x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Utah
|
30-0123229
|
(State or other
jurisdiction of incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
503 East Washington Avenue, Suite 2D,
Newtown, Pennsylvania
|
18940
|
(Address of
principal executive offices)
|
(Zip
Code)
|
Registrant's telephone number, including area code: | (215) 968-0200 |
Securities registered pursuant to Section 12(b) of the Act: | N/A |
Securities registered pursuant to section 12(g) of the Act: | N/A |
PAGE | |||
PART I | |||
Item 1 | Description of Business | 3 | |
Item 1A | Risk Factors | 7 | |
Item 1B | Unresolved Staff Comments | 9 | |
Item 2 | Description of Property | 9 | |
Item 3 | Legal Proceedings | 10 | |
Item 4 | Submission of Matters to a Vote of Security Holders | 10 | |
PART II | |||
Item 5 | Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities | 10 | |
Item 6 | Management's Discussion and Analysis or Plan of Operation | 12 | |
Item 7 | Financial Statements | 22 | |
Item 8 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 22 | |
Item 8A | Controls and Procedures | 22 | |
Item 8A(T) | Controls and Procedures | 25 | |
Item 8B | Other Information | 25 | |
PART III | |||
Item 9 | Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act | 26 | |
Item 10 | Executive Compensation | 28 | |
Item 11 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 28 | |
Item 12 | Certain Relationships and Related Transactions | 30 | |
Item 13 | Exhibits | 32 | |
Item 14 | Principal Accountant Fees and Services | 33 | |
SIGNATURES |
·
|
Sale
- In order of preference, artifacts may be sold for fair market value to a
museum, university or public institution collection; by publicly
advertised auction to the highest bidder; or by private sale based upon
fair market value.
|
·
|
Exchange -
With approval of the Board
of Directors, artifacts can
be exchanged for another artifact from a
qualified museum, university or public institution collection
to further complete the present collection of that institution, when the
exchanging institution has a policy allowing for final deaccession to a
private entity.
|
·
|
Gift -
With approval from the Board of Directors, artifacts may
be deaccessed to a qualified museum, university or public institution
collection to further complete a given
collection.
|
Quarter
Ended
|
High
|
Low
|
06/30/2006
|
$ 0.88
|
$ 0.45
|
09/30/2006
|
$ 0.63
|
$ 0.35
|
12/31/2006
|
$ 0.62
|
$ 0.26
|
03/31/2007
|
$ 0.78
|
$ 0.25
|
06/30/2007
|
$ 0.89
|
$ 0.30
|
·
|
Issuance of common shares – settlement - prior management | 910,000 (1) |
·
|
Conversion of convertible debt – acquisition of SEAI - Spain | 848,000 |
·
|
Conversion of convertible debt – private individual | 95,851 |
·
|
Issuance of common shares – Rule 506 – Regulation D | 700,000 (2) |
·
|
Issuance of common shares – Rule 144 – Regulation D | 350,000 |
·
|
Issuance of common shares – Services – S-8 | 735,000 |
(1)
|
Subject
to a leak-out agreement
|
(2)
|
$175,000
cash was received for the issuance of common
stock
|
a)
|
the
classification and amortization of the licenses and
permits,
|
b)
|
the
depreciation of the research vessel
and,
|
c)
|
the
accounting for the write-off of the accrued and unpaid salaries and
expenses to certain officers and
directors.
|
2007
|
2007
|
|||||||||||
As
Corrected
|
Change
|
|||||||||||
Current
assets
|
||||||||||||
Cash
and cash equivalents
|
$ | 542,336 | $ | 542,336 | $ | - | ||||||
Accounts
receivable
|
323,493 | 323,493 | - | |||||||||
Inventory
|
2,132,820 | 2,132,820 | - | |||||||||
Total
current assets
|
2,998,649 | 2,998,649 | - | |||||||||
Equipment,
net of depreciation
|
100,000 | - | 100,000 | |||||||||
Total
property and equipment
|
100,000 | - | 100,000 | |||||||||
Other
assets
|
||||||||||||
Capitalized
costs and permits
|
- | - | - | |||||||||
Research
vessel
|
- | 125,000 | (125,000 | ) | ||||||||
Licenses
and permits, net of amortization
|
1,480,946 | 1,682,916 | (201,970 | ) | ||||||||
Investments,
net of allowance of $173,868
|
51,962 | 51,962 | - | |||||||||
Notes
receivable, net of allowance of $832,849
|
- | - | - | |||||||||
Total
other assets
|
1,532,908 | 1,859,878 | (326,970 | ) | ||||||||
Total
assets
|
$ | 4,631,557 | $ | 4,858,527 | $ | (226,970 | ) | |||||
Liabilities and
Deficiency in Assets
|
||||||||||||
Current
liabilities
|
||||||||||||
Accounts
payable and accrued expenses
|
$ | 752,657 | $ | 752,657 | $ | - | ||||||
Related
party notes payable
|
3,459,359 | 3,459,359 | - | |||||||||
Due
to related parties
|
1,237,726 | 1,237,726 | - | |||||||||
Convertible
notes payable
|
1,000,000 | 1,000,000 | - | |||||||||
Debentures
payable
|
99,174 | 99,174 | - | |||||||||
Total
current liabilities
|
6,548,916 | 6,548,916 | - | |||||||||
Total
liabilities
|
6,548,916 | 6,548,916 | - | |||||||||
Commitments
and contingencies
|
- | - | - | |||||||||
Deficiency in
assets
|
||||||||||||
Class
A - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | - | |||||||||
Class
B - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | - | |||||||||
Class
C - Convertible Preferred stock, $.001 par value, 10,000 shares
authorized,
none
issued and outstanding
|
- | - | - | |||||||||
Class
D - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | - | |||||||||
Preferred
stock - Series A, $0 par value, 100,000,000 shares
authorized;
|
- | |||||||||||
none
issued and outstanding as of June 30, 2007
|
- | - | - | |||||||||
Common
stock - $.001 par value, 250,000,000,000 shares authorized;
29,842,017
issued and outstanding
|
29,842 | 29,842 | - | |||||||||
Additional
paid-in capital
|
20,119,147 | 20,565,550 | 446,403 | |||||||||
Minority
interest
|
(803,530 | ) | (803,530 | ) | - | |||||||
Accumulated
deficit
|
(21,262,818 | ) | (20,589,445 | ) | (673,373 | ) | ||||||
Total
deficiency in assets
|
(1,917,359 | ) | (797,583 | ) | (1,119,776 | ) | ||||||
- | ||||||||||||
Total
liabilities and deficiency in assets
|
$ | 4,631,557 | $ | 5,751,333 | $ | (1,119,776 | ) |
A
- Entry to reclassify the research vessel from other assets to property
and equipment
|
||||||
B
