Seafarer Exploration Corp. reported significant financial challenges in its 10-Q filing for the period ending September 30, 2024. The company experienced a net loss of $3,061,742 for the nine months ended September 30, 2024, compared to a net loss of $2,360,023 for the same period in 2023, marking an increase of approximately 30%. Revenue for the nine-month period was $9,784, a notable rise from $590 in the previous year, primarily attributed to service income. However, total operating expenses also increased to $2,664,502 from $2,283,001, reflecting a 17% rise year-over-year.

The company's financial position deteriorated, with total current assets decreasing to $463,780 from $640,993 as of December 31, 2023. Total liabilities surged to $3,002,046, up from $2,542,732, resulting in a working capital deficit of $2,459,269, compared to $1,808,783 at the end of the previous fiscal year. Cash reserves fell to $406,961 from $606,267, indicating liquidity challenges.

Seafarer’s operational expenses included a significant increase in research and development costs, which rose to $399,292 from $193,621, reflecting a 102% increase. Consulting and contractor expenses also increased to $1,424,204, up from $1,291,709. Conversely, vessel-related expenses decreased significantly to $178,720 from $292,690.

The company is currently in default on several loans and lacks additional sources of debt financing, raising substantial doubt about its ability to continue as a going concern. Management is exploring options to raise capital through the issuance of common stock and debt, but the ability to secure such financing remains uncertain. The company has also indicated that it may convert promissory notes into equity, which could further dilute current shareholders.

Seafarer has faced operational challenges, including high fuel prices and compliance costs associated with its archaeological exploration activities. The company has not generated significant revenue since its inception and does not expect to do so in the near future. Management has acknowledged the risk of ceasing operations if it cannot locate valuable artifacts or establish a sustainable revenue stream.

In terms of corporate governance, the company reported weaknesses in its internal controls over financial reporting, citing limited resources and a lack of segregation of duties. Management plans to implement remedial measures to address these deficiencies once sufficient capital is secured.