Kinetic Seas Inc.

Current report

The Company's artificial intelligence business is focused on AI-enabled software consulting, custom software development, AI implementation services, and the development of proprietary AI-powered solutions. Rather than concentrating on infrastructure and educational services, the Company currently focuses on helping businesses identify, plan, and implement software and artificial intelligence initiatives that improve operational efficiency and create new business opportunities.

Current report

The Company secures clients through its proprietary Skilliks™ platform, which is designed to evaluate a client's software development and technology requirements and create comprehensive development strategies. Skilliks™ utilizes artificial intelligence to identify opportunities for automation, workflow optimization, software modernization, and the incorporation of AI-powered features that can enhance business operations and customer engagement.

Current report

The Company's consulting and development services assist organizations in designing, developing, and deploying custom software applications and AI-enabled solutions. Through these engagements, the Company helps clients integrate emerging AI technologies into existing business processes while developing long-term technology roadmaps aligned with each client's strategic objectives.

Current report

In addition to its consulting activities, the Company is developing comprehensive AI-powered voice-agent solutions for the hospitality industry. These solutions are intended to automate customer interactions, streamline operations, and improve customer experiences for hospitality and food service businesses.

Current report

The Company is also pursuing software development and artificial intelligence opportunities through its strategic relationship with Sagtec Global Limited. Pursuant to this relationship, the Company is collaborating on the development of software and AI solutions for deployment throughout Southeast Asia. Sagtec currently serves more than 13,000 food and beverage locations through its point-of-sale technology platform and has secured a five-year license to develop software and AI projects within the region. The Company believes this relationship provides a significant opportunity to expand the adoption of its AI-enabled solutions across a large and established customer base.

Current report

Revenues

Current report

During the three months ended March 31, 2026 and 2025, the Company generated consulting revenue of $25,895 and $67,871, respectively. In addition, during the three months ended March 31, 2026, the Company recognized product sales revenue of $519,750 related to the satisfaction of performance obligations associated with previously deferred customer contracts. Total revenue for the three months ended March 31, 2026 and 2025 was $545,645 and $67,871, respectively.

Current report

During the three months ended March 31, 2026 and 2025, the cost of consulting labor incurred to generate consulting revenue was $0 and $57,162, respectively. The Company did not record any direct costs of product sales during the three months ended March 31, 2026. Software development expenditures are included within Selling, General and Administrative expenses because the underlying software, artificial intelligence models, code base, and technology infrastructure are developed for use across multiple current and prospective customer engagements and future commercialization opportunities. Management does not allocate these costs to specific customer contracts or product sales because the technologies developed are utilized across numerous current and future projects and may support multiple revenue-generating activities. As a result, gross profit for the three months ended March 31, 2026 was $545,645, compared to $10,709 for the three months ended March 31, 2025.

Current report

During the three months ended March 31, 2026, the Company incurred operating expenses of $363,246, compared to $204,352 during the three months ended March 31, 2025. The increase in operating expenses was primarily attributable to higher professional fees, consulting expenses, public company compliance costs, commissions, investor relations activities, and other administrative expenses associated with the Company's growth initiatives, financing activities, and expansion of operations.

Current report

Selling, general and administrative expenses increased to $210,813 during the three months ended March 31, 2026, compared to $82,490 during the comparable prior-year period. Professional fees increased to $133,027 from $5,422, reflecting increased legal, accounting, consulting, transfer agent, SEC reporting, and other public company compliance costs. Payroll and benefits were $19,405 for the three months ended March 31, 2026, compared to $116,440 for the three months ended March 31, 2025.

Current report

The Company includes all software development expenditures within Selling, General and Administrative expenses. Management believes these costs are not directly attributable to any specific customer contract, product sale, or revenue stream because the Company's software platforms, artificial intelligence models, code libraries, applications, and related technology infrastructure are developed for use across multiple current and prospective customer engagements and future commercialization opportunities. Accordingly, no software development costs are classified as direct costs of revenue.

