CleanCore Solutions, Inc. Provides Business Update for the Third Quarter of Fiscal 2024 and Appoints Clayton Adams as Chief Executive Officer and Chairman of the Board
CleanCore Solutions, developer of aqueous ozone technology, reported a business update for Q3 FY2024 and appointed Clayton Adams as CEO and Chairman. Key highlights include completing an IPO with gross proceeds of $5 million, starting NYSE American trading on April 26, 2024, and securing new customer relationships and Green Seal certifications.
Despite a decrease in Q3 revenue to $0.3 million from $0.6 million in the same period of 2023, the company projects a 75% sales increase sequentially in Q4 2024. They attribute this to a shift from distributor to direct sales models and new customer pilots in major airports and hospitality groups. CleanCore is also set to benefit from PFAS chemical bans and holds a strong cash position post-IPO. However, net loss increased to $0.5 million due to higher advertising and administrative expenses.
- Projected 75% increase in Q4 2024 sales sequentially.
- Completed IPO with $5 million in gross proceeds.
- New customer pilots and installations in major airports and hospitality groups.
- Secured two new Green Seal certifications.
- Shift from distributor to direct sales model improving gross margins.
- Benefiting from PFAS chemical bans.
- Strong cash position post-IPO with $3.76 million in net proceeds.
- Q3 2024 revenue decreased to $0.3 million from $0.6 million in Q3 2023.
- Net loss increased to $0.5 million from $0.3 million due to higher expenses.
- Cash and cash equivalents were only $0.05 million at the end of Q3 2024.
Insights
CleanCore Solutions' third-quarter business update presents several key financial insights that retail investors should carefully consider. First, the company's revenue for Q3 2024 was $0.3 million, down from $0.6 million in Q3 2023. This decrease is attributed to a significant one-time order in the prior year. However, the company is transitioning from a distributor-based sales model to a direct sales model, which could stabilize and potentially grow revenues long-term. This strategic shift is reflected in the projected 75% sequential increase in Q4 2024 sales.
Additionally, CleanCore has $0.05 million in cash and cash equivalents as of March 31, 2024. While this appears low, the completion of the IPO brought in net proceeds of approximately $3.76 million. This influx of capital is critical for funding the company's aggressive growth strategies and mitigating liquidity risks.
However, the increase in net loss from $0.3 million to $0.5 million mainly due to higher advertising and administrative expenses post-IPO is a point of concern. Investors should monitor how effectively these expenditures translate into revenue growth and improved margins.
The company's gross margin improvement from moving to a direct sales model is noteworthy, but investors should be cautious until consistent profitability is demonstrated. The reliance on a few large orders can lead to revenue volatility, which needs to be mitigated through a broader customer base.
The appointment of Clayton Adams as CEO and Chairman marks a significant leadership change for CleanCore Solutions. Although management changes are often seen as non-impactful unless it's the CEO, Adams' previous experience in scaling and selling a company could be pivotal for CleanCore's growth trajectory. His industry contacts could open new sales channels and partnerships, expediting market penetration.
Moreover, the company's focus on environmentally friendly cleaning solutions positions it well to capitalize on the recent EPA ban on PFAS. This regulatory backdrop creates a favorable market environment for CleanCore's patented aqueous ozone technology, potentially accelerating adoption rates among environmentally conscious customers.
However, the market can be highly competitive and the company must differentiate its products effectively. The Green Seal certifications are a step in the right direction, but market acceptance will depend on demonstrable benefits in cost savings and efficiency for customers.
The company's engagement with major international airports and hospitality groups signals promising market traction. If these pilot programs convert into long-term contracts, they could serve as strong endorsements, driving further adoption.
Investors should keep an eye on how fast CleanCore can convert pilot programs into substantial revenue streams. Competition and execution risks are high, but the company's strategic initiatives seem promising at this stage.
Projects sales for Q4 2024 to increase more than
Omaha, NE, June 13, 2024 (GLOBE NEWSWIRE) -- CleanCore Solutions, Inc. (NYSE American: ZONE) (“CleanCore” or the “Company”), developer of the patented aqueous ozone technology that works as an all-purpose cleaner, today provided a business update, and reported financial results for the third quarter ended March 31, 2024. Additionally, the Company announces the appointment of Clayton Adams as Chief Executive Officer and Chairman of the Board of Directors.
