Global Ai, Inc. - 10-K

ITEM 1A. RISK FACTORS

An investment in our Class A common stock is highly speculative, involves a high degree of risk, and should be made only by investors who can afford a complete loss of their investment. You should carefully consider the following risk factors, together with the other information in this annual report on Form 10-K, including our financial statements and the related notes, before you decide to buy our Class A common stock. If any of the following risks actually occur, our business, financial condition, or results of operations could be materially adversely affected, the trading of our Class A common stock could decline, and you may lose all or part of your investment therein.

Risks Relating to the Early Stage of our Company

We are at a very early operational stage, our success is subject to the substantial risks inherent in the establishment of a new business venture.

The implementation of our business strategy is in a very early stage. Our business and operations should be considered to be in a very early stage and subject to all of the risks inherent in the establishment of a new business venture. Accordingly, our intended business and operations may not prove to be successful in the near future, if at all. Any future success that we might enjoy will depend upon many factors, several of which may be beyond our control, or which cannot be predicted at this time, and which could have a material adverse effect upon our financial condition, business prospects and operations and the value of an investment in our Company.

We have a very limited operating history and our business plan is unproven and may not be successful.

To date, we have not provided, licensed or sold any substantial amount of products. We have not proven that our business model will allow us to generate a profit.

We have suffered operating losses since inception and we may not be able to achieve profitability.

We had an accumulated deficit of $5,424,034 as of December 31, 2025, and we expect to continue to incur significant developmental expenses in the foreseeable future related to development of our AI technology business. As a result, we are sustaining substantial operating and net losses, and it is possible that we will never be able to sustain or develop the revenue levels necessary to attain profitability.

We may have difficulty raising additional capital, which could deprive us of necessary resources.

We will need to raise additional funds through public or private debt or equity financing, collaborative relationships or other arrangements. Our ability to raise additional financing depends on many factors beyond our control, including the state of capital markets and the market price of our Class A common stock. Because our Class A common stock is not listed on a national securities exchange, such as the New York Stock Exchange (“NYSE”) or The NASDAQ Stock Market (“NASDAQ”), many investors may not be willing or allowed to purchase shares of our Class A common stock or may demand steep discounts to the trading price of our Class A common stock. Sufficient additional financing may not be available to us or may be available only on terms that would result in substantial dilution to the current owners of our Class A common stock.

We expect to pursue additional capital during the fiscal year ending December 31, 2026, but we do not have any firm commitments for funding. If we are unsuccessful in raising additional capital, or the terms of raising such capital are unacceptable, we may have to modify our business plan and/or significantly curtail our planned activities and other operations.

There are substantial doubts about our ability to continue as a going concern and if we are unable to continue our business, our shares may have little or no value.

The Company’s ability to become a profitable operating company is dependent upon its ability to generate revenues and/or obtain financing adequate to support our cost structure. There can be no assurance that we will generate revenues or obtain financing. These factors have raised substantial doubts about our ability to continue as a going concern. We plan to attempt to raise additional equity capital by selling shares through one or more private placement or public offerings. However, the doubts raised, relating to our ability to continue as a going concern, may make our shares an unattractive investment for potential investors. These factors, among others, may make it difficult to raise any additional capital.

Failure to effectively manage our growth could place strains on our managerial, operational and financial resources and could adversely affect our business and operating results.

Any future growth by us, or an increase in the number of our strategic relationships will create a strain on our managerial, operational and financial resources. This strain may inhibit our ability to achieve the rapid execution necessary to implement our business plan and could have a material adverse effect upon our financial condition, business prospects and operations and the value of an investment in our Company.

Risks Relating to Our Business

We will need to successfully acquire, develop and integrate AI-based technology companies and assets.

