Z Squared Inc. Signs Definitive Agreement to Acquire 100% of Paradox Data and Its Union County Campus
Rhea-AI Summary
Z Squared (Nasdaq: ZSQR) signed a definitive agreement to acquire 100% of Paradox Data from Paradox Infrastructure, expanding an initially planned majority purchase to a full acquisition. Paradox Data’s key asset is the Union County Campus in El Dorado, Arkansas, a data center development site with existing Entergy Arkansas electric service up to 8.0 MW and a pathway targeting up to 150 MW of AI-ready capacity over time.
The all-stock consideration is up to $25 million in new Series A Convertible Preferred Stock, with $5 million issued at closing at a fixed conversion price of $7.45 per share and up to $20 million tied to four development milestones at the Union County Campus. Z Squared has engaged A2 Advisors to support development. Closing is subject to customary and specific conditions, with a targeted closing within 30 days and an outside date of September 30, 2026, extendable to December 31, 2026. The company cautions there is no assurance the deal or milestones will be completed as anticipated.
Positive
- All-stock deal with up to $25 million in preferred shares, no cash or debt
- Only $5 million in preferred stock issued at closing at $7.45 conversion price
- Up to $20 million additional consideration contingent on four execution milestones
- Union County Campus targets up to 150 MW of AI-ready capacity
- Existing energy service arrangement provides up to 8.0 MW from Entergy Arkansas
- Development structure aligns most acquisition cost with requested and energized capacity
Negative
- Acquisition closing subject to multiple conditions with outside date up to December 31, 2026
- Up to $25 million in convertible preferred stock could create future equity dilution
- Milestone-based consideration depends on achieving capacity and customer-request targets that may not occur
- CTO holds an indirect minority interest in the seller and milestone recipient, creating a related-party element
News Explained
The deal uses no closing cash or debt; convertible preferred stock is issued, and the CTO has indirect interests in the seller and milestone recipient.
The release reports a signed agreement still subject to closing conditions; consideration is entirely newly designated Series A Convertible Preferred Stock, with no cash payable at closing, no debt financing, and a closing tranche convertible into common stock.
The release also identifies Chief Technology Officer Jeffery Harris as holding an indirect minority interest in Paradox Infrastructure, the seller, and in Paradox Energy, the recipient of milestone proceeds.
Key Figures
Previous Acquisition Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jun 25 | Paradox acquisition LOI | Positive | -10.0% | Signed LOI for majority Paradox interest with $5 million stock consideration and 150 MW target. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
The prior acquisition-tagged announcement was followed by a -10.03% 24-hour reaction, diverging from the transaction's expansionary framing.
Key Terms
convertible preferred stock financial
non-cash consideration financial
energization technical
form 8-k regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
All preferred stock structure links up to
Paradox Data's flagship asset is the Union County Campus at 713 Industrial Road,
Execution aligned, non-cash consideration. The aggregate consideration consists entirely of newly designated Series A Convertible Preferred Stock of Z Squared, with no cash payable at closing and no debt financing:
- At closing:
$5.0 million $7.45 - Milestone payments: Up to
$20.0 million
"This is 'scale with discipline' in contract form," said David Halabu, Chief Executive Officer of Z Squared. "Eighty percent of the total consideration is earned only as the Union County Campus achieves defined execution milestones: capacity requested, then capacity energized. This deal structure keeps our acquisition currency aligned with execution and continues to closing this transaction quickly."
Execution support. In connection with the development of the Union County Campus, Z Squared has engaged A2 Advisors, a strategic advisory and executive management firm focused on digital infrastructure: data centers, power, real estate and the capital markets that support them. A2 Advisors is expected to support the Company across site development planning, project delivery, vendor and partner alignment, and leasing and capital strategy for the campus build-out, bringing operator level execution experience to each phase of the development.
"We are excited to be building a highly efficient, technology driven data center with the help of A2 Advisors," stated Jeffery Harris, Chief Technology Officer of Z Squared. "Following closing, our focus will be the utility, generation, engineering and customer workstreams required to move toward large scale capacity."
Mr. Harris holds an indirect minority ownership interest in Paradox Infrastructure LLC, the seller in the transaction and Paradox Energy, the recipient of the milestone proceeds.
Closing conditions. The closing of the transaction is subject to customary and transaction specific conditions. The agreement provides for closing within 30 days of signing, subject to conditions, with an outside date of September 30, 2026 (extendable to December 31, 2026 under specified circumstances).
Additional information regarding the transaction, including the material terms of the purchase agreement, will be included in a Current Report on Form 8-K to be filed by the Company with the Securities and Exchange Commission. There can be no assurance that the transaction will close, or that any milestone will be achieved, on the anticipated timeline or at all.
About Paradox Data, LLC
Paradox Data, LLC is developing an AI compute and high-density data infrastructure business at the Union County Campus in
About Z Squared Inc.
Z Squared Inc. is a computing infrastructure company operating advanced computing equipment and expanding into AI infrastructure. The Company's strategy is built on three principles: lead with power by acquiring operating sites where power is already flowing; build for AI workloads by converting that capacity into AI-ready colocation where the customer brings the compute and runs what they need; and scale with discipline by deploying conversion capital site by site, against signed contracts and operational readiness. Z Squared's common stock began trading on the Nasdaq Global Market under the symbol "ZSQR" in April 2026.
For more information, visit www.zsquaredinc.com.
Investor Relations Contact: ZSQR@mzgroup.us
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, that are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "may," "will," "should," "expects," "plans," "anticipates," "intends," "targets," "projects," "believes," "estimates," "potential" or "continue," or the negatives of these terms or other comparable terminology. Forward-looking statements in this press release include, among others, statements regarding: the anticipated closing of the acquisition of Paradox Data, LLC and the timing thereof; the satisfaction of closing conditions; the achievement of the development milestones and the issuance of the related preferred stock; the development of the Union County Campus, including the targeted capacity of up to 150 MW; the availability and expansion of utility power and on-site generation; the acquisition of adjacent land; the Company's previously announced Phase 1 objective of developing 100 MW of AI-ready capacity; the expected contributions of A2 Advisors; and the Company's strategy and planned expansion into AI infrastructure, data center development and power generation.
Forward-looking statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied, including, among others: the Company's ability to continue as a going concern; the risk that the transaction does not close on the anticipated timeline or at all; the risk that the closing conditions are not satisfied; the risk that the development milestones are not achieved in whole or in part; risks related to the availability, cost and interruptible nature of electric power at the Union County Campus and the Company's ability to secure additional utility power and on-site generation; risks related to permitting, construction, equipment procurement and the development of data center capacity; customer demand for AI-ready capacity; dilution resulting from the issuance and conversion of the preferred stock issued in the transaction; volatility in digital asset prices and the economics of the Company's mining operations; and the other risks and uncertainties described under "Risk Factors" in the Company's filings with the Securities and Exchange Commission, available at www.sec.gov.
Forward-looking statements speak only as of the date of this press release. Except as may be required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You should not place undue reliance on any forward-looking statement.
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SOURCE Z Squared Inc.