o
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
x
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
Delaware
|
73-1556428
|
(State
or other jurisdiction of incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
Large
accelerated filer
|
Accelerated
filer
|
Non-accelerated
filer
|
Smaller
reporting companyx
|
|||
(Do
not check if a smaller reporting company)
|
Page
|
||
PART I
|
||
ITEM 1.
|
BUSINESS
|
5
|
ITEM 1A.
|
RISK
FACTORS
|
6
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ITEM 1B. | UNRESOLVED STAFF COMMENTS | 7 |
ITEM 2.
|
PROPERTIES
|
7
|
ITEM 3.
|
LEGAL
PROCEEDINGS
|
7
|
ITEM 4.
|
SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS
|
7
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PART II
|
||
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
|
8
|
ITEM 6. | SELECTED FINANCIAL DATA | 9 |
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
9
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ITEM 7A. | QUANITIATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 13 |
ITEM 8.
|
FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
|
14
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ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
|
29
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ITEM 9A.
|
CONTROLS AND
PROCEDURES
|
29
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ITEM 9B.
|
OTHER
INFORMATION
|
31
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PART
III
|
||
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE
|
32
|
ITEM 11.
|
EXECUTIVE
COMPENSATION
|
33
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS
MATTERS
|
34
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
|
35
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND
SERVICES
|
35
|
PART IV
|
||
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENTS
SCHEDULES
|
36
|
SIGNATURES
|
37
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Quarter
Ended
|
High
Price
|
Low
Price
|
March
31, 2007
|
0.12
|
0.06
|
June
30, 2007
|
0.13
|
0.03
|
September,
2007
|
0.20
|
0.05
|
December,
2007
|
0.128
|
0.045
|
March
31, 2008
|
0.114
|
0.05
|
June
30, 2008
|
0.157
|
0.075
|
September
30, 2008
|
0.125
|
0.015
|
December
31, 2008
|
0.04
|
0.011
|
March
31, 2009
|
0.045
|
0.015
|
Name
of Purchaser
|
Number
of Shares of Common Stock
|
Price
|
Relationship
|
||||||
Pelle
Ojasu (1)
|
12,000,0000
|
$
|
240,000
|
Board
Member
|
|||||
David
Fiedler (2)
|
1,000,000
|
$
|
15,000
|
Shareholder
|
|||||
Howard
Rubin (3)
|
1,000,000
|
$
|
15,000
|
Shareholder
|
|||||
Jordan
Erber (4)
|
300,000
|
$
|
4,500
|
Shareholder
|
1.
|
Mr.
Ojasu provided services in payment for these shares issued to
him.
|
2.
|
Mr.
Fiedler provided cash in payment for these shares issued to
him.
|
3.
|
Mr.
Rubin provided cash in payment for these shares issued to
him.
|
4.
|
Mr.
Erber provided cash in payment for these shares issued to
him.
|
|
·
|
To
date the Company has devoted its time towards establishing its business in
the exploration and salvage of artifacts and cargo from a shipwreck
located off of Juno Beach,
Florida.
|
|
·
|
Although
the Company has not generated revenues to date our development activities
continue to evolve. We have been a development stage company since
inception, in accordance with Statement of Financial Accounting Standards
No. 7.
|
|
·
|
The
Company completed the acquisition of Seafarer, and as a result we are no
longer a shell company as defined in Rule 144(i) under the Securities Act
of 1933. As discussed in Note 1 to our consolidated financial
statements, the acquisition of Seafarer was characterized as a
reverse-acquisition. Accordingly, the results of operations discussed in
this Item 7, relate to the consolidated financial assets and liabilities
and operations of Seafarer, Inc., as if it had been Organetix during the
periods being discussed.
