Kinetic Seas issues $210K 6% convertible note

Q: What are the key terms of Kinetic Seas (KSEZ)'s 6% Convertible Redeemable Note?

The note has $210,000 principal, a 6% annual interest rate payable in stock, and matures on July 8, 2027. It is convertible after six months at 60% of the lowest 20‑day trading price, with ownership caps and early redemption premiums of 105%–140% of principal plus interest.

Q: How is the conversion price determined for Kinetic Seas (KSEZ)'s new note?

The conversion price equals 60% of the lowest trading price of Kinetic Seas common stock during the 20 trading days immediately before the conversion notice, including the conversion date. During any DTC “Chill”, it adjusts to 50%, and upon certain defaults it can drop to 45% of the applicable trading price.

Q: What ownership limits apply to conversions of Kinetic Seas (KSEZ)'s note?

The holder cannot convert if it would exceed 4.99% beneficial ownership of Kinetic Seas’ outstanding common stock. This Beneficial Ownership Limitation may be increased to 9.99% upon prior notice, restricting how many shares can be received on conversion at any one time.

Q: How many shares has Kinetic Seas (KSEZ) reserved for conversion of the note?

Kinetic Seas initially reserved 49,857,550 shares of common stock for potential conversion of the note. The company also agreed to maintain an ongoing reserve equal to at least five times the number of shares required for full conversion under the note’s terms.

Q: Under what securities law exemptions was Kinetic Seas (KSEZ)'s note issuance made?

The securities underlying the note were issued relying on Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506. Kinetic Seas states it believes the deal qualified because it was not a public offering and the investor represented an investment purpose.

Kinetic Seas, Inc. entered into a Securities Purchase Agreement with CFI Capital LLC on July 8, 2026, issuing a 6% Convertible Redeemable Note with an original principal amount of $210,000.

Filing Impact

(Very High)

Filing Sentiment

(Neutral)

Form Type

8-K

Rhea-AI Filing Summary

Kinetic Seas, Inc. entered into a Securities Purchase Agreement with CFI Capital LLC on July 8, 2026, issuing a 6% Convertible Redeemable Note with an original principal amount of $210,000. The Note was issued with a $21,000 original issue discount, providing gross proceeds of $189,000 before payment of transaction expenses.

The Note matures on July 8, 2027, bears interest at 6% per year payable in common stock, and is convertible, beginning six months after issuance, at 60% of the lowest trading price of the common stock during the 20 trading days immediately preceding the conversion notice, including the conversion date, or at 50% of the applicable trading price during any DTC “Chill”. Conversions are subject to a 4.99% beneficial ownership cap, which may be increased to 9.99% upon prior notice. The company may redeem the Note before maturity at premiums of 105%–140% of outstanding principal plus accrued interest, depending on timing. Kinetic Seas reserved 49,857,550 shares of common stock for potential conversion and agreed to maintain a reserve equal to at least five times the amount needed for full conversion. The Note includes customary change-of-control and event-of-default provisions; upon default, the holder may accelerate the Note, default interest may apply, and the conversion discount may increase so that the conversion price equals 45% of the applicable trading price.

Filing Explained

The July 8 financing created a direct debt obligation, while common-stock issuance remains conditional on the note’s interest and conversion terms.

The July 8 note is reported as a created direct financial obligation, so the company has taken on the note's repayment and interest terms while the common-stock features remain governed by their stated conversion and interest provisions.

The filing separately classifies the securities as an unregistered sale made in reliance on Section 4(a)(2) and/or Rule 506, rather than as a registered public offering.

The company says that conclusion rests on its belief that the transaction did not involve a public offering and on the investor's representation that it acquired the securities for investment purposes.

8-K Event Classification

4 items: 1.01, 2.03, 3.02, 9.01

4 items

Item 1.01 Entry into a Material Definitive Agreement Business

The company signed a significant contract such as a merger agreement, credit facility, or major partnership.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial

The company incurred a new significant debt or off-balance-sheet obligation.

Item 3.02 Unregistered Sales of Equity Securities Securities

The company sold equity securities in a private placement or other unregistered transaction.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, or exhibit attachments filed with this report.