Recent Highlights:
- Completed initial public offering resulting in gross proceeds of
$5 million - Began trading on NYSE American on April 26, 2024
- Expanded relationship with Harry Reid International Airport
- Poised to benefit from recent bans and restrictions on PFAS “forever chemicals”
- Installed Power Caddies at major northeastern international airport
- Granted two new and highly recognized Green Seal Certifications
Clayton Adams, newly appointed Chief Executive Officer of CleanCore, commented, “We have made important advancements over the last few months including completing our initial public offering, expanding our customer relationships, and receiving additional Green Seal® certifications. We believe we are at a major inflection point for the Company and are well positioned to cost-effectively deploy the capital from our IPO to accelerate our growth in a very meaningful way. In fact, we are already witnessing the benefits of our sales and marketing initiatives. We currently are projecting sales for the fourth quarter of 2024 to increase more than
“In terms of new pilots and customers, we are seeing some of the world’s largest companies pilot CleanCore’s product offering, seeking solutions for cost savings and a reduction in chemical spend. What we didn’t expect was the rate at which we would be implementing these trials. We have entered into agreements with major international airports, as well as hospitality management groups, both of which are ideal verticals for the deployment of our products. These customers have completed successful pilots of our products and have begun installing additional units throughout their large facilities. Importantly, we have received very positive feedback regarding our products as they are effective cleaning solutions and enable customers to reduce cleaning material costs and labor time while eliminating the use the harmful chemicals contained in traditional cleaning solutions. We are already witnessing traction within the market and expect increased adoption moving forward.”
“Furthermore, the U.S. Environmental Protection Agency (EPA) recently implemented a new ban and restriction on the use of Per-and Polyfluorinated Substances (PFAS), also known as “forever chemicals.” Forever chemicals have posed a persistent threat to ecosystems and human health due to their non-biodegradable nature and widespread use in various industrial and consumer products. In contrast, our patented aqueous ozone technology is compliant with the EPA Organic Program and has been granted Generally-Recognized-as-Safe (GRAS) approval by the U.S. Food and Drug Administration. To our knowledge, we are the only cleaning solutions company that has received three Green Seal® certifications, which we believe provides additional credibility and validation for our products. Moreover, our products meet the highest performance standards while adhering to all regulations, allowing us to lead the way in promoting environmental stewardship within our industry.”
“Finally, I am honored to take the helm as Chairman and Chief Executive Officer of the Company. We appreciate the hard work of Doug Moore in supporting the Company through the IPO and our transition to a public company. Moving forward, we are laser-focused on accelerating our growth strategy and implementing initiatives that we believe will propel us to the forefront of the industry. In particular, I look forward to leveraging my deep industry experience and contacts, which have already begun to yield meaningful results in growing our sales pipeline. At the same time, we continue to carefully manage our expenses and have identified additional opportunities to lower our cost of goods, which should further enhance our gross margins. We have also built a highly scalable business and expect to benefit from improved operating efficiencies as we continue to grow. Overall, we are very proud of our progress within a short period of time since closing our IPO. We believe we are on a path of significant growth as we continue to secure new customers and adoption of our products increases. With our current cash position, we believe we are well-capitalized to aggressively penetrate the market while creating significant value for shareholders.”
Larry Goldman, Audit Committee Chair, stated, “This is a very exciting time for CleanCore following the IPO and appointment of Clayton as the new Chief Executive Officer. I believe CleanCore may now have the necessary foundation to execute its strategy to achieve its full potential. I expect that Clayton will implement strategic growth initiatives for CleanCore and we look forward to his contributions. He has also invested significant capital in CleanCore, illustrating his alignment with shareholders.”
Mr. Adams previously served as President and as a member of the board of directors of CleanCore since September 2022. Since January 2020, Mr. Adams has served as Principal at Bird Dog Capital LLC, where he leads various investments. Mr. Adams gained experience developing the growth of small companies as Chief Executive Officer of Carson Enterprises, Inc. from March 2009 to February 2019. At Carson Enterprises, Inc., Mr. Adams expanded the company and successfully sold the company in February 2019.
Financial Results
Revenue for the three months ended March 31, 2024, was
Cash and cash equivalents as of March 31, 2024, were
Net loss for the three months ended March 31, 2024, was
About CleanCore Solutions
CleanCore Solutions, Inc. (NYSE American: ZONE) is dedicated to revolutionizing cleaning and disinfection practices by harnessing the power of its patented aqueous ozone technology. The Company’s mission is to empower its customers with cost-effective, sustainable solutions that surpass traditional cleaning methods. Through innovation and commitment to excellence, CleanCore strives to create a healthier, greener future for generations to come. For more information, please visit https://www.cleancoresol.com/.
Forward Looking Statements
This press release may contain information about our views of future expectations, plans and prospects that constitute forward-looking statements. All forward-looking statements are based on the management’s beliefs, assumptions, and expectations of CleanCore’s future economic performance, taking into account the information currently available to it. These statements are not statements of historical fact. Although CleanCore believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. CleanCore does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. Forward-looking statements are subject to a number of factors, risks and uncertainties, some of which are not currently known to us, that may cause CleanCore’s actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial position. Actual results may differ materially from the expectations discussed in forward-looking statements. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions and other risks set forth in “Risk Factors” included in our filings with the SEC.
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