We may not be able to successfully source potential AI-based technology companies and assets. We also may not be able to effectively integrate and develop acquisition targets into our network and cannot predict when significant commercial market acceptance for the AI services provided by us and any acquired businesses will develop, if at all, and we cannot reliably estimate the projected size of any such potential market. If markets fail to accept our AI services, we may not be able to generate revenues from the provision of such services. Our revenue growth and achievement of profitability will depend substantially on the success of our M&A Program. If our M&A Program is not successful, or if the services provided by us and any acquired businesses do not achieve wide market acceptance, our business will be materially and adversely affected.

The market for agentic AI is nascent and may not develop as we expect.

Our success depends on the widespread adoption of agentic AI—systems that take autonomous action—within enterprise environments. If organizations remain hesitant to grant autonomy to AI systems due to security, ethical, or reliability concerns, the Agentic AI Platform may fail to achieve market personation.

We operate in a highly regulated environment, and changes in AI laws could harm our business.

Our customers operate in a variety of industries, including retail, healthcare, and insurance. These industries are subject to intense scrutiny regarding data privacy and algorithmic bias. Emerging global regulations (such as the EU AI Act or potential U.S. federal frameworks) may impose costly compliance requirements on our Agentic AI Platform or limit our ability to deploy certain automated features. New regulations could have a material adverse effect on our business.

We may not be able to identify, complete, or successfully integrate acquisitions.

A key component of our strategy is our M&A Program. We may be unable to find suitable targets at reasonable valuations, or at all. Even if acquisitions are effectuated, the integration of new technologies and personnel into our existing Agentic AI Platform involves significant operational risks, including, but not limited to:

Diversion of management’s attention from organic R&D;

Difficulties in harmonizing disparate software architectures;

Loss of key technical talent from acquired entities; and

Unforeseen liabilities or technical debt associated with acquired assets.

We will need to establish additional relationships with collaborative and development partners to fully develop and market our services.

We do not possess all of the resources necessary to develop and commercialize our AI technology business on a mass scale. Unless we expand our development capacity and enhance our internal marketing, we will need to make appropriate arrangements with collaborative partners to develop and commercialize consulting services.

Collaborations may allow us to:

generate cash flow and revenue;

offset some of the costs associated with our internal development; and

successfully commercialize consulting services.

If we need, but do not find, appropriate partner arrangements, our ability to develop and commercialize consulting services could be adversely affected. Even if we are able to find collaborative partners, the overall success of the development and commercialization of our services will depend largely on the efforts of other parties and is beyond our control. In addition, in the event we pursue our commercialization strategy through collaboration, there are a variety of attendant technical, business and legal risks, including:

● a development partner would likely gain access to our proprietary information and knowledge, potentially enabling the partner to develop services without us or design around our intellectual property;

● we may not be able to control the amount and timing of resources that our collaborators may be willing or able to devote to the development or commercialization of services, or to their marketing and distribution; and

● disputes may arise between us and our collaborators that result in the delay or termination of the development or commercialization of our services or that result in costly litigation or arbitration that diverts our management’s resources.

The occurrence of any of the above risks could materially impair our ability to generate revenues and materially harm our business and financial condition.

We may lose out to larger competitors.

The AI technology services industry is intensely competitive. Most of our competitors have significantly greater financial, technical, marketing and distribution resources. Our products and services may not be competitive with their products and services. If this happens, our sales and revenues will decline. In addition, our current and potential competitors may establish cooperative relationships with larger companies, to gain access to greater development or marketing resources. Competition may result in price reductions, reduced gross margins and loss of market share.

Our future success depends on the continuing efforts of our executive officers and on a small number of specialized personnel, and on our ability to attract, hire, retain and motivate highly skilled and creative executive officers and specialized personnel in the future.

Our future success depends on the continuing efforts of our executive officers and key personnel, in particular Darko Horvat, our Chief Executive Officer and Chairman of the Board, and a significant stockholder of the Company. We rely on the leadership, knowledge and experience that our executive officers provide. They foster our corporate culture, which we believe has been instrumental to our ability to attract and retain new talent. Any failure to attract new or retain key creative talent could have a material adverse effect on our business, financial condition, and results of operations.

