Cardiol Therapeutics Inc. — financial distress indicators
Financial-health summary
Cardiol Therapeutics Inc.'s reported numbers place it in the 'Watch' financial-health band (distress score 46/100). The main indicators are losses in each of the last 3 years, operations consume cash and ohlson o-score signals likely failure. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 0.0%. 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.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
O-score 7.28 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Cash covers ~14 months of free-cash-flow burn.
Funding needs within two years make the company dependent on capital-market access.
Share count up +21% in a year.
Large issuance usually funds operating losses rather than growth.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Strong current ratio (4.39).
📰 Recent news scan
- Cardiol Therapeutics Achieves Phase III MAVERIC Enrollment Target Ahead of Schedule and Expands Pivotal Trial to Strengthen Assessment of CardiolRx™'s EfficacyYahoo Finance · 2026-09-23
- Cardiol Therapeutics Announces Warrant Exercise for Over USD $7 Million in ProceedsYahoo Finance · 2026-09-16
- Cardiol Therapeutics Files US$150 Million Preliminary Base Shelf Prospectus Including Additional Disclosure Following Review by Staff of the Ontario Securities CommissionYahoo Finance · 2026-09-10
- Cardiol Therapeutics to Participate in a Fireside Chat at the H.C. Wainwright 28th Annual Global Investment ConferenceYahoo Finance · 2026-09-09
- Is Cardiol Therapeutics (CRDL) Stock Outpacing Its Medical Peers This Year?Yahoo Finance · 2026-08-25
- Cardiol Therapeutics Inc. (CRDL) is a Great Momentum Stock: Should You Buy?Yahoo Finance · 2026-08-24
⚖️ 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 Cardiol Therapeutics Inc.'s financial-health indicators show?
As of 2026-10-08, Cardiol Therapeutics Inc.'s public financial data places it in the 'Watch' band with a distress score of 46/100, driven by losses in each of the last 3 years, operations consume cash and ohlson o-score signals likely failure. 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 Cardiol Therapeutics Inc.'s financial distress score?
46/100 ('Watch'). Ohlson O-score 7.28 (model 1-year failure probability 100%). Merton distance-to-default 12.71 σ (model default probability 0.0%).
What works in Cardiol Therapeutics Inc.'s favour?
Cash on hand covers all debt (net-cash balance sheet). Strong current ratio (4.39).
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.