Business Context and Reporting Period
Company: ZeroStack Corp. (formerly Flora Growth Corp.)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Reporting Currency: United States Dollar (USD)
ZeroStack Corp. is a decentralized AI treasury and asset management company that pivoted from its legacy hemp and cannabis operations to focus on digital assets, specifically the 0G Token (native to the 0G Chain). The company retains a pharmaceutical distribution business through its subsidiary, Phatebo GmbH. In 2025, the company sold its legacy cannabis business, underwent a 1-for-39 share consolidation, and executed a major management transition, appointing Daniel Reis-Faria as CEO and Michael Heinrich as Executive Chairman.
Key Financial Metrics
| Metric | 2025 (Actual) | 2024 (Actual) |
|---|---|---|
| Revenue | $35.7 million | $35.9 million |
| Gross Profit | $1.6 million | $2.2 million |
| Gross Margin | 5% | 6% |
| Net Loss | $(119.7) million | $(15.9) million |
| Operating Loss | $(154.7) million | $(8.9) million |
| Cash and Cash Equivalents | $5.6 million | $5.2 million |
| Total Digital Assets (Fair Value) | $121.0 million | $0 |
| Total Debt | $53.5 million | $2.1 million |
| Working Capital | $0.1 million | $0.9 million |
Note: The 2024 results have been restated to reflect the sale of the cannabis business as discontinued operations.
Material Changes vs. Prior Period
- Strategic Pivot: The company sold its legacy hemp and cannabis business (JustCBD, Vessel, etc.) in September 2025, classifying these results as discontinued operations. The primary focus shifted to a digital asset treasury strategy centered on 0G Tokens.
- Net Loss Expansion: Net loss increased significantly to $119.7 million from $15.9 million. This was primarily driven by a $143.0 million unrealized loss from changes in the fair value of digital assets (specifically a $138.9 million decrease in 0G value and $4.8 million in Solana value).
- Debt Structure: Total debt surged to $53.5 million, largely due to the issuance of the Zero Gravity Convertible Note (denominated in 0G Tokens) valued at $50.7 million. A Solana-denominated PIPE Note was settled in December 2025.
- Capital Raising: The company raised approximately $13.5 million in cash and received significant token contributions (valued at over $168 million at issuance) through various private placements (PIPE) in 2025.
- Management Changes: Former CEO Clifford Starke and Executive Chairman Sammy Dorf resigned in October 2025. Daniel Reis-Faria and Michael Heinrich were appointed to replace them.
Guidance, Outlook, and Risks
Outlook and Strategy: Management intends to continue accumulating 0G Tokens as a long-term treasury holding to increase shareholder value. The company plans to leverage the native AI functionality of the 0G ecosystem. While the company believes its current cash and staking rewards are sufficient for the next 12 months, it explicitly states there is no assurance it will continue as a going concern without access to additional liquidity sources.
Key Risks and Contingencies:
- Going Concern: The company has a history of net losses and an accumulated deficit of $277.8 million. Continued operations depend on the ability to raise capital or generate positive cash flows.
- Asset Volatility: Financial results are heavily exposed to the volatility of 0G and other digital assets. A significant decline in token prices could materially adversely affect the balance sheet.
- Regulatory Uncertainty: Risks include the potential classification of 0G as a "security" under U.S. law, which could trigger registration requirements under the Investment Company Act. Additionally, evolving AI and crypto regulations pose compliance risks.
- Custody and Cybersecurity: The company relies on third-party custodians (e.g., BitGo) for digital assets. Risks include loss of private keys, cyberattacks, and custodian insolvency.
- Legal Proceedings: A $1.2 million provision was recorded for a lease dispute involving a former subsidiary (Vessel). The company also settled a legal claim regarding JustCBD shares for $1.8 million.
Investor Verification Checklist
- Going Concern Status: Verify the sufficiency of the $5.6 million cash balance against operating burn rates and the likelihood of future capital raises.
- Digital Asset Valuation: Confirm the fair value methodology for 0G Tokens and the impact of the $143 million unrealized loss on the company's solvency.
- Debt Covenants: Review the terms of the Zero Gravity Convertible Note and the Euro credit facility for potential default triggers or conversion limitations.
- Regulatory Classification: Monitor SEC guidance regarding the classification of 0G Tokens to assess potential Investment Company Act implications.
- Management Concentration: Note that the CEO (Daniel Reis-Faria) and Executive Chairman (Michael Heinrich) hold significant beneficial ownership and have related-party ties to the 0G ecosystem (Zero Gravity Labs).