In addition, our R&D and engineering team is currently led by a team of 14 senior AI specialists and software engineers. The market for AI talent is extremely competitive. The loss of even a few of these individuals to competitors could significantly delay our product development and harm our competitive position. Additionally, such competition could increase our costs to attract and retain talented individuals. As a result, we may incur significant costs to attract and retain personnel, including significant expenditures related to salaries and benefits and compensation expenses related to equity awards, and we may lose personnel to our competitors or other companies before we realize the benefit of our investment in recruiting and training them.

Turnover, including changes in our management team, could disrupt our business. The loss of one or more of our executive officers or other key personnel, or our inability to attract and retain highly skilled and creative individuals, could have a material adverse effect on our business, results of operations or financial condition.

We rely significantly on independent contractors and third-party service providers, which may expose us to operational risks.

We rely primarily on independent contractors to conduct our business operations. Our success depends on our ability to identify, hire, and retain qualified contractors. These individuals are not bound by the same duties of loyalty as employees, and we have less control over their daily activities. If any of these contractors were to terminate their relationship with us, or if we are unable to find suitable replacements on a timely basis, our business, financial condition, and results of operations could be materially and adversely affected. Furthermore, if a regulatory authority were to reclassify these contractors as employees, we could be liable for unpaid taxes, benefits, and penalties.

Security breaches of confidential customer information or confidential employee information may adversely affect our business.

Our business requires the collection, transmission and retention of certain customer and employee data, in various information technology systems that are maintained internally and by third parties with whom we contract to provide services. The integrity and protection of that customer and employee data is critical to us. Our customers and employees have a high expectation that we and our service providers will adequately protect their personal information. The information, security and privacy requirements imposed by government regulations are increasingly demanding. Our systems may not be able to satisfy these changing requirements and customer and employee expectations or may require significant additional investments or time in order to do so. Efforts to hack or breach security measures, failures of systems or software to operate as designed or intended, viruses, operator error or inadvertent releases of data all threaten our information systems and records. A breach in the security of our service providers’ information technology systems could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a loss of profits. A significant theft, loss or misappropriation of, or access to, customers’ or other proprietary data or other breach of our information technology systems could result in fines, legal claims or proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, which could disrupt our operations, damage our reputation and expose us to claims from customers and employees, any of which could have a material adverse effect on our financial condition and results of operations.

Our development and deployment of agentic AI systems involve unique operational, legal, and regulatory risks that could materially and adversely affect our business, reputation, and financial results.

Certain of our products and services incorporate or rely on agentic AI systems that use foundation models to autonomously plan, decide, and take actions across multi-step workflows, including by invoking third-party tools, APIs, and data sources. Because these systems operate with reduced human supervision relative to traditional software and earlier AI applications, they introduce risks that may differ in kind or magnitude from those associated with our other technologies, including risks related to model accuracy and reliability, unintended actions, data security and privacy, third-party system dependencies, intellectual property, regulatory compliance, and potential liability for outcomes produced or actions taken by such systems. The legal, regulatory, and commercial frameworks governing agentic AI remain unsettled and are evolving rapidly, and our ability to develop, deploy, and monetize these systems is subject to material uncertainty.

Risks Relating to our Class A Common Stock

Future stock issuances would dilute stockholders’ ownership, and may reduce our share value.

If, in the future, we issue additional shares of capital stock, the future issuance may result in substantial dilution in the percentage of our Class A common stock held by our then existing shareholders. We may value any equity issued in the future on an arbitrary basis. Many of our acquisitions will require the issuance of our capital stock as part of the consideration provided. The issuance of capital stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our Class A common stock.

Trading on the OTC Markets is volatile, sporadic and often thin, which could depress the market price of our Class A common stock and make it difficult for our stockholders to resell their Class A common stock.

