KIDZ AI Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue increased 40% sequentially, marking the first quarter-over-quarter revenue increase in 2026.
• Gross margin improved to 65.9% from 43.9% in the second quarter of 2026.
• Net loss was $654,057, compared to net income of $2,520,989 in the prior year quarter.
• Net cash position was approximately $14.9 million, comprised of $14,384,888 in cash and $3,003,537 in USDC stablecoin holdings, less $2,500,000 in notes payable principal.
• Net cash position per share was approximately $14.53.
• Stockholders' equity increased approximately 349% to $16.9 million compared to December 31, 2025.
• Total liabilities decreased approximately 54% to $5.4 million compared to December 31, 2025.
• Notes payable decreased approximately 69% to $2.6 million compared to December 31, 2025.
• The total liabilities-to-equity ratio improved from 3.12x to approximately 0.32x compared to December 31, 2025.

Business Segments and Product Lines:

• The Company is advancing its GPU computing infrastructure strategy, with initial hardware procurement and deployment planning underway.
• Operations continue to expand beyond traditional education technology into AI computing infrastructure and Physical AI.
• The Company develops proprietary learning systems combining artificial intelligence, AI agents, and robotics.
• The Company is pursuing opportunities in AI compute infrastructure, GPU cloud platforms, and related data-center ecosystems.

Management Commentary and Tone:

• CEO Stephanie Luo stated that 2026 marks an important transition as the Company expands into AI computing infrastructure and Physical AI.
• Management emphasized a focus on building a foundation through infrastructure investments, technology development, and strategic industry relationships.
• Leadership highlighted a commitment to responsible capital allocation and building sustainable long-term value for shareholders.
• Management noted that the strengthened balance sheet, increased equity, and reduced liabilities provide a stronger financial foundation for evaluating new business opportunities.

Other Key Points:

• The Company repurchased an aggregate of 74,082 shares of Class B common stock at an average price of approximately $3.36 per share, totaling approximately $249,194.
• Based on the November 11, 2026 closing price of $1.17 per share, the net cash position represented approximately 12 times the Company's market capitalization.
• The Company defines "net cash position" as cash plus USDC stablecoin holdings less the outstanding principal amount of notes payable.
• Common shares outstanding were 1,024,389 as of September 30, 2026.
• The Company filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, with the SEC.