Zone Frontier sells cleaning assets; $3.35M note
Zone Frontier retains its 79% Minnesota-campus joint-venture interest and 99% West Texas-campus capital interest after the sale.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Zone Frontier Inc. (ZONE) completed the sale of substantially all assets of its legacy cleaning-products business to Sanzonate Holdings LLC on October 7, 2026, including its wholly owned Irish subsidiary. Sanzonate is controlled by Clayton Adams, a Zone Frontier director and Sanzonate’s chief executive. Disinterested directors approved the transaction; Adams did not participate.
Consideration included a secured, non-convertible note with $3,350,000 principal, a 5% membership interest in Sanzonate, and contingent cash earnouts of up to $2,250,000. The note bears 6% annual interest, with principal due in installments 6, 12 and 18 months after closing; its payment and lien priority are subordinated to certain institutional debt. During the Earnout Period, bona fide equity financings can trigger earnouts; a financing at a pre-money valuation of at least $25,000,000 also triggers a further 2% membership interest.
Zone Frontier retained its digital assets and AI infrastructure interests, including the Minnesota and West Texas data-center joint ventures. The company said the cleaning-products business consumed approximately $3 million in cash annually. TAAD, LLP’s audit opinion on its FY2026 financial statements included an explanatory paragraph expressing substantial doubt about Zone Frontier’s ability to continue as a going concern.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointZone Frontier says the sale eliminates approximately $3 million in annual cash burn.
Negative
- Major pointFY2026 audit opinion cited substantial doubt about Zone Frontier’s ability to continue as a going concern.
Filing Explained
For the year ended June 30, 2026, the unaudited pro forma shows a $40,124,133 loss from continuing operations.
The disposition closed on
The unaudited pro forma statements for the year ended June 30, 2026 remove
8-K Event Classification
Key Figures
Key Terms
Earnout Period financial
pre-money valuation financial
first-priority security interest financial
subordinated in right of payment and lien priority financial
going concern financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What did ZONE receive for its cleaning-products business?
What are ZONE’s note repayment terms?
What triggers ZONE’s earnout payments?
What was Clayton Adams’ role in the ZONE asset sale?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging Growth Company
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
On October 7, 2026, Zone Frontier Inc. f/k/a CleanCore Solutions, Inc. (the “Company”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Sanzonate Holdings LLC, a Nevada limited liability company (the “Buyer”), pursuant to which the Company sold to the Buyer substantially all of the assets of the Company’s legacy business of developing and producing cleaning products that produce pure aqueous ozone for professional, industrial and home use (the “Cleaning Products Business”), including all of the issued and outstanding ordinary shares of CleanCore Global Limited, the Company’s wholly owned subsidiary incorporated in Ireland (the “Subsidiary”), and the Buyer assumed certain liabilities of the Cleaning Products Business (the “Disposition”). The Disposition was completed concurrently with the execution of the Purchase Agreement on October 7, 2026 (the “Closing”). The Buyer is controlled by Clayton Adams, a member of the Company’s Board of Directors (the “Board”). See “Relationship with the Buyer; Interest of Related Person” below.
The key terms of the Purchase Agreement and the related transaction documents are summarized below.
Purchased Assets. The assets sold to the Buyer (the “Purchased Assets”) include: (i) 100 ordinary shares, par value €1.00 per share, of the Subsidiary, representing 100% of its issued and outstanding securities; (ii) $500,000 in cash, excluding cash held in the Subsidiary; (iii) the intellectual property used in the Cleaning Products Business, including U.S., Canadian and Mexican patents and patent applications relating to aqueous ozone generation and dispensing technology, the registered and pending trademarks related to the Cleaning Products Business (including the CLEANCORE marks), related unregistered copyrights and the domain name associated with the Cleaning Products Business; (iv) the accounts receivable, inventory, equipment and other tangible personal property of the Cleaning Products Business; (v) the Company’s leasehold interest in its former Omaha, Nebraska facility; and (vi) related contracts, permits, digital accounts, books and records and goodwill. All cash held by the Subsidiary at the Closing remained with the Subsidiary. The Company has agreed to cease use of the “CleanCore” and “CleanCore Solutions” names.