- To record $25,000 in depreciation expense for the research vessel that
was available for use during the fiscal year ended June 30,
2007
|
||||||
C
- To record the $201,970 for the amortization of the licenses and permits
owned by the Company for the fiscal year ended June 30,
2007
|
||||||
D
- To record the $25,000 in depreciation expenses for the research vessel
and the $201,970 for the amortization of the licenses and permits
for the fiscal year ended June 30, 2007 |
2007
|
2007
|
|||||||||||
As
Corrected
|
Change
|
|||||||||||
Revenue
|
$ | 1,860,442 | $ | 1,860,442 | $ | - | ||||||
Cost
of sales
|
1,474,632 | 1,474,632 | - | |||||||||
Gross
profit
|
385,810 | 385,810 | - | |||||||||
Operating
expenses
|
- | |||||||||||
Salaries
and wages
|
562,547 | 116,144 |
A
|
446,403 | ||||||||
General
and administrative
|
585,304 | 585,304 | - | |||||||||
Legal
and professional fees
|
318,497 | 318,497 | - | |||||||||
Total
operating expenses
|
1,466,348 | 1,019,945 | 446,403 | |||||||||
Loss
from operations
|
(1,080,538 | ) | (634,135 | ) | (446,403 | ) | ||||||
Other income
(expenses)
|
||||||||||||
Depreciation
and amortization
|
(226,970 | ) | - |
B
|
(226,970 | ) | ||||||
Interest
income
|
1,351 | 1,351 | - | |||||||||
Interest
expense
|
(144,532 | ) | (144,532 | ) | - | |||||||
Total
other (income) expenses
|
(370,151 | ) | (143,181 | ) | (226,970 | ) | ||||||
Operating
loss before income taxes
|
(1,450,689 | ) | (777,316 | ) | (673,373 | ) | ||||||
Provision
for income taxes
|
- | - | - | |||||||||
Net
loss
|
$ | (1,450,689 | ) | $ | (777,316 | ) |
C
|
(673,373 | ) | |||
Net loss per common
share
|
||||||||||||
Basic
|
$ | (0.05 | ) | $ | (0.03 | ) |
D
|
(0.02 | ) | |||
Diluted
|
$ | (0.05 | ) | $ | (0.03 | ) | $ | (0.02 | ) | |||
Weighted average of
common shares outstanding
|
||||||||||||
Basic
|
27,580,209 | 27,580,209 | - | |||||||||
Diluted
|
30,132,628 | 30,132,628 | - | |||||||||
2006
|
2006
|
|||||||||||
As
Corrected
|
Change
|
|||||||||||
Current
assets
|
||||||||||||
Cash
and cash equivalents
|
$ | 570 | $ | 570 | $ | - | ||||||
Inventory
|
1,614,004 | - | 1,614,004 | |||||||||
Total
current assets
|
1,614,574 | 570 | 1,614,004 | |||||||||
- | ||||||||||||
Other
assets
|
- | |||||||||||
Capitalized
costs and permits
|
- | 3,463,890 | (3,463,890 | ) | ||||||||
Research
vessel
|
- | - | - | |||||||||
Licenses
and permits, net of amortization
|
1,682,916 | - | 1,682,916 | |||||||||
Investments,
net of allowance of $173,868
|
- | - | - | |||||||||
Notes
receivable, net of allowance of $832,849
|
- | - | - | |||||||||
Total
other assets
|
1,682,916 | 3,463,890 | (1,780,974 | ) | ||||||||
Total
assets
|
$ | 3,297,490 | $ | 3,464,460 | $ | (166,970 | ) | |||||
Current
liabilities
|
||||||||||||
Accounts
payable and accrued expenses
|
$ | 347,528 | $ | 347,528 | $ | - | ||||||
Related
party notes payable
|
2,583,955 | 2,583,955 | - | |||||||||
Due
to related parties
|
817,929 | 817,929 | - | |||||||||
Convertible
notes payable
|
800,000 | 800,000 | - | |||||||||
Debentures
payable
|
121,840 | 121,840 | - | |||||||||
Total
current liabilities
|
4,671,252 | 4,671,252 | - | |||||||||
Total
liabilities
|
4,671,252 | 4,671,252 | - | |||||||||
- | ||||||||||||
Commitments
and contingencies
|
- | - | - | |||||||||
Deficiency in
assets
|
||||||||||||
Common
stock - $.001 par value, 250,000,000,000 shares authorized;
26,203,166
issued and outstanding
|
26,203 | 26,203 | - | |||||||||
Additional
paid-in capital
|
19,215,694 | 19,215,694 | - | |||||||||
Minority
interest
|
(803,530 | ) | (803,530 | ) | - | |||||||
Accumulated
deficit
|
(19,812,129 | ) | (19,645,159 | ) | (166,970 | ) | ||||||
Total
deficiency in assets
|
(1,373,762 | ) | (1,206,792 | ) | (166,970 | ) | ||||||
- | ||||||||||||
Total
liabilities and deficiency in assets
|
$ | 3,297,490 | $ | 3,464,460 | $ | (166,970 | ) | |||||
2006
|
2006
|
|||||||||||
As
Corrected
|
Change
|
|||||||||||
Revenue
|
$ | - | $ | - | $ | - | ||||||
Cost
of sales
|
- | - | - | |||||||||
Gross
profit
|
- | - | - | |||||||||
Operating
expenses
|
- | |||||||||||
Termination of
employment and consulting agreements
|
600,000 | 600,000 | - | |||||||||
Salaries
and wages
|
802,680 | 802,680 | - | |||||||||
General
and administrative
|
507,890 | 507,890 | - | |||||||||
Legal
and professional fees
|
304,978 | 304,978 | - | |||||||||
Total
operating expenses
|
2,215,548 | 2,215,548 | - | |||||||||
Loss
from operations
|
(2,215,548 | ) | (2,215,548 | ) | - | |||||||
Other income
(expenses)
|
||||||||||||
Depreciation
and amortization
|
(166,970 | ) | - |
A
|
(166,970 | ) | ||||||
Interest
expense
|
(40,184 | ) | (40,184 | ) | - | |||||||
Total
other (income) expenses
|
(207,154 | ) | (40,184 | ) | (166,970 | ) | ||||||
Operating
loss before income taxes
|
(2,422,702 | ) | (2,255,732 | ) | (166,970 | ) | ||||||
Provision
for income taxes
|
- | - | - | |||||||||
Net
loss
|
$ | (2,422,702 | ) | $ | (2,255,732 | ) | (166,970 | ) | ||||
Net loss per common
share
|
||||||||||||
Basic
|
(0.09 | ) | $ | (0.08 | ) |
B
|
(0.01 | ) | ||||
Diluted
|
$ | (0.08 | ) | $ | (0.07 | ) | $ | (0.01 | ) | |||
Weighted average of
common shares outstanding
|
||||||||||||
Basic
|
28,022,592 | 28,022,592 | - | |||||||||
Diluted
|
28,022,592 | 28,022,592 | - | |||||||||
Class
C Convertible Preferred
Stock |
Common
Stock
|
Additional paid-in |
Stock Subscription |
Minority
|
Accumulated
|
Unrealized Depreciation of
|
||||||||||||||||||||||||||||||||||
Shares
|
Par
Value
|
Shares
|
Par
Value
|
capital
|
Receivable
|
Interest
|
Deficit
|
Investments
|
Total
|
|||||||||||||||||||||||||||||||
Balance,
June 30, 2005
|
10,000 | $ | 10,000 | 55,837 | $ | 56 | $ | 17,316,337 | $ | (4,760 | ) | $ | - | $ | (17,207,468 | ) | $ | (657,328 | ) | $ | (543,163 | ) | ||||||||||||||||||
Change
in reporting entity status
|
(10,000 | ) | (10,000 | ) | - | - | 1,925,504 | 4,760 | (803,530 | ) | (181,959 | ) | 657,328 | 1,592,103 | ||||||||||||||||||||||||||
Balance,
June 30, 2005
|
- | - | 55,837 | $ | 56 | $ | 19,241,841 | $ | - | $ | (803,530 | ) | $ | (17,389,427 | ) | $ | - | $ | 1,048,940 |
1.
