Rapidly Rising LeverageLeverage more than doubled in a year, elevating fixed obligations and reducing financial flexibility. Higher debt magnifies exposure to interest rate moves and commodity cycles, increasing refinancing and covenant risk and constraining the company’s ability to invest or weather production or price setbacks over the medium term.
Severe Free Cash Flow BurnDeep negative free cash flow signals the business is consuming capital faster than it generates it, creating ongoing dependency on external funding. This structural cash shortfall raises the risk of dilution, higher borrowing costs, or deferred projects, and burdens execution of long‑term plans absent sustainable operating cash conversion.
Weak Margins And Persistent Operating LossesVery low gross margin and heavy operating losses show underlying unit economics are currently weak. Without meaningful margin improvement or cost reductions, profitability remains distant, limiting the firm's ability to self‑finance growth and making it vulnerable to commodity price declines or cost inflation over the coming months.