Phoenix-based 1606 Corp. has entered into a non-binding Letter of Intent with Prime Tex Group, USA, a large-scale industrial group, to explore a potential acquisition or assignment of the company's contractual rights to a 132-acre biomass power and data center development property in Lufkin, Texas.

The LOI, dated September 6, 2026, and announced publicly on September 16, 2026, represents what the company described as an additional step in evaluating strategic options for the project, though it carries no obligation for either party to complete a transaction.

Terms and Scope of the Letter of Intent

The LOI contemplates that Prime Tex will evaluate a potential acquisition or assignment of 1606 Corp.'s rights and interests under an existing Purchase and Sale Agreement relating to the Lufkin property, known internally as the Project.

The agreement is expressly non-binding and non-exclusive, meaning 1606 Corp. retains full freedom to continue discussions with other parties regarding the same property or contractual interests. Under the terms of the LOI, the parties may exchange information reasonably necessary for Prime Tex to conduct its evaluation, including details related to the Purchase and Sale Agreement, the property itself, existing power infrastructure, the generation facility, title, permits, and other project-related matters. Prime Tex is not obligated to conduct due diligence, negotiate a definitive agreement, or complete any transaction.

The LOI is scheduled to expire on December 31, 2026, unless extended in writing by both parties. 1606 Corp.

Chief Executive Officer Austen Lambrecht characterized the agreement as a preliminary expression of interest.

This LOI reflects preliminary interest from Prime Tex and represents an additional step in our efforts to explore opportunities to create value from the Project," Lambrecht said in the announcement. He noted that any potential transaction remains subject to due diligence, further negotiation, and the execution of mutually acceptable definitive agreements.

Prime Tex Group's U.S. Timber and Renewable Energy Operations

According to information provided by Prime Tex and included in the announcement, the industrial group has established U.S. operations through Prime Tex Lumber LLC, which has acquired an operating sawmill in Kountze, Hardin County, Texas.

That facility produces Southern Yellow Pine lumber and industrial timber products as part of a broader strategy to expand its presence in U.S. timber and wood processing.

Prime Tex has also stated that it is independently establishing a second modern sawmill in Kennard, Texas, operating under the name Prime Tex Inc., which is expected to begin production by the end of 2026. According to Prime Tex, both sawmill operations produce large quantities of wood chips, which can be used as feedstock for biomass power generation.

Beyond its sawmill operations, Prime Tex has indicated that its broader renewable energy activities include biochar production and biomass pellet facilities designed to utilize forestry and sawmill byproducts.

The company has also expressed interest in expanding into biomass power generation in the United States. Additionally, Prime Tex stated that it maintains an investment initiative associated with its Kountze operations through an EB-5 Regional Centre identified as Prime Tex Renewables LLC.

Prime Tex has further stated that it is actively pursuing the acquisition of additional mills and forest resources as part of its U.S. expansion strategy. 1606 Corp. management stated its belief that, if confirmed, these operations and expansion objectives could provide potential strategic alignment with the existing biomass generation infrastructure at the Lufkin property and the surrounding East Texas timber market.

The Lufkin Project and Its Existing Infrastructure

The project at the center of the LOI consists of approximately 132 acres located in Lufkin, Texas, and includes an existing biomass power generation facility and related infrastructure. 1606 Corp. holds contractual rights to the property through its Purchase and Sale Agreement, and it is those rights and interests that would be the subject of any potential acquisition or assignment under a definitive agreement with Prime Tex.

Lambrecht cited the alignment between Prime Tex's stated presence in the Texas timber and sawmill industry and the biomass infrastructure already in place at the Lufkin site as a factor in viewing the company's interest as potentially relevant.

The geographic proximity of Prime Tex's sawmill operations in East Texas to the Lufkin property was implicit in the company's framing of the potential strategic fit.

1606 Corp. Continues to Evaluate Broader Strategic Alternatives

Despite the LOI with Prime Tex, 1606 Corp. made clear that it is maintaining a parallel evaluation of other strategic options for the Project. Because the LOI is non-exclusive, the company stated it remains free to discuss, negotiate, solicit, or enter into potential transactions involving the Project or its Purchase and Sale Agreement rights with additional parties simultaneously.

Lambrecht emphasized the company's intention to preserve flexibility throughout the process.

"We believe it is important to maintain flexibility as interest in the Project continues to develop," he said. "Our responsibility is to determine which path, if any, ultimately provides the greatest value to the Company and its shareholders."

The company indicated it intends to continue discussions with Prime Tex while that company conducts its evaluation, with the stated objective of identifying a transaction structure, if any, that provides what 1606 described as the strongest combination of value, certainty, and strategic benefit to the company and its shareholders.

Neither party is obligated to complete the proposed transaction unless and until definitive agreements are negotiated and executed. The company acknowledged in its announcement that there can be no assurance that the due diligence process will result in a definitive agreement or that a transaction with Prime Tex Group, USA will ultimately be completed.