Declining RevenueSustained revenue contraction weakens the business's scale and competitive position. Lower top line undermines fixed-cost absorption, reduces pricing leverage, and makes margin recovery harder, threatening medium-term viability if growth does not resume.
Negative Gross ProfitNegative gross profit signals core economics are broken: cost of sales exceeds revenue. This is a structural issue that demands product repricing, cost restructuring, or a different revenue mix before sustainable margins can be restored.
Equity ErosionRapid equity decline erodes the capital buffer, constraining investment and increasing the likelihood of dilutive or costly financing. Even with no debt, diminished equity reduces resilience to further shocks and limits strategic flexibility.