Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2022 | |
Document and Entity Information | |
Document Type | S-1 |
Entity Registrant Name | Tempo Automation Holdings, Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001813658 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 30, 2020 |
Current assets | |||||||||
Cash | $ 0 | $ 8,390 | $ 792,416 | ||||||
Prepaid expenses | 15,597 | 113,140 | 343,839 | ||||||
Total Current Assets | 15,597 | 121,530 | 1,136,255 | ||||||
Cash and marketable securities held in Trust Account | 40,293,597 | 230,158,259 | 230,091,362 | ||||||
TOTAL ASSETS | 40,309,194 | 230,279,789 | 231,227,617 | ||||||
Current liabilities | |||||||||
Accounts payable and accrued expenses | 15,756,798 | 6,260,642 | 859,811 | ||||||
Promissory note - related party | 1,051,499 | 527,756 | |||||||
Advance from related party | 427,857 | ||||||||
Convertible promissory note | 1,500,000 | ||||||||
Total current liabilities | 18,736,154 | 6,788,398 | 859,811 | ||||||
Warrant liability | 1,810,000 | 12,766,082 | 25,489,000 | ||||||
Deferred underwriting fee payable | 8,050,000 | 8,050,000 | 8,050,000 | ||||||
TOTAL LIABILITIES | 48,501,854 | 27,604,480 | 34,398,811 | ||||||
Class A ordinary shares subject to possible redemption, 8,202,277 and 23,000,000 shares issued and outstanding at redemption value of $10.21 and $10.00 per share at September 30, 2022 and December 31, 2021, respectively | 40,293,597 | 230,000,000 | 230,000,000 | ||||||
Shareholders' Deficit | |||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | |||||||||
Additional paid-in capital | 0 | 0 | |||||||
Accumulated deficit | (48,486,832) | (27,325,266) | (33,171,769) | ||||||
Total Shareholders' Deficit | (48,486,257) | $ (19,749,609) | $ (28,875,317) | (27,324,691) | $ (23,449,956) | $ (45,738,217) | $ (44,695,623) | (33,171,194) | $ 0 |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 230,279,789 | 231,227,617 | |||||||
Class A common stock [Member] | |||||||||
Shareholders' Deficit | |||||||||
Ordinary shares | 0 | 0 | |||||||
Class B common stock | |||||||||
Shareholders' Deficit | |||||||||
Ordinary shares | $ 575 | $ 575 | $ 575 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 30, 2020 |
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Preference shares, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |
Preference shares, shares issued | 0 | 0 | 0 | |
Preference shares, shares outstanding | 0 | 0 | 0 | |
Class A common stock [Member] | ||||
Ordinary shares, par value (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |
Ordinary shares, subject to possible redemption issued | 3,945,298 | 23,000,000 | 23,000,000 | |
Ordinary shares, shares subject to possible redemption | 8,202,277 | 23,000,000 | 23,000,000 | |
Class B common stock | ||||
Ordinary shares, par value (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |
Ordinary shares, shares issued | 5,750,000 | 5,750,000 | 5,750,000 | |
Ordinary shares, shares outstanding | 5,750,000 | 5,750,000 | 5,750,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Operating costs | $ 894,289 | $ 2,634,162 | $ 3,248,689 | $ 4,773,008 | $ 1,125,460 | $ 6,943,312 | ||||
Loss from operations | (894,289) | (2,634,162) | (3,248,689) | (4,773,008) | (1,125,460) | (6,943,312) | ||||
Other income (expense): | ||||||||||
Change in fair value of warrant liability | (362,000) | 24,916,621 | 10,956,082 | 14,433,236 | (7,487,000) | 12,722,918 | ||||
Offering costs allocated to warrant liability | (667,259) | (667,259) | ||||||||
Interest earned on cash and marketable securities held in Trust Account | 5,802 | 113,123 | 61,010 | 91,362 | 66,897 | |||||
Total other income (expense), net | (7,742,269) | 24,922,423 | 3,688,936 | 14,494,246 | (8,062,897) | 12,789,815 | ||||
Net income (loss) | $ (8,636,558) | $ 10,135,295 | $ (1,058,490) | $ 22,288,261 | $ (1,042,594) | $ (11,524,429) | $ 440,247 | $ 9,721,238 | $ (9,188,357) | $ 5,846,503 |
Class A common stock [Member] | ||||||||||
Other income (expense): | ||||||||||
Weighted average shares outstanding of ordinary shares, basic | 4,459,878 | 23,000,000 | 8,092,696 | 23,000,000 | 16,353,211 | 23,000,000 | ||||
Basic net loss per share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 | ||||
Weighted average shares outstanding of ordinary shares, diluted | 4,459,878 | 23,000,000 | 8,092,696 | 23,000,000 | 16,353,211 | 23,000,000 | ||||
Diluted net loss per share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 | ||||
Class B common stock | ||||||||||
Other income (expense): | ||||||||||
Weighted average shares outstanding of ordinary shares, basic | 5,750,000 | 5,750,000 | 5,750,000 | 5,750,000 | 5,529,817 | 5,750,000 | ||||
Basic net loss per share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 | ||||
Weighted average shares outstanding of ordinary shares, diluted | 5,750,000 | 5,750,000 | 5,750,000 | 5,750,000 | 5,529,817 | 5,750,000 | ||||
Diluted net loss per share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT - USD ($) | Class A common stock [Member] Common stock [Member] | Class B common stock Common stock [Member] | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at the end at Dec. 31, 2020 | $ 0 | $ 575 | $ 0 | $ (33,171,769) | $ (33,171,194) |
Balance at the end (in shares) at Dec. 31, 2020 | 0 | 5,750,000 | |||
Balance at the beginning at Mar. 30, 2020 | $ 0 | $ 0 | 0 | 0 | 0 |
Balance at the beginning (in shares) at Mar. 30, 2020 | 0 | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of Class B ordinary shares to Sponsor | $ 575 | 24,425 | 25,000 | ||
Issuance of Class B ordinary shares to Sponsor (in shares) | 5,750,000 | ||||
Accretion for Class A ordinary shares to redemption amount | (24,425) | (23,983,412) | (24,007,837) | ||
Net loss | (9,188,357) | (9,188,357) | |||
Balance at the end at Dec. 31, 2020 | $ 0 | $ 575 | 0 | (33,171,769) | (33,171,194) |
Balance at the end (in shares) at Dec. 31, 2020 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (11,524,429) | (11,524,429) | |||
Balance at the end at Mar. 31, 2021 | $ 575 | (44,696,198) | (44,695,623) | ||
Balance at the end (in shares) at Mar. 31, 2021 | 5,750,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 0 | $ 575 | 0 | (33,171,769) | (33,171,194) |
Balance at the beginning (in shares) at Dec. 31, 2020 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 9,721,238 | ||||
Balance at the end at Sep. 30, 2021 | $ 575 | (23,450,531) | (23,449,956) | ||
Balance at the end (in shares) at Sep. 30, 2021 | 5,750,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 0 | $ 575 | 0 | (33,171,769) | (33,171,194) |
Balance at the beginning (in shares) at Dec. 31, 2020 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 5,846,503 | 5,846,503 | |||
Balance at the end at Dec. 31, 2021 | $ 0 | $ 575 | 0 | (27,325,266) | (27,324,691) |
Balance at the end (in shares) at Dec. 31, 2021 | 0 | 5,750,000 | |||
Balance at the beginning at Mar. 31, 2021 | $ 575 | (44,696,198) | (44,695,623) | ||
Balance at the beginning (in shares) at Mar. 31, 2021 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (1,042,594) | (1,042,594) | |||
Balance at the end at Jun. 30, 2021 | $ 575 | 0 | (45,738,792) | (45,738,217) | |
Balance at the end (in shares) at Jun. 30, 2021 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 22,288,261 | 22,288,261 | |||
Balance at the end at Sep. 30, 2021 | $ 575 | (23,450,531) | (23,449,956) | ||
Balance at the end (in shares) at Sep. 30, 2021 | 5,750,000 | ||||
Balance at the beginning at Dec. 31, 2021 | $ 0 | $ 575 | 0 | (27,325,266) | (27,324,691) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Accretion for Class A ordinary shares to redemption amount | (492,136) | (492,136) | |||
Net loss | (1,058,490) | (1,058,490) | |||
Balance at the end at Mar. 31, 2022 | $ 575 | (28,875,892) | (28,875,317) | ||
Balance at the end (in shares) at Mar. 31, 2022 | 5,750,000 | ||||
