SFRX 10-K & 10-Q changes, risk factors and insider trading
Seafarer Exploration Corp. · OTC · Services-Amusement & Recreation Services · CIK 1106213 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Not required for smaller reporting companies.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
“At December 31, 2024 and 2023, the Company had working capital deficits of $3,002,457 and $1,789,848, respectively. Such working capital deficit may indicate that there is substantial risk to the continued viability of the Company and that there is a high degree of risk that the Company could become insolvent due to this significant working capital deficit and the lack of meaningful cash flow from its operations. Additionally, the Company’s total liabilities at December 31, 2024 and 2023 were $3,100,595 and $2,542,732, respectively. …”see in full comparison
“At December 31, 2025 and 2024, the Company had working capital deficits of $3,573,544 and $3,002,457, respectively. Such working capital deficit may indicate that there is substantial risk to the continued viability of the Company and that there is a high degree of risk that the Company could become insolvent due to this significant working capital deficit and the lack of cash flow from its operations. Additionally, the Company’s total liabilities at December 31, 2025 and 2024 were $3,703,260 and $3,100,595, respectively. …”see in full comparison
“The Company has received from the Florida Department of State a notice of lack of authority to permit or deny recovery activities on the unidentified shipwreck on Juno Beach. The Florida Bureau of Archaeological Research (the “Bureau”), Division of Historical Resources, Florida Department of State stated to Seafarer “The shipwreck is non-permittable pursuant to Rule 1A-31.0045(2), F.A.C.” The Bureau cited an order dated November 14, 2017 where the United States District Court entered a Final Order of Court Default and Final Judgement Granting Award for Admiralty in Rem. …”see in full comparison
Seafarer has generated only minimal revenue from operations andsee in full comparisondodoes not expect to report any significant revenue from operations for the foreseeable future. The Company has incurred recurring losses to date. These factors and others raise significant doubt about the Company’s ability to continue as a going concern. The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.
“In order to potentially find more efficient methods to explore and document historical shipwrecks, the Company has investigated various technologies and non-scientific methodologies. To the present date, none of these technologies have been proven to work with the exception of the SeaSearcher, which has been developed to scan historic shipwreck sites for both ferrous and nonferrous artifacts. …”see in full comparison
“This type of business venture is extremely speculative in nature and carries a tremendous amount of risk. An investment in the Company’s securities is highly speculative and very risky and should only be considered by those investors or lenders who do not require near-term liquidity and who can afford to suffer a complete and total loss of their investment.”see in full comparison
Full comparison: every changed paragraph (40)
The
following discussion contains certain forward-looking statements that are subject to business and economic risks and uncertainties, and
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-K of such words as “believes”, “plans”, “anticipates”,
“expects”,
“intends”, and similar expressions are intended to identify forward-looking statements, but are not
the exclusive means of
identifying such statements. The Company’sSeafarer’s actual results or actions may differ materially from these
forward-looking statements due to many factors and the success of the Company
is dependent on our efforts and many other factors
including, primarily, ourthe Company’s ability to raise additional capital. Such factors include,
among others, the following: ourthe Company’s 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 ourworking on projects; and other factors referenced in the Form 10-K. This Item should
be read in conjunction with the
consolidated financial statements, the related notes and with the understanding that the Company’sSeafarer’s actual
future results
may be materially different from what is currently expected or projected by the Company.
WeSeafarer
cautioncautions 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 ourthe Company’s 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 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 or due to certain economic and business factors, some of which may be beyond ourSeafarer’s control.
WeSeafarer
disclaimdisclaims 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 rescue archaeology and archaeologically-sensitive
exploration, recovery and conservation of historic shipwrecks and to eventually monetize the recovery of the shipwrecks without selling
the treasure by creating revenue through media and technology alternatives for different industry sectors. Once artifacts have been properly
conserved, they may be made available for scientific research and allowed to be displayed for the public. The Company’s secondary
business is to attempt to develop revenue streams to support its historic shipwreck exploration and recovery operations. Such revenue
streams will complement the technology developed by Seafarer or potentially be media related although no such revenue has materialized.
