Cosmos Health’s crypto treasury was down about 46% at the end of June as the Nasdaq-listed company warned that recurring losses and reliance on outside financing raised substantial doubt about its ability to continue as a going concern over the next 12 months.
The company held 474.85 ETH and 15.66 BTC worth a combined $1.66 million against a $3.1 million cost basis, leaving about $1.44 million in unrealized losses. Ethereum accounted for $1.25 million, or 87%, of the shortfall.
The holdings stem from an August 2025 financing agreement with ATW Digital Asset Opportunities VII that allowed Cosmos to issue up to $300 million of senior secured convertible notes.
Cosmos initially issued an $8 million note carrying a $720,000 original-issue discount and 9% annual interest. It also recorded $736,250 of direct issuance costs and fees.
Under the August 2025 financing agreement, Cosmos was required to direct 72.5% of net note proceeds into crypto, with the remainder available for working capital and general corporate purposes.
Cosmos later disclosed that it had used about $3.1 million to buy Ethereum and Bitcoin and about $1.8 million for working capital
As of June 30, another $644,219 remained restricted for future crypto purchases. The assets bought with note proceeds are also subject to collateral and custody arrangements securing the financing.
The losses come as Cosmos’s underlying business continues to consume cash. It reported an $8.89 million net loss and used $2.79 million in operating cash during the first half.
The company ended June with $1.80 million of unrestricted cash and said revenue remained insufficient to fund operating expenses and meet debt obligations as they come due.
The going-concern warning reflects those broader financial pressures rather than the crypto losses alone.
Financing deal drives dilution
Meanwhile, the convertible note has also pushed more stock into the market.
Cosmos issued 22.9 million shares during the first half through conversions of the August note, settling about $4.52 million of principal and interest. After the quarter, another 20.48 million shares were issued to satisfy $3.69 million of obligations, leaving just $82,500 of principal outstanding.
Cosmos’s outstanding share count rose from 41.07 million at the end of 2025 to roughly 100.6 million by Aug. 18.
The result is a financing structure that directed capital into a crypto treasury now deeply underwater, while the company continues to depend on external funding and shareholders absorb substantial dilution.