20-F: ZOOZ Strategy Pivots to Bitcoin Treasury, Reports $55.6M Loss

ZOOZ Strategy Ltd. transitioned to a primary bitcoin treasury reserve asset strategy in 2025, reporting a net loss of $55.6 million, significantly impacted by unrealized losses on digital assets.

Summary

• The company changed its legal and commercial name from ZOOZ Power Ltd. to ZOOZ Strategy Ltd. in October 2025.
• In July 2025, the company adopted bitcoin as its primary treasury reserve asset, intending to acquire and hold bitcoin using cash flows in excess of working capital and proceeds from equity/debt offerings.
• As of December 31, 2025, the company held approximately 1,047 bitcoins with an original cost basis of $121.9 million and a fair value of $91.6 million.
• An unrealized loss on digital assets of $30.3 million was recognized for the year ended December 31, 2025.
• The net loss for the year ended December 31, 2025, was $55.6 million, a significant increase from $10.9 million in 2024.
• Gross loss widened to $2.86 million in 2025 from $0.49 million in 2024.
• Operating expenses surged to $50.27 million in 2025 from $10.05 million in 2024, primarily due to the unrealized loss on digital assets and higher general and administrative expenses.
• Cash and cash equivalents increased to $27.03 million as of December 31, 2025, from $7.53 million in 2024, largely driven by financing activities.
• Net cash provided by financing activities was $154.53 million in 2025, including $153 million from private placements, $3.87 million from an ATM program, and $0.4 million from a SEPA.
• The Legacy Business (flywheel technology for EV charging) continues operations but at a reduced scale, with strategic alternatives for the patented technology being explored.
• A material weakness in internal control over financial reporting related to insufficient personnel with U.S. GAAP and SEC reporting expertise remains unremediated.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative filing due to the substantial increase in net loss, primarily driven by significant unrealized losses on bitcoin holdings and the decline in the legacy business. While capital was raised, the immediate financial performance and Nasdaq compliance issues present considerable challenges.

Positives

• Successfully raised approximately $153 million from private placements, $3.87 million from an ATM program, and $0.4 million from a Standby Equity Purchase Agreement (SEPA) in 2025.
• Repaid the EBC Note and Keyarch Global Note in full by September 30, 2025, totaling approximately $3.2 million.
• Management believes existing cash balances and liquid digital asset holdings are sufficient to meet anticipated operating and capital requirements for at least the next 12 months.
• The company is encouraged by the growing global acceptance and institutionalization of bitcoin, including the SEC's approval of 11 spot bitcoin ETFs in January 2024.
• The pilot project with Afcon Electric Transportation Ltd. in Israel successfully concluded.
• Two ZOOZTER-100 systems were successfully installed and became operational at Dor-Alon's gas stations along Highway 6 in Israel, leading to the purchase of one system and expected purchase of the second.
• The material weakness related to segregation of duties in internal control over financial reporting has been remediated.

Negatives

• Reported a significant net loss of $55.6 million in 2025, a substantial increase from $10.9 million in 2024.
• Incurred an unrealized loss on digital assets of $30.3 million in 2025 due to bitcoin price volatility.
• Gross loss widened to $2.86 million in 2025 from $0.49 million in 2024.
• Recorded inventory write-offs of $2.89 million in 2025, reflecting the current expectation of no additional system production for the Legacy Business.
• Recognized a loss on property, plant, and equipment disposals of $0.45 million in 2025.
• The Legacy Business currently does not generate revenue and operates at a reduced scale.
• Joint pilot projects with ARKO Corp in the U.S. and Osprey in the U.K. were terminated.
• Public warrants are currently out of the money, with an exercise price of $11.50 compared to a market price of $0.39 per share as of December 31, 2025.
• The company has never paid cash dividends and does not anticipate doing so in the foreseeable future.
• Received a written notice from Nasdaq on December 16, 2025, for non-compliance with the minimum bid price requirement of $1.00 per share, risking delisting.
• Classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes for the year ended December 31, 2025, which can have adverse tax consequences for U.S. investors.
• The company's ordinary shares were removed from several TASE indices, potentially reducing tradability and interest from Israeli institutional investors.
• The bitcoin treasury strategy may adversely affect the ability to raise capital through public offerings in Israel due to regulatory uncertainty.
• A material weakness in internal control over financial reporting related to insufficient personnel with U.S. GAAP and SEC reporting expertise remains unremediated.

