Z Squared Completes Stock-Based Acquisition of Paradox Data for $5 Million in Preferred Stock

Z Squared Inc. (Nasdaq: ZSQR) has completed the acquisition of Paradox Data, LLC, a data center developer, through a transaction valued at $5,000,000. The deal, finalized on September 8, 2026, was executed entirely through the issuance of equity, with no cash or debt financing used to fund the purchase.

Under the terms of the agreement, Z Squared issued 5,000 shares of newly designated Series A Convertible Preferred Stock to the seller, Paradox Infrastructure LLC. The shares have a par value of $0.0001 per share and an aggregate stated value of $5,000,000. The preferred stock carries a conversion price of $7.45 per share of common stock, subject to customary adjustments. The company also filed a Certificate of Designation with the Secretary of State of Delaware to establish the rights and preferences of this preferred stock.

The acquired asset is the Union County Campus in El Dorado, Arkansas. The site currently has an existing electric service agreement with Entergy Arkansas, LLC providing up to 8,000 kVA (approximately 8.0 MW) on an interruptible basis. Paradox Data also holds a contract to acquire approximately 10 acres of adjacent land. Z Squared’s development plan targets up to approximately 150 MW of AI-ready capacity at the site over time, though this expansion depends on additional power arrangements, customer commitments, financing, and construction.

As part of the closing, the company entered into a Triple Net Lease and Relocation Agreement with the seller. The lease is for the existing building and a three-acre parcel, with a base rent of $1.00 per year. Z Squared is liable for a one-time relocation payment of $500,000, with its total monetary liability under the lease capped at that amount. Additionally, the company is not a party to an Intercompany Power Access and Cost-Sharing Agreement, which governs the transition of electric service to the new owner.

The acquisition is subject to up to four additional milestone payments totaling up to $20,000,000 in additional Series A Preferred Stock, payable upon the achievement of specific development milestones. No milestones have been achieved as of the report date. The transaction was reviewed and approved by the company’s Audit Committee and Board of Directors. The shares issued in the transaction were unregistered and relied on exemptions under Regulation D, with the seller certifying its status as an accredited investor.