Revenue DeclineA ~42% revenue decline is a structural red flag: sustained demand loss or pricing pressure undermines the core business model and market position. Deep revenue contraction reduces scale benefits, weakens negotiating power with suppliers, and makes margin recovery more difficult absent market improvements.
Negative Cash GenerationPersistently negative operating and free cash flow limits the firm's ability to self-fund operations, invest in maintenance or growth, and creates reliance on external financing. Even with low debt, ongoing cash deficits erode liquidity and raise refinancing, covenant, or dilution risks over months.
Equity Erosion & ROE WeaknessSignificant equity erosion from large losses reduces the balance-sheet buffer that protected creditors and funded growth. Negative ROE signals persistent profitability failure, constraining borrowing capacity, increasing cost of capital, and making capital raises or restructuring more dilutive and difficult.