ZONE 10-K
Zone Frontier Inc. (ZONE)
UNITED STATES
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement relating to its 2026 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The registrant’s definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
Zone Frontier Inc. (formerly CleanCore Solutions, Inc.)
Annual Report on Form 10-K
Year Ended June 30, 2026
TABLE OF CONTENTS
i
INTRODUCTORY NOTES
Use of Terms
Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “us,” “our” and “our company” refer to Zone Frontier Inc. (formerly CleanCore Solutions, Inc.), a Nevada corporation, and its wholly owned subsidiary CleanCore Global Limited, an Irish company, or CleanCore Global.
Special Note Regarding Forward-Looking Statements
This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
| ● | our goals and strategies; |
| ● | our future business development, financial condition and results of operations; |
| ● | expected changes in our revenue, costs or expenditures; |
| ● | growth of and competition trends in our industry; |
| ● | our expectations regarding demand for, and market acceptance of, our products and services; |
| ● | our expectations regarding our relationships with investors, institutional funding partners and other parties we collaborate with; |
| ● | fluctuations in general economic and business conditions in the market in which we operate; and |
| ● | relevant government policies and regulations relating to our industry. |
In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A “Risk Factors” and elsewhere in this report. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
The forward-looking statements made in this report relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
ii
PART I
| ITEM 1. | BUSINESS. |
Overview
Zone Frontier Inc., formerly CleanCore Solutions, Inc. (the “Company”, “we”, or “Zone”) is helping to build the critical infrastructure that powers the AI economy. We aim to meet the increasing demand for compute capacity, power, and digital infrastructure required by the world’s leading AI companies.
We specialize in providing powered land and state-of-the-art data center facilities, in conjunction with our development partners, with a goal to support over one gigawatt of computer power by 2030. With campuses being planned and developed across rural and industrial Texas and Minnesota, Zone intends to continue to steadily expand its project portfolio across the United States while diversifying its customer, development partner and supplier base over time. On June 8, 2026, the Company announced a new focus on building critical AI infrastructure across the United States, led by its new CEO Tyler Hassen, and plans to move away from its cleaning products business and Dogecoin treasury strategy.
During the twelve months ended June 30, 2026, the Company operated three Segments:
| ● | CleanCore, which specializes in the development and production of cleaning products that produce pure aqueous ozone using patented nanobubble technology that is highly effective in cleaning, sanitizing, and deodorizing surfaces and high-touch areas |
| ● | Treasury, established on September 5, 2025 when the Company adopted a Digital Asset Trading strategy focused on Dogecoin as part of a $175 million private placement offering. |
| ● | Critical AI Infrastructure, announced on June 8, 2026, focused on building data centers to meet the increasing compute needs of AI companies |
The CleanCore segment specializes in the development and production of cleaning products that produce pure aqueous ozone for professional, industrial, or home use. We have patented nanobubble technology using aqueous ozone that we believe is highly effective in cleaning, sanitizing, and deodorizing surfaces and high-touch areas. 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.
As noted by the U.S. Environmental Protection Agency, or the EPA (“Wastewater Technology Fact Sheet: Ozone Disinfection,” September 1999), ozone has been used in water treatment facilities to remove pathogens from water for decades. However, ozone was not safe for traditional cleaning because the gas alone can be harmful when inhaled. In recent years, ozone has been found to become a powerful cleaning solution if infused into tap water, which then creates a solution called aqueous ozone. Once the ozone is added into the water, the resulting solution is safe to handle, yet continues to hold the effective cleaning and oxidizing components of ozone.
Our product offerings utilize patented technology that we believe produces an enhanced aqueous ozone solution that requires no additives, filters, or advanced chemicals. We believe that we are the only company that has an aqueous ozone solution that is produced in the form of nanobubbles. In a critical review from Environmental Science Nano (“Disinfection applications of ozone micro- and nanobubbles,” November 2, 2021) authors Petroula Seridou and Nicolas Kalogerakis explain that since its discovery in the 1990’s, nanobubbles have been used to remove pollutants in many industries, including biopharma and food processing. Nanobubbles are nanometer-sized (one billionth of a meter) gaseous cavities in a liquid solution. The common micro sized bubbles have larger diameters which causes them to rise quickly to the surface of an aqueous solution as compared to the smaller bubbles.
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Since nanobubbles have no natural buoyancy, they remain underwater, where each tiny, negatively charged bubble is attracted to positively charged pollutants and harmful toxins. In the article, Seridou and Kalogerakis write about how this union causes the nanobubbles to release ozone which extinguishes pathogens and slowly breaks down the cell walls of mold, germs, and other residues. Further, a smaller size of nanobubbles is also more effective as they have a higher density of ozone and are able to provide a more thorough surface coverage, which destroys a higher number of contaminants.
Our pure aqueous ozone product is a natural cleaner, sanitizer, and deodorizer produced through the infusion of ozone into water using electricity. The use of this ozone solution has been proven effective in eliminating germs, viruses, bacteria, allergens, and molds; and it performs better than bleach according to a research report published by PLoS One (“The microbial killing capacity of aqueous and gaseous ozone on different surfaces contaminated with dairy cattle manure,” May 14, 2018). Aqueous ozone technology has been tested and previously destroyed pathogens including E. Coli, Staphylococcus, Listeria, and Salmonella as described in Catalyst journal (“Ozone and Photocatalytic Processes for Pathogens Removal from Water: A Review,” January 5, 2019). The solution cleans hard surfaces, floors, carpets, upholstery, and food contact surfaces.
In addition, in an independent case study at Cape Coral Hospital in Florida, the aqueous ozone solution worked to significantly deodorize smells. The same internal case study notes that the aqueous ozone does not mask smells, but instead destroys the bacterium causing the smell.
Our aqueous ozone solution is referred to as “pure” because of its ability to keep high concentration of ozone in the solution without needing to use a stabilizer or additive. Depending on the product, the pure aqueous ozone solution contains between 0.5 to 1.5 parts per million, or ppm, of ozone for professional cleaning and up to 20 ppm of ozone for industrial cleaning. At these levels, we believe the concentration of ozone within the solution is strong enough to effectively clean and deodorize better than bleach.
The Treasury segment started on September 5, 2025, when the Company adopted a digital asset treasury strategy focused on Dogecoin. Pursuant to an asset management agreement that the Company entered into with Dogecoin Ventures, Inc. (the “Asset Manager”) and 21Shares US LLC (“21Shares”), on September 5, 2025 (the “Asset Management Agreement”), the Company established a multiyear advisory and asset-management program with the Asset Manager (which is a wholly-owned subsidiary of House of Doge Inc., the commercial arm of the Dogecoin Foundation) and 21Shares to manage the Company’s treasury assets, which include available cash or digital assets placed in the Company’s account to be utilized for such purpose (the “Treasury Account”), as well as all investments thereof, proceeds of, income on and additions or accretions to the same, including all assets which are or were in the Treasury Account, but which are deployed in decentralized finance or similar blockchain transactions from time to time in accordance with the investment strategy described in the Asset Management Agreement (the “Treasury Assets”).
On June 8, 2026, the Company announced plans to sell or dispose substantially all assets of the cleaning products business, including the wholly owned Irish subsidiary, CleanCore Global Limited. The Company is in the process of selling this business unit but is not under binding contract with any party as of September 28, 2026. The segment did not meet the criteria as Held for Sale as of June 30, 2026 and is included in this Report.
On July 9, 2026, the Company announced its first data center project. Located in West Texas, and with development platform provider HST Technologies, Inc., the company’s plan projects the initial phase to supply 200-megawatts of critical IT utility load to tenants by early 2029, with initial revenue expected in the first half of the calendar year 2028 as part of a phased approach. The project has the potential to expand to more than 500-megawatts by 2030.
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On July 20, 2026, substantially all Dogecoin assets were sold. The proceeds will be used to fund the Company’s AI strategy.
On July 29, 2026, the Company announced its second data center project, a 40-megawatt critical IT load campus located in Minnesota with a fully executed tenancy agreement with Cerebras Systems, a leading AI compute company. The site is currently under construction, and the Company expects to bring approximately at least 55-megawatts of utility power capacity and 40-megawatts of critical IT load fully online by the end of the second calendar quarter of 2027. Revenue is expected to steadily increase in the first half of 2027. The initial contract value is over $800 million dollars for a ten-year commitment with potential to reach over $3 billion dollars in aggregate revenue if two ten-year extension options are exercised by Cerebras.
On August 31, 2026, the Company changed its name from CleanCore Solutions Inc. to Zone Frontier Inc.
Corporate History and Structure
We were incorporated in the State of Nevada on August 23, 2022 under the name CC Acquisition Corp. for the sole purpose of acquiring substantially all of the assets of CleanCore Solutions, LLC, a Delaware limited liability company, or CleanCore LLC, TetraClean Systems, LLC, a Delaware limited liability company, or TetraClean, and Food Safety Technology L.L.C., a Delaware limited liability company, or Food Safety. On November 21, 2022, we changed our name from CC Acquisition Corp. to CleanCore Solutions, Inc.
On October 17, 2022, we entered into an asset purchase agreement with CleanCore LLC, TetraClean, Food Safety and Burlington Capital, LLC, or Burlington, the majority owner of these entities, pursuant to which we acquired substantially all of the assets of CleanCore LLC, TetraClean and Food Safety for a total purchase price of $5,000,000, consisting of $2,000,000 in cash and the issuance of a promissory note in the principal amount of $3,000,000.
The predecessor of CleanCore LLC was CleanCore Technologies, LLC, which was formed in 2014 and was wholly owned by Center Ridge Holdings, LLC. CleanCore LLC was formed in 2019 by Burlington and Walker Water, LLC d/b/a O-Z Tech. In 2019, prior to the formation of CleanCore LLC, Center Ridge Holdings, LLC transferred substantially all of the assets of CleanCore Technologies, LLC to Burlington, which then transferred such assets to CleanCore LLC. TetraClean and Food Safety were created to focus on industrial and food safety, respectively. CleanCore LLC, TetraClean, and Food Safety were all under majority control by Burlington prior to the acquisition by CC Acquisition Corp. All discussions in this report regarding our business prior to the acquisition reflect the combined business of CleanCore LLC, TetraClean, and Food Safety, our predecessor companies. Prior to the acquisition, we had no operations other than operations relating to our incorporation and organization. On January 29, 2025, we established CleanCore Global as a wholly owned subsidiary in Ireland.
On February 21, 2025, CleanCore Global entered into an asset purchase agreement, which was amended on April 15, 2025, with Sanzonate Europe Ltd., an Irish incorporated company, or Sanzonate, and Sanzonate Global Inc., the majority stockholder of Sanzonate, pursuant to which on April 15, 2025 CleanCore Global acquired substantially all of the assets of Sanzonate used in the manufacturer and distribution of aqueous ozone products for an aggregate purchase price of $2,475,000, consisting of: (i) $425,000 in cash; (ii) the issuance of a promissory note in the principal amount of $800,000; and (iii) up to $1,250,000 in Earn-Out Payments (as defined below). As additional consideration, we issued to Sanzonate Global Inc. a five-year warrant to purchase 425,000 shares of our common stock at an exercise price of $1.25 per share.
Sanzonate is also entitled to receive the following payments (which we refer to as the Earn-Out Payments) to the extent that Net Sales (as defined in the asset purchase agreement) achieve the following milestones during the five-year period beginning on the closing date and ending on the fifth anniversary of the closing date. If Net Sales are at least (i) €2,000,000, CleanCore Global shall pay $200,000 to Sanzonate; (ii) €4,000,000, CleanCore Global shall pay an additional $200,000 to Sanzonate; (iii) €6,000,000, CleanCore Global shall pay an additional $200,000 to Sanzonate; (iv) €8,000,000, CleanCore Global shall pay an additional $200,000 to Sanzonate; (v) €10,000,000, CleanCore Global shall pay an additional $200,000 to Sanzonate; and (vi) €12,000,000, CleanCore Global shall pay an additional $250,000 to Sanzonate.
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As of the date of this report, CleanCore Global is our only subsidiary. On September 5, 2025, we adopted a digital asset treasury strategy focused on Dogecoin. Pursuant to an asset management agreement that we entered into with Dogecoin Ventures, Inc., or the Asset Manager, and 21Shares US LLC, or 21Shares, on September 5, 2025, or the Asset Management Agreement, we established a multiyear advisory and asset-management program with the Asset Manager (which is a wholly-owned subsidiary of House of Doge Inc., the commercial arm of the Dogecoin Foundation) and 21Shares to manage our treasury assets, which include available cash or digital assets placed in our account to be utilized for such purpose, or the Treasury Account, as well as all investments thereof, proceeds of, income on and additions or accretions to the same, including all assets which are or were in the Treasury Account, but which are deployed in decentralized finance or similar blockchain transactions from time to time in accordance with the investment strategy described in the Asset Management Agreement (which we refer to as the Treasury Assets). As of February 27, 2026, all asset management agreements have been terminated but the Company maintains a portfolio of Dogecoin. See Note 10 for more information.
On June 8, 2026, the Company announced plans to sell or dispose substantially all assets of the cleaning products business, including the wholly owned Irish subsidiary, CleanCore Global Inc. The Company is in the process of selling this business unit but is not under binding contract with any party as of September 28, 2026. The segment did not meet the criteria as Held for Sale as of June 30, 2026 and is included in this Report.
On June 8, 2026, the Company also announced a new focus on building AI Critical Infrastructure and plans to dispose of the Cleaning Products business and digital asset treasury strategy. On July 9, 2026, the Company closed on its first data center campus, located in West Texas. On July 23, 2026, a second campus acquisition, located in Minnesota, was completed.
On August 31, 2026, the Company changed its name from CleanCore Solutions Inc. to Zone Frontier Inc.
Products, Raw Materials, and Suppliers
We build and manage data centers to power the AI economy. We specialize in bringing powered land and state-of-the-art data center facilities, in conjunction with development partners, to support the growing need for compute to power the next generation of Artificial Intelligence. During the twelve months ended June 30, 2026, we did not purchase any products or materials for the AI segment.
The Company’s Cleaning Products business, offers products and solutions marketed for janitorial and sanitation, ice machine cleaning, laundry, and industrial industries using patented aqueous ozone technology, that consist of wall-mounted and mobile units. The products, components, and raw materials were sourced and assembled both domestically and overseas, and shipped from our facilities in Omaha, Nebraska and Dublin, Ireland. While the Cleaning Products business uses a variety of vendors, it sources many of its finished products from one vendor. The Company had a contingency plan in place to use other vendors, if necessary, which could result in production delays.
The Company implemented strict quality control and inventory control systems and the manufacturing operations were designed to allow low-cost production of a wide variety of products of different quantities, physical sizes and packaging formats.
The Treasury segment did not purchase any products or raw materials from suppliers in the twelve months ended June 30, 2026.
Sales, Marketing, and Customers
The Company markets itself to prospective tenants of its data centers through referrals and its website, in conjunction with targeted outreach and public relations campaigns. The Minnesota campus is leased exclusively to one customer, Cerebras, in a binding ten year contract with the option for two addition ten-year renewal periods. For other and future data center campuses, we may lease to one or more tenants. The Company also markets itself to powered landowners and developers using its website.
The Cleaning Products business sold most of its products through distributors and directly to end customers. For the year ended June 30, 2026, two customers accounted for 27% and 16% of revenue, respectively, and two customers accounted for 18% and 16% of all accounts receivable at June 30, 2026. For the year ended June 30, 2025, two customers, accounted for 42% and 17% of revenue, and one customer accounted for 47% of all accounts receivable at June 30, 2025.
The Treasury segment’s assets were bought and sold on public exchanges and it did not enter into any direct sales to customers in the twelve months ended June 30, 2026.
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The loss of any major customer could have a material adverse effect on our results of operations. See Item 1A “Risk Factors—Risks Related to Our Business and Industry—Our major customers account for a significant portion of our revenue and the loss of any major customer could have a material adverse effect on our results of operations.”
Competition
The AI Critical Infrastructure industry is evolving rapidly with many new competitors entering the market, in addition to several very large and well capitalized established data center operators. Our competitors include many established BTC mining operators that are converting large power footprints into AI data centers. Our ability to compete in the market is dependent upon finding suitable land and power, long-term tenants, availability of key equipment, increasing demand for compute, adequate funding, public sentiment, and government regulation.
The janitorial services industry is highly competitive and has many established, large and small global competitors. We compete against a wide range of cleaning-focused businesses, some of which may be larger, have larger customer bases, greater brand recognition and operating histories, a dominant or more secure position, broader geographic scope, volume, scale, resources, and more market share than we do, or offer products and services we did not offer. Other competitors are smaller, younger, companies that may be more agile in responding quickly to new products or changes in the market. The Company is in the process of selling this business unit but is not under binding contract with any party as of September 28, 2026. The crypto currency market is highly competitive and subject to volatility relating to changing investor sentiment, government regulation, and payment acceptance by the broader community. The Company exited this strategy on July 20, 2026.
Competitive Strengths
We believe that the following competitive strengths contribute to our success and differentiate us from our competitors:
| ● | Contracted anchor tenant at our flagship project. Our Minnesota project is supported by a multi-year colocation agreement with Cerebras Systems, a leading AI compute company with a growing deployment footprint. Securing a creditworthy tenant prior to construction reduces speculative development risk and anchors project-level financing. We believe our ability to attract and retain high-quality tenants is central to the success of our AI infrastructure business. |
| ● | $100 million equity commitment. In August 2026, we raised $100 million through a public offering of common stock and warrants to fund our equity commitment to the Minnesota project. |
| ● | Power-first site strategy in rural and industrial markets. We target sites where power availability, interconnection timing, and permitting favor speed to market, rather than competing for constrained capacity in established data center hubs. Our Minnesota site benefits from existing power capacity, which we believe shortens our path to delivery. We are evaluating additional sites in Texas, North Dakota, and other states. |
| ● | Aligned development partners with local execution experience. We develop projects with experienced data center developers and operators under structures that tie partner compensation to on-time, on-budget delivery, and that provide us with opportunities to partner on future projects. Our Minnesota partner has a multi-year operating history in the local market, including established relationships with utilities, municipal authorities, and contractors. |
| ● | Management team with capital allocation and multi-sector operating experience. Our leadership has experience in energy, infrastructure, industrial manufacturing, and government service, which we believe enables disciplined capital allocation and efficient deployment of invested capital into revenue-generating projects. |
| ● | Public-company platform. As an NYSE American-listed company, we have access to public equity and debt capital markets and the ability to use our equity as currency for future site acquisitions and partnerships. |
Growth Strategies
The key elements of our strategy to grow our business include:
| ● | Deliver our flagship Minnesota project on schedule. Our 40-megawatt Minnesota project is under construction and is expected to be delivered in phases beginning in the first calendar quarter of 2027, with revenue commencing upon customer acceptance of each phase. Successful delivery of this project is our near-term priority and is intended to establish our operating track record, our relationship with our anchor tenant, and our access to project-level debt financing. |
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| ● | Expand our pipeline of power-enabled sites. We are evaluating additional data center campus opportunities in Texas, North Dakota, and other states, prioritizing sites with available or near-term power capacity, favorable interconnection timelines, and constructive permitting environments. We intend to advance the most attractive of these sites toward development as tenant demand and capital availability permit. |
| ● | Grow with our tenants. We seek to structure customer agreements with expansion rights and to develop sites with capacity for additional phases, so that we can grow our contracted capacity with existing tenants. |
| ● | Scale through development partnerships. We partner with established developers and operators with technical teams and local market expertise. This allows us to enter new markets and pursue multiple projects concurrently while retaining a lean organization, and to align partner economics with project delivery. We intend to pursue additional projects with existing partners and to add partners in new geographies. |
| ● | Finance future projects at the asset level. We intend to fund future projects through a combination of project-level equity, project-level debt, corporate equity, and, where available, customer-funded milestone payments, with the goal of reducing our corporate equity contribution per project and increasing the number of projects we can develop with a given capital base. |
Research and Development
For the Cleaning business, we conduct research and development into specific product applications across our core janitorial and sanitation product line, specifically aligning our direct sales and support strategy by evolving the existing product lines to capture new “real time” testing evaluations.
Previously, we conducted an adenosine triphosphate study on the Clemson University Core buildings to determine the cleaning effect of aqueous ozone and our products.
Intellectual Property
As of June 30, 2026, we held 15 patents, including 10 in the United States, 1 in Mexico and 4 in Canada. These patents covered the functions of our products that allow our machines to produce the ozone in the form of nanobubbles. Each of our United States patents are utility patents, and were owned by us. We did not license any patents.
| Patent Title | Patent Number | Jurisdiction | Expiration Year | |||
| Ozone Cleaning System | 2680331 | Canada | 2028 | |||
| Ozone Cleaning System | 320909 | Mexico | 2028 | |||
| Ozonated Liquid Dispensing Unit | 10479683 | United States | 2028 | |||
| Reaction Vessel for an Ozone Cleaning System | 8075705 | United States | 2029 | |||
| Aqueous Ozone Solution for Ozone Cleaning System | 8071526 | United States | 2029 | |||
| Aqueous Ozone Solution for Ozone Cleaning System | 8735337 | United States | 2029 | |||
| Ozonated Liquid Dispensing Unit | 9174845 | United States | 2029 | |||
| Ozone Cleaning System | 9068149 | United States | 2030 | |||
| Ozonated Liquid Dispensing Unit | 9522348 | United States | 2030 | |||
| System for Producing and Distributing an Ozonated Fluid | 2802307 | Canada | 2031 | |||
| Ozonated Liquid Dispensing Unit | 2802311 | Canada | 2031 | |||
| Ozonated Liquid Dispensing Unit | 2896332 | Canada | 2034 | |||
| Method and Systems for Controlling Microorganisms | 9670081 | United States | 2035 | |||
| Apparatus for Generating Aqueous Ozone | 11033647 | United States | 2039 | |||
| Apparatus for Generating Aqueous Ozone | 11660364 | United States | 2039 |
To protect our intellectual property, we rely on a combination of laws and regulations, as well as contractual restrictions. We relied on Federal patent laws to protect our intellectual property, including our patented technology. We also relied on the protection of laws regarding unregistered copyrights for certain content we created and trade secret laws to protect our proprietary technology. To further protect our intellectual property, we entered into confidentiality agreements with our executive officers and directors.
