What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-13 compared with 2024-06-10 · 168 added, 423 removed, 74 unchanged (89% of the section changed)

8 unchanged sentences

discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in

All periods presented on or prior to October

16, 2022 represent the operations of CleanCore Solutions, LLC, or CleanCore LLC, TetraClean Systems, LLC, or TetraClean, and Food Safety

Technology L.L.C., or Food Safety, our predecessors companies, and all references to “predecessor” refer to the combined

financial position and results of operations of CleanCore, TetraClean and Food Safety on and before such date.

References to “successor”

refer to the financial position and results of operations of our company subsequent to October 16, 2022.

Except as otherwise indicated by the context

11 unchanged sentences

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;

● 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.

goals and strategies;

future business development, financial condition and results of operations;

changes in our revenue, costs or expenditures;

of and competition trends in our industry;

expectations regarding demand for, and market acceptance of, our products and services;

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;

government policies and regulations relating to our industry.

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

“Risk Factors” included in our Prospectus, dated April 25, 2024 and filed with the Securities and Exchange Commission, or

the SEC, on April 30, 2024, 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

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” included in our Annual Report on Form

10-K for the fiscal year ended June 30, 2024, or the Form 10-K, 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.

We specialize in the development and manufacturing

of cleaning products that produce pure aqueous ozone for professional, industrial, or home use.

We have a patented nanobubble technology

using aqueous ozone that we believe is highly effective in cleaning, sanitizing, and deodorizing surfaces and high-touch areas.

We offer products and solutions that are marketed

for janitorial and sanitation, ice machine cleaning, laundry, and industrial industries.

Our products are used in many types of environments

including retail establishments, distribution centers, factories, warehouses, restaurants, schools and universities, airports, healthcare,

food service, and commercial buildings such as offices, malls, and stores.

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 manufacturing processes, and proving the effectiveness of our products in restaurants, airports, and hotels.

Recent Developments

Initial Public Offering

On April 25, 2024, we entered into an underwriting

agreement with Boustead Securities, LLC, as the representative of the several underwriters named on Schedule 1 thereto, relating to our

initial public offering of class B common stock.

Under the underwriting agreement, we agreed to sell 1,250,000 shares of class B common

stock to the underwriters, at a purchase price per share of $3.72 (the offering price to the public of $4.00 per share of class B common

stock minus the underwriters’ discount), and also agreed to grant to the underwriters a 45-day option to purchase up to 187,500

additional shares of class B common stock, at a purchase price of $3.72, pursuant to our registration statement on Form S-1 (File No.

333-274928) under the Securities Act of 1933, as amended, or the Securities Act.

On April 30, 2024, the closing of the initial

public offering was completed.

We sold 1,250,000 shares of class B common stock for total gross proceeds of $5,000,000.

After deducting

the underwriting commission and expenses, we received net proceeds of approximately $4,239,500.

On April 30, 2024, we also issued a class B common

stock purchase warrant to the representative for the purchase of 87,500 shares of class B common stock at an exercise price of $5.00,

subject to adjustments.

The warrant will be exercisable at any time and from time to time, in whole or in part, during the period commencing

on April 30, 2024 and ending on April 25, 2029 and may be exercised on a cashless basis under certain circumstances.

Conversion of Convertible Notes

On May 2, 2024, we issued an aggregate of 257,479

shares of class B common stock upon the conversion of the 10% original issue

discount convertible promissory notes issued on January 30, 2024 described below, which included principal of $250,000 and accrued interest

Debt Extension and Amendment

On April 30, 2024, we and Burlington Capital,

LLC, or Burlington, entered into an extension agreement which extended the maturity date of the promissory note issued on October 17,

2022, or the Original Note, described below to May 9, 2024 .

On May 31, 2024, Burlington and Walker Water

LLC, or WW, entered into an allonge, assignment and agreement, or the Assignment Agreement, pursuant to which Burlington agreed to transfer

$633,840.00 of the Original Note to WW.

The Assignment Agreement also provided that we would make a payment of $900,000 on May 31, 2024

to Burlington to reduce the principal amount of the Original Note.

In conjunction with the Assignment Agreement,

we issued an amended and restated promissory note to Burlington.

The note has a new principal amount of $3,196,881, accrues interest at

8.5% per annum from October 17, 2022 (the date of the Original Note), which shall increase to 10% upon an event of default, and requires

quarterly payments in the amount of $100,000 over the course of the next two and a half years, with a final payment of $1,396,881 due

on April 1, 2027.

