Kinetic Seas Narrows Losses Amid Revenue Growth, Zero Cash Balance Raises Alarm

TL;DR

**KSEZ is a high-risk bet; improved revenue is overshadowed by a zero cash balance and massive deficit, making it a speculative play for traders.**

AI Summary

Kinetic Seas Inc. (KSEZ) reported a net loss of $206,111 for the three months ended September 30, 2025, a significant improvement from the $1,053,518 net loss in the prior-year period. For the nine months ended September 30, 2025, the net loss was $1,448,780, compared to $1,710,438 in the same period of 2024. Consulting revenue increased to $91,537 for the three months ended September 30, 2025, up from $64,966 in the prior year, and for the nine months, it rose to $159,408 from $137,291. Gross margin improved substantially, reaching $91,537 for the quarter compared to $12,476 previously, and $89,269 for the nine months versus $30,542. Operating expenses decreased to $249,831 for the quarter from $1,055,870, primarily due to a negative payroll and benefits expense of $(200,092) and reduced professional fees. The company's cash balance dropped to $0 as of September 30, 2025, from $4,947 at December 31, 2024, and it continues to operate with an accumulated deficit of $6,463,700 and a working capital deficit of $928,153, raising substantial doubt about its going concern ability.

Why It Matters

This filing reveals a company in a precarious financial state, despite some operational improvements. For investors, the zero cash balance and significant working capital deficit of $928,153 signal extreme liquidity risk, making KSEZ a highly speculative investment. Employees face uncertainty given the going concern doubt, which could impact job security and future growth opportunities. Customers might question the long-term viability of a consulting firm with such financial instability, potentially affecting new contracts and existing relationships. The broader market should view KSEZ as a cautionary tale of a micro-cap company struggling to scale, highlighting the challenges in the AI consulting space for undercapitalized players.

Risk Assessment

Risk Level: high — The company has a zero cash balance as of September 30, 2025, down from $4,947 at December 31, 2024, and an accumulated deficit of $6,463,700. Furthermore, it has a working capital deficit of approximately $928,153, with current liabilities significantly exceeding current assets, which raises substantial doubt about its ability to continue as a going concern.

Analyst Insight

Investors should exercise extreme caution and consider KSEZ a highly speculative investment due to its severe liquidity issues and going concern doubt. Await clear evidence of successful capital raises and sustained positive cash flow before considering any position.

Financial Highlights

debt To Equity

N/A

revenue

$159,408

operating Margin

N/A

total Assets

$149,932

total Debt

$1,002,543

net Income

$ (1,448,780)

eps

$ (0.03)

gross Margin

56.0%

cash Position

$0

revenue Growth

+16.2%

Revenue Breakdown

Key Numbers

• $0 — Cash at End of Period (Decreased from $4,947 at December 31, 2024, indicating severe liquidity issues.)
• $6,463,700 — Accumulated Deficit (Increased from $5,014,920 at December 31, 2024, highlighting ongoing losses.)
• $928,153 — Working Capital Deficit (Reflects current liabilities significantly exceeding current assets, indicating financial distress.)
• $159,408 — Nine-Month Consulting Revenue (Increased from $137,291 in the prior-year period, showing revenue growth.)
• $1,448,780 — Nine-Month Net Loss (Improved from $1,710,438 in the prior-year period, indicating reduced losses.)
• 51,439,000 — Common Shares Outstanding (Increased from 16,329,000 at December 31, 2024, indicating significant dilution.)
• $1,107,999 — Stock-Based Compensation (Significant non-cash expense for the nine months ended September 30, 2025.)
• $205,379 — Increase in Accounts Payable (For the nine months ended September 30, 2025, contributing to cash flow from operations.)

