Core AI Holdings — financial distress indicators
Financial-health summary
Core AI Holdings's reported numbers place it in the 'Very weak' financial-health band (distress score 87/100). The main indicators are liabilities exceed assets (negative equity), operations consume cash and share price down >80% from 52-week high. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 7.4%. 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.
Total liabilities are 1.07× total assets.
Balance-sheet insolvency test: debts exceeding the fair value of assets is the statutory definition of 'insolvent' in 11 U.S.C. §101(32).
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 -98% 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 15.26 → 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 0.87.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Cash covers ~22 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.
Last price $0.24.
Below the $1 minimum-bid listing standard (Nasdaq Rule 5550(a)(2) / NYSE 802.01C); sustained breach leads to delisting and loss of capital-market access.
Merton distance-to-default 1.45 σ → PD 7.4%.
Investment-grade issuers typically have 1-year PD well below 1%.
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 (+59% YoY).
- High insider/promoter ownership (50%) aligns management with survival.
📰 Recent news scan
- Nasdaq says Core AI had $2.43M in shareholder equity, below its $2.5M minimum. It intends to submit a plan by Nov. 2. - Stock TitanGoogle News · 2026-09-23
- Core AI Holdings (CHAI) Stock Falls on Q2 2026 Earnings - Quiver QuantitativeGoogle News · 2026-08-27
- Core AI Holdings (CHAI) Stock Falls on Q2 2026 Earnings - MoomooGoogle News · 2026-08-27
- CHAI Stock Price and Chart — NASDAQ:CHAI - TradingViewGoogle News · 2026-06-09
- CHAI Stock Rockets On Heavy Volume As Traders Scan Risks - StocksToTradeGoogle News · 2026-06-09
- Chai Discovery Enters License Agreement with Pfizer to Accelerate Drug Discovery with AI - Pharmaceutical ExecutiveGoogle News · 2026-06-05
⚖️ 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 Core AI Holdings's financial-health indicators show?
As of 2026-10-08, Core AI Holdings's public financial data places it in the 'Very weak' band with a distress score of 87/100, driven by liabilities exceed assets (negative equity), operations consume cash 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 Core AI Holdings's financial distress score?
87/100 ('Very weak'). Ohlson O-score 15.26 (model 1-year failure probability 100%). Merton distance-to-default 1.45 σ (model default probability 7.4%).
What works in Core AI Holdings's favour?
Cash on hand covers all debt (net-cash balance sheet). Revenue still growing (+59% YoY). High insider/promoter ownership (50%) 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 Telecom & Media companies with distress indicators
- FreeCast, Inc. (CAST)Very weak 100/100
- Direct Digital Holdings, Inc. (DRCT)Very weak 100/100
- K Wave Media Ltd. (KWM)Very weak 100/100
- Reading International, Inc. (RDIB)Very weak 100/100
- SurgePays, Inc. (SURG)Very weak 100/100
- Upexi, Inc. (UPXI)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.