Glass House Brands Inc. — financial distress indicators
Financial-health summary
Glass House Brands Inc.'s reported numbers place it in the 'Weak' financial-health band (distress score 59/100). The main indicators are operating profit does not cover interest, cash runway under 12 months and ohlson o-score signals likely failure. Independently, the Ohlson accounting model puts its 1-year failure probability at 61% and the market-implied (Merton) default probability is 2.0%. In its favour: strong current ratio (1.85).
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.
Interest coverage (EBIT / interest) is -4.48×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
At the current free-cash-flow burn, cash covers ~11 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.
O-score 0.46 → model probability 61%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Price is -68% 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 2% to -8% 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
- Strong current ratio (1.85).
📰 Recent news scan
- Glass House Brands Inc (GLAS) (Q2 2026) Earnings Call Highlights: Record Production and ...Yahoo Finance · 2026-08-14
- Glass House Brands Retains Former DEA Compliance Executive to Advise on Interstate Commerce and Export OpportunitiesYahoo Finance · 2026-07-27
- Cannabis Was Ready For Wall St., But Was Wall St. Ready For Cannabis?Yahoo Finance · 2026-07-24
- A US raid set back Glass House. But new federal rules are a boonYahoo Finance · 2026-07-11
- Glass House Brands Completes First International Hemp SaleYahoo Finance · 2026-07-07
- Should Glass House Brands’ NYSE Debut and Medical Pivot Reshape the GLAS Investment Narrative?Yahoo Finance · 2026-07-04
⚖️ 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 Glass House Brands Inc.'s financial-health indicators show?
As of 2026-10-08, Glass House Brands Inc.'s public financial data places it in the 'Weak' band with a distress score of 59/100, driven by operating profit does not cover interest, cash runway under 12 months 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 Glass House Brands Inc.'s financial distress score?
59/100 ('Weak'). Ohlson O-score 0.46 (model 1-year failure probability 61%). Merton distance-to-default 2.05 σ (model default probability 2.0%).
What works in Glass House Brands Inc.'s favour?
Strong current ratio (1.85).
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.