Quantum Corporation — financial distress indicators
Financial-health summary
Quantum Corporation's reported numbers place it in the 'Weak' financial-health band (distress score 50/100). The main indicators are liabilities exceed assets (negative equity), losses in each of the last 3 years and operations consume cash. In its favour: high insider/promoter ownership (37%) 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 1.14× 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).
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.
Share count up +110% in a year.
Survival financing: repeated equity raises at depressed prices.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- High insider/promoter ownership (37%) aligns management with survival.
📰 Recent news scan
- Quantum Corp (QMCO) Shares Fall 6.1% -- What GF Score of 49 Tells Investors - GuruFocusGoogle News · 2026-10-09
- Quantum Corporation (QMCO) Stock Price, News, Quote & History - Yahoo! Finance CanadaGoogle News · 2026-10-08
- Quantum Corporation (QMCO) stock price, news, quote and history - Yahoo Finance UKGoogle News · 2026-10-07
- Quantum Corp. (QMCO) is a Great Momentum Stock: Should You Buy? - Yahoo Finance SingaporeGoogle News · 2026-10-07
- 200,000 options for Quantum (QMCO)'s revenue chief vest over four years, subject to continued service. - Stock TitanGoogle News · 2026-10-05
- Director receives 12,000 stock units at Quantum (QMCO), with reported direct holdings of 25,000 shares. - Stock TitanGoogle News · 2026-10-05
⚖️ 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 Quantum Corporation's financial-health indicators show?
As of 2026-10-08, Quantum Corporation's public financial data places it in the 'Weak' band with a distress score of 50/100, driven by liabilities exceed assets (negative equity), losses in each of the last 3 years 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 Quantum Corporation's financial distress score?
50/100 ('Weak').
What works in Quantum Corporation's favour?
High insider/promoter ownership (37%) 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 Hardware & Electronics companies with distress indicators
- Foxx Development Holdings Inc. (FOXX)Very weak 100/100
- Algorhythm Holdings, Inc. (RIME)Very weak 100/100
- USBC, Inc. (USBC)Very weak 100/100
- Telesat Corporation (TSAT)Very weak 79/100
- Q/C Technologies, Inc. (QCLS)Very weak 77/100
- Boxlight Corporation (BOXL)Very weak 76/100
All Hardware & Electronics companies with distress indicators →
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.