BGM — financial distress indicators
Financial-health summary
BGM's reported numbers place it in the 'Weak' financial-health band (distress score 52/100). The main indicators are market-implied default probability >20%, losses in each of the last 3 years and share price down >80% from 52-week high. Independently, the Ohlson accounting model puts its 1-year failure probability at 19% and the market-implied (Merton) default probability is 60.5%. In its favour: cash on hand covers all debt (net-cash balance sheet).
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.
Merton distance-to-default -0.27 σ → PD 61%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Price is -97% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
Share count up +2676% in a year.
Survival financing: repeated equity raises at depressed prices.
Operating margin fell from -5% to -33% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Revenue still growing (+51% YoY).
- High insider/promoter ownership (38%) aligns management with survival.
📰 Recent news scan
- Promising Chinese Stocks To Watch Today - October 5th - MarketBeatGoogle News · 2026-10-05
- BGM Group To Carry Out 1-for-30 Reverse Stock Split On October 1st, 2026 - MoomooGoogle News · 2026-09-29
- Stay updated with the stocks that are on the move in today's after-hours session. - ChartMillGoogle News · 2026-09-24
- BGM Group (NASDAQ: BGM) set to lift share count to 380M - Stock TitanGoogle News · 2026-08-28
- BGM Group (BGM) Stock Faces EPS Swing To Loss Challenges Bullish Growth Narratives - Simply Wall StreetGoogle News · 2026-07-22
⚖️ 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 BGM's financial-health indicators show?
As of 2026-10-08, BGM's public financial data places it in the 'Weak' band with a distress score of 52/100, driven by market-implied default probability >20%, losses in each of the last 3 years and share price down >80% from 52-week high. 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 BGM's financial distress score?
52/100 ('Weak'). Ohlson O-score -1.48 (model 1-year failure probability 19%). Merton distance-to-default -0.27 σ (model default probability 60.5%).
What works in BGM's favour?
Cash on hand covers all debt (net-cash balance sheet). Revenue still growing (+51% YoY). High insider/promoter ownership (38%) aligns management with survival.
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 Pharma & Biotech companies with distress indicators
- ABVC BioPharma, Inc. (ABVC)Very weak 100/100
- AKAN (AKAN)Very weak 100/100
- Endovia Health Sciences, Inc. (EDVA)Very weak 100/100
- Elicio Therapeutics, Inc. (ELTX)Very weak 100/100
- IM Cannabis Corp. (IMCC)Very weak 100/100
- NeuroSense Therapeutics Ltd. (NRSN)Very weak 100/100
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.