ZeroStack Corp.
For the period ended Jun 30, 2026. Filed Jul 31, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 31, 2026
ZSTK$2.52-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-04.
0001062993-26-002279
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-31.
0001062993-26-003961
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 148 previous paragraphs and 174 current paragraphs.
107 unchanged; 30 reworded; 18 added; 10 removed; 1 previous and 19 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
The Company recognizes staking rewards as revenue at the time they are earned and control of the reward tokens is obtained, measured at their fair value on the date of receipt. The fair value of the staking rewards at receipt becomes their cost basis for subsequent accounting and potential disposal.
Current report
Staking rewards earned by the Company are held in a separate hot wallet designated for operating liquidity. The Company intends to use these staking rewards, either in kind or through sale for cash, principally to fund operating activities, including research and development, general and administrative expenses, and other costs associated with its decentralized AI treasury strategy. Consistent with this business model and the treatment of staking rewards as operating revenue, the Company classifies cash proceeds from the sale of 0G Tokens received as staking rewards as cash flows from operating activities in its condensed consolidated statements of cash flows.
Current report
Loss (Gain) from Changes in Fair Value of Digital Assets
Current report
Non-operating (expense) income
Current report
For the Six Months Ended June, 2026 and 2025
Current report
Revenue totaled $20.9 million and $16.6 million for the six months ended June 30, 2026 and 2025, respectively. The revenue generated by the Company's Phatebo subsidiary was $17.1 million and $16.6 million for the six months ended June 30, 2026 and 2025, respectively. The Company also began staking its 0G Tokens during 2026, earning 6,619,166 0G Tokens in rewards, or $3.8 million, during the six months ended June 30, 2026.
Current report
Gross Profit
Current report
Loss (Gain) from Changes in Fair Value of Digital Assets
Current report
Salaries and Consulting Fees
Current report
Professional Fees
Current report
Share-based Compensation Expenses
Current report
Other Expenses, net
Current report
Net Loss
Current report
As of June 30, 2026, the Company had cash of $2.6 million, negative working capital of $0.6 million and an accumulated deficit of $339.1 million. The Company incurred a net loss of $61.3 million during the six months ended June 30, 2026 and relies primarily on the monetization of digital assets earned through staking activities to fund operations and satisfy its obligations as they become due. The Company's ability to generate liquidity from such digital assets, and, if necessary, from the monetization of its underlying digital asset holdings, is subject to significant market price volatility and market liquidity conditions. These factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date these financial statements are issued.
Current report
Management considered these conditions together with its liquidity outlook for the twelve-month period following the issuance of these financial statements. On July 20, 2026, the Company completed the acquisition of Texas Blocker Corp., which added approximately 148.0 million 0G tokens to the Company's treasury holdings. Following the acquisition, the Company held approximately 223 million 0G tokens, substantially all of which are staked and expected to generate recurring staking rewards. Management expects existing cash balances, together with the monetization of digital assets earned through staking activities to provide sufficient liquidity to fund forecasted operating expenditures during the assessment period. If necessary, the Company may also monetize a portion of its digital asset holdings to satisfy its liquidity requirements.
Current report
Although management has implemented the plans described above, it cannot conclude that such plans are probable of effectively mitigating the conditions and events that raise substantial doubt. Accordingly, substantial doubt exists about the Company's ability to continue as a going concern for the one-year period following the issuance of these financial statements. The accompanying financial statements have been prepared on a going concern basis and do not include any adjustments to the carrying amounts or classification of assets and liabilities that may result from the outcome of this uncertainty.
Current report
Cash used in Investing Activities
Current report
March 2026 Share Exchange Agreement
Removed paragraphs (10)
Previous report
Closing of the Contribution occurred on March 31, 2026.
