High Financial LeverageA heavy reliance on debt and a low equity ratio raise refinancing and interest-rate sensitivity risks. High leverage constrains capital allocation, increases vulnerability to demand shocks, and can limit the firm's ability to invest in capacity or weather prolonged downturns.
Negative Gross Profit MarginNegative gross margins point to underlying issues in input costs, pricing, or production efficiency. Until unit economics improve, incremental revenue risks failing to translate into sustainable operating profits, undermining long-term margin recovery efforts.
Volatile, Low Revenue BaseReported 'infinite' growth driven by a low base signals revenue volatility rather than steady expansion. Earnings and cashflow improvements may not be durable absent a consistently larger order book, making forecasts and credit metrics more uncertain over the medium term.