Zcash's 10x Growth in a Year Fails to Save Mining Company Fortitude from Losses

cryptonews.ruPublished on 2026-07-28Last updated on 2026-07-28

Abstract

Despite a 1000% annual increase in the price of Zcash (ZEC), mining company Fortitude Mining Holdings, owned by Barry Silbert's Digital Currency Group, is facing significant losses and debt issues. According to an SEC filing, Fortitude took on a $26 million loan in June 2026, with over $8.3 million borrowed before issuing an investment prospectus that claimed no outstanding debt. The company positions itself as a leader in Zcash mining, but only 28% of its $89 million 2025 mining revenue came from ZEC, with 65% derived from Bitcoin. Fortitude reported net losses of $14.3 million in 2024, $12.6 million in 2025, and $4.6 million in Q1 2026. It presented a positive adjusted EBITDA of $20 million by adding substantial depreciation costs, which in mining represent real equipment wear-and-tear expenses. Furthermore, its merger partner, AI software developer HeartSciences Inc., reported only $4,000 in revenue over a recent 12-month period and has seen its stock decline by 34% from June highs after an initial spike. Upon merger completion, the combined entity will trade under the ticker "TUDE," with DCG retaining a majority stake.

Fortitude Mining Holdings, a mining company owned by Barry Silbert's Digital Currency Group (DCG) that mines the anonymous cryptocurrency Zcash, has encountered significant debt obligations and multi-million dollar losses.

In June 2026, Fortitude published investor materials reporting no debt for a specific period in the 2025 fiscal year. However, according to a Form 8-K filed on the U.S. Securities and Exchange Commission (SEC) website, the company had signed a $26 million credit agreement on June 1, with over $8.3 million of that debt raised prior to the publication of the June prospectus.

Fortitude's positioning as the unequivocal leader in Zcash ($ZEC) mining is also called into question upon analyzing its revenue structure. It is known that out of $89 million in total mining revenue in 2025, only 28% came from mining $ZEC. The overwhelming majority of revenue, 65% or $58 million, came from Bitcoin (BTC) mining.

Notably, even an impressive 1000% growth in $ZEC over the past 12 months and 1400% growth over three years did not minimize Fortitude's losses. In 2024, the net loss was $14.3 million, in 2025 it was $12.6 million, and in the first quarter of 2026, losses reached $4.6 million.

To soften the negative tone in their presentation, Fortitude's marketers emphasized an adjusted EBITDA of $20 million. This figure was achieved via a questionable method: approximately $32 million in depreciation charges were added to the net loss. In the mining industry, depreciation is not a paper formality; it represents real costs associated with equipment wear and tear due to overheating, corrosion, and technological obsolescence.

Certain risks are also posed by the chosen merger partner, Texas-based AI-based software developer HeartSciences Inc. After the deal announcement on June 23, HeartSciences shares rose by 57%.

However, according to documents filed with the SEC, for the 12 months ended April 30, 2026, HeartSciences' revenue was only $4,000 despite a huge accumulated deficit. Consequently, the company's stock price rapidly declined, falling 34% from its June highs and settling in the range of $2.34–2.45 per share. Upon completion of the deal, the combined company is expected to trade under the ticker "TUDE," with DCG retaining an absolute majority of the shares.

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Related Questions

QWhat is the main reason why Fortitude Mining Holdings is facing financial difficulties, despite the significant growth of Zcash?

ADespite Zcash's impressive growth of 1000% over 12 months, Fortitude Mining Holdings is facing financial difficulties primarily due to substantial net losses. The company reported net losses of $14.3 million in 2024, $12.6 million in 2025, and $4.6 million in Q1 2026. Additionally, a large portion of its revenue comes from Bitcoin mining (65%), not Zcash, and it has taken on significant debt, including an $8.3 million loan disclosed after presenting itself as debt-free.

QAccording to the article, what percentage of Fortitude's total mining revenue in 2025 actually came from Zcash mining?

AIn 2025, only 28% of Fortitude's total mining revenue of $89 million came from mining Zcash. The majority, 65% or $58 million, came from Bitcoin (BTC) mining.

QHow did Fortitude's marketing team calculate the adjusted EBITDA figure of $20 million mentioned in the presentation?

AFortitude's marketing team calculated the adjusted EBITDA of $20 million by adding approximately $32 million in depreciation charges to the company's net loss. The article criticizes this as questionable, stating that in the mining industry, depreciation represents real costs from equipment wear and tear, overheating, corrosion, and technological obsolescence.

QWhat financial details about HeartSciences Inc., Fortitude's merger partner, raise concerns as presented in the article?

AThe financial details about HeartSciences Inc. that raise concerns are its extremely low revenue and significant accumulated deficit. For the 12 months ending April 30, 2026, HeartSciences reported revenue of only $4,000. Following the merger announcement, its stock price initially rose 57% but then fell 34% from its June highs.

QWhat contradictory information does the article highlight regarding Fortitude's debt situation based on SEC filings?

AThe article highlights a contradiction between Fortitude's investor materials claiming no debt for a certain period in fiscal 2025 and an SEC Form 8-K filing. The SEC filing reveals that on June 1, the company signed a credit agreement for $26 million, of which over $8.3 million was drawn as debt *before* the publication of the June prospectus that portrayed the company as debt-free.

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