The note may be prepaid at any time with no pre-payment penalty and contains customary events of default for a note

of this type.

Pursuant to the Assignment Agreement, we also issued a promissory note

to WW in the principal amount of $633,840.

The note accrues interest at 8.5% per annum from October 17, 2022 (the date of the Original

Note), which shall increase to 10% upon an event of default, and is due on December 31, 2024.

The note may be prepaid at any time with

no pre-payment penalty and contains customary events of default for a note of this type.

addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.

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.

forward-looking statements made in this report relate only to events or information as of the date on which the statements are made in

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.

specialize in the development and production of cleaning products that produce pure aqueous ozone for professional, industrial, or home

We have a patented nanobubble technology using aqueous ozone that we believe is highly effective in cleaning, sanitizing, and deodorizing

surfaces and high-touch areas.

offer products and solutions that are marketed for janitorial and sanitation, ice machine cleaning, laundry, and industrial industries.

Our products are used in many types of environments including retail establishments, distribution centers, factories, warehouses, restaurants,

schools and universities, airports, healthcare, food service, and commercial buildings such as offices, malls, and stores.

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.

Factors Affecting Our Financial Performance

21 unchanged sentences

employee compensation.

addition, Section 107 of the JOBS Act also provides that an emerging grow th 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

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, for complying with new or revised accounting standards.

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 Securities Exchange Act of 1934, as amended, or the Exchange Act, which would

occur if the market value of our class B 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

Comparison of Three Months Ended March 31, 2024 and 2023

The following table sets forth key components

of our results of operations for the three months ended March 31, 2024 and 2023, both in dollars and as a percentage of our revenues.

Three Months Ended March 31,

Our financial statements

may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

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 Securities Exchange Act of 1934,

as amended, or the Exchange Act, which would occur if the market value of our class B 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.

of Operations

following table sets forth key components of our results of operations for the three months ended September 30, 2024 and 2023, both in

dollars and as a percentage of our revenue.

Three Months Ended September 30,

Cost of sales

2 unchanged sentences

Advertising expense

Depreciation expense

Depreciation and amortization expense

Loss from operations

Interest expense

Interest expense, net

We generate revenue from sales of our cleaning products.

Our revenue decreased by $307,486, or 49.48%, to $313,920 for the three months

ended March 31, 2024 from $621,406 for the three months ended March 31, 2023.

The decrease is primarily due to a large one time order

of $393,229 in March 2023 that was not repeated this year.

Our cost of sales consists of raw materials, components and

Our cost of sales decreased by $195,344, or 53.01%, to $173,184 for the three months ended March 31, 2024 from $368,528 for the

three months ended March 31, 2023.

As a percentage of revenue, cost of sales decreased from 59.31% for the three months ended March 31,

2023 to 55.17% for the three months ended March 31, 2024.

This improvement is due to increased pricing the company implemented in May

Gross profit .

As a result of the

foregoing, our gross profit decreased by $112,142, or 44.35%, to $140,736 for the three months ended March 31, 2024 from $252,878 for

the three months ended March 31, 2023.

As a percentage of revenue, gross profit increased from 40.69% for the three months ended March

31, 2023 to 44.83% for the three months ended March 31, 2024.

General and administrative expenses .

general and administrative expenses consist primarily of personnel expenses, including employee salaries and bonuses plus related payroll

taxes, professional advisor fees, bad debts, rent expense, insurance and other expenses incurred in connection with general operations.

Our general and administrative expenses increased by $56,952, or 11.33%, to $559,398 for the three months ended March 31, 2024 from $502,446

for the three months ended March 31, 2023.

As a percentage of revenue, our general and administrative expenses increased from 80.86%

for the three months ended March 31, 2023 to 178.20% for the three months ended March 31, 2024.

Such increase was primarily due increased internal payroll related to new positions added to facilitate

future growth.

Advertising expenses .

advertising expenses consist of vendor trade shows and various trade publications.

Our advertising expenses increased by $15,527, or

702.58%, to $17,737 for the three months ended March 31, 2024 from $2,210 for the three months ended March 31, 2023.

Such increase was

primarily due to an increase in trade show sponsorship expenses.

Depreciation expense .

incurred depreciation expense of $178, or 0.06% of revenue, for the three months ended March 31, 2024, as compared to $0 for the three

months ended March 31, 2023.