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Consolidated
Balance Sheets
|
F-2
|
Consolidated
Statements of Operations
|
F-3
|
Consolidated
Statements of Stockholders’ Equity
|
F-4
|
Consolidated
Statements of Cash Flows
|
F-5
|
Note
of Consolidated Financial Statements
|
F-6
|
|
|||||||
December
31,
2008
|
April
30,
2008
|
||||||
ASSETS
|
|||||||
Current
|
|||||||
Cash
|
$
|
474
|
$
|
108,280
|
|||
Notes
receivable
|
180,521
|
75,000
|
|||||
Deposits
|
21,284
|
--
|
|||||
Total
Current Assets
|
202,279
|
183,280
|
|||||
Fixed
assets, net of accumulated depreciation of $37,917 and
$16,250
|
287,085
|
308,750
|
|||||
Total
Assets
|
$
|
489,364
|
$
|
492,030
|
|||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|||||||
Current
|
|||||||
Accounts
payable and accrued liabilities
|
$
|
147,415
|
$
|
895
|
|||
Due
to Organetix, Inc.
|
--
|
91,500
|
|||||
Convertible
notes payable, in default
|
90,000
|
64,000
|
|||||
Convertible
notes payable - related parties, in default
|
15,000
|
--
|
|||||
Notes
Payable – related parties, in default
|
56,500
|
--
|
|||||
Due
to shareholder
|
100
|
100
|
|||||
Total
Current Liabilities
|
309,015
|
156,495
|
|||||
Total
Liabilities
|
309,015
|
156,495
|
|||||
Mezzanine
equity - common stock, 3,966,668 shares par value $0.0001
|
64,500
|
--
|
|||||
Commitments
and contingencies
|
--
|
--
|
|||||
Stockholders'
Equity
|
|||||||
Preferred
Stock, Authorized 50,000,000 shares; par value $0.0001, None issued and
outstanding
|
--
|
-
|
|||||
Common
stock
|
|||||||
Authorized:
|
|||||||
500,000,000
common shares, par value $0.0001 per share
|
|||||||
Issued
and outstanding:
|
|||||||
276,609,557
common shares (April 30, 2008 – 17,533,333,000)
|
27,661
|
1,753
|
|||||
Additional
paid-in capital
|
1,346,640
|
621,440
|
|||||
Deficit
accumulated during the development stage
|
(1,258,452
|
)
|
(287,658
|
)
|
|||
Total
Stockholders’ Equity
|
115,849
|
335,535
|
|||||
Total
Liabilities & Stockholders’ Equity
|
$
|
489,364
|
$
|
492,030
|
|||
|
Eight
Months Ended
December
31,2008
|
Year
Months ended April 30, 2008
|
February
15,
2007
(Inception)
to
December 31,2008
|
|||||||||
REVENUES
|
$ | -- | $ | -- | $ | -- | ||||||
EXPENSES
|
||||||||||||
Consulting
& contractor expenses
|
615,887 | 157,594 | 776,482 | |||||||||
Vessel
expenses
|
83,439 | 46,836 | 130,276 | |||||||||
Professional
fees
|
97,689 | 27,577 | 127,266 | |||||||||
Travel
& entertainment
|
74,048 | 28,062 | 102,110 | |||||||||
General
and administrative expenses
|
53,110 | 6,879 | 60,284 | |||||||||
Rent
expense
|
21,800 | 425 | 22,225 | |||||||||
Depreciation
|
21,665 | 16,250 | 37,915 | |||||||||
Other
operating expenses
|
3,006 | 2 | 3,005 | |||||||||
Total
Expenses
|
970,644 | 283,625 | 1,259,563 | |||||||||
Loss
from Operations
|
(970,644 | ) | (283,625 | ) | (1,259,563 | ) | ||||||
OTHER
(EXPENSE) INCOME
|
||||||||||||
Interest
expense
|
(5,690 | ) | (1,150 | ) | (6,840 | ) | ||||||
Interest
income
|
5,540 | 2,411 | 7,951 | |||||||||
Total
Other (Expense) Income
|
(150 | ) | 1,261 | 1,111 | ||||||||
NET
LOSS
|
$ | (970,794 | ) | $ | (282,364 | ) | $ | (1,258,452 | ) | |||
NET
LOSS PER SHARE - BASIC AND DILUTED
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND
DILUTED
|
262,970,299 | 174,643,542 | ||||||||||
8
months ended December 31,2008
|
Year
ended April 30, 2008
|
February
15, 2007 (Inception) to December 31,2008
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
loss
|
$ | (970,794 | ) | $ | (282,364 | ) | $ | (1,258,452 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Stock
issued for services
|
323,333 | -- | 323,333 | |||||||||
Depreciation
|
21,665 | 16,250 | 37,915 | |||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
DeDeposits
|
(21,284 | ) | -- | (21,284 | ) | |||||||
Accounts
payable and accrued liabilities
|
146,520 | (1,105 | ) | 238,915 | ||||||||
Due
to Organetix, Inc.
