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. 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.