Interest expense .

incurred interest expense of $84,093, or 26.79% of revenue, for the three months ended March 31, 2024, as compared to $71,979, or 11.58%

of revenue, for the three months ended March 31, 2023.

As a result of the cumulative effect of the factors described above,

we had a net loss of $520,670 for the three months ended March 31, 2024, as compared to $323,757 for the three months ended March 31,

2023, an increase of $196,913, or 60.82%.

Comparison of Nine Months Ended March 31, 2024 and 2023

The following table sets forth key components

of our results of operations for the period from July 1, 2022 to October 16, 2022 (Predecessor), from October 17, 2022 to March 31, 2024

(Successor), and for the nine months ended March 31, 2024 (Successor).

(Predecessor)

Cost of sales

Operating expenses:

General and administrative

Advertising expense

Depreciation expense

Loss from operations

Interest expense

$ (1,302,763 )

$ (4,509,093 )

We believe that reviewing our operating results

for the nine months ended March 31, 2023, by combining the results of the successor period (October 17, 2022 to March 31, 2023) and the

predecessor period (July 1, 2022 to October 16, 2022) is more useful in discussing our overall operating performance compared to the results

of the nine months ended March 31, 2024 (successor).

We do not see any potential risks associated with utilizing this combined presentation.

Following are the combined results for the nine

months ended March 31, 2024 and 2023, both in dollars and as a percentage of our revenues.

Nine Months Ended

March 31, 2024

Combined Nine

March 31, 2023

(Predecessor)

Cost of sales

Operating expenses:

General and administrative

Advertising expense

Depreciation expense

Loss from operations

Interest expense

$ (1,302,763 )

$ (4,829,157 )

$ (4,509,093 )

Our revenue decreased by $1,075,155, or 54.49%, to $898,010 for the nine months ended March 31, 2024 from $1,973,165 for the nine months

ended March 31, 2023.

The reduced revenue was primarily due to decreases in the volume of products sold to our two largest customers,

due to external factors that impacted their number of purchases, offset by increases in product prices.

One of our largest historical

customers chose to manufacture most of their own units beginning at the start of fiscal year 2023, rather than purchasing our products.

The loss of this customer led to a major decline in sales for the nine months ended March 31, 2024.

Our second largest historical customer

was a larger buying group for several smaller regional groups, and their sales declined because a sales associate at our company, who

had a close connection with such buying group, resigned in May 2023.

We also experienced a $192,839 decrease in revenue due to our termination

of a drop ship arrangement with a third party.

Our product price increases occurred in March 2023, and an approximately 20% price increase

was applied to all products that we offer due to our market review of competitor pricing.

During the nine months ended March 31, 2024,

the decrease in revenue was due to an approximate 70% decrease in sales volume, offset by an approximate 15% increase to prices across

all product lines.

Cost of sales .

Our cost of sales

decreased by $893,801, or 66.14%, to $457,495 for the nine months ended March 31, 2024 from $1,351,296 for the nine months ended March

As a percentage of revenue, cost of sales decreased from 68.48% for the nine months ended March 31, 2023 to 50.95% for the

nine months ended March 31, 2024.

This decrease was primarily due to the price increases described above.

Gross profit .

As a result of the

foregoing, our gross profit decreased by $181,354, or 29.16%, to $440,515 for the nine months ended March 31, 2024 from $621,869 for

the nine months ended March 31, 2023.

As a percentage of revenue, gross profit increased from 31.52% for the nine months ended March

31, 2023 to 49.05% for the nine months ended March 31, 2024.

General and administrative expenses .

general and administrative expenses decreased by $3,721,623, or 71.73%, to $1,466,594 for the nine months ended March 31, 2024 from $5,188,217

for the nine months ended March 31, 2023.

As a percentage of revenue, our general and administrative expenses decreased from 262.94%

for the nine months ended March 31, 2023 to 163.32% for the nine months ended March 31, 2024.

Such decrease was primarily due to a reduction

in stock option expense.

Advertising expenses .

advertising expenses increased by $25,756, or 147.73%, to $43,191 for the nine months ended March 31, 2024 from $17,435 for the nine

months ended March 31, 2023.

Such increase was primarily due to an increase in trade show sponsorship expenses.

Depreciation expense .

incurred depreciation expense of $388, or 0.04% of revenue, for the nine months ended March 31, 2024, as compared to $6,143, or 0.31%

of revenue, for the nine months ended March 31, 2023.

