USA Companies in Financial Distress
As of 08 October 2026, 1,352 of 5,226 US-listed companies analysed (26%) show financial-distress indicators of the kind that historically precede corporate failure — 395 very weak, 438 weak and 519 on watch. Stress is most concentrated in Pharma & Biotech (57% flagged), Unclassified (42% flagged) and Healthcare & MedTech (30% flagged). The most common red flags today are losses in each of the last 3 years, operations consume cash and cash runway under 12 months.
All sectors
Financial-health bands
Where the stress is
Most common red flags
| # | Ticker | Company / industry | Distress score | Band | Ohlson PD | Merton PD | From 52w high | Mkt cap | Key reasons |
|---|
Showing companies with distress score ≥ 35. Click a ticker for the full stock page, or Details for the indicators behind the score.
Highest financial-distress scores — USA companies today
Ranked by distress score as of 2026-10-08. Each name links to the indicators behind its score.
- ABVC BioPharma, Inc. (ABVC) — Very weak 100/100 · Operating profit does not cover interest, Cash runway under 12 months, Severe working-capital shortfall
- Adagio Medical Holdings, Inc. (ADGM) — Very weak 100/100 · Operating profit does not cover interest, Cash runway under 12 months, Market-implied default probability >20%
- ADSE (ADSE) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- AIIO (AIIO) — Very weak 100/100 · Operating profit does not cover interest, Cash runway under 12 months, Market-implied default probability >20%
- AKAN (AKAN) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- AMASS Brands, Inc. (AMSS) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Braskem S.A. (BAK) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Borealis Foods Inc. (BRLS) — Very weak 100/100 · Liabilities exceed assets (negative equity), Cash runway under 12 months, Market-implied default probability >20%
- BRNX (BRNX) — Very weak 100/100 · Operating profit does not cover interest, Cash runway under 12 months, Market-implied default probability >20%
- Nuburu, Inc. (BURU) — Very weak 100/100 · Operating profit does not cover interest, Cash runway under 12 months, Market-implied default probability >20%
- FreeCast, Inc. (CAST) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- CNEY (CNEY) — Very weak 100/100 · Operating profit does not cover interest, Cash runway under 12 months, Market-implied default probability >20%
- Cyabra, Inc. (CYAB) — Very weak 100/100 · Liabilities exceed assets (negative equity), Cash runway under 12 months, Market-implied default probability >20%
- Liberty Defense Holdings, Ltd. (DETX) — Very weak 100/100 · Liabilities exceed assets (negative equity), Cash runway under 12 months, Severe working-capital shortfall
- Direct Digital Holdings, Inc. (DRCT) — Very weak 100/100 · Liabilities exceed assets (negative equity), Cash runway under 12 months, Losses in each of the last 3 years
Financial distress by sector
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Frequently asked questions
Which US companies are in financial distress in 2026?
No one can know for certain which companies will default or fail. As of 2026-10-08, our screen of 5,226 US-listed companies finds 1,352 with financial-distress indicators (395 very weak, 438 weak and 519 on watch). The ranked list on this page shows each company's score and the indicators behind it. A high score means the reported numbers resemble those of companies that later failed — it is not a prediction or an allegation of insolvency.
Which companies are in financial trouble right now?
Today 395 companies are in the 'Very weak' band and 438 in the 'Weak' band. By sector, the highest share of flagged companies is in Pharma & Biotech (354 of 621), Unclassified (235 of 562) and Healthcare & MedTech (98 of 328). Typical warning signs: losses in each of the last 3 years, operations consume cash, cash runway under 12 months and market-implied default probability >20%.
Are US banks at risk of failure?
57 banks, lenders and other financial companies currently show distress indicators. Financial firms are judged on capital (equity/assets), loss streaks, sudden profit collapses, equity erosion and share-price runs — not on current ratio. Open the Bank & Finance sector for the full list.
Is now a good time to buy US stocks?
As of 2026-10-08, HeRAI's market-regime model reads Neutral (score +0 on a −100 to +100 scale, combining macro, valuation and breadth). Model stance: Mixed signals. Reduce size, demand a clear edge, wait for breadth to confirm. Whatever the regime, check a company's financial-distress indicators before buying.
What are the warning signs of corporate financial distress?
The strongest combinations are negative equity, operating profit that does not cover interest, less than 12 months of cash at the current burn rate, collapsing sales and a share price far below its 52-week high. Today 395 companies show several of these together.
How is the distress score calculated?
Three independent lenses: the Ohlson O-score (accounting-based 1-year failure probability), a Merton distance-to-default (market-implied default probability from share price, volatility and debt), and a credit-analyst rule book covering liquidity, leverage, interest cover, cash runway, losses, sales trend, dilution and distress news. Banks and insurers use a separate capital-based rule set. Scores refresh every trading day.
What happens to shareholders if a company becomes insolvent?
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.
How the distress score works (methodology & legal basis)
Three independent lenses are combined into a 0–100 score (Watch ≥ 35, Weak ≥ 50, Very weak ≥ 70):
- Accounting model — Ohlson O-score (1980): logit model of 1-year corporate failure using size, leverage, working capital, liquidity, profitability, funds-from-operations and earnings change. Applied to non-financial companies only (as in the original study).
- Market model — Merton distance-to-default (Bharath & Shumway 2008 “naive” form): equity is treated as a call option on the firm’s assets; the probability that asset value falls below the default point (short-term debt + ½ long-term debt) within a year.
- Credit-analyst rule book: balance-sheet insolvency, interest cover, leverage (debt/EBITDA), current ratio, cash runway vs. the 12-month going-concern horizon, persistent losses and cash burn, sales collapse, margin compression, dilution, share-price collapse, sub-$1 listing breaches and distress language in recent news. Banks, insurers, brokers and lenders use a separate capital-based rule set (equity/assets vs. prudential floors, equity erosion, losses, hyper-growth).
False-positive controls: buyback-driven negative equity, capex-driven negative free cash flow, stock-comp losses at net-cash companies and utilities/REIT working-capital norms are discounted. Companies with statements older than 15 months, fewer than three usable key ratios, SPAC trust vehicles and records without price history are excluded rather than guessed.
Search indexing: an individual company page is offered to search engines only when at least one objective, verifiable condition applies (negative equity with under 12 months of cash, negative book equity, a share price below the $1 listing standard, or a reported default, going-concern, insolvency or delisting event).
Legal frame: Title 11 of the U.S. Code — Chapter 11 reorganisation and Chapter 7 liquidation. Subchapter V is limited to small-business debtors and excludes SEC-reporting companies (11 U.S.C. §101(51D)), so it rarely applies to listed firms. Banks and insurers cannot file under Title 11 (§109(b)(2)); they are resolved by the FDIC or state insurance regulators.