Risks

• The bitcoin treasury strategy exposes the company to high volatility in bitcoin prices, which can significantly impact financial results and the market price of ordinary shares.
• Bitcoin and other digital assets are novel and subject to significant legal, commercial, regulatory, and technical uncertainty, including potential reclassification as a security, which could lead to classification as an investment company under the 1940 Act.
• The company is subject to counterparty risks, particularly relating to custodians, and digital assets are not protected by deposit insurance (FDIC/SIPC), potentially leading to loss of value in insolvency events.
• Pledging bitcoin as collateral exposes the company to margin calls, forced liquidation, and significant losses if bitcoin prices decline.
• Changes in the accounting treatment of bitcoin holdings (ASU 2023-08) are expected to increase the volatility of financial results.
• The Legacy Business may operate projects at a financial loss to penetrate markets or explore new strategic opportunities, affecting financial condition.
• Exploring strategic alternatives for the Legacy Business may require additional funding, personnel, and market acceptance, with no guarantee of success.
• The Legacy Business faces significant competition from battery-based power boosters, energy storage systems, and other solutions.
• The market for Legacy Business products, including new applications like the defense industry, is at an early stage, requiring extensive development and market education.
• Inability to attract, retain, and motivate key employees and qualified management, technical, engineering, and sales personnel could harm the business.
• International expansion exposes the company to additional risks, including tax, compliance, cultural, political, and economic instability.
• The company's technology and intellectual property may not be adequately protected from unauthorized use by third parties, or third-party IP rights could affect commercialization efforts.
• Undetected defects, design or manufacturing errors, or bugs in hardware or software could negatively affect product functionality, reliability, and safety, leading to product liability claims.
• Use of open-source software under license terms that interfere with proprietary rights could disrupt the business.
• Information technology systems, or those of third parties, may fail, suffer security breaches, or be compromised, leading to business disruption, loss of assets, and regulatory actions, especially heightened due to the Israel/Hamas/Hezbollah/Iran conflict.
• The unregulated nature and lack of transparency of many bitcoin trading venues may lead to greater fraud, security failures, or operational problems, adversely affecting bitcoin value.
• Failure to have adequate sales and marketing operations could harm the ability to increase the Legacy Business customer base and achieve market acceptance.
• A highly concentrated customer base in the Legacy Business exposes the company to significant risks if key customers delay or cancel orders.
• Compliance with diverse global laws and regulations (environmental, labor, safety, trade controls, anti-bribery) is complex and evolving, potentially increasing costs and risks of non-compliance.
• Changes to tax laws or regulations in Israel, the United States, and other jurisdictions, or their interpretation, could adversely affect results of operations or financial condition.
• Future developments regarding the tax treatment of digital assets for U.S. federal income and applicable state, local, and non-U.S. tax purposes are uncertain and could negatively impact the business.
• Conditions in Israel and the Middle East, including ongoing conflicts and political instability, may adversely affect operations, workforce availability, and supply chains.
• If classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, U.S. investors may suffer adverse tax consequences.
• Inability to meet Nasdaq's continued listing standards, particularly the $1.00 minimum bid price, could result in delisting and negatively impact share price and access to capital markets.
• Future sales of ordinary shares or convertible securities may depress the share price due to dilution.
• The ZOOZ public warrants are currently out of the money and may expire worthless, and their terms may be amended or redeemed under certain conditions.
• The company may be a target of securities class action and derivative lawsuits, which could result in substantial costs and divert management attention.
• Shareholder activism could negatively affect the business by diverting management attention and creating uncertainty.
• Potential classification as a shell company under Israeli law and TASE bylaws could reduce the tradability and liquidity of ordinary shares on the TASE.
• The bitcoin treasury reserve business may adversely affect the ability to raise capital through public offerings in Israel due to regulatory uncertainty.
• The company has a history of losses and expects to continue incurring operating and comprehensive losses in the near-term, depending on fundraising to finance activities.
• Continuing or worsening inflationary pressures and associated changes in monetary policy may increase the cost of equipment, goods, services, and personnel.

