WETO — financial distress indicators
Financial-health summary
WETO's reported numbers place it in the 'Very weak' financial-health band (distress score 99/100). 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 52% and the market-implied (Merton) default probability is 86.9%. In its favour: operating cash flow is positive over the latest 12 months.
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 -6.58×.
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 -1.12 σ → PD 87%.
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.
Revenue changed -70% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
Debt is 32% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
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.
Price is -99% 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 0.07 → model probability 52%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Operating margin fell from -6% to -16% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
📰 Recent news scan
- WETO Stock Pulls Back As Traders Watch Key Support - StocksToTradeGoogle News · 2026-10-07
- WETO Stock Grinds Sideways As Traders Watch Key Levels - Timothy SykesGoogle News · 2026-10-07
- Wetour Robotics Limited Ordina Stock Short Interest Rises to 38.16% - Quiver QuantitativeGoogle News · 2026-10-07
- WETO Stock Grinds Lower As Traders Watch Support - StocksToTradeGoogle News · 2026-10-07
- Wetour Robotics (WETO) Stock Rallies Over 59% After Hours: Here's Why It Is Trending - BenzingaGoogle News · 2026-09-24
- Wetour Robotics plans to combine every 100 shares into one Aug. 3 - Stock TitanGoogle News · 2026-07-29
⚖️ 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 WETO's financial-health indicators show?
As of 2026-10-08, WETO's public financial data places it in the 'Very weak' band with a distress score of 99/100, 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 WETO's financial distress score?
99/100 ('Very weak'). Ohlson O-score 0.07 (model 1-year failure probability 52%). Merton distance-to-default -1.12 σ (model default probability 86.9%).
What works in WETO's favour?
Operating cash flow is positive over the latest 12 months.
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 Unclassified companies with distress indicators
- CNEY (CNEY)Very weak 100/100
- EPOW (EPOW)Very weak 100/100
- GIBO (GIBO)Very weak 100/100
- GNS (GNS)Very weak 100/100
- HKPD (HKPD)Very weak 100/100
- HUBC (HUBC)Very weak 100/100
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.