Persistent Operating LossesVery large operating losses and negative net margins mean the business is not yet generating returns on invested capital. Sustained losses erode book value, limit reinvestment capacity, and force reliance on external funding unless gross margins and operating leverage improve materially over time.
Cash Burn / Weak Cash GenerationConsistently negative operating and free cash flow reflects structural cash burn to support operations and growth. This creates ongoing financing and dilution risk, constraining long-term investments in products, hiring, and global expansion unless cash conversion improves.
Low Gross Margins / Component RelianceMargin compression to ~15% driven by third‑party GPU usage weakens unit economics on large contracts like Starshine. Reliance on external components undermines durable margin sustainability; replacing them with proprietary GSP cards is necessary but carries execution and timing risk for future margin recovery.