ZeroStack says ability to continue operating remains in doubt

ZeroStack has warned its cash position may not support operations for another year.

According to a Form 10-Q filed with the U.S. Securities and Exchange Commission on Friday, Nasdaq-listed crypto treasury company ZeroStack said substantial doubt exists about its ability to continue as a going concern over the next 12 months, reversing the conclusion it reached in its previous quarterly filings.

As of June 30, the company reported $2.6 million in cash, negative working capital of $600,000, and an accumulated deficit of $339.1 million. During the first half of 2026, it recorded an $82.5 million fair value loss on digital assets and a net loss of $61.3 million, according to the filing.

Management said existing cash, proceeds from staking rewards, and possible sales of treasury assets are expected to support operating costs. Even so, the company concluded it could not determine that those measures would remove the substantial doubt surrounding its ability to continue operating for the next year.

ZeroStack’s 0G treasury has lost most of its recorded value

The filing showed ZeroStack held 75.1 million Zero Gravity (0G) tokens with an aggregate acquisition cost of $163.3 million. Their fair value had fallen to $15.2 million by June 30, leaving the treasury valued about 91% below its recorded cost.

The company said its operating model depends largely on staking rewards and periodic token sales, making its access to cash dependent on both the market price and trading liquidity of the 0G token.

For the first six months of the year, ZeroStack generated $3.8 million in staking revenue after earning about 6.6 million 0G tokens following validator commissions. Over the same period, it sold nearly 4.9 million tokens for $2.4 million to cover operating expenses.

Although management said additional treasury sales remain available if needed, the filing stated that those plans were not sufficient to conclude that the going concern uncertainty had been resolved.

Filing reverses the company’s earlier liquidity outlook

The latest assessment differs from the position ZeroStack presented just three months earlier.

In its first-quarter filing, the company said available cash together with expected staking rewards would be enough to meet working capital needs and other obligations for at least the following 12 months. The latest report withdraws that conclusion after a sharp decline in the value of its digital asset holdings.

ZeroStack adopted its current treasury strategy after operating for years as cannabis and CBD products company Flora Growth.

On Sept. 19, the company announced a $401 million financing package to establish a treasury focused on the Zero Gravity ecosystem. The package included $35 million in cash and cash-equivalent commitments alongside more than $366 million in in-kind digital asset contributions. Flora Growth later rebranded as ZeroStack while retaining its Nasdaq listing.

ZeroStack CEO previously pointed to regulation as another institutional hurdle

The company’s financial disclosure comes months after ZeroStack Chief Executive Officer Daniel Reis-Faria discussed another challenge facing digital asset companies: regulatory uncertainty.

Speaking to crypto.news in May, Reis-Faria said progress on U.S. stablecoin legislation had reduced one source of uncertainty for investors but had not yet convinced larger institutions to increase participation.

His comments followed a bipartisan agreement between Senators Thom Tillis and Angela Alsobrooks on stablecoin provisions in the CLARITY Act that prohibited interest-like payments resembling bank deposits while allowing activity-based rewards tied to payments and platform use.

At the time, Reis-Faria said the remaining concern was not the legislation itself but uncertainty over how regulators would implement it. Under the proposal, the SEC, CFTC and Treasury would jointly develop implementing rules within one year after the legislation became law.

JPMorgan had previously described passage of the CLARITY Act by midyear as a positive catalyst for digital asset markets, while Blockchain Association CEO Summer Mersinger said resolving the stablecoin yield debate moved comprehensive market structure legislation closer to becoming law.

Standard Chartered also estimated that allowing unrestricted stablecoin yields could redirect as much as $500 billion in bank deposits by 2028, providing context for the banking industry’s resistance during negotiations.

Company now faces both market and funding pressure

The SEC filing indicates that ZeroStack’s operating cash generation remains closely tied to the performance of the 0G ecosystem through staking income and token sales.

With the market value of its treasury declining substantially from its acquisition cost, management said future liquidity will continue to depend on available cash, staking rewards, token prices, and market liquidity. 

Despite outlining those funding options, the company concluded that substantial doubt about its ability to continue as a going concern remains in place for the coming year.