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UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2026
Z SQUARED INC.
(Exact name of registrant
as specified in its charter)
| Delaware |
|
001-39669 |
|
98-1465952 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer
Identification No.) |
|
550 South Andrews Ave., Suite #700
Fort Lauderdale, Florida |
|
33301 |
| (Address of principal executive offices) |
|
(Zip Code) |
305-697-0792
(Registrant’s telephone
number, including area code)
________________________________________
(Former name or former
address, if changed since last report)
Check the appropriate
box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered
pursuant to Section 12(b) of the Act:
| Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange
on which registered |
| Common Stock, par value $0.0001 per share |
|
ZSQR |
|
The Nasdaq
Global Market |
Indicate by check mark
whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth
company ☐
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive
Agreement.
As previously disclosed, on June 18, 2026, Z Squared
Inc. (the “Company”) and Paradox Data, LLC, a Florida limited liability company (“Paradox Data”), entered into
a binding letter of intent contemplating the acquisition by the Company of a majority of the outstanding membership interests of Paradox
Data. The parties subsequently agreed to restructure the transaction as an acquisition by the Company of one hundred percent (100%) of
the outstanding membership interests of Paradox Data.
On July 31, 2026, the Company entered into a Membership
Interest Purchase Agreement (the “MIPA”) with Paradox Infrastructure LLC, a Florida limited liability company (“Seller”),
Paradox Data and, solely for purposes of the specified owner provisions set forth therein, the owner parties named therein, pursuant to
which the Company will acquire from Seller 100% of the outstanding membership interests of Paradox Data (the “Transaction”).
At the closing of the Transaction (the “Closing”), Paradox Data’s assets will include a data center site in El Dorado,
Union County, Arkansas, the existing building located thereon, immersion-cooling infrastructure, an electric service arrangement with
Entergy Arkansas, LLC supporting the development of AI-compute capacity, and rights to acquire up to ten additional acres under an existing
land contract.
At the Closing, the Company will issue to Seller 5,000
shares of a newly designated series of preferred stock, the Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series
A Preferred Stock”), with a stated value of $1,000 per share ($5,000,000 in the aggregate). Following the Closing, the Company will
make milestone payments of up to $20,000,000 in the aggregate, payable in additional shares of Series A Preferred Stock to Seller and
to Paradox Energy, LLC, an affiliate of Seller (“Energy”), upon the achievement of specified request-for-service and energization
milestones of up to 150 MW of capacity, with Milestones 2 through 4 each payable in two installments. The milestone payment obligations
are not subject to any expiration or sunset date, and continue until all milestones and installments have been paid or waived. If all
milestones are achieved, the aggregate consideration under the MIPA would be $25,000,000 in stated value.
The Series A Preferred Stock will accrue dividends
at a rate of 8.0% per annum, payable quarterly in cash or in kind, at the election of the holder. Each share will be convertible at the
holder’s option into shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), at a
conversion price of $7.45 per share for shares issued at the Closing and, for shares issued in satisfaction of milestone payments, the
lesser of the Nasdaq official closing price on the trading day immediately preceding the applicable achievement date and 110% of the “Minimum
Price” (as defined in Nasdaq Listing Rule 5635(d)) as of such date, in each case subject to customary adjustments. The Series A
Preferred Stock is subject to mandatory conversion if the closing price of the Common Stock equals or exceeds 250% of the applicable conversion
price for 20 consecutive trading days, votes with the Common Stock on an as-converted basis subject to a voting floor price, carries a
liquidation preference equal to stated value plus accrued and unpaid dividends, and is subject to beneficial ownership conversion limitations.
The terms of the Series A Preferred Stock will be set forth in a certificate of designation to be filed with the Secretary of State of
the State of Delaware prior to the Closing. The MIPA also provides the holders of the Series A Preferred Stock with customary piggyback
registration rights with respect to the shares of Common Stock issuable upon conversion, and requires the Company to timely file its Exchange
Act reports so as to permit resales in reliance on Rule 144 under the Securities Act; the MIPA does not grant demand or mandatory shelf
registration rights.
Shares of Common Stock issuable upon conversion
of the Series A Preferred Stock are capped at 19.99% of the Company’s outstanding Common Stock, measured immediately prior to execution
of the related June 18, 2026 letter of intent, unless the Company obtains stockholder approval under Nasdaq Listing Rule 5635. If such
approval is required and is not obtained within 90 days after submission of the matter to stockholders, the affected portion of the consideration
is instead payable in cash at $1,000 per share within five business days.
The Closing is subject to customary conditions,
including the completion of specified pre-Closing asset and real property transfers to Paradox Data, the release of liens, the negotiation
in good faith and execution at the Closing of a lease agreement pursuant to which Seller will lease back the existing building, and the
delivery of customary certificates and resignations, and is expected to occur within 30 days after signing. The MIPA contains customary
representations, warranties, covenants and indemnification provisions, including a deductible, a cap on general indemnification claims
of $750,000 and an overall cap generally equal to the consideration received, with indemnification claims satisfied first by set-off against
milestone payments and surrender of shares.