Previous report
Revenue
Previous report
Operating Expenses
Previous report
Income Tax
Previous report
Loss from Discontinued Operations
Previous report
Revenue
Previous report
Operating Expenses
Previous report
Income Tax
Previous report
Loss from Discontinued Operations
Previous report
Cash provided by Investing Activities
Reworded paragraphs (30)
Previous wording
On March 31, 2026, Texas Blocker, which was formed by Daniel Reis-Faria and Dany Vaiman, the Chief Executive Officer and Chief Financial Officer, respectively, of the Company, for the purpose of facilitating the Exchange, entered into Securities Contribution Agreements with certain investors (the "Investors") pursuant to which the Investors contributed an aggregate of 142,232,948 0G Tokens in exchange for an aggregate of 9,104,614 Blocker Shares issued on a private placement basis (the "Exchange", and together with the Contribution, the "Financing"). The fair market value of each 0G Token was deemed to be $0.7549 and the fair market value of each Blocker Share was deemed to be $11.7931 in accordance with the valuation mutually agreed upon by Texas Blocker and the Investors. Each Blocker Share will be exchanged on a one-for-one basis for one ZeroStack Share or ZeroStack Pre-funded Warrant pursuant to the Share Exchange Agreement.
Current wording
On March 31, 2026, Texas Blocker Corp. ("Texas Blocker"), which was formed by Daniel Reis-Faria and Dany Vaiman, the Chief Executive Officer and Chief Financial Officer, respectively, of the Company, for the purpose of facilitating the Exchange, entered into Securities Contribution Agreements with certain investors (the "Investors") pursuant to which the Investors contributed an aggregate of 142,232,948 0G Tokens in exchange for an aggregate of 9,104,614 Blocker Shares issued on a private placement basis (the "Exchange", and together with the Contribution, the "Financing"). The fair market value of each 0G Token was deemed to be $0.7549 and the fair market value of each Blocker Share was deemed to be $11.7931 in accordance with the valuation mutually agreed upon by Texas Blocker and the Investors. Each Blocker Share will be exchanged on a one-for-one basis for one ZeroStack Share or ZeroStack Pre-funded Warrant pursuant to the Share Exchange Agreement.
Previous wording
On March 31, 2026, concurrent with the execution of the Securities Contribution Agreements and Stockholders' Agreement, ZeroStack entered into the Share Exchange Agreement with Texas Blocker and the Investors. Under the terms of the Share Exchange Agreement, ZeroStack will issue an aggregate of 9,104,614 ZeroStack Shares and/or ZeroStack Pre-funded Warrants in exchange for an aggregate of 9,104,614 Blocker Shares, being all the issued and outstanding shares of Texas Blocker. Upon consummation of the Exchange, Texas Blocker will become a wholly-owned subsidiary of ZeroStack.
Current wording
On March 31, 2026, concurrent with the execution of the Securities Contribution Agreements and Stockholders' Agreement, ZeroStack entered into the Share Exchange Agreement with Texas Blocker and the Investors. Under the terms of the Share Exchange Agreement, ZeroStack will issue an aggregate of 9,104,614 ZeroStack Shares and/or ZeroStack Pre-funded Warrants in exchange for an aggregate of 9,104,614 Blocker Shares, being all the issued and outstanding shares of Texas Blocker. Upon consummation of the Exchange, Texas Blocker was to become a wholly owned subsidiary of ZeroStack.
Previous wording
Upon closing of the Exchange, which is expected to occur on or around July 14, 2026, Texas Blocker will become a wholly-owned subsidiary of ZeroStack and ZeroStack will be classified as a U.S. domestic corporation for U.S. federal income tax purposes pursuant to Section 7874(b) of the U.S. Internal Revenue Code of 1986, as amended.
Current wording
Upon closing of the Exchange, which occurred on July 20, 2026 upon approval by the Company's shareholders, Texas Blocker became a wholly-owned subsidiary of ZeroStack and ZeroStack is now classified as a U.S. domestic corporation for U.S. federal income tax purposes pursuant to Section 7874(b) of the U.S. Internal Revenue Code of 1986, as amended.
Previous wording
The Company began staking its 0G Tokens on January 21, 2026. Therefore, the provision of validating blockchain transactions is now an output of the Company's ordinary activities. The Company maintains control over the staked 0G Tokens as they remain in the Company's wallets and the Company has the right to direct their use. However, because the node that completes the validation is owned and operated by a third-party validator, the Company acts as an agent to the service of validating blockchain transactions. Therefore, it records the staking rewards as revenue on a net of a 2.0% commission basis.
