It was a banner week for creative financial engineering at the bottom of the market. When a fundamental business stops generating cash, executives generally have two choices: default on the debt, or pivot to crypto. This week, we saw companies eagerly pursuing both.
America's Car-Mart (CRMT)
The Filing: America's Car-Mart secured a painfully short forbearance agreement from its lenders, expiring June 12, 2026, after anticipating breaches of its liquidity and collateral coverage covenants. Naturally, while staring down an imminent liquidity cliff, the board approved a retention program, handing CEO Douglas Campbell a $1.2 million cash award.
The Reality: The stock has collapsed from a 52-week high of $62.72 down to the $7 range. We now know why the forbearance window is so tight: the company is frantically working with Jefferies to tap the private credit market for a $400 million refinancing. This pivot to private credit comes after a premarketed bond deal received a "lukewarm reception" in the broadly syndicated market, as public investors balked at underwriting the underlying portfolio of subprime auto loans. If private credit won't bail them out, the forbearance ends in a few days and the lenders can accelerate the debt.
American Shared Hospital Services (AMS)
The Filing: AMS received a notice of default from Fifth Third Bank on May 29, 2026. The company missed a $5 million minimum cash requirement, blew its coverage ratios, and failed to pay a term loan that matured in April. The bank slapped them with a default interest rate of base plus 2%.
The Reality: The company explicitly admits it does not have the cash on hand to satisfy its obligations if the lender chooses to accelerate the debt. As of June 4, Fifth Third hasn't pulled the trigger. AMS is functionally a zombie at this point, kept alive entirely at the discretion of a midwestern regional bank's workout department.
Upland Software (UPLD)
The Filing: Upland announced a 1-for-10 reverse stock split effective June 17, 2026, to regain Nasdaq compliance. In the exact same meeting, shareholders approved a 2 million share increase to the 2024 Omnibus Incentive Plan.
The Reality: Shares had cratered 56% over the past year to trade around $0.83. This is the classic micro-cap maneuver: mathematically inflate the share price to dodge a delisting notice, while simultaneously expanding the pool of equity available to pay management. It shrinks the retail base but keeps the dilution machine running.
Fathom Holdings (FTHM)
The Filing: Real estate brokerage Fathom failed to file its Q1 10-Q, triggering defaults. They entered an amended bridge note—bizarrely, with Bed Bath & Beyond—bringing the principal to $3.04 million. The waiver pushes the filing deadline to October 2026 but jacks the default interest rate to 18%.
The Reality: The waiver agreement contains a "Failed Change of Control" clause, which heavily implies Fathom is quietly trying to sell itself. If a deal is announced and falls through, the waiver terminates automatically and the debt accelerates. Adding to the intrigue, Chairman Scott Flanders is a related party to the waiver. Borrowing from Bed Bath & Beyond at an 18% default rate while trying to orchestrate an M&A exit is a deeply distressed flavor of real estate tech.
Pineapple Financial (PAPL)
The Filing: Pineapple's auditor, MNP LLP, resigned immediately. In the same filing, the mortgage broker announced it was entering a management services agreement to oversee a "digital asset treasury strategy".
The Reality: MNP had attached a "going concern" warning to Pineapple's last two years of financials. The company's response to severe cash burn and negative equity is a structural reset—slashing jobs and software costs—and installing a crypto treasury reserve policy. They are now authorizing share buybacks while talking up the discount between their enterprise value and their underlying digital asset holdings. When the core lending business bleeds cash, buying Bitcoin with the remaining liquidity is certainly a choice.
What to Watch
Keep a close eye on the June 12 deadline for America's Car-Mart. If Jefferies cannot find a private credit fund willing to underwrite $400 million in subprime auto loans by the end of the week, we are looking at an immediate and messy restructuring. Fathom Holdings also bears watching; at an 18% default interest rate, their management does not have the luxury of time to close a sale.