Persistent LossesSustained net losses and negative operating profit show the business is not yet operating at scale and is not delivering returns on capital. Persistent unprofitability consumes equity, necessitates external funding, and delays the timeframe to sustainable margins and self-funded growth.
Weak Cash GenerationRecurrent negative operating cash flow and large negative free cash flow indicate ongoing cash burn and reliance on new capital. This persistent cash deficit constrains strategic flexibility, increases dilution risk from capital raises, and makes execution contingent on external financing.
Rising LeverageA rapid increase in debt materially raises interest, covenant and refinancing risk, reducing balance sheet flexibility. Elevated leverage exacerbates funding and execution risk if operating metrics do not improve, making the firm more vulnerable to adverse shocks during the scaling phase.