High Financial LeverageA debt-to-equity ratio above 3x materially increases interest and refinancing risk, constraining strategic flexibility. With elevated leverage, the company faces durable pressure on cash flow allocation, limiting ability to fund growth or absorb shocks without external financing.
Negative Free Cash FlowSustained negative free cash flow and poor conversion of net income to FCF signal structural liquidity strain. Over months this can force reliance on debt or equity issuance, restrict capital expenditures and slow commercialization of new products, impairing long-term growth execution.
Negative Profitability And ReturnsDespite high gross margins, negative net margin and ROE point to persistent operating or non-operating costs eroding shareholder returns. This suggests structural issues in scaling or cost control that, if unresolved, will limit sustainable earnings and investor value creation over time.