Our Class A common stock is quoted on the OTCQB tier of the OTC Markets. Trading in securities quoted on the OTC Markets is often thin and characterized by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects. This volatility could depress the market price of our Class A common stock for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a stock exchange like NASDAQ or the NYSE. Our Class A common stock has a history of thin trading. These factors may result in investors having difficulty reselling any shares of our Class A common stock.

Our Class A common stock price is likely to be highly volatile because of several factors, including a limited public float.

The market price of our Class A common stock has been volatile in the past. The market price of our Class A common stock is likely to be highly volatile in the future, as well. You may not be able to resell shares of our Class A common stock following periods of volatility because of the market’s adverse reaction to volatility.

Other factors that could cause such volatility may include, among other things:

actual or anticipated fluctuations in our operating results;

the absence of securities analysts covering us and distributing research and recommendations about us;

we may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held;

overall stock market fluctuations;

announcements concerning our business or those of our competitors;

actual or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms;

conditions or trends in the industry;

litigation;

changes in market valuations of other similar companies;

future sales of Class A common stock;

departure of key personnel or failure to hire key personnel; and

general market conditions.

Any of these factors could have a significant and adverse impact on the market price of our Class A common stock. In addition, the stock market in general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Class A common stock, regardless of our actual operating performance.

Our Class A common stock is currently, has been in the past, and may be in the future, a “penny stock” under SEC rules. It may be more difficult to resell securities classified as “penny stock.”

Our Class A common stock is a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00). Unless we obtain a per-share price above $5.00, these rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.

Legal remedies available to an investor in “penny stocks” may include the following:

If a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.

If a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages.

However, investors who have signed arbitration agreements may have to pursue their claims through arbitration.

These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our Class A common stock and may affect your ability to resell our Class A common stock.

Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.

For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance that our Class A common stock will not remain classified as a “penny stock” in the future.

If we fail to maintain effective internal control over financial reporting, the price of our securities may be adversely affected.

Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our Class A common stock. We are required to establish and maintain appropriate internal control over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations. In addition, management’s assessment of internal control over financial reporting may identify weaknesses and conditions that need to be addressed in our internal control over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal control over financial reporting may have an adverse impact on the price of our Class A common stock.

We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) and if we fail to continue to comply, our business could be harmed and the price of our securities could decline.

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act require an annual assessment of internal control over financial reporting, and for certain issuers (but not us) an attestation of this assessment by the issuer’s independent registered public accounting firm. The standards that must be met for management to assess the internal control over financial reporting as effective are evolving and complex, and require significant documentation, testing, and possible remediation to meet the detailed standards. We expect to incur significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long it will take or costly it will be to complete the assessment of the effectiveness of our internal control over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to complete the assessment and remediation process on a timely basis. In the event that our Chief Executive Officer or principal financial officer determines that our internal control over financial reporting is not effective as defined under Section 404, we cannot predict how regulators will react or how the market prices of our securities will be affected; however, we believe that there is a risk that investor confidence and the market value of our securities may be negatively affected.

Shares eligible for future sale may adversely affect the market.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Class A common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non- affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements. Given the limited trading of our Class A common stock, resale of even a small number of shares of our Class A common stock pursuant to Rule 144 or an effective registration statement may adversely affect the market price of our Class A common stock.

The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our Class A common stock.

In addition to the penny stock rules discussed above, FINRA rules require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non- institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Class A common stock, which may limit the ability to buy and sell our stock and have an adverse effect on the market value for our shares.

An investor’s ability to trade our Class A common stock may be limited by trading volume.

The Company’s Class A common stock is currently quoted on the OTCQB under the symbol, “GLAI.” An active trading market for our Class A common stock has not developed, and may not develop, on the OTCQB. A limited trading volume may prevent our shareholders from selling shares at such times or in such amounts as they may otherwise desire.

Our Company has a concentration of stock ownership and voting control, which may have the effect of delaying, preventing, or deterring a change of control.

