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BRAINKRUPTCY provides vital information about listed US companies at risk of bankruptcy, by applying artificial intelligence methodology to publicly available company information and market data.

Bankruptcy risk information provided by BRAINKRUPTCY

The four reports offered by BRAINKRUPTCY contain company-specific bankruptcy risk information. These reports estimate the probability that a listed US company will file for bankruptcy according to Chapter 7 or Chapter 11 within the next 12 months, and identifies companies on the verge of bankruptcy.

The Risk Report - updated weekly - contains bankruptcy risk information on listed US companies that are classified as being at imminent risk of filing for bankruptcy.

$ 50 USD / month

The Market Report - updated weekly - contains bankruptcy risk information on all listed US companies.

$ 100 USD / month

The Professional Report - updated weekly - contains bankruptcy risk information on all listed US companies, and includes the historical bankruptcy predictions since 2015.

$ 150 USD / month

The Historical Report provides bankruptcy predictions for the period 2006 to 2014, and is available on request.

BRAINKRUPTCY empirically estimates the probability that listed US companies will have to file for bankruptcy, and identifies companies which are at imminent risk of filing for bankruptcy.

BRAINKRUPTCY applies high-performance artificial intelligence methodology to estimate, as accurately as possible, the probability that a listed US company will file for bankruptcy according to Chapter 7 or Chapter 11 within the next 12 months. BRAINKRUPTCY identifies companies which are at imminent risk of filing for bankruptcy, based on these predicted probabilities.

The empirically estimated probabilities of bankruptcy incorporate relevant information about a company. This information is processed through a bankruptcy prediction model at the beginning of each year, to estimate a company's probability of bankruptcy, using a two-step process:

In the first step, the model applies historical data of the previous ten years, which includes:

·      Solvency status

·      Comprehensive accounting and market data

·      Insider activities

·      Shareholder structure

·      Macroeconomic data

In the second step, the most recent information about a company is applied to the model, which includes:

·      Company-specific accounting and market data

·      Shareholder structure

·      Insider activities

·      Macroeconomic data The two-step procedure of BRAINKRUPTCY

The applied bankruptcy prediction model is updated at the beginning of each year. Changes in the estimated probabilities of bankruptcy are further updated with periodically disclosed information:

·      Accounting data is disclosed quarterly in 10-Q filings

·      Shareholder structure information is disclosed quarterly in 13F filings

·      Macroeconomic data is released in a weekly or monthly cycle

For example, if a specific company files a ten Q filing which provides new accounting information, the probability of bankruptcy for that specific company is updated to incorporate that most recent filing.

The applied bankruptcy prediction model also incorporates daily market data on a company’s stock price and market value.

Each weekend, BRAINKRUPTCY provides updates to estimate the probabilities of filing for bankruptcy for all listed US companies.

BRAINKRUPTCY estimates the probability that a listed US company will file for bankruptcy according to Chapter 7 or Chapter 11 within the next 12 months. The estimated probability of bankruptcy is a metric measure and ranges between zero and 1. Higher values indicate greater financial distress.

BRAINKRUPTCY displays the distribution of the probabilities of bankruptcy for all listed US companies. The distribution is skewed to the right - the vast majority of listed US companies are healthy. There are still a considerable number of companies that are either financially distressed or on the verge of bankruptcy.

Distribution of the probabilities of bankruptcy

An integral part of the applied bankruptcy prediction model is the cut-off-rate, which respresents the threshold between listed US companies that are classified as solvent and listed US companies that are classified as being at imminent risk of going bankrupt. Using the cut-off rate, BRAINKRUPTCY identifies companies that are at imminent risk of filing for bankruptcy based on these predicted probabilities.

If the probability of bankruptcy is above the cut-off-rate, this indicates that the company is in severe financial distress and is quickly approaching bankruptcy. Cut-off-rate

An enhanced analysis of a company’s financial distress looks at the current probability of bankruptcy, and compares it to the previous probability of bankruptcy. Ernest Hemingway observed that bankruptcy occurs first gradually and then suddenly. The interrelation between the current probability of bankruptcy and the previous probability of bankruptcy can provide further insights, such as indicating if the company is accelerating toward the sudden phase of potential bankruptcy.   