Current wording
The Company began staking its 0G Tokens on January 21, 2026. Therefore, the provision of validating blockchain transactions is now an output of the Company's ordinary activities. The Company maintains control over the staked 0G Tokens as they remain in the Company's wallets and the Company has the right to direct their use. However, because the node that completes the validation is owned and operated by third-party validators, the Company acts as an agent to the service of validating blockchain transactions. Therefore, it records the staking rewards as revenue on a net of a 1.0% or 2.0% commission basis.
Previous wording
Loss from changes in fair value of digital assets relate to fluctuations in fair value of the Company's digital assets.
Current wording
Loss (gain) from changes in fair value of digital assets relate to fluctuations in fair value of the Company's digital assets.
Previous wording
The following table sets forth the Company's consolidated results of operations for the three months ended March 31, 2026 and 2025 (in thousands). The period-to-period comparisons of the Company's historical results are not necessarily indicative of the results that may be expected in the future. The results of operations data have been derived from our unaudited condensed interim consolidated financial statements for the three months ended March 31, 2026 and 2025 included elsewhere in this Quarterly Report.
Current wording
The following table sets forth the Company's consolidated results of operations for the three and six months ended June 30, 2026 and 2025 (in thousands). The period-to-period comparisons of the Company's historical results are not necessarily indicative of the results that may be expected in the future. The results of operations data have been derived from our unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2026 and 2025 included elsewhere in this Quarterly Report.
Previous wording
Revenue totaled $7.3 million and $6.9 million for the three months ended March 31, 2026 and 2025, respectively. The revenue generated by the Company's Phatebo subsidiary was $4.5 million and $6.9 million for the three months ended March 31, 2026 and 2025, respectively. The Company also began staking its 0G Tokens during the three months ended March 31, 2026, earning 4,364,724 0G Tokens in rewards, or $2.8 million.
Current wording
Revenue totaled $13.7 million and $9.7 million for the three months ended June 30, 2026 and 2025, respectively. The revenue generated by the Company's Phatebo subsidiary was $12.6 million and $9.7 million for the three months ended June 30, 2026 and 2025, respectively. The Company also began staking its 0G Tokens during 2026, earning 2,254,442 0G Tokens in rewards, or $1.0 million, during the three months ended June 30, 2026.
Previous wording
Gross profit totaled $3.1 million and $0.5 million for the three months ended March 31, 2026 and 2025, respectively. As a percentage of net sales, or gross margin, the Company reported 43% and 8% for the three months ended March 31, 2026 and 2025, respectively. The increases were primarily driven by the commencement of staking by the Company in the three months ended March 31, 2026.
Current wording
Gross profit totaled $1.6 million and $0.6 million for the three months ended June 30, 2026 and 2025, respectively. As a percentage of net sales, or gross margin, the Company reported 12% and 6% for the three months ended June 30, 2026 and 2025, respectively. The increases were primarily driven by the commencement of staking by the Company in the three months ended June 30, 2026.
Previous wording
Operating expenses totaled $65.8 million and $2.2 million for the three months ended March 31, 2026 and 2025, respectively. The increase is driven by the loss from changes in fair value of digital assets recorded during the three months ended March 31, 2026.
Current wording
Operating expenses totaled $25.9 million and $2.1 million for the three months ended June 30, 2026 and 2025, respectively. The increase is driven by the loss from changes in fair value of digital assets recorded during the three months ended June 30, 2026.
Previous wording
Loss from changes in fair value of digital assets totaled $60.7 million and $nil for the three months ended March 31, 2026 and 2025, respectively. The loss in the three months ended March 31, 2026 was caused by the decrease in value of the Company's 0G holdings.
Current wording
Loss (gain) from changes in fair value of digital assets totaled a loss of $21.8 million and a gain of $0.1 million for the three months ended June 30, 2026 and 2025, respectively. The loss in the three months ended June 30, 2026 was caused by the decrease in value of the Company's 0G holdings.
Previous wording
Salaries and consulting fees were $1.0 million for the three months ended March 31, 2026 compared to $0.7 million for the three months ended March 31, 2025. These fees are related to employment and consulting contracts with most of the Company's management, as well as directors.
Current wording
Salaries and consulting fees were $1.1 million for the three months ended June 30, 2026 compared to $0.8 million for the three months ended June 30, 2025. These fees are related to employment and consulting contracts with most of the Company's management, as well as directors.
