Negative Cash GenerationPersistent negative operating and free cash flow means the business relies on external financing to fund operations. Over months this limits the company’s ability to invest organically, raises dilution or refinancing risk, and increases vulnerability if capital markets tighten.
Very Low Gross MarginA ~3% gross margin signals weak unit economics; even strong top-line growth may not translate to operating profitability without structural cost or pricing changes. Low gross margins constrain margin expansion and long-term free cash flow generation in software applications.
Eroding Equity / Limited Balance-Sheet CapacityDeclining equity reflects cumulative losses and shrinks the balance-sheet buffer against shocks. With limited assets (~$0.97M) and thin equity, the company has constrained capacity to absorb further losses or fund growth internally, increasing dependency on external capital.