Our stock ownership is highly concentrated. Through ownership of shares of our Class A common stock and Class B common stock, one shareholder, Darko Horvat, our Chief Executive Officer and Chairman of the Board, beneficially owns approximately 53% of our total outstanding shares of Class A common stock. In addition to Mr. Horvat’s ownership of a substantial amount of our Class A common stock, Mr. Horvat holds 40,000,000 shares of our Class B common stock. Each share of Class B common stock has 50 votes per share and is convertible into one share of Class A common stock at the option of the holder. Accordingly, as a result of Mr. Horvat’s Class B common stock ownership, Mr. Horvat, acting alone, is able to control all matters requiring stockholder approval, including the election of directors and approval of mergers and other significant corporate transactions. This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of our Company. It could also deprive our stockholders of an opportunity to receive a premium for their shares as part of a sale of our Company and it may affect the market price of our Class A common stock.

We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.

Federal legislation, including the Sarbanes-Oxley Act, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements; others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or NASDAQ, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges, are those that address the Board of Directors’ independence, audit committee oversight, and the adoption of a code of ethics. As our securities are not listed on a national securities exchange, we are not required to adopt such corporate governance measures; however, we intend to adopt such measures in the future. It is possible that if we were to adopt corporate governance measures, shareholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees, may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

Because we will not pay dividends in the foreseeable future, stockholders will only benefit from owning Class A common stock if it appreciates.

We have never paid dividends on our Class A common stock and we do not intend to do so in the foreseeable future. We intend to retain any future earnings to finance our growth. Accordingly, any potential investor who anticipates the need for current dividends from his investment should not purchase our Class A common stock.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes to those financial statements that are included elsewhere in this annual report on Form 10-K.

Overview

The Company is engaged in the development and commercialization of an enterprise-grade agentic artificial intelligence (“AI”) platform (the “Agentic AI Platform”) and a suite of related agentic AI products. The Agentic AI Platform is designed to enable enterprises to discover, deploy, govern, measure, and continuously improve agentic AI-driven business operations across a broad range of industries, including regulated sectors such as banking, financial services, insurance, healthcare, and life sciences.

In parallel with its internal product development and organic growth, the Company has implemented a strategic mergers and acquisitions (“M&A”) program (the “M&A Program”), focused on identifying, acquiring, integrating, and further developing AI-based technology companies and assets. The Company’s M&A Program is concentrated on companies operating in agentic AI and adjacent AI technologies serving enterprises, institutions, and industries.

The Company believes that its combined strategy of organic product development and growth, together with strategic acquisitions through its M&A Program, will enable it to accelerate growth, broaden its addressable market, deepen its competitive position in the agentic AI sector, and create long-term value for its stockholders. There can be no assurance, however, that the Company will identify suitable acquisition targets, complete any contemplated acquisitions on favorable terms, or at all, or successfully integrate acquired businesses.

We have a dedicated R&D and engineering team which is tasked with developing a suite of AI products and solutions designed to tackle complex challenges and automate processes across industries, leveraging an agentic-AI approach. Our focus is on building AI applications and solutions that are secure, scalable, and privacy-centric. Our R&D and engineering team, led by 14 senior AI specialists and software engineers, is tasked with driving the development of groundbreaking AI technologies, positioning Global AI at the forefront of enterprise AI innovation.

On December 14, 2024, the Company established a subsidiary in Israel named GL AI Ltd. Further, in December 2024, the Company signed its first commercial contract with an enterprise customer in Israel.

‘The Company’s results of operations and financial condition are, and are expected to continue to be, materially influenced by the following factors:

the rate at which the Company commercializes the Agentic AI Platform and successfully introduces new products and capabilities;

the Company’s ability to identify, complete, integrate, and realize the anticipated benefits of acquisitions;

the Company’s ability to acquire, retain, and expand customer relationships, including through cross-selling of products across acquired businesses;

the pace of investment in research and development, sales and marketing, and infrastructure required to support growth;

prevailing macroeconomic conditions, the regulatory environment for AI technologies, and the competitive landscape in the agentic AI sector; and

the Company’s ability to access capital on favorable terms to fund operations and acquisitions.