Previous wording
Professional fees totaled $0.7 million for the three months ended March 31, 2026 compared to $0.5 million for the three months ended March 31, 2025. These expenses are associated with legal, accounting and audit services.
Current wording
Professional fees totaled $1.0 million for the three months ended June 30, 2026 compared to $0.6 million for the three months ended June 30, 2025. These expenses are associated with legal, accounting and audit services.
Previous wording
Share-based compensation expenses totaled $2.8 million for the three months ended March 31, 2026 compared to $0.2 million for the three months ended March 31, 2025. These expenses represent the amortization of the fair value of share-based payments. The increase is due to the grants of options to key employees during the year ended December 31, 2025.
Current wording
Share-based compensation expenses totaled $1.6 million for the three months ended June 30, 2026 compared to $0.2 million for the three months ended June 30, 2025. These expenses represent the amortization of the fair value of share-based payments. The increase is due to the grants of options to key employees in December 2025 and May 2026.
Previous wording
Other expenses totaled $0.7 million for both the three months ended March 31, 2026 and March 31, 2025. For both periods, this income and expense consists mainly of general and administrative expenses, insurance, travel, repairs and maintenance and royalties partially offset by miscellaneous incomes.
Current wording
Other expenses totaled $0.4 million for the three months ended June 30, 2026 compared to $0.6 million for the three months ended June 30, 2025. For both periods, this income and expense consists mainly of general and administrative expenses, insurance, travel, repairs and maintenance and royalties partially offset by miscellaneous incomes.
Previous wording
We recognized less than $0.1 million in income tax benefit for the three months ended March 31, 2026 compared to $0.1 million in income tax expense for the three months ended March 31, 2025. Our effective tax rate during the periods ended March 31, 2026 and 2025 was 0.0% and -34.8%, respectively. We maintain valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, we consider such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. We continue to believe our deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance remains recorded against net deferred taxes as of March 31, 2026 and 2025.
Current wording
We recognized $0.3 million in income tax expense for the three months ended June 30, 2026 compared to less than $0.1 million in income tax expense for the three months ended June 30, 2025. Our effective tax rate during the periods ended June 30, 2026 and 2025 was -1.1% and -0.5%, respectively. We maintain valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, we consider such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. We continue to believe our deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance remains recorded against net deferred taxes as of June 30, 2026 and 2025.
Previous wording
Loss from discontinued operations totaled $nil in the three months ended March 31, 2026 compared to $0.4 million in the three months ended March 31, 2025. The sale of the legacy hemp and cannabis businesses was finalized on September 26, 2025.
Current wording
Loss from discontinued operations totaled $nil in the three months ended June 30, 2026 compared to $0.9 million in the three months ended June 30, 2025. The sale of the legacy hemp and cannabis businesses was finalized on September 26, 2025.
Previous wording
Asset impairment totaled $nil for the three months ended March 31, 2026 compared to less than $0.1 million for the three months ended March 31, 2025. The amount in 2025 represents impairment of an operating lease right of use asset in Florida.
Current wording
Asset impairment totaled $nil for the six months ended June 30, 2026 compared to less than $0.1 million for the six months ended June 30, 2025. The amount in 2025 represents impairment of an operating lease right of use asset in Florida.
Previous wording
The Company realized $26.0 million in non-operating income for the three months ended March 31, 2026 compared to non-operating income of $1.4 million for the three months ended March 31, 2025. This income consists of changes in financial instruments fair value, interest income (expense) and foreign exchange (loss) gain. The amount for the three months ended March 31, 2026 consists of a $23.0 million gain to revalue the Zero Gravity Convertible Note as well as $3.1 million gain on the settlement of the Zero Gravity Convertible Note. The amount for the three months ended March 31, 2025 includes a $1.1 million gain on the disposal of insolvent entities.
Current wording
The Company realized $25.9 million in non-operating income for the six months ended June 30, 2026 compared to non-operating income of $1.3 million for the six months ended June 30, 2025. This income consists of changes in financial instruments fair value, interest income (expense) and foreign exchange (loss) gain. The amount for the six months ended June 30, 2026 consists of a $23.0 million gain to revalue the Zero Gravity Convertible Note as well as $3.1 million gain on the settlement of the Zero Gravity Convertible Note. The amount for the six months ended June 30, 2025 includes a $1.1 million gain on the disposal of insolvent entities.
