SUNation Energy Inc. — financial distress indicators
Financial-health summary
SUNation Energy Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 86/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and losses in each of the last 3 years. Independently, the Ohlson accounting model puts its 1-year failure probability at 88% and the market-implied (Merton) default probability is 44.5%. In its favour: revenue still growing (+26% 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 -6.35×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default 0.14 σ → PD 45%.
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 2 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
O-score 2.03 → model probability 88%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +36362% in a year.
Survival financing: repeated equity raises at depressed prices.
Current ratio is 0.72.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Short-term debt is 2.0× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Price is -61% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Revenue still growing (+26% YoY).
📰 Recent news scan
- Why Did SUNE Stock Surge 190% Premarket Today? - StocktwitsGoogle News · 2026-10-07
- AI and data centers are creating new electricity demand. SUNation's CEO will discuss what it means for the grid. - Stock TitanGoogle News · 2026-09-30
- SUNation Stock Gains Nearly 150% YTD: What's Behind the Rally? - TradingViewGoogle News · 2026-09-24
- $SUNE stock is up 18% today. Here's what we see in our data. | SUNE Stock News - Quiver QuantitativeGoogle News · 2026-07-09
- Why Did SUNE Stock Surge 190% Premarket Today? - Yahoo FinanceGoogle News · 2026-06-08
- SUNE Stock Alert: Halper Sadeh LLC is Investigating Whether SUNation Energy, Inc. is Obtaining a Fair Price for its Shareholders - Business WireGoogle News · 2026-06-08
⚖️ 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 SUNation Energy Inc.'s financial-health indicators show?
As of 2026-10-08, SUNation Energy Inc.'s public financial data places it in the 'Very weak' band with a distress score of 86/100, driven by operating profit does not cover interest, market-implied default probability >20% 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 SUNation Energy Inc.'s financial distress score?
86/100 ('Very weak'). Ohlson O-score 2.03 (model 1-year failure probability 88%). Merton distance-to-default 0.14 σ (model default probability 44.5%).
What works in SUNation Energy Inc.'s favour?
Revenue still growing (+26% 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 Energy, Oil & Gas companies with distress indicators
- Sky Quarry Inc. (SKYQ)Very weak 100/100
- SolarMax Technology, Inc. (SMXT)Very weak 100/100
- Spruce Power Holding Corporation (SPRU)Very weak 100/100
- Vivakor, Inc. (VIVK)Very weak 100/100
- Canadian Solar Inc. (CSIQ)Very weak 74/100
- SunPower Inc. (SPWR)Very weak 73/100
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.