Key Players & Entities

• Kinetic Seas Inc. (company) — registrant
• Edward Honour (person) — Chairman of the Board of Directors
• Jeffey Lozinski (person) — Board of Directors member
• Joseph Lehman (person) — Board of Directors member
• Robert Jackson (person) — Board of Directors member
• SEC (regulator) — Securities and Exchange Commission
• $6,463,700 (dollar_amount) — accumulated deficit as of September 30, 2025
• $928,153 (dollar_amount) — working capital deficit as of September 30, 2025
• $0 (dollar_amount) — cash balance as of September 30, 2025
• $159,408 (dollar_amount) — consulting revenue for the nine months ended September 30, 2025

FAQ

Risk Factors

• Severe Liquidity Constraints [high — financial]: The company has a cash balance of $0 as of September 30, 2025, down from $4,947 at December 31, 2024. This, coupled with a working capital deficit of $928,153, raises substantial doubt about its ability to continue as a going concern.
• Accumulated Deficit [high — financial]: The company has an accumulated deficit of $6,463,700 as of September 30, 2025, an increase from $5,014,920 at December 31, 2024. This indicates a history of significant operating losses.
• Significant Shareholder Dilution [high — financial]: Common shares outstanding increased from 16,329,000 at December 31, 2024, to 51,439,000 as of September 30, 2025. This substantial increase of over 200% indicates significant dilution for existing shareholders.
• Reliance on Financing [high — operational]: The company's ability to obtain financing, if and when needed, on acceptable terms is a stated risk. The near-zero cash balance underscores this dependency for future operations.
• Limited Management and Financial Resources [medium — operational]: The company explicitly mentions risks related to limited management, labor, and financial resources. The current financial state supports this concern.
• Negative Working Capital [high — financial]: A working capital deficit of $928,153 as of September 30, 2025, means current liabilities ($966,812) far exceed current assets ($38,658). This indicates immediate financial distress.

Industry Context

Kinetic Seas Inc. operates in the AI consulting, research, development, infrastructure, and software sector, with a focus on GPU Cloud Hosting. This is a rapidly growing but highly competitive field, requiring significant capital investment for infrastructure and talent. The company's current financial distress and lack of cash may hinder its ability to compete effectively against larger, well-funded players.

Regulatory Implications

As a publicly traded company, Kinetic Seas Inc. is subject to SEC regulations and reporting requirements. The company's severe liquidity issues and going concern doubts necessitate clear and transparent disclosures to investors, adhering to all regulatory standards to avoid penalties.

What Investors Should Do

1. Review the company's cash burn rate and runway to assess its ability to continue operations without immediate additional financing.
2. Analyze the sustainability of the revenue growth and gross margin improvements in light of the company's overall financial precariousness.
3. Evaluate the long-term viability of the AI consulting and GPU hosting business model given the intense competition and capital requirements.
4. Consider the impact of significant share dilution on potential future returns and the overall value of existing investments.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported $0 cash, a working capital deficit of $928,153, and an accumulated deficit of $6,463,700, raising going concern doubts.
• 2025-01-19: Name Change to Kinetic Seas Incorporated — Marks a strategic shift or rebranding, potentially related to its AI focus.
• 2024-12-31: End of Fiscal Year 2024 — Reported $4,947 cash, an accumulated deficit of $5,014,920, and 16,329,000 common shares outstanding.

Glossary

Accumulated Deficit

The total net losses of a company since its inception that have not been offset by net gains. (Indicates the company has consistently incurred more expenses than revenues, leading to a negative equity position.)

Working Capital Deficit

Occurs when a company's current liabilities exceed its current assets. (Signifies potential short-term liquidity problems and difficulty in meeting immediate financial obligations.)

Going Concern

An assumption that a company will continue to operate for the foreseeable future, typically at least the next 12 months. (The company's financial condition raises substantial doubt about its ability to continue as a going concern, a critical indicator for investors and creditors.)

Stock-Based Compensation

Compensation provided to employees in the form of stock or stock options, treated as an expense for the company. (A significant non-cash expense ($1,107,999 for nine months ended Sep 30, 2025) that impacts net income but not immediate cash flow.)