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Employees
We seek to attract and retain quality employees.
As of June 30, 2026, we had 18 full time employees, 16 of whom were in the United States and 2 of whom were in Ireland. Sixteen employees were assigned to the Cleaning business, 2 to the AI business, and none to the Treasury business. None of our employees are represented by labor unions, and we believe that we have an excellent relationship with our employees.
Government Regulation
The artificial intelligence and data center industry is rapidly evolving, and we may be subject to future regulations at the federal, state, and local level. We believe we are in compliance with all government regulations as of June 30, 2026.
The cleaning business is subject to regulation by multiple U.S. government agencies, including the EPA. Our EPA registration establishment number was 090379-NE-001.We were also subject to regulation by the U.S. Food and Drug Administration, or the FDA, for the use of ozone for water treatment as well as its use as an antimicrobial agent for the treatment, storage, and processing of foods.
The application, interpretation, and enforcement of U.S. and foreign laws and regulations are often uncertain, particularly in the rapidly evolving industry in which we operate and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices. Any existing or new legislation applicable to our operations could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations, to respond to regulatory inquiries or investigations, and to defend individual or class litigation. These events could dampen growth in the use of the internet in general and cause us to divert significant resources and funds to addressing these issues, and possibly require us to change our business practices.
| ITEM 1A. | RISK FACTORS. |
An investment in our securities involves a high degree of risk. You should carefully read and consider all of the risks described below, together with all of the other information contained or referred to in this report, before making an investment decision with respect to our securities. If any of the following events occur, our financial condition, business and results of operations (including cash flows) may be materially adversely affected. In that event, the market price of our stock could decline, and you could lose all or part of your investment.
Risks Related to Our Business and Industry
We are an early-stage company with a limited operating history.
We are an early, startup stage company with a limited history upon which you can evaluate our business and prospects. Our prospects must be considered in light of the risks encountered by companies in the early stages of development in highly competitive markets. You should consider the frequency with which early-stage businesses encounter unforeseen expenses, difficulties, complications, delays and other adverse factors. These risks are described in more detail below.
We have incurred losses since our inception, and we may not be able to manage our business on a profitable basis.
We have generated losses since inception and have relied on cash on-hand, sales of securities, proceeds from our initial public offering, external bank lines of credit, and issuance of third-party and related party debt to support our operations. For the year ended June 30, 2026, we generated an operating loss of $57,978,720 and a net loss of $174,160,864. The revenue and income potential of our business and market are unproven. This makes an evaluation of our company and its prospects difficult and highly speculative. There can be no assurances that we will be able to construct our data centers on a timely and cost effective basis, that we will be able to generate any increase in revenues, that we will have adequate financing or resources to continue operating our business and to provide services to customers, that we will earn a profit, that we can raise sufficient capital to support operations by attaining profitability, or that we can satisfy future liabilities.
Our auditors have issued a going concern opinion on our audited consolidated financial statements.
The report of our independent registered public accounting firm that accompanies our consolidated financial statements for the year ended June 30, 2026 contains a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern, based on the financial statements at that time. We have generated losses since inception and have relied on cash on-hand, sales of securities, proceeds from our initial public offering, external bank lines of credit, and issuance of third-party and related party debt to support cashflow from operations. As of June 30, 2026, we had cash of $15,435,213, a net loss of $174,160,864, working capital of $17,828,233, and cash used in operating activities of $18,157,390. Management believes that currently available resources may not be sufficient to fund our planned expenditures over the next 12 months. These factors, individually and collectively, indicate that a material uncertainty exists that raises substantial doubt about our company’s ability to continue as a going concern for 12 months from the balance sheet date as of June 30, 2026.
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We will be dependent upon the raising of additional capital through equity and/or debt financing in order to implement our business plan and generate sufficient revenue in excess of costs. If we raise additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock. If we raise additional funds by issuing debt, we may be subject to limitations on its operations, through debt covenants or other restrictions. There is no assurance that we will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on our financial condition. The accompanying consolidated financial statements have been prepared on a going concern basis under which our company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business and do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should we be unable to continue as a going concern. If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment our company.
We will require additional financing to accomplish our business strategy.
We require substantial capital to fund our business development plans. We anticipate the possibility of having to raise additional funds in order to achieve our plans and accomplish our longer-term business strategy. These additional funds likely will be raised through the issuance of our securities in debt and/or equity financings. If we are unable to raise these additional funds on terms acceptable to us, we will be required to limit our expenditures for continuing our product development activities, or find alternatives to fund our business on terms that are not as favorable to us. Any such actions would impair our product development and expansion plans, reduce potential revenues, and adversely affect the value of our company.
We cannot accurately predict future revenues or profitability in the emerging market for aqueous ozone technology.
The market for alternative green cleaning supplies is rapidly evolving. As is typical of a rapidly evolving industry, demand, and market acceptance for recently introduced products are subject to a high level of uncertainty. Moreover, since the market for our products is evolving, it is difficult to predict the future growth rate, if any, and size of this market. Because of our limited operating history and the emerging nature of the markets in which we compete, we are unable to accurately forecast our revenues or our profitability. The market for our products and the long-term acceptance of our products are uncertain, and our ability to attract and retain qualified personnel with industry expertise, particularly sales and marketing personnel, is uncertain. To the extent we are unsuccessful in increasing revenues, we may be required to appropriately adjust spending to compensate for any unexpected revenue shortfall, or to reduce our operating expenses, causing us to forego potential revenue generating activities, either of which could have a material adverse effect on our business, results of operations and financial condition.
If we fail to properly manage our anticipated growth, our business could suffer.
The planned growth of our commercial operations may place a significant strain on our management and on our operational and financial resources and systems. To manage growth effectively, we will need to maintain a system of management controls, and attract and retain qualified personnel, as well as develop, train and manage management-level and other employees. Failure to manage our growth effectively could cause us to over-invest or under-invest in infrastructure, and result in losses or weaknesses in our infrastructure, which could have a material adverse effect on our business, results of operations, financial condition and cash flow. Any failure by us to manage our growth effectively could have a negative effect on our ability to achieve our development and commercialization goals and strategies.
We operate in new and rapidly changing markets, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.
The market for data centers is a rapidly changing market, characterized by changing technologies, high capital needs, the introduction of new competitors, evolving industry standards, and changing and diverse regulatory environments. Our inability to anticipate these changes and adapt our business and offerings could undermine our business strategy and impact our expected revenue growth and profitability over the next several years.
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We expect one major customer to account for all our revenue and the loss of that customer could have a material adverse effect on our results of operations.
For the year ended June 30, 2026, two customers accounted for 27% and 16% of revenue, and two customers that accounted for 18% and 16% of all accounts receivable at June 30, 2026. For the year ended June 30, 2025, two customers accounted for 42% and 17% of revenue, and one customer accounted for 47% of all accounts receivable at June 30, 2025.
For the AI Critical Infrastructure segment, our flagship Minnesota data center has already been fully leased out to one customer on a ten-year term, with two ten-year renewal period options. Our results of operations and ability to service our debt obligations would also be impacted negatively to the extent that this customer is unable to make payments to us or does not make timely payments on outstanding accounts receivable.
We depend on a limited number of third parties to supply key equipment, raw materials, and labor to us to build our data centers, and the failure to obtain a sufficient supply of these inputs in a timely fashion and at reasonable costs could significantly delay our delivery of services. These inputs could also increase in price, reducing the expected profitability.
Equipment used to build and operate data centers can be highly customized, expensive, require long lead times, and available from a small number of vendors, for which there can be high demand. Failure to secure critical equipment could result in delays or inability to generate revenue.
Changes to U.S. trade policy, tariff and import/export regulations may adversely affect our operating results.
The United States has recently enacted and/or proposed to enact significant new tariffs on goods imported from numerous countries. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs.
For the AI Critical Infrastructure business, all our suppliers are domestic and we are not aware of any material exposure to raw materials, components, or finished goods that could be subject to tariffs.
We are closely monitoring these developments and evaluating strategies to mitigate potential impacts.
Furthermore, as a result of policy changes and government proposals, there may be greater restrictions and economic disincentives on international trade in general. The new tariffs and other changes in U.S. trade policy have triggered retaliatory actions by affected countries, and foreign governments have instituted or are considering imposing trade sanctions on U.S. goods. Such changes have the potential to adversely impact the U.S. economy or sectors thereof, our industry and the demand for our products, and as a result, could have a negative impact on our business, financial condition and results of operations.
We rely on utility inputs from a variety of sources to power our data centers. If our fulfillment operations are interrupted for any significant period or are not sufficient to accommodate our facilities, our sales could decline, and our reputation could be harmed.
Our data centers receive power from grid providers, renewable sources, and backup generators. If we do not successfully provide adequate power capabilities, our sales could decline. Our data centers also require significant water resources. If we are not able to source adequate water for use in our data centers, that could impact compute capacity and our sales could decline.
In addition, our data centers and computer systems are susceptible to damage or interruption from weather, human error, pandemics, fire, flood, power loss, telecommunications failures, hackings, terrorist attacks, acts of war, break-ins, earthquakes and similar events. We maintain back-up power systems but they may not be sufficient, depending on the duration of interruption. We do not presently have a formal disaster recovery plan and our business interruption insurance may be insufficient to compensate us for losses that may occur in the event operations at our data centers are interrupted. In addition, alternative arrangements may not be available, or if they are available, may increase the cost of fulfillment. Any interruptions in our operations for any significant period of time, including interruptions resulting from the expansion of our existing facilities or the transfer of operations to a new facility, could damage our reputation and brand and substantially harm our business and results of operations.
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Security threats, such as ransomware attacks, to our IT infrastructure could expose us to liability, and damage our reputation and business.
It is essential to our business strategy that our technology and network infrastructure remain secure and is perceived by our customers to be secure. Despite security measures, however, any network infrastructure may be vulnerable to cyber-attacks. Information security risks have significantly increased in recent years in part due to the proliferation of new technologies and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign private parties and state actors. We may face cyber-attacks that attempt to penetrate our network security, including our data centers, to sabotage or otherwise disable our website, misappropriate our or our customers’ proprietary information, which may include personally identifiable information, or cause interruptions of our internal systems and services. If successful, any of these attacks could negatively affect our reputation, damage our network infrastructure and our ability to sell our services, harm our relationship with customers that are affected and expose us to financial liability.
We maintain a comprehensive system of preventive and detective controls through our security programs; however, given the rapidly evolving nature and proliferation of cyber threats, our controls may not prevent or identify all such attacks in a timely manner or otherwise prevent unauthorized access to, damage to, or interruption of our systems and operations, and we cannot eliminate the risk of human error or employee or vendor malfeasance.
In addition, any failure by us to comply with applicable privacy and information security laws and regulations could cause us to incur significant costs to protect any customers whose personal data was compromised and to restore customer confidence in us and to make changes to our information systems and administrative processes to address security issues and compliance with applicable laws and regulations. In addition, our customers could lose confidence in our ability to protect their personal information, which could cause them to stop shopping on our sites altogether. Such events could lead to lost sales and adversely affect our results of operations. We also could be exposed to government enforcement actions and private litigation.
We face significant competition.
We believe that our success will depend heavily upon attracting and retaining tenants. Current and new competitors, however, may be able to develop and introduce better or more desirable facilities in advance of us or at a lower cost. In addition, some of our current and potential competitors have longer and/or more established operating histories, greater industry experience, greater name recognition, established customer bases, and significantly greater financial, technical, marketing, and other resources than we do. To be competitive, we must respond promptly and effectively to the challenges of technological change, evolving standards and regulations, and our competitors’ innovations. Increased competition could result in a decrease in the desirability of our services, a decrease in the use of our services by customers, loss of market share and brand recognition, and a reduction in the projected revenues from our services. We cannot assure you that we will be able to compete successfully against current and future competitors. Competitive pressures faced by us could have a material adverse effect on our business, operating results and financial condition.
We could be subject to litigation, including for businesses the Company no longer operates.
The Cleaning business is being marketed for sale as of September 28, 2026 and the Treasury business was exited on July 20, 2026 but the Company could still be liable for claims made related to these strategies.
Product liability claims are common. Even though we have not been subject to such claims in the past, we could be a named defendant in a lawsuit alleging product liability claims including, but not limited to, defects in the design, manufacture or labeling of our aqueous ozone products and machines.
Any litigation, regardless of its merit or eventual outcome, could result in significant legal costs and high damage awards or settlements. Although we currently maintain insurance, the coverage is subject to deductibles and limitations, and may not be adequate to cover future claims. Additionally, we may be unable to maintain our existing liability insurance in the future at satisfactory rates or at adequate amounts.
The loss of key personnel, an inability to attract and retain additional personnel or difficulties in the integration of new members of our management team into our company could affect our ability to successfully grow our business.
Our future success depends in large part upon the continued service of the members of our executive management team and key employees, including our Chief Executive Officer, Tyler Hassen. All members of our executive management team are subject to employment agreements. In addition, our success also depends on our ability to attract and retain qualified technical, financial and accounting, legal and other managerial personnel. The competition for skilled personnel in the industries in which we operate is intense. Our personnel generally may terminate their employment at any time for any reason. We may incur significant costs to attract and retain highly skilled personnel, and we may lose new employees to our competitors before we realize the benefit of our investment in recruiting them. If we fail to attract new personnel or if we suffer increases in costs or business operations interruptions as a result of a labor dispute, or fail to retain and motivate our current personnel, we might not be able to operate our business effectively or efficiently, serve our users properly or maintain the quality of our content and services.
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Failure to comply with privacy laws and regulations and failure to adequately protect customer data could harm our business, damage our reputation and result in the loss of customers.
Federal and state regulations may govern the collection, use, sharing and security of data that we receive from our customers. In addition, we have and post on our website our own privacy policies and practices concerning the collection, use and disclosure of customer data. Any failure, or perceived failure, by us to comply with our posted privacy policies or with any data-related consent orders, U.S. Federal Trade Commission requirements or other federal, state or international privacy-related laws and regulations could result in proceedings or actions against us by governmental entities or others, which could potentially harm our business. Further, failure or perceived failure to comply with our policies or applicable requirements related to the collection, use or security of personal information or other privacy-related matters could damage our reputation and result in a loss of customers. The regulatory framework for privacy issues is currently evolving and is likely to remain uncertain for the foreseeable future.
We will face growing regulatory and compliance requirements in a variety of areas, which can be costly and time consuming.
Our business is, and may in the future be, subject to a variety of laws and regulations, including working conditions, labor, immigration and employment laws, and health, safety and sanitation requirements. We are unable to predict the outcome or effects of any potential legislative or regulatory proposals on our business. Any changes to the legal and regulatory framework applicable to our business could have an adverse impact on our business and results of operations. Our failure to comply with applicable governmental laws and regulations, or to maintain necessary permits or licenses, could result in liability that could have a material negative effect on our business and results of operations.
We have identified material weaknesses in our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results and prevent fraud. As a result, current and potential stockholders could lose confidence in our financial statements, which would harm the trading price of our common stock.
Companies that file reports with the Securities and Exchange Commission, or the SEC, including us, are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404. SOX 404 requires management to establish and maintain a system of internal control over financial reporting and annual reports on Form 10-K filed under the Securities Exchange Act of 1934, as amended, or the Exchange Act, to contain a report from management assessing the effectiveness of a company’s internal control over financial reporting. Separately, under SOX 404, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, public companies that are large accelerated filers or accelerated filers must include in their annual reports on Form 10-K an attestation report of their regular auditors attesting to and reporting on management’s assessment of internal control over financial reporting. Non-accelerated filers and smaller reporting companies, like us, are not required to include an attestation report of their auditors in annual reports.
A report of our management is included under Item 9A. “Controls and Procedures.” We are a smaller reporting company and, consequently, are not required to include an attestation report of our auditor in our annual report. However, if and when we become subject to the auditor attestation requirements under SOX 404, we can provide no assurance that we will receive a positive attestation from our independent auditors.
During its evaluation of the effectiveness of internal control over financial reporting as of June 30, 2026, management identified material weaknesses as described under Item 9A. “Controls and Procedures.” We are undertaking remedial measures, which measures will take time to implement and test, to address these material weaknesses. There can be no assurance that such measures will be sufficient to remedy the material weaknesses identified or that additional material weaknesses or other control or significant deficiencies will not be identified in the future. If we continue to experience material weaknesses in our internal controls or fail to maintain or implement required new or improved controls, such circumstances could cause us to fail to meet our periodic reporting obligations or result in material misstatements in our financial statements, or adversely affect the results of periodic management evaluations and, if required, annual auditor attestation reports. Each of the foregoing results could cause investors to lose confidence in our reported financial information and lead to a decline in our stock price.
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Industry and other market data that may be used in our periodic reports that we may file with the SEC and our other materials, including those undertaken by us or our engaged consultants, may not prove to be representative of current and future market conditions or future results.
The periodic reports that we may file with the SEC may include or refer to statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties and surveys and studies that we may have undertaken ourselves regarding the market potential for our product candidates. Although we believe that such information has been, and will be, obtained from reliable sources, the sources of such data do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we do not independently verify such data. The results of this data represent various methodologies, assumptions, research, analysis, projections, estimates, composition of respondent pool, presentation of data and adjustments, each of which may ultimately prove to be incorrect or inaccurate and may cause actual results and market viability information to differ materially from that presented in any such reports or other materials that we may prepare.
Risks Related to Ownership of Our Common Stock
On October 13, 2025, the Company filed Amended and Restated Articles of Incorporation which (i) removed the dual class structure of the Company’s common stock and (ii) increased the number of shares of common stock that the Company is authorized to issue to 6,942,000,000 shares. Accordingly, as of June 30, 2026, the Company’s authorized capital stock consists of 6,942,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of “blank check” preferred stock, par value $0.0001 per share. In connection with this change, all shares of the Company’s class B common stock were reclassified as common stock. Accordingly, all references herein to “common stock” issued prior to October 13, 2025 are to the Company’s prior class B common stock.
We may not be able to maintain a listing of our common stock on NYSE American.
We must meet certain financial and liquidity criteria to maintain the listing of our common stock on NYSE American. If we fail to meet any of NYSE American’s continued listing standards or we violate NYSE American listing requirements, our common stock may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such a listing. A delisting of our common stock from NYSE American may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment.
The market price of our stock may be highly volatile, and you could lose all or part of your investment.
The market for our common stock may be characterized by significant price volatility when compared to the shares of larger, more established companies that have large public floats, and we expect that our stock price will be more volatile than the shares of such larger, more established companies for the indefinite future. The stock market in general has recently been highly volatile. We may also experience such volatility, which may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock.
The market price of our common stock is likely to be volatile due to a number of factors. First, as noted above, our common stock is likely to be more sporadically and thinly traded compared to the shares of such larger, more established companies. The price for our common stock could, for example, decline precipitously in the event that a large number of shares are sold on the market without commensurate demand. Furthermore, we are a speculative or “risky” investment due to our lack of profits to date. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that has a large public float. Many of the foregoing factors are beyond our control and may decrease the market price of our common stock regardless of our operating performance. The market price of our common stock could also be subject to wide fluctuations in response to a broad and diverse range of factors, including the following:
| ● | actual or anticipated variations in our periodic operating results; |
| ● | increases in market interest rates that lead investors of our common stock to demand a higher investment return; |
| ● | changes in earnings estimates; |
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| ● | changes in market valuations of similar companies; |
| ● | actions or announcements by our competitors; |
| ● | adverse market reaction to any increased indebtedness we may incur in the future; |
| ● | additions or departures of key personnel; |
| ● | actions by stockholders; |
| ● | speculation in the media, online forums, or investment community; and |
| ● | our ability to maintain the listing of our common stock on NYSE American. |
Volatility in the market price of our common stock may prevent investors from being able to sell their common stock at or above the price at which they purchased it. As a result, you may suffer a loss on your investment.
We do not expect to declare or pay dividends in the foreseeable future.
We do not expect to declare or pay dividends in the foreseeable future, as we anticipate that we will invest future earnings in the development and growth of our business. Therefore, holders of our common stock will not receive any return on their investment unless they sell their shares, and holders may be unable to sell their shares on favorable terms or at all.
Future issuances of our common stock or securities convertible into, or exercisable or exchangeable for, our common stock could cause the market price of our common stock to decline and would result in the dilution of your holdings.
Future issuances of our common stock or securities convertible into, or exercisable or exchangeable for, our common stock could cause the market price of our common stock to decline. We cannot predict the effect, if any, of future issuances of our securities on the price of our common stock. In all events, future issuances of our common stock would result in the dilution of your holdings. In addition, the perception that new issuances of our securities could occur could adversely affect the market price of our common stock.
Future issuances by Zone of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which could rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock. Project level debt financing may be issued with different seniority than Zone issued debt securities and may not be subject to the same distributions.
