Persistent LossesOngoing negative margins limit the firm's ability to self-fund growth, invest in production capacity, and retain engineering talent. Continued losses increase the need for external capital, which can dilute shareholders and distract management, creating execution risk for multi‑year OEM programs.
Balance-Sheet InstabilityNegative equity and a negative debt-to-equity signal strained solvency and limited financial flexibility. This reduces borrowing capacity, increases cost of capital, and can deter OEMs or large partners that prefer stable suppliers, raising the risk of contract loss or more onerous payment terms.
Negative Cash FlowConsistent negative operating and free cash flow constrains capital expenditure, working-capital support for production ramps, and R&D investment. Reliance on external financing to bridge cash deficits elevates dilution and execution risk, making durable scaling of manufacturing and program delivery more challenging.