|
$657,328
in the unrealized depreciation of investments for the elimination of this
account.
|
2.
|
$(181,959)
in the accumulated deficit to account for the change in loss as an
operating company versus a BDC.
|
3.
|
$(803,530)
in minority interests for the capital investments in the Company’s
subsidiaries from unrelated
parties.
|
4.
|
$4,760
in stock subscription receivable to eliminate this
account.
|
5.
|
$1,925,504
in the additional paid in capital for the net effect of the change in the
reporting entity pursuant to SFAS no. 154; $2,240,163 for the effect of
the issuance of common stock for the escrow/exchange agreements, $(23,583)
for the effect of the common shares issued with the exchange agreement and
$(291,076) for the net effect of the disposal of the assets of the Company
prior to the exchange agreement in October
2005.
|
6.
|
$(10,000)
for the elimination of the Class C Convertible Preferred
Stock.
|
Name
of Company
|
Cost
|
FMV
|
||||||
Gulf Coast Records, LLC – | ||||||||
Investment and Note Receivable | $ | 1,006,717 | $ | - | ||||
Reds Caribbean – Investment | $ | 51,962 | $ |
51,962
|
||||
Totals | $ | 1,058,679 | $ | 51,962 |
1.
|
The
Company determined that as an operating company and reporting pursuant to
the 1934 Act, certain errors were discovered and corrected retrospectively
pursuant to SFAS no. 154. The following are the errors that
were discovered and corrected; the classification and amortization of the
licenses and permits, the depreciation of the research vessel, and the
accounting for the write-off of the accrued and unpaid salaries and
expenses.
|
Name, Age and Address | Position and Length of time with the Company |
Principal Occupation, Business Experience and Directorships | |
Robert D. Baca | President, CEO and |
(51) | Director since October 2005 |
503 Washington Avenue, | |
Suite 2D | |
Newtown, PA 18940 | |
President and CEO of
Sovereign Exploration Associates International, (2005-present); Chief
Financial Officer of Sovereign Marine Exploration, Inc. (2004-present);
President of Monarch Group (consulting) (2001-present); President of
Premier Neurodiagnostics, LLC (mobile EMG (neurology services) (2004 –
Present) Chief Financial Officer of Artifact Recovery and
Conservation, Inc. (marine recovery) (2005-present); President of Clinical
Strategy Partners, LLC (subject recruiting); (2005-2006); President of
Monarch Clinical Strategies (subject recruiting)
(2004-2005)
|
|
John J. Barr | Director since October 2005 |
(50) | |
503 Washington Avenue, | |
Suite 2D | |
Newtown, PA 18940 | |
Attorney, Palmer & Barr, PC. (1989 – Present) | |
James J. Cavan | Vice President since October 2005 |
(41) | |
503 Washington Avenue, | |
Suite 2D | |
Newtown, PA 18940 | |
Director of Research
of Drexel University College Associates International of Medicine
(2003-2005); Associate Director and Director of Research Office,
University of Medicine and Dentistry of Medicine and Dentistry of New
Jersey (2003)
|
|
Kevin J. Conner | Director since October 2005 |
(45) | |
503 Washington Avenue, | |
Suite 2D | |
Newtown, PA 18940 | |
Managing Director, Conner & Associates, PC (CPA firm) (1992 – Present) | |
General Partner, Westrock Partners (Private Investment Firm) (1994 – Present) | |
Donald G. Conrad | Director since October 2005 |
(77) | |
503 Washington Avenue, | |
Suite2D | |
Newtown, PA 18940 | |
Retired, Chevy Chase Bank, F.S.B. | |
Barry Gross | Senior Vice President and Secretary since October 2005 |
(56) | |
503 Washington Avenue | |
Suite 2D | |
Newtown, PA 18940 | |
Senior Vice President-Project Operations of Sovereign Exploration (2005-present); Northeast Regional Manager of Taut, Inc. (laparoscopic medical device manufacturer) (2001- present) | |
Peter Knollenberg | Chairman and Director since October 2005 |
(57) | |
503 Washington Avenue, | |
Suite 2D | |
Newtown, PA 18940 | |
Curtis R. Sprouse | Chief Operating Officer since October 2005 |
(42) | |
503 Washington Avenue | |
Suite 2D | |
Newtown, PA 18940 | |
President and CEO of
Boston Market Strategies, Inc. (consulting) (1993-present); President and
CEO of iBall, Inc. (software consulting) (2003-present); Operating Officer
of Sovereign Exploration (2005-present); Chief Operating
Officer of Sovereign Marine Exploration, Inc.