In the future, we may attempt to increase our capital resources by offering debt securities. Upon bankruptcy or liquidation, holders of our debt securities, and lenders with respect to other borrowings we may make, would receive distributions of our available assets prior to any distributions being made to holders of our common stock. Because our decision to issue debt in any future offering, or borrow money from lenders, will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings. Holders of our common stock must bear the risk that any future offerings we conduct or borrowings we make may adversely affect the level of return, if any, they may be able to achieve from an investment in our common stock.
If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected.
The trading market for our common stock may be influenced in part by any research reports that securities industry analysts publish about us. We do not currently have and may never obtain research coverage by securities industry analysts. If no securities industry analysts commence coverage of us, the market price and market trading volume of our common stock could be negatively affected. In the event we are covered by analysts, and one or more of such analysts downgrade our securities, or otherwise reports on us unfavorably, or discontinues coverage of us, the market price and market trading volume of our common stock could be negatively affected.
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If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on NYSE American or another national securities exchange and if the price of our common stock is less than $5.00, our common stock could be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.
We are subject to ongoing public reporting requirements that are less rigorous than rules for companies that are not emerging growth companies, and our stockholders could receive less information than they might expect to receive from more mature public companies.
We report on an ongoing basis as an “emerging growth company” (as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not emerging growth companies, including but not limited to:
| ● | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; |
| ● | being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and |
| ● | being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. |
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.235 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
Because we are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, our stockholders could receive less information than they might expect to receive from more mature public companies. We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock.
We are also a smaller reporting company, and if we take advantage of certain exemptions from SEC disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:
| ● | had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or |
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| ● | in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or |
| ● | in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available. |
As a smaller reporting company, we are not required and may not include a compensation discussion and analysis section in our proxy statements, and we provide only two years of financial statements. We also have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.
Anti-takeover provisions in our charter documents and under Nevada law could make an acquisition of our company more difficult, and limit attempts by our stockholders to replace or remove our current management.
Provisions in our articles of incorporation and bylaws may have the effect of delaying or preventing a change of control of our company or changes in our management.
Our authorized but unissued shares of common stock are available for our board of directors to issue without stockholder approval, subject to NYSE American’s rules. We may use these additional shares for a variety of corporate purposes, including raising additional capital, corporate acquisitions and employee stock plans. The existence of our authorized but unissued shares of common stock could render it more difficult or discourage an attempt to obtain control of our company by means of a proxy context, tender offer, merger or other transaction since our board of directors can issue large amounts of capital stock as part of a defense to a take-over challenge. In addition, we have authorized in our articles of incorporation 50,000,000 shares of preferred stock. Our board acting alone and without approval of our stockholders, subject to NYSE American’s rules, can designate and issue one or more series of preferred stock containing super-voting provisions, enhanced economic rights, rights to elect directors, or other dilutive features, that could be utilized as part of a defense to a take-over challenge.
In addition, various provisions of our bylaws may also have an anti-takeover effect. These provisions may delay, defer or prevent a tender offer or takeover attempt of our company that a stockholder might consider in his or her best interest, including attempts that might result in a premium over the market price for the shares held by our stockholders. Our bylaws may be adopted, amended or repealed only by our board of directors. Our bylaws also contain limitations as to who may call special meetings as well as require advance notice of stockholder matters to be brought at a meeting. Additionally, our bylaws also provide that no director may be removed by less than a two-thirds vote of the issued and outstanding shares entitled to vote on the removal. Our bylaws also permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships. These provisions will prevent a stockholder from increasing the size of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.
Our bylaws also establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to the board of directors. Stockholders at an annual meeting will only be able to consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given us timely written notice, in proper form, of the stockholder’s intention to bring that business before the meeting. Although our bylaws do not give the board of directors the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted at a special or annual meeting, our bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of our company.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.
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Risks Relating to our AI Critical Infrastructure Business
Our AI Critical Infrastructure Business is at an early stage and subject to significant risks, and we may be unable to implement it successfully.
Our AI Critical Infrastructure Business is at an early stage of development. On July 9, 2026, we closed on our first data center campus, located in West Texas, with development platform provider HST Technologies, Inc. On July 23, 2026, we completed the acquisition of a second campus located in Minnesota, which is currently under construction and is subject to a fully executed 10-year tenancy agreement with Cerebras Systems, a leading AI compute company. Although we have entered into these binding agreements and commenced construction activities, we have not yet generated any revenue from this business, and the AI Critical Infrastructure Business is subject to significant risks. Because our strategy is evolving, we are required to make significant assumptions regarding market conditions, customer demand, competition, capital availability, utilization, operating costs, technological developments, regulatory requirements and other factors, and these assumptions may prove to be incorrect. We may fail to develop a viable operating model, generate revenue, achieve profitability or create stockholder value. If we are unable to execute this business plan successfully, or if our assumptions prove incorrect or our strategy changes materially, our business, financial condition, results of operations and prospects could be materially and adversely affected, and the value of our common stock could decline substantially.
We have limited operating history in the AI critical infrastructure or data center industry, and there can be no assurance that we will be able to successfully operate our data center campuses or consummate additional transactions related to our AI Critical Infrastructure Business.
We have historically operated as a cleaning products company and, more recently, as a digital asset treasury company. We have limited experience in the development, acquisition, construction, or operation of data centers or computing infrastructure. Although we have entered into binding agreements for two data center campuses and a 10-year tenancy agreement with Cerebras Systems for our Minnesota campus, we have limited operating history in this industry and there can be no assurance that we will be able to successfully develop, construct and operate our data center facilities or identify and consummate additional transactions on commercially acceptable terms, or at all. The data center and AI critical infrastructure market is highly competitive, and established operators, hyperscale cloud providers, and well-capitalized new entrants may have significant advantages over us, including greater financial resources, existing relationships, technical expertise and established track records. We may be unable to compete effectively for available sites, power capacity, equipment or customers, or to complete the necessary due diligence, obtain financing, negotiate acceptable terms, obtain regulatory approvals or permits, or close transactions in a timely manner, or at all. If we are unable to successfully operate our existing campuses or consummate additional transactions related to our AI Critical Infrastructure Business, we may have expended significant time, capital and management resources without generating any return.
The AI Critical Infrastructure Business requires specialized technical, operational, commercial and financial expertise that we may be unable to attract, retain or develop, and our current management team and personnel have limited or no experience in this business.
The successful implementation of our anticipated strategy will depend on our ability to recruit, retain and manage personnel with specialized expertise in areas such as data center design, construction and operations, power procurement and management, cooling systems, high-performance computing, network architecture, enterprise sales, leasing and cybersecurity. Our management team has historically operated a cleaning products business, and more recently, a digital asset treasury strategy focused on Dogecoin. We may have limited or no institutional knowledge in the computing infrastructure industry. Such personnel are in high demand and may command compensation significantly greater than we have historically paid. If we are unable to develop or acquire the necessary capabilities in a timely or cost-effective manner, or if key personnel depart, our ability to execute our strategy could be materially impaired.
Our management team must manage the demands of operating multiple distinct businesses during our strategic transition, which may strain our limited resources and impair our ability to execute any of our business strategies effectively.
Our management team is currently responsible for operating our legacy cleaning products business and our digital asset treasury strategy, while simultaneously investigating and developing our anticipated AI Critical Infrastructure Business. These responsibilities span three fundamentally different industries and require significant time and attention, which may divert management attention and resources from any particular business line and may impair our ability to make timely and effective operational and strategic decisions. We are a small company with limited personnel and financial resources, and the simultaneous pursuit of multiple strategic objectives may exceed our organizational capacity. If our management team is unable to manage these competing priorities successfully, our business, financial condition, results of operations and prospects could be materially adversely affected.
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Demand for AI-related or high-performance computing infrastructure may not grow as expected, may be satisfied by competitors, or may prove to be temporary, and our anticipated AI Critical Infrastructure Business may not succeed.
Our anticipated AI Critical Infrastructure Business is predicated on the assumption that demand for data center capacity and computing infrastructure will continue to grow, driven by the proliferation of large language models, generative AI applications, enterprise AI adoption, cloud computing workloads and other compute-intensive applications. However, demand for AI-related computing infrastructure may not grow as expected, may grow more slowly than anticipated, may become concentrated in the hands of a small number of large incumbents, or may be satisfied through technologies, business models or providers that do not benefit us. Customers may prefer to procure computing capacity from hyperscale cloud providers, vertically integrated platforms, strategic partners or operators with established technical, operational and financing capabilities, rather than from a company with no operating history in this industry. In addition, current market enthusiasm for AI critical infrastructure may reflect speculative activity, temporary shortages, unusually strong capital spending by a limited number of participants, or expectations that are not sustained. If market enthusiasm proves temporary, if capital investment in this sector declines, if AI workloads become less infrastructure-intensive than expected, or if demand for our anticipated offerings does not materialize, our strategy may not succeed and we could lose all or a substantial portion of the capital we invest in this business.
We may be unable to secure adequate power supply, which is critical to data center operations, and power costs and availability may adversely affect our anticipated AI Critical Infrastructure Business.
Data center operations require significant and reliable power supply. The availability of power at commercially reasonable prices is a critical factor in the site selection, development and operation of data center facilities. In many markets, power supply is constrained, and demand from data centers and other large-scale energy consumers is increasing competition for available power capacity. We may be unable to secure adequate power supply on acceptable terms or at all for any data center facilities we may seek to develop or acquire. In addition, power costs may be volatile and may increase significantly due to changes in energy markets, regulatory requirements, transmission and distribution charges, carbon pricing, renewable energy mandates and other factors. Power outages, grid instability, curtailment requirements or force majeure events could disrupt data center operations and damage computing equipment, resulting in service interruptions, customer losses, liability and reputational harm. If we are unable to secure reliable, cost-effective power supply, our anticipated AI Critical Infrastructure Business may not be viable or competitive.
The AI critical infrastructure and data center industry is subject to extensive regulation, and changes in law or regulation could materially adversely affect our anticipated business.
The development, construction and operation of data center facilities are subject to a broad range of federal, state and local laws and regulations, including zoning and land use requirements, building codes, environmental regulations, energy efficiency standards, water usage restrictions, noise ordinances, fire safety requirements, telecommunications regulations and tax laws. Compliance with these requirements may be costly and time-consuming, and we may be unable to obtain necessary permits, approvals or variances in a timely manner, or at all. Changes in applicable laws or regulations, including new or more stringent environmental requirements, energy consumption limitations, data privacy laws or export controls and tariffs, could increase our compliance costs, restrict our ability to develop or operate data center facilities, reduce the economic viability of particular sites or projects, or otherwise adversely affect our anticipated AI Critical Infrastructure Business. In addition, there is increasing public and regulatory scrutiny of the energy consumption and environmental impact of data centers, and government authorities may impose restrictions, taxes, or requirements on data center operations that could increase our costs or limit our ability to operate.
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If we are unable to enter into additional profitable leases, hosting agreements, colocation arrangements or other monetization structures, or if our existing arrangements do not perform as expected, the AI Critical Infrastructure Business may fail.
Our strategy contemplates the monetization of data center assets and computing infrastructure through one or more transaction structures, including colocation arrangements, build-to-suit agreements, powered shell leases, hosting agreements and other monetization structures. We have entered into a 10-year colocation agreement with Cerebras Systems for our Minnesota campus, with potential for two 10-year extension options. However, there can be no assurance that this arrangement will be profitable or perform as expected, or that we will be able to identify additional counterparties willing to enter into such arrangements on commercially acceptable terms or at all. Even if such arrangements are entered into, they may not be profitable, may involve significant risk allocation in favor of the counterparty, may require substantial customization or negotiation and may expose us to operational, legal, tax, accounting and credit risks. If we are unable to structure and consummate attractive monetization transactions, any data center assets we acquire or develop may remain underutilized or idle, our returns may be materially impaired and our business may not be successful.
Technology in the AI critical infrastructure industry evolves rapidly, and our anticipated investments could become obsolete or less competitive.
The computing infrastructure industry is characterized by rapid technological change, including advancements in GPU architecture, server design, cooling technologies, networking equipment, power management systems and software-defined infrastructure. Technologies, configurations and specifications that are current today may become obsolete, less efficient, or less competitive in a relatively short period of time. If we invest significant capital in data center infrastructure or computing equipment that becomes technologically obsolete or is superseded by newer, more efficient or more cost-effective alternatives, we may be unable to realize acceptable returns on our investments and may be required to record significant impairment charges. In addition, our potential customers may require specific or cutting-edge technology configurations that we are unable to provide, which could limit our ability to attract or retain customers.
Our anticipated AI Critical Infrastructure Business may be affected by export controls, tariffs, sanctions and trade restrictions that could limit our ability to acquire necessary equipment or serve certain customers.
The acquisition and deployment of computing infrastructure, including GPUs, servers, networking equipment and related components, may be subject to export controls, tariffs, sanctions, trade restrictions and other governmental regulations that could limit our ability to procure necessary equipment, increase our costs, restrict our customer base or otherwise adversely affect our anticipated business. Changes in trade policy, including the imposition of new tariffs, export restrictions or sanctions, could materially increase the cost of computing equipment, delay procurement timelines or make certain equipment unavailable. Any such developments could materially adversely affect our ability to develop and operate our anticipated AI Critical Infrastructure Business.
Our disclosures regarding our anticipated AI Critical Infrastructure Business necessarily involve substantial estimates and assumptions and may become inaccurate or incomplete as circumstances evolve.
Because our anticipated AI Critical Infrastructure Business is at a very early stage, our public disclosures regarding the business, opportunities, risks, economics, financing needs, market demand, asset acquisition plans, monetization strategies and expected results necessarily depend on estimates, expectations and assumptions that may prove to be incomplete, inaccurate or subject to rapid change. In many cases, we may have only limited operating experience or third-party information on which to base such judgments. As a result, subsequent developments may differ materially from what is described in our public filings. Investors should not rely on our current disclosures regarding the anticipated AI Critical Infrastructure Business as indicative of future results. If our assumptions prove incorrect, if we are unable to execute our strategy, or if material information becomes available that changes our assessment of the opportunity, we may need to revise our strategy, disclosures and projections, which could adversely affect investor confidence and the trading price of our common stock.
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We may need to build entirely new systems, financial reporting, disclosure, accounting, operational and internal control systems to support the anticipated AI Critical Infrastructure Business, which will be costly, time-consuming and may not be successful.
Our existing financial reporting, disclosure controls, accounting systems, internal controls over financial reporting, and operational processes have been developed to support a cleaning products business and a digital asset treasury strategy. The anticipated AI Critical Infrastructure Business will likely require fundamentally different systems, processes and controls, including those related to fixed asset accounting, depreciation, capitalization of development costs, lease accounting, revenue recognition for colocation or hosting arrangements, power and utility cost allocation, project accounting, construction-in-progress tracking and impairment analysis. Developing and implementing these new systems and controls will require significant investment of time, capital and personnel resources, and there can be no assurance that we will be able to do so successfully or in a timely manner. If we are unable to maintain effective financial reporting and internal control systems as we transition to a new business model, we may fail to report financial information accurately, may be required to restate financial statements, may become subject to SEC scrutiny or stockholder claims and may suffer reputational harm.
Public company costs may consume a disproportionate amount of our limited resources, reducing capital available for the AI Critical Infrastructure Business.
As a public company, we incur significant ongoing costs for SEC reporting, NYSE American compliance, legal counsel, audit and accounting services, directors’ and officers’ insurance, investor relations and corporate governance. These costs are largely fixed and do not scale proportionally with our revenue or asset base. Given our limited financial resources and the capital-intensive nature of our anticipated AI Critical Infrastructure Business, public company costs may consume a disproportionate share of our available capital, reducing the amount available for investment in AI critical infrastructure opportunities and potentially impairing our ability to compete effectively against larger, better-capitalized competitors.
The transition from our current business lines to the AI Critical Infrastructure Business could expose us to stockholder litigation, regulatory scrutiny and reputational harm.
Our proposed strategic transition from a cleaning products and digital asset treasury company to an AI critical infrastructure company represents a fundamental change in our business direction. Some stockholders, employees, customers, investors or other stakeholders may view this shift negatively or may assert that the Company has departed from their expectations. As a result, we may experience reputational harm, stakeholder criticism, litigation, derivative claims, books-and-records demands or other disputes relating to our change in business strategy, disclosures, corporate governance or the process by which our board of directors evaluated and approved the transition. Any such matters could be time-consuming, costly and distracting, could divert management’s attention from the execution of our business strategy and could materially adversely affect our business, financial condition and prospects.
We may fail to transition successfully from a cleaning products and digital asset treasury company to a computing infrastructure company.
The successful operation of a computing infrastructure business requires capabilities that differ substantially from those required to operate a cleaning products business or a digital asset treasury strategy, including expertise in site selection and development, power procurement and grid interconnection, data center construction management, structuring leases, managing facility and equipment life cycles, evaluating utilization and residual value risk, negotiating technical services and colocation arrangements, complying with industry-specific regulations. We may be unable to develop or acquire these capabilities in a timely or cost-effective manner, and may experience difficulty adapting our internal processes, financial reporting systems, disclosure controls and risk management framework to support a fundamentally different business model. If we are unable to manage this transition effectively, our business and prospects could be materially harmed.
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The anticipated AI Critical Infrastructure Business may never generate meaningful revenue, achieve profitability or produce positive cash flow.
Our anticipated AI Critical Infrastructure Business may require substantial upfront capital expenditures, ongoing operating expenditures and significant management attention before it generates any material revenue, if at all. There can be no assurance that we will be able to generate customer demand, establish commercially reasonable pricing, maintain satisfactory utilization rates, structure profitable monetization arrangements or achieve sufficient scale to cover our costs. Even if we generate revenue, our costs may be greater than we expect, including costs associated with acquiring or developing data center sites, financing, construction, maintenance, power, hosting, insurance, professional services, regulatory compliance, public company obligations, personnel and litigation. As a result, we may continue to incur losses for an extended period or indefinitely, and we may never achieve profitability or positive cash flow. If that occurs, the value of our business and our common stock could decline materially.
We will face intense competition from larger, more experienced and significantly better-capitalized companies, and we may be unable to compete effectively.
The computing infrastructure and data center market is intensely competitive and evolving rapidly. We expect to compete, directly or indirectly, with large technology companies, hyperscale cloud providers, established data center developers and operators, colocation providers, investment firms and other market participants with substantially greater financial, technical, operational resources than we have. Many of these competitors have longer operating histories, more established brands, deeper customer relationships, superior access to capital, more sophisticated technical capabilities and greater tolerance for risk. These competitors may be able to acquire or develop data center sites at lower cost, offer more attractive terms, deploy assets more quickly and secure customers and strategic relationships more successfully than we can. Our limited resources may materially impair our ability to compete, generate revenue and create stockholder value.
We have significantly fewer resources than many of the companies with which we would compete, which could materially impair our ability to execute our business plan.
Our available cash, restricted cash, remaining assets and organizational resources are extremely limited relative to our anticipated capital needs. Larger and more established companies have access to more favorable financing, stronger supplier relationships, greater technical expertise, lower cost structures and more diversified revenue streams. Because our resources are expected to be substantially more limited than those of many competitors and counterparties in this market, we may be unable to pursue attractive opportunities, withstand pricing pressure, tolerate delays in monetization, absorb operational setbacks or respond effectively to changes in market conditions. If we are unable to compete effectively due to our limited resources, our business, financial condition and prospects could be materially adversely affected.
Our ability to execute the anticipated AI Critical Infrastructure Business will depend on our ability to obtain substantial capital, and such capital may not be available on acceptable terms or at all.
The development and acquisition of data center infrastructure may require substantial capital. The proceeds of our recent offering may not be sufficient to fund our strategy, operations or liquidity needs, and we may require additional debt or equity financing sooner than we currently expect. We expect to continue to incur significant cash needs, including for personnel costs, public company costs, professional fees, transaction expenses, working capital, debt service and the costs of attempting to develop the anticipated AI Critical Infrastructure Business. Our cash resources may be exhausted more quickly than we expect, and we may run out of cash before we are able to secure additional financing. Capital markets conditions, our limited operating history in the new business, the speculative nature of our strategy, trading volatility in our common stock, our financial condition, investor sentiment regarding our transition and other factors may make it difficult or impossible for us to obtain additional capital on terms that are acceptable to us, or at all. If financing is unavailable or available only on unfavorable terms, we may be forced to delay or abandon development projects, curtail operations, sell assets at unattractive prices, issue additional equity that is highly dilutive, incur restrictive indebtedness, drastically reduce expenses, cease operations, declare bankruptcy, or pursue other strategic alternatives. If we are unable to raise capital when needed, we may run out of cash. Any of these outcomes could materially adversely affect our business and stockholders.
The market price of our common stock may not reflect the fundamental value or prospects of the anticipated AI Critical Infrastructure Business, and any increase in our stock price following announcement of such business may not be sustained.
The market price of our common stock may be influenced by speculation, momentum trading, limited public float, short covering, media attention, social media commentary, investor enthusiasm regarding artificial intelligence or computing infrastructure themes, or other factors unrelated or disproportionate to our underlying business fundamentals. Following announcement of our anticipated AI Critical Infrastructure Business, our stock price may experience substantial volatility or appreciation. There can be no assurance that any such increase will be sustained. Investors may have only limited information regarding our anticipated AI Critical Infrastructure Business and may make investment decisions based on assumptions about our future business that do not materialize. If market expectations change, if our business plan is not executed successfully, if our financing arrangements prove insufficient or restrictive, if our disclosures are challenged, or if broader market sentiment weakens, the market price of our common stock could decline sharply, and stockholders could lose all or a substantial portion of their investment.
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Counterparties to our leases, hosting agreements, colocation arrangements or other transactions may default, terminate early, fail to renew or otherwise not perform as expected.
