Southland Holdings, Inc. — financial distress indicators
Financial-health summary
Southland Holdings, Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 81/100). The main indicators are liabilities exceed assets (negative equity), cash runway under 12 months and losses in each of the last 3 years. In its favour: high insider/promoter ownership (74%) 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 1.17× 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 ~3 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.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Price is -84% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
Revenue changed -21% year over year.
Falling sales reduce cash available for debt service.
Last price $0.78.
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.
Operating margin fell from -3% to -28% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Revenue declined every year for three years.
Structural, not cyclical, decline.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- High insider/promoter ownership (74%) aligns management with survival.
📰 Recent news scan
- Southland Awarded $71 Million Water Pipeline Project in the SouthwestYahoo Finance · 2026-09-29
- Southland Receives Notice of Noncompliance with NYSE American Continued Listing StandardsYahoo Finance · 2026-09-25
- Southland Holdings Inc (SLND) (Q2 2026) Earnings Call Highlights: Navigating Legacy Disputes ...Yahoo Finance · 2026-08-21
- Southland Holdings, Inc. Q2 2026 Earnings Call SummaryYahoo Finance · 2026-08-13
- Full Transcript: Southland Holdings Q1 2026 Earnings CallYahoo Finance · 2026-05-13
- Southland Holdings (SLND) Reports Q1 Loss, Lags Revenue EstimatesYahoo Finance · 2026-05-12
⚖️ 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 Southland Holdings, Inc.'s financial-health indicators show?
As of 2026-10-08, Southland Holdings, Inc.'s public financial data places it in the 'Very weak' band with a distress score of 81/100, driven by liabilities exceed assets (negative equity), cash runway under 12 months and losses in each of the last 3 years. 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 Southland Holdings, Inc.'s financial distress score?
81/100 ('Very weak').
What works in Southland Holdings, Inc.'s favour?
High insider/promoter ownership (74%) 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.
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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.