Previous wording
The Company recorded a net loss of $36.7 million for the three months ended March 31, 2026 compared to a net loss of $0.8 million for the three months ended March 31, 2025. The increased net loss was due to $60.7 million in losses recorded from changes in fair value of digital assets partially offset by $26.1 million in gains from the revaluation and settlement of the Zero Gravity Convertible Note.
Current wording
The Company recorded a net loss of $61.3 million for the six months ended June 30, 2026 compared to a net loss of $3.2 million for the six months ended June 30, 2025. The increased net loss was due to $82.5 million in losses recorded from changes in fair value of digital assets partially offset by $26.1 million in gains from the revaluation and settlement of the Zero Gravity Convertible Note.
Previous wording
Since the Company's inception, we have funded our operations and capital spending through cash flows from product sales and proceeds from the sale of our capital stock. The Company is generating cash from sales and is deploying its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near term to support our business growth and expansion. While we have generated significant operating losses and negative cash flows from operations as reflected in our accumulated deficit and unaudited condensed interim consolidated statements of cash flows mainly through our legacy hemp and cannabis businesses, we have implemented an expansion strategy focused on identifying and pursuing complementary growth opportunities within the global digital asset market. This has resulted in staking revenue of $2.8 million in the three months ended March 31, 2026 and $38.4 million in digital assets on the Company's unaudited condensed interim balance sheet as of March 31, 2026. Our current, principal sources of liquidity are cash and cash equivalents provided by our operations and prior equity offerings. Cash consists primarily of cash on deposit with banks. Cash was $2.3 million and $5.6 million as of March 31, 2026 and December 31, 2025, respectively. As a result of the PIPE Offering that closed on September 26, 2025, the Company believes that its existing sources of liquidity are and will be sufficient in both the short and long term to meet our working capital requirements and future obligations.
Current wording
Since the Company's inception, we have funded our operations and capital spending through cash flows from product sales and proceeds from the sale of our capital stock. The Company is generating cash from sales and is deploying its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near term to support our business growth and expansion. While we have generated significant operating losses and negative cash flows from operations as reflected in our accumulated deficit and unaudited condensed interim consolidated statements of cash flows mainly through our legacy hemp and cannabis businesses, we have implemented an expansion strategy focused on identifying and pursuing complementary growth opportunities within the global digital asset market. This has resulted in staking revenue of $3.8 million in the six months ended June 30, 2026 and $15.2 million in digital assets on the Company's unaudited condensed interim balance sheet as of June 30, 2026. Our current, principal sources of liquidity are cash and cash equivalents provided by our operations and prior equity offerings. Cash consists primarily of cash on deposit with banks.
Previous wording
Net cash used in operating activities in the three months ended March 31, 2026 was $3.8 million compared to net cash used in operating activities of $2.7 million for the three months ended March 31, 2025. Cash flows used in operating activities for the periods ended March 31, 2026 and 2025 were due primarily to operating expenses exceeding the gross profit for the periods.
Current wording
Net cash used in operating activities in the six months ended June 30, 2026 was $2.5 million compared to net cash used in operating activities of $5.5 million for the six months ended June 30, 2025. Cash flows used in operating activities for the periods ended June 30, 2026 and 2025 were due primarily to operating expenses exceeding the gross profit for the periods.
Previous wording
Cash provided by Financing Activities
Current wording
Cash used in/provided by Financing Activities
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2026 totaled $0.1 million compared to $nil for the three months ended March 31, 2025. Cash flows provided from financing activities for the period ending March 31, 2026 were due to net borrowings on the credit facilities in Germany through the Company's Phatebo subsidiary. During the three months ended March 31, 2025, net borrowings on the credit facilities in Germany through the Company's Phatebo subsidiary were $nil.
Current wording
Net cash used in financing activities for the six months ended June 30, 2026 totaled $0.2 million compared to $1.5 million provided by financing activities for the six months ended June 30, 2025. Cash flows used in financing activities for the period ending June 30, 2026 were due to net payments on the credit facilities in Germany through the Company's Phatebo subsidiary. Cash flows provided from financing activities for the period ending June 30, 2025 were due to the sale of common shares of the Company in May 2025 as well as net borrowings on the credit facilities in Germany through the Company's Phatebo subsidiary.
