Persistent Operating And Net LossesSustained, sizable operating and net losses indicate the business has not yet achieved profitable scale. Continued deficits can force dilutive capital raises, constrain R&D prioritisation, and erode investor confidence, posing a structural risk to capital continuity if profitability isn’t reached.
Shrinking Equity BaseA falling equity base reduces the balance-sheet buffer against future losses and makes the company more sensitive to shocks. Shrinking net assets limit strategic optionality, increase the relative impact of any new debt or dilution, and heighten the risk profile for partners and lenders.
Volatile Cash Flows HistoricallyThe abrupt cash-flow swing signals unpredictability in operating cash generation. Such volatility complicates planning for regulatory milestones, partner commitments and product launches; it raises the chance that cash generation could revert, requiring fresh financing or curtailed programs.