2022 3Q SRC Report

Ma. Theresa A. Calate

From: Emerson T. Azul

Sent: November 14, 2022 1:59 pm

To: Ma. Theresa A. Calate

Subject: FW: CGFD_Seafront Resources Corporation_SEC Form 17-Q_3rd Qtr 2022_11142022

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To: Emerson T. Azul <etazul@petroenergy.com.ph>

Subject: Re: CGFD_Seafront Resources Corporation_SEC Form 17-Q_3rd Qtr 2022_11142022

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SECFORM17-Q

QUARTERLYREPORTPURSUANTTOSECTION11 OFTHESECURITIESSREGULATIONCODE(SRC) ANDSRCRULE17(a)-1(b)(2)THEREUNDER

1. September30,2022 Forthequarterlyperiodended

2. SECIdentificationNumber 40979

3. SeafrontResourcesCorporation Exactnameofregistrantasspecifiedinitscharter

4. Manila,Philippines

5. (SECUseOnly) Province,countryorotherjurisdiction IndustryClassificationCode: ofincorporation

5. 7th Floor,JMTCondominium,ADBAvenue,OrtigasCenter,PasigCity 1605 Addressofprincipaloffice PostalCode

6. (632)8637-29-17 Registrant’stelephonenumber,includingareacode

7. Notapplicable Formername,formeraddressandformerfiscalyear,ifchangedsincelastreport

8. SecuritiesregisteredpursuanttoSections8and12oftheCode,orSections4and8oftheRSA

9. AreanyorallofthesecuritieslistedonthePhilippineStockExchange?

AllissuedandoutstandingcommonsharesarelistedinthePhilippineStockExchange

10. Indicatebycheckmarkwhethertheregistrant:

(a) hasfiledallreportsrequiredtobefiledbySection11oftheSecuritiesRegulationCode(SRC) andSRCRule11(a)-1thereunderandSections26and141oftheCorporationCodeofthePhilippines,during thepreceding12months(orforsuchshorterperiodtheregistrantwasrequiredtofilesuchreports)

Yes[]

(b) hasbeensubjecttosuchfilingrequirementsforthepast90days

Yes[]

3. BIRTaxIdentificationNo.000-194-465-000

SEAFRONTRESOURCESCORPORATION STATEMENTSOFFINANCIALPOSITION

See accompanying Notes to Financial Statements.

SEAFRONTRESOURCESCORPORATION STATEMENTSOFCOMPREHENSIVEINCOME

See accompanying Notes to Financial Statements.

Forthe3rdQuarterFortheninemonths

SEAFRONTRESOURCESCORPORATION

STATEMENTSOFCHANGESINEQUITY

See accompanying Notes to Financial Statements.

SEAFRONTRESOURCESCORPORATION STATEMENTSOFCASH FLOWS

See accompanying Notes to Financial Statements.

Forthe3rdQuarterEndedFortheninemonthsEnding

SEAFRONTRESOURCESCORPORATION NOTESTOFINANCIALSTATEMENTS

1. CorporateInformation

Seafront Resources Corporation (the Company or SRC) was registered with the Securities and Exchange Commission (SEC) on April 16, 1970 as an oil exploration and production company. On October 18, 1996,theCompanyamendeditsArticlesofIncorporationwhichprovidesfortherevision of its primary purpose from engagingin the business of oil exploration and production into a holding companyandtoincludeoilexplorationandproductionbusinessasoneofitssecondarypurposes.The Company’ssharesofstockwerelistedonMay7,1974andarecurrentlytradedatthePhilippineStock Exchange.

The registered office address of the Company is 7th Floor, JMT Building, ADB Avenue, OrtigasCenter,PasigCity.

The accompanying financial statements were approved and authorized for issue by the Board of Directors(BOD).

2. BasisofPreparation BasisofPreparation

The accompanying financial statements of the Company have been prepared under the historical cost basis,exceptforthefinancialassetsatfairvaluethroughprofitorloss(FVTPL)andfinancialassetsat fairvaluethroughothercomprehensiveincome(FVOCI),whichhavebeenmeasuredatfairvalue. The Company’s financial statements are presented in Philippine Peso (P=), which is also the Company’s functionalandpresentationcurrency.

The Company has investment in trust funds. The transactions and balances of the Company’s trust funds(seeNote7)areconsolidatedonalinebylinebasiswiththeCompany.Thetrustfundreportsare prepared for the same reporting year as the Company, using consistent accounting policies in accordancewithPhilippineFinancialReportingStandards(PFRSs).

StatementofCompliance

The financial statements of the Company have been prepared in accordance with PFRSs. The term PFRSs, in general, include all applicable PFRSs, Philippine Accounting Standards (PASs) and Interpretations issued by the Standing Interpretations Committee, the Philippine Interpretations Committee(PIC) andtheInternationalFinancialReportingInterpretationsCommittee(IFRIC),which havebeenapprovedbythe PhilippineFinancial Reporting StandardsCouncil (FRSC) and adopted by thePhilippineSEC.

3. ChangesinAccountingPoliciesandDisclosures

Theaccountingpoliciesadoptedareconsistentwiththoseofthepreviousfinancialyear,exceptthatthe Companyadoptedthefollowingnewstandardseffectivein2022.Theadoptionofthesenewstandards didnothaveanimpactonthefinancialstatementsoftheCompany.

 AmendmentstoPFRS3, Reference to the Conceptual Framework

 AmendmentstoPAS16, Plant and Equipment: Proceeds before Intended Use

 AmendmentstoPAS37, Onerous Contracts - Costs of Fulfilling a Contract

 Annual Improvements to PFRSs 2018-2020Cycle

• Amendments to PFRS 1, First-time Adoption of Philippines Financial Reporting Standards, Subsidiary as a First-time Adopter

• Amendments to PFRS 9, Financial Instruments, Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities

• AmendmentstoPAS41, Agriculture, Taxation in Fair Value Measurements

StandardsIssuedbutnotyetEffective

Pronouncements issued but not yet effective are listed below. The Company does not expect that the future adoption of the said pronouncements will have a significant impact on its financial statements. The Company intends to adopt the following pronouncements when they become effective.