|
-- | 91,500 | ||||||||||
Net
cash used in operating activities
|
(500,560 | ) | (175,719 | ) | (679,573 | ) ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Notes
receivable
|
(105,521 | ) | (75,000 | ) | (180,521 | ) | ||||||
Acquisition
of equipment
|
-- | (325,000 | ) | (325,000 | ) | |||||||
Net
cash used in investing activities
|
(105,521 | ) | (400,000 | ) | (505,521 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Issuance
of convertible notes
|
60,000 | 64,000 | 124,000 | |||||||||
Issuance
of notes
|
56,500 | -- | 56,500 | |||||||||
Issuance
of common shares
|
381,775 | 618,100 | 1,005,068 | |||||||||
Net
cash provided by financing activities
|
498275 | 682,100 | 1,166,568 | |||||||||
INCREASE
(DECREASE) IN CASH
|
(107,806 | ) | 106,381 | 474 | ||||||||
CASH,
BEGINNING
|
108,280 | 1,899 | -- | |||||||||
CASH,
ENDING
|
$ | 474 | $ | 108,280 | $ | 474 | ||||||
NONCASH
OPERATING AND FINANCING ACTIVITIES:
|
||||||||||||
Due
to Organetix, Inc. reclassified to additional paid-in
capital
|
$ | 91,500 | $ | - | $ | 91,500 | ||||||
Convertible
debt converted to common stock
|
$ | 19,000 | $ | - | $ | 19,000 | ||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
Cash
paid for:
|
||||||||||||
Interest
|
$ | 3,660 | $ | - | $ | 3,660 | ||||||
Income
taxes
|
$ | - | $ | - | $ | - | ||||||
Common
Stock shares
|
Common
Stock value
|
Additional
Paid-in Capital
|
Deficit
Accumulated During the Development Stage
|
Total
|
||||||||||||||||
Balance,
February -15, 2007 (Inception)
|
— | $ | — | $ | — | $ | — | $ | — | |||||||||||
Common
stock issued for cash – February 20, 2007
|
5,000,000 | 500 | 4,693 | — | 5,193 | |||||||||||||||
Net
loss for the period from inception to April 30, 2007
|
— | — | — | (5,294 | ) | (5,294 | ) | |||||||||||||
Balance April 30,
2007
|
5,000,000 | 500 | 4,693 | (5,294 | ) | (101 | ) | |||||||||||||
Common
stock issued for cash – June 15, 2007
|
5,000,000 | 500 | 4,500 | — | 5,000 | |||||||||||||||
Common
stock issued for subscription agreements – various dates
|
7,533,333 | 753 | 612,247 | — | 613,000 | |||||||||||||||
Net
loss
|
(282,364 | ) | (282,364 | ) | ||||||||||||||||
Balance
April 30, 2008
|
17,533,333 | 1,753 | 621,440 | (287,658 | ) | 335,535 | ||||||||||||||
Recapitalization
at reverse merger – June 4, 2008
|
233,522,002 | 23,352 | 68,148 | 91,500 | ||||||||||||||||
Common
stock issued for services – May 21, 2008
|
5,783,332 | 578 | 82,755 | — | 83,333 | |||||||||||||||
Common
stock issued for services – October 23, 2008
|
12,000,000 | 1,200 | 238,800 | — | 240,000 | |||||||||||||||
Common
stock issued on conversion of promissory note – November 1,
2008
|
1,344,972 | 134 | 18,866 | — | 19,000 | |||||||||||||||
Common
stock issued for subscription agreements – various dates
|
6,425,918 | 644 | 356,131 | — | 356,775 | |||||||||||||||
Reclassification
to mezzanine equity
|
— | — | (64,500 | ) | — | (64,500 | ) | |||||||||||||
Funds
received no shares issued – December 3, 2008
|
— | — | 25,000 | — | 25,000 | |||||||||||||||
Net
loss
|
— | — | — | (970,794 | ) | (970,794 | ) | |||||||||||||
Balance,
December 31,2008
|
276,609,557 | $ | 27,661 | $ | 1,346,640 | $ | (1,258,452 | ) | $ | 115,849 | ||||||||||
December 31, 2008 | April 30, 2008 | |||||
