This is a classic toxic financing structure for a distressed micro-cap. The deep discount conversion (60% of lowest trading price) will likely lead to relentless selling pressure once the conversion period opens in January 2027.
Price Chart
Executive Summary
Kinetic Seas Inc. (KSEZ) issued a $210,000 convertible redeemable note to CFI Capital LLC, receiving net proceeds of $189,000. The note carries a 6% interest rate, matures in one year, and is convertible into common stock at a deeply discounted price (60% of the lowest trading price over the prior 20 days). The highly dilutive terms and the company's status as a blank-check entity on the OTC market signal significant financial distress and potential for massive shareholder dilution.
Key Financial Metrics
Key Facts
- Issued a $210,000 6% Convertible Redeemable Note to CFI Capital LLC, with net proceeds of $189,000 after a $21,000 original issue discount.
- The note is convertible into common stock at 60% of the lowest trading price over the prior 20 trading days, a deeply dilutive structure.
- The company must reserve 49,857,550 shares for conversion, indicating massive potential dilution relative to current outstanding shares.
- Conversion is blocked until the 6-month anniversary of the note, but the holder can then convert at any time.
- The company is a blank-check entity (SIC 6770) trading on the OTC market, with no revenue or operating business disclosed.
- The filing was signed by CEO Edward Honour on July 28, 2026, for an event that occurred on July 8, 2026.
Financial Impact
The $189,000 in net proceeds is a small amount for a public company, but the potential dilution from the 49,857,550 reserved shares is massive and could overwhelm the existing share structure.
Risk Factors
- Massive dilution from conversion of the note at a deep discount to market price.
- Company is a blank-check entity with no disclosed revenue or business operations.
- Potential for default and accelerated repayment if the company fails to meet its SEC filing obligations or maintain a bid price.
- The note contains aggressive default provisions that could further dilute shareholders or force the company into insolvency.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001683168-26-005793 |
| Document: kinetic_8k.htm | 0001683168-26-005793 |
| Document: 0001683168-26-005793-index-headers.html | 0001683168-26-005793 |
| Document: 0001683168-26-005793-index.html | 0001683168-26-005793 |
| Document: 0001683168-26-005793.txt | 0001683168-26-005793 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 20, 2026 7d ago | 8-K | $0.0280 | awaiting T+60 | — | $0.0200 (−28.57%) |
Jul 28, 2026 13w ago | 8-K | $0.0400 $0.0280 | ▲ +30.00% | ▲ +34.61% | $0.0200 (+50.00%) |
Jul 28, 2026 13w ago | 8-K | $0.0400 $0.0280 | ▼ −30.00% | ▼ −34.61% | $0.0200 (−50.00%) |
Jul 10, 2026 15w ago | 8-K | $0.0430 $0.0280 | ▼ −34.88% | ▼ −39.14% | $0.0200 (−53.49%) |
US Market Status
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