Effective beginning on or after January 1, 2023

 AmendmentstoPAS12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction

 AmendmentstoPAS8, Definition of Accounting Estimates

 AmendmentstoPAS1andPFRSPracticeStatement2, Disclosure of Accounting Policies

Effective beginning on or after January 1, 2024

 AmendmentstoPAS1, Classification of Liabilities as Current or Non-current

Effective beginning on or after January 1, 2025

 PFRS17, Insurance Contracts

Deferred effectivity

 AmendmentstoPFRS10, Consolidated Financial Statements, and PAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

4. SummaryofSignificantAccountingPolicies

CashandCashEquivalents

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three (3) months or lessandthataresubject toaninsignificantriskofchangesinvalue.

FinancialInstruments

Initial recognition and subsequent measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liabilityor equityinstrumentofanotherentity.

Financial assets - Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortized cost; FVOCI;andFVTPL.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. The Company

initiallymeasuresafinancialassetatitsfairvalueplus,inthecaseofafinancialassetnotatfairvalue throughprofitorloss,transactioncosts.

InorderforafinancialassettobeclassifiedandmeasuredatamortizedcostorfairvaluethroughOCI, it needs to give rise to cash flow that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrumentlevel.

The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flowswill result fromcollectingcontractualcashflows,sellingthefinancialassets,orboth.

Subsequent measurement

Forpurposesofsubsequent measurement,financialassetsareclassifiedinfourcategories:

 Financialassetsatamortizedcost(debtinstruments)

 FinancialassetsatFVOCIwithrecyclingofcumulativegainsandlosses(debtinstruments)

 Financial assets designated at FVOCI with no recycling of cumulative gains and losses upon derecognition(equityinstruments)

 FinancialassetsatFVTPL

Financial assets at amortized cost (debt instruments)

TheCompanymeasuresfinancialassetsatamortizedcostifbothofthefollowingconditionsaremet:

 The financial asset is held within a business model with the objective to hold financial assets in ordertocollectcontractualcashflows;and

 Thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolely paymentsofprincipalandinterestontheprincipalamountoutstanding.

Financialassetsatamortizedcostaresubsequentlymeasuredusingtheeffectiveinterest(EIR)method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized,modifiedorimpaired.

TheCompany’sfinancialassetsatamortizedcostincludescashand cashequivalentsandreceivables.

Financial assets at FVTPL

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to bemeasured at fair value. Financial assets are classified as held for tradingif they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effectivehedginginstruments.Financialassetswithcashflowsthatarenotsolelypaymentsofprincipal andinterestareclassifiedandmeasuredatfairvaluethroughprofitorloss,irrespectiveofthebusiness model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated as at FVTPL on initial recognitionifdoingsoeliminates,orsignificantlyreduces,anaccountingmismatch.

FinancialassetsatFVTPLarecarriedinthestatementoffinancialpositionatfairvaluewithnetchanges infairvaluerecognizedinprofitorloss.

This categoryincludes derivativeinstruments and quoted equity investments which the Companyhad not irrevocably elected to classify at fair value through OCI. Dividends on quoted equity investments arealsorecognizedasotherincomeinprofitorlosswhentherightofpaymenthasbeenestablished.

TheCompany’s financial assets at FVTPLconsistsof investmentsinquoted equitysecurities held for trading.

Financial assets designated at FVOCI (equity instruments)

Uponinitialrecognition,theCompanycanelecttoclassifyirrevocablyitsequityinvestmentsasequity instruments designated at FVOCI when they meet the definition of equity under PAS 32 and are not heldfortrading. Theclassificationisdeterminedonaninstrument-by-instrumentbasis.

Gainsandlossesonthesefinancialassetsareneverrecycledtoprofitorloss.Dividendsarerecognized as other income in profit or loss when the right of payment has been established, except when the Company benefitsfromsuchproceedsasarecoveryof partofthecostof thefinancialasset,in which case, such gains are recorded in OCI. Equity instruments designated at FVOCI are not subject to impairmentassessment.

The Company’s financial assets at FVOCI include quoted and unquoted equity securities and quoted governmentsecurities.

Impairment of financial assets

The Company recognizes an allowance for ECLs for all debt instruments not held at FVTPL. ECLs arebasedonthedifferencebetweenthecontractualcashflowsdueinaccordancewiththecontractand all thecash flowsthattheCompanyexpectsto receive,discounted atan approximationoftheoriginal effectiveinterestrate. Theexpectedcashflowswillincludecashflowsfromthesaleofcollateralheld orothercredit enhancementsthatareintegraltothecontractualterms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposuresfor which therehasbeen a significant increasein credit risk since initial recognition, aloss allowanceisrequiredforcreditlossesexpectedovertheremaininglifeoftheexposure,irrespectiveof thetimingofthedefault(alifetimeECL).

The Company may consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before takingintoaccountanycreditenhancementsheldbytheCompany.Afinancialassetiswrittenoffwhen thereisnoreasonableexpectationofrecoveringthecontractualcashflows.

Financial liabilities - Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings andpayables,netofdirectlyattributabletransactioncosts.

Subsequent measurement

Themeasurementoffinancialliabilitiesdependsontheirclassification,asdescribedbelow:

 FinancialliabilitiesatFVTPL

 Loansandborrowings

Loans and borrowings

After initial recognition, interest-bearing financial liabilities are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognizedaswellasthroughtheEIRamortizationprocess.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statementofcomprehensiveincome.

TheCompany’sfinancialliabilitiesatamortizedcostincludesaccountspayableandaccruedexpenses, excludingstatutoryliabilities.

Derecognition of financial assets and financial liabilities

Financial assets

Afinancialasset(or whereapplicable,apart of afinancialassetor partof agroupof similarfinancial assets)isderecognizedwhen:

 therightstoreceivecashflowsfromtheassethaveexpired;

 theCompanyretainstherightstoreceivecashflowsfromtheasset,buthasassumedanobligation topaytheminfullwithoutmaterial delaytoathirdpartyundera“pass-through”arrangement; or

 the Company has transferred its right to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontroloftheasset.

When the Company has transferred its rights to receive cash flows from an asset and has neither transferrednorretainedsubstantiallyalltherisksandrewardsoftheassetnortransferredcontrolofthe asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. Continuinginvolvementthattakestheformofaguaranteeoverthetransferredassetismeasuredatthe lower of the original carrying amount of the asset and the maximum amount of consideration that the Companycouldberequiredtorepay.