The
Company has received from the Florida Department of State a notice of lack of authority to permit or deny recovery activities on the
unidentified shipwreck on Juno Beach. The Florida Bureau of Archaeological Research (the “Bureau”), Division of Historical
Resources, Florida Department of State stated to Seafarer “The shipwreck is non-permittable pursuant to Rule 1A-31.0045(2), F.A.C.” The
Bureau cited an order dated November 14, 2017 where the United States District Court entered a Final Order of Court
Default and Final Judgement Granting Award for Admiralty in Rem. The District Court’s order ruled “Seafarer is hereby the
true, sole, and exclusive owner of the Defendant Shipwrecked Vessel and having exclusive right to conduct recovery operation on the Defendant
Shipwrecked Vessel and any items recovered therefrom.” Additional permitting will still be necessary with the Florida Department
of Environmental Protection and the U.S. Army Corps of Engineers. Applications have been made to both entities.
In
order to potentially find more efficient methods to explore and document historical shipwrecks, the Company has investigated various
technologies and non-scientific methodologies. To the present date, none of these technologies have been proven to work with the exception
of the SeaSearcher, which has been developed to scan historic shipwreck sites for both ferrous and nonferrous artifacts. The ongoing
developmental work and improvements to the SeaSearcher have been expensive and Management anticipates that the expenses for these development
costs will continue to be incurred for the foreseeable future. Advances in algorithms and artificial intelligence (AI) will continue
indefinitely while the present model can be currently used in the field. The Company will continue to experiment with unproven technologies
and will actively work with third parties, consultants and scientists to develop its own proprietary technology which has and will result
in considerable expenses, with the ultimate goal of saving time and money.
The
Company continues to review revenue producing opportunities including joint ventures and partnerships with other companies and potentially
governmental agencies. Blockchain has a strategic partnership to provide referrals to a blockchain software services provider and receive
referral fees when the referrals lead to closed business for the blockchain software services company. COVID-19, pricing issues, long
sales cycles, and various other reasons have considerably slowed Blockchain’s progress and it has not generated any revenues during
2023 or 2024.
There
is a possibility that the Company will be forced to cease its operations if it is not successful in eventually locating and recovering
valuable artifacts and treasure or can’t build a revenue stream to offset its expenses. 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 highly speculative and very risky.
This
type of business venture is highly speculative in nature and carries an excessive amount of risk. An investment in the Company’s
securities is very 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 the Company’s securities. It is impossible for the Company to assure that when and if
an active-trading market in its shares will be established, or whether any such market will be sustained or sufficiently liquid to enable
holders of shares of the Company’s common stock to liquidate their investment in our company.
Moreover,
in the past few years several major brokerage firms have indicated that they will not allow their clients to deposit stock certificates
of low priced stocks. Some securities clearing firms who used to clear low priced securities for multiple brokerage firms have shut down
or been acquired, resulting in fewer brokerage firms that are willing or able to accept lower priced securities for deposit. Unless an
investor has a large and well-established relationship with a brokerage firm, it may be extremely difficult and potentially expensive
to deposit lower priced securities. An investor should consider consulting with professional financial advisers before making an investment
in our securities. The Company is a current and fully reporting company and has been for almost 14 years.
