Kinetic Seas Inc.

Item 1. Financial Statements.

BALANCE SHEETS

STATEMENTS OF OPERATIONS

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

STATEMENTS OF CASH FLOWS

NOTES TO UNAUDITED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

NOTE 1 –ORGANIZATION AND DESCRIPTION OF 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 consulting. Before the change in control to the New Directors, the Company was a shell company.

The Company’s accounting year-end is December 31.

NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company have been prepared in accordance with GAAP. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses or recognized when incurred.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of accrued liabilities and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of accounts receivable, the allowance for doubtful accounts, inventories, and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Revenue Recognition and Cost of Consulting Labor

The Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018.

The Company will recognize revenue in accordance with Accounting Standards Codification No. 606, “Revenue from Contracts with Customers” (“ASC606”). ASC 606 directs entities to recognize revenue when the promised goods or services are transferred to the customer. The amount of revenue recognized should equal the total consideration an entity expects to receive in return for the goods or services. The Financial Accounting Standards Board (FASB) created a five-step approach that entities should apply when determining the amount and timing of revenue recognition:

Step 1: Identify the contract with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

During the nine months ended September 30, 2025, we generated $159,408 in consulting revenue, compared to $137,291 in the prior-year period. Cost of consulting labor for the same nine-month period totaled $70,139.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with an original maturity of three months or less. As of September 30, 2025, the Company hadno cash or cash equivalents, reflecting a decrease from $4,947 at December 31, 2024. The decline in available cash during the first nine months of 2025 was primarily driven by operating losses and working capital requirements.

Stock-based Compensation

The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

Income taxes

The Company accounts for income taxes under FASB ASC 740,“Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05,“Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.

On December 18, 2019, the Financial Accounting Standards Board (FASB) released Accounting Standards Update (ASU) 2019-12, which affects general principles within Topic 740, Income Taxes. The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. The FASB has stated that the ASU is being issued as part of its Simplification Initiative, which is meant to reduce complexity in accounting standards by improving certain areas of generally accepted accounting principles (GAAP) without compromising information provided to users of financial statements. The Company adopted this guidance on January 1, 2021, which had no impact on the Company’s financial statements.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

Recent Accounting Pronouncements

There have been no new or material changes to the significant accounting policies discussed in the Company’s audited financial statements in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed with the SEC on April 24, 2025, that are of significance, or potential significance, to the Company.

NOTE 3 –GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business during the twelve months following the issuance of these financial statements. The Company has incurred significant operating losses since inception and continues to rely on external financing to support operations. As of September 30, 2025, the Company had an accumulated deficit of $6,463,700 and a working capital deficit of approximately $928,153, reflecting current liabilities significantly exceeding current assets.

The Company does not expect to generate operating cash flows sufficient to fund currently anticipated operating activities, which raises substantial doubt regarding its ability to continue as a going concern. Management intends to seek additional funding through potential private placements of equity and debt financing arrangements. The Company will be required to continue securing external capital until operations generate positive cash flow. However, there can be no assurance that additional financing will be available on terms acceptable to the Company, or available at all.

NOTE 4 –ACCRUED LIABILITIES

As of September 30, 2025 and December 31, 2024, the Company had $442 and $1,483,587, respectively, in accrued liabilities.

The accrued liabilities balance at September 30, 2025 consists of the following:

$105,000 related to common shares issuable under a services agreement.

$33,486, recorded in both periods, represents cash received from cigar sales during the year ended December 31, 2021. The Company was unable to substantiate revenue recognition in accordance with ASC 606 for these receipts; therefore, this amount remains recorded as a liability and will continue to be classified as such until the statute of limitations expires in 2027.

NOTE 5 –RELATED PARTY TRANSACTIONS

On September 18, 2021, the Company entered into a $30,000 Promissory Note Agreement at 24% interest with Coral Investment Partners (“CIP”). CIP’s managing director is Erik Nelson, who was formerly the CEO of the Company. On June 30, 2022, CIP increased its Promissory Note to $50,000 by funding another $20,000 loan to the Company. Subsequently, CIP made an additional loan of $40,000 on September 15, 2022, to bring the total loan balance to $90,000 plus $21,674 in accrued interest. During the fiscal year ended December 31, 2023, CIP made additional loan amounts of $5,000 on February 15, 2023, $22,000 on March 29, 2023, $11,000 on June 30, 2023, $10,000 on May 10, 2023, $4,000 on June 29, 2023, $10,000 on July 5, 2023, $15,000 on August 21, 2023 and $15,000 on November 6, 2023.