Dilution

The reduction in the value of existing shareholders' equity resulting from the issuance of new shares. (The substantial increase in shares outstanding indicates significant dilution, reducing the ownership percentage and potential value per share for existing shareholders.)

Year-Over-Year Comparison

Compared to the prior year, Kinetic Seas Inc. has shown improved revenue growth and significantly better gross margins, with consulting revenue up 16.2% for the nine months and gross margin increasing substantially. However, the company's financial health has deteriorated drastically, with cash falling to $0 and a widening working capital deficit. The accumulated deficit has also increased, and common shares outstanding have seen massive dilution, indicating a challenging financial outlook despite operational improvements.

Key Financial Figures

• $0.001 — of 21,600,000 shares of common stock at $0.001 per share to the New Directors and cert
• $0.05 — of 10,000,000 shares of common stock at $0.05 per share. An affiliate of a New Direct
• $0 — the Lender. These shares were valued at $0.50, which is equivalent to the price th

Filing Documents

• kinetic_i10q-093025.htm (10-Q) — 576KB
• kinetic_ex3101.htm (EX-31.1) — 11KB
• kinetic_ex3201.htm (EX-32.1) — 4KB
• 0001683168-25-009033.txt ( ) — 3022KB
• ksez-20250930.xsd (EX-101.SCH) — 23KB
• ksez-20250930_cal.xml (EX-101.CAL) — 32KB
• ksez-20250930_def.xml (EX-101.DEF) — 99KB
• ksez-20250930_lab.xml (EX-101.LAB) — 237KB
• ksez-20250930_pre.xml (EX-101.PRE) — 188KB
• kinetic_i10q-093025_htm.xml (XML) — 278KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) 4 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 21 Item 4.

Controls and Procedures

Controls and Procedures 21

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 23 Item 1A.

Risk Factors

Risk Factors 23 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23 Item 3. Defaults Upon Senior Securities 23 Item 4. Mine Safety Disclosures 23 Item 5. Other Information 23 Item 6. Exhibits 24

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Information contained in this quarterly report on Form 10-Q contains "forward-looking statements." These forward-looking statements are contained principally in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," and are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend" or "project" or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our ability to consummate the Merger, as such term is defined below; the continued services of the Custodian as such term is defined below; our future financial performance; the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by any forward-looking statements. These risks, uncertainties and other factors include but are not limited to: the risks of limited management, labor, and financial resources; our ability to establish and maintain adequate internal controls; our ability to develop and maintain a market in our securities; and our ability obtain financing, if and when needed, on terms that are a

Financial Statements

Item 1. Financial Statements. KINETIC SEAS INCORPORATED BALANCE SHEETS September 30, December 31, 2025 2024 (Unaudited) ASSETS Current Assets Cash $ – $ 4,947 Accounts receivable 38,658 20,719 Deferred charge – 10,852 Total current assets 38,658 36,518 Right of use assets 55,572 69,821 Property and equipment, net 55,702 84,078 Total assets $ 149,932 $ 190,417 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 368,996 $ 163,618 Accrued liabilities 442 1,483,587 Cash overdraft 864 – Accrued officer compensation – 55,601 Accrued interest 67,097 9,089 Lease liabilities-short term 20,930 20,299 Notes payable 252,844 231,164 Notes payable related parties 255,639 199,137 Total current liabilities 966,812 2,162,495 Lease liabilities long term 35,731 50,003 Total liabilities 1,002,543 2,212,497 Commitments and contingencies – – STOCKHOLDERS' DEFICIT Preferred A stock, $ 0.00001 par value, 50,000,000 shares authorized, 500 and 21,100 shares issued and outstanding, respectively, as of September 30, 2025 and December 31, 2024 – – Preferred B stock, $ 0.00001 par value, 50,000,000 shares authorized, 2,000 and 5,500 shares issued and outstanding, respectively, as of September 30, 2025 and December 31, 2024 – – Common stock, $ 0.00001 par value, 200,000,000 shares authorized and 51,439,000 and 16,329,000 shares issued and outstanding, respectively as of September 30, 2025 and December 31, 2024 514 163 Additional paid-in-capital 5,610,576 2,992,676 Accumulated deficit ( 6,463,700 ) ( 5,014,920 ) Total stockholders' deficit ( 852,610 ) ( 2,022,081 ) Total liabilities and stockholders' deficit $ 149,932 $ 190,417 Note: Amounts may not foot due to rounding. The accompanying notes are an integral part of these