Change in the probability of bankruptcy

BRAINKRUPTCY offers bankruptcy risk information on listed US companies.

BRAINKRUPTCY was founded by Christian Lohmann and Steffen Möllenhoff.

Christian and Steffen share the view that financial markets work most efficiently when market participants have easy access to vital and key market information, such as the probability of bankruptcy. Christian and Steffen combined their expertise and skillsets to found BRAINKRUPTCY, to provide investors and other market participants with accurate and up-to-date information on the bankruptcy risk of listed US companies.

Both founders have a strong academic background in the area of bankruptcies. Christian holds a PhD from the University of Munich and currently serves as a Professor at the University of Wuppertal. Steffen holds a PhD in the field of bankruptcy prediction and investor attention, and is a Senior Researcher at the University of Wuppertal.

Both founders have deep expertise in data analytics and corporate bankruptcy prediction, and actively conduct research in these fields. Christian has published several academic papers on:

·      Nonlinear effects and their effect on bankruptcy prediction

·      Bankruptcy prediction of young firms

·      The use of qualitative information in bankruptcy prediction

·      The evaluation of misclassification in credit scoring

Steffen's research analyzes investor attention and behavior before a firm files for bankruptcy, and he is an expert in:

·      Data analytics

·      Machine learning

·      Artificial intelligence

Lohmann, C. and Ohliger, T. 2021. Using Aaccounting-based and loan-related information to estimate the cure probability of a defaulted company. European Financial Management 27 (4): 620–640. DOI: 10.1111/eufm.12279.

Lohmann, C. and Ohliger, T. 2020. Bankruptcy prediction and the discriminatory power of annual reports: Empirical evidence from financially distressed German companies. Journal of Business Economics 90 (1): 137–172. DOI: 10.1007/s11573-019-00938-1.

Lohmann, C. and Ohliger, T. 2019. Using accounting-based information on young firms to predict bankruptcy. Journal of Forecasting 38 (8): 803–819. DOI: 10.1002/for.2586.

Lohmann, C. and Ohliger, T. 2019. The total cost of misclassification in credit scoring: A comparison of generalized linear models and generalized additive models based on empirical data. Journal of Forecasting 38 (5): 375–389. DOI: 10.1002/for.2545.

Lohmann, C. and Ohliger, T. 2018. Nonlinear relationships in a logistic model of default for a high risk installment portfolio. Journal of Credit Risk 14 (1): 45–68. DOI: 10.21314/JCR.2017.232.

Lohmann, C. and Ohliger, T. 2017. Nonlinear relationships and their effect on bankruptcy prediction. Schmalenbach Business Review 18 (3): 261–287. DOI: 10.1007/s41464-017-0034-y.

BRAINKRUPTCY estimated the probability of bankruptcy of X.XXX listed US companies. By applying their bankruptcy prediction model, they have classified XXX listed US companies (or xx%) as being at imminent risk of filing for bankruptcy.

The number of listed US companies that are classified to be at imminent risk of filing for bankruptcy have increased in absolute and relative values since January 1st, 2022.

The applied bankruptcy prediction model classified XXX listed US companies (or xx%) to be at imminent risk of filing for bankruptcy on January 1st, 2022.

The mean and median probability of default has increased since January 1st, 2022.

The bankruptcy predictions of BRAINKRUPTCY show that the number of financially distressed companies has increased, and that listed US companies are exposed to larger bankruptcy risk.

Frequently asked questions on the services of BRAINKRUPTCY.

BRAINKRUPTCY is an independent information provider. Based on artificial intelligence methodology BRAINKRUPTCY estimates the probability of bankruptcy for listed US companies and provides bankruptcy risk information.

Corporate bankruptcy is a major company event which has large implications for shareholders, creditors, and other stakeholders. It is vital to predict an imminent bankruptcy at an early stage, rather than be unexpectedly impacted by the consequences when a company files for bankruptcy. Precise information on the probability of bankruptcy helps evaluate the risk of an individual stock position or an entire portfolio.

