ZeroStack's 0G bag is 91% underwater — and now the lawyers are nervous 🪂

Nasdaq-listed crypto treasury company ZeroStack has warned of "substantial doubt" about its ability to continue operating over the next year, reversing the assessment it made just three months earlier. The disclosure came in a Form 10-Q filed with the US Securities and Exchange Commission on Friday.

As of June 30, ZeroStack reported $2.6 million in cash, negative working capital of $600,000 and an accumulated deficit of $339.1 million. The company also booked an $82.5 million fair value loss on digital assets and a net loss of $61.3 million for the first half of 2026. ZeroStack said its 75.1 million Zero Gravity (0G) tokens carried an aggregate cost of $163.3 million and a fair value of $15.2 million, leaving the holdings valued roughly 91% below their recorded costs.

ZeroStack funds its operations through staking rewards and token sales, meaning its ability to raise cash is tied directly to 0G's price and trading liquidity. The company generated $3.8 million in staking revenue during the first half of the year, earning about 6.6 million 0G tokens after validator commissions, and sold nearly 4.9 million tokens for $2.4 million to cover operating expenses. Management said it expects cash and staking-reward sales to meet forecast operating costs and noted it could sell additional treasury holdings if needed, but concluded it could not assure those plans would be sufficient to remove going-concern doubts.

The latest filing reverses the position ZeroStack took in its previous two reports. In its first-quarter filing, the company had said its cash and staking rewards would be enough to cover working capital requirements and obligations for at least another year.

ZeroStack was previously the cannabis and CBD products firm Flora Growth. On Sept. 19, Flora announced $401 million in funding for a 0G treasury strategy, comprising $35 million in cash and equivalent commitments and more than $366 million in in-kind digital assets. The company subsequently rebranded as ZeroStack while retaining its Nasdaq listing.