(2005-present); Chief Operating Officer of Artifact Recovery
and Conservation (marine exploration) (2005-present); Vice President of
Clinical Strategy Partners (2005-2006); Vice President of Research
Clinical Strategies (subject recruiting)
(2004-2005)
|
|
Name and principal position |
Fiscal
year
|
Salary
($)
|
Bonus
($)
|
Other Annual
Compensation
|
|||||||||
Robert D. Baca, President and CEO |
2007
|
$ | 0 | $ | 0 | $ | 0 | ||||||
2006
|
$ | 185,000 | $ | 0 | $ | 0 | |||||||
Curtis R. Sprouse, |
2007
|
$ | 0 | $ | 0 | $ | 0 | ||||||
Chief Operating Officer |
2006
|
$ | 185,000 | $ | 0 | $ | 0 | ||||||
James Cavan, Vice President |
2007
|
$ | 0 | $ | 0 | $ | 0 | ||||||
2006
|
$ | 150,000 | $ | 0 | $ | 0 |
Name and Address
(1)
|
Number
|
Percent
|
||||||
of
Shares
|
of
Outstanding
|
|||||||
Robert
D. Baca
|
||||||||
President,
Chief Executive
|
||||||||
Office
and Director
|
11,909,790 | (2) | 35.2 | % | ||||
Barry
Gross
|
||||||||
Vice
President and Secretary.
|
11,822,582 | (3) | 34.9 | % | ||||
Peter
Knollenberg
|
||||||||
Chairman
of the Board
|
11,860,238 | (4) | 35.0 | % | ||||
Curtis
R. Sprouse
|
||||||||
Chief
Operating Officer
|
11,824,725 | (5) | 34.9 | % | ||||
Robert
McKinnon
|
||||||||
Vice
– President
|
11,791,368 | (6) | 34.9 | % | ||||
Martin
Thorp
|
||||||||
Chief
Financial Officer and Director
|
100,000 | * | ||||||
Donald
G. Conrad
|
||||||||
Director
|
240,000 | * | ||||||
Kevin
J. Conner
|
||||||||
Director
|
174,800 | * | ||||||
John
J. Barr
|
||||||||
Director
|
20,000 | * | ||||||
James
Caven
|
||||||||
Vice
President
|
7,242 | * | ||||||
Robert
Holloway
|
||||||||
Vice
– President
|
- | * | ||||||
All
Executive Officers
|
||||||||
and
Directors as a Group
|
24,357,067 | (7) | 71.9 | % | ||||
Sea
Hunt, Inc.
|
||||||||
120
Alpine Road
|
||||||||
West
Palm Beach, FL 33405
|
11,791,368 | 34.8 | % | |||||
Sovereign
Marine Explorations, Inc.
|
||||||||
503
Washington Avenue, Suite 2D
|
||||||||
Newtown,
PA 18940
|
11,791,368 | 34.8 | % | |||||
* -
Denotes less than 1% of the outstanding common shares on September 17,
2007
|
1.
|
The address
for each Director and executive officer is c/o Sovereign Exploration
Associates International Inc., 503 Washington Avenue, Suite 2D, Newtown,
PA 18940.
|
2.
|
Includes
73,422 shares owned directly and 11,791,368 shares as to which Mr. Baca
may be deemed to have beneficial ownership by reason of his status as a
director and officer of Sovereign Marine Explorations, Inc. ("SME"). Mr.
Baca disclaims beneficial ownership of shares held by
SME.
|
3.
|
Includes
31,214 shares owned directly and 11,791,368 shares as to which Mr. Gross
may be deemed to have beneficial ownership by reason of his status as a
director and officer of SME. Mr. Gross disclaims beneficial ownership of
shares held by SME.
|
4.
|
Includes
24,000 shares owned directly and 11,791,368 shares as to which Mr.
Knollenberg may be deemed to have beneficial ownership by reason of his
status as president, director, and sole shareholder of Sea Hunt,
Inc.
|
5.
|
Includes
13,653 shares owned directly, 19,704 shares held through the Boston Market
Strategies, Inc. Employee Profit Sharing Plan ("BMSI"), and 11,791,368
shares as to which Mr. Sprouse may be deemed to have beneficial ownership
by reason of his status as a director and officer of SME. Mr.
Sprouse disclaims beneficial ownership of shares held by SME and through
BMSI.
|
6.
|
Includes
11,791,368 shares that may be beneficially owned by directors and officers
of SME, each of whom disclaims beneficial ownership of such
shares.
|
7.
|
Includes
11,791,368 shares that may be beneficially owned by directors and officers
of SME, each of whom disclaims beneficial ownership of such shares;
11,791,368 shares beneficially owned by Mr. Knollenberg as president,
director, and sole shareholder of Sea Hunt, Inc.; and 19,704 shares that
may be beneficially owned by Mr. Sprouse through the BMSI, who disclaims
beneficial ownership of such
shares.
|
(a)
|
The
following exhibits are incorporated as part of this Amended 10KSB annual
report:
|
3(i) | Articles of Incorporation, as Amended |
3(ii) | By-Laws |
10.1
|
Exchange
Agreement
|
10.2
|
Settlement
Agreement
|
10.3
|
Stock
Purchase Agreements – Lavelle Holdings,
Inc.