Current report

The Company expects operating expenses, including selling, general and administrative expenses, software development expenditures, professional fees, payroll and benefits, investor relations costs, public company compliance expenses, and other administrative expenses, to remain significant as the Company continues to expand its operations, pursue strategic growth opportunities, develop proprietary technology, and satisfy its reporting obligations as a public company. The Company may also incur additional expenses related to financing activities, business development initiatives, strategic partnerships, and the hiring of additional personnel as operations expand.

Current report

During the three months ended March 31, 2026, the Company recorded total other expense of $1,558,007, compared to $30,247 during the three months ended March 31, 2025. Other income (expense) during the 2026 period consisted primarily of a loss on debt extinguishment of $1,602,602, partially offset by investment income of $98,296, and interest expense of $53,702.

Current report

The increase in other expense during the three months ended March 31, 2026 was primarily attributable to transactions involving the settlement and restructuring of outstanding indebtedness, which resulted in a significant non-cash loss on debt extinguishment. These charges were partially offset by investment income earned during the period. The Company also continued to incur interest expense on its outstanding borrowings.

Current report

Management believes that a substantial portion of the increase in other expense for the three months ended March 31, 2026 was attributable to non-cash debt extinguishment and financing-related transactions that are not representative of the Company's recurring operating activities.

Current report

The increase in net loss during the three months ended March 31, 2026 was primarily attributable to a non-cash loss on debt extinguishment of $1,602,602, increased operating expenses associated with the Company's growth initiatives, public company compliance activities, professional fees, and administrative expenses. These increases were partially offset by higher revenues recognized during the period, including product sales revenue recognized from the satisfaction of performance obligations associated with previously deferred customer contracts, as well as investment income of $98,296 recognized during the period.

Current report

As of March 31, 2026, the Company had cash of $205,667.

Current report

During the three months ended March 31, 2026, the Company incurred a net loss of $(1,375,608).

Current report

Cash flows used in operating activities were $(254,064) for the three months ended March 31, 2026. Cash used in operating activities was primarily attributable to expenditures associated with operating activities, software development, professional fees, public company compliance costs, financing-related expenses, and changes in working capital accounts. Although the Company recognized revenue of $545,645 during the period, including $519,750 recognized from the satisfaction of performance obligations associated with previously deferred customer contracts, operating cash flows were impacted by ongoing business operations, technology development, and corporate infrastructure costs. Operating cash flows were partially offset by non-cash items, including a $1,602,602 loss on debt extinguishment, depreciation, amortization of right-of-use assets, stock-based compensation, and other non-cash adjustments reflected in the reconciliation of net loss to net cash used in operating activities.

Current report

Cash flows provided by financing activities were primarily attributable to proceeds received from financing arrangements and equity issuances during the three months ended March 31, 2026. During the period, the Company obtained additional funding through debt financing and capital raising transactions to support operations, working capital requirements, software development activities, commercialization efforts, and corporate growth initiatives.

Current report

Management intends to fund its working capital requirements through a combination of existing cash resources, revenues generated from operations, strategic commercial relationships, and future issuances of debt and equity securities. The Company's working capital requirements are expected to increase as it continues to expand its artificial intelligence, software development, cloud infrastructure, and commercialization activities.

Current report

Based on its current operating plan, the Company does not have sufficient internally generated cash flow to fund operations over the next twelve months. The Company requires additional capital to execute its business strategy and support future growth initiatives. There can be no assurance that the Company will be successful in obtaining additional financing on acceptable terms, or at all. If additional financing is not available when required, the Company may be forced to delay, reduce, or eliminate certain operating, development, commercialization, or strategic initiatives.

Current report

Additional issuances of equity securities or securities convertible into equity may result in substantial dilution to existing stockholders. Such securities may also contain rights, preferences, or privileges senior to those of the Company's common stock. Furthermore, debt financing may impose restrictive covenants and other obligations on the Company. If adequate capital is not available on acceptable terms, the Company's ability to pursue new business opportunities, develop products, expand operations, and achieve its strategic objectives could be materially adversely affected.

