This is from Kodak's Q2 Financial report:

As a result, these conditions raise substantial doubt about the Company’s ability to continue as a going concern as of the issuance date of the Company’s second quarter financials.

https://www.kodak.com/en/company/press-release/q2-2025-finan...

As Walter Bagehot said "Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone..."

> "these conditions raise substantial doubt about the Company’s ability to continue as a going concern"

When the story got attention yesterday I recognized that phrase as the standard boilerplate language securities lawyers warn public companies to include in filings anytime it looks possible that they might not be able to fully meet all their obligations on time. It's a CYA to prevent (or reduce the cost of) investor lawsuits if things go badly. It's not uncommon to see this phrase sometimes pop-up even in filings of companies who are pretty obviously going to be fine, so it doesn't mean much because it covers a huge range of conditions.

I'm sure it's already appeared in Kokak's filings in recent years. The only surprising thing is that some media outlet decided to headline it as click-bait and it worked well enough a lot of people not familiar with the phrase and its lack of significance saw it. Nice of Kodak to at least issue a press release but unfortunate the click-bait got that much attention. It must have been a slow news day.

Even a cursory glance at Kodak's financials shows enough revenue that creditors certainly aren't going to force the company into liquidation in the foreseeable future. Instead, the company will renegotiate and/or refinance the obligations - which is what usually happens in these situations. When there's significant revenue from ongoing operations, even if it's somewhat unprofitable, it's usually in everyone's interest to keep the company operating in the hope it can be turned around. In fact, scary sounding statements like that are sometimes intentionally issued by the company as part of the debt renegotiation process (although it doesn't appear that's the case here as things aren't that serious). Basically, the implied threat from the company to creditors is "renegotiate debt terms or you may get much less or nothing."

To be fair, "[substantial] doubt about the Company’s ability to continue as a going concern", at least for audited statements, is accounting jargon with a limited and technical definition. Notably, it doesn't take into account debt restructuring or other negotiations with debtors -- which is what TFA states may happen; notably with pension obligations.

https://pcaobus.org/oversight/standards/auditing-standards/d...

That kind of statement is made to warn the investors and potential investors about the contents of the financial statement to which it is attached. The statement will include amounts representing the 'value' of the firm's assets according to the accounting rules for valuing assets. Current earnings being the most important number that investors and potential investors look for in the financial statements, the 'rules' for reporting those asset 'values' are designed to get the current earnings to come out 'right' for firms that are operating more or less normally. In other words, the asset 'values' and the 'earnings' numbers are hypothetical, being based on the hypotheses that either the assets will be of use to the company or that the company will keep operating long enough to write off the mis-valued assets over many years without that amortization of the value ever having a catastrophic impact on earnings. Bottom line on that disclosure is that Kodak's accountants or auditors made them say it and that's because accounting standards make them make them say it, and that's all that it means.

When I look at the company's follow up assertion characterizing the required disclosure as not direful, the first thing I notice is what is not there: they do not deny that the firm is likely to be acquired.

If you read financial reports frequently you'd know this is standard language included in reports of many companies people wouldn't think are in any real trouble.

So... A report that is legally required to be accurate, vs a press release. Interesting.