financial statements

financial statements. 4 KINETIC SEAS INCORPORATED (Unaudited) Three months Three months Nine months Nine months ended ended ended ended September 30, September 30, September 30, September 30, 2025 2024 2025 2024 Consulting Revenue $ 91,537 $ 64,966 $ 159,408 $ 137,291 Cost of sales consulting labor – 52,490 70,139 106,749 Gross margin (loss) 91,537 12,476 89,269 30,542 Operating expenses Selling, general and administrative expenses 346,726 149,050 518,536 543,053 Professional fees 103,197 787,039 825,760 906,571 Payroll and benefits ( 200,092 ) 119,782 74,932 261,959 Total operating expenses 249,831 1,055,870 1,419,228 1,711,583 Loss from operations ( 158,294 ) ( 1,043,394 ) ( 1,329,959 ) ( 1,681,041 ) Other (expense): Interest expense ( 47,817 ) ( 10,125 ) ( 118,821 ) ( 29,397 ) Total other expense ( 47,817 ) ( 10,125 ) ( 118,821 ) ( 29,397 ) Net (loss) $ ( 206,111 ) $ ( 1,053,518 ) $ ( 1,448,780 ) $ ( 1,710,438 ) Basic and diluted loss per share $ ( 0.01 ) $ ( 0.06 ) $ ( 0.03 ) $ ( 0.07 ) Weighted average number of shares outstanding: Basic and diluted 49,571,065 16,858,576 42,020,723 23,342,109 Note: Amounts may not foot due to rounding. The accompanying notes are an integral part of these

financial statements

financial statements. 5 KINETIC SEAS INCORPORATED (Unaudited) Preferred A Stock Preferred B Stock Common Stock Additional Paid In Accumulated Total Stockholders' Shares Amount Shares Amount Shares Amount Capital Deficit Deficit Balance, December 31, 2023 – $ – – $ – 26,646,000 $ 266 $ 922,020 $ ( 1,117,798 ) $ ( 195,512 ) Common stock issued for cash – – – – 5,000,000 50 249,950 – 250,000 Net loss – – – – – – – ( 199,338 ) ( 199,338 ) Balance, Mar 31, 2024 – $ – – $ – 31,646,000 $ 316 $ 1,171,970 $ ( 1,317,137 ) $ ( 144,850 ) Common stock issued for services – – – – 40,000 – 2,000 – 2,000 Common stock issued in error to be returned – – – – 200,000 2 9,998 – 10,000 Common stock issued in private placement – – – – 4,104,000 41 205,159 – 205,200 Conversion of common stock to preferred stock 19,450 – – – ( 19,450,000 ) ( 195 ) 195 – – Net loss – – – – – – – ( 457,582 ) ( 457,582 ) Balance, June 30, 2024 19,450 $ – – $ – 16,540,000 $ 165 $ 1,389,322 $ ( 457,582 ) $ ( 385,232 ) Preferred A Stock Preferred B Stock Common Stock Additional Paid In Accumulated Total Stockholders' Shares Amount Shares Amount Shares Amount Capital Deficit Deficit Balance, December 31, 2024 21,100 $ – 5,500 $ – 16,329,000 $ 163 $ 2,992,676 $ ( 5,014,920 ) $ ( 2,022,081 ) Conversion of Preferred A to common stock ( 21,100 ) – – – 21,100,000 211 ( 211 ) – – Conversion of Preferred B to common stock – – ( 5,500 ) – 5,500,000 55 ( 55 ) – – Conversion of common shares to Preferred A 500 – – – ( 500,000 ) ( 5 ) 5 – – Shares issued for services – – – – 2,125,000 21 1,062,479 – 1,062,500 Net loss – – – – – – – ( 223,891 ) ( 223,891 ) Balance, March 31, 2025 500 $ – – $ – 44,554,000 $ 445 $ 4,054,894 $ ( 5,238,811 ) $ ( 1,183,472 ) S

