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 engaging in the business of oilexploration 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 accompanyingfinancial 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 have beenapprovedbythe Philippine Financial Reporting StandardsCouncil (FRSC) andadopted by thePhilippineSEC.
3. ChangesinAccountingPoliciesandDisclosures
NewStandards,InterpretationsandAmendments
Theaccountingpoliciesadoptedareconsistentwiththoseofthepreviousfinancialyear,exceptforthe adoption of new standards effective in 2024. The Company has not early adopted any standard, interpretationoramendmentthathasbeenissuedbutisnotyeteffective. Unless otherwise indicated, adoption of these new standards did not have any impact on the financial statementsoftheCompany.
AmendmentstoPAS1, Classification of Liabilities as Current or Non-current
AmendmentstoPFRS16, Lease Liability in a Sale and Leaseback
AmendmentstoPAS7andPFRS7, Disclosures: Supplier Finance Arrangements
StandardsIssuedButNotYetEffective Pronouncementsissuedbutnotyeteffectivearelistedbelow. Unlessotherwiseindicated,theCompany doesnot 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, 2025
AmendmentstoPAS21, Lack of exchangeability
Effective beginning on or after January 1, 2026
AmendmentstoPFRS9andPFRS7, Classification and Measurement of Financial Instruments
AnnualImprovementstoPFRSAccountingStandards–Volume11
o AmendmentstoPFRS1, Hedge Accounting by a First-time Adopter
o AmendmentstoPFRS7, Gain or Loss on Derecognition
o AmendmentstoPFRS9, Lessee Derecognition of Lease Liabilities and Transaction Price
o AmendmentstoPFRS10, Determination of a ‘De Facto Agent’
o AmendmentstoPAS7, Cost Method
Effective beginning on or after January 1, 2027
PFRS17, Insurance Contracts
PFRS18, Presentation and Disclosure in Financial Statements
PFRS19, Subsidiaries without Public Accountability
Deferred Effectivity
AmendmentstoPFRS10, Consolidated Financial Statements,andPAS28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
4. SummaryofSignificantAccountingPolicies
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 cashflowcharacteristicsandtheCompany’sbusinessmodelformanagingthem.TheCompanyinitially measuresafinancialassetatitsfairvalueplus,inthe caseofafinancialassetnotatfairvaluethrough profitorloss,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 whethercash flows will result fromcollectingcontractualcashflows,sellingthefinancialassets,orboth.
Subsequent measurement
Forpurposesofsubsequentmeasurement,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’sfinancialassetsat amortizedcostincludescashandcashequivalentsandreceivables.
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 tobe measured atfair value. Financial assets are classified as held for trading if 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 category includes derivative instruments andquoted equity investments which the Companyhad not irrevocably elected to classify at fair value through OCI. Dividends on quoted equityinvestments arealsorecognizedasotherincomeinprofitorlosswhenthe rightofpaymenthasbeenestablished.
The Company’s financial assets atFVTPL consists of investmentsinquotedequity securitiesheldfor 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 Companybenefitsfromsuchproceedsasarecovery ofpartofthecostof thefinancialasset,inwhich 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
TheCompanyrecognizesanallowanceforexpectedcreditloss(ECLs)foralldebtinstrumentsnotheld at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation ofthe original effective interest rate. The expectedcash flows will include cashflows fromthesaleofcollateralheldorothercreditenhancementsthatare integraltothecontractualterms. 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 defaulteventsthatarepossiblewithinthenext12months(a12-monthECL). Forthosecreditexposures for whichtherehasbeenasignificant increasein credit risksinceinitialrecognition, a lossallowance isrequiredforcreditlossesexpectedovertheremaininglifeoftheexposure,irrespectiveofthetiming ofthedefault(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
The Company’s financial liabilities consist of payables and accrued expenses classified, at initial recognition,asloansandborrowingsrecognizedatfairvalue.
Afterinitialrecognition,interest-bearingloansandborrowingsaresubsequentlymeasuredatamortized costusingtheEIRmethod.
Derecognition of financial assets and financial liabilities
Financial assets
Afinancialasset(orwhereapplicable,a partofafinancial asset orpart of agroupof similarfinancial assets)isderecognizedwhen:
therightstoreceivecashflowsfromtheassethaveexpired;
theCompanyretainstherightstoreceivecashflowsfromtheasset,buthasassumedanobligation topaytheminfullwithoutmaterialdelaytoathirdpartyundera“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.
Financial liabilities
Afinancialliabilityisderecognized whentheobligationundertheliabilityisdischarged,cancelledor hasexpired.
FairValueMeasurement
Fairvalueisthepricethatwouldbe receivedtosellanassetorpaidtotransferaliabilityinanorderly transactionbetweenmarketparticipantsatthemeasurementdate. Thefairvaluemeasurementisbased onthepresumptionthatthetransactiontoselltheassetortransfertheliabilitytakesplaceeither:
Intheprincipalmarketfortheassetorliability,or
Intheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetor liability.
The principalorthemostadvantageousmarketmust be accessibletobytheCompany. Thefairvalue of an asset or a liability is measured using the assumptions that market participants would use when pricingtheassetorliability,assumingthatmarketparticipantsactintheirbesteconomicinterest.
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 significanttothefair valuemeasurementasawhole:
Level1-Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsor liabilities
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 CompanydetermineswhethertransfershaveoccurredbetweenLevelsinthe hierarchybyre-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.
RevenueRecognition
Interest income
Interestincomeisrecognizedastheinterestaccruestakingintoaccounttheeffectiveyieldontheasset.