Previous wording
Net cash provided by investing activities for the three months ended March 31, 2026 totaled $nil compared to $0.4 million for the three months ended March 31, 2025. Cash flows provided by investing activities for the period ended March 31, 2025 were primarily related to the acquisition of United.
Current wording
Net cash used in investing activities for the six months ended June 30, 2026 totaled $nil compared to $0.7 million for the six months ended June 30, 2025. Cash flows used in investing activities for the period ended June 30, 2025 were primarily related to the acquisition of digital assets.
Previous wording
As of March 31, 2026, we had working capital of $3.1 million, including $2.3 million of cash. The Company's primary cash flow needs are for the development of its operating activities, administrative expenses and for general working capital to support growing sales with related receivables and payables.
Current wording
As of June 30, 2026, we had working capital of -$0.6 million, including $2.6 million of cash. The Company's primary cash flow needs are for the development of its operating activities, administrative expenses and for general working capital to support growing sales with related receivables and payables.
Previous wording
Our continued existence is dependent on our ability to generate positive cash flows through synergies within our operations, expanding our production capacity and geographic footprint, exploring strategic partnerships and pursuing accretive acquisitions to supplement our organic growth. We are committed to attaining a level of sustained growth that will effectively offset our overhead costs, thereby paving the path to achieving profitability. We will be required in the future to raise additional capital through either equity or debt financings. To date, we have raised capital through multiple equity offerings. There were no equity offerings in the periods ended March 31, 2026 and March 31, 2025.
Current wording
Our continued existence is dependent on our ability to generate positive cash flows through synergies within our operations, expanding our production capacity and geographic footprint, exploring strategic partnerships and pursuing accretive acquisitions to supplement our organic growth. We are committed to attaining a level of sustained growth that will effectively offset our overhead costs, thereby paving the path to achieving profitability. We will be required in the future to raise additional capital through either equity or debt financings. To date, we have raised capital through multiple equity offerings. There were no equity offerings in the period ended June 30, 2026.
Previous wording
The Company issued a total of 152,354 Common Shares through the September 2025 ATM Offering at an average purchase price of $10.61 per share for gross proceeds of $1.6 million through March 31, 2026. A total of 18,265 Common Shares were issued at an average price of $6.29 for gross proceeds of $0.1 million during the three months ended March 31, 2026.
Current wording
The Company issued a total of 152,354 Common Shares through the September 2025 ATM Offering at an average purchase price of $10.61 per share for gross proceeds of $1.6 million through June 30, 2026. A total of 18,265 Common Shares were issued at an average price of $6.29 for gross proceeds of $0.1 million during the six months ended June 30, 2026.
Previous wording
In addition to the equity offerings described above, the Company also has access to credit facilities through its Phatebo subsidiary. The credit facilities total*€2.4 million ($2.7 million) with three different German banks and are secured by default guarantees. On March 31, 2026, the outstanding amount was€2.4* million ($2.7 million) and was due within the next 12 months. The credit facilities have a weighted average interest rate of 8.12% and do not have a set maturity date. The interest rate is reset every time a new amount is drawn.
Current wording
In addition to the equity offerings described above, the Company also has access to credit facilities through its Phatebo subsidiary. The credit facilities total*€2.4 million ($2.7 million) with three different German banks and are secured by default guarantees. On June 30, 2026, the outstanding amount was€2.1* million ($2.4 million) and was due within the next 12 months. The credit facilities have a weighted average interest rate of 7.81% and do not have a set maturity date. The interest rate is reset every time a new amount is drawn.
Previous wording
On March 26, 2026, Phatebo entered into a short-term loan agreement with an individual lender. Under the terms of the agreement, Phatebo borrowed 0.3 million EUR ($0.4 million), which was funded in a single advance. The loan matures four weeks from the date of funding and is repayable in a single lump-sum payment at maturity. The loan provides for a fixed interest charge of €65,000 for the contractual term. The total contractual repayment amount at maturity is 0.4 million EUR ($0.5 million). The loan is secured by substantially all current assets and fixed assets of Phatebo.
