ZeroStack Corp. Reports 41% Revenue Growth but $24.6M Net Loss in Latest Quarter

ZeroStack Corp., formerly known as Flora Growth Corp., reported significant financial developments in its latest 10-Q filing for the quarter ending June 30, 2026. The company generated total revenue of $13.7 million for the three months ended June 30, 2026, a 41% increase from $9.7 million in the same period last year. For the six months, revenue reached $20.9 million, up from $16.6 million in the prior year. The increase was primarily driven by pharmaceutical sales from its subsidiary, Phatebo GmbH, which contributed $12.6 million in the second quarter and $17.1 million in the first half of 2026. Additionally, the company began staking its 0G Tokens, earning $1.0 million in the second quarter and $3.8 million in the first half.

Despite the revenue growth, ZeroStack reported a net loss of $24.6 million for the second quarter, compared to a loss of $2.4 million in the same period last year. The six-month net loss was $61.3 million, significantly higher than the $3.2 million loss reported in the first half of 2025. The increased losses were largely attributed to a $21.8 million loss from changes in the fair value of digital assets, reflecting the volatility in the cryptocurrency market. Operating expenses surged to $25.9 million in the second quarter, up from $2.1 million a year earlier, primarily due to the aforementioned losses in digital assets.

In terms of strategic developments, ZeroStack completed the acquisition of Texas Blocker Corp. on July 20, 2026, which added approximately 148 million 0G Tokens to its treasury. This acquisition is expected to enhance the company's digital asset holdings and support its ongoing staking operations. The company now holds approximately 223 million 0G Tokens, with most staked to generate recurring rewards. The acquisition also marks a significant shift in ZeroStack's operational focus, as it transitions from its legacy hemp and cannabis business to a digital asset treasury model.

Operationally, ZeroStack's total assets decreased to $25.2 million as of June 30, 2026, down from $130.2 million at the end of 2025, primarily due to the deconsolidation of insolvent subsidiaries and the decline in digital asset valuations. The company reported a negative working capital of $0.6 million and an accumulated deficit of $339.1 million. As of the reporting date, ZeroStack had cash reserves of $2.6 million, which it plans to utilize alongside staking rewards to fund operations.

Looking ahead, management expressed uncertainty regarding the company's ability to continue as a going concern, citing reliance on the monetization of digital assets and the volatility of cryptocurrency markets. However, they anticipate that the combination of existing cash balances and staking rewards will provide sufficient liquidity to meet operational needs in the near term. The company remains focused on expanding its digital asset strategy while navigating the challenges posed by market conditions and regulatory environments.