Excluded Assets. The Company retained all of its cash and cash equivalents in excess of $500,000, its digital asset holdings, and all of its data center and AI infrastructure interests, including its 79% membership interest in the joint venture developing the Company’s Minnesota data center campus and its 99% capital interest in the joint venture developing the Company’s West Texas data center campus, together with all related contracts, including the Colocation Services Agreement with Cerebras Systems Inc.
Assumed and Excluded Liabilities. The Buyer assumed only the liabilities specifically identified in the Purchase Agreement, including the lease obligations for the Omaha facility, the accounts payable, credit card balances, accrued liabilities and product warranty obligations of the Cleaning Products Business. The Company retained all other liabilities, including taxes arising from the Disposition, transaction expenses and environmental liabilities.
Purchase Price and Promissory Note. The purchase price for the Purchased Assets is $3,350,000 (the “Purchase Price”), which the Buyer paid at the Closing by delivering to the Company a secured, non-convertible promissory note in the principal amount of $3,350,000 (the “Note”). The Note bears interest at 6% per annum (increasing to 10% per annum during an event of default) and is payable in three installments: (i) $300,000 of principal six months after the Closing; (ii) $850,000 of principal, plus accrued interest, 12 months after the Closing; and (iii) the remaining $2,200,000 of principal, together with all accrued and unpaid interest, 18 months after the Closing. Interest accrued during the first six months is deferred to the later payment dates. The Buyer may prepay the Note at any time without premium or penalty on 15 days’ notice. The Note contains customary events of default, including payment defaults, covenant and representation defaults, judgment and cross-defaults of $100,000 or more and bankruptcy events, upon which the Company may accelerate the Note. The Note is subordinated in right of payment and lien priority to any indebtedness of the Buyer for borrowed money owed to banks, commercial finance companies or other institutional lenders.
Security. The Buyer’s obligations under the Note are secured, pursuant to an Intellectual Property Security Agreement (the “IP Security Agreement”), by a first-priority security interest in the intellectual property transferred to the Buyer in the Disposition, subject to the subordination provisions described above. The security interest will be released automatically upon the earlier of (i) repayment in full of the Note and (ii) the Buyer’s raising at least $3,000,000 in equity or debt financing after the Closing, provided that a release under clause (ii) may not occur unless the Buyer has paid the first $300,000 principal installment and the first Earnout Payment (as defined below), to the extent then due, and no event of default or unpaid Earnout Payment is outstanding. If the Buyer raises capital before the six-month anniversary of the Closing, it must apply a portion of the proceeds to pay the first principal installment and any first Earnout Payment then due.
1
Earnout Payments. In addition to the Purchase Price, the Company is entitled to additional cash payments of up to $2,250,000 in the aggregate (each, an “Earnout Payment”) if the Buyer completes a bona fide equity financing during the period ending on the later of 18 months after the Closing and the termination of the Note (the “Earnout Period”), as follows: (i) $500,000 at a pre-money valuation of at least $10,000,000; (ii) an additional $750,000 at a pre-money valuation of at least $17,500,000; and (iii) an additional $1,000,000 at a pre-money valuation of at least $25,000,000. Each Earnout Payment is due within 30 days after the applicable financing closes, and unpaid amounts accrue interest at 6% per annum.
Equity Consideration. At the Closing, the Buyer issued to the Company 526,316 common units representing a 5% membership interest in the Buyer (the “Closing Equity”), and the Company became a member of the Buyer under a joinder to the Buyer’s operating agreement. If the Buyer completes a bona fide equity financing at a pre-money valuation of at least $25,000,000 during the Earnout Period, the Buyer must issue to the Company additional common units representing a further 2% membership interest in the Buyer, measured as of the Closing, within 30 days. If it does not do so on time, it must issue a penalty of additional units equal to 6% of such additional units.
