Severe Financial DistressSustained negative profitability and declining revenues constrain reinvestment, force cost cutting, and increase refinancing risk. Over months this reduces strategic optionality, may trigger covenant breaches, and undermines the firm's ability to execute growth plans or sustain operations without external support.
Weak Balance SheetNegative equity and high leverage materially weaken financial flexibility, raise default and solvency concerns, and limit the company's ability to raise non-dilutive capital. This structural weakness constrains investment in R&D, capex, and working capital, impairing medium-term competitiveness.
Eroding Cash Generation & Revenue TrendNegative operating and free cash flow combined with a steep recent revenue decline reduce the firm's runway and increase dependency on external financing. Poor cash conversion hampers day-to-day operations and makes sustaining supplier and customer relationships harder over the coming months.