Balance at the beginning at Dec. 31, 2021 | $ 0 | $ 575 | $ 0 | (27,325,266) | (27,324,691) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 440,247 | ||||
Balance at the end at Sep. 30, 2022 | $ 575 | (48,486,832) | (48,486,257) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 5,750,000 | ||||
Balance at the beginning at Mar. 31, 2022 | $ 575 | (28,875,892) | (28,875,317) | ||
Balance at the beginning (in shares) at Mar. 31, 2022 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Accretion for Class A ordinary shares to redemption amount | (1,009,587) | (1,009,587) | |||
Net loss | 10,135,295 | 10,135,295 | |||
Balance at the end at Jun. 30, 2022 | $ 575 | (19,750,184) | (19,749,609) | ||
Balance at the end (in shares) at Jun. 30, 2022 | 5,750,000 | ||||
Balance at the beginning at Mar. 31, 2022 | $ 575 | (28,875,892) | (28,875,317) | ||
Balance at the beginning (in shares) at Mar. 31, 2022 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Accretion for Class A ordinary shares to redemption amount | (221,190) | (221,190) | |||
Balance at the end at Sep. 30, 2022 | $ 575 | (48,486,832) | (48,486,257) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 5,750,000 | ||||
Balance at the beginning at Jun. 30, 2022 | $ 575 | (19,750,184) | (19,749,609) | ||
Balance at the beginning (in shares) at Jun. 30, 2022 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (8,636,558) | (8,636,558) | |||
Balance at the end at Sep. 30, 2022 | $ 575 | $ (48,486,832) | $ (48,486,257) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 5,750,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Cash Flows from Operating Activities: | |||||
Net income (loss) | $ 440,247 | $ 9,721,238 | $ (9,188,357) | $ 5,846,503 | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||
Interest earned on cash and marketable securities held in Trust Account | (113,123) | (61,010) | (91,362) | (66,897) | |
Change in fair value of warrant liability | $ (24,916,621) | (10,956,082) | (14,433,236) | 7,487,000 | (12,722,918) |
Offering cost allocated to warrants | 667,259 | ||||
Payment of formation costs through promissory note | 1,548 | ||||
Changes in operating assets and liabilities: | |||||
Prepaid expenses | 97,543 | 171,117 | (343,839) | 230,699 | |
Accounts payable and accrued expenses | 9,496,156 | 3,516,107 | (859,811) | (5,400,831) | |
Net cash used in operating activities | (1,008,459) | (1,085,784) | (607,940) | (1,311,782) | |
Cash Flows from Investing Activities: | |||||
Investment of cash into Trust Account | (1,451,531) | (230,000,000) | |||
Cash withdrawn from Trust Account in connection with redemption | 191,429,316 | ||||
Net cash provided by investing activities | (189,977,785) | (230,000,000) | |||
Cash Flows from Financing Activities: | |||||
Proceeds from issuance of Class B ordinary shares to Sponsor | 25,000 | ||||
Proceeds from sale of Units, net of underwriting discounts paid | 225,400,000 | ||||
Proceeds from sale of Private Placement Warrants | 6,600,000 | ||||
Proceeds from promissory note - related party | 523,743 | 309,210 | 62,558 | 527,756 | |
Advance from related party | 427,857 | ||||
Convertible promissory note | 1,500,000 | ||||
Redemption of ordinary shares | (191,429,316) | ||||
Repayment of promissory note - related party | (186,760) | ||||
Payment of offering costs | (500,442) | ||||
Net cash provided by (used in) financing activities | (188,977,716) | 309,210 | 231,400,356 | 527,756 | |
Net Change in Cash | 8,390 | 776,574 | (792,416) | 784,026 | |
Cash - Beginning of period | $ 8,390 | 792,416 | 792,416 | ||
Cash - End of period | $ 15,842 | $ 15,842 | 792,416 | $ 8,390 | |
Non-cash investing and financing activities: | |||||
Offering costs paid through promissory note - related party | 122,654 | ||||
Deferred underwriting fee payable | $ 8,050,000 |
ORGANIZATION AND PLAN OF BUSINE
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | ||
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | NOTE 1 — ORGANIZATION AND PLAN OF BUSINESS OPERATIONS ACE Convergence Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 31, 2020. The Company was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses (a “Business Combination”). On January 6, 2021, ACE Convergence Subsidiary Corp. (“Merger Sub”), a Delaware corporation and a wholly owned subsidiary of the Company, was formed. Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus on businesses in the IT infrastructure software and semiconductor sector. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of September 30, 2022, the Company had not commenced any operations. All activity through September 30, 2022, relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The registration statement for the Company’s Initial Public Offering was declared effective on July 27, 2020. On July 30, 2020, the Company consummated the Initial Public Offering of 23,000,000 units (the “Units,” and the Class A ordinary shares, par value $0.0001 per share, included in the Units offered, the “Public Shares” or the “Class A Ordinary Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,600,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, ACE Convergence Acquisition LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $6,600,000, which is described in Note 5. Transaction costs amounted to $13,273,096, consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $623,096 of other offering costs. Following the closing of the Initial Public Offering on July 30, 2020, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) which was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below. On June 22, 2022, the Company instructed Continental Stock Transfer & Trust Company, the trustee managing the Trust Account, to hold all funds in the Trust Account in cash until the earlier of the consummation of the Tempo Business Combination (as defined below) or the liquidation of the Company. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Nasdaq listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote in person or by proxy at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Fourth Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor and its permitted transferees have agreed to vote their Founder Shares (as defined in Note 5) in favor of approving a Business Combination. Subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor and its and the Company’s respective directors, officers, advisors or respective affiliates may (i) purchase public shares from institutional and other investors (including those who vote, or indicate an intention to vote, against any of the proposals presented in connection with a Business Combination, or elect to redeem, or indicate an intention to redeem, public shares), (ii) enter into transactions with such investors and others to provide them with incentives to not redeem their public shares, or (iii) execute agreements to purchase such public shares from such investors or enter into non-redemption agreements in the future. In the event that the Sponsor or its or the Company’s respective directors, officers, advisors or respective affiliates purchase public shares in situations in which the tender offer rules restrictions on purchases would apply, they (a) would purchase the public shares at a price no higher than the price offered through the Company’s redemption process (i.e., approximately $10.21 per share based on Trust Account figures as of September 30, 2022; (b) would represent in writing that such public shares will not be voted in favor of approving a Business Combination; and (c) would waive in writing any redemption rights with respect to the public shares so purchased. To the extent any such purchases are made by the Sponsor or its or the Company’s respective directors, officers, advisors or respective affiliates in situations in which the tender offer rules and restrictions on purchases apply, the Company will disclose in a