OtherGeneral
Information
There
are very strict international, federal and state laws that govern the exploration and recovery of historic shipwrecks. While the Company
has been able to obtain some permits, there is no guarantee that the Company will be able to secure future permits or enter into agreements
with government agencies in order to explore and salvage historic shipwrecks. Seafarer believes they are the only company to be issued
a full recovery permit by FBAR since 1986, other than one entity with an Admiralty Claim. This demonstrates the difficulty of obtaining
a recovery permit from FBAR. There is a risk that government entities may enact legislation that is so strict that any recovery of artifacts
and cargo from historic shipwrecks will be nearly impossible. Additionally, permits and agreements with governmental agencies to conduct
historic shipwreck exploration and recovery operations are expensive, in terms of both direct costs and ongoing compliance costs. It
is also possible that the Company will not be successful in obtaining title or permission to excavate certain wrecks, even if the law
allows it. It is possible that permits that are sought for potential future international projects may never be issued, and if issued,
may not be legal or honored by the entities that issued them. For the above reasons, the Company has extended its research into shipwrecks
outside of State waters.
It
is possible that permits that are sought for potential future international projects may never be issued, and if issued, may not be legal
or honored by the entities that issued them. Governmental agencies may require various types of permits to explore shipwreck sites, and
the permitting process is often lengthy and complex. 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. Some governmental agencies may refuse to issue permits to the Company for recovery of artifacts or intentionally delay
the permitting process, or go beyond their authority and request halting of ground disturbance.
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, work halts based on biased predispositions with no authority
given by rule 1A-31, etc. Existing permits and agreements may be put on hold or suspended without notice for lengthy periods of time
due to administrative issues and disagreements over the terms and conditions. The length of time it takes to obtain permits, enter into
agreements, or rectify any conditions that are causing a permit to be suspended or on hold has caused the Company to expend significant
resources while gearing up to do work with little or no visibility as to timing.
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 had discussions with media entities to
further understand the potential advantages offered. Management believes various forms of media can represent a potential future revenue
opportunity for the Company, if the right circumstances arise.
This
type of business venture is extremely speculative in nature and carries a tremendous amount of risk. An investment in the Company’s
securities is highly speculative and very risky and should only be considered by those investors or lenders who do not require near-term
liquidity and who can afford to suffer a complete and total loss of their investment.
Seafarer
has generated only minimal revenue from operations and dodoes not expect to report any significant revenue from operations for the foreseeable
future. The Company has incurred recurring losses to date. These factors and others raise significant doubt about the Company’s
ability to continue as a going concern. The Company’s consolidated financial statements have been prepared assuming
that it will
continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization
of assets and
classification of liabilities that might be necessary should the Company be unable to continue in operation.
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 Marchthe filing
31,date 2025.of this report.
At December 31, 2024 and 2023, the Company had working
capital deficits of $3,002,457 and $1,789,848, respectively. Such working capital deficit may indicate that there is substantial risk
to the continued viability of the Company and that there is a high degree of risk that the Company could become insolvent due to this
significant working capital deficit and the lack of meaningful cash flow from its operations. Additionally, the Company’s total
liabilities at December 31, 2024 and 2023 were $3,100,595 and $2,542,732, respectively. The increase in total debt is largely attributable
to increases in notes payable and convertible notes payable. The Company does not currently generate the cash flow required to service
this debt. Unless the Company is able to generate cash flows from operations then some, or all, of the debt that is not already in default
will likely become in default. 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.
This type of business venture is extremely speculative in nature and carries a tremendous amount of risk. An investment in the Company’s securities is highly speculative and very risky and should only be considered by those investors or lenders who do not require near-term liquidity and who can afford to suffer a total loss of their investment.
At December 31, 2025 and 2024, the Company had working capital deficits of $3,573,544 and $3,002,457, respectively. Such working capital deficit may indicate that there is substantial risk to the continued viability of the Company and that there is a high degree of risk that the Company could become insolvent due to this significant working capital deficit and the lack of cash flow from its operations. Additionally, the Company’s total liabilities at December 31, 2025 and 2024 were $3,703,260 and $3,100,595, respectively. The increase in total debt is largely attributable to increases in notes payable and convertible notes payable. The Company does not currently generate the cash flow required to service this debt. Unless the Company is able to generate cash flows from operations then some, or all, of the debt that is not already in default will likely become in default. 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.