On December 14, 2023, the Company and CIP agreed to convert $50,000 of indebtedness under the Promissory Note into 1,000,000 shares of the Company’s common stock at $0.05 per share. Also, after December 14, 2023, the interest rate was reduced to 12% for the period from December 14, 2023, through December 31, 2023. Effective January 1, 2024, the interest rate became 10%.

The conversion of debt into stock reduced the balance owed on the Promissory Note to $182,000 of principal and $11,098 of interest as of December 31, 2023.

As of September 30, 2025, the balance outstanding on the promissory note related to related parties was $255,639, and accrued interest totaled $67,097.

Additionally, CIP entered into a new note with the Company and advanced $43,820 during the nine months ended September 30, 2025, bearing interest at a rate of 18%. As of September 30, 2025, accrued interest related to this note was included within the total accrued interest balance noted above.

On September 20, 2024, Lisa Lozinski (“the Lender”), the spouse of a Company director, made a $50,000 loan to the Company. The terms of the loan were as follows:

The Company failed to pay the principal and accrued interest in full by the maturity date. As a result, the Company issued the Lender as a penalty payment of 100,000 restricted common shares.

As of September 30, 2025, the Company had related-party notes payable totaling $255,639, compared to $199,137 as of December 31, 2024. Accrued interest associated with these notes totaled $67,097 at September 30, 2025, compared to $9,089 at December 31, 2024. The notes are unsecured and payable on demand. The proceeds received under these financing arrangements were used primarily to fund operating expenses and general working capital needs.

During the nine months ended September 30, 2025, Jeff Lozinski, an officer of the Company, advanced funds on an interest-free basis to support operations. These advances are unsecured, carry no stated maturity date, and remain outstanding at September 30, 2025. Additional related-party borrowings during the period were made under promissory note agreements bearing interest at 18% per annum, and the Company may continue to draw upon related parties as a source of liquidity if available. There can be no assurance that such financing will continue on similar terms, or at all.

During the year ended December 31, 2024, the Company issued 20,950 shares of Series A Convertible Preferred Stock in exchange for 20,950,000 shares of common stock to four individuals who are officers and/or directors of the Company and one investor. In addition, 150 shares of Series A Preferred Stock were issued to an investor as a financing fee. These transactions were approved by the Board of Directors and accounted for as equity exchanges.

Management believes that continued access to related-party financing is critical to ongoing operations; however, such financing is not guaranteed and raises uncertainty regarding future liquidity. The Company may be required to seek additional external capital, and failure to obtain such funding could materially affect operations and financial condition.

NOTE 6 –EQUITY

The Company is authorized to issue 200,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000 shares of preferred stock, par value $0.00001 per share. As of September 30, 2025 and December 31, 2024, there were 51,439,000 and 16,329,000 shares of common stock outstanding, respectively.

Issuance of Common Stock

On December 14, 2023, the Board of Directors approved an offering of up to 10,000,000 shares of common stock in a private offering to accredited investors for $0.05 per share. Before the year-end, the Company issued 1,000,000 shares in an offering for an investment of $50,000. During the six months ended June 30, the Company completed the private placement by issuing 9,000,000 shares at $0.05 per share, which generated $450,000 in proceeds.

On March 19, 2024, the Board of Directors approved an offering of up to 6,000,000 shares of common stock in a private offering to accredited investors for $0.05 per share. During the three months ended June 30, 2024, the Company issued 4,104,000 shares in the offering and raised $205,200 in proceeds. The offering of 6,000,000 shares continued until July 14, 2024. During the period from July 1, 2024, through July 14, 2024, the Company sold 197,000 common shares in the offering and raised $9,850 in proceeds.

During the six months ended June 30, 2024, the Company also issued 40,000 shares for services rendered valued at $2,000.

On July 15, 2024, the Company commenced a new offering of 2,000,000 shares for $0.50 per share.

During the three months ended March 31, 2025, Preferred A and Preferred B shareholders converted all of the preferred shares into 26,600,000 shares of common stock. Additionally, one shareholder converted 500,000 shares of common stock into 500 shares of Preferred A stock. Also, during the three months ended March 31, 2025, the Company issued 2,125,000 shares to two investor relations firms.