Current Report on Form 8-K prior to the extraordinary general meeting the following: (i) the number of public shares purchased outside of the redemption offer, along with the purchase price(s) for such public shares; (ii) the purpose of any such purchases; (iii) the impact, if any, of the purchases on the likelihood that the Business Combination will be approved; (iv) the identities of the Company securityholders who sold to the Sponsor or its or the Company’s respective directors, officers, advisors or respective affiliates (if not purchased on the open market) or the nature of the securityholders (e.g., 5% security holders) who sold such public shares; and (v) the number of ordinary shares for which the Company has received redemption requests pursuant to its redemption offer. The purpose of such share purchases and other transactions would be to increase the likelihood of (x) satisfaction of a minimum cash condition in connection with a Business Combination, (y) otherwise limiting the number of public shares electing to redeem and (z) the Company’s net tangible assets (as determined in accordance with Rule 3a51(g)(1) of the Exchange Act) being at least $5,000,001. A purchase of warrants by the Sponsor or its or the Company’s respective directors, officers, advisors or respective affiliates may have the effect of increasing share ownership of the target company on a fully diluted basis. If such transactions are affected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Consistent with SEC guidance, purchases of shares by the persons described above would not be permitted to be voted for the Business Combination at the extraordinary general meeting and could decrease the chances that the Business Combination would be approved. In addition, if such purchases are made, the public “float” of the Company’s securities and the number of beneficial holders of its securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of its securities on a national securities exchange. Additionally, each Public Shareholder may elect to redeem their Public Shares, with or without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination. Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent. The Sponsor and its permitted transferees have agreed (a) to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Company’s Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares. The Company will have until January 30, 2023 (the “Combination Period”), to complete the Business Combination. On January 21, 2022, the shareholders of the Company voted to amend the Company’s Amended and Restated Memorandum and Articles of Association to extend the Combination Period to July 13, 2022, from January 30, 2022. On January 21, 2022, in connection with the extension of the business combination period, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, $148,079,821 was paid out of the Trust Account in connection with such redemptions. On July 12, 2022, the shareholders of the Company voted to amend the Company’s Second Amended and Restated Memorandum and Articles of Association to extend the Combination Period to October 13, 2022, and in connection therewith, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 4,256,979 Class A Ordinary Shares. As a result, $43,349,494 was paid out of the Trust Account in connection with such redemptions. On October 11, 2022, the shareholders of the Company voted to amend the Company’s Third Amended and Restated Memorandum and Articles of Association to extend the Combination Period to January 30, 2023, and in connection therewith, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 1,202,070 Class A Ordinary Shares. As a result, $12,324,919 was paid out of the Trust Account in connection with such redemptions. If the Company has not completed a Business Combination within the Combination Period (as it may be extended), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten The Sponsor and its permitted transferees have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period (as it may be extended). However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period (as it may be extended). The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period (as it may be extended), and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Going Concern As of September 30, 2022, the Company had no cash in its operating bank accounts, $40,293,597 in cash held in the Trust Account to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and a working capital deficit of $18,720,557. The Company intends to complete a Business Combination by January 30, 2023 (or, as such date may be extended, such extended date). However, in the absence of a completed Business Combination, the Company will require additional capital. The Company as of September 30, 2022, has no cash held outside of trust and will require further capital contribution from the Sponsor, management, or related parties. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of a Business Combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through one year from the date of these financial statements if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until January 30, 2023, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities as of September 30, 2022, should the Company be required to liquidate after January 30, 2023. The Company intends to complete its Business Combination before January 30, 2023. | NOTE 1 — ORGANIZATION AND PLAN OF BUSINESS OPERATIONS ACE Convergence Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 31, 2020. The Company was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses (a “Business Combination”). On January 6, 2021, ACE Convergence Subsidiary Corp. (“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of ACE Convergence Acquisition Corp., was formed. Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus on businesses in the IT infrastructure software and semiconductor sector. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2021, the Company had not commenced any operations. All activities from inception to December 31, 2021 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and, after the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on July 27, 2020. On July 30, 2020, the Company consummated the Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units offered, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000, which is described in Note 3. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,600,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, ACE Convergence Acquisition LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $6,600,000, which is described in Note 4. Transaction costs amounted to $13,273,096 consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $623,096 of other offering costs. Following the closing of the Initial Public Offering on July 30, 2020, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) which was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Nasdaq listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote in person or by proxy at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination. Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent. The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares. The Company will have until July 13, 2022 (the “Combination Period”) to complete the Business Combination. On January 25, 2022 the Company voted to amended its Articles of Association to extend the Combination Period to July 13, 2022 from January 30, 2022. However, if the Company has not completed a Business Combination within the Combination Period or any Extension Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period or any Extension Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period or any Extension Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period or any Extension Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Going Concern As of December 31, 2021, the Company had $8,390 in its operating bank accounts, $230,158,259 in marketable securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and a working capital deficit of $6,666,868. The Company intends to complete a Business Combination by July 13, 2022 or during any Extension Period, as applicable. However, in the absence of a completed Business Combination, the Company may require additional capital. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of a Business Combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until July 13, 2022 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after July 13, 2022. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 10, 2022. The interim results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with those of another public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Marketable Securities Held in Trust Account At September 30, 2022, all of the assets held in the Trust Account were held in cash. At December 31, 2021, substantially all of the assets held in the Trust Account were held in cash and money market funds which were invested primarily in U.S. Treasury securities. All of the Company’s investments that were held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. With respect to the regulation of special purpose acquisition companies like the Company (“SPACs”), on March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating to, among other items, disclosures in business combination transactions involving SPACs and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. With regard to the SEC’s investment company proposals included in the SPAC Rule Proposals, while the funds in the Trust Account have, since the Company’s initial public offering, been held only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries, to mitigate the risk of being viewed as operating an unregistered investment company (including pursuant to the subjective test of Section 3(a)(1)(A) of the Investment Company Act of 1940), on June 22, 2022, the Company instructed Continental Stock Transfer & Trust Company, the trustee managing the Trust Account, to hold all funds in the Trust Account in cash until the earlier of consummation of the Tempo Business Combination or the liquidation of the Company. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2022, and December 31, 2021. Warrant Liability The Company accounts for the public warrants and the private placement warrants (collectively, the “Warrants”) in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s condensed consolidated statements of operations. The Private Placement Warrants (and the Public Warrants for periods where no observable traded price was available) are valued using a Modified Black Scholes Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. As of September 30, 2022 due to market conditions the Company is using the price of the Public Warrants to value the Private Warrants. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The PIPE Derivative is comprised of the Additional PIPE Incentive Shares (as defined in Note 6). The PIPE Derivative meets the criteria for derivative liability classification. As such, the PIPE derivative liability is recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivative liability is recognized as a non-cash gain or loss on the condensed statements of operations. The fair value of the derivative liability is discussed in Note 9. Class A Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2022, and December 31, 2021, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. On January 13, 2022, contingent upon the Company’s shareholders’ approval of the extension of the business combination period, the Sponsor agreed to contribute to the Company as a loan $0.03 for each Class A Ordinary Share of the Company that was not redeemed in connection with the shareholder vote to approve such extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the Tempo Business Combination and (ii) $1.5 million has been loaned, which amounts were to be deposited into the Trust Account. For the three and nine months ended September 30, 2022, the Company contributed an aggregate of $221,190 and $1,451,532 to the Trust Account, respectively. On June 30, 2022, the Sponsor and the Company agreed to, among other things, increase the aggregate principal amount available under such loan from $1,500,000 to $2,000,000, contingent upon the approval by the Company’s shareholders of the proposal to extend the date by which the Company must complete an initial business combination to October 13, 2022, which proposal was approved at an extraordinary general meeting on July 12, 2022. On August 28, 2022, the Company and the Sponsor agreed to, among other things, increase the aggregate principal amount available under such loan from $2,000,000 to $2,125,000, contingent upon the approval by the Company’s shareholders of the extension of the date by which the Company must consummate an initial business combination to January 30, 2023, which proposal was approved in October 2022. Monthly deposits into the Trust Account following the October 2022 redemptions are based on the number of Class A Ordinary Shares still outstanding following such redemptions. In connection with the extension of the business combination period in January 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, $148,079,821 was paid out of the Trust Account in connection with such redemptions. In connection with the extension of the business combination period in July 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 4,256,979 Class A Ordinary Shares. As a result, $43,349,494 was paid out of the Trust Account in connection with such redemptions. In connection with the extension of the business combination period in October 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 1,202,070 Class A Ordinary Shares. As a result, $12,349,642 was paid out of the Trust Account in connection with such redemptions. At September 30, 2022, and December 31, 2021, the Class A Ordinary Shares reflected in the condensed consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption, December 31, 2021 $ 230,000,000 Less: Redemption of Class A Ordinary Shares (191,429,316) Add: Accretion of carrying value to redemption value 1,722,913 Class A ordinary shares subject to possible redemption, September 30, 2022 $ 40,293,597 Offering Costs Offering costs consisted of underwriting, legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounted to $13,273,096, of which $12,605,837 were charged to temporary equity and accreted to redemption value upon the completion of the Initial Public Offering, and the remaining $667,259 of offering costs allocated to the warrant liability was charged to operations. Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2022, and December 31, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. For the three and nine months ended September 30, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limits of $250,000. The Company has not experienced losses on this account, and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature except derivative liabilities (see Note 9). Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements. | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2021 and 2020. Marketable Securities Held in Trust Account At December 31, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. Warrant Liability The Company accounts for the Warrants in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. The Private Warrants (and the Public Warrants for periods where no observable traded price was available) are valued using a Modified Black Scholes Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. Class A Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2021 and 2020, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit. At December 31, 2021 and 2020, the Class A ordinary shares reflected in the consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption $ 230,000,000 Offering Costs Offering costs consisted of underwriting, legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounted to $13,273,096, of which $12,737,837 were charged to temporary equity upon the completion of the Initial Public Offering, and the remaining $667,259 of offering costs allocated to the warrant liability was charged to operations. Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2021 and 2020, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared prorata between the two classes of shares. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. As of December 31, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature except warrant liabilities (see Note 9). Recent Accounting Standards In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
