Z Squared has signed a definitive agreement to acquire all of Paradox Data, expanding its planned artificial intelligence infrastructure and data center development platform.
The transaction was initially structured as an acquisition of a majority interest under a June 2026 letter of intent but has been expanded to include 100% of Paradox Data’s membership interests.
The consideration consists entirely of newly designated Z Squared Series A convertible preferred stock. No cash will be paid at closing, and Z Squared does not plan to use debt financing for the acquisition.
At closing, the seller will receive $5 million in preferred stock convertible into Z Squared common shares at a fixed price of $7.45 per share.
Up to an additional $20 million in preferred stock may be issued if four development milestones are reached at Paradox Data’s Union County Campus in El Dorado, Arkansas.
The first milestone is tied to the initial energization of AI computing capacity at the existing site. The remaining milestones are linked to reaching 50 megawatts, 100 megawatts and 150 megawatts of capacity.
Each capacity-based payment will require binding requests for electric service and the eventual energization of that capacity.
Paradox Data’s Union County Campus currently has an electric service arrangement with Entergy Arkansas supporting up to 8 megawatts. It also has a contract to acquire adjacent land and a development path targeting as much as 150 megawatts through utility power and on-site generation.
The project supports Z Squared’s previously announced first-phase objective of developing 100 megawatts of AI-ready capacity across several U.S. sites.
Z Squared said tying 80% of the transaction value to operational milestones aligns the acquisition consideration with actual development progress while allowing the company to maintain a debt-free balance sheet.
The company has engaged A2 Advisors to assist with site planning, project delivery, vendor relationships, leasing and capital strategy.
Z Squared CTO Jeffery Harris holds an indirect minority interest in the seller, Paradox Infrastructure, and Paradox Energy, which will receive milestone consideration.
The acquisition is expected to close within 30 days of signing, subject to customary and transaction-specific conditions. The outside closing date is September 30, 2026, with a potential extension through December 31.
KEY QUOTES:
“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 keep our balance sheet completely debt free.”
David Halabu, CEO of Z Squared
“Following closing, our focus will be the utility, generation, engineering and customer workstreams required to move toward large-scale capacity.”
Jeffery Harris, CTO of Z Squared