During the three months ended June 30, 2025, the Company issued 3,200,000 common shares for service,425,000 common shares issued in error which will be returned to the Company,400,000 shares for financing fees due to non-payment of loans by the maturity date and 250,000 common shares were sold in a private placement for $0.20 per share yielding $50,000 in proceeds to the Company.

During the nine months ended September 30, 2025, the Company issued common stock through service-based compensation agreements and financing-related equity transactions, resulting in a significant increase in shares outstanding. These issuances were made to support operating needs, compensate service providers, and secure funding.

During the period, the Company issued:

As a result of these issuances and other equity activity, the number of common shares outstanding increased to 51,439,000 shares as of September 30, 2025, compared to 16,329,000 shares at December 31, 2024.

The Company expects that future equity issuances may continue to be a source of liquidity; however, there is no assurance that such financing will remain available on similar terms, or at all.

Issuance of Preferred A Stock

In February 2023, the Board of Directors approved the issuance of one series of preferred stock, the Series A Convertible Preferred Stock (the “Series A Preferred”), for 100,000,000 shares, of which 19,250 shares were issued on May 31, 2024, in exchange for 19,250,000 shares of common stock. During the three months ended September 30, 2024, the Company issued 150 shares of Series A Preferred as a financing fee. On November 18, 2024,1,700,000 common shares were converted to 1,700 Series A Preferred. As of December 31, 2024, there were 21,100 shares of Series A Preferred outstanding.

During the six months ended June 30, 2025, the 21,100 shares of Preferred A outstanding were converted into 21,100,000 shares of common stock. Additionally,500,000 shares of common stock were converted into Preferred A stock. As a result, as of June 30, 2025, there were 500 shares of Preferred A stock outstanding.

As of September 30, 2025, the number of Preferred A shares outstanding remained unchanged at 500 shares, with no additional conversions or issuances recorded during the subsequent quarter.

The Series A Preferred has the following rights:

Dividends: Each share of Series A Preferred is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have received if such share of Series A Preferred were converted into shares of common stock immediately before the record date of the dividend declared on the common stock.

Liquidation Preference: The Series A Preferred Stock is entitled to receive, before any distribution to any junior class of securities, an amount equal to $0.01 per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior security, including the common stock.

Voting Rights: Each holder of Series A Preferred Stock shall vote with holders of the common stock upon any matter submitted to a vote of shareholders, in which event it shall have the number of votes equal to the number of shares of common stock into which such share of Series A Preferred Stock would be convertible on the record date for the vote or consent of shareholders.

Voluntary Conversion Rights: Each share of Series A Preferred Stock is convertible into 1,000 shares of common stock.

Mandatory Conversion Rights: The Company may convert all outstanding shares of Series A Preferred Stock into common stock, at the same ratio as the voluntary conversion rights held by the holders, at any time that there are fewer than 200,000 shares of Series A Preferred Stock outstanding.

Rank: The Series A Preferred ranks senior to the common stock and any other class or series of preferred stock that may be authorized and which is designated as junior to the Series A Preferred Stock.

Issuance of Preferred B Stock

On July 13, 2024, the Board of Directors approved the issuance of a second series of preferred stock, the Series B Convertible Preferred Stock (the “Series B Preferred”), for 10,000,000 shares. During the three months ended March 31, 2025, the Company issued 4,000 shares of Series B Preferred for cash consideration of $200,000, and 1,500 shares of Series B Preferred for consulting services valued at $750,000. As of December 31, 2024, there were 5,500 shares of Series B Preferred outstanding.

During the three months ended March 31, 2025, the 5,500 shares of Preferred B outstanding were converted into 5,500,000 shares of common stock. As of June 30, 2025, there were -0- shares of Preferred B stock outstanding.

During the three months ended September 30, 2025, the Company issued 2,000 shares of Preferred B stock, increasing the total number of Preferred B shares outstanding from 0 at June 30, 2025 to 2,000 at September 30, 2025. No conversions or redemptions of Preferred B shares occurred during the quarter.

The Series B Preferred has the following rights:

Dividends: Each share of Series B Preferred is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have received if such share of Series B Preferred were converted into shares of common stock immediately before the record date of the dividend declared on the common stock.

