Envirotech Vehicles, Inc. (NASDAQ: EVTV) experienced a notable increase in its stock value on Tuesday following the announcement of an amended and restated Letter of Intent (LOI) to acquire AZIO AI Corporation comprehensively. The proposed arrangement outlines a merger through which Envirotech Vehicles would obtain 100% of AZIO AI's outstanding equity.
Under the current terms, which remain non-binding and subject to a definitive agreement, AZIO AI has been appraised at $480 million. This valuation is anchored to a reference price of $3.00 per common share of Envirotech Vehicles.
Within the LOI framework, the acquisition would result in AZIO AI becoming a wholly owned subsidiary of Envirotech Vehicles, signaling a potential pivot in Envirotech’s operational focus toward the domains of advanced artificial intelligence infrastructure and high-performance computing technologies.
The execution strategy for this acquisition involves a statutory merger in which a newly formed Envirotech subsidiary would merge into AZIO AI, with AZIO AI surviving as a fully owned entity under Envirotech Vehicles’ corporate umbrella. Shareholders of AZIO AI are expected to receive equity in Envirotech Vehicles, and all outstanding equity-like instruments of AZIO AI, such as options and warrants, would be converted into Envirotech Vehicles equity. The final terms of conversion will be outlined in the definitive agreement to be completed.
The LOI also identifies a leadership change in which Chris Young, the current Chief Executive Officer of AZIO AI, would assume the CEO role at Envirotech Vehicles upon closing the transaction. Furthermore, the agreement includes customary exclusivity and no-shop provisions, effectively pausing Envirotech Vehicles' discussions with other potential acquisition targets during the due diligence period.
This transaction remains contingent upon several critical factors, including the signing of a definitive agreement, satisfactory completion of due diligence, regulatory approvals, approvals from boards and shareholders of the involved entities, and fulfillment of other standard closing conditions.
Elgin Tracy, Chief Operating Officer at Envirotech Vehicles, described the LOI as reflecting a "disciplined and deliberate approach" toward the company’s strategic development. Tracy emphasized that the merger proposal aims to align Envirotech Vehicles with a larger artificial intelligence infrastructure platform, provide experienced technology leadership, and establish a governance framework committed to long-term execution and value creation for shareholders.
In market reactions, Envirotech Vehicles’ shares surged approximately 49.77%, reaching $0.57 in premarket trading on Tuesday, as reported by Benzinga Pro data. The stock, however, has seen a dramatic decline over the past five years, losing nearly 99% of its value.