10-Q/A: Seafarer Exploration Corp. Q1 2026 Filing Amendment

Seafarer Exploration Corp. files an amendment to its Q1 2026 Form 10-Q, primarily to include iXBRL data and correct minor typographical errors, with no changes to the reported financial information.

Summary

• This filing is an amendment (10-Q/A) to Seafarer Exploration Corp.'s Quarterly Report on Form 10-Q for the period ended March 31, 2026.
• The amendment's primary purpose is to furnish Inline eXtensible Business Reporting Language (iXBRL) data under Exhibits 101 and 104.
• A few immaterial typographical errors were also corrected.
• No other changes have been made to the original Form 10-Q, and the disclosures remain as of the original filing date.
• The company continues to face significant going concern issues, with a substantial working capital deficit and a high likelihood of needing to cease operations if further capital cannot be raised.
• Net loss for the three months ended March 31, 2026, was $894,170, an increase from $731,401 in the same period of 2025.
• Operating expenses decreased by approximately 5% to $625,152 in Q1 2026 from $655,691 in Q1 2025, mainly due to lower research and development costs.
• Other expenses increased significantly by 255% to $269,018 in Q1 2026, largely driven by a $201,908 increase in loss on extinguishment of debt.
• Cash used in operating activities increased to $662,774 in Q1 2026 from $593,162 in Q1 2025.
• Financing activities provided $642,521 in Q1 2026, an increase from $593,143 in Q1 2025, primarily due to higher proceeds from common stock issuance.
• The company has a substantial amount of convertible notes and other notes payable, many of which are in default.
• The company's CEO, Kyle Kennedy, has certified the accuracy of the report.
• The company has limited internal resources and personnel, leading to a conclusion that its internal controls over financial reporting are not effective.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to the company's precarious financial position, significant debt defaults, increasing net losses, and explicit statements about the risk of ceasing operations and the potential for total loss of invested capital.

Positives

• The company successfully negotiated the dismissal of a lawsuit with prejudice, agreeing to pay $22,500.
• Proceeds from financing activities increased in Q1 2026 compared to Q1 2025, indicating some ability to raise capital.
• Operating expenses decreased by approximately 5% in Q1 2026 compared to the prior year period.

Negatives

• The company has a substantial working capital deficit of $3,327,699 as of March 31, 2026.
• The company has incurred net losses since inception, with an accumulated deficit of $35,880,846 as of March 31, 2026.
• Net loss for Q1 2026 increased by 22% to $894,170 compared to Q1 2025.
• The company expects to expend its available cash in less than one month from the filing date.
• Numerous convertible notes and other notes payable are in default, posing a significant risk of lenders filing suit and potential foreclosure on assets.
• The company's internal controls over financial reporting are not effective due to limited resources and personnel.
• The company has a significant amount of debt, including convertible notes, which carry a high probability of dilutive effects on current shareholders.
• The company has not generated significant revenues and does not expect to do so in the foreseeable future.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to its accumulated deficit, working capital deficit, and reliance on external financing.
• Failure to raise adequate capital could force the company to curtail or cease operations, leading to a complete loss of invested capital.
• Lenders may file suit to foreclose on assets securing defaulted notes, potentially forcing the company to scale back or cease operations.
• Convertible notes, often issued at prices below market value, represent significant potential dilution to current shareholders.
• The company's business is highly speculative and carries a tremendous amount of risk.
• The company's lack of operating cash flow and reliance on stock sales and loans to fund operations is extremely risky.
• The sale of restricted securities, including those issued for services or to settle debt, is highly dilutive and may cause a significant decline in the market price of the company's securities.
• Regulatory agencies making it difficult for broker dealers to accept stock certificates from low-priced stock issuers could continue.
• The company may not be able to obtain additional financing on acceptable terms, or at all, which could lead to cessation of operations.
• The company's exploration and recovery activities are subject to risks associated with locating artifacts, permitting, and potential environmental or historical preservation challenges.
• Technical delays and high costs associated with developing proprietary technology like the SeaSearcher pose a risk.
• The company's business model is highly dependent on the successful discovery and recovery of valuable artifacts from shipwrecks, which is inherently uncertain.