If we enter into leases, hosting agreements, colocation arrangements, powered shell leases, build-to-suit agreements or other commercial contracts, we will be exposed to counterparty credit, performance and enforcement risk. Our counterparties may become unwilling or unable to perform their obligations, may dispute contractual terms, may seek concessions, may terminate agreements early, may fail to renew agreements or may become insolvent or bankrupt. Any such nonperformance could reduce our revenues, impair the value of our data center assets, increase our costs, require costly enforcement efforts, result in litigation or force us to re-market capacity on less favorable terms. These risks may be heightened in periods of economic volatility or in emerging or rapidly changing markets. Counterparty nonperformance could materially adversely affect our business and financial condition.
Transactions with external parties through SPVs and other investment structures expose us to heightened risks of default, disagreement, bankruptcy and personnel changes that could impair our investments and operations.
Our anticipated AI Critical Infrastructure Business will involve entering into transactions with a variety of external parties, including development partners, operating partners, tenants, contractors, vendors, lenders and other counterparties, many of which may be conducted through special purpose vehicles, joint ventures or similar investment structures. These arrangements expose us to significant risks that could materially impair our investments and operations.
External parties with whom we transact may default on their contractual obligations, including capital contribution commitments, development milestones, payment obligations, operational responsibilities or other material covenants. Counterparties may dispute the interpretation or enforceability of contractual terms, refuse to perform, seek to renegotiate arrangements, or pursue litigation or arbitration to resolve disagreements. These disputes may be costly, time-consuming and distracting to management, and their outcomes may be uncertain. Even if we ultimately prevail in a dispute, the process of enforcement may delay project completion, impair relationships with other parties or damage our reputation.
External parties may experience financial distress, insolvency or bankruptcy, which could trigger defaults under governing agreements, impair the SPV’s ability to perform under its contracts, create uncertainty regarding ownership and governance, delay or prevent the completion of development activities, expose us to claims from creditors of the distressed party, or result in the loss of a substantial portion of our invested capital. Bankruptcy proceedings involving a partner, tenant, contractor or other counterparty may be protracted, unpredictable and costly, and may result in outcomes that are materially adverse to our interests. We may have limited ability to assess the creditworthiness or financial condition of our counterparties, and our due diligence may not reveal all material risks associated with their financial stability.
The success of our SPV investments and external party transactions may depend significantly on the continued involvement of key personnel at our partners, tenants, contractors and other counterparties. Changes in personnel, including the departure of individuals with specialized expertise in data center development, power procurement, tenant relationships, project management or other critical functions, could materially impair a counterparty’s ability to perform its obligations under our agreements. We may have limited visibility into personnel changes at counterparty organizations and limited recourse if key individuals depart. The loss of key personnel at a development partner, operating partner or other critical counterparty could result in delays, cost overruns, execution failures or the termination of arrangements, any of which could materially adversely affect our business, financial condition and results of operations.
Our anticipated AI Critical Infrastructure Business may be exposed to residual value risk and remarketing risk with respect to data center facilities and equipment.
If we acquire or develop data center facilities and seek to monetize them through leases, hosting agreements or other arrangements, the returns on those assets may depend in part on the residual value of the facilities and equipment at the end of a contractual term or anticipated holding period. The residual value of data center infrastructure may be difficult to predict and may decline materially due to technological change, changes in customer preferences, increased supply, reduced demand, shifts in geographic demand patterns, changes in power costs, the introduction of newer or more efficient facility designs, changes in cooling or power delivery technology or other market developments. If the residual value of any data center assets is lower than we expect, we may be unable to sell, re-lease, redeploy or otherwise monetize those assets on favorable terms or at all. We may also be required to reduce pricing, accept lower returns, record impairment charges or incur additional costs in remarketing or reconfiguring assets. Any such developments could materially and adversely affect our business, financial condition, results of operations and prospects.
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Our anticipated business model depends on assumptions regarding customer demand, pricing, utilization, residual values and monetization opportunities that may prove incorrect.
We expect that the AI Critical Infrastructure Business may involve colocation arrangements, powered shell leases, build-to-suit agreements, hosting arrangements and other monetization structures. The success of these arrangements would depend on numerous assumptions, including assumptions regarding demand from potential customers, the pricing they are willing to pay, contract duration, uptime requirements, facility utilization, residual values, maintenance costs, power and cooling costs, financing costs, counterparty creditworthiness and the availability of secondary market opportunities. If any of these assumptions prove to be incorrect, our anticipated business model may not be viable or may be materially less profitable than we currently expect. In particular, lower-than-expected utilization, pricing pressure, higher-than-expected costs, counterparty defaults or lower residual values could materially adversely affect our revenues, margins, asset values and overall business.
Investors may have difficulty evaluating our future prospects because we will be a company with a limited operating history in a new business and no historical information relevant to that business.
Investors will have no historical financial information relevant to the anticipated AI Critical Infrastructure Business. Our historical financial statements primarily reflect a cleaning products business and, more recently, a digital asset treasury strategy, each of which is materially different businesses from data center development and operations. Accordingly, historical results may not be indicative of future performance, and investors may find it difficult to evaluate our prospects, strategy, valuation and risks. This limited visibility may contribute to volatility in our common stock, impair investor confidence and make it more difficult for us to raise capital. If investors are unable to assess our future prospects accurately, the market price of our common stock could be materially adversely affected.
The proposed change in our corporate name, identity and strategic direction may create confusion, reduce credibility and harm our ability to establish the anticipated new business.
We are proposing to transition from a cleaning products and digital asset treasury company to an AI critical infrastructure company. This change in identity and strategic direction may include a change in company name, and may create confusion among investors, counterparties, employees and other stakeholders regarding who we are, what business we are in and what capabilities we possess. Some market participants may question the credibility or viability of our new strategy or may be reluctant to transact with us until we establish a track record in the new business. Any reputational challenges, uncertainty or skepticism arising from our change in business direction could impair our ability to hire personnel, attract counterparties, raise capital and create stockholder value.
If the anticipated AI Critical Infrastructure Business is unsuccessful, we may be unable to continue as a going concern.
The success of our continuing business plan is uncertain. If we are unable to implement the anticipated AI Critical Infrastructure Business successfully, generate meaningful revenues, raise sufficient capital, manage costs, satisfy obligations or otherwise sustain operations, we may not be able to continue as a going concern. We have historically incurred significant operating losses and have an accumulated deficit of approximately $169 million as of March 31, 2026. If we are unable to generate sufficient revenue or raise additional capital, we may need to seek additional financing on unfavorable terms, sell assets, drastically reduce operations, restructure obligations or pursue strategic transactions. Any such outcome could materially reduce or eliminate value for stockholders.
Stockholders may not realize the benefits they expect from our proposed strategic transition and may lose all or a substantial portion of their investment.
The contemplated sale or disposition of our cleaning products business, the contemplated sale, disposition, or wind-down of our Dogecoin holdings, and our anticipated AI Critical Infrastructure Business may not produce the benefits that stockholders expect. The Company may fail to execute its continuing business strategy, may experience severe stock price volatility, may be unable to maintain its NYSE American listing, may incur substantial litigation or financing costs, may be unable to raise additional capital and may ultimately fail. If one or more of these risks materialize, the market price of our common stock could decline materially, and stockholders could lose all or a substantial portion of their investment.
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We may be exposed to tax risks associated with asset acquisitions, leasing structures, hosting arrangements and other monetization arrangements.
Our anticipated AI Critical Infrastructure Business may involve complex domestic, state, local and potentially international tax issues. The tax treatment of asset acquisitions, ownership, leasing transactions, hosting arrangements, financing arrangements, depreciation, revenue streams, property taxes, sales and use taxes, transfer taxes and other aspects of our anticipated business may be uncertain and may depend on highly technical rules and factual determinations. Tax authorities may challenge our positions, and changes in tax law, tax rates, regulations, administrative guidance or judicial interpretations could adversely affect the economics of our business model. In addition, tax compliance associated with asset-intensive and multi-jurisdictional operations may be costly and burdensome, and may require use of external resources. If our tax positions are challenged successfully, or if the expected tax treatment of our transactions is not realized, we could incur additional taxes, penalties, interest and professional fees, which could materially and adversely affect our business, financial condition and results of operations.
The data center project contemplated by our letter of intent requires capital commitments that substantially exceed our current financial resources, and we may be unable to secure adequate capital resources through debt or equity to fund our obligations under the proposed transaction.
The letter of intent contemplates significant capital commitments for the development and buildout of the data center facility. As of March 31, 2026, we had cash and cash equivalents of approximately $4.1 million, restricted cash of approximately $13 million and an accumulated deficit of approximately $169 million. We will need to raise significant additional capital through debt financing, equity financing, project-level financing or other sources to fund these commitments, and there can be no assurance that such financing will be available on acceptable terms, or at all. If we are unable to fund our capital commitments to the project SPV in a timely manner, we may be required to seek third-party capital on potentially unfavorable terms, may lose our majority ownership interest or other economic benefits under the proposed transaction structure, may be subject to dilution or adverse renegotiation of terms, or may be unable to consummate or continue to participate in the transaction. Any such outcome could materially adversely affect our business, financial condition and prospects and could result in a significant loss of the capital we have invested.
Our initial AI critical infrastructure strategy will likely be concentrated in a limited number of projects, and we will be dependent on our development and operating partners, which exposes us to significant concentration, execution and counterparty risks.
Our initial AI critical infrastructure opportunities will be concentrated in a limited number of data center projects. As a result, our near-term AI Critical Infrastructure Business strategy is highly concentrated and dependent on the successful execution of these projects. If any project encounters delays, cost overruns, construction difficulties, permitting issues, power procurement challenges, equipment supply disruptions, financing shortfalls or other setbacks, or if a tenant fails to execute a definitive lease, terminates its arrangement, defaults on its obligations, reduces its capacity requirements or becomes insolvent, our AI Critical Infrastructure Business could be materially impaired before it has generated significant revenue or diversified across a broader portfolio of projects or tenants. There can be no assurance that we will be able to identify, evaluate or consummate additional AI critical infrastructure opportunities to reduce this concentration.
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In addition, under the proposed transaction structures, our development partners would serve as the development, operating and execution partners for our projects, with authority and responsibilities over development, utility coordination, tenant coordination, vendor management, construction oversight, commissioning support, operations and transition matters, subject to agreed budgets, major decision rights and SPV governance. We would hold majority ownership interests in the project SPVs, but our development partners would retain day-to-day operational control over critical development and construction activities. We have limited ability to independently verify our development partners’ operational capabilities, track records and financial conditions, and our due diligence may not reveal all material risks associated with these counterparties. If any development partner fails to perform its development, construction or operational obligations effectively, experiences financial difficulties, loses key personnel, becomes involved in disputes with contractors, vendors or tenants, or otherwise fails to meet project milestones and delivery standards, the affected project could experience significant delays, cost overruns or failure, and we could lose a substantial portion of our invested capital. Disagreements between us and our development partners regarding project decisions, budget allocations, governance matters, capital calls, distribution mechanics or strategic direction could result in deadlock, litigation or other disputes that impair the projects and our investments. Our reliance on a limited number of development partners for our initial AI critical infrastructure projects amplifies these risks.
Our anticipated AI Critical Infrastructure Business may be conducted through special purpose vehicles and joint venture structures, which expose us to governance, counterparty and structural risks that could materially impair our investments.
We may conduct some of our AI Critical Infrastructure Business through special purpose vehicles, joint ventures and similar structures in which we hold ownership interests alongside development partners, operating partners or other third parties. These structures involve inherent risks that differ from, and may be in addition to, the risks of operating assets directly. We may not control the day-to-day management or key decisions of the SPV, or may share governance or approval rights with partners whose interests may not always align with ours. Disputes may arise regarding capital contributions, development timelines, budgets, distributions, exit strategies, refinancing decisions, major contracts, admission of new partners or other material matters, and such disputes could result in deadlock, litigation, forced buyouts or dissolution of the venture.
Our partners in these structures may default on capital call obligations, fail to fund their pro rata share of development costs, become insolvent or file for bankruptcy, experience a change of control, lose key personnel critical to the project, or otherwise become unable or unwilling to perform their obligations under the governing agreements. A partner’s financial distress or bankruptcy could trigger complex legal proceedings, impair the SPV’s ability to access financing or perform under its contracts, create uncertainty regarding ownership and governance, and delay or prevent the completion of development activities. The departure or replacement of key personnel at a partner entity, particularly individuals with specialized expertise in data center development, power procurement or tenant relationships, could materially impair the partner’s ability to execute on project milestones and deliverables.
In addition, SPV and joint venture structures may limit our ability to unilaterally sell, transfer or encumber our interests, may subject us to rights of first refusal, tag-along or drag-along provisions, buy-sell mechanisms or other transfer restrictions that limit our liquidity and exit options. We may be unable to exit an underperforming investment on acceptable terms or in a timely manner. The governing documents of these structures may also contain forfeiture, clawback, dilution or penalty provisions that could reduce our economic interest if we fail to meet capital call obligations or other commitments. If any of these risks materialize, our investments in SPVs and joint ventures could be impaired, we could lose a substantial portion of our invested capital, and our business, financial condition and prospects could be materially adversely affected.
| ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
Not applicable.
| ITEM 1C. | CYBERSECURITY. |
Risk Management and Strategy
We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. We have developed the following processes as part of our strategy for assessing, identifying, and managing material risks from cybersecurity threats.
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Managing Material Risks & Integrated Overall Risk Management
We
have
Engaging Third-parties on Risk Management
Recognizing
the complexity and evolving nature of cybersecurity threats, we plan to engage external experts, including consultants and auditors, in
evaluating and testing our risk management systems. These services will enable us to leverage specialized knowledge and insights, ensuring
our cybersecurity strategies and processes remain at the forefront of industry best practices. Our collaboration with these
Overseeing Third-Party Risk
Because we are aware of the risks associated with third-party service providers, we implement processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.
Risks from Cybersecurity Threats
Governance
Board of Directors Oversight
Management’s Role Managing Risk
Monitoring Cybersecurity Incidents
Management is continually informed about the latest developments in cybersecurity, including potential threats and innovative risk management techniques. Management implements and oversees processes for the regular monitoring of our information systems. This includes the deployment of industry-standard security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, management will implement an incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
Reporting to Board of Directors
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| ITEM 2. | PROPERTIES. |
The Company’s headquarters is located at 5718 Westheimer Road, Suite 1000, Houston, Texas 77057. We have a lease through July 2027.
Our previous corporate headquarters, as of June 30, 2026, was in Omaha, NE, which includes both our corporate offices and the warehouse and assembly functions. Our facilities are approximately 12,420 square feet and include an office bay, a manufacturing and shipping bay, and a warehouse and storage bay. We lease the building, and are on a contract until the end of February 2028.
We also have a small warehouse in Dublin, Ireland for CleanCore Global. This location was on a month-to-month lease and was approximately 5,000 square feet.
We believe that our property is adequately maintained, is in generally good condition, and adequate for our business.
| ITEM 3. | LEGAL PROCEEDINGS. |
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
As previously disclosed, on August 20, 2024, Matthew Atkinson, our former Chief Executive Officer, filed a complaint against our company in the District Court of Douglas County, Nebraska, which was amended on November 25, 2024 to add Clayton Adams, our Chief Executive Officer, and David Enholm, our Chief Financial Officer, as defendants, in which Mr. Atkinson alleged certain claims arising from his employment with, and separation of employment from, our company, and we alleged certain counterclaims against Mr. Atkinson for breach of contract. On June 6, 2025, we and Messrs. Adams and Enholm entered into a settlement and release agreement with Mr. Atkinson to settle this matter. Pursuant to the settlement and release agreement, which became effective on June 21, 2025, we issued 200,000 shares of our common stock to James T. Coyle Legacy Trust in order to resolve an obligation that Mr. Atkinson had to transfer such shares that had not been met. The settlement and release agreement also contains a release of claims by each party and standard confidentiality and non-disparagement provisions. On June 26, 2025, the lawsuit was dismissed with prejudice.
| ITEM 4. | MINE SAFETY DISCLOSURES. |
Not applicable.
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PART II
| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Market Information
Our common stock is listed on the NYSE American under the symbol “ZONE.”
Number of Holders of our Common Shares
As of September 28, 2026, there were approximately 3500 stockholders of record of our common stock. In computing the number of holders of record of our common stock, each broker-dealer and clearing corporation holding shares on behalf of its customers is counted as a single stockholder.
Dividend Policy
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends in the near future. We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. See also Item 1A “Risk Factors—Risks Related to Ownership of Our Common Stock—We do not expect to declare or pay dividends in the foreseeable future.”
Securities Authorized for Issuance under Equity Compensation Plans
See Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
Recent Sales of Unregistered Securities
Except as set forth below, we have not sold any equity securities during the 2026 fiscal year that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during the 2026 fiscal year.
| ● | On June 25, 2026, the Company issued 300,000 restricted shares to a service provider. |
Purchases of Equity Securities
No repurchases of our common stock were made during fiscal year 2026.
| ITEM 6. | [RESERVED] |
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| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”
Overview
Zone Frontier Inc., formerly CleanCore Solutions, Inc. (“the Company”, “we”, or “Zone”) is helping to build the critical infrastructure that powers the AI economy. We aim to meet the increasing demand for compute capacity, power, and digital infrastructure required by the world’s leading AI companies.
We specialize in providing powered land and facilities, in conjunction with our development partners, to support over one gigawatt of computer power by 2030. With campuses being developed across rural and industrial Minnesota and Texas, we expect to bring approximately 55 MW of utility power capacity and 40 MW of critical IT load online and revenue generating during the first calendar quarter of 2027.
On June 8, 2026, the Company announced a new focus on building critical AI infrastructure across the United States, led by newly hired CEO Tyler Hassen, and plans to move away from its cleaning products business and Dogecoin treasury strategy.
On July 9, 2026, the Company announced its first data center project. Located in West Texas, and with development platform provider HST Technologies, Inc., it is projected to supply an initial 200-megawatts of utility power by 2029, with potential to expand to more than 500-megawatts by 2030.
On July 20, 2026, substantially all Dogecoin assets were sold. The proceeds will be used to fund the Company’s AI strategy.
On July 29, 2026, the Company announced its second data center project, its flagship campus located in Minnesota. The site is already powered and under exclusive pre-leased occupancy with Cerebras Systems, a leading AI compute company. It is expected to generate revenue beginning in the first calendar quarter of 2027, offering 55-megawatts of utility power and 40-megawatts of critical load, once fully built out.
On June 8, 2026, the Company announced plans to sell or dispose substantially all assets of the cleaning products business, including the wholly owned Irish subsidiary, CleanCore Global Inc. The Company is in the process of selling this business unit but is not under binding contract with any party as of September 28, 2026. The segment did not meet the criteria as Held for Sale as of June 30, 2026 and is included in this Report. On August 31, 2026, the Company changed its name from CleanCore Solutions Inc. to Zone Frontier Inc.
During the twelve months ended June 30, 2026, the Company operated three Segments:
| ● | CleanCore, which specializes in the development and production of cleaning products that produce pure aqueous ozone using patented nanobubble technology that is highly effective in cleaning, sanitizing, and deodorizing surfaces and high-touch areas |
| ● | Treasury, established on September 5, 2025 when the Company adopted a Digital Asset Trading strategy focused on Dogecoin as part of a $175 million private placement offering. |
| ● | Critical AI Infrastructure, announced on June 8, 2026, focused on building data centers to meet the increasing compute needs of AI companies |
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The Treasury segment included dedicated resources assigned to execute on our digital asset strategy, unrealized gain or loss on digital assets, and other third-party costs associated with our digital assets holdings, and income tax effects generated from our Dogecoin holdings to better align with their activities and utilization.
The AI Critical Infrastructure segment includes costs related to the development of data centers. This segment has not generated any revenue as of June 30, 2026.
Principal Factors Affecting the Financial Performance of our AI Critical Infrastructure Business, which was announced on June 8, 2026
The operating results for our AI Critical Infrastructure operations are primarily affected by the following factors:
| ● | our ability to secure suitable land and power for development of future data centers |
| ● | our ability to attract tenants to lease our facilities |
| ● | our ability to raise funding with investors to meet the capital demands of our data campus projects |
Principal Factors Affecting the Financial Performance of our Cleaning Solutions Business
Our operating results are primarily affected by the following factors:
| ● | our ability to acquire new customers or retain existing customers; |
| ● | our ability to stay ahead of our value-proposition to end consumers; |
| ● | our ability to continue innovating our technology to meet consumer demand; |
| ● | industry demand and competition; and |
| ● | market conditions and our market position. |
Principal Factors Affecting the Financial Performance of our Cryptocurrency Treasury Operations, which the Company exited on July 20, 2026 by selling all remaining digital assets
The operating results for our Treasury operations were primarily affected by the following factors:
| ● | the market value of Dogecoin tokens; |
| ● | the trading volume of Dogecoin tokens; and |
| ● | investor understanding and willingness to purchase and use Dogecoin. |
The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer, Tyler Hassen, who was appointed on March 16, 2026, who managed the Company as three discrete segments as well as on a consolidated basis, in conjunction with the Company’s General Manager, Clayton Adams, who was the former Chief Executive Officer. The CODM uses net income (loss) to assess the profitability of the CleanCore Segment by comparing actual to budgeted results on a quarterly basis. In doing so, he focused on revenue, gross profit, and operating profit (loss) of the CleanCore Segment. The CODM assessed the Treasury Segment using the value of the Dogecoin and number of tokens held. The CODM assesses the AI Critical segment using actual vs. budgeted expenses and progress towards construction completion. All segments allocate personnel and budget accordingly to maximize potential profitability. The CODM also uses net income (loss) to understand the impact from income taxes and financing costs for general tax and liquidity planning purposes.