Components of Results of Operations

Revenue. The Company generates revenues primarily from (i) software license for access to the Agentic AI Platform and related products, (ii) support and maintenance fees tied to platform usage, (iii) outcome-indexed fees tied to realized customer outcomes, and (iv) professional services fees related to implementation, integration, and advisory engagements.

Cost of Revenues. Cost of revenues consists primarily of expenses related to hosting and infrastructure (including third-party cloud computing services and foundation model usage), personnel costs (including salaries, benefits, and stock-based compensation) for employees engaged in delivering the Company’s products and services, amortization of acquired developed technology, and allocated overhead. Cost of revenues is expected to vary with the modality and configuration of customer deployments, including the proportion of workloads executed on customer-owned infrastructure versus cloud-based infrastructure.

Operating Expenses

Research and Development. Research and development expenses consist primarily of personnel costs (including salaries, benefits, and stock-based compensation) for engineers and other personnel engaged in the design, development, and enhancement of the Agentic AI Platform and related products, costs of foundation model access and experimentation, third-party software and tools, and allocated overhead. The Company expects research and development expenses to increase in absolute dollars as the Company continues to invest in product innovation, although such expenses may decline as a percentage of revenues over time.

Sales and Marketing. Sales and marketing expenses consist primarily of personnel costs (including salaries, commissions, benefits, and stock-based compensation) for sales and marketing personnel, costs of demand generation, marketing programs, customer events, travel, and allocated overhead. Sales and marketing expenses also include costs associated with the Company’s forward-deployed engineering model, in which technical personnel are embedded directly with customers during the pursuit and early deployment phases of the customer lifecycle. The Company expects sales and marketing expenses to increase in absolute dollars as the Company expands its sales organization, deepens enterprise customer relationships, and supports the integration of Acquisitions.

General and Administrative. General and administrative expenses consist primarily of personnel costs (including salaries, benefits, and stock-based compensation) for executive, finance, legal, human resources, and information technology functions, professional services fees (including audit, legal, and consulting fees), insurance, public-company compliance costs, and allocated overhead. The Company expects general and administrative expenses to increase in absolute dollars in support of growth, regulatory and compliance obligations, and costs associated with being a public reporting company.

Recent Developments

Commercial Launch of the Agentic AI Platform

The principal commercial achievement of fiscal year 2025 was the commencement of revenue-generating sales of the Company’s Agentic AI Platform to enterprise customers. During December 2025, the Company executed software license and platform contracts with six enterprise customers, marking the transition of the Company’s business from a development and early-stage commercialization phase to a phase characterized by enterprise-grade, contracted deployments of the Agentic AI Platform.

The six enterprise contracts executed in December 2025 spanned multiple regulated and mission-critical industry verticals, including pharmaceutical and life sciences, insurance, and retail. A number of these customers are among the largest enterprises in their respective sectors and geographies, with operations in Europe and globally. The Company’s customer engagements reflect its strategic focus on, among others, regulated, mission-critical enterprise environments, and we believe demonstrate the commercial viability of the Agentic AI Platform across multiple industry verticals.

Management believes that the 2025 commercial launch of the Agentic AI Platform, together with the customer engagements executed in connection with that launch, establishes a foundation for the Company’s continued enterprise customer acquisition strategy, validates the technical and operational scalability of the Agentic AI Platform, and creates reference architectures suitable for replication across customers, industries, and geographies in future periods.

2026 Customer Engagements

In 2026, the Company had a number of additional customer deployments, expansions of existing customer engagements, and new enterprise contracts, including the following:’

The Company entered into an agreement to deploy the Agentic AI Platform with one of Europe’s larger energy and utilities companies. The deployment is focused on enabling near real-time pricing synchronization across the customer’s commercial systems during month-end sales cycles, orchestrating and governing the customer’s existing system integrations without requiring replacement of core infrastructure. The engagement marked the Company’s expansion into regulated, mission-critical energy and utilities environments.

