ZONE.AMEXCleancore Solutions, INC
10-Q: CleanCore Reports Soaring Losses Amid Dogecoin Treasury Strategy
Sentiment:
Quarterly Report
CleanCore Solutions, Inc. reported a net loss of $117.7 million for the six months ended December 31, 2025, primarily driven by an $88.7 million unrealized loss on its Dogecoin holdings and significantly increased operating expenses.
Capital raiseCompleted an offering of pre-funded warrants on September 5, 2025, generating aggregate gross proceeds of $175,000,420 ($148,650,530 cash and $26,349,890 cryptocurrency), with net proceeds of approximately $164,257,145.Entered into an amended and restated sales agreement on August 29, 2025, for an at-the-market offering, allowing the company to sell up to $1,150,000,000 of common stock.Issued 8,579,273 shares of common stock under the Sales Agreement for gross proceeds of $26,399,778 and net proceeds of approximately $25,608,235 during the six months ended December 31, 2025.Management explicitly stated dependence on raising additional capital through equity and/or debt financing to fund its business plan and address going concern issues.
Worse than expectedThe net loss for the six months ended December 31, 2025, was $117,728,051, a massive increase from $1,861,109 in the prior year, indicating significantly worse financial performance.A substantial unrealized loss of $88,699,929 on digital assets (Dogecoin) was a primary driver of the increased net loss.General and administrative expenses surged by 1,538.12%, far outpacing revenue growth, contributing to the worsened operational loss.The company explicitly stated that currently available resources are insufficient to fund planned expenditures for the next 12 months, raising substantial doubt about its ability to continue as a going concern.Disclosure controls and procedures were found to be ineffective due to material weaknesses, indicating significant internal control deficiencies.
Summary
- Net loss for the six months ended December 31, 2025, was $117,728,051, a substantial increase from $1,861,109 in the prior year.
- This loss was primarily due to an $88,699,929 change in the fair value of digital assets (Dogecoin) and a 1,538.12% increase in general and administrative expenses to $29,934,861.
- Revenue increased by 217.21% to $1,973,608, and gross profit rose by 410.52% to $1,263,594, driven by a new customer and improved efficiencies in the CleanCore segment.
- The company adopted a digital asset treasury strategy focused on Dogecoin on September 5, 2025, acquiring 733,060,893 Dogecoin tokens with a cost basis of $174,955,530, resulting in an unrealized loss of $88,699,929 by December 31, 2025.
- Management has raised substantial doubt about the company's ability to continue as a going concern for the next 12 months, citing insufficient resources to fund planned expenditures.
- Disclosure controls and procedures were deemed ineffective as of December 31, 2025, due to material weaknesses in internal control over financial reporting.
Sentiment
Score: 2
Explanation: StockSavvy.ai views this filing with significant concern due to the massive net loss driven by speculative digital asset holdings, coupled with a going concern warning and ineffective internal controls, despite strong revenue growth in the core business.
Positives
- Revenue increased by 217.21% to $1,973,608 for the six months ended December 31, 2025, compared to $622,168 in the prior year, largely due to a new customer generating $863,334 in sales.
- Gross profit surged by 410.52% to $1,263,594 for the six months ended December 31, 2025, up from $247,511, reflecting better efficiencies, cost optimization, and technological improvements.
- The company successfully raised significant capital through a pre-funded warrants offering ($164,257,145 net proceeds) and an at-the-market offering ($25,608,235 net proceeds) during the period.
- Cash and cash equivalents increased to $7,403,390 as of December 31, 2025, from $1,460,997 as of June 30, 2025.
- The acquisition of Sanzonate Europe Ltd. in April 2025 expanded the company's presence in Europe and added an EOTA license, trade name, and distribution agreements.
Negatives
- Net loss dramatically increased by 6,225.69% to $117,728,051 for the six months ended December 31, 2025, from $1,861,109 in the prior year.
- An $88,699,929 unrealized loss on digital assets (Dogecoin) significantly contributed to the net loss for the six months ended December 31, 2025.