Dividend income
DividendincomeisrecognizedwhentheCompany’srighttoreceivethepaymentisestablished,which isgenerallywhentheBODapprovesthedividenddeclaration.
Rental income
Rental income under non-cancellable leases is recognized in the statement of comprehensive income onastraight-linebasisovertheleaseterms,asprovidedunderthe termsoftheleasecontract.
Management income
Management income from contacts with customers is recognized when control of the services is transferredtothecustomeratanamountthatreflectstheconsiderationtowhichtheCompanyexpects to be entitled in exchange for those goods. The Company has concluded that it is the principal in its revenue arrangement since it is the primary obligor in all revenue arrangements, has pricing latitude andisalsoexposedtocreditrisk. Managementincomeisrecognizedovertime,usinganinputmethod tomeasureprogresstowardscompletesatisfactionoftheservice,becausethecustomersimultaneously receivesandconsumesthebenefitsprovidedbytheCompany.
GeneralandAdministrativeExpenses
Expenses are recorded when incurred. General and administrative expenses constitute costs of administeringthebusiness.
IncomeTax
Current tax
Currenttaxassetsandliabilitiesforthecurrent andpriorperiodsaremeasuredatthe amountexpected 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.
EventsAfterthe ReportingDate
Post year-end events up to the date of auditors’ report that provide additional information about the Company’ssituationatthereportingdate(adjustingevents)arereflectedinthefinancialstatements,if any. Postyear-endeventsthatarenotadjustingeventsaredisclosedinthenoteswhenmaterial.
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 andestimates 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
The Company’s deferred tax assets pertain to the carryforward benefits of NOLCO and 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 because the management believes that it may not be probable thatsufficienttaxable income willbeavailable against which the incometax benefits can berealizedpriortotheirexpiration.
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. AsofSeptember30,2025,theCompanyhasnounquotedequityinvestments. As of December 31, 2024, the Company valued the unquoted equity securities classified as financial assetsatFVOCIusingtheadjustednetassetmethodwhichisacombinationofthemarketandincome approaches. It involves directly measuring the fair value of the assets and liabilities of the investee company. Assets of the investee company consist mainly of parcelsof landfor sale areadjusted to its fair value. Thefair value adjustments arisingfromchangesinfairvalueofunquotedequitysecurities arefullydisclosedinNote8.
6. CashandCashEquivalents
30-Sep-25 31-Dec-24 (Unaudited) (Audited)
Cashinbanks(Notes7and8) P=7,561,090 P =5,040,634
Cashequivalents(Notes7and8) 376,167,252 11,783,132 P=383,728,342 P =16,823,766
Cash in banks earn interest at the prevailing bank deposit rates. Cash equivalents are short-term investmentsthataremadefor varying periodsofuptothree monthsdependingontheimmediatecash requirementsoftheCompanyandearninterestattheprevailingshort-termplacementrates.
Interest income earned on cash in banks and cash equivalents amounted to P =6.44 million and P =5.11 millionasofSeptember30,2025andSeptember30,2024,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 trusteebankareasfollows:
30-Sep-25 31-Dec-24 (Unaudited) (Audited)
Assets
Cashandcashequivalents(Note6) P=4,380,536 P =7,208,003
FinancialassetsatFVTPL(Note8) 6,477,201 3,979,293
FinancialassetsatFVOCI-governmentsecurities (Note8) 13,039,983 13,009,867 Receivablesandothercurrentassets 70,154 56,269 23,967,874 24,253,432
Liability
Accountspayableandaccruedexpenses (51,069) (50,054) P=23,916,805 P =24,203,378
Equity
Principalfund P=28,006,730 P =28,056,417
Accumulatedtrustfundlossat beginningofyear 30,116 519,987
Trustfundincome(loss)for the year (4,120,041) (4,373,026)
Accumulatedtrustfundlossatendof year (4,089,925) (3,853,039) P =23,916,805 P =24,203,378
The assets, liabilities and performance of the fund are consolidated in the applicable accounts of the Companyforfinancialstatementpresentationpurposes.
8. FinancialAssets
TheCompany’sfinancialassetsaresummarizedbymeasurementcategoriesasfollows:
30-Sep-25 31-Dec-24 (Unaudited) (Audited) Cashandcashequivalents(Note6)
P
(Note9)
Notesreceivable(Note10)
(Note13)
atFVOCI(Note13)
FinancialAssetsatFVTPL
DetailsoffinancialassetsatFVTPLconsistingofquotedequitysecuritiesareasfollows:
30-Sep-25 31-Dec-24 (Unaudited) (Audited)
The netloss onfairvaluechangesonfinancialassetsatFVTPL amountedtoP =0.19millionandP =5.44 millionasofSeptember30,2025and2024,respectively.