Liquidation Preference: The Series B Preferred Stock is entitled to receive, before any distribution to any junior class of securities, an amount equal to $0.01 per share, plus any accrued but unpaid dividends, as a liquidation preference before any distribution may be made to the holders of any junior security, including the common stock.

Voting Rights: The Series B Preferred Stock does not have the right to vote on any matter submitted to a vote of shareholders, but is entitled to notice of any shareholder meeting or any action proposed to be taken by shareholders instead of a meeting.

Voluntary Conversion Rights: Each share of Series B Preferred is convertible into 1,000 shares of common stock, provided that no holder of Series B Preferred may convert its shares into common stock to the extent the holder would be the beneficial owner of more than 4.99% of the Company’s common stock immediately after the conversion, and further provided that the holder has the right to waive this limitation on at least 61 days prior notice to the Company.

Mandatory Conversion Rights: The Company may convert all outstanding shares of Series B Preferred Stock into common stock, at the same ratio as the voluntary conversion rights held by the holders, at any time that there are fewer than 200,000 shares of Series B Preferred Stock outstanding.

Rank: The Series B Preferred ranks senior to the common stock and any other class or series of preferred stock that may be authorized and which is designated as junior to the Series B Preferred. The Series B Preferred ranks junior to the Series A Preferred.

On July 24, 2024, the Company changed its Articles of Incorporation and filed a Certificate of Designation to create 10,000,000 shares of Series B Convertible Preferred Stock. The Series B preferred shares are junior to Series B Preferred Stock and have the same rights as Series A Preferred, with one exception. Series B preferred holders cannot hold more than 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the conversion.

Warrants

The Company has outstanding 500,000 Class A Warrants and 500,000 Class B Warrants. The Class A Warrants are exercisable at $1.00 per share until June 20, 2026, and the Class B Warrants are exercisable at $2.50 per share until June 20, 2026. The Class A and B Warrants are exercisable at any time by the holder on a cash or cashless basis, provided that the holder may not exercise the warrants if the holder would own more than 4.99% of the Company immediately following the exercise, provided that the holder has the right to increase such percentage to no more than 9.99% upon at least 61 days prior written notice to the Company.

Reverse Stock Split

On June 5, 2023, the Company effected a 1 for 50,000 reverse split immediately followed by a 500 to 1 forward split. The net impact was areverse split of 1 for 100. At that time, the split was declared the Company had 140,790,867 shares outstanding. Post split, there were 3,046,000 shares outstanding. As a result of FINRA policies regarding beneficial ownership of odd lot holders, the Company issued approximately 1,000,000 shares in excess of the amounts anticipated by the split. This split has been retroactively applied in the financial statement to all prior periods, and all reference to share counts in this report reflect post-split amounts unless specifically stated otherwise.

NOTE 7 –NOTES PAYABLE

As of September 30, 2025, the Company had a total of $252,844 in short-term notes payable to multiple noteholders, with interest rates ranging from 10% to 36%. A portion of these notes are past due and continue to accrue interest.

NOTE 8 –LEASES

During 2024, the Company entered into a non-cancellable four-year lease for which it recorded a right-of-use asset and liability based on the present value of the lease payments in the amount of $82,897 using a term of 47 months and a discount rate of 12.00%.

The weighted average remaining lease term is 35 months and the weighted average discount rate is 12%. Operating lease expense for the nine months ended September 30, 2025, was approximately $20,040.

As of September 30, 2025, the Company had total operating lease liabilities of $56,661, consisting of $20,930 classified as current and $35,731 classified as long-term, compared to $70,302 at December 31, 2024. The decrease during the period reflects ongoing lease payments and the scheduled amortization of the right-of-use asset. No new operating leases were entered into during the three or nine months ended September 30, 2025, and no leases were terminated or modified.

Future minimum lease payments under the Company’s existing non-cancellable operating lease agreement are expected to be paid within the normal lease term. Lease expense is recognized on a straight-line basis over the lease period.

NOTE 9 –SUBSEQUENT EVENTS

In accordance with ASC 855-10, the Company evaluated subsequent events occurring after September 30, 2025 through December 4, 2025, the date on which the financial statements were issued. Based on this evaluation, the Company did not identify any subsequent events requiring adjustment to, or disclosure in, the accompanying financial statements.