Negative Shareholders' Equity And Extreme LeverageNegative equity and a severely impaired debt-to-equity position signal solvency stress and constrained financial flexibility. This structural weakness raises refinancing risk, increases cost of capital, limits strategic options, and threatens long-term viability absent substantive recapitalization.
Weak Cash Conversion And Limited Operating CashVery low operating cash conversion means reported earnings are not translating into cash, leaving the business reliant on external financing for working capital and growth. Poor cash conversion undermines sustainable reinvestment, increases liquidity risk, and can necessitate dilutive or costly capital raises.
Dilutive And Costly Financing InstrumentsNew convertible preferred units and warrants with low conversion/exercise economics create material dilution risk and potential share overhang. Coupled with prior convertible promissory notes and high-interest instruments, these structural financing actions can impair long-term shareholder value and complicate capital structure.