GNS — financial distress indicators
Financial-health summary
GNS's reported numbers place it in the 'Very weak' financial-health band (distress score 100/100). The main indicators are operating profit does not cover interest, cash runway under 12 months and market-implied default probability >20%. Independently, the Ohlson accounting model puts its 1-year failure probability at 77% and the market-implied (Merton) default probability is 71.2%. In its favour: revenue still growing (+11% yoy).
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 -7.39×.
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 ~2 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.
Merton distance-to-default -0.56 σ → PD 71%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
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.
Price is -86% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 1.23 → model probability 77%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +155% in a year.
Survival financing: repeated equity raises at depressed prices.
Current ratio is 0.86.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Last price $0.14.
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.
Short-term debt is 8.1× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Operating margin fell from -91% to -314% 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
- Revenue still growing (+11% YoY).
📰 Recent news scan
- Genius Group to host Genius Future Summit on November 5-6, 2026.Yahoo Finance · 2026-09-22
- Genius Group Is Shrinking Its Share Count — Here's What Investors Need To KnowYahoo Finance · 2026-06-17
- GNS Stock On Track To Wipe Out May Losses – The Company That Dumped Bitcoin Now Wants To Hold SpaceX, OpenAIYahoo Finance · 2026-05-28
- Genius Group Makes Foray Into AI – Adopts A Dual Treasury Strategy Expanding Beyond CryptoYahoo Finance · 2026-05-27
- D. Boral Capital acted as Exclusive Placement Agent to Genius Group Limited (NYSE:GNS) in Connection with its $8,000,000 Registered Direct OfferingYahoo Finance · 2026-04-17
⚖️ 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 GNS's financial-health indicators show?
As of 2026-10-08, GNS's public financial data places it in the 'Very weak' band with a distress score of 100/100, driven by operating profit does not cover interest, cash runway under 12 months and market-implied default probability >20%. 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 GNS's financial distress score?
100/100 ('Very weak'). Ohlson O-score 1.23 (model 1-year failure probability 77%). Merton distance-to-default -0.56 σ (model default probability 71.2%).
What works in GNS's favour?
Revenue still growing (+11% YoY).
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
- HKPD (HKPD)Very weak 100/100
- HUBC (HUBC)Very weak 100/100
- IBG (IBG)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.