Declining Revenue TrendA persistent revenue decline erodes scale economics and undermines the business model's ability to cover fixed operating costs. Over months, falling top-line reduces margin leverage, restricts reinvestment, and signals demand or competitive weaknesses that threaten long-term recovery prospects.
Persistent Net Losses And Negative MarginsOngoing net losses and negative EBIT margins indicate the core operations are not profitable after operating costs. Even with high gross margins, sustained negative operating profitability pressures cash needs and increases reliance on external funding, impairing durable financial health.
Negative Shareholders' EquityNegative shareholders' equity signals solvency and balance sheet distress, limiting borrowing capacity and reducing investor confidence. Over months this structural weakness constrains strategic options, may force dilutive recapitalisation, and elevates long‑term financial risk.