SmartKem (SMTK) and Jericho Energy Ventures have signed a non-binding letter of intent for a proposed all-stock merger to create an artificial intelligence infrastructure company, the companies said in separate Tuesday statements.

The companies said they have agreed to a 60-day exclusivity period to negotiate the terms of a definitive agreement.

SmartKem would be the surviving legal entity of the new combined company and will continue to list on the Nasdaq. If the transaction goes through, Jericho stockholders would own 65%, while SmartKem will hold the remaining equity in the combined company, subject to certain adjustments, the companies said.

Jericho Chief Executive Brian Williamson would become the CEO of the combined company, and its board will be reconstituted to include a majority of members designated by Jericho, they said.

Financial terms for the proposed transaction were not disclosed.

Shares of SmartKem were up nearly 13% in recent trading.

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