Persistent Cash BurnNegative operating and free cash flow across periods means the business is not self-funding and continues to consume capital. Persistent burn limits the firm's ability to invest sustainably in product, sales, and support without external funding, raising financing risk and potential dilution if losses persist.
Eroding Equity And Negative ReturnsA material decline in equity and strongly negative returns reflect cumulative losses that have depleted shareholder capital. This weakens the balance sheet's shock-absorption capacity, reduces credibility with lenders and partners, and increases reliance on dilutive capital raises or strategic alternatives to restore financial strength.
Small, Volatile Revenue BaseThe rebound comes from a very small revenue base and historical volatility, making future cash flows unpredictable. Such instability complicates planning, pricing power, and scale economics; without durable customer retention and repeatable sales channels, recent gains may not persist into sustainable, profitable growth.