Negative Shareholders' EquityA negative equity base materially weakens the balance sheet cushion, raising insolvency and refinancing risks. This structural capital shortfall limits borrowing capacity, elevates creditor sensitivity, and makes the company more vulnerable to any sustained revenue or margin setbacks.
High Debt Relative To AssetsDebt that exceeds or materially matches assets increases leverage risk and interest burden for a small company. The stretched capital structure constrains investment, raises the likelihood of covenant pressure or costly refinancing, and reduces strategic flexibility over the medium term.
Ongoing Net LossesDespite revenue gains, persistent multi-year net losses and a negative net margin mean the company still must convert growth into durable profitability. Continued losses increase the probability of future capital raises, dilute existing stakeholders, and heighten dependence on sustained cash flow improvements.