Severe Revenue DeclineA dramatic, multi-year revenue collapse undermines economies of scale and fixed-cost coverage, pressuring gross margins and cash generation. Structurally lower top line reduces strategic options, making long-term recovery dependent on restoring demand or diversifying revenue streams over the coming months.
Persistent Losses And Weak MarginsSustained multi-year losses and negative operating margins erode shareholder equity and limit funding for growth or capex. Over a 2-6 month horizon this reduces flexibility to rebuild operations, increases default risk, and complicates efforts to attract partner investment or bank refinancing.
Rising LeverageIncreasing debt-to-equity raises interest and principal repayment obligations, constraining free cash flow available for reinvestment. Structurally higher leverage lowers resilience to demand shocks, elevates refinancing risk, and can force asset sales or austerity measures over the medium term.