Persistent Negative Cash FlowSustained negative operating and free cash flow shows the business consumes capital to operate. Over months this raises reliance on external funding or equity dilution, constrains reinvestment, and increases execution risk if funding options tighten or investor appetite wanes.
Recurring And Widening LossesPersistent, widening net losses erode shareholder equity and limit internal capital for growth. Over a multi-month horizon this undermines sustainability, pressures management to cut costs or seek dilutive financing, and reduces strategic flexibility to invest in growth opportunities.
Uneven, Shrinking Revenue BaseVolatile and declining revenue from a very small base weakens the foundation for scaling fixed-cost operations. This structural instability compromises forecasting, makes fixed-cost leverage risky, and heightens the chance that operating losses persist absent clear, sustained revenue recovery.