Key Figures

Note principal amount: $210,000 Original issue discount: $21,000 Gross proceeds: $189,000 +5 more

8 metrics

Note principal amount $210,000 Original principal amount of the 6% Convertible Redeemable Note issued July 8, 2026

Original issue discount $21,000 Discount applied to the note, producing $189,000 gross proceeds

Gross proceeds $189,000 Proceeds to Kinetic Seas before transaction expenses upon note issuance

Interest rate 6% per annum Annual interest on the Convertible Redeemable Note, payable in common stock

Maturity date July 8, 2027 Date on which the 6% Convertible Redeemable Note matures

Standard conversion price discount 60% of lowest 20-day trading price Conversion formula for the note after six months from issuance

Conversion price during DTC Chill 50% of applicable trading price Adjusted conversion formula while securities are subject to a DTC “Chill”

Reserved shares for conversion 49,857,550 shares Initial common share reserve for potential conversion of the note

Key Terms

Convertible Redeemable Note, original issue discount, DTC "Chill", beneficial ownership, +2 more

6 terms

Convertible Redeemable Note financial

"the Company issued a 6% Convertible Redeemable Note in the original principal amount"

original issue discount financial

"The Note was issued with an original issue discount of $21,000"

Original issue discount (OID) is the difference between a debt security’s face value and the lower price at which it is first sold, treated as additional interest that accrues over the life of the instrument. For investors it matters because OID raises the effective yield and changes taxable income and the holding’s cost basis over time — think of buying a $100 voucher for $90 and recognizing the $10 gain as earned interest as the voucher approaches maturity.

DTC "Chill" market

"During any period in which the Company's securities are subject to a DTC "Chill,""

beneficial ownership financial

"would result in beneficial ownership in excess of 4.99% of the Company's outstanding"

Beneficial ownership means the person or entity that actually enjoys the benefits of owning shares or other assets — such as receiving dividends, voting rights, or price gains — even if the legal title is held in another name. For investors it matters because knowing who truly controls and profits from a company reveals who can influence decisions, exposes potential conflicts of interest or hidden concentration of power, and affects transparency and risk in the stock.

Section 4(a)(2) of the Securities Act of 1933 regulatory

"issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933"

Rule 506 regulatory

"and/or Rule 506 promulgated thereunder"

A Securities and Exchange Commission rule that lets companies sell securities without registering them with the SEC when they meet certain conditions, commonly used for private placements. It allows issuers to raise unlimited capital from accredited investors and, in some versions, a small number of knowledgeable non‑accredited investors; one version also permits public advertising if the seller takes steps to verify investor credentials. For investors, it signals a private offering with lighter disclosure and different protections than a public stock sale, similar to buying into a private club rather than a publicly traded marketplace.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What financing did Kinetic Seas (KSEZ) enter into on July 8, 2026?

Kinetic Seas entered a Securities Purchase Agreement with CFI Capital LLC, issuing a 6% Convertible Redeemable Note with $210,000 original principal. The note carries a $21,000 original issue discount, giving $189,000 in gross proceeds before transaction expenses.

What are the key terms of Kinetic Seas (KSEZ)'s 6% Convertible Redeemable Note?

The note has $210,000 principal, a 6% annual interest rate payable in stock, and matures on July 8, 2027. It is convertible after six months at 60% of the lowest 20‑day trading price, with ownership caps and early redemption premiums of 105%–140% of principal plus interest.

How is the conversion price determined for Kinetic Seas (KSEZ)'s new note?

The conversion price equals 60% of the lowest trading price of Kinetic Seas common stock during the 20 trading days immediately before the conversion notice, including the conversion date. During any DTC “Chill”, it adjusts to 50%, and upon certain defaults it can drop to 45% of the applicable trading price.

What ownership limits apply to conversions of Kinetic Seas (KSEZ)'s note?

The holder cannot convert if it would exceed 4.99% beneficial ownership of Kinetic Seas’ outstanding common stock. This Beneficial Ownership Limitation may be increased to 9.99% upon prior notice, restricting how many shares can be received on conversion at any one time.

