Volato Group, Inc. — financial distress indicators
Financial-health summary
Volato Group, Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 74/100). The main indicators are liabilities exceed assets (negative equity), severe working-capital shortfall and share price down >80% from 52-week high. Independently, the Ohlson accounting model puts its 1-year failure probability at 81% and the market-implied (Merton) default probability is 8.2%. 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.
Total liabilities are 1.06× 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).
Current ratio is 0.69 (current assets cover 69% of near-term obligations).
Cash-flow insolvency test: inability to pay debts as they fall due is the trigger for both U.S. involuntary petitions and Indian IBC default.
Price is -91% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
Share count up +416% in a year.
Survival financing: repeated equity raises at depressed prices.
Last price $0.31.
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 1.39 σ → PD 8.2%.
Investment-grade issuers typically have 1-year PD well below 1%.
Operating cash flow negative in 2 of the last 3 years. The company is profitable, so this likely reflects working-capital or loan-book growth.
A business that cannot fund itself from operations depends on external capital to survive.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+101% YoY).
- High insider/promoter ownership (34%) aligns management with survival.
📰 Recent news scan
- Volato Group to Rebrand as SOAR AI as the Company Scales AI Infrastructure BusinessYahoo Finance · 2026-10-08
- Zacks Initiates Coverage of Volato With Neutral RecommendationYahoo Finance · 2026-09-22
- Volato Group Names Chris Ensey Chief Executive Officer Following Completion of Alignment Engine MergerYahoo Finance · 2026-09-17
- Volato (NYSE American: SOAR) Completes Alignment Engine Merger, Entering AI Data Center Market Projected at $810.6 Billion by 2033Yahoo Finance · 2026-09-14
- Volato Group Reports Strong Preliminary Second Quarter 2026 Results with Record Vaunt Growth and Strengthened Balance SheetYahoo Finance · 2026-07-06
- Volato Closes $2.2 Million PIPE Priced at $0.34 Per ShareYahoo Finance · 2026-06-22
⚖️ 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 Volato Group, Inc.'s financial-health indicators show?
As of 2026-10-08, Volato Group, Inc.'s public financial data places it in the 'Very weak' band with a distress score of 74/100, driven by liabilities exceed assets (negative equity), severe working-capital shortfall and share price down >80% from 52-week high. 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 Volato Group, Inc.'s financial distress score?
74/100 ('Very weak'). Ohlson O-score 1.45 (model 1-year failure probability 81%). Merton distance-to-default 1.39 σ (model default probability 8.2%).
What works in Volato Group, Inc.'s favour?
Cash on hand covers all debt (net-cash balance sheet). Operating cash flow is positive over the latest 12 months. Revenue still growing (+101% YoY). High insider/promoter ownership (34%) 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.