- General and administrative expenses soared by 1,538.12% to $29,934,861 for the six months ended December 31, 2025, primarily due to increased professional/consulting fees ($18.6 million) and stock-based compensation ($7.5 million).
- Cash used in operating activities increased to $7,167,396 for the six months ended December 31, 2025, from $1,662,330 in the prior year.
- The company incurred substantial cash outflows for investing activities, primarily $148,605,650 for the purchase of digital assets.
- Subsequent to the reporting period, the fair value of digital assets decreased by an additional $18,318,460 between January 1, 2026, and February 10, 2026.
Risks
- Management has raised substantial doubt about the company's ability to continue as a going concern for the next 12 months, as currently available resources are believed to be insufficient to fund planned expenditures.
- The company is dependent on raising additional capital through equity and/or debt financing, with no assurance of success, which could lead to significant stockholder dilution or operational limitations through debt covenants.
- The vast majority of the company's assets are concentrated in Dogecoin holdings, a novel asset class subject to significant legal, commercial, regulatory, and technical uncertainty.
- Dogecoin prices have historically experienced significant volatility, and a substantial decrease would adversely affect financial condition and results of operations.
- Exposure to counterparty risks with respect to Dogecoin custody and cybersecurity risks, including the risk that private keys with respect to digital assets are lost or destroyed, leading to loss of some or all digital assets.
- Disclosure controls and procedures were not effective as of December 31, 2025, due to material weaknesses in internal control over financial reporting, which could adversely affect financial reporting accuracy and timing.
- The company is subject to risks similar to other early-stage companies, including profitability challenges, the need for additional financing, ability to obtain regulatory approval, significant competition, and dependence on key individuals.
Future Outlook
Management believes that currently available resources will not be sufficient to fund planned expenditures over the next 12 months and is dependent upon raising additional capital through equity and/or debt financing. The company is also continuing efforts to remediate material weaknesses in internal control over financial reporting.
Management Comments
- Our mission is to become a leader in creating safe, clean spaces that are free from any chemical residue or skin irritants.
- We are currently expanding our distributor network, improving our production processes, and proving the effectiveness of our products in restaurants, airports, and hotels.
- Management believes that currently available resources will not be sufficient to fund the Company's planned expenditures over the next 12 months.
- Management, including our Chief Executive Officer and Chief Financial Officer, believes the unaudited condensed consolidated financial statements included in this report fairly represent, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with United States generally accepted accounting principles.
Industry Context
StockSavvy.ai notes that CleanCore Solutions, Inc.'s dual strategy of traditional cleaning product manufacturing alongside a significant, volatile digital asset treasury (Dogecoin) presents a unique and high-risk profile. While the core cleaning business shows promising revenue growth and efficiency improvements, the substantial unrealized losses from its Dogecoin holdings overshadow these operational gains. This approach diverges significantly from typical corporate treasury management, which usually prioritizes stability and liquidity, and instead aligns more with speculative investment strategies seen in some technology or crypto-native firms. The company's reliance on Dogecoin's market value for its overall financial performance makes it highly susceptible to cryptocurrency market fluctuations, a risk not typically associated with a cleaning solutions provider.
Comparison to Industry Standards
- The 217.21% revenue growth in the CleanCore segment is strong, potentially outperforming many established cleaning product companies which typically see single to low double-digit growth. However, specific comparable companies like Ecolab or Diversey are not mentioned in the filing to provide direct benchmarks.
- The gross profit margin of 68.05% for the three months ended December 31, 2025, in the CleanCore segment is robust and competitive within the specialty cleaning products industry, often exceeding the margins of commodity chemical producers.
- The company's strategy of holding a significant portion of its treasury in Dogecoin is highly unconventional for a company in the cleaning solutions industry. Traditional companies in this sector, such as Procter & Gamble (PG) or Clorox (CLX), maintain highly liquid and diversified treasury portfolios, typically in fiat currencies and low-risk financial instruments, to ensure operational stability and minimize market volatility exposure.
