XTI Aerospace, Inc. — financial distress indicators
Financial-health summary
XTI Aerospace, Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 100/100). The main indicators are liabilities exceed assets (negative equity), cash runway under 12 months and severe working-capital shortfall. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 9.5%. 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.
Total liabilities are 1.17× 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).
At the current free-cash-flow burn, cash covers ~8 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.
Current ratio is 0.55 (current assets cover 55% 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.
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.
O-score 7.04 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +1846% in a year.
Survival financing: repeated equity raises at depressed prices.
Last price $0.81.
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 1.31 σ → PD 9.5%.
Investment-grade issuers typically have 1-year PD well below 1%.
Price is -74% 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
- Cash on hand covers all debt (net-cash balance sheet).
📰 Recent news scan
- XTI Aerospace Announces Receipt of Nasdaq Deficiency NoticeYahoo Finance · 2026-08-31
- XTI Aerospace Announces Executive Leadership TransitionYahoo Finance · 2026-08-18
- XTI Aerospace Postpones Release of Second Quarter 2026 Financial ResultsYahoo Finance · 2026-08-11
- XTI Aerospace to Participate in Needham's 15th Annual Virtual Industrial Tech, Robotics & Power ConferenceYahoo Finance · 2026-07-27
- XTI Aerospace Schedules Second Quarter 2026 Earnings WebcastYahoo Finance · 2026-07-22
- XTI Aerospace's Drone Nerds Business Adds RigiTech Eiger Delivery Drone to Enterprise PortfolioYahoo Finance · 2026-06-24
⚖️ 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 XTI Aerospace, Inc.'s financial-health indicators show?
As of 2026-10-08, XTI Aerospace, Inc.'s public financial data places it in the 'Very weak' band with a distress score of 100/100, driven by liabilities exceed assets (negative equity), cash runway under 12 months and severe working-capital shortfall. 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 XTI Aerospace, Inc.'s financial distress score?
100/100 ('Very weak'). Ohlson O-score 7.04 (model 1-year failure probability 100%). Merton distance-to-default 1.31 σ (model default probability 9.5%).
What works in XTI Aerospace, Inc.'s favour?
Cash on hand covers all debt (net-cash balance sheet).
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.