Sharp Revenue DeclineA ~46% annual revenue drop is a structural red flag: it impairs scale economics, reduces fixed‑cost absorption and weakens customer traction. Persistent top‑line contraction makes sustainable profitability difficult and requires material changes to sales, product or go‑to‑market strategy to reverse.
Negative Operating And Free Cash FlowDeep negative operating and free cash flow indicate the business is burning cash from core operations, increasing reliance on external funding. Over months to quarters this erodes liquidity, constrains reinvestment and forces difficult restructuring or financing decisions that can dilute shareholders or limit growth.
Materially Higher LeverageA rapid rise in leverage increases interest and covenant risk, reducing financial flexibility. In combination with losses and cash burn, higher debt magnifies refinancing and solvency risk, limiting the company’s ability to invest in product development or weather prolonged revenue weakness.