The movementsinfinancial assets atFVTPLfortheperiodendedSeptember 30,2025 andDecember 31,2024areasfollows:
30-Sep-25 31-Dec-24 (Unaudited) (Audited)
Balanceatbeginningofyear P=29,738,681 P =38,107,024
Fairvalue gain(loss)recognizedduringtheperiod (191,132) (8,368,343)
Balanceatendofyear P=29,547,549 P =29,738,681
FinancialAssetsatFVOCI
FinancialassetsatFVOCIconsistofquotedandunquotedsharesofstockheldforlong-terminvestment purposesandarecarriedatfairvalue. Thecarryingvaluesoftheseinvestmentsareasfollows:
30-Sep-25 31-Dec-24 (Unaudited) (Audited)
Quotedequitysecurities:
PetroEnergyResourcesCorporation(PERC)(Note 13) P=13,248,005 P =13,864,191
Unquotedequitysecurity:
HermosaEcozone DevelopmentCorporation(HEDC) (Note13) - 603,067,536
Investmentsingovernmentsecurities(Note7and13) 7,085,533 3,979,293 P=20,333,538 P =620,911,020
The movementsinfinancial assetsatFVOCIforthe periodendedSeptember 30, 2025 andDecember 31,2024areasfollows:
30-Sep-25 31-Dec-24 (Unaudited) (Audited)
Balanceatbeginningofyear P =620,911,020 P =514,706,416 Fairvalue lossrecognizedduringtheperiod (509,946) 107,204,604
Disposalof
(603,067,536)
MovementsinthenetunrealizedgainsonfinancialassetsatFVOCIinequityareasfollows:
30-Sep-25 31-Dec-24 (Unaudited) (Audited)
Balanceatbeginningofyear P=428,417,775 P =337,293,862
Unrealizedlossrecognizedinothercomprehensive income 766,308 ‒
Cumulativegainondisposedfinancialassettransferred toretainedearnings (191,250,000) 91,123,913
‒
Dividend income earned on investments amounted to P =0.53 million as of September 30, 2025 and P =0.54millionasof September30,2024.
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 develop500to600hectaresofrawlandin Hermosa,Bataanintoa new township consisting of industrial estates, residential communities, a golf and country club and a commercialcenter.
The fair valueofinvestmentinHEDCisdeterminedusingtheadjustednetassetvaluemethod 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 Cuervo Appraisers, Inc., a SEC-accredited independentappraiserasofDecember31,2024. ThismeasurementfallsunderLevel3inthefairvalue hierarchy.
Fairvaluemeasurementdisclosuresforthedeterminationoffairvalueofunquotedequitysecuritiesare providedinNote13.
On July 8, 2025, the Company sold its 11.33% equity interest in HEDC for a total consideration of P =325million.TherecordedgainofP =190millionisdirectlyrecognizedintheretainedearningsaccount, whilethepreviouslyrecognizedunrealizedgainonappraisalincreaseunderStockholdersEquity.
9.
Receivables
30-Sep-25 31-Dec-24 (Unaudited) (Audited)
HEDC(Note12)
10. NotesReceivable
OnFebruary1,2024,theCompanyplacedP =100.00millionina362-daytenorpromissorynotethrough RCBCCapitalCorporation,subjecttoquarterlyinterestpaymentof8%perannum. Thiswasrecorded underNotesreceivableinthestatementoffinancialposition.Thematurityofthisinvestmentoccurred onApril29,2025.
Interest income earned on notes receivable amounted to P =1.91 million and P =5.94 million for the year of2025and2024.
11. OtherIncome
30-Sep-25 30-Sep-24 31-Dec-24 (Unaudited) (Unaudited) (Audited)
Management income pertains to accounting, legal and administrative services rendered by the CompanytoHEDC(seeNote12).
Rental income pertains to rentals earned from a parking slot owned by the Company which are classified as investment property. As of September 30, 2025 and December 31, 2024, the cost of the fullydepreciatedparkingslotsamountedtoP =207,598.
The fair value of the investment property ranges from P =800,000 to P =1,735,000 per slot as of September 30, 2025 and December 31, 2024, respectively. This has been determined on the basis of recent sales of similar properties in the same area as the investment property and taking into account the economic conditions prevailing at the time the valuation was made. The significant unobservable inputs used in determining the fair value include the location, size, shape, and highest and best use (Level 3 - Significant unobservable inputs). There are no related costs for the operation of the investment property.
12. 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-25 (Unaudited)
Affiliate:
* included as part of accounts payable and accrued expenses
31-Dec-24 (Audited)
and 11)
* included as part of accounts payable and accrued expenses
TheCompanyhasnoemployeesandPERCprovidesadministrativesupporttotheCompany.
On April 1, 2022, the Company entered into a management agreement with PERC. Under the said agreement, PERC provides the Company management and technical services including compliance, administration and supervision of operations, finance, accounting, and treasury, and general services. The agreement took effect on the date of execution of the management agreement and may be terminatedbyeither partyupon 30 daysofprior written notice.The Companypays amonthly service fee amounting to P =35,000, exclusive of VAT. Furthermore, PERC also charges direct costs as an incidence of the performance of services such as rent of office space and other office-related costs. Therefore, no compensation and short-term benefits for key management personnel were charged in profitorlossforthequartersendedSeptember30,2025and2024andyearendedDecember31,2024.
Terms and conditions of transactions with related parties
Outstandingbalancesatyear-endaretobesettledincash. Therehavebeennoguaranteesprovidedor receivedforanyrelatedpartyreceivablesorpayables.
13. 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 Level1categoryofthe fairvaluehierarchy.
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:
The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at September 30, 2025 and December31,2024areshownbelow:
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-20%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.
ThetablesbelowsummarizethematurityprofileoftheCompany’sfinancialassetsandliabilitiesasof September30,2025andDecember31,2024basedoncontractualundiscountedpayments.
