CleanCore Solutions Reports Increased Net Loss and Revenue Growth Amid Rising Costs

CleanCore Solutions, Inc. reported its financial results for the six months ending December 31, 2024, revealing a net loss of $1.86 million, a significant increase from the $782,093 loss recorded in the same period the previous year. Revenue for the period rose to $622,168, up 6.52% from $584,090 in the prior year, primarily driven by increased sales to its largest customer, which saw an 80% increase. However, the company's gross profit margin declined sharply, with gross profit falling to $247,511, or 39.78% of revenue, compared to 51.32% in the previous year, largely due to increased costs associated with sales strategies and inventory management.

In the most recent quarter, CleanCore's revenue slightly decreased to $257,269 from $258,406 year-over-year. The cost of sales surged by 48.22% to $195,258, leading to a gross profit of $62,011, down 51.04% from the previous year. The company's operating expenses also rose dramatically, with general and administrative expenses increasing by 184.46% to $911,173, attributed to higher stock compensation, additional personnel costs, and increased professional fees. As a result, the net loss for the quarter was $1,005,030, compared to a loss of $344,799 in the same quarter of 2023.

Operationally, CleanCore has been focusing on expanding its distributor network and enhancing its product offerings, particularly in the janitorial and sanitation sectors. The company has also made strategic decisions to provide demonstration equipment at no cost to potential large customers, which has impacted its cost structure. As of December 31, 2024, the company had cash and cash equivalents of $560,489, a decrease from $2.02 million at the end of June 2024, reflecting significant cash outflows from operations.

The company’s balance sheet shows total assets of $6.13 million, down from $7.48 million in June 2024, with total liabilities increasing to $3.92 million. The stockholders' equity has also decreased significantly to $2.21 million from $3.74 million, primarily due to the accumulated deficit growing to $9.17 million. CleanCore's management has expressed concerns regarding its ability to continue as a going concern, indicating that additional capital will be necessary to fund operations and growth initiatives over the next 12 months.

Looking ahead, CleanCore Solutions plans to raise additional capital through equity and debt financing to support its business strategy. The company has initiated a unit offering aimed at accredited investors, which could generate up to $4 million in gross proceeds. However, management cautions that there is no assurance of successful financing, and the inability to secure such funding may adversely affect the company's financial condition and operations.