Acquisition and Financing - CleanCore Global acquired assets from Sanzonate Europe Ltd. for a total purchase price of $2,475,000, which includes $425,000 in cash and a promissory note of $800,000[121][122]. - The acquisition includes Earn-Out Payments based on Net Sales milestones, starting at €2,000,000 for an additional $200,000 payment, with a maximum potential of $1,250,000[126]. - The company raised $1,010,000 through private placement of promissory notes and warrants, with notes bearing 12% interest due by April 16, 2027[131][132]. - The promissory note issued to Gary Hollst was amended to a principal amount of $342,154.57, due on May 31, 2026, with an interest rate of 8.5%[133]. - CleanCore Global's acquisition strategy is supported by a five-year warrant for 425,000 shares at an exercise price of $1.25 per share[122]. - The company anticipates needing to raise additional capital through equity or debt financing to fund planned expenditures over the next 12 months[159]. Financial Performance - Revenue increased by $243,995, or 77.73%, to $557,915 for the three months ended March 31, 2025, compared to $313,920 for the same period in 2024, primarily due to increased sales to a distributor in India[140]. - Cost of sales increased by $73,599, or 42.50%, to $246,783 for the three months ended March 31, 2025, while as a percentage of revenue, it decreased from 55.17% to 44.23%[141]. - Gross profit increased by $170,396, or 121.07%, to $311,132 for the three months ended March 31, 2025, with gross profit margin rising from 44.83% to 55.77%[142]. - General and administrative expenses rose by $447,365, or 85.88%, to $968,264 for the three months ended March 31, 2025, increasing as a percentage of revenue from 165.93% to 173.55%[143]. - Net loss for the three months ended March 31, 2025, was $809,354, compared to a net loss of $520,670 for the same period in 2024, representing an increase in loss of $288,684, or 55.44%[147]. - For the nine months ended March 31, 2025, revenue increased by $282,073, or 31.41%, to $1,180,083, driven by a 171% increase in sales with the largest customer[150]. - General and administrative expenses for the nine months ended March 31, 2025, increased by $1,512,901, or 111.98%, to $2,863,998, with expenses as a percentage of revenue rising from 150.45% to 242.69%[153]. - Net cash used in operating activities was $2,234,206 for the nine months ended March 31, 2025, compared to $485,530 for the same period in 2024[163]. - Cash and cash equivalents as of March 31, 2025, were $796,843, with a net loss for the nine months ended March 31, 2025, of $2,670,469[158]. Accounting and Financial Reporting - CleanCore Global is classified as an "emerging growth company," allowing it to delay compliance with certain accounting standards until they apply to private companies[136][137]. - The company’s financial statements require management to make estimates and assumptions that could materially affect reported financial position and results of operations[170]. - The company evaluates its accounting estimates regularly based on historical industry experience and other reasonable assumptions[170]. - There are no significant accounting policies that involve complex estimation that could materially affect cash flows or financial position[171]. - The company has no off-balance sheet arrangements that are likely to affect its financial condition or results of operations[169]. - As of March 31, 2025, the company has no long-term debt obligations other than obligations under loans and a non-cancellable operating lease commitment expiring in 2028[168]. - The company has a non-cancellable operating lease commitment for its office facility, which is set to expire in 2028[168]. - The company has no other long-term liabilities reflected on its statements of financial position as of the reporting date[168]. - The company has not disclosed any quantitative or qualitative market risk factors that are applicable[172]. Business Strategy and Operations - The company aims to expand its distributor network and improve production processes to enhance product effectiveness in various environments, including restaurants and airports[120]. - The company is focused on creating safe, chemical-free cleaning solutions using patented nanobubble technology[118]. - The company’s financial performance is influenced by customer acquisition and retention, technology innovation, and market conditions[138].
CleanCore Solutions, Inc.(ZONE) - 2025 Q3 - Quarterly Report