Representations, Covenants and Indemnification. The Purchase Agreement contains customary representations, warranties and covenants, including a three-year covenant by the Company not to compete with the Cleaning Products Business within 50 miles of any area where it is conducted or planned by the Buyer to be conducted as of the Closing, not to induce customers or suppliers of the Buyer to terminate their relationships with the Buyer, and not to hire or retain employees or officers of the Buyer. The Company’s representations survive for 24 months after the Closing, and specified fundamental representations survive until the applicable statute of limitations. Indemnification claims for breaches of representations and warranties are subject to a $50,000 aggregate threshold (with recovery from the first dollar once exceeded), which does not apply to the Buyer’s claims for breaches of fundamental representations. They are also subject to a cap of 25% of the Purchase Price, or 100% of the Purchase Price for breaches of fundamental representations and certain covered third-party claims. Claims based on fraud or intentional misrepresentation are not subject to these limitations. The Company also indemnifies the Buyer for excluded liabilities, and the Buyer indemnifies the Company for assumed liabilities and the post-Closing operation of the Cleaning Products Business.
Ancillary Agreements. At the Closing, the Company and the Buyer also entered into a Bill of Sale and Assignment, an Intellectual Property Assignment Agreement (together with short-form trademark, patent and copyright assignments) and an assignment of the Omaha facility lease.
The foregoing descriptions of the Purchase Agreement, the Note, the IP Security Agreement and the Termination Agreement (as defined below) do not purport to be complete and are qualified in their entirety by reference to the full text of (i) the Purchase Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference, and which includes the forms of the Note and the IP Security Agreement as exhibits thereto, and (ii) the Note, the IP Security Agreement and the Termination Agreement, copies of which the Company intends to file as exhibits to its Quarterly Report on Form 10-Q for the quarter ending December 31, 2026.
The Purchase Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company or the Buyer. The representations, warranties and covenants in the Purchase Agreement were made solely for the purposes of that agreement and as of specific dates, solely for the benefit of the parties to it. They may be subject to limitations agreed upon by the parties, including qualification by confidential disclosure schedules, and may be subject to standards of materiality that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants, or any descriptions of them, as characterizations of the actual state of facts or condition of the Company, the Buyer or the Subsidiary.
Relationship with the Buyer; Interest of Related Person.
Clayton Adams, a controlling member and Chief Executive Officer of the Buyer, is a member of the Board and previously served the Company under an Executive Transition Services Agreement, dated March 26, 2026 (the “Transition Services Agreement”). Mr. Adams also held an option to purchase the Cleaning Products Business under an Option Agreement with the Company dated September 5, 2025 (the “Option Agreement”). On October 7, 2026, Mr. Adams delivered a notice irrevocably exercising the option through the Buyer’s acquisition of the Cleaning Products Business under the Purchase Agreement. Under that notice, the Option Agreement terminated upon the Closing. Mr. Adams’s exercise or relinquishment of the option was a condition to the Company’s obligation to complete the Disposition.
2
Because of these relationships, Mr. Adams has a direct and indirect material interest in the Disposition, including through his ownership of the Buyer, the counterparty to the Purchase Agreement, the Note and the IP Security Agreement. The approximate dollar value of the transaction is $3,350,000 (the Purchase Price), plus up to $2,250,000 of contingent Earnout Payments. As required by the Option Agreement, the Company received a fairness opinion from Newbridge Securities Corporation in connection with the Disposition. The Disposition was reviewed and approved by the disinterested members of the Board, in accordance with the Company’s related person transaction policy, with Mr. Adams not participating in the deliberations or vote.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth in Item 1.01 under “Relationship with the Buyer; Interest of Related Person” is incorporated herein by reference. On October 7, 2026, and effective upon the Closing, the Option Agreement terminated in accordance with Mr. Adams’s notice of exercise. No early termination penalties were incurred by the Company in connection with the termination.
