Sharp Revenue DeclineA near 45% revenue collapse materially impairs scale economics and fixed cost absorption. Sustained top-line weakness undermines pricing power, supplier and distributor leverage, and the ability to invest in product innovation, making margin recovery and growth more difficult over months.
Negative Equity / Solvency RiskNegative shareholder equity signals balance-sheet distress and may constrain borrowing, vendor credit, or capital raises. That structural weakness increases the likelihood management must pursue recapitalization, asset sales, or restructuring, which can materially alter operations and strategy.
Weak Cash Flow GenerationNegative operating cash flow and deteriorating free cash flow reduce internal funding for inventory, R&D and marketing. Persistent cash shortfalls force reliance on external financing, increasing leverage or dilution risk and limiting the company's ability to execute medium-term strategic initiatives.