Consistent Negative Cash FlowPersistent negative operating and free cash flow indicate ongoing cash burn from operations. Over months this constrains ability to self‑fund growth or commercialization, increases dependency on external financing, and can force dilutive capital raises or restrict investment in scale.
Ongoing UnprofitabilityRepeated negative EBIT and net income show the business has yet to convert revenue into sustainable profits. Continued unprofitability undermines retained earnings, reduces reinvestment capacity and may limit confidence from partners and lenders, slowing long‑term scaleup.
Declining Shareholders' EquityErosion of shareholders' equity from ongoing losses reduces the balance sheet buffer and borrowing headroom. Over time this weakens financial resilience, raises refinancing and solvency risk, and can limit ability to fund product launches or enter new markets without external capital.