In addition, on October 7, 2026, the Company and Mr. Adams entered into a Termination and Release Agreement (the “Termination Agreement”), effective as of and contingent upon the Closing. Under the Termination Agreement, the Transition Services Agreement and Mr. Adams’s employment with the Company under it terminated, and the parties exchanged mutual releases of claims arising out of or relating to the Transition Services Agreement. The Termination Agreement does not affect Mr. Adams’s continued service as a director of the Company.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. On October 7, 2026, the Company completed the Disposition under the Purchase Agreement. The consideration consisted of the Note in the principal amount of $3,350,000, the Closing Equity representing a 5% membership interest in the Buyer, and the contingent right to receive the Earnout Payments of up to $2,250,000 and additional membership interests in the Buyer, each as described in Item 1.01. The consideration was determined through negotiations between the Company and the Buyer and was supported by the fairness opinion described in Item 1.01. As described in Item 1.01, the Buyer is controlled by Clayton Adams, a director of the Company, and Mr. Adams has a material interest in the Disposition.
The Disposition completes the Company's previously announced plan, first disclosed on June 8, 2026, to dispose of its cleaning products segment as part of its strategic transition to AI critical infrastructure. The Company previously announced it sold all its Dogecoin holdings and exited the Treasury strategy on July 20, 2026. Following the Dispositions, the Company's operations consist of its data centers and AI infrastructure business.
Item 7.01 Regulation FD Disclosure.
On October 8, 2026, the Company issued a press release announcing the completion of the Disposition. A copy of the press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information in this Item 7.01, including Exhibit 99.2, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. It shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the Buyer’s payment of the Note and any Earnout Payments, the Buyer’s ability to complete future financings and the valuations it may achieve, the value of the Company’s membership interest in the Buyer, and the Company’s strategic transition to an AI infrastructure business. Forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These factors include, among others: the Buyer’s ability to perform its obligations under the Note and the Purchase Agreement; the Buyer’s ability to raise capital on acceptable terms or at all; the subordination of the Note and the related security interest to senior indebtedness of the Buyer and the possible release of that security interest; the value and realizability of the collateral and of the Company’s equity interest in the Buyer; potential indemnification claims; the Company’s continued ability to successfully transition its business model; and other factors described in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, except as required by law.
3
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed consolidated financial information of the Company giving effect to the Disposition, prepared in accordance with Article 11 of Regulation S-X, is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
(d) Exhibits.
| Exhibit No. | Description | |
| 2.1* | Asset Purchase Agreement, dated October 7, 2026, by and between Sanzonate Holdings LLC and Zone Frontier Inc. | |
| 99.1 | Unaudited Pro Forma Condensed Consolidated Financial Information | |
| 99.2 | Press Release, dated October 8, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| * | Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a supplemental copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request. Certain identified information has been redacted pursuant to Item 601(b)(2)(ii) of Regulation S-K because it is both not material and of the type the Company treats as private or confidential. |
