Declining Revenue And Net LossesFalling revenue and a swing to net losses erode retained earnings and operational runway. Over several months this reduces capacity to invest in growth or support portfolio companies, pressures margins and could force cost cuts or asset disposals if the trend persists.
Negative Operating And Free Cash FlowSustained negative operating and free cash flow undermines financial sustainability and increases reliance on external funding. This weakens the firm's ability to finance operations or back portfolio companies internally, raising dilution and refinancing risk over the coming months if cash generation doesn't improve.
Rising LeverageIncreasing debt-to-equity while reporting losses raises solvency and interest-service risk. Higher leverage reduces strategic flexibility, can increase borrowing costs, and may necessitate deleveraging that constrains investment or growth initiatives if cash flows do not recover within the near term.