INITIAL PUBLIC OFFERING
INITIAL PUBLIC OFFERING | 12 Months Ended |
Dec. 31, 2021 | |
INITIAL PUBLIC OFFERING | |
INITIAL PUBLIC OFFERING | NOTE 3 — INITIAL PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 23,000,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one- half of one |
PRIVATE PLACEMENT
PRIVATE PLACEMENT | 12 Months Ended |
Dec. 31, 2021 | |
PRIVATE PLACEMENT | |
PRIVATE PLACEMENT | NOTE 4 — PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,600,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $6,600,000. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period or any Extension Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 5 — RELATED PARTY TRANSACTIONS Founder Shares In May 2020, the Sponsor purchased 5,750,000 of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate consideration of $25,000. On May 29, 2020, the Sponsor transferred an aggregate of 155,000 Founder Shares to certain members of the Company’s management team. On October 13, 2021, the Sponsor distributed 1,678,500 Founder Shares to Sunny Siu. In January 2022, the Sponsor distributed 755,930 Founder Shares to ACE SO5 Holdings Limited (“ACE SO5”), an affiliate of the Sponsor, and ACE SO5 became a party to (i) the Letter Agreement, dated as of July 27, 2020, by and among ACE, the Sponsor and certain of ACE’s current and former officers, directors and director nominees, and (ii) the Sponsor Support Agreement (as defined below). The Sponsor, the initial shareholders and their respective permitted transferees have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like) for any 20 30 Working Capital Facility On August 12, 2020, the Company entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Company, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility shall be utilized to finance transaction costs in connection with a Business Combination. The Working Capital Facility is non-interest bearing, non-convertible and due to be repaid upon the consummation of a Business Combination. In return, the Company deposited $900,000 into an account held by ASIA-IO, from which the Company may make fund withdrawals for up to $1,500,000. Any outstanding amounts deposited with ASIA-IO upon the completion of a Business Combination or dissolution of the Company, shall be returned to the Company. As of September 30, 2022, and December 31, 2021, the Company had $1,051,499 and $527,756, respectively, borrowings under the working capital facility. Administrative Services Agreement The Company entered into an agreement, commencing on July 28, 2020, to pay the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and nine months ended September 30, 2022, the Company incurred $30,000 and $90,000, respectively, in fees for these services, of which such fee is included in accrued liabilities as of September 30, 2022, on the condensed consolidated balance sheet. For the three and nine months ended September 30, 2021, the Company incurred $30,000 and $90,000 in fees for these services. As of September 30, 2022, and December 31, 2021 the Company had accrued fees in the amount of $180,000 and $90,000, respectively. Related Party Loans On January 13, 2022, in connection with the Company’s extension of the date by which it must complete an initial business combination, the Sponsor agreed to contribute to the Company as a loan (as amended and restated on June 30, 2022, and August 28, 2022, the “Sponsor Loan”) $0.03 for each Class A Ordinary Share of the Company that was not redeemed in connection with the shareholder vote to approve such extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the Tempo Business Combination and (ii) $1.5 million has been loaned. Up to $1.5 million of the loans may be settled in whole warrants to purchase Class A Ordinary Shares of the Company at a conversion price equal to $1.00 per warrant. The loan will not bear any interest, and will be repayable by ACE to the Sponsor upon the earlier of the date by which ACE must complete an initial business combination and the consummation of the Tempo Business Combination. The maturity date of the Sponsor Loan may be accelerated upon the occurrence of an Event of Default (as defined therein). Any outstanding principal under the Sponsor Loan may be prepaid at any time by ACE, at its election and without penalty, provided, however, that the Sponsor shall have a right to first convert such principal balance as described in Section 6 of the Sponsor Loan upon notice of such prepayment. On June 30, 2022, ACE and the Sponsor amended and restated the Sponsor Loan in its entirety to, among other things, increase the aggregate principal amount available thereunder from $1,500,000 to $2,000,000, contingent upon the approval by the Company’s shareholders of the proposal to extend the date by which the Company must complete an initial business combination to October 13, 2022, which proposal was approved by special resolution at an extraordinary general meeting on July 12, 2022. On August 28, 2022, ACE and the Sponsor amended and restated the Sponsor Loan in its entirety to, among other things, increase the aggregate principal amount available thereunder from $2,000,000 to $2,125,000, contingent upon the approval by ACE’s shareholders of the extension of the date by which ACE must consummate an initial business combination to January 30, 2023, which extension was approved in October 2022. For the three and nine months ended September 30, 2022, the Company contributed $221,190 and $1,451,532 to the Trust Account, respectively. Monthly deposits into the Trust Account following the October 2022 redemptions are based on the number of Class A Ordinary Shares still outstanding following such redemptions. As of September 30, 2022, and December 31, 2021, the Company had $1,500,000 and $0 borrowings under the Sponsor Loan, respectively. Management has determined the fair value of the note is more accurately recorded at par since the conversion price is almost 1,250% higher than the value of the warrants. No arm’s-length transaction by a note holder would result in a conversion with this fact pattern, thus it is a more accurate depiction with recording at par. As such, no fair value change was booked to the condensed consolidated statements of operations. As of September 30, 2022, and December 31, 2021, members of the Sponsor, the Company’s management and certain other related parties advanced the Company an aggregate of $427,857 and $0, respectively, for expenses related to operations and completing a Business Combination. The amounts loaned are non-interest bearing and due to be repaid upon the consummation of a Business Combination. | NOTE 5 — RELATED PARTY TRANSACTIONS Founder Shares In May 2020, the Sponsor purchased 5,750,000 of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate consideration of $25,000. On May 29, 2020, the Sponsor transferred an aggregate of 155,000 Founder Shares to certain members of the Company’s management team. On