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: October 14, 2026 | ZONE FRONTIER INC. | |
| /s/ Tyler Hassen | ||
| Name: | Tyler Hassen | |
| Title: | Chief Executive Officer | |
5
Exhibit 99.1
ZONE FRONTIER INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
| As of June 30, 2026 | ||||||||||||
| As Reported | Disposition | Pro Forma | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 15,435,213 | $ | (837,422 | ) | $ | 14,597,791 | |||||
| Accounts receivable, net | 458,303 | (458,303 | ) | - | ||||||||
| Inventory, net | 909,219 | (909,219 | ) | - | ||||||||
| Deferred offering costs | - | - | ||||||||||
| Note receivable, related party | 1,000,000 | 300,000 | 1 | 1,300,000 | ||||||||
| Prepaid expenses and other current assets | 906,310 | (537,598 | ) | 368,712 | ||||||||
| Total current assets | 18,709,045 | (2,442,542 | ) | 16,266,503 | ||||||||
| Property and equipment, net | 53,759 | (53,028 | ) | 731 | ||||||||
| Right of use assets | 254,972 | (254,972 | ) | - | ||||||||
| Digital assets | 33,480,376 | - | 33,480,376 | |||||||||
| Intangibles, net | - | - | - | |||||||||
| Goodwill | - | - | - | |||||||||
| Note receivable, related party | - | 3,050,000 | 1 | 3,050,000 | ||||||||
| Other assets | 9,440 | (9,440 | ) | - | ||||||||
| Total assets | $ | 52,507,592 | $ | 290,018 | $ | 52,797,610 | ||||||
| Liabilities and Stockholders’ Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable and accrued expenses | $ | 720,067 | $ | (320,844 | ) | $ | 399,223 | |||||
| Lease liability – current | 159,126 | (159,126 | ) | - | ||||||||
| Note payable – current | - | - | - | |||||||||
| Note payable – related party | - | - | - | |||||||||
| Due to related parties | 1,619 | (1,619 | ) | - | ||||||||
| Total current liabilities | 880,812 | (481,589 | ) | 399,223 | ||||||||
| Lease liability – non-current | 113,972 | (113,972 | ) | - | ||||||||
| Note payable – non-current | - | - | - | |||||||||
| Total liabilities | 994,784 | (595,561 | ) | 399,223 | ||||||||
| Commitments and contingencies (Note 19) | ||||||||||||
| Stockholders’ Equity | ||||||||||||
| Class A Common Stock; $0.0001 par value, 50,000,000 shares authorized as of June 30, 2025; 0 and 1,875,795 shares issued and outstanding as of June 30, 2026 and 2025, respectively | - | - | - | |||||||||
| Common Stock (formerly class B); $0.0001 par value, 6,942,000,000 shares authorized; 226,050,057 and 9,961,227 shares issued and outstanding as of June 30, 2026 and 2025, respectively | 22,605 | - | 22,605 | |||||||||
| Additional paid-in capital | 239,630,545 | - | 239,630,545 | |||||||||
| Other comprehensive income | 67,746 | - | 67,746 | |||||||||
| Accumulated deficit | (188,208,088 | ) | 885,579 | 1 | (187,322,509 | ) | ||||||
| Total stockholders’ equity | 51,512,808 | 885,579 | 52,398,387 | |||||||||
| Total liabilities and stockholders’ equity | $ | 52,507,592 | $ | 290,018 | $ | 52,797,610 | ||||||
| (1) | Reflects the estimated gain (loss) on sale we would have recognized upon completion of the 2026 Dispositions as if the sale occurred as of June 30, 2026. |
| As of June 30, 2026 | ||||
| Sale price | $ | 3,350,000 | ||
| Less: net book value | (2,464,421 | ) | ||
| Less: transaction fees | (195,248 | ) | ||
| Gain on sale of assets | $ | 885,579 | ||
ZONE FRONTIER INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| As of June 30, 2026 | ||||||||||||
| As Reported | Disposition | Pro Forma | ||||||||||
| Revenue, net | $ | 3,406,434 | $ | (3,406,434 | ) | $ | - | |||||
| Cost of sales (exclusive of depreciation shown separately below) | 2,118,487 | (2,118,487 | ) | - | ||||||||
| Gross profit | 1,287,947 | (1,287,947 | ) | - | ||||||||
| Operating expenses: | ||||||||||||
| General and administrative | 56,492,928 | (16,495,894 | ) | 39,997,034 | ||||||||
| Advertising expense | 276,231 | (149,213 | ) | 127,018 | ||||||||
| Depreciation and amortization expense | 259,598 | (259,517 | ) | 81 | ||||||||
