Kinetic Seas Inc.

Kinetic Seas Incorporated is an Artificial Intelligence consulting, research and development, and software company focused on delivering practical, locally deployed AI solutions. The company’s core business centers on helping businesses integrate AI into their operations through technical consulting, training and education, and purpose-built software products. The company was formed on January 3, 2015 as a Colorado corporation and underwent several name changes, most recently on January 19, 2024, when it changed its name to Kinetic Seas Incorporated. Prior to a change in control on December 14, 2023, the company was a shell company, and the appointment of new directors enabled the company to enter the business of artificial intelligence hosting, research and development, and consulting.

The company’s service offerings are structured around several interconnected areas including consulting services, training and education, product development, and partnerships and incubation services. Consulting services include strategic consulting, project execution, and infrastructure planning, and the company no longer provides staff augmentation services. Training and education play a central role in the business model, with both free and paid learning opportunities, including custom-designed training programs for enterprise clients. During fiscal year 2025, the company developed Skilliks, a proprietary AI software platform designed to support enterprise software development, AI integration, and workflow automation, which was licensed to an international client pursuant to a multi-year licensing agreement.

The company’s product development strategy leverages the Ollama platform, allowing it to run Large Language Models efficiently on local hardware, combining supervised fine-tuning and advanced prompt engineering to tailor models to client-specific needs. The company also designs and builds intuitive graphical user interfaces for these AI-driven applications. The company supports and participates in the AI Masters Community with ED, an AI-focused learning and collaboration community hosted on the Skool platform, which has grown to include over 10,000 active AI enthusiasts. The company develops partnerships and incubation services for up-and-coming AI companies as a flexible way to earn consulting revenue, attract long-term hosting clients, and support early-stage innovation.

During the year ended December 31, 2025, the company generated total revenues of $417,768, consisting of $71,268 in consulting revenue and $346,500 in product sales, compared to $210,584 in consulting revenue during the year ended December 31, 2024. The increase in revenues in fiscal 2025 was attributable to the company’s continued expansion of its AI-related consulting and technology operations, as well as the commencement of product sales activities. Gross profit increased to $351,019 during fiscal 2025, compared to gross profit of $52,808 during fiscal 2024. The company incurred a net loss of $(1,235,227), or $(0.05) per share, compared to a net loss of $(3,897,121), or $(0.18) per share, during the year ended December 31, 2024.

As of December 31, 2025, the company had cash on hand of $7,767 compared to cash on hand of $4,947 as of December 31, 2024. The company reported total assets of $10,608,843 as of December 31, 2025, compared to $190,417 as of December 31, 2024, with the increase primarily driven by investments of $10,460,540 related to equity received from licensing and development arrangements. Total liabilities were $10,959,453 as of December 31, 2025, compared to $2,212,497 as of December 31, 2024, and total stockholders' deficit was $(350,609) as of December 31, 2025, compared to $(2,022,081) as of December 31, 2024.

The independent registered public accounting firm’s auditors’ report accompanying the December 31, 2025 financial statements contained an explanatory paragraph expressing substantial doubt about the company’s ability to continue as a going concern. The company has suffered recurring losses from operations and has a net capital deficiency for the period ended December 31, 2025 that raise substantial doubt about its ability to continue as a going concern. The company’s common stock is quoted on the OTCQB Venture Market under the symbol “KSEZ,” and as of May 26, 2026, there were approximately 366 holders of record of the company’s common stock.

Management intends to fund working capital requirements through a combination of revenues generated from operations and future issuances of debt or equity securities. Working capital requirements are expected to increase in line with the continued implementation of the business plan, expansion of operations, and growth of the company’s AI and technology-related business activities. Based upon current operations, the company may require additional working capital to fund operations over the next 12 months, and there can be no assurance that additional capital will be available on acceptable terms, if at all.

The company’s growth strategy is centered on enabling successful AI adoption across a broad range of use cases and maturity levels, supporting organizations from early-stage adoption to advanced enterprise deployment through a combination of education, consulting, and proprietary AI software platforms. By engaging with customers early in their AI adoption lifecycle, including through training, platform licensing, and development partnerships, the company seeks to establish long-term relationships that evolve as customers’ needs grow. The company’s focus on locally deployed, secure, and customizable AI solutions positions it to address increasing concerns around data privacy, performance, and control, while participating in the ongoing commercialization of AI-enabled products and services through licensing and revenue-sharing arrangements.

