Persistent Net LossesOngoing net losses erode retained capital and force reliance on external financing or dilutive equity raises. Over months, continued losses limit the company’s ability to fund expansion, reward stakeholders, or withstand market shocks, delaying a durable path to profitability.
Negative Operating And Free Cash FlowFailure to generate positive operating and free cash flow means core operations do not self-fund investment or debt service. This structural cash shortfall creates ongoing financing needs, constrains capex and product investment, and raises liquidity and execution risks.
Elevated Leverage RiskHigh relative leverage increases interest and refinancing risk and reduces financial flexibility. If revenue or cash generation falters, leverage magnifies downside, limits strategic options and could force costly deleveraging actions over the medium term.