- The $88.7 million unrealized loss on Dogecoin holdings for the six months ended December 31, 2025, represents a substantial impairment of capital, a scenario rarely observed in the treasury operations of conventional industrial or consumer goods companies.
- The significant increase in general and administrative expenses, particularly professional and consulting fees and stock-based compensation, suggests a cost structure that may be disproportionately high relative to the revenue generated by the core cleaning business, especially when compared to more mature, efficient operators in the sector.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Executive Officer | NA | Clayton Adams | 2025-09-05 | Entered into an Executive Employment Agreement, nullifying previous consulting agreement. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Capital Structure Change | Removed the dual class structure of common stock and increased authorized common stock to 6,942,000,000 shares. | 2025-10-13 | Simplifies capital structure but significantly increases potential for dilution through future equity issuances. |
| Internal Control Deficiencies | Disclosure controls and procedures were not effective as of December 31, 2025, due to material weaknesses in internal control over financial reporting. | 2025-12-31 | Raises concerns about the reliability of financial reporting and compliance, requiring significant remediation efforts. |
Legal Proceedings
- Currently not aware of any legal proceedings or claims that are believed to have a material adverse effect on the business, financial condition, or operating results.
Related Party Transactions
- Outstanding short-term amount due to Clayton Adams (CEO and founder) of $3,195 as of December 31, 2025, for operational expenses.
- Consulting agreement with Birddog Capital, LLC (owned by Clayton Adams) for monthly fees and deferred expenses, which was nullified by an Executive Employment Agreement with Clayton Adams on September 5, 2025.
- Outstanding payable balance of $105,000 and accrued interest of $13,550 to Nebraska C. Ozone, LLC (owned by Lisa Roskens, a significant stockholder) for inventory purchases.
- Revolving credit note up to $500,000 with Clayton Adams, with no advances made as of December 31, 2025.
- Promissory note of $316,920 to Gary Hollst (Chief Revenue Officer), which was amended and later converted into common stock that was subsequently cancelled.
- Promissory note of $290,241.25 to Clayton Adams and $125,000 to Travis Buchanan (President), both paid in full on September 5, 2025.
- ACME People Company (owned by Travis Buchanan) participated in a private placement, with its promissory note paid in full on September 5, 2025.
- CleanCore Global issued a 7% unsecured promissory note of $475,000 to CleanCore US, with an accrued interest balance of $17,572, which is eliminated in consolidation.
- Option agreement with Clayton Adams on September 5, 2025, for a potential spin-off or acquisition of the Legacy Business.
- Strategic advisor agreement with Dogecoin Ventures LLC (not related to the Asset Manager) for a monthly advisory fee of $83,333 and equity compensation (10,000,000 restricted shares).
Stakeholder Impact
- Shareholders: Significant dilution from numerous common stock issuances (warrant exercises, debt settlements, restricted stock awards) and potential future dilution from necessary capital raises. Exposed to extreme volatility and substantial losses from the Dogecoin treasury strategy.
- Employees: Increased headcount and payroll benefits, but the going concern warning introduces job security uncertainty.
- Customers: The core cleaning business shows revenue growth and improved efficiencies, suggesting continued product availability and service.
- Creditors: Existing debt has been partially converted to equity or repaid, but the going concern warning indicates elevated risk for future debt financing.
Next Steps
- Raise additional capital through equity and/or debt financing to fund planned expenditures and address going concern issues.
- Continue efforts to remediate identified material weaknesses in internal control over financial reporting.
- Expand the distributor network, improve production processes, and prove product effectiveness in restaurants, airports, and hotels for the CleanCore segment.
- Manage the digital asset treasury strategy focused on Dogecoin, including potential further investments or divestments based on market conditions.
