UnderSea Recovery Corporation (trading under the symbol UNDR), also referred to as UNSR or UnderSea Recovery, is a technology company engaged in the business of locating and recovering historical shipwrecks, primarily those from the 15^th through 19^th centuries. Most of UnderSea Recovery’s operations are to be conducted through license and joint venture agreements with host governments in whose territorial waters these wrecks lie. UnderSea Recovery’s projects also include the recovery of other cultural resources (artifacts and other objects of historical and archaeological interest) from the world’s oceans and large lakes by applying advanced technologies in an environmentally and ecologically responsible manner. UnderSea Recovery’s mission is to become the world leader in the exploration and excavation of historic shipwrecks.

Enormous quantities of gold, silver, jewels, porcelains, valuable artifacts and other cultural heritage items were known to have been lost in the thousands of valuable historic ships lost throughout the ages. A majority of these are believed to have been European vessels that sank in the 330-year period from 1500 to 1830. Only a fraction of the thousands of treasure wrecks have been found and only a few of those fully salvaged.

To pursue the mission of searching for and recovering marine artifacts and bullion, UnderSea Recovery has signed a licensing agreement with Admiralty Corporation for its ATLIS^® technology. Under this agreement, UnderSea Recovery, at its sole expense, will complete the two first generation ATLIS^® field units and UnderSea Recovery, at is sole expense, will undertake shipwreck search and recovery projects. In return for the licensing agreement, Admiralty Corporation will receive ten percent (10%) of the net revenues UnderSea Recovery receives from its successful recoveries as a direct result of UnderSea Recovery’s use of the ATLIS^® technology.

Additionally, UnderSea Recovery is currently developing several proprietary detection (remote-sensing) technologies to be used in future shipwreck search and recovery projects.

UnderSea Recovery plans on generating future revenues from two primary sources: (1) the sale and public exhibition of recovered items (some sales will be for pure bullion value and some sales will be for the much higher artifact and numismatic values), and (2) the sale of intellectual property rights, including documentaries, television specials, merchandise, books and educational programs. The Company believes these revenues will be substantial.

The Company will operate primarily in the territorial waters of host countries under carefully crafted license and joint venture agreements. The main objective is to work in partnership with host governments in a manner which will be beneficial to the governments both financially and in terms of preserving important and previously lost elements of their cultural heritage.

The efficiency and effectiveness of any search and recovery project is the direct result of initial research put into the design of the operation and of the characteristics and adaptability of the equipment available for use in on-site operations.

Currently the industry is dependent on advances in technology, especially for recovery operations conducted at a depth of 300 feet and greater. One way UnderSea Recovery expects to become the world leader in the recovery of historic shipwrecks is through the development and employment of proprietary marine search and recovery technology such as the 3-D High Resolution Sub-Bottom Imaging SONAR, currently being developed by UnderSea Recovery, as well as its Rapidly-Reconfigurable Polymorphic Remotely Operated Devices (RR-PRODs). In addition UnderSea Recovery is working on improvements, for which it will retain sole rights, to the ATLIS^® technology.

We are confident these innovative developments will allow the company to save money and time and enable the recovery of previously undetectable or unreachable items. The Sub-Bottom Imaging SONAR is expected to save operational resources since the field team will not have to use manned submersibles to examine sea bottom surface features or to conduct sub-bottom surveys in turbid or murky waters where visibility is limited to a range such that underwater light-based cameras cannot be used. This catadioptric system (an optical system using both reflective and refractive optical devices) uses acoustic imaging to overcome both the bandwidth limitations and two-dimensional limitations of standard systems, enabling a larger search area in less time with far better resolution.

RR-PRODs are expected to greatly improve the flexibility of salvage equipment and save reconfiguration time. This flexibility should allow for rapid optimization of the salvage equipment without returning to port for equipment changes and also allow for novel on-the-spot configurations to be adapted to the field conditions of any particular site.

ATLIS^® is a one-of-a-kind remote-sensing proprietary technology used in the marine environment to detect and differentiate nonferrous metals. Currently, ATLIS^® has received five (5) patents pertaining to critical aspects of the overall technology. ATLIS^® can detect gold, silver and other precious metals in salt-water environments and has been designed primarily for use in regions where the water is shallow (i.e., where the depth is up to 300 feet). Of the many thousands of historic shipwrecks lost since the early 1500s, it is estimated that most went down in shallow water locations within ten miles from shore.

UnderSea Recovery has engaged professionals in the fields of underwater archaeology and heritage management to ensure its compliance with the laws, regulations and protocols of partner nations relating to cultural heritage and environmental and ecological protection. The Company will prepare and submit detailed project plans and will always conduct operations in an environmentally responsible manner. Additionally, UnderSea Recovery has in house capabilities for historical research and access to world-renowned marine historians and researchers.

A key component of UnderSea Recovery Corporation’s operational success will be the quality of its historical research. Millions of original records (ships’ manifests, port records, and tax documents) relating to a large percentage of the lost “treasure ships” can be extensively researched at archives located in Seville, Spain and other nations. When galleons were being loaded with gold and silver over a period of many months for their long voyages back to the Old World, Spanish and other authorities maintained meticulous written records. Nearly every item loaded onto these ships, including food, liquids and animals, was recorded. One or two copies of the ship manifest would always travel with the fleet while one copy was retained in the New World for at least a year before being sent back on another fleet and brought to Spain and eventually sent to Seville for safe keeping.

