ZeroStack Corp., formerly known as Flora Growth Corp., reported a revenue of $7.3 million for the first quarter of 2026, marking a 6% increase from $6.9 million in the same period of 2025. The revenue was primarily driven by the company's pharmaceutical distribution subsidiary, Phatebo, which generated $4.5 million, down from $6.9 million year-over-year. The company also began staking its 0G Tokens in January 2026, earning approximately $2.8 million in staking rewards during the quarter. Despite the increase in revenue, ZeroStack recorded a net loss of $36.7 million, significantly higher than the $0.8 million loss reported in the prior year, largely due to a $60.7 million loss from changes in the fair value of digital assets.
The company's financial position showed a substantial decline in total assets, which decreased to $45.2 million as of March 31, 2026, down from $130.2 million at the end of 2025. This decline was attributed to a significant reduction in digital assets, which fell from $72 million to $38.4 million, primarily due to losses in the value of 0G Tokens. The company's cash reserves also decreased to $2.3 million from $5.6 million, raising concerns about liquidity and the ability to meet operational needs.
Strategically, ZeroStack has undergone significant changes, including the sale of its legacy hemp and cannabis business in September 2025, allowing the company to focus on its digital asset treasury strategy. The company is in the process of acquiring Texas Blocker Corp., which will become a wholly-owned subsidiary upon completion of a share exchange agreement expected around July 14, 2026. This acquisition is part of ZeroStack's broader strategy to enhance its position in the decentralized AI infrastructure market.
Operationally, the company reported a gross profit of $3.1 million for the quarter, reflecting a gross margin of 43%, a notable increase from 8% in the previous year. This improvement is attributed to the commencement of staking activities. However, total operating expenses surged to $65.8 million, driven by the aforementioned losses in digital asset valuations and increased share-based compensation expenses. The company’s employee headcount and customer engagement metrics were not disclosed in the filing.
Looking ahead, ZeroStack's management expressed optimism about its liquidity position, bolstered by recent equity offerings and the anticipated benefits from its digital asset strategy. The company believes that its existing cash and staking rewards will be sufficient to meet its working capital requirements for at least the next year. However, the ongoing volatility in digital asset markets and the company's reliance on these assets for revenue generation present significant risks that could impact future performance.
About Flora Growth Corp.
Flora Growth Corp. is a multinational cannabis company specializing in the manufacturing and distribution of consumer packaged goods, medicinal cannabis, and pharmaceutical products. Its core segments include wellness, nutraceuticals, accessories, and medical cannabis, with key brands like JustCBD and Vessel. The company leverages a diversified strategy, global supply chain expertise, and regulatory licenses to serve markets in North America, Europe, and beyond, focusing on quality, innovation, and strategic acquisitions.
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