Net
income available to common shareholders
|
$
|
(970,794)
|
$ |
(282,364)
|
||
Weighted
average shares outstanding:
|
||||||
Basic
and diluted
|
262,970,299
|
174,643,542
|
||||
Loss
per share:
|
||||||
Basic
and diluted
|
$
|
(0.00)
|
$ |
(0.00)
|
||
2008
|
2008
|
||||
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
|
|
||||
Effective
rate
|
0.00
|
% |
0.00
|
%
|
|
Name
|
Age
|
Position
|
Kyle
Kennedy
|
48
|
President,
Chief Executive Officer, Chairman of the Board
|
Christopher
Gilcher
|
38
|
Chief
Financial Officer
|
Pelle
Ojasu
|
39
|
Director
|
Mary
Pecoraro*
|
43
|
Corporate
Secretary
|
Name
and Principal Position
|
Year
End
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compen-sation
($)
|
Non-qualified
Deferred
Compen-sation Earnings
($)
|
All
Other Compen-sation
($)
|
Total
($)
|
||||||||||||||||||||||||||||||||
Kyle
Kennedy(1)
|
12/31/08
|
—
|
—
|
—
|
—
|
—
|
—
|
0
|
0
|
||||||||||||||||||||||||||||||||
04/30/08
|
—
|
—
|
—
|
—
|
—
|
—
|
25,000
|
25,000
|
|||||||||||||||||||||||||||||||||
Christopher
Gilcher(2)
|
12/31/08
|
37,000
|
2,000
|
—
|
—
|
—
|
—
|
0
|
39,000
|
||||||||||||||||||||||||||||||||
04/30/08
|
—
|
—
|
—
|
—
|
—
|
—
|
0
|
0
|
|||||||||||||||||||||||||||||||||
Pelle
Ojasu(3)
|
12/31/08
|
—
|
—
|
240,000
|
—
|
—
|
—
|
20,000
|
260,000
|
||||||||||||||||||||||||||||||||
04/30/08
|
—
|
—
|
—
|
—
|
—
|
—
|
0
|
0
|
|||||||||||||||||||||||||||||||||
Mary
Pecoraro(4)*
|
12/31/08
|
19,741
|
500
|
—
|
—
|
—
|
—
|
0
|
20,241
|
||||||||||||||||||||||||||||||||
04/30/08
|
—
|
—
|
—
|
—
|
—
|
—
|
0
|
0
|
(1)
|
Mr.
Kennedy does not receive a salary from the Company. The Company provided
Mr. Kennedy with a one-time payment of $25,000 during the twelve month
period ended April 30, 2008 for his efforts in the development and growth
of the Company since its inception. The Company provides Mr. Kennedy with
expense advances and Mr. Kennedy is reimbursed for expenses that he incurs
on behalf of the Company.
|
(2)
|
In
2008 the Company agreed to pay Mr. Gilcher a minimum of $5,000 per month
plus expenses to perform duties as the Company’s Chief Financial Officer
and Mr. Gilcher is reimbursed for expenses that he incurs on behalf of the
Company.
|
(3)
|
For
the period ending December 31, 2008 the Company paid Mr. Ojasu a payment
of $20,000 and 12,000,000 restricted shares of the Company’s common stock
for his efforts and involvement in the development and growth of the
Company since its inception.
|
(4)
|
In
2008 the Company verbally agreed to pay Ms. Pecoraro a fee of $3,800 per
month to perform duties as the Company’s Corporate Secretary as well as to
provide administrative, accounting and secretarial consulting
services.
|
Name and Address of Beneficial
Owner(1)
|
Shares
of Common Stock
Beneficially
Owned
|
Percentage
of Common Shares
Beneficially
Owned(2)
|
||||||
Kyle
Kennedy
|
37,035,000(3)
|
13.39%
|
||||||
Pelle Ojasu |
9,940,765(4)
|
3.59%
|
||||||
Christopher
Gilcher
|
0
|
0.00%
|
||||||
Mary
Pecoraro*
|
208,200
|
0.08%
|
||||||
All
directors and officers as a group (4 persons)
|
47,183,965
|
17.06%
|
||||||
Credo
Argentarius, LLC
|
34,700,000(3)
|
12.54%
|
||||||
*Subsequent
to December 31, 2008 Mary Pecoraro is no longer with the
Company.
