Kinetic Seas Inc. Issues $210K Convertible Note

What Happened Kinetic Seas, Inc. announced on July 8, 2026 that it entered into a Securities Purchase Agreement and issued a 6% Convertible Redeemable Note to CFI Capital LLC with an original principal of $210,000. The note carried a $21,000 original issue discount, producing gross proceeds of $189,000 before transaction expenses, and matures on July 8, 2027. Interest accrues at 6% per annum and is payable in shares of the company’s common stock under the note’s terms.

Key Details

• Original principal: $210,000; original issue discount: $21,000; net proceeds: $189,000.
• Maturity date: July 8, 2027; interest rate: 6% per year, payable in common stock.
• Conversion: holder may convert beginning six months after issuance at a price equal to 60% of the lowest trading price during the 20 trading days immediately preceding conversion (including conversion date). During any DTC “Chill” the conversion price adjusts to 50%.
• Ownership cap: holder cannot convert to exceed 4.99% beneficial ownership (can be raised to 9.99% with prior notice).
• Redemption: Company may redeem early by paying specified premiums (105%–140% of outstanding principal plus accrued interest depending on timing).
• Default provisions: events of default permit acceleration, allow default interest at the highest lawful rate, and increase the conversion discount from 40% to 55% (conversion price becomes 45% of the applicable trading price); other penalties may apply for failure to timely issue conversion shares.
• Share reserve: Company agreed to reserve 49,857,550 authorized shares for conversion and to maintain a reserve at least five times the number of shares required for full conversion.

Why It Matters This filing documents a short-term debt financing that can convert into equity at a substantial discount to market prices, which could significantly dilute existing shareholders if conversion occurs. Interest paid in shares and the aggressive conversion discounts (especially under default or certain transfer restrictions) increase potential dilution. Investors should note the near-term maturity (one year) and the company’s share reservation, which shows management has planned for potential conversion. The filing also creates a direct financial obligation and reflects an unregistered sale of securities as reported in the 8-K.