Severe Revenue DeclineA collapse in revenue indicates material loss of commercial traction or discontinued operations, shrinking scale and limiting the firm's ability to achieve operating leverage. This structural shrinkage raises the likelihood of further capital raises and constrains long‑term market positioning.
Persistent Negative Operating And Free Cash FlowOngoing negative operating and free cash flows show the company is burning cash to fund operations. Over months this reduces runway, curtails investment in sales and R&D, increases refinancing risk, and may necessitate dilutive financing or asset sales to sustain operations.
Sustained Net Losses And Margin DeteriorationLarge net losses and worsening margins indicate persistent unprofitability and cost structure issues. This undermines ability to self‑fund growth, erodes equity, and suggests structural challenges in pricing, unit economics or scale that must be addressed for long‑term viability.