Jeffery Harris, the Company’s Chief Technology
Officer, holds an indirect interest in Seller through a minority membership interest in an indirect owner of Seller, and a 24% membership
interest in Energy, and accordingly has an indirect interest in the Transaction of approximately $3.6 million if all milestones are achieved
in full. The Transaction was reviewed and approved as a related person transaction by the Audit Committee of the Company’s Board
of Directors, and approved by the Board of Directors, in accordance with the Company’s related person transaction policy and Item
404 of Regulation S-K.
The foregoing description of the MIPA does not
purport to be complete and is qualified in its entirety by reference to the full text of the MIPA, a copy of which is filed as Exhibit
2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive
Agreement.
On July 29, 2026, the Company delivered to Moneta
Advisory Partners, LLC (“MAP”) a notice of termination, effective as of July 29, 2026 (the “Termination Date”),
that certain Corporate Services Agreement, dated as of January 23, 2026 (the “MAP Agreement”), between Z Squared Inc., a Wyoming
corporation (now Z Squared OpCo Inc., a wholly-owned subsidiary of the Company), and MAP, pursuant to which MAP provided corporate advisory
and related services. No early termination penalty, severance or termination fee is payable by the Company in connection with the termination.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 above
is incorporated into this Item 3.02 by reference. The shares of Series A Preferred Stock issuable under the MIPA, and the shares of Common
Stock issuable upon conversion thereof, will be issued in reliance upon the exemption from registration provided by Section 4(a)(2) of
the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506(b) of Regulation D thereunder, based upon representations
of the recipients, including as to their status as “accredited investors,” and the absence of any general solicitation. Such
shares will constitute “restricted securities” under Rule 144 under the Securities Act.
Item 7.01. Regulation FD Disclosure.
On August 3, 2026, the Company issued a press
release announcing the entry into the MIPA described under Item 1.01 above. A copy of the press release is furnished as Exhibit 99.1 to
this Current Report on Form 8-K.
The information set forth under this Item 7.01,
including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly
set forth by specific reference in such a filing.
Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected timing and consummation
of the Transaction, the achievement of milestones and related consideration, and the effects of the termination of the MAP Agreement.
These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual
results to differ materially, including the risk that closing conditions to the Transaction are not satisfied, that required stockholder
or Nasdaq approvals are not obtained, risks relating to the Company’s ability to continue as a going concern, and other risks described
in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update these statements
except as required by law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. |
|
Description |
| 2.1 |
|
Membership Interest Purchase Agreement, dated as of July 31, 2026, by and among Z Squared Inc., Paradox Infrastructure LLC, Paradox Data, LLC, and the Owner Parties named therein.* |
| 99.1 |
|
Press Release dated August 3, 2026, titled “Z Squared Inc. Signs Definitive Agreement to Acquire 100% of Paradox Data and Its Union County Campus.” |
| 104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Certain schedules
and exhibits to the MIPA have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally
a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request. |
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 4, 2026
| |
Z SQUARED INC. |
| |
|
| |
By: |
/s/ David Halabu |
| |
Name: |
David Halabu |
| |
Title: |
Chief Executive Officer |
Exhibit 99.1
Z Squared Inc. Signs Definitive Agreement to Acquire 100% of Paradox
Data and Its Union County Campus
All preferred stock structure links up to $25 million in total consideration
to execution at the Union County Campus, with $20 million earned only as the site achieves defined development milestones on the path
targeting up to 150 MW of AI-ready capacity
FT. LAUDERDALE, Fla., August 3, 2026 — Z Squared Inc.
(Nasdaq: ZSQR) (“Z Squared” or the “Company”), a computing infrastructure company expanding into AI infrastructure,
today announced that it has signed a definitive agreement to acquire 100% of the membership interests of Paradox Data, LLC from Paradox
Infrastructure LLC. The transaction, initially contemplated as a majority interest acquisition under the binding letter of intent announced
on June 25, 2026, has been expanded to a full acquisition of Paradox Data.
Paradox Data’s flagship asset is the Union County Campus at 713
Industrial Road, El Dorado, Arkansas, a data center development site with an existing electric service arrangement with Entergy Arkansas
providing for energy service of up to 8.0 MW, an executed land contract for the acquisition of adjacent land, and a development pathway
targeting up to 150 MW of AI-ready capacity over time through a combination of utility power and on site generation. The site supports
Z Squared’s previously announced Phase 1 objective of developing 100 MW of AI-ready capacity for workloads across multiple U.S.
sites.
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 of Series A Convertible
Preferred Stock convertible into common stock at a fixed conversion price of $7.45 per share. |
| ● | Milestone payments: Up to $20.0 million of additional
convertible preferred stock, earned only upon achievement of four defined development milestones at the Union County Campus: the first
tied to initial energization of AI compute capacity at the existing site, and the remaining three tied to aggregate site capacity thresholds
of 50 MW, 100 MW and 150 MW, each earned in installments upon receipt of binding requests for service for the additional capacity and
upon energization of that capacity. |
“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 alongside a tenant. This deal structure
keeps our acquisition currency aligned with execution and continues to keep our balance sheet completely debt free. “
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 El Dorado, Arkansas, including electric power capacity under an existing interruptible
service arrangement with Entergy Arkansas and land rights supporting phased expansion.
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.