|
10.4
|
Stock
Purchase Agreement – LeChameau Explorations
Limited
|
21
|
Subsidiaries
of Registrant
|
31.1
|
Section
302 CEO Certification
|
31.2
|
Section
302 CFO Certification
|
32.1
|
Section
906 CEO and CFO Certification
|
32.2
|
Section
906 CEO and CFO Certification
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Restated
Consolidated Balance Sheets
|
F-3
|
Restated
Consolidated Statements of Operations
|
F-4
|
Restated
Consolidated Statements of Deficiency in Assets
|
F-5
|
Restated
Consolidated Statements of Cash Flows
|
F-6
|
Notes
to Restated Consolidated Financial Statements
|
F-7
|
Assets
|
||||||||
2007
|
2006
|
|||||||
Restated
|
Restated
|
|||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 542,336 | $ | 570 | ||||
Accounts
receivable
|
323,493 | - | ||||||
Inventory
|
2,132,820 | 1,614,004 | ||||||
Total
current assets
|
2,998,649 | 1,614,574 | ||||||
Equipment,
net of depreciation
|
100,000 | - | ||||||
Other
assets
|
||||||||
Licenses
and permits, net of amortization
|
1,480,946 | 1,682,916 | ||||||
Investments,
net of allowance of $173,868
|
51,962 | - | ||||||
Notes
receivable, net of allowance of $832,849
|
- | - | ||||||
Total
other assets
|
1,532,908 | 1,682,916 | ||||||
Total
assets
|
$ | 4,631,557 | $ | 3,297,490 | ||||
Liabilities and
Deficiency in Assets
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ | 752,657 | $ | 347,528 | ||||
Related
party notes payable
|
3,459,359 | 2,583,955 | ||||||
Due
to related parties
|
1,237,726 | 817,929 | ||||||
Convertible
notes payable
|
1,000,000 | 800,000 | ||||||
Debentures
payable
|
99,174 | 121,840 | ||||||
Total
current liabilities
|
6,548,916 | 4,671,252 | ||||||
Total
liabilities
|
6,548,916 | 4,671,252 | ||||||
Commitments
and contingencies
|
- | - | ||||||
Deficiency in
assets
|
||||||||
Class
A - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | ||||||
Class
B - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | ||||||
Class
C - Convertible Preferred stock, $.001 par value, 10,000 shares
authorized,
none
issued and outstanding
|
- | - | ||||||
Class
D - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | ||||||
Preferred
stock - Series A, $0 par value, 100,000,000 shares
authorized;
None
issued and outstanding as of June 30, 2007, and
10,000,000
issued and outstanding as of June 30, 2006
|
- | - | ||||||
Common
stock - $.001 par value, 250,000,000,000 shares authorized;
29,842,017
issued and outstanding as of June 30, 2007,
and
26,203,166 issued and outstanding as of June 30, 2006
|
29,842 | 26,603 | ||||||
Additional
paid-in capital
|
20,119,147 | 19,215,694 | ||||||
Minority
interest
|
(803,530 | ) | (803,530 | ) | ||||
Accumulated
deficit
|
(21,262,818 | ) | (19,812,129 | ) | ||||
Total
deficiency in assets
|
(1,917,359 | ) | (1,373,762 | ) | ||||
Total
liabilities and deficiency in assets
|
$ | 4,631,557 | $ | 3,297,490 |
2007
|
2006
|
|||||||
Restated
|
Restated
|
|||||||
Revenue
|
$ | 1,860,442 | $ | - | ||||
Cost
of sales
|
1,474,632 | - | ||||||
Gross
profit
|
385,810 | - | ||||||
Operating
expenses
|
||||||||
Termination
of employment and consulting agreements
|
- | 600,000 | ||||||
Salaries
and wages
|
562,547 | 802,680 | ||||||
General
and administrative
|
585,304 | 507,890 | ||||||
Legal
and professional fees
|
318,497 | 304,978 | ||||||
Total
operating expenses
|
1,466,348 | 2,215,548 | ||||||
Loss
from operations
|
(1,080,538 | ) | (2,215,548 | ) | ||||
Other income
(expenses)
|
||||||||
Depreciation
and amortization
|
(226,970 | ) | (166,970 | ) | ||||
Interest
income
|
1,351 | - | ||||||
Interest
expense
|
(144,532 | ) | (40,184 | ) | ||||
Total
other expenses
|
(370,151 | ) | (207,154 | ) | ||||
Operating
loss before income taxes
|
(1,450,689 | ) | (2,422,702 | ) | ||||
Provision
for income taxes
|
- | - | ||||||
Net
loss
|
$ | (1,450,689 | ) | $ | (2,422,702 | ) | ||
Net loss per common
share
|
||||||||
Basic
|
$ | (0.05 | ) | $ | (0.09 | ) | ||
Diluted
|
$ | (0.05 | ) | $ | (0.09 | ) | ||
Weighted average of
common shares outstanding
|
||||||||
Basic
|
27,580,209 | 28,022,592 | ||||||
Diluted
|
30,132,628 | 28,022,592 | ||||||
Dividends
declared per common share
|
$ | - | $ | - |
Class
C Convertible
|
Series
A
|
Additional
|
Stock
|
Net
Unrealized
|
||||||||||||||||||||||||||||||||||||||||||||
Preferred
Stock
|
Preferred
Stock
|
Common
Stock
|
paid-in
|
Subscription
|
Minority
|
Accumulated
|
Depreciation
|
|||||||||||||||||||||||||||||||||||||||||
Shares
|
Par
Value
|
Shares
|
Par
Value
|
Shares
|
Par
Value
|
capital
|
Receivable
|
Interest
|
Deficit
|
of
investments
|
Total
|
|||||||||||||||||||||||||||||||||||||
Balance,
June 30, 2005
|
10,000 | $ | 10,000 | - | - | 55,837 | $ | 56 | $ | 17,316,337 | $ | (4,760 | ) | $ | - | $ | (17,207,468 | ) | $ | (657,328 | ) | $ | (543,163 | ) | ||||||||||||||||||||||||
Change
in reporting entity status
|
(10,000 | ) | (10,000 | ) | - | - | - | - | 1,925,504 | 4,760 | (803,530 | ) | (181,959 | ) | 657,328 | 1,592,103 | ||||||||||||||||||||||||||||||||
Balance,
June 30, 2005
|
- | - | - | - | 55,837 | 56 | 19,241,841 | - | (803,530 | ) | (17,389,427 | ) | - | 1,048,940 | ||||||||||||||||||||||||||||||||||
Post
- split common shares issued per Exchange Agreement
|
- | - | - | - | 26,147,203 | 26,147 | (26,147 | ) | - | - | - | - | 0 | |||||||||||||||||||||||||||||||||||
Rounding
stock split
|
- | - | - | - | 126 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | - | - | (2,422,702 | ) | - | (2,422,702 | ) | ||||||||||||||||||||||||||||||||||
Balance,
June 30, 2006
|
