You have good energy, Z Squared (NASDAQ: ZSQR) to acquire Skycore Digital in $22 million deal

Z Squared Inc. (NASDAQ: ZSQR) announced it entered a binding letter of intent to acquire 100% of Skycore Digital LLC for up to $22 million in convertible preferred stock.

The acquisition will add 24 megawatts of energized power capacity currently connected to the Duke Energy grid, with an additional 18 megawatts available through existing Duke Energy authorizations. The combined assets provide a potential total capacity of 42 megawatts.

Skycore operates three active sites in North Carolina. Spectrum high-speed fiber internet service is expected to be activated at two of the three sites in the coming weeks.

The transaction is structured entirely in Series B Convertible Preferred Stock with no cash consideration. Base consideration totals $18 million in aggregate liquidation preference at closing, plus up to an additional $4 million scaled based on additional megawatts secured prior to closing.

The Series B Convertible Preferred Stock carries an 8% cash dividend or 10% payment-in-kind dividend at the company’s election, conversion at a 10% premium to the 20-day volume-weighted average price at signing, seven-year mandatory redemption, and annual holder put right beginning in year two capped at 20% per year.