Seafarer Exploration Corp., a Florida Corporation, was incorporated on May 28,
2003. The Company formerly operated under the name Organetix, Inc. (“Organetix”).
The Companys principal business plan is to develop the infrastructure to engage
in the archaeologically-sensitive exploration and recovery of historic shipwrecks.
The exploration and recovery of historic shipwrecks is by nature extremely
speculative, and there is a high degree of risk inherent in this type of business
venture. The exploration and recovery of historic shipwrecks involves a multi-year,
multi stage process and it may take several years and/or be prohibitively expensive
to locate and recover valuable artifacts, if any are ever located at all, from
historic shipwreck sites. It is possible that the Company will never locate
any valuable artifacts from historic shipwreck sites.
There are a number of other significant challenges and risks regarding this
type of business venture that make it extremely risky with high potential that
the Company could fail. If the Company were to cease its operations, it is likely
that there would be complete loss of all capital invested in and/or borrowed
by the Company to date.
The Company’s principal business plan is to develop the infrastructure
to engage in the archaeologically-sensitive exploration and recovery of historic
shipwrecks and to actively search for, explore, and recover historic shipwrecks.
This type of business venture is extremely speculative in nature and there is
a tremendous amount of risk that any capital invested in and/or borrowed by
the Company could be lost.
It has been estimated that there are over three million undiscovered shipwrecks
around the world and a few of these shipwrecks were lost with verifiable cargoes
that contained valuable materials, including artifacts and treasure. However,
many of these shipwrecks may have very little archaeological or historical value,
and furthermore, a very high percentage of these shipwrecks would not have been
carrying valuable cargo including artifacts or treasure of any kind.
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
and the probability that the Company will locate valuable artifacts or treasure
is extremely remote. If the Company is not able to locate artifacts or treasure
with significant value then there is high probability that the Company will
face adverse consequences.
Underwater recovery operations are inherently difficult and dangerous and may
be delayed or suspended by weather, sea conditions or other natural hazards.
In addition, even though sea conditions in a particular search location may
be somewhat predictable, the possibility exists that unexpected conditions may
occur, and already have occurred, that adversely affect the Company’s
operations. It is also possible that natural hazards may prevent or significantly
delay search and recovery operations.
In addition to natural hazards there are constant repair and maintenance issues
with treasure salvage vessels which tend to be older vessels that were originally
used in other industries that have been converted for use in shipwreck exploration
and recovery. The repairs, maintenance and upkeep of this type of vessel, and
in particular the Company’s main salvage vessel, is very time consuming
and expensive and there may be significant periods of vessel down time that
result from lack of financing to make repairs to the vessel.
Furthermore there are very strict international, federal and state laws that
govern the exploration and recovery of historic shipwrecks. While the Company
has been able to obtain some permits, there is no guarantee that the Company
will be able to secure future permits or enter into agreements with government
agencies in order to explore and salvage historic shipwrecks. There is a substantial
risk that government entities may enact legislation that is so strict that any
recovery of artifacts and cargo from historic shipwrecks will be nearly impossible.
Additionally, permits and agreements with governmental agencies to conduct historic
shipwreck exploration and recovery operations are expensive, in terms of both
direct costs and ongoing compliance costs. It is also entirely possible that
the Company will not be successful in obtaining title or permission to excavate
certain wrecks. It is possible that permits that are sought for potential future
international projects may never be issued, and if issued, may not be legal
or honored by the entities that issued them.
Even if the Company is able to obtain permits for shipwreck projects there
is a possibility that the shipwrecks may have already been salvaged or may not
be found, or may not have had anything valuable on board at the time that they
sank. The Company does research on its’ targeted sites, but that research
may not prove out. In the event that valuable artifacts are located and recovered
it is possible that the cost of recovery will be greater than the value of the
artifacts recovered. It is also possible that other entities, including both
private parties and governmental entities, will assert conflicting claims and
challenge the Company’s rights to the recovered artifacts.
Moreover, there is the possibility that should the Company be successful in
locating and salvaging artifacts that have significant archeological and/or
monetary value that a country whose ship was salvaged may attempt to claim ownership
of the artifacts by pursuing litigation. In the event that the Company is able
to make a valid claim to artifacts or other items at a shipwreck site there
is a risk of theft of such items at sea both before or after the recovery or
while the artifacts are in transit to a safe destination as well as when stored
in a secured location. Such thefts may not be adequately covered by insurance.
Based on a number of these and other potential issues the Company could spend
a great deal of time and invest a large sum in a specific shipwreck project
and receive very little or no salvage claim or revenue for its work.
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 and risky business venture with a high degree of risk that the
Company may fail. There is a possibility that the Company will be forced to
cease its operations if it is not successful in eventually locating valuable
artifacts. If the Company were to cease its operations, then it is likely that
there would be complete loss of all capital invested in or borrowed by the Company.