The Company deployed the Agentic AI Platform with a leading European insurance and asset management group to modernize and automate a high-volume, compliance-critical insurance back-office workflow. The deployment replaced a fully manual, document-intensive process with a governed agentic AI validation layer, fully integrated with the customer’s existing customer channels and core back-office systems, executed in alignment with the customer’s enterprise security, data privacy, and regulatory compliance standards.

‘ The Company executed a contract with one of the world’s largest pharmaceutical and life sciences companies to automate and govern multiple compliance-critical and data-intensive business processes. Under the agreement, the Company is deploying the Agentic AI Platform to support regulatory monitoring, compliance reporting, and internal human resources operations, with full auditability across the reporting lifecycle and alignment with the regulatory standards applicable to global pharmaceutical organizations operating across multiple jurisdictions.

‘ The Company entered into a contract with one of the world’s largest supermarket operators to deploy the Agentic AI Platform across the customer’s supplier invoice lifecycle. The deployment automates how supplier invoices are received, validated, and recorded across the customer’s finance systems, with the Agentic AI Platform’s agents operating continuously, processing invoices without manual intervention, and escalating exceptions for finance team review.

The Company deployed an agentic automated invoice processing solution for a leading European insurance group, representing a live, production implementation within a highly regulated financial environment. The deployment automates the full invoice processing workflow, including ingestion, processing, and system integration, operates on a scheduled basis with multiple daily processing cycles, and provides full auditability of each processing run.

The Company effectuated a full production deployment of the Agentic AI Platform with a Fortune Global 500 pharmaceutical company. ‘The Agentic AI Platform is operating in production across regulatory reporting and payroll workflows, with end-to-end integration with the customer’s ERP, human resources, inventory, and financial systems.’

Industry Diversification

Considering the six enterprise contracts executed in 2025 and the 2026 customer engagements, the Company’s customer base reflects a deliberate strategy of industry diversification. The Company has commercialized the Agentic AI Platform across pharmaceutical and life sciences, insurance and asset management, retail and supermarket operations, energy and utilities, commercial aviation, and with customers based primarily in Europe and operating across multiple regulatory jurisdictions. The Company believes that this diversification reduces dependence on any single industry, mitigates customer-concentration risk, and provides a foundation for cross-vertical product enhancement and customer reference development.

Results of Operations

Financial Overview

For the years ended December 31, 2025 and 2024, we generated revenues of $143,838 and $24,896, respectively, and reported a net loss of $2,371,546 and $1,001,095, respectively. We had negative cash flows used in operating activities of $1,944,156 and $927,368, respectively. As noted in our consolidated financial statements, as of December 31, 2025, we had an accumulated deficit of $5,424,034.

For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

For the Year Ended

December 31,

Variance ($)

Variance (%)

Revenues

Cost of revenues

Gross profit

Operating expenses:

General and administrative expenses

Research and development

Sales and marketing

Professional fees

Total operating expenses

Loss from operations

Other expenses:

Financial expenses, net

Other expenses, net

Net loss before taxes

Income tax provision

Net loss

Revenues : For the twelve months ended December 31, 2025, the Company generated revenues of $143,838, compared to $24,896 for the twelve months ended December 31, 2024, representing an increase of 478%. This increase was primarily due to an increase in revenues from software license sales and related services in 2025.

Operating Expenses: Operating expenses increased to $2,350,805 for the year ended December 31, 2025, from $1,010,647 for the year ended December 31, 2024 — a 133% increase. The primary reason for the increase in operating expenses were increases in general and administrative, sales and marketing, and professional fees of $445,938 or 138%, $203,109 or 100%, and $735,418 or 114%, respectively and a decrease in research and development expenses of $44,307 or 100% due to the capitalization of the expenses.