| Goodwill impairment | 2,237,910 | (2,237,910 | ) | - | ||||||||
| Total operating expenses | 59,266,667 | (19,142,534 | ) | 40,124,133 | ||||||||
| Loss from continued operations | (57,978,720 | ) | (17,854,587 | ) | (40,124,133 | ) | ||||||
| Other income (expense) | ||||||||||||
| Interest income (expense), net | 140,365 | 132,238 | 272,603 | |||||||||
| Change in fair value of digital assets | (116,318,363 | ) | - | (116,318,363 | ) | |||||||
| Foreign exchange gain (loss) | (4,146 | ) | 4,146 | - | ||||||||
| Total other income (expense) | $ | (116,182,144 | ) | $ | 136,384 | (116,045,760 | ) | |||||
| Net loss | $ | (174,160,864 | ) | $ | 17,990,971 | $ | (174,160,864 | ) | ||||
| Foreign currency translation adjustment | 67,746 | (67,674 | ) | - | ||||||||
| Total comprehensive loss | $ | (174,093,118 | ) | $ | 17,923,225 | $ | (156,923,225 | ) | ||||
| Net loss per share of Class A and common stock (formerly class B), basic and diluted | $ | (1.04 | ) | $ | 0.10 | $ | (0.94 | ) | ||||
| 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 | 167,097,047 | - | 167,097,047 | |||||||||
2
ZONE FRONTIER INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| As of June 30, 2025 | ||||||||||||
| As Reported | Disposition | Pro Forma | ||||||||||
| Revenue, net | $ | 2,072,834 | $ | (2,072,834 | ) | $ | - | |||||
| Cost of sales (exclusive of depreciation shown separately below) | 1,086,369 | (1,086,369 | ) | - | ||||||||
| Gross profit | 986,465 | (986,465 | ) | - | ||||||||
| Operating expenses: | ||||||||||||
| General and administrative | 7,081,299 | (7,081,299 | ) | - | ||||||||
| Advertising expense | 92,598 | (92,598 | ) | - | ||||||||
| Depreciation and amortization expense | 198,909 | (198,909 | ) | - | ||||||||
| Goodwill impairment | - | - | - | |||||||||
| Total operating expenses | 7,372,806 | (7,372,806 | ) | - | ||||||||
| Loss from continued operations | (6,386,341 | ) | (6,386,341 | ) | - | |||||||
| Other income (expense) | ||||||||||||
| Interest income (expense), net | (356,054 | ) | 356,064 | - | ||||||||
| Change in fair value of digital assets | - | - | - | |||||||||
| Foreign exchange gain (loss) | 120 | (120 | ) | - | ||||||||
| Total other income (expense) | $ | (355,934 | ) | $ | 355,934 | - | ||||||
| Net loss | $ | (6,742,275 | ) | $ | 6,742,275 | $ | - | |||||
| Foreign currency translation adjustment | 21,259 | (21,259 | ) | - | ||||||||
| Total comprehensive loss | $ | (6,721,016 | ) | $ | 6,721,016 | $ | - | |||||
| Net loss per share of Class A and common stock (formerly class B), basic and diluted | $ | (0.79 | ) | $ | 0.79 | $ | - | |||||
| Weighted average shares used in computing net loss per Class A share, basic and diluted | 228,891 | - | 228,891 | |||||||||
| Weighted average shares used in computing net loss per Class B share, basic and diluted | 8,320,481 | - | 8,320,481 | |||||||||
3
Exhibit 99.2
Zone Frontier Sells Legacy Cleaning Products
Business, Eliminating Approximately $3 Million in
Annual Cash Burn While Retaining Significant Potential Upside
| ● | Completes Zone’s transformation into a pure-play AI infrastructure developer |
| ● | Ends approximately $3 million annual cash burn and preserves capital for AI infrastructure platform |
| ● | $3.35 million secured promissory note at 6% interest, significantly above an independent valuation of the business |
| ● | Up to $2.25 million in additional cash earnout payments tied to the buyer’s future equity financings |
| ● | 5% equity interest in the buyer at closing with tag-along rights |
HOUSTON, October 8, 2026 /PRNewswire/ – Zone Frontier Inc. (NYSE AMERICAN: ZONE) (the “Company” or “Zone Frontier”) today announced the sale of its legacy aqueous ozone cleaning products business, including its wholly owned subsidiary CleanCore Global Limited, to Sanzonate Holdings LLC (“Sanzonate”), an entity controlled by Clayton Adams, the Company’s former Chief Executive Officer and current board member.