30-Sep-25 (Unaudited)
Liquidity risk
Liquidity risk is the risk that the Company is unable to meet its financial obligation when due. As of December31,2024,theCompanyhassubstantialinvestmentsinsharesofstockwhicharenotlistedin the Philippine Stock Exchange and may not be readily convertible to liquid assets necessary to meet any potential additional liquidity requirements of the Company. Investments in unquoted equity securities classified as financial assets at FVOCI amounted to P =603.07 million. Said investment was subsequentlysoldonJuly8,2025foratotalconsiderationofP =325million.AsofSeptember30,2025, majorityoftheCompany’sassetscomprisedofcashandcashequivalentstherebyreducingtheliquidity riskataveryminimaltonillevel.
The Company monitors its cash position and overall liquidity position in assessing its exposure to liquidityrisk. TheCompanymaintainsalevelofcashandcashequivalentsdeemedsufficienttofinance operationsandtomitigatetheeffectsoffluctuationincashflows.
Market risk
Marketriskistheriskoflossonfutureearnings,onfairvaluesoronfuture cashflowsthatmayresult fromchangesinmarketprices. The valueof afinancialinstrumentmaychangeasa resultofchanges 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-specific factors which could directly or indirectly affect the prices of these instruments. In case of an expected declineinits portfolio of equitysecurities,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.
The Companyconsidersitscashand cashequivalentsandquotedgovernment securitiesashighgrade 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, 2025 and December 31, 2024. No receivablesareconsideredcredit-impaired.
As of September 30, 2025 and December 31, 2024, the carrying values of the Company’s financial instrumentsrepresentmaximumexposure asofreportingdate.
Thetablebelowshowsthecomparativesummaryofmaximumcreditriskexposuresonfinancial instrumentsasofSeptember30,2025andDecember31,2024:
30-Sep-25 (Unaudited) 31-Dec-24 (Audited) FinancialassetsatFVTPL:
ThefollowingtablesshowfinancialinstrumentsrecognizedatfairvalueasofSeptember30,2025and December31,2024,analyzedbetweenthose whosefairvaluesare basedon:
1. quotedpricesinactivemarketsforidenticalassetsorliabilities(Level1);
2. thoseinvolvinginputsotherthanquotedpricesincludedinLevel1thatareobservablefortheasset orliability,eitherdirectlyorindirectly(Level2);and
3. those with inputs for the asset or liability that are not based on observable market data (unobservable inputs)(Level3).
30-Sep-25 (Unaudited)
(Audited)
TherewerenotransfersbetweenLevel1andLevel2fairvaluemeasurementsandnotransfersintoand outofLevel3fairvaluemeasurementsinSeptember30,2025andDecember31,2024.
14. OtherNoncurrentAssets
OnJuly8,2025,theCompanysoldallofitssharesofstockinHEDCtoScienceParkofthePhilippines, Inc., Regatta Holdings, Inc.and Asset Growth Inc.. The Purchase Price for the HEDC Sale Shares is P =325 million, of which P =300 million shall be paid by the buyers to the Seller in a one-time cash payment, upon which a Deed of Absolute Sale shall be executed. The remaining P=25 million shall be treated as a receivable of SRC and settled through an "earnout" mechanism, whereby fifty percent (50%) of any cash dividends received by the buyers from the HEDC Sale Shares shall be remitted to SRC until the full amount is paid. The proceeds from the sale will be allocated by the Company for potentialinvestments.
15. 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:accountspayable andaccruedexpenses. Total equityincludescapitalstock,netunrealizedgainsonfinancialassetsatFVOCIandretainedearnings.
TheCompanyhasnoexternallyimposedcapitalrequirementsasofSeptember30,2025andDecember 31,2024.
The tablebelowdemonstratesthedebt-to-equityratiosof theCompanyas ofSeptember 30, 2025and December31,2024:
30-Sep-25 (Unaudited) 31-Dec-24 (Audited)
Therewerenochangesinthe objectives,policies orprocessesforthe 3rd quarter 2025andyear ended December31,2024.
The Company has retained earnings available for dividend declaration amounting to P =94.268 million asofSeptember30,2025.
TheCompany’strackrecordofcapitalstockisasfollows:
Listingdate-May7,1974
Add(deduct):
stockdividend
P =0.01/share November5,1973
November27,1981
0.01/share October31,1990 1:2.400stockrightsoffering
0.01/share September28,1992 1:2.125stockrightsoffering
15%stockdividend
0.01/share February8,1994
January 20,1997
Changeinparvaluefrom P =0.01/sharetoP =1.00/share (56,925,000,000) August14,1997
Quasi-reorganization (412,000,000) 1/share October5,1998
16. BasicandDilutedEarningsPerShare
ThecomputationsoftheCompany’sbasic earningspershareareasfollows:
30-Sep-25 (Unaudited)
30-Sep-24 (Unaudited)
31-Dec-24 (Audited)
(loss)
TheCompanyhasnopotentiallydilutivecommonstockasofSeptember30,2025,September30,2024, andDecember31,2024.
