Zone Frontier sells cleaning unit to board member-controlled firm

Zone Frontier Inc. (NYSE American: ZONE) announced the sale of its aqueous ozone cleaning products business, including its wholly owned subsidiary CleanCore Global Limited, to Sanzonate Holdings LLC, an entity controlled by Clayton Adams, the company's former chief executive and current board member.

The buyer issued Zone Frontier a $3.35 million secured promissory note at 6% annual interest, payable in installments over 18 months: $300,000 at six months, $850,000 at twelve months, and $2.2 million at eighteen months. Zone Frontier also transferred approximately $844,000 in cash to Sanzonate at closing for working capital.

Newbridge Securities Corporation provided the company's board with a fairness opinion valuing the cleaning business, excluding cash, at approximately $1.72 million. Zone Frontier is also entitled to up to $2.25 million in additional earnout payments contingent on Sanzonate completing future equity financings at pre-money valuations of $10 million, $17.5 million, and $25 million. Zone Frontier retained a 5% equity interest in Sanzonate with tag-along rights.

The cleaning unit consumed approximately $3 million in cash annually and recorded an $18 million loss in fiscal year 2026. Because Adams controls Sanzonate and sits on Zone Frontier's board, the transaction was treated as a related-party deal and reviewed by independent directors. Adams recused himself from all board deliberations.

Zone Frontier separately announced in July the sale of digital assets for approximately $33 million and the closure of its Treasury segment, which lost $156 million last year.

The company's auditor, TAAD, LLP, included a going-concern explanatory paragraph in its audit opinion on Zone Frontier's fiscal year 2026 financial statements, filed with the Securities and Exchange Commission on September 28, 2026.

Zone Frontier said it expects to begin generating revenue from its Minnesota data center campus, which has a 10-year colocation agreement with Cerebras Systems Inc. (Nasdaq: CBRS), in the first half of 2027. The company also holds a Texas campus sized at an initial 200 MW with expansion potential beyond 500 MW.

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