Persistent Net LossesOngoing net losses erode equity and limit reinvestment capacity. Over months, sustained deficits can force dilutive capital raises or spending cuts, undermining long-term strategic initiatives and making a durable path to profitability imperative for viability.
Weak Operating Cash GenerationInability to generate positive operating cash flow means the business isn't converting revenues into cash, raising reliance on financing to fund operations. Structurally, this limits capacity for capex, R&D, or expansion without external capital over the coming quarters.
Eroding Asset Base And EquityDeclining assets and shareholder equity shrink the balance-sheet cushion against shocks and reduce borrowing capacity. Over several quarters, this trend can impair scale, limit strategic options, and signal structural contraction rather than temporary fluctuation.