17. Others
a) The Interim Financial Report as of September 30, 2025 is in compliance with generally accepted accountingprinciples(alleffectivestandardsandinterpretationsunderPFRS).
b) The same policies and methods of computation were followed in the preparation of the interim financialreportcomparedtotheDecember31,2024AuditedFinancialStatements.
c) Earnings (loss) per share is presented in the face of the unaudited statements of income for the periodendedSeptember30,2025andSeptember30,2024.
d) There is no foreseeable event that will trigger direct or contingent financial obligation that is materialtotheCompany,includinganydefaultofacceleratedobligation.
e) There are no material off-balance sheet transactions, arrangements, obligations and other relationshipoftheCompanywithotherentitiesorpersonsthatwerecreatedduringtheperiod.
f) Therearenochangesinestimatesofamountsreportedinpriorperiodsofthecurrentfinancialyear orchangesinestimatesofamountsreportedinpriorfinancialyearsthatcouldhavematerialeffect inthecurrentperiod.
g) Therearenoissuances,repurchasesandrepaymentsofdebtandequitysecurities.
h) Therearenochangesinthecompositionoftheissuerduringtheinterimperiod,includingbusiness combinations, acquisition or disposal of subsidiaries, restructuring and discounting operations duringtheperiod.
i) For thesignificant event whichhappenedduringthe quarter, the Companysoldits 11.33% equity interestinHEDCforatotalconsiderationofP =325milliononJuly8,2025.
j) Other than item I thereareno unusualitemor items that affectedthe assets, liabilities, equity and cashflowsoftheSeptember30,2025FinancialStatements.
k) Other than item I nosignificanteventshappenedduring the quarter that willaffect the September 30,2025UnauditedFinancialStatements.
l) There are no seasonal aspects that had a material effect on the financial condition or results of operationof theCompanyotherthanitemI.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOFOPERATIONS
1.FinancialCondition(AsofSeptember30,2025andSeptember30,2024)
ASSETS
Total assets amounted to P =463.035 million and P =660.947 million as of September 30, 2025 and September30,2024,respectively.
The Company’s cash and cash equivalents amounted to P =383.728 million as of September 30, 2025 and P =15.441million as of September 30, 2024. Thenet increase of 2385.08% is primarily duetothe proceeds fromthesaleofequityinvestmentinHEDCandmaturityoftheNotesReceivable.
ReceivablesaccountasofSeptember30,2025amountedtoP =1.549millioncomparedtoP =1.836millionas of September 30, 2024. The 15.63% net decrease mainly refers to interest receivable from money market placements(MMPs)anddividendreceivablefromvariousstockinvestmentsduringtheperiod.
NotesreceivableasofSeptember30,2024amountedtoP=100millionreferstothe362-daytenorpromissory notethroughRCBCCapitalCorporation. ThematurityofthisinvestmentoccurredonApril29,2025.
FinancialassetsatFVTPLamountedtoP =29.548millionandP =32.671millionasofSeptember30,2025and as of September 30, 2024,respectively. The 9.56% decrease isdue todownwardmovement of the market valuesofinvestmentsinstockstradedatPSE.
Othercurrentassetsconsistofprepaymentsandprepaidtaxes.ThisamountedtoP =1.404millionandP =0.581 millionasofSeptember30,2025andSeptember30,2024,respectively.The141.83%netincreasemainly representsadditionaldeferredtaxassetrecordedduringthe period.
FinancialassetsatFVOCIasofSeptember30,2025amountedtoP =20.334millionandP =509.136millionas ofSeptember30,2024. The96.01%netdecreaseismainlyduetothesaleofinvestmentinHEDC.
Othernon-currentassetsamountedtoP=25.000millionasofSeptember2025referstotheremainingbalance ofthepurchasepricerelatedtothe Company’ssaleofitsininvestmentinHEDC.
Accounts payable and accrued expenses amountedto P =0.223 million andP=0.362million as of September 30, 2025 and September 30, 2024, respectively. The 38.45% decrease is due to settlement of payables duringtheperiod.
DeferredtaxliabilityamountedtoP =58.589millionasofSeptember30,2024.The100%decreaseisdueto thesaleoftheCompany’sinvestmentinHEDC.
Total stockholders’ equity as of as of September 30, 2025 amounted to P =462.813 million or P =2.839 book valuepershareandP =601.996millionorP =3.693bookvaluepershareasof September30,2024.
2.ResultsofOperations(FortheQuarterendedSeptember30,2025andSeptember30,2024) %Change 2025vs.2024 REVENUES
EXPENSESANDCHARGES
TheCompanypostedanetincomeofP =1.914millionorP =0.012earningspershareasofSeptember30,2025 andP =0.823millionorP =0.005earningspershareasofSeptember30,2024.
Interest income amounted toP =3.578 million andP =1.775million asof September 30, 2025 and September 30, 2024, respectively. The 101.59% increase is attributable to significant increase in cash balance as a resultofsale ofinvestmentinHEDCduringtheperiod.
Dividendincomeamountedto₱0.452millionand₱0.505millionasofSeptember30,2025andSeptember 30, 2024, respectively. The 10.55% decrease refers to lower cash dividends received from various stock investments.
OtherincomeforSeptember2025and2024mainlypertainstotherentalincomefromtheCompanyowned parkingspaceinTektiteTowersandmanagementservicesrenderedtoHEDC.The78.77%decreaseisdue
to the termination of the lease agreement for parking space and discontinuance of management services followingthesaleoftheCompany’sinvestmentinHEDCduringtheperiod.
General and administrative expenses amountedtoP =1.679million andP =0.604 millionas of September 30, 2025 and September 30, 2024, respectively. The 178.02% increase refers to higher stockholders meeting expense,capitalgainstaxanddocumentarystamptaxduringthe period.
The Company’s net loss on fair value changes on financial assets at FVTPL amounted to P =0.459 million andP =0.954millionasofSeptember30,2025andSeptember30,2024,respectively.Thenegativevariance isduetothedownwardmovementofinvestmentsinstocksduringthe period.
Provision for income tax as of September 30, 2025 and 2024 refers to the recognition of 2% Minimum CorporateIncomeTax(MCIT). The Companyset-upMCITratherthanthe25%regulartaxbecausemost ofitsincomearederivedfromtheunrealizedmarketchangesofitsinvestmentsandpassiveincomesubject tofinaltax.
