Virtuix Holdings Inc. — financial distress indicators
Financial-health summary
Virtuix Holdings Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 72/100). The main indicators are cash runway under 12 months, 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 100% and the market-implied (Merton) default probability is 58.5%. 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.
At the current free-cash-flow burn, cash covers ~12 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.
Merton distance-to-default -0.21 σ → PD 58%.
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 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Price is -96% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 7.35 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Revenue still growing (+18% YoY).
📰 Recent news scan
- Tesla has placed repeat orders for Virtuix's treadmill to use in its humanoid robot program. - Stock TitanGoogle News · 2026-10-08
- Virtuix Holdings Inc. (VTIX) Stock Price, News, Quote & History - Yahoo! Finance CanadaGoogle News · 2026-10-07
- Virtuix Holdings Inc Share Price - VTIX, RNS News, Articles, Quotes, & Charts (NASDAQ:VTIX) - Proactive financial newsGoogle News · 2026-10-07
- Virtuix Holdings Inc. (VTIX) stock price, news, quote and history - Yahoo Finance SingaporeGoogle News · 2026-10-06
- Virtuix Holdings (VTIX) Stock Rises on Q1 2027 Earnings - Quiver QuantitativeGoogle News · 2026-08-19
⚖️ 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 Virtuix Holdings Inc.'s financial-health indicators show?
As of 2026-10-08, Virtuix Holdings Inc.'s public financial data places it in the 'Very weak' band with a distress score of 72/100, driven by cash runway under 12 months, 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 Virtuix Holdings Inc.'s financial distress score?
72/100 ('Very weak'). Ohlson O-score 7.35 (model 1-year failure probability 100%). Merton distance-to-default -0.21 σ (model default probability 58.5%).
What works in Virtuix Holdings Inc.'s favour?
Cash on hand covers all debt (net-cash balance sheet). Revenue still growing (+18% 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 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.