Significance of Cash Flows

Significance of cash flows
Saxony Company is a relatively new business. In its first three years of operations, the company has recorded positive and increasing net cash from its operating activities. In each of these three years the company has also reported a loss on its income statement. Suggest at least one plausible explanation for these financial results. Given the losses in the first three years of operations, should investors be concerned about the solvency and future profitability of Saxony? Explain.