3.FinancialConditions(AsofSeptember30,2025andDecember31,2024)
Accountspayableandaccrued
Total assets amountedtoP =463.036 million as of September 30, 2025comparedtoP =771.343 million as of December31,2024.
The Company’s cash and cash equivalents amounted to P =383.728 million as of September 30, 2025 compared to P =16.824 million as of December 31, 2024. The 2180.87% increase is due to the receipt of proceedsfromthesaleofequityinvestmentinHEDCandmaturityoftheNotesReceivable.
ReceivablesaccountasofSeptember30,2025amountedtoP =1.549millioncomparedtoP =1.975millionas of December 31, 2024. The 21.57% decrease mainly refers to shorter period of interest receivable from MMPsanddividendreceivablefromvariousstockinvestments.
The decrease in Notes Receivable refers to the maturity of its investment through RCBC Capital CorporationonApril29,2025.
FinancialassetsatFVTPLamountedtoP =29.548millioncomparedtoP =29.739millionasofSeptember30, 2025and December 31,2024,respectively. The 0.64% decrease refersto downward movement ofmarket valuesofinvestmentsinstockstradedatPSEduringtheperiod.
OthercurrentassetsasofSeptember30,2025amountedtoP =1.404millioncomparedtoP =0.585millionas ofDecember31,2024.The140.06%increasereferstodeferredtaxassetarisingfromthesaleofinvestment inHEDC.
Input VAT as of September 30, 2025 amounted to P =1.437 million compared to P = 1.310 million as of December31,2024.The12.47%increasemainlyreferstotheinputtaxespaidduringtheperiod.
The decreases in financial assets at FVOCI and deferred tax liability refer to the sale of the equity investment inHEDCduringtheperiod.
Accounts payable and accrued expenses amountedto P =0.223 million andP=0.822million as of September 30, 2025 and December 31, 2024, respectively. The 72.90% net decrease accounts for the settlement of payablesandaccrualsduringtheperiod.
Total stockholders’ equity asof September30, 2025 amountedtoP =462.813 million or P2.839book value persharecomparedtoP =695.851millionorP4.269bookvalueasofDecember31,2024.
4.ResultsofOperations(ForninemonthsendedSeptember30,2025andSeptember30,2024)
TheCompanypostedanetincomeofP =3.837millionorP =0.024earningspershareasofSeptember30,2025 andnetlossofP =1.265millionorP =0.008losspershareasofSeptember30,2024.
Interest income amounted toP =6.436 million andP =5.105million asof September 30, 2025 and September 30,2024,respectively.Theincreaseisattributabletohigherinterestratesonspecialsavingsaccountduring theperiod.
Dividend income for September 30, 2025 and 2024 mainly refers to cash dividends from various stock investment.Thedecreaseof3.19% pertainstolowercashdividendsreceivedfrom investments duringthe period.
OtherincomeamountedtoP =0.199millionandP =0.315millionasofSeptember30,2025andSeptember30, 2024, respectively. The decrease pertainsto the termination oflease agreement for parkingspace in April 2025anddiscontinuanceofmanagementservicesduringthecurrentperiod.
General and administrative expenses amountedtoP =3.128million andP =1.786 millionas of September 30, 2025andSeptember30,2024,respectively.The75.15%increaseaccountsforhigherstockholders’meeting expenseduringtheperiod.
TheCompany’snetlossonfair valuechangeson financialassets at FVTPL amounted toP =0.191million asofSeptember30,2025andP =5.436millionasofSeptember30,2024.Thedecreasepertainstodownward movementsinmarketvalueofthe investmentsinstockstradedatthePSEfortheperiod.
Provision for income tax as of September 30, 2025 and 2024 refers to the recognition of 2% Minimum CorporateIncomeTax(MCIT). TheCompanyset-upMCITratherthanthe 25%regulartaxbecause most ofitsincomearederivedfromtheunrealizedmarketchangesofitsinvestmentsandpassiveincomesubject tofinaltax.
KEYPERFORMANCEINDICATORS(KPI):
The following liquidity and profitability ratios indicate acceptable levels of financial condition and performanceofthecompany:
0.024(0.008)(0.019)NetIncome(Loss)/Issued&Outstanding Shares
The Company’s current ratio as of September 30, 2025 is higher compared to September 30, 2024 due to theincreaseincurrentassetsanddecreaseincurrentliabilities.
The Company’sdebt-equity ratioasofSeptember 30,2025 islowercomparedtoSeptember 30,2024due todecreasesinliabilityandstockholders’equityduringthe period.
Assetturnoverforthe3rd quarter2025ishighercomparedtothe3rd quarter2024duetoincreaseinrevenues anddeclineinassetsduringtheperiod.
Please refer to Financial Soundness Indicators for additional KPIs
DiscussionofindicatorsoftheCompany’slevelofperformance
ReceivableManagement
TheCompany’sreceivablesreportedintheStatementsofFinancialPositionincludethefollowing:
1. CashDividendsfromvariousstockinvestments.
2. AccruedInterestReceivablefromtheCompany’sshortterminvestmentsasofSeptember30,2025 ofwhichtheCompanywillreceiveuponmaturity.
Furthermore, the Company manages its receivables by monitoring on a regular basis to ensure timely executionofnecessaryinterventionsefforts.