By using BRAINKRUPTCY, corporate bankruptcies are detected at the earliest possible stage. As a result, shareholders, creditors, and other stakeholders can take action before the bankruptcy event actually occurs.

BRAINKRUPTCY estimates the probability of bankruptcy and provides bankruptcy risk information on listed US companies.

BRAINKRUPTCY empirically estimates the probability of bankruptcy of listed US companies and accurately distinguishes between solvent companies and companies that are at imminent risk of filing for bankruptcy. BRAINKRUPTCY helps detect corporate bankruptcies at the earliest possible stage.

BRAINKRUPTCY offers different services on a monthly subscription basis which provide weekly updated bankruptcy risk information on listed US companies. The user can cancel their subscription any time. The minimum period of commitment is one month.

BRAINKRUPTCY provides detailed bankruptcy risk information on listed US companies that is particularly important for advanced retail investors, as well as shareholders, creditors and other stakeholders. The services of BRAINKRUPTCY and the associated monthly subscriptions are for non-professional use. The services of BRAINKRUPTCY can also be used by professional investors and institutions such as universities. Professional users will get an individual offer on request.

According to the “efficient market hypothesis,” stock prices should fully reflect all available information on a company’s financial status at any point in time. The probability of a company going bankrupt in the future should also be reflected in its stock price. However, markets are not as efficient as they should be about making price adjustments on the basis of a company's financial distress. Bankruptcy prediction is extremely valuable because it protects investors from the negative financial impact of bankruptcies.

BRAINKRUPTCY applies artificial intelligence methodology to predict companies that are at imminent risk of filing for bankruptcy. The applied bankruptcy prediction model estimates the probability that a listed US company will file for bankruptcy according to Chapter 7 or Chapter 11 within the next 12 months.

The empirical results are derived from a two-step procedure:

(1) Estimation of the bankruptcy prediction model: The bankruptcy prediction model is estimated at the beginning of each year by applying the historical data of the last 10 years for US listed companies. Historical data includes accounting information and market data, along with further company information such as shareholder structure, and macroeconomic data.

(2) Estimation of a company’s probability of bankruptcy: The most recent information is applied to the bankruptcy prediction model to estimate the probability of bankruptcy, and includes company-specific accounting information and market data, company information such as shareholder structure, and macroeconomic data.

If the estimated probability that a company files for bankruptcy according to Chapter 7 or Chapter 11 within the next 12 months exceeds a specific threshold value, the company is classified as being at imminent risk of filing for bankruptcy.

The applied bankruptcy prediction model is updated at the beginning of each year. Changes in the estimated probabilities of bankruptcy are regularly updated, by including periodically disclosed information:

·      Accounting data is disclosed quarterly in ten Q filings

·      Shareholder structure information is disclosed quarterly in thirteen F filings

·      Macroeconomic data is released in a weekly or monthly cycle

For example, if a specific company files a ten Q filing which provides new accounting information, the probability of bankruptcy for that specific company is updated to incorporate that most recent filing.

The applied bankruptcy prediction model also incorporates daily market data on a company’s stock price and market value.

Each weekend, BRAINKRUPTCY provides updates to estimate the probabilities of filing for bankruptcy for all listed US companies.

Please read the Privacy Policy carefully. The Privacy Policy covers how BRAINKRUPTCY treats the personal information of its users.

This policy covers how BRAINKRUPTCY treats personal information that BRAINKRUPTCY collects and receives, including information related to your past use of our Services. Personal information is information about you that is personally identifiable, like your name, address, email address, and that is not otherwise publicly available.

This policy does not apply to the practices of companies that BRAINKRUPTCY does not own or control, or to people that BRAINKRUPTCY does not employ or manage.

BRAINKRUPTCY collects personal information when you register with BRAINKRUPTCY, when you use the Services of BRAINKRUPTCY, when you visit the BRAINKRUPTCY website or the pages of certain BRAINKRUPTCY partners. BRAINKRUPTCY may combine information about you that BRAINKRUPTCY has with information BRAINKRUPTCY obtains from business partners or other companies.