Spain and other countries also kept records of the general location of their ships lost at sea using information from many sources including “eyewitness” reports of survivors from the wreck itself or individuals on other ships in proximity to the wreck who may have survived the event (storm, rogue waves, or battle) that caused the wreck to occur.

UnderSea Recovery Corporation has access to and will avail itself of experienced archival researchers, archaeologists, and historians for extensive shipwreck research on targeted wrecks and geographical areas.  

There are a number of companies, both public and private, who publicly identify themselves as engaged in aspects of the shipwreck business. Probably the best known, most established and largest of these is Odyssey Marine Exploration, Inc. (”Odyssey”). However, since our business for the foreseeable future will be limited to shallow water projects and since Odyssey is a deep-water exploration company, we do not view Odyssey as a direct competitor at the present time.

Other potential competitors include, but are not limited to Sovereign Exploration Associates International Inc., Deep Blue Marine, Marine Exploration, Inc., Oceanic Research and Recovery, Seafarer Exploration, and Deep6 Ltd. Additionally, there are many individuals and small groups that make up the bulk of this industry and they are from virtually every country throughout the world. However, most are not well-financed and few are well-equipped.

The company has a strong competitive advantage due to its worldwide license of the proprietary ATLIS^® technology, an advantage which we believe will be enhanced and strengthened with the development of additional remote-sensing (detection) technology. Furthermore, most search and recovery permits grant exclusive rights within defined territories of water. Thus, such permits will preclude any competition during the term of the permit. Consequently, as we secure permits, we will also secure exclusive project rights.

As noted above, there are three basic conventional technologies used by others in the search for precious metals such as gold and silver, however, none of these technologies have any scientifically proven capabilities to detect nonferrous (precious) metals. Following is a summary of these conventional technologies. Keep in mind, UnderSea Recovery will utilize these remote-sensing instruments on any and all its research vessel(s) to supplement and support ATLIS^® in its search and recovery operations.

Magnetometers - These instruments measure the magnitude and direction of a magnetic field. They measure localized differences in the intensity and direction of the earth's magnetic field as a result of variations caused by changes in subsurface geology…or as a result of human activity that may have changed the magnetic properties of the ground; like the presence of historic cannon, cannon balls, anchors and other iron-bearing materials that may have been lost over the centuries when ships went down. But, mags (as they are known) cannot detect nonferrous metals such as gold and silver.

Mags are available in a number of versions, but regardless of all their unique abilities, they can only detect ferrous (iron bearing) materials or magnetized objects and features such as fired ceramics, cooking hearths, and magnetized rocks. (For the sake of simplicity, the following will refer primarily to ferrous materials rather than the more complex issue of magnetized objects and features.)

Side-Scan SONARs - These instruments are a type of sonar system that transmits, receives and interprets sound waves to create an image of large areas of the sea floor. They are often used in mapping the seabed for a wide variety of purposes, including the creation of nautical charts and detection and identification of underwater objects and the depth of water. Side-scan sonar imagery is also a commonly used tool to detect debris and other obstructions on the seafloor. UnderSea Recovery will make beneficial use of such instrumentation.

Sub-Bottom Profilers - These are survey instruments emitting sound pulses that bounce back from features and objects buried beneath the sea floor. As opposed to side-scan sonar, which gives an image of what is on the sea floor, these devices produce an image of what is under the sea floor; they will be immensely helpful during our operations.

UnderSea Recovery Corporation expects to generate revenues from the sale of precious metals (on a bullion value basis), gemstones, and other valuable materials recovered from our operations. Revenues generated under the auspices of licenses with host governments are ordinarily shared with the host governments (permitting authorities). Such revenue-sharing arrangements typically range from 50% for the licensee and 50% for the licensor to 75% for the licensee and 25% for the licensor. The world market for precious metals and gemstones is enormous, with no shortage of buyers.

Other potentially lucrative revenue sources may include:

1) Sales of coins to numismatists; worldwide, there are tens of millions of such collectors

2) Sales of artifacts to museums or private collectors (many private sales are arranged by professional dealers or sold at auctions conducted by companies such as Sotheby's and Christies

3) Creation of replica gold and silver jewelry based on examples from successful recovery operations

4) Arrangements with TV and cable companies to feature ongoing operations in documentaries and other broadcast media. This would include National Geographic^®, the History Channel^®, and Discovery^®

5) The publication of one or more major books on the use of our sophisticated technologies in archaeological research and recovery of historic shipwrecks

6) Joint ventures with nonprofit museums and commercial exhibitors to display and interpret our discoveries with the public, thereby stimulating heritage tourism and associated economic impacts.

Many of the shipwrecks UnderSea Recovery Corporation intends to pursue may have important historical and cultural characteristics. All such projects undertaken will be subject to stringent archaeological standards, thus adding to the body of knowledge of the people, the history and culture of the vessel’s time. Adherence to these principles is a core value of the Company, and, in addition to satisfying professional international standards, will enhance shareholder value by increasing the economic value of the artifacts and intellectual property rights of each project.