Crypto Treasury Firm ZeroStack Warns of Going-Concern Risk After $82.5 Million Loss

ZeroStack, a Nasdaq listed crypto treasury company, disclosed substantial doubt about its ability to continue operating over the next year, marking a sharp reversal from its more confident assessment just three months ago. The warning came in a quarterly filing with the Securities and Exchange Commission on Friday.

Token Holdings Lose Most of Their Value

As of June 30, ZeroStack reported just $2.6 million in cash, negative working capital of $600,000, and an accumulated deficit exceeding $339 million. The company posted an $82.5 million fair value loss on its digital asset holdings, driven largely by its position in Zero Gravity tokens, which were valued around 91% below their original cost basis.

Staking Income Central to Survival Plan

ZeroStack depends heavily on staking rewards and token sales to cover operating expenses. During the first half of the year, it earned $3.8 million in staking revenue and sold nearly 4.9 million tokens for $2.4 million. Management said it may sell additional treasury holdings if needed but could not confirm these steps would resolve concerns about the company’s financial stability.

From Cannabis Company to Crypto Treasury

ZeroStack was previously known as Flora Growth, a cannabis and CBD products firm, before securing $401 million last year to launch its digital asset treasury strategy and rebranding under its current name while keeping its Nasdaq listing.