We incurred interest expense of $233,105, or 25.96% of revenue,

for the nine months ended March 31, 2024, as compared to $239,231, or 12.12% of revenue, for the nine months ended March 31, 2023.

As a result of the cumulative effect of the factors described above,

we had a net loss of $1,302,763 for the nine months ended March 31, 2024, as compared to $4,829,157 for the nine months ended March 31,

2023, a decrease of $3,526,394, or 73.02%.

Our revenue increased by $39,216, or 12.04%, to $364,900 for the three months

ended September 30, 2024 from $325,684 for the three months ended September 30, 2023.

The increase is primarily due to an increased number

of customers.

Our cost of sales consists of raw materials, components and labor.

Our cost of sales increased by $26,826, or 17.58%,

to $179,401 for the three months ended September 30, 2024 from $152,575 for the three months ended September 30, 2023.

As a percentage

of revenue, cost of sales increased from 46.85% for the three months ended September 30, 2023 to 49.16% for the three months ended September

This increase was primarily due to an increase in sales and increase in demo expenses due to a change in sales strategy of

providing customers considering large orders demonstration equipment at no cost.

As a result of the foregoing, our gross profit increased by $12,390, or 7.16%, to $185,499 for the three months ended

September 30, 2024 from $173,109 for the three months ended September 30, 2023.

As a percentage of revenue, gross profit decreased from

53.15% for the three months ended September 30, 2023 to 50.84% for the three months ended September 30, 2024.

and administrative expenses .

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, rent

expense, insurance and other expenses incurred in connection with general operations.

Our general and administrative expenses increased

by $406,338, or 79.69%, to $916,214 for the three months ended September 30, 2024 from $509,876 for the three months ended September

As a percentage of revenue, our general and administrative expenses increased from 156.25% for the three months ended September

30, 2023 to 251.09% for the three months ended September 30, 2024.

This increase was primarily due to $118,440 stock related compensation

expense, $106,720 external accounting fees, $74,600 in consulting fees and $69,200 increase in director and officer insurance.

Our advertising expenses consist of vendor trade shows and various trade publications.

Our advertising

expenses increased by $45,387, or 5,514.82%, to $46,210 for the three months ended September 30, 2024 from $823 for the three months

ended September 30, 2023.

As a percentage of revenue, our advertising expenses increased from 0.25% for the three months ended September

30, 2023 to 12.66% for the three months ended September 30, 2024.

Such increase was primarily due to a significant increase in our public

relations activities.

and amortization expense .

We incurred depreciation and amortization expense of $39,823, or 10.91% of revenue, for

the three months ended September 30, 2024, as compared to $38,562, or 11.84% of revenue, for the three months ended September 30, 2023.

expense, net .

We incurred interest expense, net, of $39,334, or 10.78% of revenue, for the three months ended September

30, 2024, as compared to $61,142, or 18.77% of revenue, for the three months ended September 30, 2023.

The decrease is primarily due

to interest expense for the 2024 period being offset by interest income of $17,153 from an interest bearing money market account opened

in the fourth quarter of fiscal 2024.

As a result of the cumulative effect of the factors described above, we had a net loss of $856,082 for the

three months ended September 30, 2024, as compared to $437,294 for the three months ended September 30, 2023, an increase in loss of

$418,788, or 95.77%.

Liquidity and Capital Resources

Our company has incurred losses and negative cash

flows from operations.

To date, we have financed our operations primarily through revenue generated from operations, third party borrowings,

private placements of our securities and advances from our founders.

As of March 31, 2024, we had cash of $56,082, a net loss for the

nine-month period ended of $1,302,763 and cash used in operating activities of $485,530.

Our company was formed in August 2022 and completed

the acquisition in October 2022.

Since the acquisition, we have invested in further developing our products, hiring key personnel, and

engaging third party experts such as accountants and underwriters in connection with our initial public offering described above.

Despite the initial public offering, management

believes that currently available resources will 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 date of issuance of the accompanying unaudited condensed financial statements.

Our company has incurred losses and negative

cash flows from operations.

From October 17, 2022 (the date of the acquisition) through September 30, 2024, we have financed our

operations primarily through private investor funding and an initial public offering.

As of September 30, 2024, we had cash and cash

equivalents of $1,210,382, a net loss for the three months ended September 30, 2024 of $856,082 and cash used in operating

activities of $799,764.

