Severe Operating LossesExtremely negative EBIT and net margins show core operations currently destroy value, meaning the business requires ongoing external funding. Structural unprofitability erodes shareholder equity, constrains reinvestment, and raises the bar for management to demonstrate a credible path to sustainable profits.
Negative Operating Cash FlowPersistent negative operating cash flow forces reliance on financings or asset sales to continue operations. That structural cash-burn restricts the company's ability to scale manufacturing, honor customer commitments, or invest in commercialization without diluting shareholders or increasing leverage.
Declining Revenue TrendA falling top line despite operating in photonics markets signals weak commercial traction or slow customer adoption. Declining revenue combined with small scale amplifies execution risk and makes it harder to leverage the company's gross margin into sustainable operating profitability over the medium term.