KIDZ AI Inc. — financial distress indicators
Financial-health summary
KIDZ AI Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 94/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and material debt with no ebitda. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 85.0%.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Interest coverage (EBIT / interest) is -8.74×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default -1.03 σ → PD 85%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Debt is 52% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
Operating cash flow negative in 2 of the last 2 years.
A business that cannot fund itself from operations depends on external capital to survive.
Price is -100% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 5.57 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.94.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Cash covers ~18 months of free-cash-flow burn.
Funding needs within two years make the company dependent on capital-market access.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- No material mitigating factors found in the available data.
📰 Recent news scan
- KIDZ AI Inc. (KIDZ) Stock Price, News, Quote & History - Yahoo! Finance CanadaGoogle News · 2026-10-07
- A data center association with more than 2,000 professionals adds KIDZ AI - Stock TitanGoogle News · 2026-10-07
- 12 Consumer Discretionary Stocks Moving In Wednesday's Pre-Market Session - BenzingaGoogle News · 2026-10-07
- 500 Reasons to Buy Little-Known KIDZ AI Stock - Yahoo FinanceGoogle News · 2026-10-03
- KIDZ AI explores the ride-hailing business with 500 Tesla robotaxis (TSLA:NASDAQ) - Seeking AlphaGoogle News · 2026-09-30
- $KIDZ stock is down 9% today. Here's what we see in our data. - Quiver QuantitativeGoogle News · 2026-09-23
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do KIDZ AI Inc.'s financial-health indicators show?
As of 2026-10-08, KIDZ AI Inc.'s public financial data places it in the 'Very weak' band with a distress score of 94/100, driven by operating profit does not cover interest, market-implied default probability >20% and material debt with no ebitda. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is KIDZ AI Inc.'s financial distress score?
94/100 ('Very weak'). Ohlson O-score 5.57 (model 1-year failure probability 100%). Merton distance-to-default -1.03 σ (model default probability 85.0%).
What works in KIDZ AI Inc.'s favour?
No material mitigating factors were found in the available data.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Consumer Staples companies with distress indicators
- AMASS Brands, Inc. (AMSS)Very weak 100/100
- Borealis Foods Inc. (BRLS)Very weak 100/100
- Reed's, Inc. (REED)Very weak 100/100
- Sadot Group Inc. (SDOT)Very weak 100/100
- Rocky Mountain Chocolate Factory, Inc. (RMCF)Very weak 97/100
- Sow Good Inc. (SOWG)Very weak 97/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.