A Chinese company primarily involved in steel pipes for gas and water has posted a net loss of $61 million after writing off its $53.2 million investment in the Malta-registered CG Malta and its software platforms, including xSigma Trading, MaximNFT and Defi Exchange.

CG stands for Carousel Group, led by Daniel Graetzer, which registered impressive growth in 2021 and 2022 with MaximBet, developed in partnership with the men’s lifestyle brand.

In 2021, it also made headlines for signing a market access deal with Caesars Entertainment.

That same year, ZK International Group got involved with a $50 million investment to take a 25 per cent stake in MaximBet, after setting up a subsidiary with the intent of acquiring online gaming assets to increase shareholder value by targeting businesses in the growing online casino industry.

However, the deal did not yield the desired results, and in its financial results for 2023, ZK International Group wrote off its investment.

It said that although CG Malta initially achieved high growth, during the 2023 fiscal year, “the competition of gaming market has been increasingly intense.”

It said that “market bullishness and valuations peaked in early-2023 and declined rapidly from there, preventing CG Malta from raising further capital to execute its business plan.

“For the best interest of the company's shareholder, the company decided to stop funding CG Malta and instead demanded the management team of CG Malta took active measures to achieve organic growth and healthy cash flow.

“However, the business was unable to raise the capital required to fund the business plan, and therefore the shareholders of CG Malta passed shareholder resolution on November 27, 2023 to cease operations of CG Malta and wind up the entity.

“For the year ended September 30, 2023, the company has written off the investment in CG Malta.”

It also evaluated the recoverability of the three platforms, including Defi Exchange, xSigma Trading, and MaximNFT, and concluded that the carrying value of the three platforms “may not be recoverable,” projecting that the platform is likely to have continuing losses.

Therefore, ZK International Group wrote off the carrying value of the three platforms.

Jiancong Huang, Chairman of ZK International, commented, "while ZK International declared a net loss of $61 million for the year, this was largely due to a series of one-time write-offs related to various non-core investments.

“These write-offs are part of the company's broader strategy to streamline operations and focus on high-growth opportunities, ensuring a more robust financial foundation for the future."