financial statements

financial statements. 6 KINETIC SEAS INCORPORATED (Unaudited) Nine months Nine months ended ended September 30, September 30, 2025 2024 Cash flows provided by (used in) operating activities Net (loss) from operations $ ( 1,448,780 ) $ ( 1,710,438 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation 28,376 19,782 Common stock issued for financing fees – 32,499 Stock based compensation 1,107,999 752,000 Changes in assets and liabilities Accounts receivable ( 17,939 ) ( 20,816 ) Lease liability-net 608 – Deferred charge 10,852 ( 23,489 ) Accounts payable 205,379 102,725 Accrued liabilities ( 227,895 ) – Accrued interest 58,008 ( 6,217 ) Cash overdraft 864 – Accrued officer compensation ( 55,601 ) – Net cash (used in) operating activities ( 338,129 ) ( 853,954 ) Cash flows provided by (used in) investing activities Purchases of property and equipment – ( 100,178 ) Net cash (used in) investing activities – ( 100,178 ) Cash flows provided by (used in) financing activities Proceeds from related party notes 56,502 50,000 Proceeds from notes payable 82,597 150,000 Repayments of notes payable ( 5,917 ) ( 35,881 ) Proceeds from common stock issued for cash 200,000 786,050 Net cash provided by financing activities 333,182 950,169 Net (decrease) in cash ( 4,947 ) ( 3,962 ) Cash, beginning of period 4,947 17,931 Cash, end of period $ – $ 13,969 Note: Amounts may not foot due to rounding. The accompanying notes are an integral part of these

financial statements

financial statements. 7 NOTES TO UNAUDITED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 NOTE 1 – ORGANIZATION AND DESCRIPTION OF

BUSINESS

BUSINESS Nature of Operations Kinetic Seas Incorporated (the "Company") was formed on January 3, 2015, as a Colorado corporation with the name ONCO Merger Sub, Inc. On January 5, 2025, the Company merged with Oncology Med, Inc. as part of a holding company reorganization involving Oracle Nutraceuticals Company, under which the Company was the surviving entity in the merger. On January 18, 2015, the Company changed its name to Oncology Med, Inc. On September 16, 2016, the Company changed its name to Bellatora, Inc. On January 19, 2024, the Company changed its name to Kinetic Seas Incorporated. The Company is an Artificial Intelligence (" AI ") consulting, research and development, infrastructure, and software company with a primary focus on GPU Cloud Hosting. By a written consent dated December 14, 2023, the Board of Directors of the Company approved the appointment of Edward Honour, Jeffey Lozinski, Joseph Lehman, and Robert Jackson to the Board of Directors of the Company, and appointed Edward Honour as Chairman (the "New Directors"). At the same time, the Board of Directors approved the issuance of 21,600,000 shares of common stock at $0.001 per share to the New Directors and certain new employees, of which 19,950,000 were acquired by the New Directors. In addition, the Board of Directors also approved a private offering of 10,000,000 shares of common stock at $0.05 per share. An affiliate of a New Director purchased the initial 1,000,000 shares in this offering. As a result of both transactions, the New Directors and their affiliates acquired an aggregate of 20,950,000 Shares of common stock, which constituted approximately 84% of the issued and outstanding common shares of the Company at the time. The appointment of the New Directors to the Company's board, and the sale to the New Directors of a controlling interest in the Company, were made to enable the Company to enter the business of artificial intelligence hosting, research & development, and consult

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