Zone Frontier Inc. Announces Ground Lease for West Texas Data Center

What Happened

• Zone Frontier Inc. (ZONE) reported on Form 8‑K that a Nevada subsidiary entered into a Ground Lease with GKC Operating, LLC on September 24, 2026, securing approximately 4,077 acres in Potter County, Texas, for development of a West Texas data center campus in partnership with HST Technologies, Inc. The lease secures land, water rights, and development rights around an existing 345 kV substation in the Southwest Power Pool region.

Key Details

• Lease term: initial 30 years from rent commencement, plus two 10‑year extension options.
• Site allocations: Company may designate 200–800 acres for data center facilities and at least 1,800 acres for solar + battery storage; remaining acreage available for other lawful uses.
• Rent and fees: base rent $6,000/acre/year for data center acreage and $1,000/acre/year for solar acreage (each begins only when construction on that area starts); 0.5% revenue share on data center revenue (fully eliminated if Company exercises the purchase option).
• Purchase option: buy data center acreage at $100,000/acre if exercised before commercial operation of on‑site power, or $135,000/acre if exercised on/after that date. A $250,000 escrow deposit will be made upon recording the Memorandum of Lease (refundable in most cases; partially non‑refundable if inspection period is extended).
• Conditions and protections: lease commencement is subject to Company‑favorable conditions precedent (acceptable title, commitments for ≥200 MW firm service, water supply commitments, interconnection agreement, permits, and satisfactory diligence). Company controls a one‑year inspection period (with one one‑year extension) and may terminate before period end. If construction on a site area does not begin within 48 months, the Landlord may terminate the lease and purchase option for that area. The Company has guaranteed its subsidiary’s obligations, limited until conditions are satisfied and construction begins.

Why It Matters

• This agreement secures significant land and water rights in a high‑voltage area near an existing substation, which is a key step toward developing a large West Texas data center and renewable power footprint.
• The structure limits near‑term cash commitments: base rent and many lease obligations only begin when Zone Frontier elects to start construction, and the Company retains rights to terminate during diligence. The purchase option and revenue share provide optionality for ownership versus long‑term leasing.
• Material follow-ups for investors include whether Zone Frontier secures tenants and the required utility, interconnection, and water commitments (including ≥200 MW firm service), and the timing of construction starts that would trigger rent and other obligations.