Key Dates
| Date | Description |
|---|---|
| 2022-08-23 | CC Acquisition Corp. incorporated in Nevada. |
| 2022-10-17 | CC Acquisition Corp. entered into an asset purchase agreement to acquire CleanCore Solutions, LLC, TetraClean Systems, LLC, and Food Safety Technologies, LLC. Also issued a $3,000,000 promissory note to Burlington Capital, LLC. |
| 2022-11-21 | CC Acquisition Corp. changed its name to CleanCore Solutions, Inc. |
| 2023-07-27 | Agreed to purchase approximately $105,000 worth of inventory from Nebraska C. Ozone, LLC, a related party. |
| 2023-09-13 | Extension agreement signed for Burlington Capital promissory note, increasing interest to 10% and extending maturity. |
| 2023-12-17 | Second extension agreement signed for Burlington Capital promissory note. |
| 2023-12 | FASB issued ASU No. 2023-08, requiring crypto assets to be measured at fair value. |
| 2024-03-26 | Entered into a loan agreement with Clayton Adams for a revolving credit note up to $500,000. |
| 2024-03-31 | Deadline for purchasing inventory from Nebraska C. Ozone, LLC before interest accrues. |
| 2024-04-01 | Entered into a new consulting agreement with Birddog Capital, LLC. |
| 2024-04-30 | Extension agreement signed for Burlington Capital promissory note, extending maturity to May 9, 2024. |
| 2024-05-31 | Burlington Capital and Walker Water LLC entered into an assignment agreement; company issued an amended and restated promissory note to Burlington and a new note to WW. |
| 2024-11 | FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. |
| 2024-12-24 | Entered into a note assignment and cancellation agreement with WW, Gary Hollst, and Gary Rohwer. Issued promissory notes to Gary Hollst ($316,920) and Gary Rohwer ($316,920). Issued a 20% OID promissory note to Clayton Adams ($415,241). |
| 2024-12-30 | Repaid the Rohwer Note in full. |
| 2025-01 | FASB issued ASU 2025-01, clarifying effective date of ASU 2024-03. |
| 2025-01-27 | Clayton Adams assigned $125,000 of his promissory note to Travis Buchanan. |
| 2025-01-29 | Established CleanCore Global Limited as a wholly owned subsidiary in Ireland. |
| 2025-04-15 | Completed acquisition of specified assets of Sanzonate Europe Ltd. CleanCore Global issued a 10% subordinated promissory note of $800,000 to Sanzonate. CleanCore Global issued a 7% unsecured promissory note of $475,000 to CleanCore US. |
| 2025-04-16 | Entered into subscription agreements for 12% unsecured promissory notes ($1,010,000) and warrants. |
| 2025-05-02 | Amended and restated promissory note issued to Mr. Hollst ($342,154.57). Amended maturity date for notes to Clayton Adams and Travis Buchanan to require repayment within 60 days of written demand. |
| 2025-06-02 | Principal and interest due under Mr. Hollst's amended and restated promissory note ($344,625) converted into 307,701 shares of common stock, which were subsequently cancelled. |
| 2025-06-06 | Entered into a subscription agreement for a 12% unsecured promissory note ($500,000) and warrant. |
| 2025-06-11 | Entered into an amendment to the consulting agreement with Birddog Capital, LLC. |
| 2025-06-30 | Burlington Capital conversion agreements for $300,000 of quarterly payments into 133,500 shares. Issued an original issue discount promissory note ($520,000) and warrant to an accredited investor. |
| 2025-07-01 | Granted a restricted stock award under the 2022 Plan for 30,000 shares of common stock, which vested in full on the date of grant. |
| 2025-07-21 | Granted a restricted stock award under the 2022 Plan for 250,000 shares of common stock and a restricted stock unit award for 100,000 shares. |
| 2025-08 | Paid $175,000 to Birddog Capital, LLC in full. |
| 2025-08-20 | Issued 375,000 shares of common stock pursuant to a settlement agreement with Boustead Securities, LLC. |
| 2025-08-21 | Granted a restricted stock award under the 2022 Plan for 725,000 shares of common stock, which vested in full on the date of grant. |
| 2025-08-26 | Sanzonate promissory note ($819,766) converted into 415,584 shares. A 12% unsecured promissory note ($405,417) converted into 85,366 shares. A 12% unsecured promissory note ($579,167) converted into 243,902 shares. An OID promissory note ($532,181) converted into 126,829 shares. |