LiquidityManagement
AsofSeptember30,2025,theCompanyhasalreadydisposeditsinvestmentsinsharesofstockwhichare not listed in the Philippine Stock Exchange. As of December 31, 2024, the Company’s investment in unquotedsecuritiesincludedinfinancialassetsatFVOCIamountedtoP =603.068million.
The management of liquidity requires a flow and stock perspective. Constraints such as political environment, taxation, foreign exchange, interest rates and other environmental factors can impose significantrestrictionsonfirmsinmanagementoftheirfinancialliquidity.
Seafront has considered the above factors and paid special attention to its cash flow management. The Companyidentifiesallitscashrequirementsforacertainperiodandinvestsunrestrictedfundstomaximize interestearnings,i.e.moneymarketplacements.
RateofReturnofEachStockholder
The Companyhasnoexistingdividend policy. However,theCompanyintendstodeclaredividendsinthe futureoutofitsunrestrictedretainedearningsinaccordancewiththeCorporationCodeofthePhilippines.
CostReductionEffort
In order to minimize expenses, the Company has engaged the services of PetroEnergy Resources Corporationtohandleitslegal,administrative,accountingandtreasuryfunctions.
Financialdisclosuresinviewofthecurrentfinancialcondition
The Company is still on wait-and-see attitude with respect to investing in other businesses. It has no intentionofincreasingitscapitalstock. Thecurrentmarketdoesnotwarrantanaggressivestancetowards investments. The Company is generating its funds from interest earnings on money market placements.
Therearenoknowntrends,demands,commitments,eventsoruncertaintiesthatwillhave materialimpact ontheCompany’sliquidity.
TheCompanyassessesthefinancialriskexposuresparticularlyoncurrency,interestcredit,andmarketand liquidity risks. Based on current assessments, there were no significant changes in these risks during the period that would materially affect the Company’s financial condition or results of operations. The Companycontinuestoimplementriskmanagementpoliciesdesignedtoaddresspotentialexposuresandto preservethevalueofitsfinancialassets.
The Company’s principalfinancialinstrumentsinclude cashandcash equivalents,tradingand investment securities (financial assets at FVTPL) andreceivables.The main purpose of these financial instruments is tofundtheCompany’sworkingcapitalrequirements.
FinancialRiskManagementObjectivesandPolicies
Please refertoNote13.
PlanofOperations
A. InvestmentinFinancialAssetsatFVOCInottradedinthemarket(InvestmentinHEDC)
OnMay8,2025,theBODapprovedthesaleoftheCompany’sentire11.33%equityinterestinHEDC.
On July 8, 2025, the Company sold the same for a total consideration of P =325 million to existing stockholdersofHEDC.
B. InvestmentinFinancialAssetsatFVTPLandFVOCItradedinthemarket
The Company will continue to closely monitor the prices of its securities as well as those 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 inthe portfolio will prompt the Companytodispose ortrade thesecurities for replacementwithmore viableandlessriskyinvestmentsin thefuture.
Withthe Company’scurrentcashposition,itcansustainitsneedsforitsoperatingexpenses.Thus,itdoes notintendtoraiseadditionalfunds.
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
SEPTEMBER30,2025
Philippine Securities and Exchange Commission (SEC) issued the amended Securities Regulation Code RuleSRCRule68whichconsolidatesthetwoseparate rulesandlabeledintheamendmentas“PartI”and “Part II”,respectively. Italsoprescribedthe additionalinformationand schedulerequirements forissuers ofsecuritiestothepublic.
BelowaretheadditionalinformationandschedulesrequiredbyRevisedSRCRuleNo.68,thatarerelevant totheCompany. ThisinformationispresentedforpurposesoffilingwiththeSECandisnotrequiredpart ofthebasicfinancialstatements.
ScheduleA.FinancialAssets
BelowisthedetailedscheduleoftheCompany’sfinancialassetsasofSeptember30,2025:
NameofIssuingEntityandAssociationof EachIssue
FinancialassetsatFVTPL
Numberof Sharesor Principal Amountof BondsandNotes AmountShown inthe Statementof
NameofIssuingEntityandAssociationof EachIssue Numberof Sharesor Principal Amountof Bondsand Notes AmountShown inthe Statementof Financial
FinancialassetsatFVOCI Debtequities
Quoted:
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 unquotedfinancial securities, the Company uses its judgment to select the most appropriate valuation methodology to value its unquoted equity investments and make assumptions that are mainly based on market conditions existing at each reporting period. It involves directly measuring the fair value of the assets andliabilitiesofthe investee company,asmainly determinedbythe Company’s external appraiser. Assetsoftheinvesteecompanyconsistmainlyofparcelsoflandforsalewhichisadjustedtoitsfairvalue.
Schedule B. Amounts Receivable from Directors, Officers, Employees and Principal Stockholders (Other thanRelatedParties)
The Company has no outstanding receivables from its directors, officers, employees and principal stockholdersasofSeptember30,2025andDecember31,2024.
Schedule C. Amounts Receivable from/Payable to Related Parties which are Eliminated during the ConsolidationofFinancialStatements
Notapplicable.
Schedule D.Long-termDebt
TheCompanyhasnooutstandinglong-termdebtasofSeptember 30,2025andDecember31,2024.
Schedule E.IndebtednesstoRelatedParties(LongTermLoansfromRelatedCompanies)
TheCompanyhasnolong-termindebtednesstorelatedpartiesasofSeptember30,2025andDecember31, 2024.
Schedule F.GuaranteesofSecuritiesofOtherIssuers
The Company does not have guarantees of securities of other issuers as of September 30, 2025 and December31,2024.
