Persistent Losses & Rising LiabilitiesOngoing net losses combined with growing liabilities erode financial flexibility. Over 2–6 months this raises the likelihood of additional financing need, creditor pressure, or dilution, constraining the company’s ability to invest in growth initiatives and weakening long-term competitive positioning.
Negative Operating And Free Cash FlowNegative operating and free cash flow means core operations do not generate sufficient cash to sustain activities. This creates a durable liquidity gap that limits reinvestment in product, marketing, or partnerships, increasing reliance on external financing and raising execution risk over the medium term.
Declining Margins And ProfitabilityRevenue growth accompanied by falling gross margins and deep net losses indicates structural cost or pricing pressures. Without margin recovery, scaling revenues won't translate into profits, implying persistent inefficiencies and a prolonged path to break-even that threatens long-term viability.