Empery Digital Inc. — financial distress indicators
Financial-health summary
Empery Digital Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 70/100). The main indicators are cash runway under 12 months, losses in each of the last 3 years and revenue collapse. In its favour: high insider/promoter ownership (31%) aligns management with survival.
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.
At the current free-cash-flow burn, cash covers ~0 months.
Going-concern standard: management must assess ability to continue for 12 months (ASC 205-40). Runway below that horizon forces dilution, asset sales or default.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Revenue changed -76% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
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.
Share count up +60226% in a year.
Survival financing: repeated equity raises at depressed prices.
Price is -61% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Operating margin fell from -914% to -15742% 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
- High insider/promoter ownership (31%) aligns management with survival.
📰 Recent news scan
- ATG Capital Announces that the Delaware Supreme Court has Affirmed the Chancery Court’s Ruling in Empery Digital Appeal – Upholding Stockholder FranchiseYahoo Finance · 2026-10-08
- ATG Capital Highlights Empery Digital’s Low-Road Campaign of Misleading Statements, Attempted Distractions and Lack of Accountability for Breach of Fundamental Fiduciary DutiesYahoo Finance · 2026-09-28
- Leading Independent Proxy Advisory Firm ISS Recommends Empery Digital Stockholders Vote on ATG Capital's GOLD Proxy CardYahoo Finance · 2026-09-25
- ATG Capital Releases Investor Presentation on Empery Digital and the Need for Targeted Boardroom Change at the CompanyYahoo Finance · 2026-09-17
- Delaware Court of Chancery Rules Empery Digital's Board Breached Its Fiduciary DutiesYahoo Finance · 2026-09-10
- Empery Digital trims BTC holdings, invests $65M in Midwest AI data centerYahoo Finance · 2026-07-29
⚖️ 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 Empery Digital Inc.'s financial-health indicators show?
As of 2026-10-08, Empery Digital Inc.'s public financial data places it in the 'Very weak' band with a distress score of 70/100, driven by cash runway under 12 months, losses in each of the last 3 years and revenue collapse. 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 Empery Digital Inc.'s financial distress score?
70/100 ('Very weak').
What works in Empery Digital Inc.'s favour?
High insider/promoter ownership (31%) 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.
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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.