Financial liabilities

Afinancialliabilityisderecognizedwhentheobligationundertheliabilityisdischarged, cancelledor hasexpired.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modificationistreatedasaderecognitionoftheoriginalliabilityandtherecognitionofanewliability, andthedifferenceintherespectivecarryingamountsisrecognizedinprofitorloss.

Offsetting of Financial Instruments

Financial assets and financial liabilities are set off and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and thereisanintentiontosettleonanetbasis,ortorealizetheassetandsettletheliabilitysimultaneously.

FairValueMeasurement

Fairvalueisthepricethat wouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderly transactionbetweenmarketparticipantsatthemeasurementdate. Thefairvaluemeasurementisbased onthepresumptionthatthetransactiontoselltheassetortransfertheliabilitytakesplaceeither:

 Intheprincipalmarketfortheassetorliability,or

 Intheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability.

Theprincipalorthemostadvantageousmarket must beaccessibletobytheCompany. Thefair value of an asset or a liability is measured using the assumptions that market participants would use when pricingtheassetorliability,assumingthatmarketparticipantsactintheireconomicbestinterest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs andminimizingtheuseofunobservableinputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorizedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatis significanttothefairvaluemeasurementasawhole:

 Level1-Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities

 Level 2 - Valuation techniques for which the lowest level input that is significant to the fair valuemeasurementisdirectlyorindirectlyobservable

 Level 3 - Valuation techniques for which the lowest level input that is significant to the fair valuemeasurementisunobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the CompanydetermineswhethertransfershaveoccurredbetweenLevelsinthehierarchybyre-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole)attheendofeachreportingperiod.

CapitalStock

Capital stock is measured at par value for all shares issued. Incremental costs incurred directly attributabletotheissuanceofnewsharesareshowninequityasadeductionfromproceeds,netoftax. WhentheCompanypurchasesitsowncapitalstock(treasuryshares),theconsiderationpaid,including any attributable incremental costs, is deducted from equity until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of anydirectlyattributableincrementaltransactioncostsandtherelatedtaxeffectsisincludedinequity.

RetainedEarnings

Retained earnings represent accumulated earnings of the Company less dividends declared and with consideration of any changes in accounting policies and other adjustments applied retroactively. The retainedearningsoftheCompanyareavailablefordividendsonlyuponapprovalanddeclarationofthe BOD.

EarningsPerShare(EPS)

Basic earnings per share are computed on the basis of the weighted average number of shares outstandingduringtheyearaftergivingretroactiveeffectforanystockdividendsdeclaredinthecurrent year.

Diluted earningspershare, if applicable, is computed on the basis of theweighted average number of sharesoutstandingduringtheyearplustheweightedaveragenumberofordinarysharesthatwouldbe issuedontheconversionofallthedilutivepotentialordinarysharesintoordinaryshares.Thereareno dilutive potential common sharesthat would requiredisclosureof diluted earningsper common share inthefinancialstatements.

RevenueRecognition

Revenuefromcontractswithcustomersisrecognizedwhencontroloftheservicesistransferredtothe customer at an amount that reflects the consideration to which the Company expects to be entitled in

exchange for those goods. The Company has concluded that it is the principal in its revenue arrangementsinceitistheprimaryobligorinallrevenuearrangements,haspricinglatitudeandisalso exposedtocreditrisk.

Dividend income

DividendincomeisrecognizedwhentheCompany’srighttoreceivethepaymentisestablished,which isgenerallywhentheBODapprovesthedividenddeclaration.

Interest income

Interestincomeisrecognizedastheinterestaccruestakingintoaccounttheeffectiveyieldontheasset.

Service income

TheCompanyrecognizesrevenuefromservicesovertime,usinganinputmethodtomeasureprogress towards complete satisfaction of the service, because the customer simultaneously receives and consumesthebenefitsprovidedbytheCompany.

Rental income

Rental incomeunder non-cancellableleasesis recognized intheon a straight-linebasis over the lease terms,asprovidedunderthetermsoftheleasecontract.

GeneralandAdministrativeExpenses

Expenses are recorded when incurred. General and administrative expenses constitute costs of administeringthebusiness.

IncomeTax

Current tax

Currenttaxassetsandliabilitiesforthecurrentandpriorperiodsaremeasuredattheamountexpected toberecoveredfromorpaidtothetaxationauthorities. Thetaxratesandtaxlawsusedtocomputethe amountarethosethatareenactedorsubstantiallyenactedbythereportingdate.

Deferred tax

Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.

Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits from excess minimum corporate income tax (MCIT) over regular corporate income tax and unused net operating loss carryover (NOLCO), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits from excess MCITandunexpiredNOLCOcanbeutilized.

Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferredtaxassettobeutilized. Unrecognizeddeferredtaxassetsarereassessedateachreportingdate and are recognized to the extent that it has become probable that future taxable profit will allow the deferredtaxassettoberecovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enactedorsubstantiallyenactedatthereportingdate.

ProvisionsandContingencies

ProvisionsarerecognizedwhentheCompanyhasapresentobligation(legalorconstructive)asaresult ofapastevent,itisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequired tosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation. Wherethe Companyexpectsaprovisiontobereimbursed,thereimbursementisrecognizedasaseparateassetbut onlywhenthereimbursement is virtuallycertain. If theeffect ofthe time value of moneyis material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects currentmarketassessmentsofthetimevalueofmoneyand,whereappropriate,therisksspecifictothe liability. Where discounting is used, the increase in the provision due to the passage of time is recognizedasaninterestexpense. Provisionsarereviewedateachreportingdateandadjustedtoreflect thecurrentbestestimate.

Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but are disclosed when an inflow of economic benefits is probable. Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefitswillarise,theassetandtherelatedincomearerecognizedinthefinancialstatements.

EventsAftertheReportingDate

Post year-end events up to the date of auditors’ report that provide additional information about the Company’ssituationatthereportingdate(adjustingevents)arereflectedinthefinancialstatements,if any. Postyear-endeventsthat arenotadjustingeventsaredisclosedinthenoteswhenmaterial.

5. SignificantAccountingJudgments,EstimatesandAssumptions

The preparation of the accompanying financial statements requires management to make judgments, estimates and assumptions that affect amounts reported in the financial statements and related notes. The judgments, estimates and assumptions used in the financial statements are based upon management’sevaluationofrelevantfactsandcircumstancesasofthedateoftheCompany’sfinancial statements. Actualresultscoulddifferfromsuchestimates.