| 2025-08-27 | Burlington Note ($1,785,342) converted into 1,000,000 shares of common stock. Issued 200,000 shares to a service provider for legal services. |
| 2025-08-29 | Entered into an amended and restated sales agreement with Maxim Group LLC and Curvature Securities LLC for an at-the-market offering. Issued 90,172 shares upon cashless exercise of stock options. |
| 2025-09-02 | Issued 200,000 shares of common stock to a service provider for legal services. |
| 2025-09-05 | Completed an offering of pre-funded warrants for $175,000,420 gross proceeds. Adopted a digital asset treasury strategy focused on Dogecoin. Entered into an Executive Employment Agreement with Clayton Adams. Paid outstanding principal and accrued interest for Clayton Adams' note ($304,295), Travis Buchanan's note ($131,053), and ACME People Company's note ($10,217) in full. Issued warrants to Maxim Group LLC (3,150,008 shares), Curvature Securities LLC (2,100,005 shares), and Dogecoin Ventures, Inc. (8,750,021 and 5,250,013 shares). Granted restricted stock unit awards for 360,000 and 120,000 shares. |
| 2025-09-09 | Granted restricted stock awards under the 2022 Plan for 15,000 and 20,000 shares of common stock, which vested in full on the date of grant. |
| 2025-09-23 | 163,805,420 pre-funded warrants exercised for common stock. |
| 2025-09-25 | Granted a restricted stock award under the 2022 Plan for 175,000 shares of common stock, which vested in full on the date of grant. |
| 2025-10-06 | Granted a restricted stock unit award under the 2022 Plan for 94,340 shares of common stock. |
| 2025-10-13 | Filed Amended and Restated Articles of Incorporation, removing dual class structure and increasing authorized shares. 5,000,000 pre-funded warrants exercised on a cashless basis for 4,999,750 shares. Granted restricted stock awards under the 2022 Plan for 4,000,000 and 3,250,000 shares of common stock, which vested in full on the date of grant. |
| 2025-10-20 | Granted two restricted stock awards for an aggregate of 300,000 shares of common stock, which vested in full on the date of grant. |
| 2025-11-17 | Issued 4,000,000 shares of common stock to Dogecoin Ventures LLC. Granted a restricted stock award under the 2022 Plan for 6,000,000 shares of common stock, which vested in full on the date of grant. Entered into a strategic advisor agreement with Dogecoin Ventures LLC. |
| 2025-12-31 | End of the quarterly reporting period. Stockholders surrendered 909,621 shares for cancellation. Terminated a restricted stock award agreement and surrendered all shares granted on July 21, 2025. |
| 2026-01-01 | Issued 36,828 shares upon vesting of restricted stock units. |
| 2026-01-05 | Issued 40,000 shares upon vesting of restricted stock units. |
| 2026-02-05 | Issued 40,000 shares upon vesting of restricted stock units. |
| 2026-02-10 | As of this date, digital asset fair value is $67,937,151, representing an unrealized loss of $18,318,460 since December 31, 2025. Total 210,556,229 shares of common stock issued and outstanding. |
Recommendation
strong sellThe company's financial position is highly precarious, marked by a staggering net loss of $117.7 million, primarily due to an $88.7 million unrealized loss on its speculative Dogecoin holdings. Management explicitly states substantial doubt about the company's ability to continue as a going concern, indicating a severe liquidity crisis and reliance on uncertain future capital raises. Furthermore, the disclosure of ineffective internal controls raises significant governance and operational red flags. While the core cleaning business shows some revenue growth, it is completely overshadowed by the catastrophic losses and high-risk treasury strategy. This combination of severe financial distress, high operational risk, and governance issues makes the stock a strong sell for any seasoned investor.
Keywords
CleanCore Solutions, ZONE, Quarterly Report, 10-Q, Dogecoin, Digital Assets, Cryptocurrency, Aqueous Ozone, Cleaning Products, Financial Results, Net Loss, Going Concern, SEC Filing, Stock Compensation, Capital Raise, Internal Controls, Sanzonate Acquisition
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