Negative Shareholders' EquitySustained negative equity is a major solvency red flag: liabilities exceed assets, which constrains access to unsecured financing, increases counterparty risk, and limits strategic options. Over months this structural weakness forces dependence on dilutive or costly funding alternatives.
No Revenue (pre‑production)Absence of operating revenue means the business lacks an internal source of cash to fund operations or demonstrate market viability. Structurally, this keeps the company dependent on external capital and prevents margin generation, making long-term sustainability contingent on successful asset development.
Persistent Negative Cash FlowChronic negative operating and free cash flow create a structural funding gap that necessitates ongoing financing. Over months, repeated capital raises or creditor dependence increase dilution, restrict strategic choices, and heighten execution risk before any revenue-generating stage is reached.