Zone Frontier Inc.: sells cleaning products business for $3,350,000

What happened

• Zone Frontier Inc. reported that on Oct 7, 2026 it entered into an Asset Purchase Agreement with Sanzonate Holdings LLC and sold substantially all assets of its legacy cleaning products business (the "Cleaning Products Business"); the disposition was completed concurrently with execution of the Purchase Agreement (the "Closing").
• The Buyer is controlled by Clayton Adams, a member of Zone Frontier’s board, and Mr. Adams exercised an existing option that terminated upon the Closing.

Key details

• Purchase price: $3,350,000, paid at Closing by a secured, non-convertible promissory note (the "Note") bearing 6% interest (increasing to 10% on default) with principal due in three installments: $300,000 at 6 months, $850,000 at 12 months plus accrued interest, and $2,200,000 at 18 months plus accrued interest; interest for the first 6 months is deferred.
• Additional consideration: up to $2,250,000 in earnout payments if the Buyer completes equity financings during the earnout period: $500,000 at a pre-money valuation of at least $10,000,000; $750,000 at at least $17,500,000; $1,000,000 at at least $25,000,000.
• Equity and security: Zone Frontier received 526,316 common units equal to a 5% membership interest in the Buyer at Closing and the Note is secured by a first-priority security interest in the transferred intellectual property under an IP Security Agreement, subject to subordination to institutional lenders.
• Purchased assets included: 100 ordinary shares of the Company’s Irish subsidiary, $500,000 in cash (excluding cash held in the subsidiary), patents and trademarks (including CLEANCORE marks), accounts receivable, inventory, equipment, leasehold interest in the Omaha facility, contracts and goodwill. Zone Frontier retained cash and cash equivalents in excess of $500,000, digital asset holdings, and its data center and AI infrastructure interests (including 79% and 99% joint venture interests in two data center campuses).
• Liabilities: the Buyer assumed liabilities specifically identified in the Purchase Agreement (including Omaha lease obligations, accounts payable, credit card balances, accrued liabilities and product warranty obligations); Zone Frontier retained other liabilities, including taxes from the disposition and environmental liabilities.
• Agreements and covenants: customary representations and warranties and indemnities; a 3-year non-compete within 50 miles of areas where the Buyer conducts or plans to conduct the Cleaning Products Business; indemnification recoveries subject to a $50,000 aggregate threshold and caps generally equal to 25% of the Purchase Price (100% for fundamental representations), except for fraud claims.

Why it may matter

• The filing reports Item 1.01 (entry into a material definitive agreement), Item 2.01 (completion of disposition of assets) and Item 7.01 (Regulation FD disclosure via a press release dated Oct 8, 2026).
• The filing states the Purchase Agreement, the Note and related agreements are filed as exhibits or will be filed, and that disinterested directors approved the disposition after receiving a fairness opinion from Newbridge Securities Corporation. The filing does not explain why the insider traded or why the company acted.