Vincerx Pharma announces non-binding LOI for Qumulus AI combination

Vincerx Pharma (VINC) has entered into a non-binding letter of intent with Global Digital Holdings conducting business as QumulusAI, a privately-held, high-performance computing infrastructure company for artificial intelligence, relating to a business combination between Vincerx and QumulusAI. The contemplated transaction would result in QumulusAI becoming a publicly traded company through a reverse triangular merger with Vincerx. Under the proposed terms, a subsidiary of Vincerx would merge into QumulusAI, with QumulusAI stockholders receiving shares of Vincerx common stock. Additionally, QumulusAI options, warrants, and other rights would be converted into options, warrants, and rights to acquire Vincerx common stock. The exchange ratio is intended to result in QumulusAI equity holders owning approximately 95% of the combined company, while Vincerx equity holders would own approximately 5%. The proposed transaction assumes a value for QumulusAI of approximately $285 million and a value for Vincerx of approximately $15 million, assuming zero cash (net of liabilities) at closing. As part of the transaction, to the extent requested by Vincerx, QumulusAI or its designees will invest up to $1.5 million in the equity of Vincerx prior to closing. Following the closing of the business combination, the combined company’s board of directors would consist of seven members, all of whom would be designated by QumulusAI. QumulusAI would also determine the composition of senior management of the combined company following the closing. The parties intend to negotiate a definitive business combination agreement that incorporates the provisions of the LOI as well as other terms and conditions typical for transactions of this nature. Conditions to execution of a definitive business combination agreement include satisfactory completion of due diligence by the parties and approval by the boards of directors of the parties. The parties have agreed to a 30-day exclusivity period to negotiate and enter into a definitive business combination agreement, which will include customary closing conditions such as board and stockholder approvals, regulatory approvals, effectiveness of a registration statement relating to the issuance of Vincerx common stock in the business combination and listing of the combined company’s common stock on Nasdaq.