Negative Equity / Solvency RiskNegative shareholders' equity signals severe balance-sheet distress and potential insolvency risk. This materially constrains financing options, increases lender scrutiny, raises refinancing and covenant risk, and limits strategic flexibility, undermining long-term viability absent capital restructuring.
Negative Operating & Free Cash FlowPersistent negative operating and free cash flows indicate the business burns cash rather than generates it, forcing reliance on external funding. Over months this pressures liquidity, hinders reinvestment, and raises the probability of financing dilution or distress if revenue growth doesn't translate into cash conversion.
Very Weak Profitability MetricsAn almost-zero gross margin and deep negative net margins show the core business is not currently profitable. Structural cost or pricing issues make it hard to achieve sustainable operating margins, limiting the company's ability to self-fund growth, improve cash flow, or repair the balance sheet over the medium term.