The
Company’s core business involving the exploration and recovery of historic shipwrecks has not generated any revenues to date and
is not expected to generate any significant revenues for the foreseeable future. During the years ended December 31, 20242025 and 2023,2024, the
Company generated $16,303$0 and $19,235$16,303 inof revenue respectively, a decrease of 15%, which is shown as service income on the accompanying
consolidated statements
of operations.
Operating expenses were $2,552,126 for the year ended December 31, 2025 versus $3,356,551 for the year ended December 31, 2024, a decrease of $804,425 or approximately 24%. The decrease in operating expenses in 2025 was primarily due to a $582,142 decrease in consulting and contractor expenses, $135,530 decrease in vessel maintenance and dockage expense, $113,099 decrease in general and administrative expenses, and a $68,442 decrease in travel and entertainment expenses. Operating expenses decreased primarily due to lack of financing.
Operating expenses were $3,356,551 for the year ended
December 31, 2024 versus $3,070,726 for the year ended December 31, 2023, an increase of $285,825 or approximately 9%. Although the growth
in the rate of inflation has moderated somewhat in 2024, the elevated price environment has continued to pressure costs relating to many
of the Company’s expenses. The increase in operating expenses in 2024 was primarily due to a $165,006 increase in research and
development expenses, a $101,126 increase in general and administrative expenses, an increase in professional fees of $66,971, and a
$63,007 increase in travel and entertainment expenses. These expense increases offset a $123,900 decrease in vessel maintenance and dockage
expenses in 2024. The Company is actively reviewing expenses in an effort to identify opportunities to ameliorate rising costs due to
inflationary pressures.
Other income (
expense) was $(556,471) during the year
ended December 31, 2024 versus $(129,155)$190,373 during the year ended December 31, 2023.2025 versus $556,471 during the year ended December 31, 2024. The 331%approximately
66% increasedecrease in other expense in 20242025 was primarily
due to a $263,727$216,300 increasedecrease in interest expenses and a $172,109$158,318 increasedecrease in loss on
extinguishment of debt. There was less interest expense in 2025 and a smaller loss on extinguishment of debt. Interest expense increased
in 2024 due to the amortization of debt discounts and increase in convertible notes payable and notes payable. The increase in the loss
on extinguishment of debt in 2024 was due to the conversion of the principal balance and accrued interest on convertible notes payable.
The
Company’s net loss for the years ended December 31, 20242025 and 20232024 was $3,896,719,$2,742,499, and $3,180,646,$3,896,719, respectfully,respectively, a year-over-year
increasedecrease of approximately 23%.30%. Net losses increaseddecreased in 20242025 due to increasesdecreases in operating expenses and other expenses.
For the year ended December 31, 2025 net cash flows used in operating activities was $2,015,223.
For
the year ended December 31, 2023 net cash flows used in operating activities was $2,313,688.
Cash
flows used in operating activities increased
decreased in 2024 due to the2025 primarily due to the increasedecreases in the Company’s net losses from operations, increase in loss on extinguishment
of debt, and increase in accounts payable and accrued expenses
which offset decreases in common stock issued for services and depreciation.loss on extinguishment of debt.
For
the year ended December 31, 2024 net cash flows used in investing activities was $(58,406).
For the year ended December 31, 2024 net cash flows used in investing activities was $58,406.
CashNo
flowscash was used in investing activities increasedin due to the purchase of equipment for the Company’s operations.2025.
For the year ended December 31, 2025 net cash provided by financing activities was $2,041,996.
For
the year ended December 31, 2023 net cash provided by financing activities was $2,742,546.
Cash
flows provided by financing activities decreased in 20242025 primarily due to a decrease in the proceeds from the issuance of commonnotes payable and
stock.proceeds from the issuance of convertible notes payable.
The
Company has experienced a net loss in every fiscal year since inception. The Company’s losses from operations were $3,340,248 for
the year ended December 31, 2024 and $3,051,491 for the year ended December 31, 2023. The Company believes that it will continue to generate
losses from its operations for the foreseeable future and the Company may not be able to generate positive cash flow or a profit in the
long-term, or ever.