- | - | - | - | 26,203,166 | 26,203 | 19,215,694 | - | (803,530 | ) | (19,812,129 | ) | - | (1,373,762 | ) | |||||||||||||||||||||||||||||||||
Adjustment
|
- | - | - | - | - | - | (1,612,517 | ) | - | - | - | - | (1,612,517 | ) | ||||||||||||||||||||||||||||||||||
Capital
contribution - Sea Quest
|
- | - | - | - | - | - | 125,000 | - | - | - | - | 125,000 | ||||||||||||||||||||||||||||||||||||
Conversion
of convertible debt to common shares
|
- | - | - | - | 943,851 | 944 | 881,562 | - | - | - | - | 882,506 | ||||||||||||||||||||||||||||||||||||
Issuance
of common shares
|
- | - | - | - | 2,695,000 | 2,695 | 1,063,005 | - | - | - | - | 1,065,700 | ||||||||||||||||||||||||||||||||||||
Issuance
of Series A Preferred Stock in exchange for revenue participation
agreement
|
- | - | 10,000,000 | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Write-off
of accrued and unpaid salaries and expenses
|
- | - | - | - | - | - | 446,403 | - | - | - | - | 446,403 | ||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | - | - | (1,450,689 | ) | - | (1,450,689 | ) | ||||||||||||||||||||||||||||||||||
Balance,
June 30, 2007
|
- | $ | - | 10,000,000 | - | 29,842,017 | $ | 29,842 | $ | 20,119,147 | $ | - | $ | (803,530 | ) | $ | (21,262,818 | ) | $ | - | $ | (1,917,359 | ) |
2007
|
2006
|
|||||||
Restated
|
Restated
|
|||||||
Cash flows from
operating activities:
|
||||||||
Net
loss
|
$ | (1,450,689 | ) | $ | (2,422,702 | ) | ||
Adjustments
to reconcile net loss from operations to
|
||||||||
net cash used in operating activities:
|
||||||||
Stock
issued for services
|
376,200 | - | ||||||
Depreciation
and Amortization
|
226,970 | 166,970 | ||||||
(Increase)
decrease in:
|
||||||||
Accounts
receivable
|
(323,493 | ) | 3,692 | |||||
Inventory
|
(518,816 | ) | (1,614,004 | ) | ||||
Increase
in accounts payable and accrued expenses
|
463,355 | 269,539 | ||||||
Net
cash (used in) operating activities
|
(1,226,473 | ) | (3,596,505 | ) | ||||
Cash flows from
investing activities
|
||||||||
Purchases
of licenses and permits
|
- | (1,849,886 | ) | |||||
Purchase
of business
|
(525,000 | ) | ||||||
Purchase
of equipment
|
(125,000 | ) | - | |||||
Purchase
of investment
|
(51,962 | ) | - | |||||
Net
cash (used in) investing activities
|
(701,962 | ) | (1,849,886 | ) | ||||
Cash flows from
financing activities
|
||||||||
Proceeds
from the issuance of common stock, net
|
175,000 | 2,014,043 | ||||||
Proceeds
from notes payable
|
1,000,000 | - | ||||||
Proceeds
from due to related parties
|
419,797 | 817,929 | ||||||
Proceeds
from related party notes payable
|
875,404 | 2,583,955 | ||||||
Net
cash provided by financing activities
|
2,470,201 | 5,415,927 | ||||||
Net
increase(decrease) in cash and cash equivalents
|
541,766 | (30,464 | ) | |||||
Cash
and cash equivalents , beginning of year
|
570 | 31,034 | ||||||
Cash
and cash equivalents, end of year
|
$ | 542,336 | $ | 570 | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Interest
paid
|
$ | 263 | $ | - | ||||
Taxes
paid
|
$ | - | $ | - |
Non-cash investing and
financing activities
|
2007
|
2006
|
||||||
Restated
|
Restated
|
|||||||
Common
stock issued for:
|
||||||||
Settlement
- prior management
|
$ | 364,000 | $ | - | ||||
Conversion
of convertible debt – acquisition of SEAI - Spain
|
848,000 | - | ||||||
Conversion
of convertible debt – private individual
|
34,506 | - | ||||||
Rule
144 – Regulation D
|
150,500 | - | ||||||
Services
|
176,200 | - | ||||||
Note
payable issued for:
|
||||||||
Acquisition
of LeChameau Limited
|
$ | 274,009 | $ | - |
Class
C Convertible Preferred
Stock |
Common
Stock
|
Additional
|
Stock
|
|
|
Unrealized Depreciation |
||||||||||||||||||||||||||||||||||
Shares
|
Par
Value
|
Shares
|
Par
Value
|
paid-in capital |
Subscription Receivable |
Minority Interest |
Accumulated Deficit |
of
Investments
|
Total
|
|||||||||||||||||||||||||||||||
Balance,
June 30, 2005
|
10,000 | $ | 10,000 | 55,837 | $ | 56 | $ | 17,316,337 | $ | (4,760 | ) | $ | - | $ | (17,207,468 | ) | $ | (657,328 | ) | $ | (543,163 | ) | ||||||||||||||||||
Change
in reporting entity status
|
(10,000 | ) | (10,000 | ) | - | - | 1,925,504 | 4,760 | (803,530 | ) | (181,959 | ) | 657,328 | 1,592,103 | ||||||||||||||||||||||||||
Balance,
June 30, 2005
|
- | - | 55,837 | $ | 56 | $ | 19,241,841 | $ | - | $ | (803,530 | ) | $ | (17,389,427 | ) | $ | - | $ | 1,048,940 |
1.
|
$657,328
in the unrealized depreciation of investments for the elimination of this
account.
|
2.
|
$(181,959)
in the accumulated deficit to account for the change in loss as an
operating company versus a BDC.
|
3.
|
$(803,530)
in minority interests for the capital investments in the Company’s
subsidiaries from unrelated
parties.
|
4.
|
$4,760
in stock subscription receivable to eliminate this
account.
|
5.
|
$1,925,504
in the additional paid in capital for the net effect of the change in the
reporting entity pursuant to SFAS no. 154; $2,240,163 for the effect of
the issuance of common stock for the escrow/exchange agreements, $(23,583)
for the effect of the common shares issued with the exchange agreement and
$(291,076) for the net effect of the disposal of the assets of the Company
prior to the exchange agreement in October
2005.
|
6.
|
$(10,000)
for the elimination of the Class C Convertible Preferred
Stock.
|
d)
|
the
classification and amortization of the licenses and
permits,
|
e)
|
the
depreciation of the research vessel
and,
|
f)
|
the
accounting for the write-off of the accrued and unpaid salaries and
expenses to certain officers and
directors.