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Emerging Growth Company
We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
| ● | have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
| ● | comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
| ● | submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and |
| ● | disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. |
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.235 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
Results of Operations
The following table sets forth key components of our results of operations for the years ended June 30, 2026 and 2025, both in dollars and as a percentage of our revenue.
| Years Ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Amount | %
of Revenue |
Amount | %
of Revenue |
|||||||||||||
| Revenue | $ | 3,406,434 | 100.00 | % | $ | 2,072,834 | 100.00 | % | ||||||||
| Cost of sales | 2,118,487 | 62.19 | % | 1,086,369 | 52.41 | % | ||||||||||
| Gross profit | 1,287,947 | 37.81 | % | 986,465 | 47.59 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 56,492,928 | 1,658.42 | % | 7,081,299 | 341.62 | % | ||||||||||
| Advertising expense | 276,231 | 8.11 | % | 92,598 | 4.47 | % | ||||||||||
| Depreciation and amortization expense | 259,598 | 7.62 | % | 198,909 | 9.60 | % | ||||||||||
| Goodwill impairment | 2,237,910 | 65.70 | % | - | 0.00 | % | ||||||||||
| Total operating expenses | 59,266,667 | 1,739.84 | % | 7,372,806 | 355.69 | % | ||||||||||
| Loss from operations | (57,978,720 | ) | (1,702.04 | )% | (6,386,341 | ) | (308.10 | )% | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest income (expense), net | 140,365 | 4.12 | % | (356,054 | ) | 17.18 | % | |||||||||
| Change in fair value of digital assets | (116,318,363 | ) | (3,414.67 | )% | - | - | ||||||||||
| Foreign exchange gain | (4,146 | ) | (0.12 | )% | 120 | 0.01 | % | |||||||||
| Total other income (expense) | (116,182,144 | ) | (3,410.67 | )% | (355,933 | ) | (17.17 | )% | ||||||||
| Net loss | $ | (174,160,864 | ) | (5,112.70 | )% | $ | (6,742,275 | ) | (325.27 | )% | ||||||
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Revenue. All of our revenue is generated by the CleanCore segment, which generates revenue from sales of our cleaning products. Our revenue increased by $1,333,600, or 64.34%, to $3,406,434 for the year ended June 30, 2026 from $2,072,834 for the year ended June 30, 2025. The primary increase is from an increase in revenue from the Ireland location of approximately $817,000 due to a full-year of sales from Ireland.
Cost of sales. Our cost of sales consists of raw materials, components, labor, demo expenses and warranty reserves. Our cost of sales increased by $1,032,118, or 95.01%, to $2,118,487 for the year ended June 30, 2026 from $1,086,369 for the year ended June 30, 2025. As a percentage of revenue, cost of sales increased from 52.41% for the year ended June 30, 2025 to 62.19% for the year ended June 30, 2026. The increase is the result of higher year-over-year revenue, and an increase in indirect sales costs, primarily inventory reserve. Inventory reserve expense increased by approximately $414,000 as the company has shifted some unit production overseas resulting in a one-time increase in the reserve.
Gross profit. As a result of the foregoing, our gross profit increased by $301,482, or 30.56%, to $1,287,947 for the year ended June 30, 2026 from $986,465 for the year ended June 30, 2025. As a percentage of revenue, gross profit decreased from 47.59% for the year ended June 30, 2025 to 37.81% for the year ended June 30, 2026. The decrease is primarily attributed to the increased indirect inventory reserve expense of $414,000.
General and administrative expenses. In the CleanCore segment, our general and administrative expenses consist primarily of personnel expenses, including employee salaries and bonuses plus related payroll taxes, stock-based compensation expense, professional advisor fees, bad debts, impairment expense, rent expense, insurance and other expenses incurred in connection with general operations. In the Treasury segment, our general and administrative expenses consist primarily of professional advisor fees, stock-based compensation expense, insurance expense, and employee salaries and bonuses plus related payroll taxes. In the AI Critical Infrastructure segment, our costs primary consists of legal fees. Our general and administrative expenses increased by $49,411,629, or 697.78%, to $56,492,928 for the year ended June 30, 2026 from $7,081,299 for the year ended June 30, 2025. As a percentage of revenue, our general and administrative expenses increased from 341.62% for the year ended June 30, 2025 to 1,658.42% for the year ended June 30, 2026. The year-over-year increase is primarily due to a full year of Treasury segment expenses, a full year of Ireland operations, impairment of intangibles, and increased payroll related to the new data-center focus. The most significant increases were $23,252,313 of non-cash professional fees from the Treasury segment, $14,539,737 of Treasury management related expenses, $6,023,783 in non-cash stock option expense and $1,748,969 of intangibles impairment.
Advertising expenses. In the CleanCore segment, advertising expenses consist of vendor trade shows and various trade publications. Our advertising expenses increased by $183,633, or 198.31%, to $276,231 for the year ended June 30, 2026 from $92,598 for the year ended June 30, 2025. As a percentage of revenue, our advertising expenses increased from 4.47% for the year ended June 30, 2025 to 8.11% for the year ended June 30, 2026. Such an increase was primarily due to increased expenses related to crypto marketing, offset by lower marketing expenses for the CleanCore segment.
Depreciation and amortization expense. Depreciation and amortization expense, all of which is generated by the CleanCore segment, was $259,598, or 7.62% of revenue, for the year ended June 30, 2026, as compared to $198,909, or 9.60% of revenue, for the year ended June 30, 2025. The increase is due to amortization expense associated with additional intangibles acquired with the asset acquisition of Sanzonate in April 2025.
Goodwill impairment. In connection with the proposed sale of the CleanCore segment, the Company obtained a third party valuation of the business and performed a quantitative impairment test. The test indicated that the fair value of the reporting unit was less than the carrying amount. As a result, the Company fully impaired its goodwill balance as of June 30, 2026.
Total Other income (expense), net. We had $116,182,144 in Total other expense, net, or (3,410.67)% of revenue, for the year ended June 30, 2026, as compared to $355,934 Other expense, net, or 17.17% of revenue, for the year ended June 30, 2025. Total other expense, net, for the year ended June 30, 2026 consisted of a change in fair value of digital assets held of $(116,318,363), interest income, net, of $140,365, and a foreign exchange loss of $4,146, while other expense, net, for the year ended June 30, 2025, consisted entirely of interest expense. The increase in change in fair value of digital assets is driven by the adoption of our digital asset treasury and a decrease in fair value of Dogecoin, and the increase in interest income is driven by cash from pre-funded warrants and issuance of ATM in the bank earning interest.
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Net loss. As a result of the cumulative effect of the factors described above, we had a net loss of $174,160,864 for the year ended June 30, 2026, as compared to $6,742,275 for the year ended June 30, 2025, an increase in loss of $167,418,589, or 2,483.12%.
Liquidity and Capital Resources
Our company has incurred losses and negative cash flows from operations. From October 17, 2022 (the date of the acquisition) through June 30, 2026, we have financed our operations primarily through private investor funding. As of June 30, 2026, we had cash and cash equivalents of $15,435,213. For the year ended June 30, 2026, we had a net loss of $174,160,864 and cash used in operating activities of $18,157,390.
Despite our recent offerings described below, management believes that currently available resources will not be sufficient to fund our planned capital expenditures over the next 12 months. These factors, individually and collectively, indicate that a material uncertainty exists that raises substantial doubt about our company’s ability to continue as a going concern for 12 months from the date of issuance of the accompanying consolidated financial statements.
We will be dependent upon the raising of additional capital through equity and/or debt financing in order to implement our business plan and generate sufficient revenue in excess of costs. If we raise additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of our common stock. If we raise additional funds by issuing debt, we may be subject to limitations on its operations, through debt covenants or other restrictions. There is no assurance that we will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on our financial condition. The accompanying consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should we be unable to continue as a going concern.
The accompanying consolidated financial statements have been prepared on a going concern basis under which our company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business.
Summary of Cash Flow
The following table provides detailed information about our net cash flow for the years ended June 30, 2026 and 2025.
| Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (18,157,390 | ) | $ | (2,337,659 | ) | ||
| Net cash used in investing activities | (130,274,845 | ) | (614,181 | ) | ||||
| Net cash provided by financing activities | 162,383,965 | 2,374,967 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 22,486 | 21,259 | ||||||
| Net increase (decrease) in cash | 13,974,216 | (555,614 | ) | |||||
| Cash at beginning of year | 1,460,997 | 2,016,611 | ||||||
| Cash at end of year | $ | 15,435,213 | $ | 1,460,997 | ||||
Net cash used in operating activities was $18,157,390 for the year ended June 30, 2026, as compared to $2,337,659 for the year ended June 30, 2025. For the year ended June 30, 2026, our net loss of $174,160,864, offset by a change in fair value of digital assets of $116,318,363, non-cash professional fees of $26,482,428, stock-based compensation of $9,227,013, goodwill impairment of $2,237,910 and intangibles impairment of $1,748,969, were the primary drivers of net cash used in operating activities. For the year ended June 30, 2025, our net loss of $6,742,275, offset by non-cash stock-based compensation of $3,203,230, were the primary drivers of net cash used in operating activities.
Net cash used in investing activities was $130,274,845 for the year ended June 30, 2026, as compared to $614,181 for the year ended June 30, 2025. The net cash used in investing activities for the year ended June 30, 2026 consisted of net purchases of digital assets of $148,605,650 and purchases of property and equipment of $37,555, offset by the sale of digital assets of $18,368,360, while the net cash used investing activities for the year ended June 30, 2025 consisted of $581,792 cash used in the acquisition of the assets of Sanzonate and purchases of property and equipment of $32,389.
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Net cash provided by financing activities was $162,383,965 for the year ended June 30, 2026, as compared to $2,374,967 for the year ended June 30, 2025. Net cash provided by financing activities for the year ended June 30, 2026 consisted of proceeds from the private placement described below of $137,907,255, proceeds from the Sales Agreement described below of $27,270,267, and proceeds from the exercise of warrants of $370,288, offset by repayments of notes payable of $660,000, payments for deferred offering costs of $1,078,967, funds provided for a note receivable of $1,000,000 and repayments of related party loans of $425,241, while net cash provided by financing activities for the year ended June 30, 2025 consisted of proceeds from the issuance of promissory notes and warrants of $1,510,000, proceeds from the issuance of original issue discount notes of $500,000, proceeds from the exercise of warrants of $403,171 and proceeds from related party loans of $332,193, offset by payments of notes payable of $316,920 and payments for deferred offering costs of $53,477.
On August 29, 2025, we entered into an amended and restated sales agreement, or the Prior Sales Agreement, with Maxim Group LLC and Curvature Securities LLC, or the Prior Sales Agents, pursuant to which we could, from time to time, in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended, issue and sell through or to the Prior Sales Agents up to a maximum aggregate amount of $1,150,000,000 of shares of common stock. During the year ended June 30, 2026, we issued an aggregate of 10,915,474 shares of common stock under the Prior Sales Agreement for gross proceeds of $28,111,924 and net proceeds of approximately $27,270,267. In May 2026, the Prior Sales Agreement was terminated, and the Company entered into a new sales agreement with Cantor Fitzgerald & Co., and Curvature Securities LLC, or the Sales Agents, pursuant to which we may offer and sell shares of common stock from time to time through the Sales Agents, acting as agent for up to $750,000,000 of shares of common stock.
On September 5, 2025, we completed an offering of pre-funded warrants to purchase an aggregate of 175,000,420 shares of common stock for aggregate gross proceeds of $175,000,420, of which $148,650,530 was paid in cash and $26,349,890 was paid in cryptocurrency. After deducting placement agent fees, reimbursed expenses, and other offering expenses from the total gross proceeds, including both cash and cryptocurrency gross proceeds, we received net proceeds of approximately $164,257,145. Of this amount, approximately $1,075,000 was used to pay off outstanding indebtedness and $4,400,000 was to be used for working capital and general corporate purposes, with the balance of the net proceeds used to acquire Dogecoin. The Company sold its Dogecoin holdings on July 20, 2026 and allocated the cash proceeds to the AI Critical Infrastructure. As of June 30, 2026, none of our cash is classified as restricted.
Debt
Please see Notes 14 and 15 to the accompanying consolidated financial statements for a description of the terms of our outstanding debt.
Contractual Obligations
Pursuant to the terms of the Asset Management Agreement, we agreed to pay the Asset Manager and 21Shares a monthly fee in arrears computed at an annual rate as follows: (i) 2% in the aggregate on amounts up to and including $1,000,000,000 in Treasury Account value, with 1.75% paid to the Asset Manager and 0.25% paid to 21Shares; (ii) 1.75% in the aggregate on amounts above $1,000,000,000 up to and including $1,500,000,000 in Treasury Account value, with 1.5% paid to the Asset Manager and 0.25% paid to 21Shares; and (iii) 1.5% in the aggregate on amounts above $1,500,000,000 in Treasury Account value, with 1.25% paid to the Asset Manager and 0.25% paid to 21Shares. Such payments may be made, in the sole discretion of the Asset Manager or 21Shares, in shares of common stock, cash, or Dogecoin and shall be pro-rated for partial periods. These agreements were terminated on February 27, 2026.
On November 17, 2025, we entered into a strategic advisor agreement with Dogecoin Ventures LLC (which, for the avoidance of doubt, is not related to the Asset Manager), pursuant to which we engaged Dogecoin Ventures LLC to provide certain advisory services relating to our digital asset treasury business in exchange for, among other things, a monthly advisory fee of $83,333. This agreement was terminated on February 27, 2026.
Our other principal commitments consist mostly of obligations under the loans described in Note 20 to our audited consolidated financial statements. We also had a non-cancellable operating lease commitment for our office facility expiring in 2028 as described in Note 20 to the audited consolidated financial statements.
Other than the foregoing, at June 30, 2026, we did not have other long-term debt obligations, capital (finance) lease obligations, operating lease obligations, purchase obligations or other long-term liabilities reflected on our statements of financial position.
33
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The following discussion relates to critical accounting policies for our company. The preparation of financial statements in conformity with United States generally accepted accounting principles, or GAAP, requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:
Revenue Recognition. We generate revenues from sales of our products and recognize revenue as control of the products is transferred to customers, which is generally at the time of shipment based on the contractual terms with our customers. We provide customer programs and incentive offerings, including growth incentives and volume-based incentives. These customer programs and incentives are considered variable consideration. We include in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. This determination is made based upon known customer program and incentive offerings at the time of sale, and expected sales volume forecasts as it relates to our volume-based incentives. This determination is updated every reporting period. For the years ended June 30, 2026 and 2025, customer growth and volume-based incentives were minimal. Certain product sales include a 2-year manufacturer’s warranty that provides the customer with assurance that the product performs as intended. Such warranties are assurance-type warranties and are accounted for as contingencies under ASC 460-10.
Asset Acquisitions. Acquisitions of assets that do not meet the definition of a business are accounted for using the cost accumulation and allocation model. The cost accumulation and allocation model requires us to measure the assets acquired based on their cost, which is then allocated to the assets on a relative fair value basis. The cost of the assets includes direct acquisition-related costs such as fees paid to external advisors, attorneys, and accountants. When the cost of the acquired assets is greater than the fair value of the group, the excess cost is allocated to the nonfinancial assets acquired. Contingent consideration included in an asset acquisition is first assessed as to whether it qualifies as a derivative instrument. If it does, we would measure the contingent consideration at fair value with changes in fair value reported in earnings. If the contingent consideration is not a derivative instrument, we will recognize the contingent consideration when it is probable and estimable and subsequent changes are recorded as adjustments to the carrying amount of the assets acquired. Determining the fair value of assets acquired, for purposes of allocating cost based on their relative fair values, requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. Estimates of fair value are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from those estimates.
Intangible Assets. Intangible assets primarily consisted of existing technology, customer relationships, and trademarks obtained as a result of the acquisition on October 17, 2022. Intangible assets with definite lives are amortized based on their pattern of economic benefit over their estimated useful lives and reviewed periodically for impairment. Our trademarks are deemed to have an indefinite life. The estimated useful life of the acquired technology is 15 years while the estimated useful life of the customer relationships is 5 years. In connection with the proposed sale of the CleanCore segment, we have fully impaired our intangible assets as of June 30, 2026. See Note 12 for additional details. During the year ended June 30, 2025, as a result of the analysis, we recognized an impairment loss of $261,250 on our customer relationship intangible asset.
Impairment of Long-Lived Assets. Long-lived assets consist primarily of property and equipment and intangible assets. Long-lived assets are tested for impairment when events and circumstances indicate the assets might be impaired by first comparing the estimated future undiscounted cash flows of the asset or asset group to the carrying value. If the carrying value exceeds the estimated future undiscounted cash flows, an impairment loss is recognized based on the amount that the carrying value exceeds the fair value of the asset or asset group.
34
In connection with the proposed sale of the CleanCore segment, we fully impaired our intangible assets during the year ended June 30, 2026. We compared the estimated future undiscounted cash flows of property and equipment noting that the undiscounted future cash flows were greater than the carrying amount. Therefore, we concluded that property and equipment is not impaired for the years ended June 30, 2026 and 2025. See Note 12 for additional details. Subsequent evaluations will be performed annually on June 30, per our policy.
Impairment of Goodwill. We evaluate goodwill for impairment annually, as of June 30, or more frequently when indicators of impairment exist. We consider qualitative factors including market conditions, legal factors, operating performance indicators, and competition, among others, to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If we conclude that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, we perform a quantitative impairment test. In performing the quantitative impairment test, we compare the fair value of its reporting unit to the carrying amount including the goodwill of the reporting unit. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, we will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value.
In connection with the proposed sale of the CleanCore segment, we obtained a third party valuation of the business and performed a quantitative impairment test. The test indicated that the fair value of the reporting unit was less than the carrying amount. As a result, we fully impaired our goodwill balance as of June 30, 2026. Subsequent evaluations will be performed annually on June 30, per our policy.
Digital Assets
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company’s dogecoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in the statement of operations each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective September 2025.
The Company accounts for its digital assets, which were comprised solely of Dogecoin, as indefinite-lived intangible assets in accordance with ASC 350-60 (Intangibles – Goodwill and Other – Crypto Assets). The Company had ownership and control over its digital assets and uses well-known crypto custodians to secure it.
The Company’s digital assets were initially recorded at cost, with the cost basis determined using the weighted average cost (“WAC”) method. Upon disposal, the cost basis of the digital assets sold is determined using the WAC method.
Digital assets were measured at fair value at each reporting period. The Company determined the fair value of Dogecoin in accordance with ASC 820 (Fair Value Measurement), based on the period-end quoted (unadjusted) prices in the Company’s principal market. Changes in fair value are recognized at each reporting date within the change in fair value of digital assets line item in the statement of operations. Upon disposal, the net cash received was subtracted from the cost basis of assets sold to determine the change in fair value of digital assets for the disposed assets.
The vast majority of the Company’s assets were concentrated in its Dogecoin holdings until all Dogecoin tokens were sold on July 20, 2026. Dogecoin is a digital asset, which is a novel asset class that is subject to significant legal, commercial, regulatory and technical uncertainty. Holding Dogecoin did not generate any cash flows and involves custodial fees and other costs. Additionally, the price of Dogecoin has historically experienced significant price volatility, and a significant decrease in the price of Dogecoin adversely affected the Company’s financial condition and results of operations. The Company’s strategy of acquiring and holding Dogecoin also exposed it to counterparty risks with respect to the custody of its Dogecoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, the Company was subject to the risk that, if its private keys with respect to its digital assets were lost or destroyed or other similar circumstances or events occur, the Company may have lost some or all of its digital assets, which could materially adversely affect the Company’s financial condition and results of operations.
35
Stock-based Compensation. Compensation expense is recognized for all share-based payments to employees and non-employees, including stock options, restricted stock awards, and warrants, in the statements of operation based on the fair value of the awards that are granted. As necessary, our stock price at the date of grant was estimated using an acceptable valuation technique such as the probability-weighted expected return model. The fair value of stock options and warrants are estimated at the date of grant using the Black-Scholes option-pricing model. The fair value of restricted stock awards is based on the fair market value of our common stock on the date of grant. Compensation expense for restricted stock awards with performance-based vesting conditions is calculated based on the number of awards that are expected to vest during the performance period if it is probable that the performance metrics will be achieved. Generally, measured compensation cost, net of actual forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award. We account for forfeitures of stock-based awards as they occur.
| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Not applicable.
| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
The full text of our audited consolidated financial statements begins on page F-1 of this annual report.
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
None.
| ITEM 9A. | CONTROLS AND PROCEDURES. |
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure information required to be disclosed in our reports that we file or furnish pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer, principal financial officer and principal accounting officer), as appropriate to allow for timely decisions regarding required disclosure.
Our management, with the participation of our principal executive officer, who also serves as principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. Based on such evaluation, our principal executive officer has concluded that, as of such date, our disclosure controls and procedures were not effective at a reasonable assurance level due to the material weaknesses in internal control over financial reporting described below.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officer, who also serves as our principal financial and accounting officer, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and includes those policies and procedures that:
| (1) | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
| (2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and |
| (3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
36
Our management evaluated the effectiveness of our internal control over financial reporting as of June 30, 2026. In making this evaluation, management used the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on our evaluation, we determined that, as of June 30, 2026, our internal control over financial reporting was not effective due to the following material weaknesses:
| ● | We lack a sufficient number of trained professionals with the expertise to design, implement, and execute a formal risk assessment process and formal accounting policies, procedures, and controls over accounting and financial reporting to ensure the timely and accurate recording of financial transactions while maintaining a segregation of duties. |
| ● | We lack a sufficient number of trained professionals with the appropriate GAAP technical expertise to identify, evaluate, and account for complex transactions and review valuation reports prepared by external specialists. |
We are planning on implementing measures designed to improve our internal control over financial reporting to remediate these material weaknesses, including formalizing our processes and internal control documentation and strengthening supervisory reviews by our financial management and hiring additional qualified accounting and finance personnel and engaging financial consultants to enable the implementation of internal control over financial reporting and segregating duties amongst accounting and finance personnel.