The company’s product development strategy is now primarily dedicated to developing commercial products based on locally run AI models, leveraging the Ollama platform and combining supervised fine-tuning and advanced prompt engineering. The company’s consulting operations are divided into three categories: strategic consulting, project consulting, and infrastructure consulting, with strategic consulting remaining the highest-impact segment. The company’s education-first engagement strategy, including the AI Masters Community with over 10,000 active AI enthusiasts, serves as both an educational ecosystem and a practical talent and innovation network that supports the broader strategy of early engagement with organizations exploring AI adoption.

The company’s competitive advantage is driven by its development of Skilliks, a proprietary AI-powered platform designed to transform how organizations move from concept to execution by applying artificial intelligence to structure ideas, requirements, and decisions into clearly defined topics and development modules. Unlike large cloud providers or traditional software vendors, the company combines platform-driven planning with secure, locally deployed AI systems, leveraging tools such as Ollama, supervised fine-tuning, and prompt engineering to deliver private, high-performance AI applications without reliance on third-party cloud platforms.

The company’s sales and marketing efforts are closely aligned with its focus on education-driven engagement and product-based AI solutions, with education continuing to be at the heart of its marketing strategy through channels like the Kinetic Seas Business AI podcast, instructional video content, webinars, and written guides. The company actively demonstrates product capabilities through case studies, live demos, and tailored proof-of-concept builds, and its sales process often begins with training and evolves into deeper consulting and product integration projects. The company employs a mix of digital lead generation and traditional relationship-based strategies for enterprise sales.

The company’s capital allocation plans include using proceeds from the issuance of common stock for cash, proceeds from notes payable, and proceeds from related party notes to fund operations. During fiscal year 2025, cash flows provided by financing activities were $556,749, consisting primarily of $255,000 in proceeds from the issuance of common stock for cash, $252,858 in proceeds from notes payable, and $56,501 in proceeds from related party notes, partially offset by repayments of related party notes of $(15,682). The company anticipates that it may continue to incur operating losses as it expands its operations and invests in the growth of its business.

The company’s margin trajectory showed improvement during fiscal 2025, with gross profit increasing to $351,019 compared to $52,808 in fiscal 2024, and the improvement in gross margin was primarily attributable to higher revenue levels, increased operational efficiencies, and the addition of higher-margin product sales. Operating expenses decreased to $1,553,681 in fiscal 2025 from $3,820,014 in fiscal 2024, primarily attributable to lower professional fees, reduced stock-based and startup-related expenses, and management’s continued efforts to control operating costs while scaling operations.

The company faces significant risks related to its business and industry, including that artificial intelligence and machine learning are emerging technologies involving significant risks and uncertainties, and the company’s operations and future success are substantially dependent on its ability to develop, integrate, and effectively utilize AI and ML technologies. Adverse conditions in the AI market or the global economy more generally could have adverse effects on results of operations, as adverse macroeconomic conditions such as recessions, economic slowdowns, inflation, currency fluctuations, or political instability can reduce spending on AI technology and services. The company’s success depends on the growth of its industry, most specifically on the growing adoption and use of AI technology in general and the adoption and use of its products, and there is a risk that the AI market may not grow as anticipated due to a variety of factors including economic downturns, regulatory changes, market saturation, or a shift in consumer preferences away from AI-driven solutions. The company’s success depends on an unproven market, and the demand and viability of the market it intends to serve are unproven and may be influenced by a multitude of factors beyond its control. The market in which the company operates is highly competitive and rapidly changing, and the company competes with a range of businesses, including larger companies with more resources, established market presence, and brand recognition. As of December 31, 2024, the company only had one customer, and the company may become increasingly dependent on a few key partnerships. The company’s business is subject to a complex and evolving regulatory environment, including the EU AI Act which classifies AI systems into risk-based categories and imposes obligations based on the level of risk, and compliance with these evolving frameworks may require changes to products, development practices, documentation, data handling, and contractual arrangements, and may increase operating costs or limit certain business activities. The company’s independent registered public accounting firm’s auditors’ report accompanying the December 31, 2025 financial statements contained an explanatory paragraph expressing substantial doubt about the company’s ability to continue as a going concern.

Management’s message to shareholders emphasizes the company’s vision to lead the evolution of practical artificial intelligence by making it accessible, manageable, and meaningful for every organization, with a focus on local model deployment, intuitive user experiences, and business-ready solutions. The key themes in management’s message include the philosophy of "be evolutionary, not revolutionary" and a practical approach to AI based on the team’s experience implementing large scale AI applications. The strategic priorities emphasized by management include developing and commercializing proprietary AI platforms through licensing and revenue-sharing arrangements, expanding the company’s education-first engagement strategy through the AI Masters Community, and building long-term customer relationships by engaging with organizations early in their AI adoption lifecycle through training, platform licensing, and development partnerships.