|
2007
|
2007
|
|||||||||||
As
Corrected
|
Change
|
|||||||||||
Current
assets
|
||||||||||||
Cash
and cash equivalents
|
$ | 542,336 | $ | 542,336 | $ | - | ||||||
Accounts
receivable
|
323,493 | 323,493 | - | |||||||||
Inventory
|
2,132,820 | 2,132,820 | - | |||||||||
Total
current assets
|
2,998,649 | 2,998,649 | - | |||||||||
Equipment,
net of depreciation
|
100,000 | - | 100,000 | |||||||||
Total
property and equipment
|
100,000 | - | 100,000 | |||||||||
Other
assets
|
||||||||||||
Capitalized
costs and permits
|
- | - | - | |||||||||
Research
vessel
|
- | 125,000 | (125,000 | ) | ||||||||
Licenses
and permits, net of amortization
|
1,480,946 | 1,682,916 | (201,970 | ) | ||||||||
Investments,
net of allowance of $173,868
|
51,962 | 51,962 | - | |||||||||
Notes
receivable, net of allowance of $832,849
|
- | - | - | |||||||||
Total
other assets
|
1,532,908 | 1,859,878 | (326,970 | ) | ||||||||
Total
assets
|
$ | 4,631,557 | $ | 4,858,527 | $ | (226,970 | ) | |||||
Liabilities and
Deficiency in Assets
|
||||||||||||
Current
liabilities
|
||||||||||||
Accounts
payable and accrued expenses
|
$ | 752,657 | $ | 752,657 | $ | - | ||||||
Related
party notes payable
|
3,459,359 | 3,459,359 | - | |||||||||
Due
to related parties
|
1,237,726 | 1,237,726 | - | |||||||||
Convertible
notes payable
|
1,000,000 | 1,000,000 | - | |||||||||
Debentures
payable
|
99,174 | 99,174 | - | |||||||||
Total
current liabilities
|
6,548,916 | 6,548,916 | - | |||||||||
Total
liabilities
|
6,548,916 | 6,548,916 | - | |||||||||
Commitments
and contingencies
|
- | - | - | |||||||||
Deficiency in
assets
|
||||||||||||
Class
A - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | - | |||||||||
Class
B - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | - | |||||||||
Class
C - Convertible Preferred stock, $.001 par value, 10,000 shares
authorized,
none
issued and outstanding
|
- | - | - | |||||||||
Class
D - Preferred stock, no par value, 10,000 shares authorized,
none
issued and outstanding
|
- | - | - | |||||||||
Preferred
stock - Series A, $0 par value, 100,000,000 shares
authorized;
|
- | |||||||||||
none
issued and outstanding as of June 30, 2007
|
- | - | - | |||||||||
Common
stock - $.001 par value, 250,000,000,000 shares authorized;
29,842,017
issued and outstanding
|
29,842 | 29,842 | - | |||||||||
Additional
paid-in capital
|
20,119,147 | 20,565,550 | 446,403 | |||||||||
Minority
interest
|
(803,530 | ) | (803,530 | ) | - | |||||||
Accumulated
deficit
|
(21,262,818 | ) | (20,589,445 | ) | (673,373 | ) | ||||||
Total
deficiency in assets
|
(1,917,359 | ) | (797,583 | ) | (1,119,776 | ) | ||||||
- | ||||||||||||
Total
liabilities and deficiency in assets
|
$ | 4,631,557 | $ | 5,751,333 | $ | (1,119,776 | ) |
A
- Entry to reclassify the research vessel from other assets to property
and equipment
|
||||||
B
- To record $25,000 in depreciation expense for the research vessel that
was available for use during the fiscal year ended June 30,
2007
|
||||||
C
- To record the $201,970 for the amortization of the licenses and permits
owned by the Company for the fiscal year ended June 30,
2007
|
||||||
D
- To record the $25,000 in depreciation expenses for the research vessel
and the $201,970 for the amortization of the licenses and
permits
for the fiscal year ended June 30, 2007 |
2007
|
2007
|
|||||||||||
As
Corrected
|
Change
|
|||||||||||
Revenue
|
$ | 1,860,442 | $ | 1,860,442 | $ | - | ||||||
Cost
of sales
|
1,474,632 | 1,474,632 | - | |||||||||
Gross
profit
|
385,810 | 385,810 | - | |||||||||
Operating
expenses
|
- | |||||||||||
Salaries
and wages
|
562,547 | 116,144 |
A
|
446,403 | ||||||||
General
and administrative
|
585,304 | 585,304 | - | |||||||||
Legal
and professional fees
|
318,497 | 318,497 | - | |||||||||
Total
operating expenses
|
1,466,348 | 1,019,945 | 446,403 | |||||||||
Loss
from operations
|
(1,080,538 | ) | (634,135 | ) | (446,403 | ) | ||||||
Other income
(expenses)
|
||||||||||||
Depreciation
and amortization
|
(226,970 | ) | - |
B
|
(226,970 | ) | ||||||
Interest
income
|
1,351 | 1,351 | - | |||||||||
Interest
expense
|
(144,532 | ) | (144,532 | ) | - | |||||||
Total
other (income) expenses
|
(370,151 | ) | (143,181 | ) | (226,970 | ) | ||||||
Operating
loss before income taxes
|
(1,450,689 | ) | (777,316 | ) |
C
|
(673,373 | ) | |||||
Provision
for income taxes
|
- | - | - | |||||||||
Net
loss
|
$ | (1,450,689 | ) | $ | (777,316 | ) | (673,373 | ) | ||||
Net loss per common
share
|
||||||||||||
Basic
|
$ | (0.05 | ) | $ | (0.03 | ) |
D
|
$ | (0.02 | ) | ||
Diluted
|
$ | (0.05 | ) | $ | (0.03 | ) | $ | (0.02 | ) | |||
Weighted average of
common shares outstanding
|
||||||||||||
Basic
|
27,580,209 | 27,580,209 | - | |||||||||
Diluted
|
30,132,628 | 30,132,628 | - |
2006
|
2006
|
|||||||||||
As
Corrected
|
Change
|
|||||||||||
Current
assets
|
||||||||||||
Cash
and cash equivalents
|
$ | 570 | $ | 570 | $ | - | ||||||
Inventory
|
1,614,004 | - | 1,614,004 | |||||||||
Total
current assets
|
1,614,574 | 570 | 1,614,004 | |||||||||
- | ||||||||||||
Other
assets
|
- | |||||||||||
Capitalized
costs and permits
|
- | 3,463,890 | (3,463,890 | ) | ||||||||
Research
vessel
|
- | - | - | |||||||||
Licenses
and permits, net of amortization
|
1,682,916 | - | 1,682,916 | |||||||||
Investments,
net of allowance of $173,868
|
- | - | - | |||||||||
Notes
receivable, net of allowance of $832,849
|
- | - | - | |||||||||
Total
other assets
|
1,682,916 | 3,463,890 | (1,780,974 | ) | ||||||||
Total
assets
|
$ | 3,297,490 | $ | 3,464,460 | $ | (166,970 | ) | |||||
Current
liabilities
|
||||||||||||
Accounts
payable and accrued expenses
|
$ | 347,528 | $ | 347,528 | $ | - | ||||||
Related
party notes payable
|
2,583,955 | 2,583,955 | - | |||||||||
