KIDZ AI Inc. (NASDAQ:KIDZ) came under heavy selling pressure in premarket trading on Thursday after announcing plans to implement a 1-for-10 reverse stock split aimed at restoring compliance with Nasdaq listing requirements.
Shares of the company fell 29.3% following the announcement.
Reverse Split Scheduled for June 8
The reverse stock split will take effect on June 8, 2026, at 12:01 a.m. Eastern Time.
Following the adjustment, KIDZ AI’s Class B common stock will continue trading on the Nasdaq Capital Market under the ticker symbol “KIDZ,” with trading beginning on a split-adjusted basis when markets open that day.
The company said the measure is intended to increase its share price and satisfy Nasdaq’s minimum bid price requirement of $1.00 for continued listing.
Move Aims to Maintain Nasdaq Compliance
KIDZ AI’s Board of Directors approved the reverse stock split on May 26, 2026, pursuant to Nevada corporate law.
Reverse stock splits are commonly used by companies seeking to raise their share price without altering the overall value of shareholders’ holdings, although such actions can sometimes trigger negative investor sentiment.
Management indicated that maintaining its Nasdaq listing remains a key priority.
Share Counts to Be Reduced Proportionally
As a result of the transaction, the company’s authorized Class A common stock will decrease from 1,000,000 shares to 100,000 shares.
Authorized Class B shares will be reduced from 40,000,000 to 4,000,000 shares.
Outstanding shares will also be adjusted proportionally. Class A shares outstanding as of June 4, 2026, will decline from 130,701 to 13,071 shares, while Class B shares outstanding will be reduced from 11,134,459 to 1,113,446 shares.
Equity Awards and Securities to Be Adjusted
The reverse stock split will also affect the company’s equity incentive plans and other outstanding securities.
The number of shares available under compensation programmes will be reduced proportionately, while exercise prices for warrants and conversion terms for convertible securities will be adjusted to reflect the new share structure.
No fractional shares will be issued as part of the transaction. Any fractional ownership resulting from the split will be rounded up to the nearest whole share.
Company Continues Focus on AI Education and Infrastructure
KIDZ AI, formerly known as Classover Holdings Inc., provides artificial intelligence-focused education services for K-12 students as well as AI infrastructure solutions.
Following completion of the reverse split, the company’s Class B shares will trade under a new CUSIP number, 182744 300, while continuing to pursue growth opportunities across the education technology and artificial intelligence sectors.