Sharp Revenue DeclineA sustained ~30% revenue drop materially erodes scale economics and market position. Long-term declines reduce pricing power, raise per-unit fixed costs, and make it harder to fund growth or cover SG&A; recovery requires durable demand restoration or new revenue streams.
Negative Operating And Free Cash FlowPersistently negative operating and free cash flows constrain the company's ability to invest, service obligations, and avoid dilution. Over months, negative cash generation limits strategic flexibility, increases refinancing risk, and forces reliance on external funding or asset sales.
Negative Shareholders' Equity / Solvency RiskNegative equity indicates liabilities exceed assets, raising solvency concerns and limiting access to conventional financing. Structurally this increases the risk of forced recapitalization, creditor pressure, or dilution, constraining long-term investment and strategic initiatives.