Negative Shareholders' EquityNegative shareholders' equity—liabilities exceeding assets—is a structural solvency concern. It limits borrowing capacity, increases creditor and covenant risk, and typically necessitates restructuring, asset sales, or dilutive recapitalization to restore balance‑sheet viability over months.
Negative Operating And Free Cash FlowPersistent negative operating and free cash flows show the company cannot fund operations internally. Over a multi-month horizon this forces reliance on external financing, raises refinancing and liquidity risks, and constrains investment in turnaround or production‑improvement initiatives.
Declining Revenue And Negative MarginsSustained revenue decline combined with negative gross margins and operating losses signals structural issues in the business model or cost base. Margin impairment makes operational recovery difficult without material cost reduction, asset optimization, or new capital, weakening medium‑term viability.