High LeverageSubstantial leverage reduces financial flexibility and raises refinancing and interest-cost risks. With diminished equity and elevated debt, the company faces constrained capacity to fund capex or absorb commodity downturns, increasing default or covenant pressures over the medium term.
Persistent Negative Cash FlowConsistently negative operating and free cash flow means core activities do not generate sufficient cash, forcing reliance on external financing. Over 2–6 months this erodes reserves, risks project delays, and elevates the likelihood of dilution, asset sales, or disrupted development schedules.
Unprofitable Core OperationsSustained negative gross and EBITDA margins show structural cost or payability issues that prevent profitability. Even with revenue growth, persistent margin deficits limit free cash generation and long-term viability unless operational efficiency improves or project economics are materially restructured.