Due
to related parties
|
817,929 | 817,929 | - | |||||||||
Convertible
notes payable
|
800,000 | 800,000 | - | |||||||||
Debentures
payable
|
121,840 | 121,840 | - | |||||||||
Total
current liabilities
|
4,671,252 | 4,671,252 | - | |||||||||
Total
liabilities
|
4,671,252 | 4,671,252 | - | |||||||||
- | ||||||||||||
Commitments
and contingencies
|
- | - | - | |||||||||
Deficiency in
assets
|
||||||||||||
Common
stock - $.001 par value, 250,000,000,000 shares authorized;
26,203,166
issued and outstanding
|
26,203 | 26,203 | - | |||||||||
Additional
paid-in capital
|
19,215,694 | 19,215,694 | - | |||||||||
Minority
interest
|
(803,530 | ) | (803,530 | ) | - | |||||||
Accumulated
deficit
|
(19,812,129 | ) | (19,645,159 | ) | (166,970 | ) | ||||||
Total
deficiency in assets
|
(1,373,762 | ) | (1,206,792 | ) | (166,970 | ) | ||||||
- | ||||||||||||
Total
liabilities and deficiency in assets
|
$ | 3,297,490 | $ | 3,464,460 | $ | (166,970 | ) |
2006
|
2006
|
|||||||||||
As
Corrected
|
Change
|
|||||||||||
Revenue
|
$ | - | $ | - | $ | - | ||||||
Cost
of sales
|
- | - | - | |||||||||
Gross
profit
|
- | - | - | |||||||||
Operating
expenses
|
- | |||||||||||
Termination of
employment and consulting agreements
|
600,000 | 600,000 | - | |||||||||
Salaries
and wages
|
802,680 | 802,680 | - | |||||||||
General
and administrative
|
507,890 | 507,890 | - | |||||||||
Legal
and professional fees
|
304,978 | 304,978 | - | |||||||||
Total
operating expenses
|
2,215,548 | 2,215,548 | - | |||||||||
Loss
from operations
|
(2,215,548 | ) | (2,215,548 | ) | - | |||||||
Other income
(expenses)
|
||||||||||||
Depreciation
and amortization
|
(166,970 | ) | - |
A
|
(166,970 | ) | ||||||
Interest
expense
|
(40,184 | ) | (40,184 | ) | - | |||||||
Total
other (income) expenses
|
(207,154 | ) | (40,184 | ) | (166,970 | ) | ||||||
Operating
loss before income taxes
|
(2,422,702 | ) | (2,255,732 | ) | (166,970 | ) | ||||||
Provision
for income taxes
|
- | - | - | |||||||||
Net
loss
|
$ | (2,422,702 | ) | $ | (2,255,732 | ) | $ | (166,970 | ) | |||
Net loss per common
share
|
||||||||||||
Basic
|
(0.09 | ) | $ | (0.08 | ) |
B
|
(0.01 | ) | ||||
Diluted
|
$ | (0.08 | ) | $ | (0.07 | ) | $ | (0.01 | ) | |||
Weighted average of
common shares outstanding
|
||||||||||||
Basic
|
28,022,592 | 28,022,592 | - | |||||||||
Diluted
|
28,022,592 | 28,022,592 | - |
Statutory
federal income tax rate
|
34%
|
State
taxes - net of federal benefits
|
5%
|
Valuation
allowance
|
39%
|
Income
tax rate – net
|
0%
|
5.25%
convertible debenture to a company dated June 29, 2005 with an
initial
|
||||
principal
balance of $40,000 due no later than June 29, 2008;
outstanding
|
||||
principal
and interest. This convertible debenture is currently in
dispute.
|
$ | 99,174 | ||
Total
notes payable, current
|
$ | 99,174 |
● Issuance of
common shares – settlement - prior management
|
910,000 | (1) | |||
● Conversion
of convertible debt – acquisition of SEAI - Spain
|
848,000 | ||||
● Conversion
of convertible debt – private individual
|
95,851 | ||||
● Issuance of
common shares – Rule 506 – Regulation D
|
700,000 | (2) | |||
● Issuance of
common shares – Rule 144 – Regulation D
|
350,000 | ||||
● Issuance of
common shares – Services – S-8
|
735,000 |
June
30, 2007
|
June
30, 2006
|
|||||||
Term
note payable of $160,000 due on November 15, 2007
|
||||||||
plus
accrued interest of the lesser of 0.9% or the legal
|
||||||||
rate
under Texas law - November 15, 2006
|
$ | 161,440 | $ | - | ||||
Term
note payable of $600,000 due on November 15, 2007
|
||||||||
plus
accrued interest of the lesser of 0.9% or the legal
|
||||||||
rate
under Texas law - November 15, 2006
|
671,111 | 635,111 | ||||||
Term
note payable of $274,009 plus interest
|
||||||||
at
6% per annum for the acquisition of LeChameau
|
||||||||
LeChameau
Explorations Limited – June 13, 2007
|
275,836 | - | ||||||
Demand
note payable of $350,000 plus accrued interest
|
||||||||
at
6% per annum for the purchase of the original
|
||||||||
permits
|
408,240 | 385,132 | ||||||
Demand
note payable of $250,000 plus accrued interest
|
||||||||
at
6% per annum for the balance of the Fantome
|
||||||||
Cove
Project
|
259,329 | 254,650 | ||||||
Demand
note payable of $500,000 plus accrued interest
|
||||||||
of
$3,444 per month as a direct pass through from
|
||||||||
Nova
Savings Bank - July 10, 2006
|
541,328 | - | ||||||
Demand
note payable - advances to Sovereign Exploration
|
||||||||
Associates
International, Inc. These advances have no
|
||||||||
formal
repayment requirements
|
- | 47,200 | ||||||
Demand
note payable - advances to Sovereign Exploration
|
||||||||
Associates
International, Inc. These advances have no
|
||||||||
formal
repayment requirements
|
- | 11,900 | ||||||
Demand
note payable - advances to Sea Research, Inc.
|
||||||||
prior
to the exchange agreement on October 17, 2005
|
574,355 | 574,355 | ||||||
Demand
note payable - advances to Sovereign Exploration
|
||||||||
Associates
International, Inc. These advances have no
|
||||||||
formal
repayment requirements
|
- | 120,188 | ||||||
Demand
note payable - advances to Sovereign Exploration
|
||||||||
Associates
International, Inc. These advances have no
|
||||||||
formal
repayment requirements
|
81,720 | 69,419 | ||||||
Demand
note payable - advances to Interspace
|
||||||||
Explorations
Limited plus accrued interest at 6% per
|
||||||||
annum.
|
486,000 | 486,000 | ||||||
Total
related party notes payable - all current
|
$ | 3,459,359 | $ | 2,583,955 |
November 14, 2008 | By: /s/ Robert D. Baca |
Date | Robert D. Baca |
President and Chief Executive Officer | |
November 14, 2008 | By: /s/ Martin Thorp |
Date | Martin Thorp |
Chief Financial Officer |