It was a rough week in the micro-cap trenches. When you aren't getting booted to the OTC markets, you're handing the keys to your term lenders in Texas bankruptcy court. We tracked 313 alerts this week, but five filings tell you everything you need to know about the current state of distressed public equities: subprime auto loans are souring, the pandemic pool boom is dead, and toxic death spiral financing is alive and well.
Getty Images Holdings (GETY)
The Filing: NYSE pulled the plug on Getty Images due to an "abnormally low selling price."
What Happened Since: The stock was immediately suspended and dumped onto the OTC Pink Limited Market. In a clear sign of defeat, management canceled a planned October 8 stockholder meeting where they were going to beg retail for a reverse stock split. If you are cancelling your own reverse split vote to just accept a demotion to the Pink sheets, your balance sheet restructuring talks are probably not going well. The equity is now trading for pennies, and the going-concern warnings are flashing red.
America's Car-Mart (CRMT)
The Filing: The buy-here-pay-here subprime auto dealer is surviving on borrowed time, securing yet another short-term waiver from lenders regarding liquidity and collateral defaults.
What Happened Since: The new forbearance deadline is October 8. Car-Mart is reportedly hunting for a $500 million rescue loan through Houlihan Lokey, while actively prepping a Chapter 11 fallback just in case. Subprime auto delinquencies are sitting near record highs, and the company's collateral coverage is blown. You don't repeatedly extend default waivers by a few days unless the lenders are just giving you time to finalize the bankruptcy paperwork or find a miracle buyer.
Leslie's, Inc. (LESL)
The Filing: The pool supply retailer filed for Chapter 11 in the Southern District of Texas to implement a pre-packaged restructuring.
What Happened Since: The pandemic-era pool building boom is over, leaving Leslie's with a $757 million term loan it couldn't service as EBITDA completely collapsed. Under the pre-arranged plan, 76 stores are shutting down. If you hold the common stock, you get a 100% wipeout. The term lenders are providing $90 million in debtor-in-possession financing and taking majority ownership of the reorganized company. Standard operating procedure: the debt becomes the equity, and the old equity becomes zero.
Celularity Inc. (CELU)
The Filing: Celularity closed an initial $11.01 million tranche of a $25 million senior secured convertible note.
What Happened Since: This is textbook distressed financing. The notes carry a 10% compounding interest rate and a 15% default rate. More importantly, the lenders get a first-priority lien on substantially all company assets and a board seat for Philip A. Barach. They also settled a dispute with Helena Global by issuing 2.7 million new shares. When you encumber every asset you own and heavily dilute your equity base just to keep the lights on, you aren't really running a biotech company anymore; you are managing collateral for your noteholders.
Goldenwell Biotech, Inc. (GWLL)
The Filing: The company fired its auditor, Michael Gillespie & Associates, and hired Privatco CPA Limited.
What Happened Since: The outgoing auditor had slapped them with a going concern warning. But the real story here is the scale of the business. According to Goldenwell's recent 10-K, their total revenue for fiscal 2025 was $55. Not $55 million. Fifty-five dollars. They also had to issue restatements earlier this year because they misclassified a $9,840 legal bill. The fact that a public company with $55 in annual revenue is executing auditor swaps instead of dissolving is a testament to the sheer resilience of the OTC markets.
What to Watch
All eyes are on America's Car-Mart this Thursday, October 8. If they don't announce a massive capital injection by the time the waiver expires, expect a Friday morning Chapter 11 filing. Until then, keep your stop losses tight.