Operating Cash BurnA material swing to negative operating and free cash flow increases execution risk: it narrows the runway to fund inventory, marketing, and VAT receivable timing gaps. Even with cash reserves, persistent negative cash conversion would force tighter spending or capital raises, undermining strategic flexibility.
Margin CompressionSustained margin pressure reduces room to invest in growth while maintaining profitability. Lower gross margins and a return to net losses weaken ROE and the company's capacity to cover fixed costs, raising the bar for operational improvements needed to restore durable earnings power.
Regulatory & Working Capital HeadwindsHigher U.S. duties structurally raise fulfillment costs and erode competitiveness in a key market. Large, slow-moving VAT receivables tie up working capital and produced a going-concern auditor qualification on current assets, creating persistent operational and liquidity constraints until resolved.