Bannix Acquisition Corp. (NASDAQ:BNIX) announced in an 8-K this morning that it has entered into a definitive agreement to combine with autonomous vehicle company EVIE.

Staffordshire, UK-based EVIE’s pod-shaped autonomous vehicles have transported about 6.3 million people at London’s Heathrow Airport and logged about 5.5 million kilometers (3.4 million miles) in commercial service.

Transaction Overview

The parties have not yet filed an investor presentation or a press release, but they earlier announced a binding letter-of-intent (LOI) in April that laid out many key proposed terms at the time.

At the time, the parties had settled on an enterprise value of $542.5 million for EVIE with the sellers receiving 50,000,000 shares as consideration. This has since bumped up +70% to 85,000,000 shares in the definitive agreement.

The LOI’s terms would have transferred 4,250,000 shares to GBT Technologies (OTC Pink:GTCH) to acquire the intellectual property for its Apollo radio sensor technology. But, this is not mentioned in the new combination agreement, nor has GBT given an update since noting the agreement in its May 22 quarterly report.

Bannix also envisioned at the time raising a PIPE of $20 million for a scenario in which it faced 100% redemptions. For now, the SPAC has seen just 57.4% of shares redeemed and it is unlikely to see anymore go out the door before the completion vote.

Last October, Instant Fame LLC took over a chunk of Bannix’s sponsor interest and subsequently nominated a new leadership team and Board. The new Bannix team secured an extension of its deadline to March 14, 2024 in exchange for monthly $75,000 contributions to its trust.

For now, Bannix has about $30.5 million in its trust and the combination does not include a minimum cash condition, but Bannix must maintain its listing on the Nasdaq in order for the deal to close.

Bannix’s sponsor is to have its promote shares locked for one year, but may trade them early should the combined company trade at or above $12 for 20 of 30 trading days at least 150 days out from close.

Quick Takes: EVIE provides a different kind of autonomous EV experience to SPAC investors in that its vehicles are not competing for spots on treacherous roads but getting them around specific spaces managed by its clients.

Founded in 2018, it has built its autonomous pod concept through a series of acquisitions and technology partnerships. The bulk of its deployed experience appears to have come in from buying out Westfield.

Westfield had operated as a manufacturer of open-topped kit cars for automotive hobbyists since 1983, but it had gradually transitioned into making small autonomous shuttle pods. It won a contract to deploy these pods in Heathrow Airport in 2016, but fell into bankruptcy last June.

EVIE bought it out of bankruptcy and has been working to tack on improvements to the original design since. It announced in February that its pods would be “driven by” Cavonix sensors and autonomous software.

Its earlier envisioned acquisition of GBT’s Apollo technology would have brought another interesting piece. Apollo’s radio sensors were designed to be a compliment to lidar, because radio waves can detect objects behind small obstacles and provide a headcount on nearby crowds of people with the appropriate software tools.

Radio waves can also sense into bags to detect hidden weapons or other potential threats and therefore could allow the roving pods to perform a passive security function while moving around an airport or event space.

EVIE’s early applications beyond Heathrow have also been UK-based with pilot programs looking at them for an urban travel option in downtown Leeds. Feasibility studies have also been launched to see if they could be a fit as an autonomous tour bus and shuttle in national parks.

But, the company’s biggest opportunity may lay much further afield. South Korea ordered five pods in 2017 for testing from Westfield before its acquisition and has the option to purchase 195 more. The country is also serious about autonomous cars.

That same year, it built a fake city center to test autonomous designs and has set the goal of having half of all cars on its roads be autonomous by 2035. EVIE’s pods could only form some parts of that ambitious goal as its vehicles are not intended to be driven on public roads and highways.

But, meeting South Korea’s goal is going to take vehicles of all kinds, and it may want to handle the easier applications first.

That said, the news from EVIE’s deployments has gone relatively quiet since its takeover of Westfield eight months ago and the pod business was clearly not booming before bankruptcy.

So, the market will likely be eager to see some more defined financials for the company. This is especially so, because EV and autonomous vehicle technology companies have experienced major scrutiny post de-SPAC when concrete orders were found to be elusive.