Future Outlook

The company expects to continue incurring operating and comprehensive losses in the near-term and does not anticipate significant improvement in cash flow generation and operating results through 2026 and 2027. It plans to monitor market conditions for additional bitcoin purchases and may periodically sell bitcoin for general corporate purposes or tax benefits, as well as pursue strategies to generate income from its bitcoin holdings. The company is also exploring strategic alternatives to fully capitalize on its patented flywheel technology and synergistic opportunities within the digital asset ecosystem to add robust operating cash flow. Furthermore, the company expects to cease meeting the definition of a foreign private issuer as of June 30, 2026, and will be subject to U.S. domestic issuer reporting and governance requirements starting January 1, 2027.

Management Comments

• "We believe bitcoin has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability."
• "We believe that the growing global acceptance and institutionalization of bitcoin supports its view that bitcoin is a reliable store of value."
• "We believe that bitcoins unique attributes not only differentiate it from fiat money, but also from other cryptocurrency assets, and for that reason, we currently have no plans to purchase cryptocurrency assets other than bitcoin, however, we may decide to purchase cryptocurrency assets other than bitcoin in the future given what we consider to be appropriate market conditions."
• "We believe that despite recent volatility, usually inherent in emerging asset classes, our conviction in bitcoin remains unshakable."
• "We view it as not just digital currency, but potentially as a premier store of value, which our management believes to be reliable collateral that is open, neutral, and censorship-resistant."
• "We believe that the market dynamics which bitcoin has experienced in the past and may experience in the future reflect the realities of a maturing asset."
• "While short-term price action captures headlines, we believe that underlying fundamentals suggest a deeper and longer-term trend for potential broadening institutional adoption, growing interest on the part of sovereign states and funds, and increasing scarcity of the asset itself."
• "We believe we are in the early stages of a multi-decade growth-story for bitcoin."
• "As global liquidity expands, we believe that bitcoin stands as both a singular hedge and unique vehicle for asymmetric upside."
• "Management currently believes that since the Company has a history of losses, it is more likely than not that the deferred tax assets regarding the loss carry-forward will not be realized in the foreseeable future and as a result the Company recorded a full valuation allowance."

Industry Context

StockSavvy.ai notes that ZOOZ Strategy's pivot to a bitcoin treasury reserve strategy aligns with a broader trend of corporate adoption of digital assets, particularly following the SEC's approval of spot bitcoin ETFs in January 2024, which has increased institutional participation and market infrastructure maturity. The company's belief in bitcoin as a "premier store of value" and "asymmetric upside" reflects a bullish sentiment prevalent among some digital asset proponents, contrasting with the traditional view of bitcoin's high volatility. The continued operation of its Legacy Business in EV charging, while exploring strategic alternatives, indicates a hedging strategy against the nascent and volatile digital asset market, though the EV charging market itself is still in early stages of development and faces significant competition.

Comparison to Industry Standards

• The filing mentions competition in the EV charging market from providers of battery-based power boosters, energy storage systems such as BESS (Battery Energy Storage Systems), hydrogen-based energy storage, and supercapacitors-based energy storage, but does not provide specific quantitative comparisons of performance or market share.
• No explicit comparisons to specific comparable companies or projects in either the digital asset treasury space or the EV charging market are provided within the filing.

Management Changes

Corporate Governance

Legal Proceedings

• Currently, the company is not a party to any material legal or arbitration proceedings, including governmental proceedings, that are pending or known to be contemplated, that management believes, individually or in the aggregate, may have a significant effect on its financial position or profitability.

