motion for contempt against the Defendant. The Court dismissed the Defendant’s motions, and renewed the ability of the Company to seek attorney’s fees on such matter, which hearing has not been set at present. On February 28, 2017, the Court entered an Order denying the Defendant’s motion for summary judgment. The Company has a pending motion for sanctions related to the Defendant’s filing of the motion for summary judgment which has not been set for hearing. The Company will be attempting to set such matter for trial during 2018.

Item 1A. Risk Factors

Not required for smaller reporting companies.

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

During the three month period ended March 31, 2018, the Company issued or agreed to issue 5,250,000 shares of its restricted common stock to several consultants for business advisory consulting services and technology consulting fees. The Company also issued 7,500,000 shares of its restricted common shares as loan origination fees, 2,000,000 of the shares issued for loan origination fees were issued to a related party lender. The Company also 1,000,000 shares of its restricted common stock to a related party lender as a penalty fee for the non payment of principal and interest related to a promissory note that had come due. The Company believes that the issuance of the securities was exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering and based on the fact that such securities were issued for services to sophisticated or accredited investors and persons who are thoroughly familiar with the Company’s proposed business by virtue of their affiliation with the Company.

During the three month period ended March 31, 2018, the Company entered into a subscription agreements to sell 10,000,000 shares of its restricted common stock in exchange for proceeds of $25,000 and additional consideration. The proceeds that were received were used for general corporate purposes, working capital and the repayment of debt.

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

Exemptions from Registration for Sales of Restricted Securities.

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

Issuance of Securities Due to Conversion of Notes and Debt

During the three month period ended March 31, 2018, the holder a promissory notes with a remaining principal balance of $15,000 elected to convert all of the balance of the notes plus accrued interest into 10,507,947 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.

Item 3. Defaults Upon Senior Securities

See Part I, Item 2, notes payable and convertible notes payable, in default, for discussion of defaults on certain debt obligations of the Company.

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

None.

Item 5. Other Information

None

Item 6. Exhibits

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

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

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

*99.1	Temporary Hardship Exemption

**101.INS	XBRL Instance Document

**101.SCH	XBRL Taxonomy Extension Schema

**101.CAL	XBRL Taxonomy Extension Calculation Linkbase

**101.DEF	XBRL Taxonomy Extension Definition Linkbase

**101.LAB	XBRL Taxonomy Extension Label Linkbase

**101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

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

SIGNATURE

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

	Seafarer Exploration Corp.


Date: May 15, 2018	By:	/s/ Kyle Kennedy
		Kyle Kennedy President, Chief Executive Officer, and Chairman of the Board (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Date: May 15, 2018	By:	/s/ Chuck Branscomb
		Chuck Branscomb, Director

Date: May 15, 2018	By:	/s/ Robert L. Kennedy
		Robert L. Kennedy, Director

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