Sharp Revenue ContractionSignificant and sustained top-line deterioration undermines economies of scale and suggests weak commercial traction or customer concentration. Over months this reduces bargaining power with partners, limits ability to absorb fixed costs, and makes margin recovery harder absent clear commercial turnaround.
Persistent Negative Free Cash FlowConsistent negative free cash flow indicates ongoing cash burn from operations and investments. This erodes liquidity over time, forces reliance on external funding or equity raises, and constrains the company's ability to invest in sales, regulatory processes, or scale manufacturing without diluting shareholders.
Deteriorating Profitability / Negative ROETransition from prior profitability to growing losses and negative returns on equity signals weak operating leverage and cost pressures. If losses persist, the equity cushion will erode, reducing strategic flexibility and increasing likelihood of financing events that could alter ownership or strategy.