Zeo Energy Corp. — financial distress indicators
Financial-health summary
Zeo Energy Corp.'s reported numbers place it in the 'Very weak' financial-health band (distress score 73/100). The main indicators are cash runway under 12 months, operations consume cash and share price down >80% from 52-week high. Independently, the Ohlson accounting model puts its 1-year failure probability at 93% and the market-implied (Merton) default probability is 18.2%. 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 ~4 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.
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 -86% 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 2.54 → model probability 93%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +150% in a year.
Survival financing: repeated equity raises at depressed prices.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Last price $0.28.
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 0.91 σ → PD 18.2%.
Investment-grade issuers typically have 1-year PD well below 1%.
Operating margin fell from 5% to -30% 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 (1.65).
- High insider/promoter ownership (31%) aligns management with survival.
📰 Recent news scan
- The Zacks Analyst Blog Highlights TotalEnergies, Snowflake, Marathon, MIND and Zeo EnergyYahoo Finance · 2026-10-05
- Zeo Energy, Ewyze Team Up to Power AI Data-Center ExpansionYahoo Finance · 2026-09-25
- Zeo Energy Retires $1.67 Million Convertible Debt, Leaving Corporate Debt-Free Balance SheetYahoo Finance · 2026-09-23
- Zeo Energy Corp. Achieves Corporate Debt-Free Balance Sheet Following Early Retirement of Convertible DebtYahoo Finance · 2026-09-23
- Zeo Energy Enters Cooperation Agreement with Ewyze to Develop Integrated Off-Grid Power and Data-Center InfrastructureYahoo Finance · 2026-09-22
- Zeo Energy Selected as Fulcrum Point’s Primary Energy Storage Provider for Power Development ProjectsYahoo Finance · 2026-09-08
⚖️ 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 Zeo Energy Corp.'s financial-health indicators show?
As of 2026-10-08, Zeo Energy Corp.'s public financial data places it in the 'Very weak' band with a distress score of 73/100, driven by cash runway under 12 months, operations consume cash and share price down >80% from 52-week high. 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 Zeo Energy Corp.'s financial distress score?
73/100 ('Very weak'). Ohlson O-score 2.54 (model 1-year failure probability 93%). Merton distance-to-default 0.91 σ (model default probability 18.2%).
What works in Zeo Energy Corp.'s favour?
Cash on hand covers all debt (net-cash balance sheet). Strong current ratio (1.65). High insider/promoter ownership (31%) aligns management with survival.
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
- SUNation Energy Inc. (SUNE)Very weak 86/100
- Canadian Solar Inc. (CSIQ)Very weak 74/100
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.