SEC Filing Details Liquidity Concerns

ZeroStack, a Nasdaq-listed company focused on crypto treasury management, disclosed in a Form 10-Q filed with the US Securities and Exchange Commission that substantial doubt exists about its ability to continue operating as a going concern over the next 12 months. The assessment marks a clear shift from the firm’s earlier guidance.

As of June 30, ZeroStack held $2.6 million in cash and reported negative working capital of approximately $600,000. Its accumulated deficit stood at $339.1 million. For the first half of 2026, the company recorded a net loss of $61.3 million, driven in large part by an $82.5 million fair value loss on its digital asset holdings.

Sharp Drop in 0G Token Holdings

The company’s treasury centers on Zero Gravity (0G) tokens. ZeroStack reported ownership of 75.1 million 0G tokens with an aggregate recorded cost of $163.3 million. By the end of June, those holdings carried a fair value of just $15.2 million, representing a decline of about 91 percent from their original cost basis.

This valuation gap places significant pressure on the firm’s ability to generate liquidity through asset sales if needed.

Reliance on Staking and Token Sales

ZeroStack funds its operations primarily through staking rewards and the sale of tokens. In the first six months of 2026, the company generated $3.8 million in staking revenue and earned roughly 6.6 million 0G tokens after validator commissions. During the same period, it sold nearly 4.9 million tokens for $2.4 million to help cover operating expenses.

Management stated that it expects existing cash reserves combined with proceeds from staking reward sales to meet forecast operating costs. The company also noted it could sell additional treasury holdings if further funds become necessary. However, it could not conclude that these measures would be sufficient to remove the substantial doubt surrounding its ability to continue operations.

Reversal of Prior Guidance

The latest filing reverses the outlook presented in ZeroStack’s first-quarter report. At that time, the company indicated that its cash position and expected staking rewards would be adequate to satisfy working capital needs and other obligations for at least the following year.

The change in assessment coincides with the sharp decline in the fair value of its core digital asset holdings and the resulting impact on available liquidity.

Company Background and Strategic Shift

ZeroStack previously operated as Flora Growth, a firm focused on cannabis and CBD products. On September 19, Flora Growth announced a $401 million funding plan centered on a 0G treasury strategy. That package included $35 million in cash and related commitments together with more than $366 million in in-kind digital assets. The company later rebranded as ZeroStack while retaining its Nasdaq listing and shifting fully into crypto treasury operations.

The business model remains closely tied to the price performance and trading liquidity of the 0G token. Continued pressure on either factor would further constrain the firm’s ability to raise cash through staking or sales.