Current wording
On March 26, 2026, Phatebo entered into a short-term loan agreement with an individual lender. Under the terms of the agreement, Phatebo borrowed 0.3 million EUR ($0.4 million), which was funded in a single advance. The loan matures four weeks from the date of funding and is repayable in a single lump-sum payment at maturity. The loan provides for a fixed interest charge of €65,000 for the contractual term. The total contractual repayment amount at maturity is 0.4 million EUR ($0.5 million). The loan is secured by substantially all current assets and fixed assets of Phatebo. On April 21, 2026, the Company paid 0.4 million EUR ($0.4 million) in a single lump-sum payment for the outstanding principal and interest on the Phatebo short term borrowing.
Previous wording
There were no new accounting standards issued during the three months ended March 31, 2026 that impacted the Company. See Note 3, Significant Accounting Policies, of the notes to the consolidated financial statements for the year ended December 31, 2025 for a discussion of recently issued accounting standards.
Current wording
There were no new accounting standards issued during the six months ended June 30, 2026 that impacted the Company. See Note 3, Significant Accounting Policies, of the notes to the consolidated financial statements for the year ended December 31, 2025 for a discussion of recently issued accounting standards.
Rearranged current paragraphs (19)
Current report — wording carried from elsewhere
The Company realized $0.1 million in non-operating expense for the three months ended June 30, 2026 compared to non-operating expense of less than $0.1 million for the three months ended June 30, 2025. This income consists of changes in financial instruments fair value, interest income (expense) and foreign exchange (loss) gain.
Current report — wording carried from elsewhere
The Company recorded a net loss of $24.6 million for the three months ended June 30, 2026 compared to a net loss of $2.4 million for the three months ended June 30, 2025. The increased net loss was due to $21.8 million in losses recorded from changes in fair value of digital assets.
Current report — wording carried from elsewhere
Gross profit totaled $4.8 million and $1.2 million for the six months ended June 30, 2026 and 2025, respectively. As a percentage of net sales, or gross margin, the Company reported 23% and 7% for the six months ended June 30, 2026 and 2025, respectively. The increases were primarily driven by the commencement of staking by the Company in the six months ended June 30, 2026.
Current report — wording carried from elsewhere
Operating expenses totaled $91.7 million and $4.3 million for the six months ended June 30, 2026 and 2025, respectively. The increase is driven by the loss from changes in fair value of digital assets recorded during the six months ended June 30, 2026.
Current report — wording carried from elsewhere
Loss (gain) from changes in fair value of digital assets totaled a loss of $82.5 million and a gain of $0.1 million for the six months ended June 30, 2026 and 2025, respectively. The loss in the six months ended June 30, 2026 was caused by the decrease in value of the Company's 0G holdings.
Current report — wording carried from elsewhere
Salaries and consulting fees were $2.0 million for the six months ended June 30, 2026 compared to $1.6 million for the six months ended June 30, 2025. These fees are related to employment and consulting contracts with most of the Company's management, as well as directors.
Current report — wording carried from elsewhere
Professional fees totaled $1.7 million for the six months ended June 30, 2026 compared to $1.2 million for the six months ended June 30, 2025. These expenses are associated with legal, accounting and audit services.
Current report — wording carried from elsewhere
Share-based compensation expenses totaled $4.4 million for the six months ended June 30, 2026 compared to $0.3 million for the six months ended June 30, 2025. These expenses represent the amortization of the fair value of share-based payments. The increase is due to the grants of options to key employees in December 2025 and May 2026.
Current report — wording carried from elsewhere
Other expenses totaled $1.1 million for the six months ended June 30, 2026 compared to $1.3 million for the six months ended June 30, 2025. For both periods, this income and expense consists mainly of general and administrative expenses, insurance, travel, repairs and maintenance and royalties partially offset by miscellaneous incomes.
Current report — wording carried from elsewhere
We recognized $0.2 million in income tax expense for the six months ended June 30, 2026 compared to $0.1 million in income tax expense for the six months ended June 30, 2025. Our effective tax rate during the periods ended June 30, 2026 and 2025 was -0.4% and -5.3%, respectively. We maintain valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, we consider such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. We continue to believe our deferred tax assets are not more-likely-than-not to be realized and a full valuation allowance remains recorded against net deferred taxes as of June 30, 2026 and 2025.