While we are implementing these measures, we cannot assure you that these efforts will remediate our material weaknesses and significant deficiencies in a timely manner, or at all, or prevent restatements of our financial statements in the future. If we are unable to successfully remediate our material weaknesses, or identify any future significant deficiencies or material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports, and the market price of our common stock may decline as a result.
Our management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
As a smaller reporting company, we are not required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm in this report.
Changes in Internal Controls over Financial Reporting
We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.
Except for the matters described above, there have been no changes in our internal control over financial reporting during the fourth quarter of fiscal year 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| ITEM 9B. | OTHER INFORMATION. |
We have no information to disclose that was required to be in a report on Form 8-K during the fourth quarter of fiscal year 2026 but was not reported.
None of
our directors or executive officers
| ITEM 9C. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. |
Not applicable.
37
PART III
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
The information required by this Item will be included in our definitive proxy statement to be filed with the SEC within 120 days after June 30, 2026 in connection with the solicitation of proxies for our 2026 annual meeting of stockholders, or the 2026 Proxy Statement, and is incorporated herein by reference.
| ITEM 11. | EXECUTIVE COMPENSATION. |
The information required by this Item will be included in the 2026 Proxy Statement and is incorporated herein by reference.
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
The information required by this Item will be included in the 2026 Proxy Statement and is incorporated herein by reference.
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
The information required by this Item will be included in the 2026 Proxy Statement and is incorporated herein by reference.
| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES. |
The information required by this Item will be included in the 2026 Proxy Statement and is incorporated herein by reference.
38
PART IV
| ITEM 15. | EXHIBIT AND FINANCIAL STATEMENT SCHEDULES. |
| (a) | List of Documents Filed as a Part of This Report: |
| (1) | Index to Financial Statements: |
| (2) | Index to Financial Statement Schedules: |
All schedules have been omitted because the required information is included in the financial statements or the notes thereto, or because it is not required.
| (3) | Index to Exhibits: |
See exhibits listed under Part (b) below.
39
(b) Exhibits:
40
41
| * | Filed herewith |
| ** | Furnished herewith |
| † | Executive compensation plan or arrangement |
| ITEM 16. | FORM 10-K SUMMARY. |
None.
42
FINANCIAL STATEMENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Zone
Frontier, formerly known as
CleanCore Solutions, Inc. and its Subsidiaries,
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Zone Frontier, formerly known as CleanCore Solutions, Inc. and its Subsidiaries (the Company) as of June 30, 2026, and 2025, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the two-year ended June 30, 2026, and 2025, and the related notes (collectively referred to as the consolidated “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026, and 2025, and the results of its operations and its cash flows for the two-year periods ended June 30, 2026, and 2025, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has an accumulated deficit and negative cash flows from operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
| /s/ |
|
| We have served as the Company’s auditor since 2022. | |
| September 28, 2026 | |
F-2
ZONE
FRONTIER INC.
CONSOLIDATED BALANCE SHEETS
| As of June 30, | ||||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory, net | ||||||||
| Deferred offering costs | ||||||||
| Note receivable, related party | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right of use assets | ||||||||
| Digital assets | ||||||||
| Intangibles, net | ||||||||
| Goodwill | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Lease liability – current | ||||||||
| Note payable – current | ||||||||
| Note payable – related party | ||||||||
| Due to related parties | ||||||||
| Total current liabilities | ||||||||
| Lease liability – non-current | ||||||||
| Note payable – non-current | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 20) | ||||||||
| Stockholders’ Equity | ||||||||
| Class A Common Stock;
$ |
||||||||
| Common
Stock (formerly class B); $ |
||||||||
| Additional paid-in capital | ||||||||
| Other comprehensive income | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
F-3
ZONE
FRONTIER INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue, net | $ | $ | ||||||
| Cost of sales (exclusive of depreciation shown separately below) | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| General and administrative | ||||||||
| Advertising expense | ||||||||
| Depreciation and amortization expense | ||||||||
| Goodwill impairment | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( |
) | ( |
) | ||||
| Other income (expense) | ||||||||
| Interest income (expense), net | ( |
) | ||||||
| Change in fair value of digital assets | ( |
) | ||||||
| Foreign exchange gain (loss) | ( |
) | ||||||
| Total other income (expense) | $ | ( |
) | ( |
) | |||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Foreign currency translation adjustment | ||||||||
| Total comprehensive loss | $ | ( |
) | $ | ( |
) | ||
| Net loss per share of Class A and common stock (formerly class B), basic and diluted | $ | ( |
) | $ | ( |
) | ||
| Weighted average shares used in computing net loss per Class A share, basic and diluted | ||||||||
| Weighted average shares used in computing net loss per Class B share, basic and diluted | ||||||||
The accompanying notes are an integral part of these financial statements.
F-4
ZONE
FRONTIER INC.
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
| Class
A Common Stock |
Common
Stock (formerly Class B) |
Additional Paid in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||||||||
| Balance at July 1, 2024 | $ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
| Conversion of class A common stock into class B common stock | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Issuance of class A common stock upon exercise of options | - | |||||||||||||||||||||||||||||||
| Issuance of class B common stock upon vesting of restricted stock units – 2022 Equity Incentive Plan | - | |||||||||||||||||||||||||||||||
| Issuance of restricted stock awards – 2022 Equity Incentive Plan | - | |||||||||||||||||||||||||||||||
| Issuance of Class B common stock upon exercise of warrants | - | |||||||||||||||||||||||||||||||
| Issuance of Class B common stock pursuant to convertible notes | - | |||||||||||||||||||||||||||||||
| Issuance of Class B common stock upon settlement of debt | - | |||||||||||||||||||||||||||||||
| Issuance of class B common stock under separation agreement | - | |||||||||||||||||||||||||||||||
| Issuance of class B common stock under settlement agreement | - | |||||||||||||||||||||||||||||||
| Stock based compensation – 2022 Equity incentive plan | - | - | ||||||||||||||||||||||||||||||
| -Modification of related party debt | - | - | ||||||||||||||||||||||||||||||
| Acquisition-related costs | - | - | ||||||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
| Conversion of class A common stock into class B common stock | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Issuance of common stock in at-the-market offering | - | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | - | |||||||||||||||||||||||||||||||
| Issuance of common stock upon settlement of debt | - | |||||||||||||||||||||||||||||||
| Issuance of common stock under settlement agreement | - | |||||||||||||||||||||||||||||||
| Issuance of common stock for services | - | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of options – 2022 Equity Incentive Plan | ( |
) | ||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units – 2022 Equity Incentive Plan | ||||||||||||||||||||||||||||||||
| Issuance of restricted stock awards – 2022 Equity Incentive Plan | - | |||||||||||||||||||||||||||||||
| Issuance of restricted stock awards for services – 2022 Equity Incentive Plan | - | |||||||||||||||||||||||||||||||
| Issuance of common stock – 2022 Equity Incentive Plan | ||||||||||||||||||||||||||||||||
| Common stock cancelled | - | ( |
) | ( |
) | |||||||||||||||||||||||||||
| Stock based compensation – 2022 Equity incentive plan | - | - | ||||||||||||||||||||||||||||||
| Currency translation adjustment | ||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
F-5
ZONE
FRONTIER INC.
CONSOLIDATED
STATEMENT OF CASH FLOWS
| Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Accretion of note payable discount | ||||||||
| Non-cash interest expense | ||||||||
| Change in fair value of digital assets | ||||||||
| Impairment of goodwill | ||||||||
| Stock based compensation | ||||||||
| Non-cash professional fees | ||||||||
| Non-cash lease expense | ( |
) | ( |
) | ||||
| Reversal of contingent liability | ( |
) | ||||||
| Modification of related party debt | ||||||||
| Provision for bad debt and write-off on uncollectable accounts | ||||||||
| Provision for inventory reserve and write-off | ||||||||
| Impairment of intangibles | ||||||||
| Foreign exchange (gain)/loss | ( |
) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ||||||
| Inventory | ( |
) | ( |
) | ||||
| Prepaid expenses | ( |
) | ( |
) | ||||
| Deferred revenue | ( |
) | ||||||
| Due to related parties | ( |
) | ||||||
| Accounts payable and accrued liabilities | ( |
) | ||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Investing activities | ||||||||
| Purchase of property and equipment | ( |
) | ( |
) | ||||
| Purchase of digital assets | ( |
) | ||||||
| Sale of digital assets | ||||||||
| Cash used in acquisition | ( |
) | ||||||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of common stock (ATM), net of fees | ||||||||
| Proceeds from related party loans | ||||||||
| Proceeds from issuance of promissory notes and warrants | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Proceeds from issuance of original issue discount notes | ||||||||
| Proceeds from pre-funded warrants, net of fees | ||||||||
| Funds provided for related party notes receivable | ( |
) | ||||||
| Payments for deferred offering costs | ( |
) | ( |
) | ||||
| Payments on notes payable | ( |
) | ( |
) | ||||
| Repayments of loans due to related parties | ( |
) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ||||||||
| Net increase (decrease) in cash | ( |
) | ||||||
| Cash and cash equivalents at beginning of year | ||||||||
| Cash and cash equivalents at the end of year | $ | $ | ||||||
| Supplementary cash flow disclosure | ||||||||
| Interest paid | $ | $ | ||||||
| Unpaid deferred offering costs | $ | $ | ||||||
| Debt to equity conversion | $ | $ | ||||||
| Digital assets received in connection with pre-funded warrants | $ | |||||||
| Issuance of debt in connection with acquisition | $ | $ | ||||||
| Issuance of warrants in connection with acquisition | $ | $ | ||||||
| Fair value of assets acquired | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
F-6
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| 1. | Organization and Business |
Zone Frontier Inc., formerly CleanCore Solutions, Inc. (“the Company”, “we”, or “Zone”) is helping to build the critical infrastructure that powers the AI economy. We aim to meet the increasing demand for compute capacity, power, and digital infrastructure required by the world’s leading AI companies.
We specialize in providing powered land and facilities, in conjunction with our development partners, to support over one gigawatt of computer power by 2030. With campuses being developed across rural and industrial Minnesota and Texas, we expect to bring approximately 55 MW of utility power capacity and 40 MW of critical IT load online and revenue generating during the first calendar quarter of 2027.
We were incorporated in the State of Nevada on August 23, 2022 under the name CC Acquisition Corp. for the sole purpose of acquiring substantially all of the assets of CleanCore Solutions, LLC, a Delaware limited liability company. On November 21, 2022, we changed our name from CC Acquisition Corp. to CleanCore Solutions, Inc.
On
October 17, 2022, we entered into an asset purchase agreement with CleanCore LLC, TetraClean, Food Safety and Burlington Capital, LLC,
or Burlington, the majority owner of these entities, pursuant to which we acquired substantially all of the assets of CleanCore LLC, TetraClean
and Food Safety for a total purchase price of $
On
January 29, 2025, we established CleanCore Global as a wholly owned subsidiary in Ireland. On February 21, 2025, CleanCore Global entered
into an asset purchase agreement, with Sanzonate Europe Ltd., an Irish incorporated company, pursuant to which on April 15, 2025 CleanCore
Global acquired substantially all of the assets of Sanzonate for an aggregate purchase price of $
On September 5, 2025, we adopted a digital asset treasury strategy focused on Dogecoin and entered into a multiyear asset advisory management agreement with Dogecoin Ventures, Inc. and 21Shares US LLC. As of February 27, 2026, all asset management agreements have been terminated and substantially all digital assets were sold on July 20, 2026.
On June 8, 2026, the Company announced a new focus on building critical AI infrastructure across the United States, led by newly hired CEO Tyler Hassen, and plans to move away from its cleaning products business and Dogecoin treasury strategy.
On June 8, 2026, the Company also announced plans to sell or dispose substantially all assets of the cleaning products business, including the wholly owned Irish subsidiary, CleanCore Global Inc. The Company is in the process of selling this business unit but is not under binding contract with any party as of September 28, 2026. The segment did not meet the criteria as Held for Sale as of June 30, 2026 and is included in this Report.
On July 9, 2026, the Company announced its first data center project. Located in West Texas, and with development platform provider HST Technologies, Inc., it is projected to supply an initial 200-megawatts of utility power by 2029, with potential to expand to more than 500-megawatts by 2030.
On July 29, 2026, the Company announced its second data center project, its flagship campus located in Minnesota. The site is already powered and under exclusive pre-leased occupancy with Cerebras Systems, a leading AI compute company. It is expected to generate revenue beginning in the first calendar quarter of 2027, offering 55-megawatts of utility power and 40-megawatts of critical load, once fully built out.
On August 31, 2026, the Company changed its name from CleanCore Solutions Inc. to Zone Frontier Inc.
As of June 30, 2026, the headquarters, principal address and records of the Company were located at 5920 South 118th Circle, Omaha, Nebraska. In July 2026, the Company moved its headquarters to 5718 Westheimer Road, Suite 1000, Houston, Texas 77057.
F-7
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Liquidity
The
Company has incurred losses and negative cash flows from operations. From October 17, 2022 (the date of the acquisition) through June
30, 2026, the Company has financed its operations primarily through investor funding. As of June 30, 2026, the Company had cash of $
On
September 5, 2025, the Company completed an offering of pre-funded warrants to purchase an aggregate of
During
the year ended June 30, 2026, the company sold an aggregate of
On
August 29, 2025, the Company entered into an amended and restated sales agreement (the “Prior Sales Agreement”) with Maxim
Group LLC and Curvature Securities LLC (the “Prior Sales Agents”), which amended and restated that certain sales agreement,
dated June 20, 2025, between the Company and Curvature Securities LLC in its entirety. Pursuant to the terms of the Prior Sales Agreement,
the Company could, from time to time, in transactions that are deemed to be “at the market offerings” as defined in Rule 415
under the Securities Act of 1933, as amended, issue and sell through or to the Prior Sales Agents up to a maximum aggregate amount of $
Despite the initial public offering described above, management believes that currently available resources will not be sufficient to fund the Company’s planned expenditures over the next 12 months. These factors, individually and collectively, indicate that a material uncertainty exists that raises substantial doubt about the Company’s ability to continue as a going concern for 12 months from the date of issuance of these consolidated financial statements.
The Company will be dependent upon the raising of additional capital through equity and/or debt financing in order to implement its business plan and generate sufficient revenue in excess of costs. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock. If the Company raises additional funds by issuing debt, the Company may be subject to limitations on its operations, through debt covenants or other restrictions. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. These consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business.
F-8
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| 2. | Summary of Significant Accounting Policies |
Basis of Presentation and Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments considered necessary for a fair presentation have been included.
Use of Estimates
The preparation of the Company’s consolidated financial statements require management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure in the Company’s consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates. Significant estimates and assumptions made by the Company are allowance for bad debt, useful lives of fixed assets, warranty liabilities, accrued contingent liabilities, and allowance for inventory obsolescence.
Foreign Currency
The Company’s consolidated financial statements are reported in U.S. Dollars (“USD”), the CleanCore US’s functional currency. The functional currency for the subsidiary in Ireland, CleanCore Global, is the Euro (“EUR”). The translation of EUR into USD is performed for balance sheet accounts using the exchange rates in effect as of the balance sheet date and for revenues and expense accounts using an average exchange rate prevailing during the respective period. The gains or losses resulting from such translation are reported as currency translation adjustments under other comprehensive income/loss, or under accumulated other comprehensive income/loss as a separate component of equity.
Monetary assets and liabilities of the Company that are denominated in currencies other than EUR are translated into their respective functional currency at the rates of exchange prevailing on the balance sheet date. Transactions of the Company that are denominated in currencies other than EUR are translated into the respective functional currencies at the average exchange rate prevailing during the period of the transaction. The gains or losses resulting from foreign currency transactions are included in the consolidated statements of operations.
Comprehensive Income (Loss)
Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss), net of tax. Other comprehensive income (loss), net of tax, refers to revenue, expenses, gains, and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net income (loss). The Company’s other comprehensive income (loss), net of tax, consists of foreign currency translation adjustments that result from consolidation of its foreign entity.
Risks and Uncertainties
The Company is subject to a number of risks similar to other early-stage companies including, but not limited to, profitability, the need for additional financing to achieve its business strategy, ability to obtain regulatory approval, significant competition, and dependence on key individuals.
Cash and Cash Equivalents
Cash consists of cash in readily available checking and money market accounts. Cash is recorded at cost, which approximates fair value. As of June 30, 2026 and 2025, cash balances were deposited at a major financial institution. Cash balances are subject to minimal credit risk as the balances are with high credit quality financial institutions.
Concentration of Credit Risk
Financial instruments, which potentially subject the Company to significant concentration of credit risk, consist of cash. The Company maintains deposits in federally insured financial institutions in excess of respective insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
F-9
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Major Customers
The
Company had two customers that accounted for
Major Vendors
The Company sources many of its finished products from one vendor. The Company expects to maintain this relationship with the vendor; however, it does have a contingency plan in place to use other vendors if necessary, which could result in production delays.
Accounts Receivable
Accounts
receivable is comprised of trade receivables from the Company’s customers. Accounts receivable are recorded at the invoiced amount
and do not bear interest. The Company established an allowance for bad debt of accounts receivables based on a percentage assigned to
aged days outstanding categories. The Company recorded an allowance for doubtful accounts of $
Inventory
Inventory
consists of parts, work in progress and finished goods. The Company values parts and finished goods at the lower of the actual costs or
net realizable value. The Company values work in progress at cost. The Company periodically reviews inventory for obsolete and potentially
impaired items. As of June 30, 2026 and 2025, the Company maintained an allowance for slow-moving and inventory obsolescence of $
Digital Assets
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company’s dogecoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in the statement of operations each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective September 2025.
The Company accounts for its digital assets, which were comprised solely of Dogecoin, as indefinite-lived intangible assets in accordance with ASC 350-60 (Intangibles – Goodwill and Other – Crypto Assets). The Company had ownership and control over its digital assets and used well-known crypto custodians to secure it.
The Company’s digital assets were initially recorded at cost, with the cost basis determined using the weighted average cost (“WAC”) method. Upon disposal, the cost basis of the digital assets sold was determined using the WAC method.
Digital assets were measured at fair value at each reporting period. The Company determined the fair value of Dogecoin in accordance with ASC 820 (Fair Value Measurement), based on the period-end quoted (unadjusted) prices in the Company’s principal market. Changes in fair value were recognized at each reporting date within the change in fair value of digital assets line item in the statement of operations. Upon disposal, the net cash received was subtracted from the cost basis of assets sold to determine the change in fair value of digital assets for the disposed assets.
F-10
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
The vast majority of the Company’s assets were concentrated in its Dogecoin holdings until all Dogecoin tokens were sold on July 20, 2026. Dogecoin is a digital asset, which is a novel asset class that is subject to significant legal, commercial, regulatory and technical uncertainty. Holding Dogecoin did not generate any cash flows and involves custodial fees and other costs. Additionally, the price of Dogecoin has historically experienced significant price volatility, and a significant decrease in the price of Dogecoin adversely affected the Company’s financial condition and results of operations. The Company’s strategy of acquiring and holding Dogecoin also exposed it to counterparty risks with respect to the custody of its Dogecoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, the Company was subject to the risk that, if its private keys with respect to its digital assets are lost or destroyed or other similar circumstances or events occur, the Company may have lost some or all of its digital assets, which could have materially adversely affect the Company’s financial condition and results of operations.
Leases
The Company accounts for leases in accordance with ASC Topic 842 (Topic 842), Leases. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The lease liability is measured as the present value of the unpaid lease payments, and the right-of-use asset value is derived from the calculation of the lease liability. Operating leases are included in right-of-use assets, current lease liabilities, and noncurrent lease liabilities in the consolidated balance sheet.
Lease payments include fixed and in-substance fixed payments, variable payments based on an index or rate, reasonably certain purchase options, termination penalties, and probable amounts the lessee will owe under a residual value guarantee. Variable lease payments are recognized as lease expenses as incurred, and generally relate to variable payments made based on the level of services provided by the landlords of the leases. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term within general and administrative expenses in the consolidated statement of operations.
The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments because the Company does not have the information necessary to determine the rate implicit in the lease. The Company’s lease term includes any option to extend the lease when it is reasonably certain to be exercised based on consideration of all relevant factors. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.
Asset Acquisitions.
Acquisitions of assets that do not meet the definition of a business are accounted for using the cost accumulation and allocation model. The cost accumulation and allocation model requires the Company to measure the assets acquired based on their cost, which is then allocated to the assets on a relative fair value basis. The cost of the assets includes direct acquisition-related costs such as fees paid to external advisors, attorneys, and accountants. When the cost of the acquired assets is greater than the fair value of the group, the excess cost is allocated to the nonfinancial assets acquired. Contingent consideration included in an asset acquisition is first assessed as to whether it qualifies as a derivative instrument. If it does, the Company would measure the contingent consideration at fair value with changes in fair value reported in earnings. If the contingent consideration is not a derivative instrument, the Company will recognize the contingent consideration when it is probable and estimable and subsequent changes are recorded as adjustments to the carrying amount of the assets acquired. Determining the fair value of assets acquired, for purposes of allocating cost based on their relative fair values, requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. Estimates of fair value are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from those estimates.