Related Party Transactions

• Keywise Discovery Master Fund, affiliated with Mr. Fang Zheng (former director and majority shareholder of Keyarch Global), invested $8 million in the Subsequent Private Placement.
• Blue Horizon Consulting LLC, wholly-owned by Happy Walters (a partner of the Sponsor), invested $4 million in the Initial Private Placement.
• Jordan Fried, the company's Chief Executive Officer and a member of its board of directors, invested $3 million in the Subsequent Private Placement.
• Headwaters Capital LLC, where Todd Thomson (a director) is the managing member, invested $100,000 in the Subsequent Private Placement.
• Alberto Franco, a director, invested $500,000 in the Subsequent Private Placement.
• The company entered into a Sponsor Support Agreement with Forest Hill 18, LP (the Sponsor), which provided strategic advisory services in exchange for 6,927,706 ZOOZ ordinary shares, 13,453,632 Units (each with one ordinary share and three warrants), and 6,525,926 pre-funded warrants. The Sponsor is also entitled to a quarterly advisory fee of 0.125% of the value of the company's crypto-currency assets, with a provision of $115,000 made on December 31, 2025.
• A purchase order was received from SMYZE Intelligent Technology (Shanghai) Co., Ltd, controlled by Mr. Fang Zheng, for the shipment of one ZOOZTER-100 for demo purposes in January 2025.
• The Keyarch Global Note, a promissory note to Keyarch Global (affiliated with Mr. Fang Zheng), was repaid in full by September 30, 2025, for approximately $2.27 million.
• The EBC Note, a promissory note to EarlyBirdCapital (placement agent for the Business Combination), was repaid in full by August 15, 2025, for approximately $0.93 million.
• The company entered into an Amended and Restated Sales Agreement with Chardan Capital Markets LLC (where Jonas Grossman, a director, is Co-Founder and President) and Jett Capital as sales agents for its ATM program. Due to Mr. Grossman's role, Chardan had a conflict of interest, and offerings were conducted in accordance with FINRA Rule 5121 with Jett Capital as a qualified independent underwriter.
• A collaboration agreement with Dor-Alon (jointly operating the ON charging network with Afcon Electric Transportation) for ZOOZTER-100 systems led to the purchase of one system and the expected purchase of a second. This transaction was classified as a related party transaction for cautionary purposes.

Stakeholder Impact

• Shareholders face significant dilution from past and future equity issuances, high volatility due to the company's bitcoin holdings, and the risk of delisting from Nasdaq due to minimum bid price non-compliance. U.S. shareholders may also incur adverse tax consequences due to the company's PFIC status. The removal of shares from TASE indices could reduce tradability and investor interest.
• Employees have experienced headcount reductions as part of cost-cutting initiatives. Remaining finance personnel may face increased workload due to the unremediated material weakness in internal controls. Israeli employees are subject to potential military service obligations, which could impact operations.
• Customers of the Legacy Business may be impacted by the termination of pilot projects and the company's reduced focus on this segment. Future adoption of Legacy Business products relies on market education and government incentives.
• Creditors benefit from the repayment of promissory notes, but the company's history of losses and continued dependence on fundraising could pose future risks to its ability to meet obligations.
• Suppliers to the Legacy Business may experience reduced demand due to the company's decreased operational scale in this segment.

Next Steps

• Continue to monitor market conditions in determining whether to engage in additional bitcoin purchases.
• Periodically sell bitcoin for general corporate purposes or to generate tax benefits in accordance with applicable law.
• Pursue strategies to generate income or other funds from bitcoin holdings.
• Explore strategic alternatives to fully capitalize on its advanced, patented flywheel technology.
• Explore synergistic opportunities within the digital asset ecosystem to add robust operating cash flow to its holding company structure.
• Implement remediation measures during 2026 to address the material weakness in internal control over financial reporting, including mapping regulatory obligations, quantifying effort for SOX controls, and evaluating finance function capabilities.
• Regain compliance with Nasdaq's minimum bid price requirement by June 15, 2026, potentially by effecting a reverse share split if necessary.
• Prepare for the transition to U.S. domestic issuer reporting and governance requirements starting January 1, 2027.
• Continue to operate and commercialize its legacy technology in the market of charging infrastructure for EVs.
• Maintain a small team focused on developing the company's flywheels and complex systems of power boosters.
• Potentially apply to receive additional grants from the Israel Innovation Authority (IIA) and other governmental institutions.
• Continue repurchasing ordinary shares under the $50 million share repurchase program.

Key Dates

Recommendation

The company's strategic pivot to a bitcoin treasury model has resulted in a substantial net loss, primarily driven by significant unrealized losses on its bitcoin holdings due to price volatility. The legacy EV charging business is in decline, with asset write-offs and minimal revenue generation, indicating a lack of future growth prospects in this segment. Furthermore, the company faces a Nasdaq delisting threat due to its low share price and has an unremediated material weakness in internal financial controls, raising concerns about financial reporting reliability. While recent capital raises provide short-term liquidity, the highly speculative nature of its primary asset (bitcoin) combined with operational and governance challenges presents an elevated risk profile with significant downside potential for investors.

Keywords

Bitcoin, Digital Assets, Treasury Strategy, SEC Filing, 20-F, Financial Results, Net Loss, Unrealized Loss, Nasdaq, TASE, Israel, EV Charging, Flywheel Technology, Capital Raise, Corporate Governance, Risk Management, Internal Controls, Warrants, Share Repurchase, PFIC, Cybersecurity