When you register BRAINKRUPTCY asks for information such as your name, email address, address, etc. Once you register with BRAINKRUPTCY and sign in to our Services, you are not anonymous to us.

BRAINKRUPTCY collects information about your transactions with us, and with some of our business partners, including information about your use of Services that BRAINKRUPTCY offers.

BRAINKRUPTCY automatically receives and records information on our server logs from your browser, including your IP address, BRAINKRUPTCY cookie information, and the page you request.

BRAINKRUPTCY uses information for the following general purposes: to customize the advertising and content you see, to fulfill your requests for Services, improve our Services, contact you, conduct research, and provide anonymous reporting for internal and external clients.

BRAINKRUPTCY does not rent, sell, or share personal information about you with other people or non-affiliated companies, except to provide the Services you’ve requested, when BRAINKRUPTCY has your permission, or under the following circumstances:

(1) BRAINKRUPTCY provides the information to trusted partners who work on behalf of or with BRAINKRUPTCY under confidentiality agreements. These companies may use your personal information to help BRAINKRUPTCY communicate with you about offers from BRAINKRUPTCY and our marketing partners. However, these companies do not have any independent right to share this information.

(2) BRAINKRUPTCY responds to subpoenas, court orders, or legal processes, or to establish or exercise our legal rights, or defend our company against legal claims. It may be necessary to share information in order to investigate, prevent, or take action regarding illegal activities, suspected fraud, situations involving potential threats to the physical safety of any person, violations of BRAINKRUPTCY’s terms of use, or as otherwise required by law.

(3) BRAINKRUPTCY transfers information about you if BRAINKRUPTCY is acquired by or merged with another company. In this event, BRAINKRUPTCY will notify you before information about you is transferred and becomes subject to a different privacy policy.

BRAINKRUPTCY may display targeted advertisements based on personal information. Advertisers (including ad serving companies) may assume that people who interact with, view, or click on targeted ads meet the targeting criteria – for example, women ages 18-24 from a particular geographic area. BRAINKRUPTCY does not provide any personal information to the advertiser when you interact with or view a targeted ad. However, by interacting with or viewing an ad you are consenting to the possibility that the advertiser will make the assumption that you meet the targeting criteria used to display the ad.

BRAINKRUPTCY may set and access BRAINKRUPTCY cookies on your computer.

BRAINKRUPTCY lets other companies that show advertisements on some of our pages place and access their cookies on your computer. Other companies’ use of their cookies is subject to their own privacy policies, not this one. Advertisers or other companies do not have access to BRAINKRUPTCY’s cookies.

BRAINKRUPTCY uses web beacons to access BRAINKRUPTCY cookies inside and outside our network of websites, and in connection with BRAINKRUPTCY Services.

You can edit your BRAINKRUPTCY Account Information, including your preferences, at any time.

BRAINKRUPTCY reserves the right to send you certain communications relating to BRAINKRUPTCY Services, such as service announcements and administrative messages that are considered part of your BRAINKRUPTCY account, without offering you the opportunity to opt-out of receiving them.

BRAINKRUPTCY limits access to personal information about you to employees who need to come into contact with that information to provide Services to you, or in order to do their tasks.

In certain areas BRAINKRUPTCY may use industry-standard SSL encryption to protect data transmissions.

BRAINKRUPTCY may update this policy. BRAINKRUPTCY will notify you about significant changes to the way BRAINKRUPTCY treats personal information by sending a notice to the primary email address specified in your BRAINKRUPTCY account, or by placing a prominent notice on the BRAINKRUPTCY website.

Please read these Terms & Conditions carefully. The Terms & Conditions impose legal obligations on you. By using the Services of BRAINKRUPTCY, you are acknowledging that you have read and understood these Terms of Service and agree to be legally bound by them.

The following terms shall have the following meaning: (1) User means a person that has registered to obtain the Services of BRAINKRUPTCY. (2) Services mean those of the services provided by BRAINKRUPTCY and selected by the User. (3) Website means brainkruptcy.com.

