Severe Revenue DeclineA nearly 38% revenue drop materially reduces scale and erodes fixed-cost absorption, making margin recovery harder. Persistent top-line contraction threatens long-term competitiveness, reduces bargaining power with suppliers, and complicates profitable growth strategies.
Weak Balance Sheet / High LeverageAn equity ratio near 5% signals a thin capital base and high leverage, leaving little buffer for losses. Structurally weak solvency increases refinancing and covenant risks, limits strategic flexibility, and raises the likelihood of dilutive capital raises or distressed financing if performance doesn't improve.
Negative Operating And Free Cash FlowPersistent negative operating and free cash flows indicate the business cannot self-fund operations or capex, increasing dependence on external financing. Over months this raises liquidity and refinancing risks, constrains investment, and can force unfavorable funding or asset sales.