Judgments and estimates are contractually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judgments

In the process of applying the Company’s accounting policies, management has made the following judgments,apartfromthoseinvolvingestimations,whichhasthemostsignificanteffectontheamounts recognizedinthefinancialstatements:

Recognition of deferred tax assets

TheCompany’s deferredtax assets pertain to the carryforward benefits of NOLCOand excess MCIT overRCIT.Judgmentisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The Company did not recognize deferred tax assets amounting to P =2.01 million as of December 31, 2022andSeptember30,2022. Managementbelievesthatitmaynotbeprobablethatsufficienttaxable incomewillbeavailableagainstwhichtheincometaxbenefitscanberealizedpriortotheirexpiration.

EstimatesandAssumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the statementsoffinancialpositiondate,thathaveasignificantriskofcausingamaterialadjustmenttothe carryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.

Estimation of fair value of unquoted equity securities classified as financial assets at FVOCI

The Company uses its judgment to select the most appropriate valuation methodology to value its unquotedequityinvestmentsandmakeassumptionsthataremainlybasedonmarketconditionsexisting ateachreportingperiod. Asof September 30,2022andDecember 31, 2021,theCompany valuedthe unquoted equity securities classifiedasfinancial assets at FVOCI using the adjusted net asset method which is a combination of the market and income approaches. It involves directly measuring the fair value of the assets and liabilities of the investee company. Assets of the investee company consist mainlyofparcelsoflandforsalewhichisadjustedtoitsfairvalue. Thefairvalueadjustmentsarising fromchangesinfairvalueofunquotedequitysecuritiesarefullydisclosedinNote8.

6. CashandCashEquivalents

Cash in banks earns interest at the prevailing bank deposit rates. Cash equivalents are short-term investmentsthataremadeforvaryingperiodsof uptothreemonthsdependingontheimmediatecash requirementsoftheCompanyandearninterest attheprevailingshort-termplacementrates.

Interest income earned from cash in banks and cash equivalents amounted to P =0.99 million and P =0.62millionasofSeptember30,2022andDecember 31,2021,respectively.

7. InvestmentinTrustFunds

The Company established trust funds (the Trust) which are being administered by a local bank under two trust agreements. The details of the trust funds based on the financial statements issued by the trusteebankasfollows:

The assets, liabilities and performance of the fund are consolidated in the applicable accounts of the Companyforfinancialstatementpresentationpurposes.

8. FinancialAssets

TheCompany’sfinancialassetsaresummarizedbymeasurementcategoriesasfollows:

FinancialAssetsatFVTPL

DetailsoffinancialassetsatFVTPLconsistingofquotedequitysecuritiesfollow:

Thenetlosson fair value changesonfinancialassetsatFVTPL amountedto P =0.36million andP =2.29 millionasofSeptember30,2022andfortheyear endedDecember31,2021,respectively.

The movements in financial assets at FVTPL as of September 30, 2022 and for the year ended December31,2021areasfollows:

FinancialAssetsatFVOCI

FinancialassetsatFVOCIconsistofquotedandunquotedsharesofstockheldforlong-terminvestment purposesandarecarriedatfairvalue. Thecarryingvaluesoftheseinvestmentsareasfollows:

The movements in financial assets at FVOCI as of September 30, 2022 and for the year ended December31,2021areasfollows:

MovementsinthenetunrealizedgainsonfinancialassetsatFVOCIinequityareasfollows:

Dividendincome earnedonitsinvestments amountedto P =31.71millionasof December 31, 2021 and nilasofSeptember30,2022.

Investment in HEDC

On January 31, 1997, the Company entered into a Project Shareholders’ Agreement with five other companies led by Investment and Capital Corporation of the Philippines (ICCP) and Penta Capital Investment Corporation(PCIC) to develop 500to600hectaresof rawland in Hermosa, Bataan into a new township consisting of industrial estates, residential communities, a golf and country club and a commercialcenter.

Thefair valueof investmentinHEDCisdeterminedusingtheadjustednetasset valuemethod wherein the assets of HEDC consisting mainly of parcels of land are adjusted from cost to its fair value. The valuation of the parcels of land was performed by a SEC-accredited independent appraiser as at December31,2021. Thismeasurementfallsunder Level3inthefairvaluehierarchy.

From inception to September 30, 2022, HEDC sold a total of 1,008,475 sqm. Out of this total, 6,248 sqm.weresoldin2022.

Fairvaluemeasurementdisclosuresforthedeterminationoffairvalueofunquotedequitysecuritiesare providedinNote14.

9. Receivables

10. OtherIncome

Service income pertains to accounting, legal and administrative services rendered by the Company to HEDC.

Rental incomepertainsto rentalsearnedfromthetwo(2)parkingslotsownedbytheCompanywhich are classified as investment property. As of September 30, 2022 and December 31, 2021, the cost of thefullydepreciatedparkingslotsamountedtoP =207,598.

The fair value of the investment property ranges from P =800,000 to P =1,000,000 per slot as of September30,2022andDecember31,2021. Thishasbeendeterminedonthebasisofrecentsalesof similar properties in the same area as the investment property and taking into account the economic conditions prevailingatthetime the valuation was made. Thereare no related costsfor theoperation oftheinvestmentproperty.

11. RelatedPartyTransactions

Relatedpartyrelationshipexistswhenonepartyhastheabilitytocontrol,directly,orindirectlythrough one or more intermediaries, the other party or exercise significant influence over the other party in makingfinancialandoperatingdecisions. Suchrelationshipalsoexistsbetweenand/oramongentities, which are under common control with the reporting enterprises and its key management personnel, directors,oritsshareholders. Inconsideringeachrelatedpartyrelationship,attentionisdirectedtothe substanceoftherelationship,andnotmerelythelegalform.

TheCompanyinitsregularconductofbusinesshasenteredintothefollowingtransactionswithrelated partiesconsistingofreimbursementofexpensesandmanagementandaccountingservicesagreements.

The Company’s financial statements include the following amounts resulting from transactions with relatedparties:

30-Sep-22 (Unaudited)

31-Dec-21 (Audited)

TheCompanyhasnoemployee.PERCprovidesadministrativesupporttotheCompany.Therefore, nocompensationandshort-termbenefitsforkeymanagementpersonnel wereincurredforthequarter endedSeptember30,2022andyear endedDecember31,2021.

Terms and conditions of transactions with related parties

Outstandingbalancesatyear-end aretobesettledincash. Therehavebeennoguaranteesprovidedor receivedforanyrelatedpartyreceivablesorpayables.

12. FinancialInstruments

CategoriesandFairValuesofFinancialInstruments

The methods and assumptions used by the Company in estimating the fair values of the financial instrumentsare:

Cash and cash equivalents and receivables

Due to the short-term nature of the instruments, carrying amounts approximate fair values as of the reportingdate.

Government securities

Fairvaluesaregenerallybasedonquotedmarketpricesatreportingdate. ThisisunderLevel1category ofthefairvaluehierarchy.

Equity securities

For quoted equity securities, fair values are based on published quoted prices. This is under Level1categoryofthefairvaluehierarchy.

For unquoted equity securities, fair values are determined using the adjusted net asset value method which involves directly measuring the fair value of the assets and liabilities of the investee company. ThismeasurementfallsunderLevel3inthefairvaluehierarchy.

Accounts payable and accrued expenses

Carryingvaluesapproximatefairvaluesduetotheirshort-termnature.

Descriptionofsignificantunobservableinputstovaluation: Thesignificant unobservableinputsused in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at September 30, 2022 and December31,2021areshownbelow:

Valuation

The appraised value of the land was determined using the market approach which is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable assets. Net adjustment factors arising from external and internal factors (i.e. location, size/shape/terrain, and development) affecting the subject properties as compared to the marketlistingofcomparablepropertiesrangesfrom-5% to -10%.Significantfavorable(unfavorable) adjustments to the aforementioned factors based on the professional judgment of the independent appraisers would increase (decrease) the fair value of land, in return the fair value of the unquoted financialasset.

FinancialRiskManagementObjectivesandPolicies

TheCompany’sfinancialinstrumentscomprisecashandcashequivalents,receivables,financialassets andaccountspayableandaccruedexpenses. Themainpurposeofthesefinancialinstrumentsistofund its own operations and capital expenditures. The BOD reviews and approves policies for managing these risks. Also, the Audit Committee of the BOD meets regularly and exercises oversight role in managingtheserisks.

Financial Risks

The main financial risks arising from the Company’s financial instruments are liquidity risk, market riskandcreditrisk.

Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its financial obligation when due. The Company has substantial investments in shares of stock which are not listed in the Philippine Stock Exchangeandmaynotbereadilyconvertibletoliquidassetsnecessarytomeetanypotentialadditional liquidityrequirementsoftheCompany.Investmentsinunquotedequitysecuritiesclassifiedasfinancial assets at FVOCI amounted to P =404.38 million as of September 30, 2022 and December 31, 2021, respectively.

The Company monitors its cash position and overall liquidity position in assessing its exposure to liquidityrisk. TheCompanymaintainsalevelofcashandcashequivalentsdeemedsufficienttofinance operationsandtomitigatetheeffectsoffluctuationincashflows.

TheCompany’saccountspayableandaccruedexpensesareallsettledonamonthlybasis.

ThetablesbelowsummarizethematurityprofileoftheCompany’sfinancialassetsandliabilitiesas ofSeptember30,2022andDecember31,2021basedoncontractualundiscountedpayments.

Market risk

Marketriskistheriskoflossonfutureearnings,onfairvaluesoronfuturecashflowsthatmayresult fromchangesin marketprices. The valueof afinancial instrumentmaychangeasaresult ofchanges in interest rates, foreign currency exchanges rates, commodity prices, equity prices and other market changes. TheCompany’smarketriskemanatesfromitsholdingsindebtandequitysecurities.

The Company closely monitors the prices of its debt and equity securities as well as macroeconomic and entity-specificfactorswhichcould directlyor indirectlyaffect theprices of these instruments. In caseofanexpecteddeclineinitsportfolioofequitysecurities,theCompanyreadilydisposesortrades thesecuritiesforreplacementwithmoreviableandlessriskyinvestments.

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. With respect to credit risk arising from cash and cash equivalents, receivables, financial assets at FVTPL and financial assets at FVOCI, the Company’s exposure to credit risk is equal to the carrying amount of these instruments. The Company limits its creditriskontheseassetsbydealingonlywithreputablecounterparties.

For cash and cash equivalents and quoted government securities, the Company applies the low credit risksimplificationwheretheCompanymeasurestheECLsona12-monthbasisbasedontheprobability of default and loss given default which are publicly available. The Companyalso evaluates the credit rating of the bank and other financial institutions to determine whether the debt instrument has significantlyincreasedincredit riskandtoestimateECLs.

TheCompanyconsidersitscashand cash equivalentsand quotedgovernmentsecuritiesashighgrade since these are placed in financial institutions of high credit standing. Accordingly, ECLs relating to thesedebtinstrumentsroundstonil.

The Company’s receivables are aged current as of September 30, 2022 and December 31, 2021. No receivablesareconsideredcredit-impaired.

As of September 30, 2022 and December 31, 2021, the carrying values of the Company’s financial instrumentsrepresentmaximumexposureasofreportingdate.

Thetablebelowshowsthecomparativesummaryofmaximumcreditriskexposuresonfinancial instrumentsasofSeptember30,2022andDecember31,2021:

ThefollowingtablesshowfinancialinstrumentsrecognizedatfairvalueasofSeptember30,2022and December31,2021,analyzedbetweenthosewhosefairvaluesarebasedon:

1. quotedpricesinactivemarketsforidenticalassetsorliabilities(Level 1);

2. thoseinvolvinginputsotherthanquotedpricesincludedinLevel1thatareobservablefortheasset orliability,eitherdirectlyorindirectly(Level2);and

3. those with inputs for the asset or liability that are not based on observable market data (unobservableinputs)(Level3).

TherewerenotransfersbetweenLevel1andLevel2fairvaluemeasurementsandnotransfersintoand outofLevel3fair valuemeasurementsinSeptember30,2022andDecember31,2021.

13. CapitalManagement

The primary objective of the Company’s capital management is to ensure that it maintains a strong creditratingandhealthycapitalratiosinordertosupportitsbusinessandmaximizeshareholders’value.

TheCompanymanagesitscapitalstructureandmakesadjustmentstoit,inlightofchangesineconomic conditions. Tomaintainoradjustthecapitalstructure,theCompanymayadjustthedividendpayment toshareholdersorissuenewshares.

TheCompanymonitorscapitalusingadebt-to-equityratio,whichistotaldebtdividedbytotalequity. TheCompanyincludeswithintotaldebtthefollowing:accountspayableandaccruedexpenses. Total equityincludescapitalstock,netunrealizedgainsonfinancialassetsatFVOCIandretainedearnings.

TheCompanyhasnoexternallyimposedcapitalrequirementsasofSeptember30,2022andDecember 31,2021.

Thetablebelow demonstratesthedebt-to-equityratiosof theCompanyasof September 30, 2022and December31,2021:

Therewerenochangesintheobjectives,policiesorprocessesasofSeptember30,2022andyearended December31,2021.

TheCompanyhasretainedearningsavailablefordividenddeclarationamountingtoP =93.54millionas ofSeptember30,2022.

TheCompany’strackrecordofcapitalstockisasfollows:

14. BasicandDilutedEarningsPerShare

ThecomputationsoftheCompany’sbasicearningspershareareasfollows:

TheCompanyhasnopotentiallydilutivecommonstockasofSeptember30,2022,September30,2021, andDecember31,2021.

15. Others

a) The Interim Financial Report as of September 30, 2022 is in compliance with generally accepted accountingprinciples(alleffectivestandardsandinterpretationsunderPFRS).

b) The same policies and methods of computation were followed in the preparation of the interim financialreportcomparedtotheDecember31,2021AuditedFinancialStatements.

c) Therearenounusualitemoritemsthataffectedtheassets,liabilities,equityand cashflowsofthe September30,2022FinancialStatements.

d) There are no material events happened subsequent to the end of September 30, 2022 that might affecttheresult ofsaidfinancialstatements.

e) Earnings per share is presented in the face of the unaudited statements of income for the period endedSeptember30,2022andSeptember30,2021.

f) No significant events happened during the quarter that will affect the September 30, 2022 UnauditedFinancialStatements.

g) There are no seasonal aspects that had a material effect on the financial condition or results of operationoftheCompany.

h) There is no foreseeable event that will trigger direct or contingent financial obligation that is materialtotheCompany,includinganydefaultofacceleratedobligation.

i) There are no material off-balance sheet transactions, arrangements, obligations and other relationshipoftheCompanywithotherentitiesorpersonsthatwerecreatedduringtheperiod.

j) Therearenochangesinestimatesofamountsreportedinpriorperiodsofthecurrentfinancialyear orchangesinestimatesofamountsreportedinpriorfinancialyearsthatcouldhavematerialeffect inthecurrentperiod.

k) Therearenoissuances,repurchases,repayments,repaymentsofdebtandequitysecurities.

l) We are not required to disclose segment information in our financial statements because we only haveonesourceofrevenue.

m) Therearenochangesinthecompositionoftheissuerduringtheinterimperiod,includingbusiness combinations, acquisition or disposalof subsidiariesandlongterm investments, restructuringand discountingoperationsduringtheperiod.

ITEM2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOFOPERATIONS

1.FinancialCondition(AsofSeptember30,2022andSeptember30,2021)

TotalassetsamountedtoP =574.849millionandP =618.248millionasofSeptember30,2022andSeptember 30,2021,respectively.

The Company’s cash and cash equivalents amounted to P =96.932 million as of September 30, 2022 andP = 108.105 million asof September 30, 2021. The 10.34% net decrease is primarily dueto payment of share inplugandabandonmentofTaraSouth-1Well,thiswasfullysettledin2021.

FinancialassetsatfairvaluethroughprofitorlossamountedtoP=35.755millionandP =36.364millionasof September 30, 2022 and as of September 30, 2021, respectively. The 1.68% decrease is mainly due to downwardmovementofmarketvaluesofinvestmentsinstockstradedatPSE.

ReceivablesaccountasofSeptember30,2022amountedtoP =0.432millioncomparedtoP =0.357millionas ofSeptember30,2021.The21.02%netincreasewasduetohigheraverageinterestratesof moneymarket placementsresultingtotheincreaseininterestreceivable.

Other current assets consist of prepayments, prepaidtaxesandinputtaxcarry-overs.Totalamountedto P =1.417 million and P =1.248 million as of September 30, 2022 and September 30, 2021, respectively. The 13.60%netincreasemainlyrepresentsadditionalinputtaxesrecordedduringtheperiod.

Financial assets at FVOCIasof September 30, 2022 amountedtoP =440.313 million andP =472.174million asofSeptember30,2021. The6.75%netdecreaseisduetotherevaluationoftheinvestmentinHEDCin December2021.

Accounts payable and accrued expenses amounted to P =0.535 million and P=7.779 million as of September 30,2022andSeptember30,2021,respectively.BulkoftheamountasofSeptember30,2021accountsfor

theset-upofCompany’sshareintheplugandabandonmentofTaraSouth-1Well,thiswasfullysettledin 2021.

Total Stockholders’ Equity as of as of September 30, 2022 amountedto P =528.665millionorP =3.243 book valuepershareand P =559.364millionorP =3.432bookvaluepershareasofSeptember30,2021.

TheCompanypostedanetlossofP =2.958millionor(P=0.018)losspershareforthe3rd quarterofSeptember 30, 2022 compared to net income of P =7.473 million or P =0.046 earnings per share for the 3rd quarter of September 30,2021.Netlossin September 2022ismainlyduetodownwardmovement of investmentsin stocksduringtheperiod.

Interest income amounted toP =0.645 million andP =0.192million for the3rd quarter of September 30, 2022 and September 30, 2021, respectively. There is a 236.20% increase due to increase in money market placementsaswellashigherinterestratesduringtheperiod.

OtherincomeamountedtoP =0.080millionforthe3rd quarterofSeptember30,2022andP =0.085millionfor the3rd quarterofSeptember30,2021,respectively.ThispertainstotherentalincomefromtheCompany’s ownedparkingspaceinTektiteandaccountingservicesrenderedtoHEDC.

The Company’s net loss on fair value changes on financial assets at FVTPL amounted to P =3.080 million for the 3rd quarter of September 30, 2022 and P =3.723 million for the 3rd quarter of September 30, 2021, respectively.Thenetdecreasepertainstotheslightrecoveryofinvestmentsinstocksduringtheperiod.

General and administrativeexpensesamountedto P =0.604million andP =0.404millionfor the3rd quarterof September30,2022andSeptember30,2021,respectively.Higherexpensein2022pertainstorecognition oftime-writingfeeandrentexpensetoPetroEnergyResourcesCorporation.

Provision for income tax for the quarter September 30, 2022 and 2021 pertains to the set up of Minimum CorporateIncomeTax(MCIT)set-up.TheCompanyset-upMCITratherthanthe30%regulartaxbecause

2.ResultsofOperations(FortheQuarterendedSeptember30,2022andSeptember30,2021)

mostof itsincomearefromunrealizedmarket changesofinvestments andpassive incomesubjecttofinal tax.

3.FinancialConditions(AsofSeptember30,2022andDecember31,2021)

LIABILITIESANDEQUITY

Total assets amountedto P =574.849 million as of September 30, 2022 compared to P =573.623 million as of December31,2021.

The Company’s cash and cash equivalents amounted to P =96.932 million as of September 30, 2022 compared to P =100.293 million as of December 31, 2021. The 3.35% decline pertains to the decrease in moneymarketplacementsreinvestedatFVOCI.

Financialassetsat FVTPLaccountasofSeptember 30,2022amountedtoP =35.755millioncompared toP = 36.112millionasofDecember31,2021. The0.99%decreasepertainstodownwardmovementsofmarket valuesof investmentsinstockstraded atPSEduringtheperiod.

ReceivablesaccountasofSeptember30,2022amountedtoP =0.432millioncomparedtoP =0.330millionas ofDecember31,2021.The30.90%increasepertainstoreceivablefromHEDCfortheaccountingservices fee.

Other currentassetsasofSeptember30,2022 amountedto P =1.417millioncomparedtoP =1.278millionas of December 31, 2021. The increase is due to additional input taxes and other assets recorded during the period.

Increaseof1.08%infinancialassetat FVOCIpertainstotheincreaseinmarketvalueof PERC.

Accounts payable and accrued expenses amounted to P =0.535 million and P=0.634 million as of September 30, 2022 and December 31, 2021, respectively. The 15.66% net decrease accounts for the settlement of generaland administrativeexpensesparticularlyprofessionalfeesandotherservicesaccruedlastyear.

TotalStockholders’EquityasofSeptember30,2022amountedtoP =528.665millionorP =3.243bookvalue persharecomparedtoP =527.340millionorP =3.235bookvalueasofDecember31,2021.

Exceptforitemsdiscussedabove,therearenomorechangesinthefinancialstatementsthatwillreachthe materialitythresholdof5%.

The Company posted a net loss of P =0.377 million or P =0.002 loss per share as of September 30, 2022 and netincomeofP =21.048millionorP =0.129earningspershareasofSeptember30,2021.

The Company’s net loss on fair value changes on financial assets at fair value through profit or loss amounted to P =0.357 million and P =2.035 million as of September 30, 2022 and September 30, 2021, respectively. The decrease pertains to positive movements in market value of the investments in stocks tradedatthePSEfortheperiod.

Interest income amounted toP =0.992 million and P =0.496million asof September 30, 2022 and September 30,2021,respectively.Therewasa100.24%increaseduetohighermoneymarketplacements.

Other income for September 30, 2022 and 2021 mainly pertains to accounting services rendered by the CompanytoHEDCandrentalincomefromtheCompany’sownedparkingspaceinTektite.

Dividend income as of September 30, 2021 amounting to P31.710 million pertains to dividend paid by HEDCinFebruary,MayandAugust2021.

General and administrative expenses amountedtoP =1.262million andP =9.375 millionas of September 30, 2022 and September 30, 2021, respectively. The 86.54% decrease accounts for lower expense during the period. Bulk of the expense as of September 30, 2021 accounts for the Company’s share in the plug and abandonmentofTaraSouth-1Well.

Provision for income tax as of September 30, 2022 and September 30, 2021 pertains to the Minimum CorporateIncomeTax(MCIT)set-up.

4. ResultsofOperations(ForninemonthsendedSeptember30,2022andSeptember30,2021)

KEYPERFORMANCEINDICATORS(KPI):

The following liquidity and profitability ratios indicate acceptable levels of financial condition and performanceofthecompany:

There is an increase in the Company’s current ratio as of September 30, 2022 as compared to September 30,2021mainlyduetothedecreaseincurrentliabilitiesasaresult of payment ofCompany’sshareinthe plugandabandonmentof TaraSouth-1Well.

ThereisadecreaseintheCompany’sdebt-equityratioasof September 30, 2022 compared to September 30,2021duetodecreaseinliabilitiesduringtheperiodasmentionedabove.

Asset turnover as of September 30, 2022 is lower compared to September 30, 2021 since there is no dividendincomefromHEDCforthecurrentperiod.

Please refer to Financial Soundness Indicators for additional KPIs

DiscussionofindicatorsoftheCompany’slevelofperformance

ReceivableManagement

TheCompany’sreceivablesreportedintheStatementsofFinancialPositionincludethefollowing:

1. CashDividendsfromvariousstockinvestments.

2. AccruedInterestReceivablefromtheCompany’sshortterminvestmentsasofSeptember30,2022 whichtheCompanywillreceiveuponmaturity.

Furthermore, the Company manages its receivables by monitoring on a regular basis to ensure timely collection.

LiquidityManagement

The Company has substantial investments in shares of stock which are not listed in the Philippine Stock Exchange and may not be readily convertible to liquid assets necessary to meet any potential additional liquidity requirements of the Company. Investment in unquoted securities included in financial assets at FVOCIamountedtoP404.382millionasofSeptember30,2022andDecember31,2021.

Management of liquidity requiresa flow andstock perspective. Constraint such aspolitical environment, taxation,foreignexchange,interestratesandotherenvironmentalfactorscanimposesignificantrestrictions onfirmsinmanagementoftheirfinancialliquidity.

Seafront has considered the above factors and paid special attention to its cash flow management. The Companyidentifiesallitscashrequirementsforacertainperiodandinvestsunrestrictedfundstomaximize interest earnings,i.e.moneymarketplacements.

RateofReturnofEachStockholder

TheCompanyhasnoexistingdividend policy. However, theCompanyintendstodeclaredividendsinthe futureoutofitsunrestrictedretainedearningsinaccordancewiththeCorporationCodeofthePhilippines.

CostReductionEffort

In order to minimize expenses, the Company outsourced its manpower requirement and has engaged the servicesofPetroEnergyResourcesCorporationtohandleitslegal,administrative,accountingandtreasury functions.

