XCH — financial distress indicators
Financial-health summary
XCH's reported numbers place it in the 'Very weak' financial-health band (distress score 73/100). The main indicators are losses in each of the last 3 years, revenue collapse and operations consume cash. Independently, the Ohlson accounting model puts its 1-year failure probability at 98% and the market-implied (Merton) default probability is 0.0%. 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.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Revenue changed -41% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
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 -92% 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 3.87 → model probability 98%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Cash covers ~17 months of free-cash-flow burn.
Funding needs within two years make the company dependent on capital-market access.
Share count up +22% in a year.
Large issuance usually funds operating losses rather than growth.
Operating margin fell from -17% to -131% 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
- Cash on hand covers all debt (net-cash balance sheet).
- Strong current ratio (1.58).
📰 Recent news scan
- EnBW Deploys XCharge C7 480 kW Fast Chargers Across Its Nationwide Charging Network in GermanyYahoo Finance · 2026-09-21
- XCharge Regains Compliance with Nasdaq Minimum Bid Price RequirementYahoo Finance · 2026-09-09
- XCharge Announces Plan to Implement ADS Ratio ChangeYahoo Finance · 2026-08-19
- XCharge Announces Pricing of $4.375 Million Registered Direct Offering with a Single Global Institutional InvestorYahoo Finance · 2026-06-26
- Analysts Expect Breakeven For XCHG Limited (NASDAQ:XCH) Before LongYahoo Finance · 2026-05-04
- XCharge Files 2025 Annual Report on Form 20-FYahoo Finance · 2026-04-27
⚖️ 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 XCH's financial-health indicators show?
As of 2026-10-08, XCH's public financial data places it in the 'Very weak' band with a distress score of 73/100, driven by losses in each of the last 3 years, revenue collapse and operations consume cash. 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 XCH's financial distress score?
73/100 ('Very weak'). Ohlson O-score 3.87 (model 1-year failure probability 98%). Merton distance-to-default 3.99 σ (model default probability 0.0%).
What works in XCH's favour?
Cash on hand covers all debt (net-cash balance sheet). Strong current ratio (1.58).
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.