Future Outlook

The company does not expect to generate any significant revenues for the foreseeable future and anticipates continuing to incur significant operating losses and negative cash flow from operations. Management plans to raise capital through equity and debt issuances to fund operations. The ability to raise sufficient capital and generate adequate revenues is uncertain and failure to do so could result in the cessation of operations.

Management Comments

• "Based on its historical rate of expenditures, the Company expects to expend its available cash in less than one month from the filing date of this report."
• "Managements plans include raising capital through the issuance of common stock and debt to fund operations and, eventually, the generation of revenue through its business."
• "Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations."
• "The Company does not have additional sources of debt financing to refinance its convertible notes payable and notes payable that are currently in default."
• "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 lenders option. These convertible notes represent significant potential dilution to the Companys current shareholders..."
• "Management is aware that certain changes in accounting estimates employed in generating financial statements can have the effect of making the Company look more or less profitable than it actually is. Management does not believe that the Company has made any such changes in accounting estimates."
• "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 Companys limited internal resources and lack of ability to have multiple levels of transaction review."
• "Management concluded that our internal control over financial reporting was not effective so as to timely record, process, summarize and report financial information required to be included on our Securities and Exchange Commission (SEC) reports due to the Companys limited internal resources and lack of ability to have multiple levels of transaction review."
• "The Company has an insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls."
• "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."

Industry Context

StockSavvy.ai notes that Seafarer Exploration Corp.'s filing highlights the extreme challenges faced by early-stage companies in highly capital-intensive and speculative industries like deep-sea exploration. The company's ongoing struggle with liquidity, debt defaults, and the need for continuous capital raises are common themes for firms attempting to commercialize complex, long-term projects with uncertain revenue streams.

Corporate Governance

Legal Proceedings

• A lawsuit filed by Diane McConnell alleging breach of contract and negligence regarding a residential property lease was successfully negotiated to be dismissed with prejudice for $22,500, with each party responsible for their own attorney fees. The case is closed.

Related Party Transactions

• The company paid $0 in consulting fees to a related party for general business consulting services in Q1 2026, compared to $12,000 in Q1 2025. A balance of $2,500 was owed at March 31, 2026.
• The company paid $6,200 in fees to a related party LLC for stock transfer agency services in Q1 2026, compared to $3,386 in Q1 2025. A balance of $13,868 was owed at March 31, 2026.
• Several convertible notes payable and notes payable are held by related parties, some of which are in default.

Stakeholder Impact

• Shareholders face significant dilution risk from the conversion of convertible notes and the issuance of new shares for capital raises and services.
• Investors face a high risk of total capital loss due to the company's going concern issues and potential cessation of operations.
• Creditors and lenders face a high risk of non-payment on defaulted notes, with potential foreclosure on company assets.
• Employees may face job insecurity if the company is forced to cease operations.

Next Steps

• Continue to pursue joint ventures and other revenue-producing opportunities.
• Continue to explore new technologies to aid in exploration and recovery operations.
• Management intends to have discussions with promissory note holders regarding converting their notes into equity.
• Management intends to take practical, cost-effective steps to implement internal controls upon obtaining sufficient capital and operations.

Key Dates

Recommendation

The company's severe liquidity crisis, substantial debt defaults, increasing net losses, and explicit statements about the high probability of ceasing operations and total capital loss for investors make this a highly speculative and risky investment. The ongoing dilution from convertible notes and capital raises further erodes shareholder value. A seasoned investor would likely avoid this situation or exit existing positions due to the extreme downside risk.

Keywords

Seafarer Exploration Corp, SEC Filing, 10-Q/A, Quarterly Report, Financial Statements, Going Concern, Debt Default, Convertible Notes, Capital Raise, Shipwreck Exploration, Archaeology, Florida, Kyle Kennedy, Disclosure Controls, Internal Controls