How many shares has Kinetic Seas (KSEZ) reserved for conversion of the note?

Kinetic Seas initially reserved 49,857,550 shares of common stock for potential conversion of the note. The company also agreed to maintain an ongoing reserve equal to at least five times the number of shares required for full conversion under the note’s terms.

Under what securities law exemptions was Kinetic Seas (KSEZ)'s note issuance made?

The securities underlying the note were issued relying on Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506. Kinetic Seas states it believes the deal qualified because it was not a public offering and the investor represented an investment purpose.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Available on EDGAR 07/28/2026 - 09:46 AM Accepted by SEC EDGAR 07/28/2026 - 09:45 AM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 8, 2026

KINETIC SEAS INCORPORATED

(Exact name of registrant as specified in its charter)

Colorado

(State or other jurisdiction

of incorporation or organization)

000-56478

(Commission

File Number)

47-1981170

(IRS Employer

Identification No.)

1501 Woodfield Road, Suite 114E

Schaumburg, IL 60173

(Address of principal executive office) (Zip Code)

(847) 754-4600

(Registrants’ telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

On July 8, 2026, Kinetic Seas, Inc. (the "Company") entered into a Securities Purchase Agreement with CFI Capital LLC pursuant to which the Company issued a 6% Convertible Redeemable Note in the original principal amount of $210,000 (the "Note"). The Note was issued with an original issue discount of $21,000, resulting in gross proceeds to the Company of $189,000 before payment of transaction expenses. The Note matures on July 8, 2027 and bears interest at a rate of 6% per annum. Interest is payable in shares of the Company's common stock pursuant to the terms of the Note.

The Note is convertible, at the option of the holder beginning six months following issuance, into shares of the Company's common stock at a conversion price equal to 60% of the lowest trading price of the Company's common stock during the twenty trading days immediately preceding the conversion notice, including the date of conversion, subject to the terms and limitations set forth in the Note. During any period in which the Company's securities are subject to a DTC "Chill," the conversion price adjusts to 50% of the applicable trading price. The holder is prohibited from converting the Note to the extent such conversion would result in beneficial ownership in excess of 4.99% of the Company's outstanding common stock, which limitation may be increased to 9.99% upon prior notice.

The Company may redeem the Note prior to maturity by paying specified premiums ranging from 105% to 140% of the outstanding principal, plus accrued interest, depending upon the timing of the redemption.

The Note contains customary provisions relating to corporate transactions, including mergers and asset sales, pursuant to which the holder may require redemption or elect conversion immediately prior to such transaction.

The Note contains customary events of default, including payment defaults, breaches of covenants, bankruptcy events, certain judgments, reporting failures, trading suspensions, failure to timely deliver conversion shares, and other specified events. Upon an event of default, the holder may accelerate the Note, default interest may accrue at the highest lawful rate, and the conversion discount may increase from 40% to 55% (resulting in a conversion price equal to 45% of the applicable trading price). Additional penalties may apply for failure to timely issue conversion shares.

The Company also agreed to reserve sufficient authorized shares of common stock for issuance upon conversion of the Note, initially reserving 49,857,550 shares and maintaining a reserve equal to at least five times the number of shares required for full conversion.

The foregoing description of the Note is qualified in its entirety by reference to the Note, a copy of which is filed as an exhibit to this Current Report and incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement.

The information contained in Item 1.01 of this Current Report is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The securities described in Item 1.01 were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 promulgated thereunder. The Company believes the issuance qualified for exemption because the transaction did not involve a public offering and the investor represented that it was acquiring the securities for investment purposes.

Item 9.01. Financial Statements and Exhibits.

(d)

Exhibits

Item No.		Description

10.1		6% Convertible Redeemable Note dated July 8, 2026
104		The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Kinetic Seas Incorporated


Dated: July 28, 2026	By:	/s/ Edward Honour
	Name:	Ed Honour
	Title:	Chief Executive Officer

Source: View Original Filing on SEC EDGAR

Filing Exhibits & Attachments

4 documents

Agreements & Contracts

EX-10.1 6% CONVERTIBLE REDEEMABLE NOTE DATED JULY 8, 2026 53.5 KB