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ZeroStack has disclosed substantial doubt over its ability to continue as a going concern during the next 12 months after the Nasdaq-listed crypto treasury company recorded an $82.5 million fair-value loss on digital assets.
The company reported a $61.3 million net loss for the six months ended June 30, compared with $3.2 million a year earlier. Management said its funding plans may not be sufficient to remove the going-concern uncertainty.
0G Treasury Falls 91% Below Its $163.3M Cost
ZeroStack held 75.1 million Zero Gravity tokens at the end of June. The position had an aggregate cost of $163.3 million but a fair value of $15.2 million, leaving it about 91% below its recorded acquisition cost.
The decline in 0G produced the company’s $82.5 million digital asset loss during the first half. A $26.1 million gain linked to the revaluation and settlement of a Zero Gravity convertible note partly offset the effect on net income.
Cash Drops to $2.6M as Working Capital Turns Negative
ZeroStack ended June with $2.6 million in cash, negative working capital of $600,000, and an accumulated deficit of $339.1 million. It used about $2.5 million in operating activities during the first half.
The company relies mainly on selling tokens earned through staking to meet operating expenses and other obligations. It generated $3.8 million in staking revenue from 6.6 million 0G tokens during the period and sold nearly 4.9 million tokens for $2.4 million.
ZeroStack said lower 0G prices and limited market liquidity could reduce both the value of its staking rewards and the cash available from token sales.
Texas Blocker Deal Lifts 0G Holdings to 223M Tokens
ZeroStack completed its acquisition of Texas Blocker on July 20, adding about 148 million 0G tokens and increasing its total position to roughly 223 million tokens. Substantially all the holdings are staked.
Management expects existing cash, staking rewards, and possible treasury sales to fund forecast expenses. The company said it may also need to raise additional equity or debt capital.
ZeroStack said it could not conclude that those measures would probably remove the financial uncertainty, leaving the going-concern warning in place.
