Balance Sheet InstabilityA history of negative or near-zero equity and volatile capital structure raises refinancing and solvency risk. Large swings in leverage reduce confidence in durability of improvements and can limit strategic choices, especially under economic stress or revenue shocks.
Covenant And Leverage ConstraintsFinancial covenants impose persistent operational constraints and force conservative capital allocation. Covenant breaches could trigger acceleration or restrictive remedies, increasing the probability of asset sales, equity raises, or tightened liquidity during cyclical downturns.
Governance / Shareholder Rights ChangeShifting incorporation to Nevada and modifying shareholder rights can entrench management and reduce minority protections, potentially raising long-term governance risk and lowering investor appeal for those sensitive to jurisdictional corporate-law differences.