Fusemachines Inc. — financial distress indicators
Financial-health summary
Fusemachines Inc.'s reported numbers place it in the 'Weak' financial-health band (distress score 69/100). The main indicators are liabilities exceed assets (negative equity), cash runway under 12 months and operations consume cash. In its favour: high insider/promoter ownership (36%) 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.
Total liabilities are 4.04× 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).
At the current free-cash-flow burn, cash covers ~4 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.
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.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Last price $0.41.
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.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- High insider/promoter ownership (36%) aligns management with survival.
📰 Recent news scan
- Fusemachines Inc. (FUSE) Stock Price, News, Quote & History - Yahoo! Finance CanadaGoogle News · 2026-10-07
- Fusemachines Launches fuse.ai to Showcase the Future of AI Twins in the Workplace - www.marketscreener.comGoogle News · 2026-10-07
- If You Invested $100 In Bel Fuse Stock 10 Years Ago, You Would Have This Much Today - BenzingaGoogle News · 2026-10-05
- Bel Fuse Stock Price Forecast. Should You Buy BELFB? - StockInvest.usGoogle News · 2026-10-02
- 2 Cash-Heavy Stocks with Exciting Potential and 1 Facing Headwinds - StockStoryGoogle News · 2026-10-01
- FUSE Stock Stabilizes After Nasdaq Compliance Win - Timothy SykesGoogle News · 2026-08-04
⚖️ 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 Fusemachines Inc.'s financial-health indicators show?
As of 2026-10-08, Fusemachines Inc.'s public financial data places it in the 'Weak' band with a distress score of 69/100, driven by liabilities exceed assets (negative equity), cash runway under 12 months 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 Fusemachines Inc.'s financial distress score?
69/100 ('Weak').
What works in Fusemachines Inc.'s favour?
High insider/promoter ownership (36%) 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 IT & Software companies with distress indicators
- Cyabra, Inc. (CYAB)Very weak 100/100
- Exyn Technologies, Inc. (EXYN)Very weak 100/100
- The OLB Group, Inc. (OLB)Very weak 100/100
- Roadzen, Inc. (RDZN)Very weak 100/100
- Rekor Systems, Inc. (REKR)Very weak 100/100
- Veea Inc. (VEEA)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.