High LeverageA high debt-to-equity ratio and low equity ratio signal heavy reliance on debt financing. This elevates refinancing and interest-rate risk, constrains strategic flexibility, and magnifies the damage from any cash-flow shortfall, making capital structure a persistent vulnerability.
Negative Gross MarginsA negative gross profit margin means core production costs exceed revenues at the product level. This structural issue undermines sustainable profitability absent pricing power, input-cost reductions, or manufacturing improvements and can negate reported net income gains.
Very Small, Volatile Revenue BaseAn extremely low revenue base that creates 'infinite' growth metrics implies results are lumpy and statistically volatile. Small scale limits economies of scale, bargaining power and makes earnings highly sensitive to a handful of tenders or contract timing.