Despite our initial public offering, management believes that currently available resources will 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 date of issuance of the accompanying

financial statements.

We will be dependent upon the raising of additional

2 unchanged sentences

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.

Thes accompanying unaudited condensed 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 unaudited condensed 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.

additional funds by issuing debt, we may be subject to limitations on its operations, through debt covenants or other restrictions.

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.

Thes accompanying 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 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 nine months ended March 31, 2024.

Combined Nine Months Ended

March 31, 2023

(Predecessor)

about our net cash flow for the nine months ended September 30, 2024.

Three Months Ended

September 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Net cash used in financing activities

Net decrease in cash

Cash at beginning of period

Cash at end of period

Net cash used in operating activities was $485,530 for the nine months

ended March 31, 2024, as compared to $286,318 for the nine months ended March 31, 2023.

For the nine months ended March 31, 2024, our

net loss of $1,302,763 and an increase in inventory of $103,569, offset by an increase in accounts payable and accrued liabilities of

$386,279, a non-cash interest expense of $223,783, stock-based compensation of $151,981, and depreciation and amortization of $115,885,

were the primary drivers of net cash used in operating activities.

For the nine months ended March 31, 2023, our net loss of $4,829,157

and a decrease in accounts receivable of $354,176, offset by stock-based compensation of $3,997,442 and an increase in accounts payable

and accrued liabilities of $313,174, were the primary drivers of the net cash used in operating activities.

Net cash used in operating activities was $799,764

for the three months ended September 30, 2024, as compared to $308,335 for the three months ended September 30, 2023.

For the three months

ended September 30, 2024, our net loss of $856,082 and a decrease in prepaid expenses of $142,084, offset by an increase in non-cash

stock based compensation expense of $182,400, were the primary drivers of net cash used in operating activities.

the three months ended September 30, 2023, our net loss of $437,294, a decrease in accounts payable and accrued liabilities of $144,224,

a decrease in inventory of $77,026, and a decrease in accounts receivable of $66,233, offset by a non-cash interest expense of $208,248,

an increase in prepaid expenses of $93,550 and stock based compensation of $63,960, were the primary drivers of the net cash used in

operating activities.

Net cash used in investing activities was $6,465

for the nine months ended March 31, 2024, as compared to $2,007,882 for the nine months ended March 31, 2023.

The net cash used in investing

activities for the nine months ended March 31, 2024 consisted entirely of purchases of property and equipment.

Net cash used in investing

activities for the nine months ended March 31, 2023 consisted of cash used in connection with the acquisition of the assets of CleanCore

LLC, TetraClean and Food Safety of $2,000,000 and purchases of property and equipment of $7,882.

Net cash provided by financing activities was

$150,556 for the nine months ended March 31, 2024, as compared to $2,608,761 for the nine months ended March 31, 2023.

Net cash provided

by financing activities for the nine months ended March 31, 2024 consisted of proceeds from the issuance of convertible notes of $225,000

and proceeds from related party loans of $50,014, offset by payments for deferred offering costs of $124,458, while net cash provided

by financing activities for the nine months ended March 31, 2023 consisted of proceeds from the issuance of class B common stock of $1,650,000,

proceeds from the issuance of series seed preferred stock of $1,000,000, proceeds from related party loans of $399,483 and proceeds from

the issuance of class A common stock of $100, offset by repayments of loans due to related parties of $288,861, payments for deferred

offering costs of $150,683 and repayments of long term debt of $1,278.

Private Placement

Between October 14, 2022 and November 29, 2022,

we issued an aggregate of 660,921 shares of class B common stock for total gross proceeds of $1,150,000 and net proceeds of approximately

$1,035,000 in a private placement transaction.

Promissory Note

On October 17, 2022, we issued a promissory note

in the principal amount of $3,000,000 to Burlington, which was amended pursuant to extension agreements on September 13, 2023 and December

The note bears interest at a rate of 7% per annum;

provided that such interest rate increased to 10% per annum on September

The note is due on the earlier of (a) the closing of a firm commitment initial public offering and concurrent listing on a national

securities exchange or (b) April 4, 2024.

We may prepay the note at any time at any time without penalty.

The note is unsecured and contains

customary events of default.

As of March 31, 2024, the outstanding principal balance of this note is $3,000,000 and it has accrued interest

Convertible Promissory Notes

On January 30, 2024, we issued three 10%

original issue discount convertible promissory notes to three separate accredited investors in the principal amounts of $27,778, $111,111,

and $111,111.