Current report

The Company expects to continue incurring operating losses in the near term as it invests in software development, artificial intelligence technologies, commercialization efforts, growth initiatives, and public company compliance activities. Because the Company's software platforms, artificial intelligence models, applications, code libraries, and related technology infrastructure are developed for use across multiple current and prospective customer engagements and future commercial opportunities, software development expenditures are included within Selling, General and Administrative expenses rather than cost of sales. The Company's future success will depend on its ability to generate sustainable revenues, manage growth effectively, secure additional financing when necessary, attract and retain qualified personnel, develop and commercialize its technology solutions, and successfully execute its business strategy. There can be no assurance that the Company will successfully achieve these objectives.

Current report

For the three months ended March 31, 2026 and 2025, diluted net loss per share was equal to basic net loss per share because the Company reported a net loss for each period and the inclusion of potentially dilutive securities would have been anti-dilutive. Accordingly, all potentially dilutive securities were excluded from the computation of diluted net loss per share.

Current report

Potentially dilutive securities outstanding as of March 31, 2026 included 500 shares of Series A Convertible Preferred Stock, 4,917 shares of Series B Preferred Stock, and certain debt and financing instruments that may be convertible into or exercisable for shares of the Company's common stock. Because the effect of these securities would have been anti-dilutive, they were excluded from the calculation of diluted net loss per share for the three months ended March 31, 2026 and 2025.

Current report

Segment Reporting

Current report

We operate in a single operating segment and a single reportable segment focused on artificial intelligence consulting, software development, AI platform licensing, and related services. Operating segments are defined as components of an enterprise for which separate financial information is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s chief executive officer serves as the CODM and evaluates performance and allocates resources based on consolidated financial information. Because the Company operates as asingle operating and reportable segment, all financial segment information required by ASC 280 is included in the consolidated financial statements.

Previous report

We have identified five basic segments of our AI business: technical consulting; GPU infrastructure and rental (Kinetic Cloud); open source software and libraries; software and platform as a service (SaaS/PaaS); and education and training. We are focusing our initial efforts on our education and training segment, which is targeted toward educating and training existing non-AI businesses in how they incorporate AI technology to optimize the performance of their existing business. We believe that developing a respected education and training business will create a natural sales channel for our other segments, such as consulting and GPU hosting and rental. Secondarily, we are marketing our consulting and implementation services to the growing body of AI startups that may lack the in-house expertise to implement their AI business.

Previous report

Revenues and Cost of sales consulting labor

Previous report

During the three months ended September 30, 2025 and 2024, we generated $91,537 and $64,966, respectively, in consulting revenue. The increase in revenue during the 2025 period reflects execution of AI consulting engagements following the strategic repositioning of our service model and the proportional share of the license agreement for Skilliks valued at $2,000,000 over a 5 year term. While we anticipate continued revenue generation from these client engagements, there can be no assurance that future revenue levels will be consistent or that growth will occur. As we remain in early-stage operational development, revenue may fluctuate materially from period to period.

Previous report

During the three months ended September 30, 2025 and 2024, cost of consulting labor was $0 and $52,490, respectively. The additional costs of the license agreement will be realized as further development is allocated to the long-term project. During the three months ended September 30, 2024, the Company recognized consulting revenue relating to services that were performed and invoiced under net-30 terms. The related consulting labor was incurred and expensed during the prior quarter ended June 30, 2025, resulting in zero cost of sales associated with this revenue in the current quarter.

Previous report

During the three months ended September 30, 2025, we incurred $249,831 in operating expenses, as compared to $1,055,870 during the same period in 2024. The 2024 operating expenses were materially higher due to professional fees and start-up related activities, including consulting and legal costs associated with business formation and market entry. In future periods, operating expenses, including sales, general and administrative expenses, payroll and benefits, and professional fees, may increase as we expand operations, hire personnel, and grow our service delivery capacity.

