No Reported RevenueAbsence of revenue means the company has not validated a scalable business model and remains fully reliant on external financing. Over 2-6 months this structural gap limits operational sustainability, makes progress dependent on successful commercialization or financing, and raises execution risk.
Persistent Negative Cash FlowConsistent negative operating and free cash flow means the firm burns cash to operate and cannot self-fund growth. This creates an ongoing funding requirement that constrains strategic options, risks dilution or costly financing, and limits the company's ability to invest in scaling the business.
Materially Shrinking Equity BaseA severely reduced equity base cuts the capital buffer available to absorb losses and impairs financial resilience. Over the medium term this increases vulnerability to operational shocks, reduces borrowing capacity, and makes future capital raises more dilutive or difficult to execute.