The purchase prices of the notes were $25,000, $100,000 and $100,000, respectively.

These notes accrue with simple interest

on the outstanding principal amount at the rate of 12% per annum and the interest shall commence on the date of issuance and continue

to accrue until paid in full or until the note is converted.

The principal amounts and all accrued and unpaid interest automatically convert

into class B common stock upon the closing of our initial public offering.

Unless earlier converted into class B common stock, all unpaid

interest and principal is due and payable on December 31, 2024, which date may be extended at the election of us by up to two additional

90-day periods.

As of March 31, 2024, the outstanding principal balance of these notes is $250,000 and they have accrued interest

Related Party Demand Notes

On October 4, 2022, we issued a promissory note

to each of Matthew Atkinson, our Chief Executive Officer at such time, and Clayton Adams, our President at such time and current significant

stockholder, in the principal amount of $104,450 each for a total of $208,900.

These notes bear interest at a rate of 5% per annum beginning

on the 30th day after issuance and are due on the 60th day following written demand from the holder.

As of March 31, 2024, the outstanding

principal balance of these notes is $208,900 and they have accrued interest of $ 15,567 .

Related Party Revolving Loan

On March 26, 2024, we entered into a loan agreement

with Clayton Adams, a significant stockholder, pursuant to which we issued a revolving credit note to Mr.

Adams in the principal amount

of up to $500,000.

Pursuant to the loan agreement and note, Mr.

Adams agreed to provide advances to us upon request during the period

commencing on the effective date of the registration statement relating to our initial public offering (April 25, 2024) and continuing

until the second anniversary of such date, which is referred to as the maturity date.

This note accrues simple interest on the outstanding

principal amount at the rate of 8% per annum, with all principal and interest due on the maturity date;

provided that upon an event of

default (as defined in the note), such rate shall increase to 13%.

We may prepay the note at any time without penalty or premium.

note is unsecured and contains customary events of default for a loan of this type.

As of March 31, 2024, no advances have been made and

the principal amount of this note is $0.

for the three months ended September 30, 2024, as compared to $1,015 for the nine months ended September 30, 2023.

The net cash used

in investing activities for both periods consisted entirely of purchases of property and equipment.

Net cash used in financing activities was $0

for the three months ended September 30, 2024, as compared to $19,726 for the three months ended September 30, 2023.

Net cash used in

financing activities for the three months ended September 30, 2023 consisted of payments

for deferred offering costs of $13,523 and repayment of related party loans of $6,203 .

Please see Note 9 to our unaudited condensed

financial statements above for a description of the terms of our outstanding debt.

Contractual Obligations

Our principal commitments consist mostly of obligations

under the loans described above.

Other than indicated above, at March 31, 2024, 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.

under the loans described in Note 9 to our unaudited condensed financial statements above.

We also have a non-cancellable operating lease

commitment for our office facility expiring in 2028 as described in Note 13 to the unaudited condensed financial statements above.

than the foregoing, at September 30, 2024, 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.

Off-Balance Sheet Arrangements

3 unchanged sentences

Critical Accounting Policies and Estimates

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 U.S.

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 .

revenue from sales of our products and recognize revenue as control of our products is transferred to our 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.

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 periods ended March 31, 2024 and 2023, 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

Such warranties are assurance-type warranties and are accounted for as contingencies under ASC 460-10.

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.

We did not recognize

impairment losses during the periods ended March 31, 2024 and 2023.

Intangible Assets .

Intangible assets

primarily consist of existing technology, customer relationships, and trademarks obtained as a result of the acquisition on October 17,

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 customer relationships is 5 years.

Stock-based Compensation .

expense is recognized for all share-based payments to employees and non-employees, including stock options and warrants, in the statements

of operation based on the fair value of the awards that are granted.

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 is estimated at the date of

grant using the Black-Scholes option-pricing model.

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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The preparation of our unaudited condensed financial

statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues

and expenses, and related disclosure of contingent assets and liabilities.

On a regular basis, we evaluate these estimates.

These estimates

are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under

the circumstances.

Actual results may differ from these estimates.

For a description of the accounting policies

that, in management’s opinion, involve the most significant application of judgment or involve complex estimation and which could,

if different judgment or estimates were made, materially affect our reported financial position, results of operations, or cash flows,

see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting

Policies” in the Form 10-K.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis