ZTG — financial distress indicators
Financial-health summary
ZTG's reported numbers place it in the 'Watch' financial-health band (distress score 45/100). The main indicators are share price down >80% from 52-week high, ohlson o-score signals likely failure and trading below $1. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 5.5%. 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.
Price is -93% 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 14.52 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Last price $0.69.
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 1.60 σ → PD 5.5%.
Investment-grade issuers typically have 1-year PD well below 1%.
Operating margin fell from 54% to 43% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Operating cash flow negative in 2 of the last 3 years. The company is profitable, so this likely reflects working-capital or loan-book growth.
A business that cannot fund itself from operations depends on external capital to survive.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Comfortable interest coverage (2415.6×).
- Strong current ratio (7.30).
- Revenue still growing (+56% YoY).
📰 Recent news scan
- Zenta Group Provides Business Update on ZentoAIYahoo Finance · 2026-09-24
- Zenta Group Company Limited Clarifies Shares Outstanding Following Recent Share IssuanceYahoo Finance · 2026-09-23
- Zenta Group Company Limited Announces Filing of US$50 Million Universal Shelf Registration Statement on Form F-3Yahoo Finance · 2026-09-22
- Zenta Group Company Limited Announces Agreement to Acquire ZentoAI Intelligent Technology Company LimitedYahoo Finance · 2026-09-09
⚖️ 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 ZTG's financial-health indicators show?
As of 2026-10-08, ZTG's public financial data places it in the 'Watch' band with a distress score of 45/100, driven by share price down >80% from 52-week high, ohlson o-score signals likely failure and trading below $1. 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 ZTG's financial distress score?
45/100 ('Watch'). Ohlson O-score 14.52 (model 1-year failure probability 100%). Merton distance-to-default 1.6 σ (model default probability 5.5%).
What works in ZTG's favour?
Cash on hand covers all debt (net-cash balance sheet). Comfortable interest coverage (2415.6×). Strong current ratio (7.30). Revenue still growing (+56% 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 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.