Jericho Energy, Smartkem sign LOI to create AI-focused infrastructure company

Jericho Energy Ventures (JROOF) signed a non-binding Letter of Intent, dated October 6, 2025, with Smartkem (SMTK) for a proposed all-stock business combination. If completed, the Proposed Transaction would establish a U.S.-owned and controlled AI infrastructure company, integrating low-cost domestic energy with advanced semiconductor packaging and materials to support the surging demand for AI compute capacity. Under the LOI, the Proposed Transaction would be structured as an all-stock business combination, effected through either a share exchange or statutory merger, pursuant to which Smartkem would be the surviving legal entity and would continue as a publicly listed company on The Nasdaq Stock Market. Upon the closing of the Proposed Transaction, Jericho stockholders would own 65% and Smartkem stockholders prior to the Proposed Transaction would own 35% of the fully diluted issued and outstanding equity securities of the Combined Company, subject to adjustment in certain circumstances. Brian Williamson, the current chief executive officer of Jericho, would become the chief executive officer of the Combined Company, and the board of directors of the Combined Company would be reconstituted to include a majority of members designated by Jericho, subject to compliance with applicable requirements of Nasdaq and the Securities and Exchange Commission. The LOI is non-binding, and there can be no assurance that Smartkem and Jericho will ultimately enter into a definitive agreement for the Proposed Transaction, that the Proposed Transaction will be consummated, or as to the timing or ultimate terms of any Proposed Transaction that may occur. Both Smartkem and Jericho will need significant additional capital to complete the negotiation of the Proposed Transaction, obtain any required stockholder approvals and ultimately complete the Proposed Transaction. The closing of the Proposed Transaction would be subject to significant closing conditions, including the negotiation of the definitive agreement, the satisfactory completion of due diligence, required board and stockholder approvals, and approval of continued listing by Nasdaq. In the LOI, Smartkem and Jericho have agreed to a 60-day exclusivity period to negotiate the terms of a definitive agreement, which exclusivity period is terminable by either party under certain circumstances including, in the case of Jericho, if Smartkem does not purchase Jericho common shares having a value of at least $500,000 on or prior to November 30, 2025. So long as the LOI is still in effect, upon the earlier of Smartkem’s chief financial officer’s good faith determination that Smartkem has regained compliance with Nasdaq’s minimum stockholders’ equity requirement and Smartkem’s issuance of securities for aggregate gross proceeds of not less than $5,000,000, Smartkem will purchase from treasury Jericho common shares in an amount equal to the greater of $500,000 and 10% of the gross proceeds of such issuances, subject to a cap of $1,000,000. There can be no assurance that the circumstances necessary for Smartkem to satisfy the requirements for completion of the investment will occur. The transaction terms set forth in the LOI are expected to be replaced by a definitive agreement. Completion of the proposed transaction remains subject to regulatory approvals, including approval by the TSX Venture Exchange, as well as customary closing conditions. These include approval of the merger by the boards of directors of both JEV and Smartkem, approval by Jericho shareholders, and the completion of satisfactory due diligence by each party. The final legal structure of the merger may be modified following further review of applicable tax, corporate, securities, and accounting considerations. JEV is also pleased to announce that Markus Seywerd, a Director of the Company, has been appointed as Corporate Secretary, effective October 1, 2025.