Pre-revenue OperationsAbsence of revenue leaves the company's business model unproven and creates high execution risk. Without commercial sales, there is no visibility on pricing, margins, or operating leverage; long-term viability depends on successful project development and sustained capital support to reach commercialization.
Sharply Shrinking Equity CushionA rapidly declining equity base materially reduces the company's shock-absorbing capacity and raises the probability of dilutive financing. Over months to quarters this weakens credit and investor confidence, increasing funding costs and the likelihood of equity issuance that dilutes existing holders.
Persistent Negative Cash GenerationChronic negative operating and free cash flow creates a structural dependency on external capital. Even with improved burn, sustained negative generation forces periodic fundraising, constrains investment choices, and can limit the firm's ability to scale or respond to protracted development timelines without dilution.