Loss from Operations: The Company reported a loss from operations of $2,308,412 for the year ended December 31, 2025, compared to a loss of $1,001,095 for the year ended December 31, 2024, representing an increase of 131%. The primary reason for this was due to the increase in operating expenses during the current period.

The Company has historically funded its operations through a combination of equity issuances, debt financings, and, to a lesser extent, cash generated from operating activities. The Company’s principal uses of cash include funding research and development activities, sales and marketing investments, general and administrative expenses, working capital requirements, capital expenditures.

The Company’s future capital requirements will depend on numerous factors, including the rate of growth of the Agentic AI Platform business, the timing and size of future acquisitions pursuant to the Company’s M&A Program, working capital and capital expenditure needs, and the timing of cash flows from operations. The Company may seek to raise additional capital through equity issuances, debt financings, or other arrangements, although there can be no assurance that such financing will be available on favorable terms, or at all.

The Company’s M&A Program is expected to require ongoing access to capital. The Company expects to finance future acquisitions through the issuance of equity securities, the incurrence of indebtedness, or other forms of consideration. The use of any particular form of consideration will depend on the size and structure of the applicable acquisition, prevailing market conditions, and the Company’s overall capital structure and strategic objectives.

As of December 31, 2025, the Company had cash on hand of $77,200 and a working capital deficit of $5,557,828, compared to cash of $9,929 and a working capital deficit of $689,892 at December 31, 2024. The increase in the deficit was largely due to cash operating losses and expanded operations. Management is actively seeking investor funding and pursuing strategic alternatives, including a potential merger or combination with another operating company, to improve liquidity and financial position.

Cash Flows for the Years Ended December 31, 2025 and 2024

For the Years Ended December 31,

Net cash (used in) provided by:

Operating activities

Investing activities

Financing activities

Net increase (decrease) in cash

Net cash used in operating activities was $1,944,156 for the year ended December 31, 2025, as compared to net cash used in operating activities of $927,368 for the year ended December 31, 2024, this increase was primarily due to the increases in general and administrative and professional fees expense.

Net cash used in investing activities was $1,931,604 for the year ended December 31, 2025, as compared to net cash used in operating activities of $0 for the year ended December 31, 2024, this increase was primarily due to the capitalization of research and development costs and purchase of property and equipment.

Net cash provided by financing activities was $3,943,031 for the year ended December 31, 2025, as compared to the net cash provided by investing activities of $753,333 for the year ended December 31, 2024. This increase is due to $1,100,000 in proceeds from sale of Class A common stock, $136,667 of receipts from subscriptions receivable and $2,706,364 in advance payables.

Related Party Transactions

For information on related party transactions and their financial impact, see Note 3 to the financial statements.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenues and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenues and expenses incurred during the financial reporting period. We continue to evaluate the estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies reflect the more significant judgments and estimates used in preparation of our consolidated financial statements.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”. Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.

Research and Development Costs

The Company capitalizes costs in accordance with ASC 985-20 “Software – Costs of Software To Be Sold, Leased, or Marketed.” Beginning January 1, 2025, as technological feasibility had been established, all internal software development costs are capitalized until the product is available for general release to customers.

Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the commencement of product sales. The amortization of these costs is included in cost of revenue over the estimated life of the products, which the Company has determined to be three years.

In 2024, the Company expensed research and development costs as incurred. Research and development activities primarily include the design, development, and testing of new products, technologies, or significant improvements to existing products. Costs incurred in connection with these activities, including salaries and benefits of personnel directly engaged in R&D, materials and supplies used in the development process, third-party development costs, are charged to expenses as incurred.

Recently Issued Accounting Pronouncements

In 2024, the FASB issued Accounting Standards Update 2024-03, which requires the disaggregated disclosure of certain costs and expenses on an interim and annual basis. The new standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

Off-Balance Sheet Arrangements

As of December 31, 2025, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that is material to investors.