S-1/A: CleanCore Solutions Files for IPO, Aiming to List on NYSE American

CleanCore Solutions, a cleaning product developer, files for an initial public offering of its Class B common stock, planning to list on NYSE American under the symbol ZONE.

Summary

• CleanCore Solutions, Inc. has filed an S-1/A registration statement for an initial public offering of 1,250,000 shares of its Class B common stock.
• The company specializes in developing and manufacturing cleaning products that produce pure aqueous ozone for professional, industrial, and home use.
• They plan to list their Class B common stock on NYSE American under the symbol ZONE.
• The expected initial public offering price is between $4.00 and $6.00 per share.
• The company has two classes of common stock: Class A (ten votes per share) and Class B (one vote per share).
• Upon completion of the offering, Matthew Atkinson, one of the founders, will be able to exercise approximately 63% of the company's total voting power.
• CleanCore Solutions is considered an emerging growth company and a smaller reporting company, which allows them to comply with reduced public company reporting requirements.
• The company intends to use the net proceeds from the offering for debt repayment, research and development/intellectual property, working capital, and general corporate purposes.
• For the year ended June 30, 2023, the company generated pro forma revenues of $2,441,356 and a net loss of $5,343,271.
• For the six months ended December 31, 2023, the company generated revenues of $584,090 and a net loss of $782,093.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While the company is pursuing growth through an IPO and has patented technology, it also faces significant financial challenges, including recurring losses and the need for additional financing. The concentration of voting power and potential market volatility add to the uncertainty.

Positives

• The company possesses patented nanobubble technology for aqueous ozone production.
• The company's products are environmentally conscious, reducing packaging waste and water consumption.
• The company is targeting key industries such as healthcare, education, food service, and commercial buildings.
• The company has an exclusive licensing agreement for products sold in Europe.
• The company's products eliminate the need for harsh chemicals and reduce labor costs in janitorial services.

Negatives

• The company has incurred losses since its inception and may continue to experience losses in the future.
• The company will require additional financing to accomplish its business strategy.
• The company faces significant competition in the cleaning products market.
• The company's major customers account for a significant portion of its revenue, and the loss of any major customer could have a material adverse effect on its results of operations.
• The company has historically depended on a limited number of third parties to supply key raw materials to it and the failure to obtain a sufficient supply of these raw materials in a timely fashion and at reasonable costs could significantly delay its delivery of products.

Risks

• The company is an early-stage company with a limited operating history.
• The company may face significant challenges in obtaining market acceptance of its aqueous ozone cleaning products.
• The company may not be able to maintain a listing of its Class B common stock on NYSE American.
• The structure of the company's common stock has the effect of concentrating voting control with a single stockholder, which will limit or preclude your ability to influence corporate matters.
• The market price of the company's stock may be highly volatile, and you could lose all or part of your investment.
• Quality problems with, and product liability claims in connection with, the company's aqueous ozone machines could lead to recalls or safety alerts, harm to its reputation, or adverse verdicts or costly settlements, and could have a material adverse effect on its business, financial condition, and results of operations.

Future Outlook

The company expects to expand its distributor network, improve manufacturing processes, and prove the effectiveness of its products in restaurants, airports, and hotels. They believe the demand for their products and services will continue to grow.

Industry Context

The company operates in the global household cleaning market, the global food service market, the global commercial and residential laundry market, and the global health care market. There is a growing demand for green cleaning and eco-friendly products that are effective, safe, and sanitary.

Comparison to Industry Standards

• The company competes with traditional cleaning companies such as Proctor and Gamble and Unilever, which are companies that develop and manufacture traditional chemical cleaning products.
• The company also competes with companies in the aqueous ozone cleaning market such as Tennant Company, Tersano Inc., and Enozo Technologies Inc and O3 Waterworks.
• Each of these companies also produces devices to make aqueous ozone, and Tersano Inc. and Enozo Technologies Inc. produce aqueous ozone products for both personal and professional use.

Management Changes

Related Party Transactions

• On October 4, 2022, the company issued promissory notes to Matthew Atkinson and Clayton Adams for $104,450 each.
• On July 27, 2023, the company agreed to purchase approximately $105,607 worth of inventory from Nebraska C. Ozone, LLC, a related party business owned by Lisa Roskens.
• On September 13, 2023, the company signed an extension agreement with Burlington Capital, LLC, for the promissory note described elsewhere in this prospectus.

Stakeholder Impact

• Shareholders will experience dilution as a result of the IPO.
• Employees may benefit from the company's growth and expansion plans.
• Customers may benefit from the company's continued research and development efforts.
• Suppliers may benefit from the company's increased production and sales.
• Creditors may be impacted by the company's use of proceeds to repay debt.

Next Steps

• The company plans to list its Class B common stock on NYSE American under the symbol ZONE.
• The company intends to use the net proceeds from the offering for debt repayment, research and development/intellectual property, working capital, and general corporate purposes.
• The company plans to expand its marketing efforts to increase awareness of its products.
• The company anticipates evolving the business model into a hybrid of both traditional distributors and a direct sales model with key salespeople penetrating the health care, education, food service, and commercial buildings industries.

Key Dates

Keywords

aqueous ozone, cleaning products, nanobubble technology, initial public offering, Class B common stock, NYSE American, emerging growth company, CleanCore Solutions