FAMI — financial distress indicators
Financial-health summary
FAMI's reported numbers place it in the 'Very weak' financial-health band (distress score 70/100). The main indicators are market-implied default probability >20%, revenue collapse and operations consume cash. Independently, the Ohlson accounting model puts its 1-year failure probability at 1% and the market-implied (Merton) default probability is 95.6%. In its favour: operating cash flow is positive over the latest 12 months.
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 -1.71 σ → PD 96%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Revenue changed -56% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
Operating cash flow negative in 2 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Price is -94% 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 +516% in a year.
Survival financing: repeated equity raises at depressed prices.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Last price $0.12.
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.
Operating margin fell from 3% to -169% 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
- Operating cash flow is positive over the latest 12 months.
- Strong current ratio (5.64).
📰 Recent news scan
- Why Farmmi (FAMI) Stock Is Up Today - Quiver QuantitativeGoogle News · 2026-09-02
- waited this penny stocks! Thanks Tigers Trade 🐯.. Thanks MooMoo too for the great monitoring platform 😅 - MoomooGoogle News · 2026-09-02
- Memecoin shenanigans spill into Nasdaq as microcap mushroom seller Farmmi surges 350% - The BlockGoogle News · 2026-09-02
- 12 Consumer Staples Stocks Moving In Thursday's After-Market Session - BenzingaGoogle News · 2026-08-27
- Farmmi (FAMI) flagged for Nasdaq bid price rule, issues 1.58M shares to Atlas - Stock TitanGoogle News · 2026-08-12
- Why Did FAMI Stock Crash 78% Today? - Yahoo FinanceGoogle News · 2026-06-29
⚖️ 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 FAMI's financial-health indicators show?
As of 2026-10-08, FAMI's public financial data places it in the 'Very weak' band with a distress score of 70/100, driven by market-implied default probability >20%, revenue collapse and operations consume cash. 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 FAMI's financial distress score?
70/100 ('Very weak'). Ohlson O-score -4.19 (model 1-year failure probability 1%). Merton distance-to-default -1.71 σ (model default probability 95.6%).
What works in FAMI's favour?
Operating cash flow is positive over the latest 12 months. Strong current ratio (5.64).
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 Unclassified companies with distress indicators
- CNEY (CNEY)Very weak 100/100
- EPOW (EPOW)Very weak 100/100
- GIBO (GIBO)Very weak 100/100
- GNS (GNS)Very weak 100/100
- HKPD (HKPD)Very weak 100/100
- HUBC (HUBC)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.