ZeroStack flags going concern after $82.5M crypto loss

In a Form 10‑Q filed with the Securities and Exchange Commission on Friday, Nasdaq‑listed ZeroStack said substantial doubt exists about its ability to continue operating over the next year after an $82.5 million fair‑value loss on digital assets. The filing reports $2.6 million in cash, negative working capital of $600,000 and an accumulated deficit of $339.1 million as of June 30. The company recorded a net loss of $61.3 million for the first half of 2026, driven largely by the fair‑value decline.

ZeroStack reported it held 75.1 million Zero Gravity (0G) tokens with an aggregate cost basis of $163.3 million and a fair value of $15.2 million as of June 30, a drop of roughly 91% from recorded costs. The company relies on staking rewards and sales of 0G to fund operations; its ability to raise cash depends on the token’s market price and trading liquidity.

For the first half of 2026, ZeroStack reported $3.8 million in staking revenue and earned about 6.6 million 0G tokens after validator commissions. To cover operating expenses, it sold nearly 4.9 million tokens and realized approximately $2.4 million in proceeds. The filing states management expects current cash balances plus future staking reward sales to cover forecast operating costs and that it could sell additional treasury holdings if necessary, but it cannot conclude those measures would remove doubts about its status as a going concern.

In its first‑quarter filing, the company had said cash and staking rewards would be sufficient to meet working capital needs and obligations for at least another year. The updated assessment in the latest 10‑Q ties the revised outlook to the steep decline in the reported fair value of the 0G holdings.

ZeroStack traces its 0G treasury strategy to a Sept. 19 funding package announced when the company operated as Flora Growth. That package included $35 million in cash and more than $366 million in in‑kind digital assets, for a total of $401 million of support. The company later rebranded as ZeroStack and kept its Nasdaq listing.

The filing provides limited detail on contingency plans beyond token sales and staking rewards. The company said it will continue to monitor cash flows and may sell parts of its treasury if required, while noting uncertainty about whether those steps will be sufficient to sustain operations for the next 12 months.