CleanCore Solutions, Inc. Debt Disclosure

11. Debt

 

Promissory Notes

 

On October 17, 2022, the Company issued a promissory note in the principal amount of $3,000,000 to Burlington Capital, LLC (“Burlington”), which bore interest at 7% per annum and was to mature on October 17, 2023. On September 13, 2023, the parties signed an extension agreement, pursuant to which the interest rate was increased to 10% per annum and the maturity date was extended to the earlier of (a) the closing of a firm commitment initial public offering and concurrent listing on a national securities exchange or (b) December 17, 2023. On December 17, 2023, the parties signed a second extension agreement, pursuant to which the maturity date was extended to 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. On April 30, 2024, the Company and Burlington entered into an extension agreement which extended the maturity date to May 9, 2024.

 

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 $633,840 of the note to WW. The Burlington Assignment Agreement also provided that the Company make a payment of $900,000 on May 31, 2024 to Burlington to reduce the principal amount of the note by $480,667 and pay the outstanding accrued interest of $419,333 in full. Also on May 31, 2024, the Company issued an amended and restated promissory note to Burlington (the “Burlington Note”). The Burlington Note has a new principal amount of $2,366,160, 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 Burlington Note may be prepaid at any time with no pre-payment penalty and contains customary events of default for a note of this type. Although the Company did not timely make certain payments as required under the Burlington Note, Burlington has agreed to waive any default caused by such lack of payment and has not accelerated payment under the Burlington Note. On June 30, 2025, the Company and Burlington entered into conversion agreements pursuant to which the quarterly payments of $100,000 that were due on each of January 1, 2025, April 1, 2025 and July 1, 2025 were converted into an aggregate of 133,500 shares of the Company’s class B common stock. As of June 30, 2025, the outstanding principal balance of the Burlington Note is $1,760,314 and it has an accrued interest balance of $0.

 

Pursuant to the Burlington Assignment Agreement, the Company also issued a promissory note to WW in the principal amount of $633,840 (the “WW Note”). The WW Note accrued 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 was due on December 31, 2024.

 

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 $316,920 to Gary Hollst and a promissory note in the principal amount of $316,920 and accrued interest of $15,714 to Gary Rohwer (the “Rohwer Note”). Please see Note 12 for a description of the promissory note issued to Gary Hollst.

 

The Rohwer Note was due and payable on December 31, 2024. On December 30, 2024, the Company repaid the Rohwer Note in full.

 

On April 15, 2025, CleanCore Global issued a 10% subordinated promissory note in the principal amount of $800,000 to Sanzonate. The note bears interest at a rate of 10% per annum, payable quarterly, and is due and payable on April 15, 2027. The note may be prepaid at any time without premium or penalty, is unsecured, and contains customary events of default for a loan of this type. As of June 30, 2025, the outstanding principal balance of this note is $800,000 and it has an accrued interest balance of $6,667.

On April 16, 2025, the Company entered into subscription agreements with several accredited investors for the purchase of (i) 12% unsecured promissory notes in the aggregate principal amount of $1,010,000 and (ii) five-year warrants to purchase an aggregate of 134,666 shares of the Company’s class B common stock at an exercise price of $1.06 per share for an aggregate purchase price of $1,010,000. The notes bear interest at a rate of 12% per annum, payable quarterly, and are due and payable on April 16, 2027. The notes may be prepaid at any time without premium or penalty, are unsecured, and contain customary events of default for a loan of this type. As of June 30, 2025, the outstanding principal balance of these notes is $1,010,000 and they have an accrued interest balance of $10,100.

 

On June 6, 2025, the Company entered into a subscription agreement with an accredited investor for the purchase of (i) a 12% unsecured promissory note in the principal amount of $500,000 and (ii) a five-year warrant to purchase 66,667 shares of the Company’s class B common stock at an exercise price of $1.06 per share for a purchase price of $500,000. The note bears interest at a rate of 12% per annum, payable quarterly, and is due and payable on June 6, 2027. The note may be prepaid at any time without premium or penalty, is unsecured, and contains customary events of default for a loan of this type. As of June 30, 2025, the outstanding principal balance of this note is $500,000 and it has an accrued interest balance of $3,833.

 

On June 30, 2025, the Company issued to an accredited investor (i) an original issue discount promissory note in the principal amount of $520,000 and (ii) a five-year warrant to purchase 25,000 shares of the Company’s class B common stock at an exercise price of $2.00 per share for a purchase price of $500,000. This note is due and payable on October 10, 2025 and accrues interest at a rate of 15% per annum. The note may be prepaid at any time without premium or penalty, is unsecured, and contains customary events of default for a loan of this type. Upon an event of default, the Company is required to issue 200,000 shares of its class B common stock to the holder. As of June 30, 2025, the outstanding principal balance of this note is $520,000 and it has a discount balance of $20,000 and an accrued interest balance of $0.

 

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 $100,000 with a variable interest rate tied to the U.S. Prime Rate. Monthly payments of accrued interest are due beginning July 28, 2024. The principal and any outstanding accrued interest are due in full on June 28, 2025. The Company drew on the line during May 2025 and paid the outstanding balance and interest in full as well as terminated the line of credit in June 2025. Total interest payments during the year ended June 30, 2025 were $199.