Financialdisclosuresinviewofthecurrentfinancialcondition

The Company is still on wait-and-see attitude with respect to investing in other businesses. It has no intentionofincreasingitscapitalstock. Thecurrentmarketdoesnotwarrantanaggressivestancetowards investments. TheCompanyisgeneratingitsfundsfrominterestearningsfrommoneymarketplacements.

Therearenoknowntrends,demands,commitments,eventsoruncertaintiesthat willhave materialimpact ontheCompany’sliquidity.

ThePhilippineeconomyisstillaffectedbyeconomiccrisis,resultinginfluctuatingforeignexchangerates and increase stock market uncertainties. Uncertainties including the impact of the COVID 19 pandemic remainastowhetherthecountrywillcontinuetobeaffectedbyregionaltrendsinthecomingmonths. The financial statements do not include any adjustments that might result from these uncertainties. Related effectswillbereportedinthefinancial statements, astheybecomeknownand estimable.

Assess the financial risks exposures of the Company particularly on currency, interest credit, and market and liquidity risks. If any change thereof would materially affect the financial condition and results of operation of the Company, provide a discussion in the report on quantitative impact or such risks and includeadescriptionofenhancementinthecompany’sriskmanagementpoliciestoaddressthesame.

TheCompany’sprincipal financialinstrumentsinclude cashand cash equivalents, tradingandinvestment securities (financial assets at FVTPL) and receivables. Themain purpose of these financial instruments is tofundtheCompany’sworkingcapitalrequirements.

FinancialRiskManagementObjectivesandPolicies

PleaserefertoNote12

PlanofOperations

A. InvestmentinFinancialassetsatFVOCInottradedinthemarket(InvestmentinHEDC)

Asof September30,2022andSeptember30,2021, theCompanyholds11.33%interestinitsinvestment inHermosaDevelopmentCorporation(HEDC).

ThemanagementofHEDCwasabletosellthebulkofitssaleablepropertyforPhase1 andtheremaining 20 hectares lot is still awaiting for the approval of its PEZA application for Presidential Proclamation. Constructionandotherlanddevelopmentactivitiesareon-goingfortheexpansionofitsIndustrialPark.

The Company will continue to closely monitorthe prices of its securities as well asthose specific factors which could directly or indirectly affect the prices of these instruments. Because such investments are subject to price risk due tochanges in market values, an expected decline in the portfolio will prompt the Company to disposeortradethe securitiesfor replacement with moreviableand lessriskyinvestmentsin thefuture.

WiththeCompany’scurrentcashposition,itcansustainitsneedsforoperatingexpenses.Theonlypossible materialcommitmentisacashcallfromHEDC,ofwhichisnotexpectedtocallinthenexttwelvemonths. Thus,itdoesnotintendtoraiseadditionalfunds.

Aside from the Company’s investments stated above, there are no other researches or development plans, andpurchaseorsaleof significantequipmentthattheCompanyexpectsperform.

PARTII-OtherInformation

The Company has no other information that need to be disclosed other than disclosures made under SEC Form17-C(ifany).

SEAFRONTRESOURCESCORPORATION

SUPPLEMENTARYINFORMATIONANDDISCLOSURESREQUIREDONSRC RULE68ASAMENDED SEPTEMBER30,2022

Philippine Securities and Exchange Commission (SEC) issued the amended Securities Regulation Code RuleSRCRule68whichconsolidatesthetwoseparaterulesandlabeledintheamendmentas“PartI”and “PartII”,respectively. Italsoprescribed theadditional information andschedulerequirementsfor issuers ofsecuritiestothepublic.

BelowaretheadditionalinformationandschedulesrequiredbySRCRule68,asAmended(2011)thatare relevant to the Company. This information is presented for purposes of filing with the SEC and is not requiredpartofthebasicfinancialstatements.

ScheduleA.FinancialAssets

BelowisthedetailedscheduleoftheCompany’sfinancialassetsasofSeptember30,2022: NameofIssuingEntityandAssociationof

Thefairvalueforfinancialinstrumentstradedinactivemarketsatthereportingdateisbasedontheirquoted market price without any deduction for transaction costs. For securities in which current bid and asking

pricesarenotavailable,thepriceofthemostrecenttransactionprovidesevidenceofthecurrentfairvalue as long as there has not been a significant change in economic circumstances since the time of the transaction.

For unquoted financial securities, the most recent sales transaction was used as the basis for determining thefairvalueasofSeptember30,2022andDecember 31,2021.

Schedule B. Amounts Receivable from Directors, Officers, Employees, Related Parties and Principal Stockholders(OtherthanRelatedParties)

The Company has no outstanding receivables from its directors, officers, employees, related parties and principalstockholdersasof September30,2022andDecember31,2021.

Schedule C. Amounts Receivable from/Payable to Related Parties which are Eliminated during the ConsolidationofFinancialStatements

Notapplicable.

ScheduleD.IntangibleAsset

TheCompanyhasnointangibleassetsasofSeptember30,2022andDecember31,2021.

ScheduleE.Long-termDebt

TheCompanyhasnooutstandinglong-termdebtasofSeptember30,2022andDecember31,2021.

ScheduleF.IndebtednesstoRelatedParties(LongTermLoansfromRelatedCompanies)

TheCompanyhasnolong-termindebtednesstorelatedpartiesasofSeptember30,2022andDecember31, 2021.

ScheduleG.Guaranteesof SecuritiesofOtherIssuers

The Company does not have guarantees of securities of other issuers as of September 30, 2022 and December31,2021.

ScheduleH.Capital Stock

SEAFRONTRESOURCESCORPORATION SCHEDULEOFFINANCIALSOUNDNESSINDICATORS

Financial Soundness Indicators

Below are the financial ratios that are relevant to the Company for the 3rd quarter ended September 30, 2022,September30,2021andfortheyearendedDecember31,2021:

*Earnings

SEAFRONTRESOURCESCORPORATION RECONCILIATIONOFRETAINED EARNINGSAVAILABLEFORDIVIDEND DECLARATION

SEAFRONTRESOURCESCORPORATION MAPOFRELATIONSHIPS OFTHECOMPANIESWITHINTHEGROUP

Group Structure

AllexistingstockholdersasofSeptember30,2022neitherconstitutecontrolnorsignificantinfluence overtheCompany. Also,theCompany’sinvestmentsneitherconstitutecontrolnorsignificant influence.