ScheduleH.CapitalStock
SEAFRONTRESOURCESCORPORATION
SCHEDULEOFFINANCIALSOUNDNESSINDICATORS
Financial Soundness Indicators
BelowarethefinancialratiosthatarerelevanttotheCompanyfortheninth-monthperiodendedSeptember 30,2025,September30,2024andfortheyearendedDecember31,2024:
*Earnings before interest, taxes, depreciation and amortization (EBITDA)
SEAFRONTRESOURCESCORPORATION
RECONCILIATIONOFRETAINED EARNINGSAVAILABLEFORDIVIDEND DECLARATION
SEPTEMBER30,2025
ThetablebelowpresentstheretainedearningsavailablefordividenddeclarationasofSeptember30,2025:
UnappropriatedRetainedEarnings(Deficit),beginningofthereporting period P =92,162,586
Add:CategoryA:ItemsthataredirectlycreditedtoUnappropriated RetainedEarnings
ReversalofRetainedEarningsappropriation
Effectofreinstatementsorprior-periodadjustments
Others
Less:CategoryB:ItemsthataredirectlydebitedtoUnappropriated RetainedEarnings
Dividenddeclarationduringthereportingperiod
RetainedEarningsappropriatedduringthereporting period
Effectofreinstatementsorprior-periodadjustments –
Others
Less:CategoryC.1Unrealizedincomerecognizedintheprofitorloss duringthereportingperiod(netoftax)
Equityinnetincomeofassociate /jointventure,netofdividendsdeclared –
Unrealizedforeignexchangegain,exceptthoseattributabletocashand cashequivalents
Unrealizedfairvalue adjustment(mark-to-marketgains)offinancial instrumentsatfairvalue throughprofitorloss(FVPTL) 191,132
Unrealizedfairvalue gainofInvestmentProperty –
Otherunrealizedgainsoradjustmentstotheretainedearningsasa resultofcertain transactionsaccountedforunderthePFRS –
Subtotal 191,132
Add:CategoryC.2Unrealizedincomerecognizedintheprofitorlossinprior reportingperiodsbutrealizedinthecurrentreportingperiod(netoftax)
Realizedforeignexchange gain,exceptthoseattributable tocashandcash equivalents –
Realizedfairvalueadjustment(mark-to-marketgains)offinancial instrumentsatfairvalue through profitorloss(FVPTL)
RealizedfairvaluegainofInvestmentProperty
Otherrealizedgainsoradjustmentstotheretainedearningsasaresultof certain transactionsaccounted forunderPFRS
Subtotal
Add:CategoryC.3Unrealizedincomerecognizedintheprofitorlossinprior reportingperiodsbutreversedinthecurrentreportingperiod(netoftax)
Reversalofpreviouslyrecordedforeignexchangegain,exceptthose attributabletocashand cashequivalents –
Reversalofpreviouslyrecordedfairvalueadjustment(mark-to-market gains)offinancialinstrumentsatfairvalue throughprofitorloss(FVPTL) –
Reversalofpreviouslyrecordedfairvaluegainof InvestmentProperty –
Reversalofotherrealizedgainsoradjustmentstothe retainedearningsasa resultofcertain transactionsaccountedforunderPFRS
Subtotal
Add:CategoryD:Nonactuallossesrecognizedinprofitorlossduringthe reportingperiod(netoftax)
Depreciationonrevaluationincrement(aftertax)
Subtotal
Add/Less:CategoryE:AdjustmentsrelatedtothereliefgrantedbySEC andBSP(seeFootnote3)
Amortizationofthe effectofreportingrelief
Totalamountofreportingrelief grantedduringtheyear
Others
Subtotal
Add/Less:CategoryF:Otheritemsthatshouldbeexcludedfromthe determinationoftheamountavailablefordividendsdistribution
Netmovementofthe treasuryshares(exceptforreacquisition of redeemableshares)
Netmovementofthedeferredtaxassetnotconsideredinreconcilingitems underpreviouscategories
Netmovementofthedeferredtaxassetanddeferredtaxliabilitiesrelated tosame transaction,e.g,set-upofrightofuseassetandleaseliability, set-upofassetandleaseliability,set-upofassetandassetretirement obligation,andset-up ofservice concession assetandconcessionpayable AdjustmentduetodeviationfromPFRS/GAAP-gain (loss)
Others
Subtotal
TotalRetainedEarnings,endofthereportingperiodavailablefordividend 94,267,995
FOOTNOTES:
(1) Theamountofretainedearningsofthecompanyshouldbebasedon itsseparate(“standalone”)auditedfinancialstatements.
(2) Unappropriated Retained Earnings, beginning of the reporting period refers to the ending balance as reported in the “Reconciliationof Retained EarningsAvailableforDividendDeclaration”oftheimmediately precedingperiod.
(3) Adjustments related to the relief provided by SEC and BSP pertain to accounting relief (e.g losses that are reported on a staggeredbasis)grantedbyregulators.However,theseareactuallossessustainedbythecompanyandmustbeadjustedinthe reconciliationto reflecttheactualdistributableamount.
(4) This Reconciliation of Retained Earnings Available for Dividend Declaration is pursuant to Sec.42 of the Revised Corporate Code,whichprohibitsstockcorporationsto retain surplus profitsin excessofonehundred (100%)percentoftheirpaid-in capital andtheirpower to declare dividends. However, thisReconciliationofRetained Earnings shouldnotbe usedbytheREITActand itsImplementingRulesandRegulations.