Current report — wording carried from elsewhere
Loss from discontinued operations totaled $nil in the six months ended June 30, 2026 compared to $1.3 million in the six months ended June 30, 2025. The sale of the legacy hemp and cannabis businesses was finalized on September 26, 2025.
Current report — wording carried from elsewhere
March 2026 Blocker Securities Contribution Agreements and Blocker Stockholders' Agreement
Current report — wording carried from elsewhere
On March 31, 2026, Texas Blocker, which was formed by Daniel Reis-Faria and Dany Vaiman, the Chief Executive Officer and Chief Financial Officer, respectively, of the Company, for the purpose of facilitating the Exchange, entered into Securities Contribution Agreements with the Investors pursuant to which the Investors contributed an aggregate of 142,232,948 0G Tokens in exchange for an aggregate of 9,104,614 Blocker Shares issued on a private placement basis. The fair market value of each 0G Token was deemed to be $0.7549 and the fair market value of each Blocker Share was deemed to be $11.7931 in accordance with the valuation mutually agreed upon by Texas Blocker and the Investors. Each Blocker Share will be exchanged on a one-for-one basis for one ZeroStack Share or ZeroStack Pre-funded Warrant pursuant to the Share Exchange Agreement.
Current report — wording carried from elsewhere
The Securities Contribution Agreements include customary representations, warranties and covenants by Texas Blocker and the Investors for an agreement of its type. Additionally, Texas Blocker has agreed to provide the Investors with customary indemnification against certain liabilities.
Current report — wording carried from elsewhere
Concurrent with entering into the Securities Contribution Agreements, each of the Investors entered into a Stockholders' Agreement and a Share Exchange Agreement.
Current report — wording carried from elsewhere
Under the Stockholders' Agreement, the Investors agreed to not transfer any of their Blocker Shares unless (i) pursuant to the Share Exchange Agreement, (ii) to an Affiliate of such Investor, subject to Unanimous Stockholder Approval and Board Approval or (iii) to any other person, subject to Unanimous Stockholder Approval and Board Approval. Additionally, without Unanimous Stockholder Approval, Texas Blocker will not be able to enter into any commitment to conduct any business or transaction that is not (i) in furtherance of the Exchange and the other transactions contemplated by the Share Exchange Agreement, (ii) related to the staking of 0G Tokens owned or acquired after the date of signing the Stockholders' Agreement by Texas Blocker or (iii) to pay a management fee to ZeroStack or engage in another tax-planning arrangement as determined by the Board of Directors of Texas Blocker.
Current report — wording carried from elsewhere
On March 31, 2026, concurrent with the execution of the Securities Contribution Agreements and Stockholders' Agreement, ZeroStack entered into the Share Exchange Agreement with Texas Blocker and the Investors. Under the terms of the Share Exchange Agreement, ZeroStack will issue an aggregate of 9,104,614 ZeroStack Shares and/or ZeroStack Pre-funded Warrants in exchange for an aggregate of 9,104,614 Blocker Shares, being all the issued and outstanding shares of Texas Blocker. Upon consummation of the Exchange, Texas Blocker was to become a wholly-owned subsidiary of ZeroStack.
Current report — wording carried from elsewhere
The respective obligations of ZeroStack and the Investors to consummate the Exchange are subject to the satisfaction or waiver (if applicable) of a number of customary conditions for an agreement of its type including, but not limited to: (i) the ZeroStack Shareholder Approval and (ii) the approval of the stockholders of Texas Blocker by written consent resolution to exchange the Blocker Shares for the ZeroStack Securities. Additionally, ZeroStack agreed to file a re-sale registration statement on Form S-3 registering the ZeroStack Shares, ZeroStack Pre-funded Warrants and the Common Shares issuable upon exercise of the ZeroStack Pre-funded Warrants. The Share Exchange Agreement includes customary representations, warranties and covenants by ZeroStack, Texas Blocker and the Investors for an agreement of its type.
Current report — wording carried from elsewhere
Upon closing of the Exchange, which occurred on July 20, 2026 upon approval by the Company's shareholders, Texas Blocker became a wholly-owned subsidiary of ZeroStack and ZeroStack is now classified as a U.S. domestic corporation for U.S. federal income tax purposes pursuant to Section 7874(b) of the U.S. Internal Revenue Code of 1986, as amended.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Loss from Changes in Fair Value of Digital Assets