This legacy business consumed approximately $3 million of cash per year, lost $18 million in FY26, and required management time and attention that Zone is now directing entirely toward power-enabled compute campuses for AI customers across rural and industrial America. Additionally, the Company previously announced in July the sale of all remaining digital assets for approximately $33 million, and closure of its Treasury segment, which lost $156 million last year. With these sales, Zone stops funding those losses, keeps the vast majority of the cash it had previously set aside for the business, and retains several ways to benefit if the business succeeds under new ownership.
The consideration is well above the independent value of the business. A fairness opinion delivered to the Company’s Board of Directors by Newbridge Securities Corporation valued the legacy business, excluding cash, at approximately $1.72 million. The $3.35 million face amount of the note significantly exceeds that valuation. If all earnout milestones are achieved, total potential cash payments to Zone would be approximately $5.6 million, before counting the retained equity.
| Component | Amount | Status | ||
| Secured promissory note (principal) | $3,350,000 | Scheduled over 18 months | ||
| Interest on note (6%) | ~$231,750 | Scheduled over 18 months | ||
| Earnout payments | Up to $2,250,000 | Contingent on buyer financings at $10M, $17.5M and $25M pre-money valuations | ||
| Equity in Sanzonate | 5% at closing | Tag-along rights | ||
| Cash transferred to Sanzonate with the business | ~($844,000) | Paid at closing for working capital needs | ||
| Annual cash burn eliminated | ~$3M per year | Ongoing corporate costs materially reduce immediately after closing |
“The CleanCore business has promising technology, but the business does not fit our core strategy anymore. This sale eliminates an ongoing cash drain that pulled management and Board attention away from our core AI infrastructure strategy. This transaction completes our transition into critical AI infrastructure as Zone Frontier,” said Tyler Hassen, Chief Executive Officer of Zone Frontier. “We also receive a secured note with a face value significantly greater than the independent valuation of the business, and an equity stake in a team that is helping to shape the future of chemical free cleaning. If Sanzonate succeeds, our shareholders share in that success. Meanwhile, our capital and our focus are fully on building AI infrastructure.”
Transaction Terms
| ● | Secured promissory note. Sanzonate issued Zone a $3.35 million non-convertible promissory note bearing 6% annual interest, payable in installments of $300,000 at six months, $850,000 at twelve months and $2,200,000 at eighteen months, plus accrued interest. |
| ● | Security interest. The note is secured by a first-priority lien on the intellectual property transferred in the transaction. The lien remains in place until the note is repaid and may be released earlier only if Sanzonate raises at least $3.0 million in new capital, has made its first $300,000 principal payment, and is not in default under the note or behind on any earnout payment. The note and lien may be subordinate to future institutional senior debt of Sanzonate. |
| ● | Earnout payments. Zone is entitled to up to $2.25 million in additional cash payments if Sanzonate completes equity financings at specified pre-money valuations: $500,000 at $10 million or more, an additional $750,000 at $17.5 million, and a further $1.0 million at $25 million. |
| ● | Retained equity. Zone received a 5% membership interest in Sanzonate at closing. Zone has tag-along rights on sales by Sanzonate’s majority holders. |
| ● | Other terms. Zone transferred approximately $844,000 of cash to Sanzonate with the business and agreed to a three-year non-compete covering cleaning products. |
| ● | Ongoing CleanCore operating losses. Any future losses by the CleanCore business will be funded by new ownership. |
The transaction was approved by the Company’s independent directors following receipt of a fairness opinion from Newbridge Securities Corporation. Because Mr. Adams is a current member of the Company’s Board of Directors and controls Sanzonate, the transaction was reviewed and negotiated as a related party transaction, but at arm’s length terms. Mr. Adams recused himself from all Board deliberations and did not participate in the evaluation of the transaction or any negotiations on behalf of the Company. Additional information will be included in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission (“SEC”).