Intangible Assets
Intangible
assets primarily consisted of existing technology, customer relationships, and trademarks obtained as a result of the acquisition on October
17, 2022. Intangible assets with definite lives are amortized based on their pattern of economic benefit over their estimated useful lives
and reviewed periodically for impairment. The Company’s trademarks are deemed to have an indefinite life. The estimated useful life
of the acquired technology is
F-11
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Impairment of Long-Lived Assets
Long-lived assets consist primarily of property and equipment and intangible assets. Long-lived assets are tested for impairment when events and circumstances indicate the assets might be impaired by first comparing the estimated future undiscounted cash flows of the asset or asset group to the carrying value. If the carrying value exceeds the estimated future undiscounted cash flows, an impairment loss is recognized based on the amount that the carrying value exceeds the fair value of the asset or asset group.
In connection with the proposed sale of the CleanCore segment, the Company has fully impaired its intangible assets during the year ended June 30, 2026. The Company compared the estimated future undiscounted cash flows of property and equipment noting that the undiscounted future cash flows were greater than the carrying amount. Therefore, the Company concluded that property and equipment is not impaired for the years ended June 30, 2026 and 2025. See Note 12 for additional details. Subsequent evaluations will be performed annually on June 30, per the Company’s policy.
Impairment of Goodwill
The Company evaluates goodwill for impairment annually, as of June 30, or more frequently when indicators of impairment exist. The Company considers qualitative factors including market conditions, legal factors, operating performance indicators, and competition, among others, to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If the Company concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative impairment test. In performing the quantitative impairment test, the Company compares the fair value of its reporting unit to the carrying amount including the goodwill of the reporting unit. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, the Company will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value.
In connection with the proposed sale of the CleanCore segment, the Company obtained a third party valuation of the business and performed a quantitative impairment test. The test indicated that the fair value of the reporting unit was less than the carrying amount. As a result, the Company fully impaired its goodwill balance as of June 30, 2026. See Note 12 for additional details. Subsequent evaluations will be performed annually on June 30, per the Company’s policy.
Fair Value Measurements
The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels:
Level 1 – Quoted prices in active markets for identical assets and liabilities.
Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets.
Level 3 – Unobservable inputs.
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company’s financial assets are subject to fair value measurements on a recurring basis. The Company’s remaining carrying amounts reported in the consolidated balance sheets of these financial assets are a reasonable estimate of fair value due to their short-term nature or because their stated interest rates are indicative of market interest rates.
F-12
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Deferred Offering Costs
In
accordance with ASC 340-10-S99-1 and SEC Accounting Bulletin Topic 5A, specific incremental costs incurred directly attributable to a
proposed offering of securities were deferred. As the pre-funded warrants offering closed on September 5, 2025 (see Note 16), a total
of $
Patent Costs
Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are included in general and administrative expenses.
Advertising Costs
The
Company reports as expense the cost of advertising and promoting its services as incurred. Such amounts totaled $
Stock-based Compensation
Compensation expense is recognized for all share-based payments to employees and non-employees, including stock options, restricted stock awards, and warrants, in the statements of operation based on the fair value of the awards that are granted. As necessary, the Company’s stock price at the date of grant was estimated using an acceptable valuation technique such as the probability-weighted expected return model. The fair value of stock options and warrants are estimated at the date of grant using the Black-Scholes option-pricing model. The fair value of restricted stock awards is based on the fair market value of the Company’s common stock on the date of grant. Compensation expense for restricted stock awards with performance-based vesting conditions is calculated based on the number of awards that are expected to vest during the performance period if it is probable that the performance metrics will be achieved. Generally, measured compensation cost, net of actual forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award. The Company accounts for forfeitures of stock-based awards as they occur.
Revenue Recognition
The Company generates revenues from sales of its products and recognizes revenue as control of its products is transferred to its customers, which is generally at the time of shipment based on the contractual terms with the Company’s customers.
The Company provides customer programs and incentive offerings, including growth incentives and volume-based incentives. These customer programs and incentives are considered variable consideration. The Company includes in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. This determination is made based upon known customer program and incentive offerings at the time of sale and expected sales volume forecasts as it relates to the Company’s volume-based incentives. This determination is updated every reporting period. For the years ended June 30, 2026 and 2025, customer growth and volume-based incentives were minimal.
Certain product sales include a 2-year manufacturer’s warranty that provides the customer with assurance that the product performs as intended. Such warranties are assurance-type warranties and are accounted for as contingencies under ASC 460-10. Refer to Note 13 for warranty reserve.
F-13
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Income Taxes
The Company accounts for income taxes in accordance with income tax accounting guidance Accounting Standards Code (ASC) 740, Income Taxes. The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized.
Tax positions are recognized if it is more-likely-than-not, based on technical merits, that the tax position will be realized or sustained upon examination. The term “more-likely-than-not” means a likelihood of more than 50%; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment.
Net Loss per Share of Common Stock
Basic
net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares of each respective class
outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing
the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding
for the period. For purposes of the diluted net loss per share calculation, stock options, warrants and convertible debt are considered
to be potentially dilutive securities. As of June 30, 2026 and 2025, there were
Segment reporting
Operating segments are defined as components of an entity where discrete financial information is evaluated regularly by the Chief Executive Officer as the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, fund raising, allocating resources and evaluating financial performance.
During the twelve months ended June 30, 2026, the Company operated three Segments:
| ● | CleanCore, which specializes in the development and production of cleaning products that produce pure aqueous ozone using patented nanobubble technology that is highly effective in cleaning, sanitizing, and deodorizing surfaces and high-touch areas. |
| ● | Treasury, established on September 5, 2025 when the Company adopted a Digital Asset Trading strategy focused on Dogecoin as part of a $175 million private placement offering. |
| ● | Critical AI Infrastructure, announced on June 8, 2026, focused on building data centers to meet the increasing compute needs of AI companies. |
F-14
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Recent Accounting Pronouncements
Accounting Pronouncements Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance in this update is effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has adopted this pronouncement for the fiscal year beginning July 1, 2024, which did not result in a material impact on its consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company’s dogecoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in the statement of operations each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standards. The Company adopted this guidance effective September 2025.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid, and is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. The Company adopted this pronouncement for the fiscal year beginning July 1, 2025, which did not result in a material impact on its consolidated financial statements.
Accounting Pronouncements Pending Adoption
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements. Further, in January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarifies the effective date of ASU 2024-03. The guidance is effective for all public entities with fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact that adoption of this provision may have on its consolidated financial statements.
| 3. | Disaggregated Revenue |
The following table disaggregates revenue by product category for the following periods:
| Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Janitorial and Sanitation | $ | $ | ||||||
| Other | ||||||||
| Total Revenue | $ | $ | ||||||
The
“Other” category of revenue consists primarily of sales of ice and laundry units, parts, accessories, shipping and handling,
and equipment rental income.
| Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Domestic | $ | $ | ||||||
| International | ||||||||
| Total Revenue | $ | $ | ||||||
F-15
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
4. Cash and Cash Equivalents
Cash and cash equivalents consists of the following at:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Checking and savings | $ | |||||||
| Money market | ||||||||
| Total cash and cash equivalents | $ | |||||||
5. Asset Acquisition
On April 15, 2025, the Company completed its acquisition of specified assets of Sanzonate Europe Ltd. (“Sanzonate”). Sanzonate was a former customer of the Company that produces products similar to the Company’s products. The assets acquired included accounts receivable, inventory, and intangibles. The intangibles consisted of a license issued by the European Organization for Technical Assessment to sell ozone products in the European Union (“EOTA license”), Sanzonate’s trade name, and distribution agreements. The Company also retained one sales representative and one administrative resource. The Company entered into this transaction to expand its presence in the European Union.
The total cost of the assets consisted of the following:
| Consideration | Total Asset Cost | |||
| Cash | $ | |||
| Promissory note | ||||
| Warrant | ||||
| Direct acquisition-related costs | ||||
| Total | $ | |||
The
promissory note was a
In
addition, the transaction included contingent consideration in the form of an earnout of up to $
The total cost of the assets was allocated to the acquired assets in accordance with ASC 850-50, Acquisition of Assets Rather than a Business, as follows:
| Asset | Allocated Cost | |||
| Accounts receivable | $ | |||
| Inventory | ||||
| EOTA license | ||||
| Trade name | ||||
| Distribution agreements | ||||
| Total | $ | |||
The accounts receivable was assessed for collectability and recorded at fair value as of the closing date. Similarly, inventory was reviewed for obsolescence and recorded at fair value as of the closing date.
The
EOTA license allowed the Company to sell ozone products in the European Union (“EU”). The EOTA license was to be amortized
over an estimated useful life of
Sanzonate’s
trade name was continue to be used, as necessary, when customers had preexisting relationship with Sanzonate. The trade name was to be
amortized over an estimated useful life of
F-16
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FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Sanzonate’s
distribution agreements were agreements with distributors in the EU that sell product to end users. The Company utilized the existing
distributors, but also expanded on both distributors and non-distributor customers in the EU. The distribution agreements were to be amortized
over an estimated useful life of
The Company engaged a third-party valuation firm to determine the fair values of the intangible assets. The intangible assets were valued using a discounted cash flow method. Key inputs and assumptions include projected cash flows and the discount rate used to calculate the present value of such cash flows. In addition, all long-lived assets were tested for impairment when events and circumstances indicated the assets might be impaired.
6. Accounts Receivable, Net
Accounts receivable, net consists of the following at:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Trade accounts receivable | $ | $ | ||||||
| Allowance for doubtful accounts | ( |
) | ( |
) | ||||
| Total accounts receivable, net | $ | $ | ||||||
7. Note Receivable, Related Party
| June
30, 2026 |
June
30, 2025 |
|||||||
| Note receivable | $ | $ | ||||||
| Total note receivable | $ | $ | ||||||
On
February 20, 2026, the Company entered into a loan agreement with a company to which a significant shareholder, Devlin DeFrancesco, is
a paid advisor. The loan agreement is for $
8. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consists of the following at:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Prepaid inventory parts | $ | $ | ||||||
| Prepaid insurance | ||||||||
| Prepaid certification and fees | ||||||||
| Prepaid other | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
9. Inventory
Inventory consists of the following at:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Parts | $ | $ | ||||||
| Finished goods | ||||||||
| Inventory reserve | ( |
) | ( |
) | ||||
| Total inventory, net | $ | $ | ||||||
The
Company values inventory at the balance sheet date using the weighted average method. The Company recorded an inventory reserve of $
F-17
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FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
10. Digital Assets
| June
30, 2026 |
June
30, 2025 |
|||||||
| Number of Dogecoin held | ||||||||
| Digital assets carrying fair value | $ | $ | ||||||
| Digital assets cost basis | $ | $ | ||||||
| Unrealized loss on digital assets | $ | ( |
) | $ | ||||
| Loss on digital assets | $ | ( |
) | $ | ||||
| Change in fair value of digital assets | $ | ( |
) | $ | ||||
During
the year ended June 30, 2026, the company sold an aggregate of
The
fair value per share used to compute the digital assets carrying fair value as of June 30, 2026 was $
The
Company sold all remaining Dogecoin for approximately $
| 11. | Property and Equipment, Net |
Property and equipment, net, consist of the following at:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Equipment | $ | $ | ||||||
| Leasehold improvements | ||||||||
| Total | ||||||||
| Less: accumulated depreciation | ( |
) | ( |
) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation
expense related to property and equipment was $
| 12. | Intangible Assets |
Intangible assets consist of the following at:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Technology | $ | $ | ||||||
| Customer relationships | ||||||||
| Trademarks | ||||||||
| License | ||||||||
| Total | ||||||||
| Less: accumulated amortization | ( |
) | ( |
) | ||||
| Total intangible assets, net, prior to impairment | ||||||||
| Impairment of intangibles | ( |
) | ||||||
| Total intangible assets, net | $ | $ | ||||||
The
Company held
During the quarter ended June 30, 2026, the Company’s Board of Directors authorized management to initiate a plan to pursue the strategic sale of its CleanCore segment. The decision to divest this segment represents a triggering event under ASC 350, requiring an evaluation of the associated goodwill and long-lived intangible assets for impairment.
F-18
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
In connection with the proposed sale of the CleanCore segment, management obtained a formal valuation report from an independent third party valuation firm. The valuation report estimated the fair value of the reporting unit on a going-concern basis in the context of a potential asset or stock divestiture transaction. The fair value was determined using the Market Approach which is based on implied transaction and revenue multiples of comparable publicly traded businesses.
Due to significant unobservable inputs used to evaluate market-participant parameters, these measurements are classified as Level 3 within the fair value hierarchy. The valuation report indicated that the implied market and transaction values for the reporting unit were lower than previously projected, primarily driven by adjusted expectations from strategic buyers in the current market environment.
Because
the carrying value of the reporting unit exceeded its calculated fair value, the Company recognized non-cash impairment charges of $
As
a result of the Company’s annual impairment evaluation, an impairment loss on customer relationships of $
Amortization
expense related to intangibles was $
| 13. | Accounts Payable and Accrued Expenses |
Accounts payable and accrued expenses consist of the following at:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | ||||||||
| Accrued payroll and related expenses | ||||||||
| Warranty reserve | ||||||||
| Accrued legal | ||||||||
| Contract termination | ||||||||
| Other accrued expenses | ||||||||
| Total accounts payable and other accrued expenses | $ | $ | ||||||
On
June 6, 2025, the Company entered into a settlement and release agreement with its former Chief Executive Officer, which was effective
June 21, 2025. This settlement required the Company to issue shares of common stock to an unrelated third party (Note 15) and released
claims by each party, therefore the Company released the $
| 14. | Debt |
Promissory Notes
On
October 17, 2022, the Company issued a promissory note in the principal amount of $
F-19
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
On
May 31, 2024, Burlington and Walker Water LLC (“WW”) entered into an allonge, assignment and agreement (the “Burlington
Assignment Agreement”), pursuant to which Burlington agreed to transfer $
Pursuant
to the Burlington Assignment Agreement, the Company also issued a promissory note to WW in the principal amount of $
On
December 24, 2024, the Company entered into a note assignment and cancellation agreement (the “WW Assignment Agreement”) with
WW, Gary Hollst, the Company’s Chief Revenue Officer, and Gary Rohwer, a third party, pursuant to which WW assigned half of its
right, title and interest in and to the WW Note to Garry Hollst and the remaining half to Gary Rohwer. Accordingly, the WW Note was cancelled
and the Company issued a promissory note in the principal amount of $
The
Rohwer Note was due and payable on
On
April 15, 2025, CleanCore Global issued a
On
April 16, 2025, the Company entered into subscription agreements with several accredited investors for the purchase of (i)
F-20
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
On
June 30, 2025, the Company issued to an accredited investor (i) an original issue discount promissory note in the principal amount of
$
Line of Credit
On
June 28, 2024, the Company entered into a loan agreement with Arbor Bank for a revolving line of credit in the amount of $
| 15. | Related Party Transactions |
As
of June 30, 2026 and 2025, the Company had a short-term amount due to Clayton Adams, its Chief Executive Officer and founder, in the amount
of $
On
October 17, 2022, the Company entered into a consulting agreement with Birddog Capital, LLC (“Birddog”), a limited liability
company owned by Clayton Adams, pursuant to which the Company engaged Birddog to provide management services to the Company. Pursuant
to the consulting agreement, the Company agreed to pay Birddog a monthly fee of $
On
July 27, 2023, the Company agreed to purchase approximately $
On
March 26, 2024, the Company entered into a loan agreement with Clayton Adams, pursuant to which the Company issued a revolving credit
note to Mr. Adams in the principal amount of up to $
F-21
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
On
December 24, 2024, the Company issued a promissory note in the principal amount of $
On
December 24, 2024, the Company issued a
On
September 5, 2025, the Company entered into an option agreement with Clayton Adams, pursuant to which the Company granted Mr. Adams an
irrevocable option to elect, in his sole discretion, at any time commencing on the date that is one hundred eighty (180) days after the
closing of the offering that was completed on September 5, 2025, and ending on the third (3rd) anniversary of such date, to either (i)
direct the Company to consummate a spin-off of the Company’s business and operations as conducted immediately prior to the closing
of such offering, excluding any digital asset treasury business or other business lines commenced after such date, and including all assets,
liabilities and employees primarily related thereto (the “Legacy Business”), or (ii) acquire, or cause one or more entities
designated by Mr. Adams to acquire, the Legacy Business at a price proposed by Mr. Adams that he believes falls within a range that is
considered fair, from a financial point of view, for the Legacy Business and that is confirmed as fair from a financial point of view
by a fairness opinion (the “Option Price”). The Option Price will assume that the Legacy Business will have at least $
On
February 20, 2026, the Company entered into a loan agreement with a company to which a significant shareholder, Devlin DeFrancesco, is
a paid advisor. The loan agreement is for $
Intercompany Promissory Note
In
connection with the acquisition of the assets of Sanzonate, on April 15, 2025, CleanCore Global issued a
F-22
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| 16. | Stockholders’ Equity |
On
October 13, 2025, the Company filed Amended and Restated Articles of Incorporation which (i) removed the dual class structure of the Company’s
common stock and (ii) increased the number of shares of common stock that the Company is authorized to issue to
Common Stock
For the Year Ended June 30, 2026
On
August 20, 2025, the Company issued
On
August 27, 2025, the Company issued
On
August 29, 2025, the Company issued
On
September 2, 2025, the Company issued
On
September 5, 2025, all remaining
On
September 23, 2025, the Company issued an aggregate of
On
October 13, 2025, the Company issued
On
November 17, 2025, the Company issued
On
December 31, 2025, stockholders surrendered an aggregate of
On
February 10, 2026, an aggregate of
On
May 26, 2026, the Company issued
During
the year ended June 30, 2026, the Company issued an aggregate of
During
the year ended June 30, 2026, the Company issued an aggregate of
During
the year ended June 30, 2026, the Company issued an aggregate of
During
the year ended June 30, 2026, the Company issued an aggregate of
During
the year ended June 30, 2026, the Company issued an aggregate of
During
the year ended June 30, 2026, the Company issued an aggregate of
During
the year ended June 30, 2026, the Company issued an aggregate of
F-23
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
As
of June 30, 2026, there were
For the Year Ended June 30, 2025
On
July 12, 2024, the Company issued
On
September 19, 2024, the Company issued
On
October 19, 2024, the Company issued
On
October 30, 2024,
On
November 19, 2024, the Company issued
On
December 18, 2024, the Company issued
On
December 19, 2024, the Company issued
On
January 2, 2025, the Company issued
On
January 2, 2025, the Company issued
On
January 19, 2025, the Company issued
On
February 19, 2025, the Company issued
On
March 19, 2025, the Company issued
On
April 1, 2025, the Company issued an aggregate of
On
April 15, 2025, the Company issued
On
April 19, 2025, the Company issued
On
May 6, 2025, the Company issued an aggregate of
On
May 19, 2025, the Company issued
On
May 30, 2025, the Company issued an aggregate of
On
June 2, 2025, the Company issued
F-24
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
On
June 3, 2025, the Company issued
On
June 9, 2025, the Company issued
On
June 11, 2025, the Company issued
On
June 11, 2025, the Company issued
On
June 19, 2025, the Company issued
On
June 21, 2025, the Company issued
On
June 30, 2025, the Company issued
As
of June 30, 2025, there were
2022 Equity Incentive Plan
On
September 16, 2022, the Company’s board of directors adopted the 2022 Plan, which was adopted by stockholders on November 18, 2022,
which reserved a total of
Incentive awards authorized under the 2022 Plan include, but are not limited to, nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and stock appreciation rights. If an incentive award granted under the 2022 Plan expires, terminates, is unexercised or forfeited, the surrendered shares will become available for future awards under the 2022 Plan.
The Company’s employees and advisors were granted awards under the 2022 Plan. Therefore, an allocation of the share-based compensation was made to the Company.
Stock Options
During the year ended June 30, 2026, options were issued.