Previous report

During the three months ended September 30, 2025, we incurred $47,817 in other expenses, compared to $10,125 during the three months ended September 30, 2024. In both periods, other expense consisted solely of interest expense on outstanding loans. The increase in 2025 is attributable to a higher balance of notes payable and related interest accruals.

Previous report

Revenues and Cost of sales consulting labor

Previous report

During the nine months ended September 30, 2025 and 2024, we generated $159,408 and $137,291 in consulting revenue, respectively. The increase year-over-year reflects a ramp-up in commercial activity following the refinement of our AI consulting service model. However, because we are still in early operational stages, revenue levels may vary significantly in future periods and there is no assurance that revenue growth will continue.

Previous report

During the nine months ended September 30, 2025 and 2024, the cost of consulting labor was $70,139 and $106,749, respectively.

Previous report

Operating Expenses

Previous report

During the nine months ended September 30, 2025, we incurred $1,419,228 in operating expenses, compared to $1,711,583 for the same period in 2024, The 2024 operating expenses were higher due to professional fees and start-up related activities.

Previous report

We expect operating expenses including compensation, professional services, and administrative overhead to continue to increase in future reporting periods as the Company expands its operational footprint, executes strategic growth initiatives, and scales personnel resources.

Previous report

Other (Expense)

Previous report

During the nine months ended September 30, 2025, we incurred $118,821 in other expenses, compared to $29,397 for the same period in 2024. In both periods, other expense consisted entirely of interest expense. The increase year-over-year is attributable to higher outstanding note balances and the continued accrual of interest during 2025.

Previous report

Net Loss

Previous report

As a result of the foregoing, we recorded a net loss of $(1,448,780) for the nine months ended September 30, 2025, compared to a net loss of $(1,710,438) for the nine months ended September 30, 2024. Basic and diluted loss per share was $(0.03) and $(0.07) respectively.

Previous report

As of September 30, 2025, the Company reported no cash on hand and a cash overdraft of $(864).

Previous report

During the nine months ended September 30, 2025, the Company recorded a net loss of $(1,448,780).

Previous report

Cash flows used in operating activities were $(338,129) for the nine months ended September 30, 2025, compared to $(853,954) for the nine months ended September 30, 2024. The reduced operating cash burn in 2025 was primarily driven by changes in working capital, including increases in accounts payable, accrued interest, accrued liabilities, and stock issued in lieu of cash compensation.

Previous report

Cash flows provided by financing activities totaled $333,182 for the nine months ended September 30, 2025, compared to $950,169 for the nine months ended September 30, 2024. The reduction reflects lower stock issuance proceeds and decreased borrowing levels during the 2025 period.

Previous report

Management intends to fund operations through external financing, including potential future issuances of equity and/or debt securities. Working capital requirements are expected to increase as operational activity scales, revenue development advances, and headcount expands.

Previous report

Based on current operating conditions, the Company does not have sufficient liquidity to sustain operations through the next 12 months. Continued losses, limited cash resources, and dependence on external funding raise substantial doubt regarding the Company’s ability to continue as a going concern. Additional capital will be required, and there is no assurance that financing will be available on acceptable terms, or at all. Any completed financing may be dilutive to existing shareholders or include rights senior to common equity.

Previous report

Future issuances of equity or convertible instruments will result in shareholder dilution and may contain features that adversely impact existing holders. If the Company is unable to secure additional financing as needed, its ability to execute its business plan, support growth initiatives, and maintain operations may be materially impaired.

Previous report

We expect operating losses to continue over the next twelve months. Successful execution of the business model will require raising capital, increasing revenue generation, expanding personnel, and scaling operations effectively. Failure to achieve these objectives may materially affect financial results, liquidity, and overall business viability.

Previous report — wording carried elsewhere

Comparison of Results of Operations for the Nine Months Ended September 30, 2025 and 2024