Bannix Acquisition Corp. (NASDAQ:BNIX) announced this morning that it has entered into a binding letter of intent to combine with autonomous vehicle company EVIE at a proposed enterprise value of $542.5 million.

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.

The LOI sets up a period during which Bannix will engage in due diligence beginning May 2 along with payments by EVIE to the SPAC. If a definitive agreement is not finalized by May 30 then the payments will end and presumably the LOI will peter out.

EVIE is required to pay Bannix £130,000 ($161,245) in a promissory note on April 19 and a further £70,000 ($86,820) on May 12. If the parties get a DA signed, then EVIE is to provide notes for £150,000 ($186,115) on July 30 and up to £400,000 ($496,300) more to meet other working capital requirements through the listing process.

These amounts will be repaid if the transaction fails to close and will be repaid in shares if Bannix lacks sufficient cash for this. Although the LOI is “binding,” Bannix will remain in SPACInsider‘s “Searching” column until a definitive agreement to combine is announced.

Bannix currently has about $30.5 million in its trust. If it were to face no further redemptions, these shares combined with the sponsor’s 2,524,000 promote shares would represent a 9.2% stake in the combined company under the proposed LOI structure.

EVIE shareholders would meanwhile be issued 50,000,000 shares as consideration, and its acquisition target Apollo would receive 4,250,000 shares for stakes of 83.7% and 7.1%, respectively.

The parties’ letter agreement notes that Bannix would seek to bring in a $20 million PIPE in a scenario of near 100% redemptions. The LOI may have indeed been announced at this stage as a means of attracting more potential PIPE investors into the due diligence process.

And, although this period is currently envisioned to run for about a month, Bannix has plenty of time overall. Last October, Instant Fame LLC took over a chunk of Bannix’s sponsor interest and subsequently nominated a new leadership team and Board.

Led by new CEO and Co-Chairman Douglas Davis alongside Co-Chairman Craig Marshak, the new Bannix team secured an extension of its deadline to March 14, 2024 in exchange for monthly $75,000 contributions to its trust.