CleanCore Solutions, Inc. (ZONE) - 10-Q Summary
Business Context and Reporting Period
Company: CleanCore Solutions, Inc.
Filing Type: Form 10-Q (Unaudited)
Period Ended: December 31, 2025
Business Overview: The Company operates two segments: (1) CleanCore Segment, developing aqueous ozone cleaning products; and (2) Treasury Segment, a digital asset strategy focused on Dogecoin adopted on September 5, 2025. The Company is classified as an Emerging Growth Company and a Smaller Reporting Company.
Key Financial Metrics
| Metric | Three Months Ended Dec 31, 2025 | Six Months Ended Dec 31, 2025 |
|---|---|---|
| Revenue | $1,068,851 | $1,973,608 |
| Gross Profit | $727,400 (68.1% margin) | $1,263,594 (64.0% margin) |
| Net Loss | $(104,360,352) | $(117,728,051) |
| Loss Per Share (Basic/Diluted) | $(0.51) | $(1.02) |
| Cash and Cash Equivalents | $7,403,390 (as of Dec 31, 2025) | |
| Restricted Cash | ||
| Digital Assets (Dogecoin) | $86,255,611 (Fair Value) | |
| Total Assets | $101,105,378 | |
| Total Liabilities | $7,286,512 | |
| Stockholders' Equity | $93,818,866 |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 315% ($811k) for the three months and 217% ($1.35M) for the six months compared to the prior year periods, driven by a new customer in the CleanCore segment.
- Operating Expenses: General and administrative expenses surged to $21.3M (3 months) and $29.9M (6 months), primarily due to $12.8M in professional fees and $6.5M in stock-based compensation related to the Treasury strategy.
- Digital Asset Impact: The adoption of the Dogecoin treasury strategy resulted in an unrealized loss of $83.7M (3 months) and $88.7M (6 months) due to the decline in Dogecoin fair value. This is the primary driver of the net loss.
- Balance Sheet Shift: Total assets increased from $8.5M to $101.1M, almost entirely due to the acquisition of $86.3M in Dogecoin. Cash increased from $1.5M to $7.4M following a $175M pre-funded warrant offering.
- Debt Reduction: The Company converted or repaid significant debt obligations, including notes to Burlington Capital, Sanzonate, and related parties, reducing total liabilities despite new warrant liabilities.
Guidance, Outlook, and Risks
- Going Concern Warning: Management explicitly states that a material uncertainty exists regarding the Company's ability to continue as a going concern for the next 12 months. Current resources are deemed insufficient to fund planned expenditures without additional financing.
- Capital Strategy: The Company is dependent on raising additional capital through equity or debt. Recent financing included a $175M pre-funded warrant offering (net proceeds ~$164M) and an "at-the-market" sales agreement allowing up to $1.15B in share sales.
- Digital Asset Volatility: The Company's financial condition is heavily exposed to the price volatility of Dogecoin. A significant decrease in price would materially adversely affect financial results.
- Internal Controls: Disclosure controls and procedures were deemed not effective due to material weaknesses in internal control over financial reporting, which are currently being remediated.
- Subsequent Events: As of February 10, 2026, the fair value of digital assets dropped to $67.9M, representing an additional unrealized loss of $18.3M since the period end.
Investor Verification Checklist
- Going Concern Status: Verify the timeline and likelihood of securing additional financing to sustain operations beyond the next 12 months.
- Digital Asset Valuation: Monitor the fair value of Dogecoin holdings, which constitute ~85% of total assets and drive the majority of reported losses.
- Revenue Quality: Assess the sustainability of the new customer driving the 315% revenue increase in the CleanCore segment.
- Dilution Risk: Review the impact of the $1.15B "at-the-market" facility and recent warrant exercises on existing shareholder equity.
- Internal Controls: Track the progress of remediation efforts for the identified material weaknesses in financial reporting.