October 13, 2021, the Sponsor transferred an aggregate of 1,678,500 Founder Shares to Sunny Siu. The Sponsor and the initial shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Working Capital Facility On August 12, 2020, the Company entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Company, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility shall be utilized to finance transaction costs in connection with a Business Combination. The Working Capital Facility is non-interest bearing, non-convertible and due to be repaid upon the consummation of a Business Combination. In return, the Company deposited $900,000 into an account held by ASIA-IO, from which the Company may make fund withdrawals for up to $1,500,000. Any outstanding amounts deposited with ASIA-IO upon the completion of a Business Combination or dissolution of the Company, shall be returned to the Company. As of December 31, 2021 and 2020, the Company had $527,756 and no borrowing, respectively, borrowings under the working capital facility. Administrative Services Agreement The Company entered into an agreement, commencing on July 28, 2020, to pay the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2021, the Company incurred $120,000, of which $90,000 is included in accounts payable and accrued expenses on the December 31, 2021 consolidated balance sheet. For the period from March 31, 2020 (inception) through December 31, 2020, the Company incurred and paid $20,000 in fees for these services. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of December 31, 2021 and 2020, the Company had no outstanding borrowings under the Working Capital Loans. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or close of a Business Combination, the specific impact is not readily determinable as of the date of these condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 2020 Registration Rights Agreement Pursuant to a registration rights agreement entered into on July 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of any working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of such working capital loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. In connection with the Tempo Business Combination, the registration rights agreement will be amended and restated. At the closing of the Tempo Business Combination, Domesticated ACE (as defined below), the Sponsor, the other parties to the Sponsor Support Agreement and certain former stockholders of Tempo Automation, Inc. will enter into an Amended and Restated Registration Rights Agreement, pursuant to which Domesticated ACE will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Domesticated ACE common stock and other equity securities of Domesticated ACE that are held by the parties thereto from time to time. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. On March 16, 2022, Cantor Fitzgerald & Co. agreed that the deferred fee may be paid in shares of common stock of Domesticated ACE, subject to certain terms and conditions. Termination of Proposed Achronix Business Combination On January 7, 2021, the Company entered into an Agreement and Plan of Merger (the “Achronix Merger Agreement”) with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”), and Merger Sub. On May 24, 2021, in the Form 10-Q for the quarter ended March 31, 2021, the Company disclosed that the SEC informed the Company that it was investigating certain disclosures made in the Form S-4 relating to the proposed business combination with Achronix. On July 11, 2021, the Company and Achronix entered into a termination and release agreement, pursuant to which the parties agreed to mutually terminate the Achronix Merger Agreement relating to the proposed business combination with Achronix. On October 27, 2021, the Company received a letter from the SEC in connection with its investigation with the following response: “We have concluded the investigation as to ACE Convergence Acquisition Corp. (“ACE”). Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against ACE.” Business Combination Agreement On October 13, 2021, the Company entered into an Agreement and Plan of Merger (as amended and restated on August 12, 2022, and as amended on September 7, 2022, and September 23, 2022, the “Merger Agreement”) with Tempo Automation, Inc., a Delaware corporation (“Tempo”), and Merger Sub. Pursuant to the transactions contemplated by the Merger Agreement (the “Tempo Business Combination”), and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Tempo, with Tempo surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Prior to the closing of the Tempo Business Combination (the “Closing”), the Company shall domesticate as a Delaware corporation (the “Domestication” and, ACE, after the Domestication, “Domesticated ACE”) and shall be renamed “Tempo Automation Holdings, Inc.” As a result of and upon the Closing, among other things, all outstanding shares of Tempo common stock (after giving effect to the Company Preferred Conversion (as defined in the Merger Agreement)) as of immediately prior to the Closing, and, together with shares of Tempo common stock reserved in respect of Tempo options outstanding as of immediately prior to the Closing that will be converted into awards based on Domesticated ACE common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of any earnout shares, if and to the extent earned, and in the case of the Tempo options, if and to the extent earned and subject to their respective terms), an aggregate of approximately 23,500,000 shares of Domesticated ACE common stock (at a deemed value of $10.00 per share) equal to the quotient obtained by dividing (i) $235,000,000 (the “Base Purchase Price”) by (ii) $10.00. On September 7, 2022, ACE and Tempo entered into the First Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, to increase the Base Purchase Price from $235,000,000 to $257,927,013. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Tempo Business Combination will, at the effective time of the Tempo Business Combination, be converted into (a) Domesticated ACE RSUs and (b) the right to receive a number of earnout shares. Additionally, Tempo has undertaken to use its commercially reasonable efforts to cause the holder of each outstanding and unexercised Tempo warrant to exercise such Tempo warrant in exchange for shares of Tempo common stock immediately prior to the effective time of the Merger. Holders of Tempo warrants may elect not to exercise such Tempo warrants in exchange for shares of Tempo common stock prior to the effective time of the Merger. Any Tempo warrants that remain issued and outstanding as of immediately prior to the effective time of the Tempo Business Combination will be converted into warrants to purchase shares of Domesticated ACE common stock on substantially similar terms to the Tempo warrants. An additional 550,000 shares of Domesticated ACE common stock will be purchased (at a price of $10.00 per share) at the Closing by certain third-party investors (“Third Party PIPE Investors”) and certain related parties of the Sponsor (collectively with the Third Party PIPE Investors, the “PIPE Investors”), for a total aggregate purchase price of up to $5.5 million (the “PIPE Investment”). In addition, the Company originally agreed to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the volume weighted average price per share of Domesticated ACE common stock during the 30 days commencing on the date on which a registration statement registering the resale of the shares of Domesticated ACE common stock acquired by the PIPE Investors is declared effective is less than $10.00 per share (which registration statement the Company has agreed to file pursuant to the subscription agreements entered into in connection with the PIPE Investment). Certain PIPE Investors originally subscribed for $25.0 million of ACE’s 12.0% convertible senior notes due 2025, but