When a stock has lost 99% of its value over five years, you're basically out of conventional options. So Envirotech Vehicles, Inc. (EVTV) is doing what any desperate company would do: pivoting to AI.

The electric vehicle maker announced Tuesday it signed an Amended and Restated Letter of Intent with AZIO AI Corporation to acquire the entire company through a merger. And judging by the market's reaction, investors are at least willing to hear them out.

How the Deal Works

The non-binding framework values AZIO AI at $480 million, using a reference price of $3.00 per EVTV common share. That's notable considering EVTV was trading well below a dollar before this announcement.

Under the proposed structure, AZIO AI would become a wholly owned subsidiary of EVTV through a statutory merger. A newly created EVTV subsidiary would merge into AZIO AI, with AZIO AI surviving as the subsidiary. AZIO AI shareholders would receive EVTV equity in exchange, and any outstanding options, warrants, or other equity instruments would convert into EVTV equity under terms still being hammered out.

If completed, the transaction would essentially transform EVTV from an electric vehicle company into an AI infrastructure and high-performance computing business. That's a fairly dramatic shift, but then again, the EV strategy wasn't exactly working out.

New Leadership, New Direction

Perhaps the most telling detail: AZIO AI CEO Chris Young would become EVTV's CEO when the deal closes. When you're acquiring a company and immediately handing over the CEO role, you're not really acquiring them as much as they're acquiring you with your own stock.

The LOI includes standard exclusivity and no-shop provisions, meaning EVTV has to suspend talks with other potential acquisition partners during due diligence. The deal still needs a definitive agreement, completion of due diligence, regulatory approvals, board and shareholder approvals, and other customary closing conditions.

EVTV Chief Operating Officer Elgin Tracy framed the move as a "disciplined and deliberate approach" to strategic evolution, suggesting the deal would position EVTV alongside a scaled AI infrastructure platform, experienced technology leadership, and a governance framework aimed at long-term execution and shareholder value creation.

Market Reaction

EVTV shares surged 49.77% to $0.57 in premarket trading Tuesday. That sounds impressive until you remember the stock has lost roughly 99% of its value over the past five years. So yes, it's up big on the day, but there was a lot of room to fall before this announcement.