Sharp Revenue DeclineA ~30% revenue contraction materially erodes scale economics, pressures fixed-cost absorption and undermines the firm's ability to fund R&D and commercial activities internally. Unless reversed by structural market share gains or new product launches, revenue decline weakens long-term viability.
Negative Operating And Free Cash FlowPersistent negative operating and free cash flows limit the firm's capacity to self-fund growth, service debt or invest in commercialization. This creates structural financing risk: the company may need external capital, which can dilute shareholders or restrict strategic options over the medium term.
Elevated LeverageA debt-to-equity ratio around 1.28 represents significant leverage given the business's cash flow weakness. High leverage raises interest and refinancing risk, reduces financial flexibility for R&D or M&A, and amplifies downside during revenue volatility or prolonged margin pressure.