During
the year ended June 30, 2026, a holder exercised a stock option issued under the 2022 Plan on a cashless basis for
During
the year ended June 30, 2025, the Company issued options to purchase
F-25
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Warrants
For the Year Ended June 30, 2026
On September 5, 2025, the Company completed
an offering of pre-funded warrants to purchase an aggregate of
In
connection with this offering and as partial compensation for their services, on September 5, 2025, the Company issued a five-year warrant
to purchase
On
September 5, 2025, the Company also issued to the Asset Manager (i) a five-year warrant to purchase
All
of the foregoing warrants contain a beneficial ownership limitation which provides that the Company will not effect any exercise, and
a holder will not have the right to exercise, any portion of a warrant to the extent that, after giving effect to the exercise, such holder
(together with such holder’s affiliates) would beneficially own in excess of
During
the year ended June 30, 2026, an aggregate of
For the Year Ended June 30, 2025
On
July 11, 2024, the Company issued four warrants for the purchase of
F-26
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
On
April 15, 2025, Company issued a five-year warrant for the purchase of
On
April 16, 2025, the Company issued five-year warrants for the purchase of an aggregate of
On
June 6, 2025, the Company issued a five-year warrant for the purchase of
On
June 9, 2025, the Company issued to Boustead Securities, LLC (“Boustead”), the representative of the underwriters in the Company’s
initial public offering (i) a five-year warrant for the purchase of
On
June 30, 2025, the Company issued a five-year warrant for the purchase of
Restricted Stock Awards
For the Year Ended June 30, 2026
On
July 1, 2025, the Company granted a restricted stock award under the 2022 Plan for
On
July 21, 2025, the Company granted a restricted stock unit award under the 2022 Plan for
On
August 21, 2025, the Company granted a restricted stock award under the 2022 Plan for
On
September 5, 2025, the Company granted a restricted stock unit award under the 2022 Plan for
On
September 5, 2025, the Company granted a restricted stock unit award under the 2022 Plan for
On
September 9, 2025, the Company granted a restricted stock award under the 2022 Plan for
On
September 9, 2025, the Company granted a restricted stock award under the 2022 Plan for
On
October 6, 2025, the Company granted a restricted stock unit award under the 2022 Plan for
On
October 13, 2025, the Company granted a restricted stock award under the 2022 Plan for
F-27
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
On
October 13, 2025, the Company granted a restricted stock award under the 2022 Plan for
On
October 20, 2025, the Company granted
On
November 17, 2025, the Company granted a restricted stock award under the 2022 Plan for
On
December 31, 2025, the Company entered into share surrender agreements with various holders, pursuant to which a total of
On
March 17, 2026, the Company granted a restricted stock award under the 2022 Plan for
For the Year Ended June 30, 2025
On
September 19, 2024, the Company granted a restricted stock unit award under the 2022 Plan for
On
January 2, 2025, the Company granted a restricted stock unit award under the 2022 Plan for
On
March 20, 2025, the Company granted a restricted stock unit award under the 2022 Plan for
On
April 15, 2025, the Company granted a restricted stock unit award under the 2022 Plan for
On
April 15, 2025, the Company granted a restricted stock award under the 2022 Plan for
On
May 6, 2025, the Company granted restricted stock awards under the 2022 Plan for an aggregate of
On
May 6, 2025, the Company granted a restricted stock unit award under the 2022 Plan for
On
June 2, 2025, the Company granted a restricted stock award under the 2022 Plan for
On
June 11, 2025, the Company granted a restricted stock award under the 2022 Plan for
The information presented in the following table represents the restricted stock awards, including performance-based awards, granted and outstanding during the period:
| Performance- Based Restricted Shares | Service-Based Restricted Shares | Weighted Average Grant Date Fair Value |
||||||||||
| Beginning balance | ||||||||||||
| Granted | ||||||||||||
| Forfeited | ||||||||||||
| Vested | ( |
) | ||||||||||
| Outstanding, unvested grants at June 30, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Forfeited | ( |
) | ||||||||||
| Vested | ( |
) | ||||||||||
| Outstanding, unvested grants at June 30, 2026 | $ | |||||||||||
F-28
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Stock-based Compensation
Stock options and warrants are granted at the fair market value of the underlying common stock on the date of grant. The Company recognizes compensation expense for these awards using the straight-line recognition method over the vesting period.
The fair value of stock options and warrants was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted average assumptions for the years ended June 30, 2026 and 2025:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Risk-free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected life of awards | ||||||||
| Fair value of awards granted during the year | $ | $ | ||||||
The
risk-free interest rate is based on U.S. government issues with a remaining term equal to the expected life of the awards. The determination
of expected volatility is based on historical volatility of an appropriate industry sector index.
| Warrants | Stock Options |
Weighted Average Remaining Life (years) |
Weighted Average Exercise Price |
|||||||||||||
| Outstanding, June 30, 2024 (2,738,472 shares exercisable) | $ | |||||||||||||||
| Granted | ||||||||||||||||
| Granted | ||||||||||||||||
| Cancelled | ( |
) | - | |||||||||||||
| Forfeited | ( |
) | - | |||||||||||||
| Exercised | ( |
) | ( |
) | - | |||||||||||
| Outstanding, June 30, 2025 (1,242,741 shares exercisable) | $ | |||||||||||||||
| Granted | ||||||||||||||||
| Cancelled | ( |
) | - | |||||||||||||
| Cancelled | ( |
) | - | |||||||||||||
| Exercised | ( |
) | - | |||||||||||||
| Exercised | ( |
) | - | |||||||||||||
| Outstanding, June 30, 2026 (25,006,269 shares exercisable) | $ | |||||||||||||||
The
aggregate intrinsic value of the
Total
stock compensation expense for the year ended June 30, 2026 was $
F-29
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| 17. | Net Loss Per Share |
The following table sets forth the computation of basic and dilutive net income per share of common stock:
| 2026 | 2025 | |||||||||||
| Basic and Diluted Net Loss Per Share | Common Stock | Class A | Common Stock | |||||||||
| Numerator | ||||||||||||
| Allocation of undistributed loss | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Denominator | ||||||||||||
| Weighted average number of shares used in per share computation | ||||||||||||
| Basic and diluted net loss per share | $ |
|
) | $ | ( |
) | $ | ( |
) | |||
| 18. | Segment Information |
During the twelve months ended June 30, 2026, the Company operated three Segments:
| ● | CleanCore, which specializes in the development and production of cleaning products that produce pure aqueous ozone using patented nanobubble technology that is highly effective in cleaning, sanitizing, and deodorizing surfaces and high-touch areas |
| ● | Treasury,
established on September 5, 2025 when the Company adopted a Digital Asset Trading strategy focused on Dogecoin as part of a $ |
| ● | Critical AI Infrastructure, announced on June 8, 2026, focused on building data centers to meet the increasing compute needs of AI companies |
Due
to the establishment of our digital asset treasury strategy on September 5, 2025, and AI Critical Infrastructure business on June 8, 2026,
we had
The Treasury segment included dedicated resources assigned to execute on our digital asset strategy, unrealized gain or loss on digital assets, and other third-party costs associated with our digital assets holdings, and income tax effects generated from our Dogecoin holdings to better align with their activities and utilization.
The AI Critical Infrastructure segment includes costs related to the development of data centers. This segment has not generated any revenue as of June 30, 2026.
The following table presents each Segment and on a consolidated basis, the Company’s revenues, gross profit and operating profit (loss) regularly provided to the CODM and reconciled to net income (loss) for each of the periods presented. Total segment assets provided to the CODM are also disclosed in the tables below for each period presented.
| For the Year Ended June 30, 2026 | ||||||||||||||||
| AI | CleanCore | Treasury | Consolidated | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Gross Profit | ||||||||||||||||
| Loss from Operations | ) | ) | ) | ) | ||||||||||||
| Net Loss | ) | ) | ) | |||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
F-30
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
| 19. | Income Taxes |
The Company files income tax returns in the U.S. federal and applicable foreign and state jurisdictions.
Management of CleanCore is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. The fiscal year ended June 30, 2023 was the entity’s initial year of existence, and is not subject to federal or state tax examinations prior to this period. The tax impact of the Irish subsidiary in the current tax year did not have a material impact on the company’s tax provision. On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act, which changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes. The Company analyzed this information and there is not significant impact.
The Company’s provision for income taxes is comprised of the following components:
| Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Current Tax Expense (Benefit) | ||||||||
| Federal | ||||||||
| State | ||||||||
| Current Tax Expense (Benefit) | $ | $ | ||||||
| Deferred Tax Expense (Benefit) | ||||||||
| Federal | ||||||||
| State | ||||||||
| Deferred Tax Expense (Benefit) | ||||||||
| Total Income Tax Expense (Benefit) | $ | $ | ||||||
The
Company’s income tax expense from continuing operations for the year ended June 30, 2026 differed from the statutory federal rate
of
| Pre-Tax Book Net Loss | $ | ( |
) |
| Years Ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Rate Reconciliation | Amount | Percent | Amount | Percent | ||||||||||||
| Federal tax (benefit) at a statutory rate | $ | ) | % | $ | ( |
) | % | |||||||||
| State tax expense (benefit) | ( |
) | % | |||||||||||||
| Federal effect of State tax expense (benefit) | ( |
)% | ||||||||||||||
| Effect of rate change | ( |
)% | ( |
)% | ||||||||||||
| True-up of deferred taxes | ( |
)% | ( |
) | % | |||||||||||
| Other permanent differences | ( |
)% | ( |
) | ( |
)% | ||||||||||
| Other items | ( |
)% | ( |
)% | ||||||||||||
| Increase (decrease) in valuation allowance related to current period profit and loss activity | ( |
)% | ( |
)% | ||||||||||||
| Total tax expense | $ | $ | ||||||||||||||
F-31
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Deferred tax assets and liabilities consist of the following:
| Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Deferred Tax Assets | ||||||||
| Intangible Assets | $ | $ | ||||||
| Accrued expenses | ||||||||
| Equity compensation | ||||||||
| Lease liabilities | ||||||||
| Unrealized Gain / Loss | ||||||||
| Capital Loss Limitation | ||||||||
| NOL carryforwards | ||||||||
| Valuation allowance | ( |
) | ( |
) | ||||
| Total Deferred Tax Assets | $ | $ | ||||||
| Deferred Tax Liabilities | ||||||||
| Property and equipment | $ | ( |
) | $ | ||||
| Intangible assets | ( |
) | ||||||
| Prepaid expenses | ( |
) | ( |
) | ||||
| ASC 842 right of use asset | ( |
) | ( |
) | ||||
| Valuation allowance | ||||||||
| Total Deferred Tax Liabilities | $ | ( |
) | $ | ( |
) | ||
| Net Deferred Tax Asset (Liability) | $ | $ | ||||||
In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion of the deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
As of June 30, 2026 the Company recognized a full valuation allowance on its net deferred tax asset to reflect the fact it is not more-likely-than-not to realize any portion of the asset.
| Years Ended June 30, | ||||||||
| Other Items – All Gross | 2026 | 2025 | ||||||
| Federal NOL Carryovers | $ | $ | ||||||
| State NOL Carryovers | $ | $ | ||||||
At
June 30, 2026 and June 30, 2025, the Company had net operating loss carryforwards for Federal income tax purposes of $
| 20. | Commitments and Contingencies |
Legal Proceedings
From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. The Company is currently not aware of any such legal proceedings or claims that it believes will have a material adverse effect on its business, financial condition or operating results.
Retirement Plans
The Company does not maintain a defined contribution plan or any other type of retirement plan for its employees.
F-32
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Leases
The
Company has a non-cancellable operating lease commitment for its office facility expiring in 2028. Rent expense totaled $
The following table discloses the lease cost, discount rate, and remaining lease term for operating leases as of June 30, 2026 and 2025:
| June
30, 2026 |
June
30, 2025 |
|||||||
| Operating lease cost | $ | $ | ||||||
| Remaining lease term | ||||||||
| Discount rate | % | % | ||||||
The discount rate was determined using the Company’s external debt and was adjusted for collateralization, term and lease amount.
The following table discloses the undiscounted cash flows on an annual basis and a reconciliation of the undiscounted cash flows of operating lease liabilities recognized in the balance sheet as of June 30, 2025:
|
Year Ended June 30, |
||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total undiscounted cash flows | ||||
| Less amount representing interest | ( |
) | ||
| Present value of lease liabilities | ||||
| Less current portion | ( |
) | ||
| Noncurrent lease liabilities | $ | |||
Settlement Agreement
On
June 5, 2025, the Company entered into a settlement agreement with Boustead Securities, LLC (“Boustead”) relating to certain
compensation that Boustead asserted was owed to it under an engagement letter between the parties, dated September 21, 2022 and an underwriting
agreement between the parties, dated April 25, 2024. Pursuant to the settlement agreement, the Company agreed, among other things, to
pay Boustead $
Asset Management Agreement
Pursuant
to the terms of the Asset Management Agreement, the Company agreed to pay the Asset Manager and 21Shares a monthly fee in arrears computed
at an annual rate as follows: (i)
F-33
ZONE
FRONTIER INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
Strategic Advisor Agreement
On
November 17, 2025, the Company entered into a strategic advisor agreement with Dogecoin Ventures LLC (which, for the avoidance of doubt,
is not related to the Asset Manager), pursuant to which the Company engaged Dogecoin Ventures LLC to provide certain advisory services
relating to the Company’s digital asset treasury business in exchange for, among other things, a monthly advisory fee of $
| 21. | Subsequent Events |
The Company has evaluated events subsequent to June 30, 2026 to assess the need for potential recognition or disclosure. Such events were evaluated through September 28, 2026, the date the consolidated financial statements were available to be issued. The following were noted:
| ● | On July 9, 2026, the Company announced its first data center project. Located in West Texas, and with development platform provider HST Technologies, Inc., the company’s plan projects the initial phase to supply 200-megawatts of critical IT utility load to tenants by early 2029, with initial revenue expected in the first half of the calendar year 2028 as part of a phased approach. The project has the potential to expand to more than 500-megawatts by 2030. |
| ● | On
July 20, 2026, substantially all Dogecoin assets were sold for approximately $ |
| ● | On
July 29, 2026, the Company announced its second data center project, a 40-megawatt critical IT load campus located in Minnesota with a
fully executed tenancy agreement with Cerebras Systems, a leading AI compute company. The site is currently under construction, and the
Company expects to bring approximately at least 55-megawatts of utility power capacity and 40-megawatts of critical IT load fully online
by the end of the second calendar quarter of 2027. Revenue is expected to steadily increase in the first half of 2027. The initial contract
value is over $ |
| ● | On August 31, 2026, the Company changed its name from CleanCore Solutions Inc. to Zone Frontier Inc. |
| ● | August
11, 2026, the Company priced a best efforts public offering of |
| ● | On September 11, 2026, the Company’s Chief Financial Officer, David Enholm, retired. Chief Executive Officer, Tyler Hassen, now serves as the Company’s principal financial officer and principal accounting officer with additional support from Vice President of Finance, Meredith Kenyon, and numerous third-party accounting advisors with bookkeeping, SEC compliance and technical accounting expertise. |
F-34
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Date: September 28, 2026 |
ZONE FRONTIER INC. |
| /s/ Tyler Hassen | |
| Name: Tyler Hassen | |
| Title: Chief Executive Officer | |
| (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
SIGNATURE |
TITLE | DATE | ||
| /s/ Tyler Hassen | Chief Executive Officer (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) | September 28, 2026 | ||
| Tyler Hassen | ||||
| /s/ Alexander Benjamin Spiro | Chairman | September 28, 2026 | ||
| Alexander Benjamin Spiro | ||||
| /s/ Peter Frei | Director | September 28, 2026 | ||
|
Peter Frei |
||||
| /s/ Timothy Stebbing | Director | September 28, 2026 | ||
| Timothy Stebbing | ||||
|
/s/ Clayton Adams |
Director |
September 28, 2026 | ||
| Clayton Adams |
43
Exhibit 4.1
DESCRIPTION OF SECURITIES
General
The following description summarizes important terms of the classes of our capital stock as of June 30, 2026. This summary does not purport to be complete and is qualified in its entirety by the provisions of our articles of incorporation and our bylaws, which have been filed as exhibits to this report.
On October 13, 2025, the Company filed the Amended and Restated Articles of Incorporation which (i) removed the dual class structure of the Company’s common stock and (ii) increased the number of shares of common stock that the Company is authorized to issue to 6,942,000,000 shares. Accordingly, as of June 30, 2026, our authorized capital stock consists of 6,942,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of “blank check” preferred stock, par value $0.0001 per share. In connection with this change, all shares of the Company’s class B common stock were reclassified as common stock.
As of June 30, 2026, there were 226,050,057 shares of common stock issued and outstanding.
Common Stock
All shares of our common stock have identical rights and preferences and rank equally, share ratably and are identical in all respects as to all matters. The holders of common stock are entitled to one (1) vote for each share of common stock held of record on all matters submitted to a vote of the stockholders.
Under our articles of incorporation and bylaws, any corporate action to be taken by vote of stockholders other than for election of directors shall be authorized by the affirmative vote of the majority of votes cast. Directors are elected by a plurality of votes. Stockholders do not have cumulative voting rights.
Subject to preferences that may be applicable to any then-outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock.
Holders of common stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock.
Preferred Stock
Our articles of incorporation authorize our board to issue up to 50,000,000 shares of preferred stock in one or more series, to determine the designations and the powers, preferences and rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series. Our board of directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock and which could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our outstanding voting stock.
Stock Options
As of June 30, 2026, we have outstanding options to purchase 625,000 shares of common stock at a weighted average exercise price of $0.93 per share.
Warrants
As of June 30, 2026, we have outstanding warrants to purchase 24,395,713 shares of common stock at a weighted average exercise price of $0.93 per share.
Unvested Restricted Stock Units
As of June 30, 2026, we have reserved 7,832,919 shares of common stock for issuance upon the vesting of restricted stock units and restricted stock awards.
Anti-Takeover Provisions
Provisions of the Nevada Revised Statutes, our articles of incorporation and our bylaws could have the effect of delaying or preventing a third-party from acquiring us, even if the acquisition would benefit our stockholders. Such provisions of the Nevada Revised Statutes, our articles of incorporation and our bylaws are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of control of our company. These provisions are designed to reduce our vulnerability to an unsolicited proposal for a takeover that does not contemplate the acquisition of all of our outstanding shares, or an unsolicited proposal for the restructuring or sale of all or part of our company.
Authorized but Unissued Shares
Our authorized but unissued shares of common stock are available for our board of directors to issue without stockholder approval, subject to NYSE American’s rules. We may use these additional shares for a variety of corporate purposes, including raising additional capital, corporate acquisitions and employee stock plans. The existence of our authorized but unissued shares of common stock could render it more difficult or discourage an attempt to obtain control of our company by means of a proxy context, tender offer, merger or other transaction since our board of directors can issue large amounts of capital stock as part of a defense to a take-over challenge. In addition, we have authorized in our articles of incorporation 50,000,000 shares of preferred stock. Our board acting alone and without approval of our stockholders, subject to NYSE American’s rules, can designate and issue one or more series of preferred stock containing super-voting provisions, enhanced economic rights, rights to elect directors, or other dilutive features, that could be utilized as part of a defense to a take-over challenge.
Bylaws
In addition, various provisions of our bylaws may also have an anti-takeover effect. These provisions may delay, defer or prevent a tender offer or takeover attempt of our company that a stockholder might consider in his or her best interest, including attempts that might result in a premium over the market price for the shares held by our stockholders. Our bylaws may be adopted, amended or repealed only by our board of directors. Our bylaws also contain limitations as to who may call special meetings as well as require advance notice of stockholder matters to be brought at a meeting. Additionally, our bylaws also provide that no director may be removed by less than a two-thirds vote of the issued and outstanding shares entitled to vote on the removal. Our bylaws also permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships. These provisions will prevent a stockholder from increasing the size of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.
Our bylaws also establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to the board of directors. Stockholders at an annual meeting will only be able to consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given us timely written notice, in proper form, of the stockholder’s intention to bring that business before the meeting. Although our bylaws do not give the board of directors the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted at a special or annual meeting, our bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of our company.
2
Cumulative Voting
Furthermore, neither the holders of our common stock nor the holders of our preferred stock have cumulative voting rights in the election of our directors. The combination of the present ownership by a few stockholders of a significant portion of our issued and outstanding common stock and lack of cumulative voting makes it more difficult for other stockholders to replace our board of directors or for a third party to obtain control of our company by replacing its board of directors.
Nevada Anti-Takeover Statutes
Pursuant to our articles of incorporation, we have elected not to be governed by the terms and provisions of Nevada’s control share acquisition laws (Nevada Revised Statutes 78.378 – 78.3793), which prohibit an acquirer, under certain circumstances, from voting shares of a corporation’s stock after crossing specific threshold ownership percentages, unless the acquirer obtains the approval of the issuing corporation’s stockholders. The first such threshold is the acquisition of at least one-fifth but less than one-third of the outstanding voting power.
Pursuant to our articles of incorporation, we have also elected not to be governed by the terms and provisions of Nevada’s combination with interested stockholders statute (Nevada Revised Statutes 78.411 – 78.444) which prohibits an “interested stockholder” from entering into a “combination” with the corporation, unless certain conditions are met. An “interested stockholder” is a person who, together with affiliates and associates, beneficially owns (or within the prior two years, did beneficially own) 10% or more of the corporation’s voting stock, or otherwise has the ability to influence or control such corporation’s management or policies.
Transfer Agent and Registrar
The transfer agent for our class B common stock is Securities Transfer Corporation. The address for Securities Transfer Corporation is 2901 N Dallas Parkway, Suite 380, Plano, Texas 75093, and the telephone number is (469) 633-0101.
3
Exhibit 21.1
LIST OF SUBSIDIARIES
| Name of Subsidiary | Jurisdiction
of Incorporation or Organization |
Percentage of Ownership | ||
| CleanCore Global Limited | Ireland | 100% |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
To the Audit Committee of CleanCore Solutions, Inc. and its Subsidiary
We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 of CleanCore Solutions, Inc. and its Subsidiary (the “Company”) of our report dated September 28, 2026, relating to the consolidated financial statements, which appear in the Company’s Annual Report on Form 10-K as of and for the years ended June 30, 2026 and 2025 to which this consent is filed as an exhibit. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.
We also consent to the reference to our firm under the caption “Experts” in this Registration Statement.
Diamond Bar, California
September 28, 2026
Exhibit 31.1
CERTIFICATIONS
I, Tyler Hassen, certify that:
| 1. | I have reviewed this annual report on Form 10-K of Zone Frontier Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under myr supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: September 28, 2026
| /s/ Tyler Hassen | |
| Tyler Hassen | |
| Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
The undersigned Chief Executive Officer of ZONE FRONTIER INC. (the “Company”), DOES HEREBY CERTIFY that:
| 1. | The Company’s Annual Report on Form 10-K for the year ended June 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. |
IN WITNESS WHEREOF, the undersigned has executed this statement on September 28, 2026.
| /s/ Tyler Hassen | |
| Tyler Hassen | |
| Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
A signed original of this written statement required by Section 906 has been provided to Zone Frontier Inc. and will be retained by Zone Frontier Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.