such subscription was terminated in January 2022 in connection with the subscription by certain parties for $200.0 million of 15.5% convertible notes. The latter subscription was terminated in July 2022; as a result of such termination, if ACE consummates an initial business combination with or among Tempo, Compass AC Holdings, Inc. (“Compass”), Whizz Systems, Inc. (“Whizz”) or any of their respective affiliates or subsidiaries, OCM Tempo Holdings, LLC (“OCM”) will be entitled to a termination fee of 3.5% of the aggregate principal amount of the subscribed notes (approximately $7.0 million), to be paid by ACE immediately following and as a condition subsequent to the closing of such initial business combination. On September 4, 2022, Tempo, ACE, OCM and Oaktree Capital Management, L.P. (“Oaktree”) agreed to reduce such termination fee to 0.6% of the aggregate principal amount of the subscribed notes (approximately $1.1 million) if the closing of the Tempo Business Combination occurs on or before October 15, 2022 (the “Specified Fee Date”), to be paid on the earlier of (i) six months after the closing of the Tempo Business Combination and (ii) the date on which either ACE or Tempo commence bankruptcy proceedings. In addition to the reduced termination fee, ACE and Tempo are required to pay approximately $1.2 million in fees and expenses to OCM on the earlier of (x) immediately following the closing of the Tempo Business Combination and (y) the Outside Business Combination Date (as defined below). The reduced termination fee and all other fees and expenses owed to OCM under such agreement will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. If the Tempo Business Combination has not been consummated prior to the Specified Fee Date, on the earliest of (I) the date on which the Merger Agreement is terminated, (II) the date on which either ACE or Tempo commence bankruptcy proceedings and (III) June 15, 2023 (the earliest date, the “Outside Business Combination Date”), ACE and Tempo will pay OCM the full 3.5% termination fee and all of its accrued and unpaid fees and expenses. To the extent the termination fee and accrued and unpaid fees and expenses are not paid on or prior to June 15, 2023, the unpaid portion of the termination fee (together with all other unpaid fees and expenses) will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. On October 11, 2022, Tempo, ACE, OCM and Oaktree entered into a letter agreement pursuant to which the Specified Fee Date was amended to November 15, 2022. Additionally, in March 2022, ACE SO3 SPV Limited agreed to purchase an unsecured subordinated convertible note in an aggregate principal amount of $20.0 million in connection with the Closing, which agreement was terminated in July 2022. On July 1, 2022, ACE and Tempo entered into that certain First Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”), pursuant to which the parties agreed, among other things, to (i) reduce the Base Purchase Price from $658,434,783 to $488,375,000, (ii) increase the number of earnout shares issuable to eligible Tempo equity holders (the “Tempo Earnout Shares”) from 7,500,000 to 10,000,000, which will vest in two equal tranches of 5,000,000 shares based on Domesticated ACE reaching $10.0 million in EBITDA and $50.0 million in revenue in any quarter during the five-year period following the closing date of the Tempo Business Combination, (iii) remove certain covenants and other obligations of the parties relating to the employee stock purchase plan contemplated by the Merger Agreement and (iv) extend the outside date of the Merger Agreement to November 13, 2022. On August 12, 2022, ACE, Merger Sub and Tempo entered into the Merger Agreement, pursuant to which the parties agreed, among other things, to (i) reduce the Base Purchase Price from $488,375,000 to $235,000,000, (ii) reduce the number of Tempo Earnout Shares from 10,000,000 to 7,000,000, which will vest in two equal tranches of 3,500,000 shares based on Domesticated ACE reaching $5.0 million in Adjusted EBITDA (as defined in the Merger Agreement) and $15.0 million in revenue in any quarter during the five-year period following the closing date, (iii) remove terms relating to the proposed acquisitions by Tempo of each of Whizz and Compass, (iv) reduce the minimum cash condition from $320.0 million to $10.0 million and (v) extend the outside date of the Merger Agreement to December 13, 2022. Pursuant to the Merger Agreement, all outstanding shares of Tempo common stock (after giving effect to the Company Preferred Conversion (as defined in the Merger Agreement)) as of immediately prior to the closing, and, together with shares of Tempo common stock reserved in respect of Tempo options as of immediately prior to the closing that will be converted into awards based on Domesticated ACE common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of Tempo options, if and to the extent earned and subject to their respective terms), an aggregate of approximately 23,500,000 shares of Domesticated ACE common stock (at a deemed value of $10.00 per share) equal to the quotient obtained by dividing (i) the Base Purchase Price by (ii) $10.00, including, as applicable, a number of Tempo Earnout Shares. On September 7, 2022, ACE and Tempo entered into the First Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, to increase the Base Purchase Price from $235,000,000 to $257,927,013. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Tempo Business Combination will, at the effective time of the Tempo Business Combination, be converted into (a) Domesticated ACE RSUs and (b) the right to receive a number of Tempo Earnout Shares. On July 6, 2022, the Company entered into Second Amended and Restated Subscription Agreements (the “Second A&R Subscription Agreements”) with each of the PIPE Investors. Pursuant to the Second A&R Subscription Agreements, among other things, the parties agreed to reduce the minimum Adjustment Period VWAP (as defined in the Second A&R Subscription Agreements) from $6.50 to $4.00. Additionally, ACE agreed (1) to issue 2,000,000 additional shares (the “PIPE Incentive Shares”) to the PIPE Investors on a pro rata basis as an incentive to subscribe for and purchase the shares under the Second A&R Subscription Agreements, (2) that if the Adjustment Period VWAP is less than $10.00 per share, the number of additional shares each PIPE Investor will be entitled to receive shall be (i) (A) (x) the number of shares issued to such PIPE Investor at the closing of the subscription and held by such PIPE Investor on the Measurement Date (as defined in the Second A&R Subscription Agreements), times (y) $10.00, minus the Adjustment Period VWAP, minus (B) the number of PIPE Incentive Shares, times the Adjustment Period VWAP, divided by (ii) the Adjustment Period VWAP, and (3) to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the Additional Period VWAP (as defined below) is less than the Adjustment Period VWAP. In such case, each PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock (such additional shares, if any, the “Additional Period Shares”) equal to the lesser of (1) such PIPE Investor’s pro rata portion of 2,000,000 shares, and (2) (i) (A) (x) the number of shares issued to such PIPE Investor pursuant to such subscription agreement and held by such PIPE Investor on the last day of the 30 calendar day period ending on the date that is 15 months following the closing of the subscriptions (such 30 calendar day period, the “Additional Period”), times (y) the Adjustment Period VWAP, minus the average of the volume weighted average price of a share of Domesticated ACE common stock determined for each of the trading days during the Additional Period (the “Additional Period VWAP”), minus (B) the number of PIPE Incentive Shares, times the Additional Period VWAP, divided by (ii) the Additional Period VWAP. Notwithstanding