Deeply Negative EquityNegative equity reflects accumulated losses and materially weakens financing flexibility. Over months, this limits access to non-dilutive capital, raises refinancing risk, and increases likelihood of dilutive equity raises or restructuring, constraining strategic investments and long-term stability.
Persistent Operating LossesLarge, ongoing losses indicate the business has not yet achieved scale where revenues cover operating costs. Persistently negative margins force reliance on external funding for R&D, marketing and inventory, slowing reinvestment and risking dilution or curtailed growth if capital access tightens.
Fragile Cash GenerationWeak and volatile cash conversion undermines self-funding ability and increases dependency on financing. Limited free cash constrains sustained product development, inventory buildup, or marketing spend needed to scale, making the company vulnerable to revenue shocks and slowing durable growth prospects.