Negative Gross ProfitA negative gross profit indicates the company’s core product economics are loss-making before overheads, undermining long-term viability. Unless product pricing, sourcing, or mix changes materially, negative unit economics erode margins and require ongoing external funding or major operational redesign to restore sustainable profitability.
Persistent Cash BurnConsistent negative operating and free cash flow shows losses are converting into cash outflows, not just accounting deficits. This persistent cash burn creates structural funding risk, forces reliance on external financing, and limits the company’s ability to invest in distribution, R&D, or inventory needed to stabilize and grow the business.
Thin/unstable Equity And High LeverageNegative equity in 2024 and elevated leverage materially weaken the balance sheet’s shock absorption. This structural capital weakness raises solvency and refinancing risk, diminishes financial flexibility for strategic actions, and can make accessing additional debt or equity more dilutive or expensive over the medium term.