What changed in the latest 10-Q
Risk Factors
Not required for smaller reporting companies.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “FORWARD LOOKING STATEMENTS”
New heading “Summary of the Three Month Period Ended June 30, 2026 Results of Operations Compared to the Three Month Period Ended June 30, 2025 Results of Operations”
New heading “Operating Expenses”
New heading “Other Expenses, Net”
Removed heading “Results of Operations”
Largest changes
“At March 31, 2026 and 2025, the Company had working capital deficits of $3,327,699 and $3,055,436, respectively. Such working capital deficit may indicate that there is substantial risk to the continued viability of the Company and that there is a high degree of risk that the Company could become insolvent due to this significant working capital deficit and the lack of cash flow from its operations. The Company does not currently generate the cash flow required to service this debt. …”see in full comparison
“Summary of the Three Month Period Ended June 30, 2026 Results of Operations Compared to the Three Month Period Ended June 30, 2025 Results of Operations”see in full comparison
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, 2025 and 2024 raises substantial doubt as to our ability to continue as a going concern. As discussed in Note 2 to our unaudited condensed consolidated financial statements for thesee in full comparisonyearssix month period endedDecemberJune31,30,2025 and 2024,2026, we have experienced operating losses in every year since our inception resulting in an accumulated deficit.Our independent auditors believe, based on our financial results as of March 31, 2026, that such results raised substantial doubts about the Company’s ability to continue as a going concern.If the Company is not able to continue as a going concern, it is highly likely that all capital invested in the Company or borrowed by the Company will be lost.
Full comparison: every changed paragraph (38)
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 annualquarterly 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. Seafarer’s actual results or actions may differ materially from these forward-looking statements and
is dependent on many other factors including, primarily, the Company’s ability to raise additional capital. Such factors include,
among others, the following: the Company’s ability to continue as a going concern, general economic and business conditions; competition;
success of operating initiatives; ability to raise capital and the terms thereof; changes in business strategy or development plans;
future revenues; the continuity, experience and quality of management; changes in or failure to comply with government regulations or
the lack of government authorization to continue working on projects; and other factors referenced in the Form 10-K.10-Q. This Item should
be read in conjunction with the financial statements, the related notes and with the understanding that Seafarer’s actual
future results may be materially different from what is currently expected or projected by the Company.
Results
of Operations
At
March 31, 2026 and 2025, the Company had working capital deficits of $3,327,699 and $3,055,436, respectively. Such working capital deficit
may indicate that there is substantial risk to the continued viability of the Company and that there is a high degree of risk that the
Company could become insolvent due to this significant working capital deficit and the lack of cash flow from its operations. The Company
does not currently generate the cash flow required to service this debt. Unless the Company is able to generate cash flows from operations
then some, or all, of the debt that is not already in default will likely become in default. 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.
Summary
of the ThreeSix Month Period Ended MarchJune 31,30, 2026 Results of Operations Compared to the ThreeSix Month Period Ended MarchJune 31,30, 2025 Results
of Operations
The
Company’s core business involving the exploration and recovery of historic shipwrecks has not generated any revenues to date and
is not expected to generate any significant revenues for the foreseeable future. During the threesix month periods ended MarchJune 31,30, 2026 and
and 2025, the Company didgenerated not$0 generateof anyrevenue revenue.respectively, which is shown as service income on the accompanying unaudited condensed consolidated
statements of operations.
