No Recurring RevenueZero reported revenue across consecutive years signals an inability to generate sustainable inflows from operations. Structurally, lack of recurring revenue forces reliance on external capital, prevents internal reinvestment, and makes proving long-term demand and scalability difficult.
Persistent Negative Free Cash FlowOngoing negative operating and free cash flow means the business cannot self-fund operations or growth. Over several months this necessitates external funding, raises dilution risk, restricts strategic investment, and limits the firm's ability to respond to setbacks or pursue opportunities.
Severe Equity ErosionDeterioration of shareholder equity removes a capital buffer and materially weakens the balance sheet. This reduces tolerance for further losses, limits borrowing capacity, and increases the likelihood of dilutive financing or distressed measures if operational recovery stalls over the medium term.