Persistent Net LossesSustained multi-million dollar losses erode equity and signal the business remains far from break-even. Over months this necessitates ongoing financing, increases dilution or creditor dependency, and constrains strategic options until profitable operations or a significant margin shift occur.
Negative Cash GenerationConsistent negative operating and free cash flow indicate the company is consuming cash to run and grow, requiring recurring external funding. This undermines long-term self-sufficiency, limits reinvestment capacity, and raises funding risk that could pressure operations or force dilutive financing.
Small Revenue Base Vs Cost BaseA modest absolute revenue base means fixed and operating costs overwhelm income, making margins highly sensitive to demand swings. Structural scale gaps lengthen the timeline to sustainable profitability and make the business vulnerable to even moderate revenue setbacks.