Operating expenses were $1,145,948 for the six month period ended June 30, 2026 versus $1,259,895 for the six month period ended June 30, 2025, a decrease of 9%. The decrease in operating expenses in 2026 was primarily due to $120,000 or a 42% decrease in research and development expenses. Once the Company is able to obtain adequate financing it believes that it will continue to expend significant resources to further develop the SeaSearcher and to further develop technological advances and upgrades into the existing SeaSearcher platform including next generation versions of the technology and complimentary technologies including the hand held metal discriminator
Operating
expenses were $625,152 for the period ended March 31, 2026 versus $655,691 for the period ended March 31, 2025, a decrease of $30,539
or approximately 5%. The decrease in operating expenses in 2026 was primarily due to a $70,948 decrease in research and development,
a $17,265 decrease in professional fees, and a $10,757 decrease in vessel maintenance and dockage expense. These decreases offset a $63,718
increase in consulting and contractor expenses.
Other
ExpensesExpenses, Net
Other
expense,expenses, net were $269,018$145,682 during the threesix month period ended MarchJune 31,30, 2026 versus $75,710$115,662 during the threesix month period ended June 30,
March 31, 2025, an increase of $193,308$30,020 or 255%.26%. The increase in other expenseexpenses in 2026 was primarily due to the company settling a $201,908debt increaseagreement
that resulted in
a $234,245 loss on extinguishment of debt.debt which was partially offset by a $105,000 gain on extinguishment of debt on
another agreement.
The
Company’s net loss for the threesix months ended MarchJune 31,30, 2026 and 2025 was $894,170,$1,291,630 and $731,401,$1,375,557, respectively, a year-over-year
increasedecrease of $83,927 or approximately 22%.6%. Net losses increaseddecreased in 2026 due to decreases in operating expenses which offset an increase
in other expenses.
Summary of the Three Month Period Ended June 30, 2026 Results of Operations Compared to the Three Month Period Ended June 30, 2025 Results of Operations
Revenue
The Company’s core business involving the exploration and recovery of historic shipwrecks has not generated any revenues to date and is not expected to generate any significant revenues for the foreseeable future. During the three month periods ended June 30, 2026 and 2025, the Company generated $0 of revenue respectively, which is shown as service income on the accompanying unaudited condensed consolidated statements of operations.
Operating Expenses
Operating expenses were $520,796 for the three month period ended June 30, 2026 versus $604,204 for the three month period ended June 30, 2025, a decrease of $83,408 or 14%. The decrease in operating expenses in 2026 was primarily due to a $44,836 or 15% decrease in consulting and contractor expenses, a $49,818 or 37% decrease in research and development expenses, a $8,738 or 33% decrease in professional fees, and a $2,453 or 3% decrease in general and administrative expenses. The Company believes that it will continue to expend significant resources to further develop the SeaSearcher and to begin developing next generation versions of the technology and research and development expenses are expected to fluctuate for the foreseeable future based on the adoption of technological advances and upgrades into the existing SeaSearcher platform and the availability of financing. Operating expenses decreased due to a lack of financing and strong currents at the Juno Beach shipwreck site that hampered operations.
Other Expenses, Net
Other expense, net was income of $123,336 during the three month period ended June 30, 2026 versus expense of $39,952 during the three month period ended June 30, 2025, a decrease of $163,288 or 409%. The decrease in other expenses in 2026 was primarily due to the company settling a debt agreement that resulted in a $234,245 loss on extinguishment of debt during the previous three month period which was partially offset by a $105,000 gain on extinguishment of debt on another agreement.
Net Losses
The Company’s net loss for the three months ended June 30, 2026 and 2025 was $397,460, and $644,156, respectively, a year-over-year decrease of $246,696 or approximately 38%. Net losses decreased in 2026 due to decreases in operating expenses and other expenses.
For
the threesix month period ended MarchJune 31,30, 2026 net cash flows used in operating activities was $662,774.$1,026,619.
For
the threesix month period ended MarchJune 31,30, 2025 net cash flows used in operating activities was $593,162.$1,084,831.
Cash
flows used in operating activities increaseddecreased in 2026 mainly due to ana increasedecrease in the Company’s net losses.
For
the threesix month period ended MarchJune 31,30, 2026 net cash
flows usedprovided inby investing activities was $0.$52,450.