|
||||||||
(1)
|
Unless
otherwise indicated, the address of each person listed below is c/o
Seafarer Exploration Corp.
|
|||||||
(2)
|
Percentages
are based on 276,609,557 shares of common stock outstanding at December
31, 2008.
|
(3)
|
For
the purposes of this table the share amounts being shown as beneficially
owned by Mr. Kennedy includes 34,700,000 shares legally owned by Credo
Argentarius, LLC (“Credo”) even though Mr. Kennedy’s wife legally owns
100% of Credo (Credo’s mailing address is 18829 Rue Loire, Lutz, FL
33558), 1,094,000
shares legally owned by Mr. Kennedy’s daughter, 694,000 shares legally
owned by Mr. Kennedy’s daughter, 347,000 shares legally owned by Mr.
Kennedy’s father, and 200,000 shares legally owned by Mr. Kennedy’s
daughter.
|
(4)
|
Consists
of 8,305,920 shares owned by Pelle Ojasu. For the purposes of this table
the share amounts being shown as beneficially owned by Mr. Ojasu also
includes 1,434,845 shares legally owned by Mr. Ojasu’s brother, and
200,000 shares legally owned by Mr. Ojasu’s daughter.
|
(2)
|
Plan
of acquisition, reorganization, arrangement, liquidation or
succession
|
||
2.1
|
Form
of Share Exchange Agreement dated June 4, 2008 by and among
Organetix, Inc., Seafarer Exploration, Inc. and each of the shareholders
of Seafarer Exploration incorporated by reference to Form 8-K filed with
the Commission on June 10, 2008.
|
||
(3)
|
Articles
of Incorporation and By-laws
|
||
3.1
|
Amended
and Restated Certificate of Incorporation of Organetix, Inc. incorporated
by reference to Organetix, Inc.’s Schedule 14C Definitive Information
Statement filed with the Commission on May 6, 2008.
|
||
3.2
|
Certificate
of Amendment to the Certificate of Incorporation to merge Seafarer
Exploration Corp., a wholly-owned subsidiary of the Company into the
Company with the Secretary of State of the State of
Delaware. Pursuant to the Certificate of Amendment, the
Company’s Articles of Incorporation were amended to change its name from
Organetix, Inc. to Seafarer Exploration Corp. dated July 17, 2008,
incorporated by reference to Form 8-K filed with the Commission on July
24, 2008.
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||
(10)
|
Material
Contracts
|
||
10.1
|
Agreement
by and between Tulco Resources, Ltd., and Seafarer Exploration, Inc. dated
February 2007, incorporated by reference to Form 8-K filed with the
Commission on June 10, 2008.
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||
10.2
|
Consulting
Agreement by and between Chris Davis and Organetix, Inc. dated June 23,
2008. Filed with this Form 10-K.
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||
10.3
|
Purchase
and Sale Agreement by and between Sinclair Educational Archaeological
Research Expeditions, Inc., Vanessa E. Friedman, James J. Sinclair and
Seafarer Exploration, Inc. ("Buyer") dated July 2, 2008, incorporated by
reference to Form 10-Q for the period ending September 30, 2008 filed with
the Commission on November 14, 2008.
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||
10.4
|
Agreement
Regarding Research and Recovery of Archaeological Material Between Florida
Division of Historical Resources and Tulco Resources, Ltd. and Seafarer
Exploration Corp. dated November 4, 2008. Filed with this Form
10-K.
|
||
10.5
|
Cancellation
Agreement by and between Sinclair Educational Archaeological Research
Expeditions, Inc., Vanessa E. Friedman, James J. Sinclair and Seafarer
Exploration, Inc. dated December 9, 2008. Filed with this Form
10-K.
|
||
10.6
|
Purchase
and Sale Agreement by and between Sinclair Educational Archaeological
Research Expeditions, and Seafarer Exploration, Inc. dated December 10,
2008. Filed with this 10-K.
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||
(31)
|
Section
302 Certification
|
||
(32)
|
Section
906
Certification
|
Seafarer
Exploration Corp.
|
||
Date:
May 8, 2009
|
By:
|
/s/
Kyle Kennedy
|
Kyle
Kennedy
President,
Chief Executive Officer, Chairman of the Board
|