Natural Health Trends Corp. — financial distress indicators
Financial-health summary
Natural Health Trends Corp.'s reported numbers place it in the 'Weak' financial-health band (distress score 55/100). The main indicators are operations consume cash, ohlson o-score signals likely failure and trading below $1. Independently, the Ohlson accounting model puts its 1-year failure probability at 80% and the market-implied (Merton) default probability is 10.4%. In its favour: cash on hand covers all debt (net-cash balance sheet).
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.
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.
O-score 1.38 → model probability 80%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Last price $0.93.
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.
Merton distance-to-default 1.26 σ → PD 10.4%.
Investment-grade issuers typically have 1-year PD well below 1%.
0 severe and 4 moderate distress-related headlines in the last 6 months.
Headlines are corroborating evidence only; they are weighted lightly and never drive a flag alone.
Price is -77% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Revenue declined every year for three years.
Structural, not cyclical, decline.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Strong current ratio (1.99).
📰 Recent news scan
- restructurNatural Health Stock Slips Post Q2 Earnings, Revenues Decline Y/YYahoo Finance · 2026-08-03
- restructurNatural Health Stock Rises Post Q1 Earnings, Margin GainsYahoo Finance · 2026-05-05
- restructurNatural Health Trends Corp (NHTC) Q1 2026 Earnings Call Highlights: Navigating Challenges with ...Yahoo Finance · 2026-04-30
- restructurNatural Health Trends Reports First Quarter 2026 Financial ResultsYahoo Finance · 2026-04-29
- Natural Health Trends Corp (NHTC) (Q2 2026) Earnings Call Highlights: Navigating Headwinds with ...Yahoo Finance · 2026-07-31
- Natural Health Trends to Report First Quarter 2026 Financial Results on April 29thYahoo Finance · 2026-04-22
⚖️ 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 Natural Health Trends Corp.'s financial-health indicators show?
As of 2026-10-08, Natural Health Trends Corp.'s public financial data places it in the 'Weak' band with a distress score of 55/100, driven by operations consume cash, ohlson o-score signals likely failure and trading below $1. 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 Natural Health Trends Corp.'s financial distress score?
55/100 ('Weak'). Ohlson O-score 1.38 (model 1-year failure probability 80%). Merton distance-to-default 1.26 σ (model default probability 10.4%).
What works in Natural Health Trends Corp.'s favour?
Cash on hand covers all debt (net-cash balance sheet). Strong current ratio (1.99).
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 Consumer Discretionary companies with distress indicators
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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.