The Nasdaq-listed biotechnology firm is raising $425 million for its ETH strategy, joining a parade of penny stocks investing in cryptocurrencies as their business flounders.
Nasdaq-listed 180 Life Sciences Corp plans to invest heavily in Ether and rebrand as ETHZilla Corporation, a strategic pivot away from its biotechnology origins amid mounting losses.
On Tuesday, the company announced a $425 million private placement aimed at building an Ether (ETH) treasury reserve. The funds are being raised through a private investment in public equity (PIPE) deal involving the sale of common stock, a structure often used by crypto-focused investors.
Additionally, the company disclosed it has approval to issue up to $150 million in debt securities.
Once the Ether treasury is established, venture firm Electric Capital will act as the company’s external manager, overseeing yield generation through various onchain activities.
Founded in 2016 as a clinical-stage biotechnology firm, 180 Life Sciences went public in 2020. Since its initial public offering (IPO), the stock has plunged over 99.9%, now trading below $3.00 with a market capitalization of approximately $17 million.
The sharp decline is largely attributed to a lack of revenue, mounting losses and repeated shareholder dilution to raise capital.
As of the end of 2024, the company reported an accumulated deficit of more than $141.5 million and a working capital deficit of approximately $1.6 million.
Related: The Bitcoin treasury model is breaking, but Strategy’s isn’t. Here’s why
Penny stocks pivot to crypto amid mounting business pressures
180 Life Sciences began its corporate pivot last year, announcing plans to enter the online gaming market by adopting blockchain technology and launching an online casino.
Its shift reflects a broader trend: hundreds of companies have added crypto to their balance sheets, inspired partly by Michael Saylor’s strategy of acquiring Bitcoin (BTC) as a treasury asset starting in 2020.
More recently, Nasdaq-listed Mill City Ventures revealed plans to raise $441 million for a Sui (SUI) strategy; agri-tech firm Nature’s Miracle announced up to $20 million in investments in XRP (XRP); and consumer products company Upexi disclosed a $16.7 million purchase of Solana (SOL).
According to Charles Schwab, more public companies are using crypto treasury strategies to boost share prices.
“What some critics find troubling with this strategy is that many of these companies started off with an entirely different business objective,” Schwab noted. “Putting large chunks of cash in a historically volatile asset that isn’t tied to their core business has raised a red flag or two.”
Nevertheless, the trend shows no signs of slowing, as corporations increasingly look beyond Bitcoin for their crypto reserves. According to Standard Chartered, companies could eventually hold up to 10% of Ether’s total supply as crypto treasury strategies gain momentum.
Magazine: Bitcoin inheritances: A guide for heirs and the not-yet-dead