BRAINKRUPTCY shall make commercially reasonable efforts to make the Services always available to the User, and shall restore the Services as soon as reasonably possible in the event of any interruption. BRAINKRUPTCY shall not be liable for any failure to provide the Services.

BRAINKRUPTCY does not warrant that the Services of BRAINKRUPTCY will be error-free or uninterrupted.

The User is permitted to store, manipulate, analyze the bankruptcy risk information provided by the Services of BRAINKRUPTCY and use the Services for the User’s private use. In no event shall the User sell, resell, retransmit, redistribute, provide or permit access to any bankruptcy risk information or the Services as is, or to repackage bankruptcy risk information to anyone with any subscription. Please contact info@brainkruptcy.com for any commercial usage of the data.

BRAINKRUPTCY would like to remind you that the data contained in this Website is not necessarily accurate. All bankruptcy risk information provided by the Services of BRAINKRUPTCY represents probabilities or predictions that can only occur with a certain probability. Therefore, BRAINKRUPTCY doesn’t bear any responsibility for any losses that you might incur as a result of using this data. BRAINKRUPTCY or anyone involved with BRAINKRUPTCY will not accept any liability for losses or damages as a result of reliance on the information contained within this Website.

BRAINKRUPTCY does not give any warranties (including, without limitation, as to merchantability or fitness for a particular purpose or use). Without limitation to this clause, BRAINKRUPTCY does not warrant that access to the Website will not expose the User to viruses or other harmful items, and no assurance can be given that the Website or any linked website will not harm or cause loss to the User, or the User’s computer or network.

The User shall have a username and password (specified by the User) that enables the User to access the Services. The User is responsible for maintaining the confidentiality of the username and password and is not entitled to disclose the username or password to any other person.

The Services are offered on a monthly subscription basis. As a result, the User is under no long-term obligations. The User can cancel their subscription any time, and the minimum period of commitment is one month.

If the User is an individual, BRAINKRUPTCY and its agents are authorized to collect information about the User. This information may be used to enable access to the Services, for statistical analysis, research and marketing purposes.

The User can request access to and correction of any personal information held by BRAINKRUPTCY about the User. Any such request must be in writing and BRAINKRUPTCY, at its discretion, may charge for any costs reasonably incurred in responding to such a request.

Without prejudice to any other rights, BRAINKRUPTCY may without notice terminate its contract with the User immediately if the User fails to comply with any of these terms and conditions, or if BRAINKRUPTCY ceases to supply any Services. Users wishing to cancel subscription-based services can cancel at any time.

BRAINKRUPTCY does not allow refunds or exchanges on any of its Services. All sales are final.

To the maximum extent permitted by law, BRAINKRUPTCY excludes all and any liability to the User arising out of the contract between BRAINKRUPTCY and the User. Notwithstanding and without limiting any provision of these terms and conditions, any claim brought by the User against BRAINKRUPTCY must be served within one year following the date on which the cause of action accrued.

The User indemnifies BRAINKRUPTCY against all and any losses, costs (including legal costs on a solicitor-client basis), expenses and damages, whether direct or indirect, arising from or in connection with a claim by a third party against BRAINKRUPTCY relating to Services obtained by the User.

The User may not assign its rights under the contract between BRAINKRUPTCY and the User.

If any provision of these terms and conditions is found to be invalid or unenforceable to any extent, the remainder of the terms and conditions shall not be affected and shall remain enforceable to the greatest extent permitted by law.

BRAINKRUPTCY reserves the right to alter these terms and conditions at any time. BRAINKRUPTCY will endeavor to provide reasonable notice to the User of any variation by posting the new terms and conditions on the Website and by email to the User at the last email address which the User has used to correspond with BRAINKRUPTCY.

 

Contact BRAINKRUPTCY anytime.

Commercial register number: HRA 11302

Tax identification number: 204/151/03019

CEO: Professor Dr. Christian Lohmann

Address: Heinrich-Heine-Str. 15 01877 Demitz-Thumitz Germany

Email: info@brainkruptcy.com