For
the threesix month period ended MarchJune 31,30, 2025 net cash
flows used in investing activities was $0.
The Company received an insurance settlement of $52,450 for one of its vessels that was damaged which increased net cash flows provided by investing activities in 2026.
For
the threesix month period ended MarchJune 31,30, 2026 net cash provided by financing activities was $642,521.$948,967 For
the six month period ended June 30, 2025 net cash provided by financing activities was $1,064,372.
For
the three month period ended March 31, 2025 net cash provided by financing activities was $593,143.
Cash
flows provided by financing activities increaseddecreased in 2026 primarily due to an increasedecreases in the proceeds from the issuance of common stock.stock
which offset an increase in proceeds convertible notes payable.
At
March 31,June 30, 2026, the Company had $30,216$25,267 cash in
the bank. During the threesix month periods ended MarchJune 31,30, 2026 and 2025, the Company incurred
net losses of $894,170$1,291,630 and $731,401$1,375,557 respectively.
At MarchJune 31,30, 2026, the Company had $37,324$27,620 in current assets and $3,365,023$3,481,346 in current
liabilities, leaving the Company a working capital
deficit of $3,327,699.$3,453,726.
A
major financial challenge and significant risk facing
the Company is a lack of positive cash flow and liquidity. The Company continued
to operate with significant debt and a working capital
deficit of $3,453,726, during the threesix month period ended MarchJune 31,30, 2026, and the year ended December 31, 2025.2026. This working
capital deficit indicates
that the Company is unable to meet its short-term liabilities with its current assets. This
working capital deficit is
extremely risky for the Company as it may be forced to cease its operations due to its inability to meet its
current obligations. If the
Company is forced to cease its operations, then it is highly likely that all capital invested in and/or borrowed
by the Company will be
lost.
In addition to the operation 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, professional fees, 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.
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, 2025 and 2024 raises substantial doubt as to our ability to continue as a going concern. As discussed in Note 2 to
our unaudited condensed consolidated financial statements for the yearssix month period ended DecemberJune 31,30, 2025 and 2024,2026, we have experienced operating
losses in every year
since our inception resulting in an accumulated deficit. Our independent auditors believe, based on our financial results as of March
31, 2026, that such results raised substantial doubts about the Company’s ability to continue as a going concern. If the Company
is not able to continue as a going concern,
it is highly likely that all capital invested in the Company or borrowed by the Company will
be lost.
The Company has experienced a net loss in every fiscal year since inception. The Company’s losses from operations were $1,291,630 for the six month period ended June 30, 2026 and $1,375,557 for the six month period ended June 30, 2025. The Company believes that it will continue to generate losses from its operations for the foreseeable future and the Company may not be able to generate a profit in the long-term, or ever.
Our
discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated 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 unaudited condensed consolidated financial statements for the threesix month periods
ended March 31,June
30, 2026 and 2025 contained in this filing). On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience
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.
The Company agreed to pay a lender treasure and artifacts of the lender’s choice selected from the treasure and artifacts located and recovered by the Company from any of its historic shipwreck sites, with such treasure and artifacts having a minimum value of $3,200,000 provided that Seafarer recovers treasure with a minimum value of $6,400,000.
The Company previously agreed to pay an investor $500,000 of treasure of the investor’s choice after both the Company has recovered a minimum of $1,200,000 worth of artifacts and the State of Florida has received its full share of treasure per any permits or agreements.
None.
SFRX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-24 | Soeder Thomas B |
Other | 20,000,000 | — | — |
| 2026-08-24 | Kennedy Robert L. |
Other | 20,000,000 | — | — |
| 2026-08-24 | Clark Bradford S |
Other | 20,000,000 | — | — |
| 2026-08-24 | Branscum Charles |
Other | 20,000,000 | — | — |
Well-known investors holding SFRX (13F)
None of the 59 investors we track reported a position in their latest 13F.