NYSE American Section 610(b) Notice
As required by Section 610(b) of the NYSE American Company Guide, the Company announces that the audit opinion of TAAD, LLP on the consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended June 30, 2026, filed with the SEC on September 28, 2026, includes an explanatory paragraph expressing substantial doubt about the Company’s ability to continue as a going concern. For fiscal year 2026, the legacy cleaning products business and Treasury segment were the primary sources of the Company’s operating losses and cash used in operations. Following the sale of such assets, which was announced today , the Company expects no future ongoing losses attributable to such businesses. This announcement does not reflect any change to the Company’s financial statements or Form 10-K. Management’s plans are described in Note 1 to the consolidated financial statements.
2
Zone Frontier’s AI Infrastructure Portfolio
Zone’s AI infrastructure portfolio includes its Minnesota data center campus, with an initial 10-year Colocation Services Agreement with Cerebras Systems, Inc. (NASDAQ: CBRS) and two 10-year potential extension options. This campus is making material construction progress and the Company expects to generate revenue beginning in the first half of 2027, consistent with previous guidance. Project finance discussions are also progressing concurrently, consistent with previous guidance.
Zone’s portfolio also includes its Texas campus, sized to an initial 200 MW with potential to expand beyond 500 MW, as part of Zone’s active and growing pipeline of AI infrastructure projects to support the rapidly increasing demand for compute power.
For more information, visit www.zonefrontier.com.
About Zone Frontier Inc.
Zone Frontier Inc. (NYSE AMERICAN: ZONE) is helping to build the critical infrastructure that powers the AI economy. Through a growing pipeline of projects, the Company aims to help meet the increasing demand for compute capacity, power, and digital infrastructure required by the world's leading AI companies.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements regarding the expected benefits of the sale of the legacy cleaning products business, expected cash savings, the receipt of payments under the promissory note, the achievement of earnout milestones, the value of the Company’s equity interest in Sanzonate, the Company’s ability to continue as a going concern and management’s plans to address it, the Company’s business strategy and pipeline of projects, and the Company’s transition to an AI infrastructure business. Forward-looking statements are generally identified by words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “may,” “will,” “could,” “should,” “estimates,” “projects,” “potential,” “focused on,” “aims,” and similar expressions. These forward-looking statements are based on management's current expectations and assumptions as of the date of this press release and are subject to significant risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. Such risks and uncertainties include, but are not limited to: Sanzonate’s ability to make payments under the promissory note, which depends on its operating results and ability to raise capital; the possibility that Sanzonate does not complete financings at the valuations required to trigger earnout payments or additional equity; the release of the Company’s security interest in specified circumstances and the subordination of the note to future senior debt; the value and liquidity of a minority interest in a private company; liabilities retained by the Company under the purchase agreement; the substantial doubt about the Company’s ability to continue as a going concern; the Company’s ability to raise additional capital on acceptable terms or at all; the highly speculative and uncertain nature of the Company's AI critical infrastructure business; the Company's lack of operating history in the data center or computing infrastructure industry; the Company's ability to obtain project-level debt financing on acceptable terms or at all; and general economic, financial, capital market and industry conditions.
For a more complete discussion of risks and uncertainties, please refer to the Company's filings with the SEC, including the “Risk Factors” section of the Company's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. All forward-looking statements are qualified in their entirety by this cautionary statement.
MEDIA CONTACT
Marcy Simon
Marcy@agentofchange.com
+19178333392
SOURCE Zone Frontier Inc. (NYSE AMERICAN: ZONE)
3