the foregoing, in the event that Domesticated ACE consummates a strategic transaction during the 15 consideration will be (a) with respect to any securities, (i) the average of the closing prices of the sales of such securities on all securities exchanges on which such securities are then listed, averaged over a period of 30 trading days ending on the day as of which such value is being determined and the 29 consecutive days preceding such day, or (ii) if the information contemplated by the preceding clause (i) is not practically available, then the fair value of such securities as of the date of valuation as determined in accordance with the succeeding clause (b), and (b) with respect to any other non-cash assets, the fair value thereof as of the date of valuation, as determined by an independent, nationally recognized valuation firm reasonably selected by Domesticated ACE, on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant (and giving effect to any transfer taxes payable in connection with such sale). On September 7, 2022, ACE entered into Third Amended and Restated Subscription Agreements (the “Third A&R PIPE Subscription Agreements”) with each of the PIPE Investors, which amend and restate the applicable Second A&R Subscription Agreements in their entirety. One of the Third Party PIPE Investors who entered into a Second A&R Subscription Agreement did not enter into a Third A&R PIPE Subscription Agreement and terminated its Second A&R Subscription Agreement on September 7, 2022. Pursuant to the Third A&R PIPE Subscription Agreements, ACE has agreed to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the volume weighted average price per share of Domesticated ACE common stock (the “Measurement Period VWAP”) during the 30 days commencing on the date on which a registration statement registering the resale of the shares of Domesticated ACE common stock acquired by such PIPE Investors (the “PIPE Resale Registration Statement”) is declared effective is less than $10.00 per share. In such case, each PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock equal to the product of (x) the number of shares of Domesticated ACE common stock issued to such PIPE Investor at the closing of the subscription and held by such PIPE Investor through the date that is 30 days after the effective date of the PIPE Resale Registration Statement (the “Measurement Date”) multiplied by (y) a fraction, (A) the numerator of which is $10.00 minus the Adjustment Period VWAP (as defined therein) and (B) the denominator of which is the Adjustment Period VWAP. In the event that the Adjustment Period VWAP is less than $4.00 (the “Price Floor Value”), the Adjustment Period VWAP shall be deemed to be the Price Floor Value. ACE has also agreed to issue up to 500,000 additional shares of Domesticated ACE common stock to each such PIPE Investor in the event that the Additional Period VWAP (as defined below) is less than the Adjustment Period VWAP. In such case, each such PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock equal to the lesser of (1) such PIPE Investor’s pro rata portion of 500,000 additional shares of Domesticated ACE common stock, and (2) (i) (A) (x) the number of shares issued to such PIPE Investor pursuant to such subscription agreement and held by such PIPE Investor on the last day of the 30 calendar day period ending on the date that is 15 months following the closing of the subscriptions (such 30 calendar day period, the “Additional Period”), times (y) the Adjustment Period VWAP, minus the average of the volume weighted average price of a share of Domesticated ACE common stock determined for each of the trading days during the Additional Period (the “Additional Period VWAP”), minus (B) the number of PIPE Incentive Shares (as defined below), times the Additional Period VWAP, divided by (ii) the Additional Period VWAP. Additionally, ACE has agreed to issue up to 2,000,000 additional shares (the “PIPE Incentive Shares”) to such PIPE Investors on a pro rata basis with respect to each PIPE Investor’s subscription amount as an incentive to subscribe for and purchase the shares under the Third A&R PIPE Subscription Agreements. Notwithstanding the foregoing, in the event that Domesticated ACE consummates a strategic transaction during the 15-month period beginning on the closing date, then the measurement date for the issuance of such additional shares shall be one day prior to the closing date of such strategic transaction, and the Additional Period VWAP will be deemed to equal the price per share paid or payable to the holders of outstanding shares of Domesticated ACE common stock in connection with such strategic transaction. If such price is payable in whole or in part in the form of consideration other than cash, the value of such consideration will be (a) with respect to any securities, (i) the average of the closing prices of the sales of such securities on all securities exchanges on which such securities are then listed, averaged over a period of 30 trading days ending on the day as of which such value is being determined and the 29 consecutive days preceding such day, or if the information contemplated by the preceding clause (i) is not practically available, then the fair value of such securities as of the date of valuation as determined in accordance with the succeeding clause (b), and (b) with respect to any other non-cash assets, the fair value thereof as of the date of valuation, as determined by an independent, nationally recognized valuation firm reasonably selected by Domesticated ACE, on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant (and giving effect to any transfer taxes payable in connection with such sale). One of the PIPE Investors’ subscription agreement provides that, if such PIPE Investor is an Eligible Investor (defined as any subscriber in the offering who is not a beneficial or record owner of ACE’s equity or an affiliate of ACE prior to the Initial Closing (as defined therein)), if, after the date of such subscription agreement, such PIPE Investor acquires ownership of Class A Ordinary Shares in the open market or in privately negotiated transactions with third parties (along with any related rights to redeem or convert such shares in connection with the redemption conducted by ACE in connection with the vote to approve the Tempo Business Combination (the “Tempo Redemption”)) at least five business days prior to ACE’s extraordinary general meeting to approve the Tempo Business Combination, and such PIPE Investor does not redeem or convert such shares in connection with the Tempo Redemption (including revoking any prior redemption or conversion elections made with respect to such shares) (such shares, “PIPE Non-Redeemed Shares”), the number of shares such PIPE Investor (only if an Eligible Investor) will be obligated to purchase under its subscription agreement shall be reduced by the number of PIPE Non-Redeemed Shares. The proceeds of the PIPE Investment, together with the amounts remaining in ACE’s trust account as of immediately following the effective time of the Tempo Business Combination, will be retained by Domesticated ACE following the Closing. In connection with the Tempo Business Combination and pursuant to separate agreements, Tempo was to acquire 100% of the issued The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Tempo, (ii) the absence of any legal restraints on the Closing, and (iii) receipt of approval for listing on The Nasdaq Stock Market LLC (“Nasdaq”) the shares of Domesticated ACE common stock to be issued in connection with the Merger. ACE’s obligation to consummate the Business Combination is also subject to, among other things, the accuracy of the representations and warranties of Tempo as of the date of the Original Merger Agreement (as defined below) and as of the Closing and each of the covenants of Tempo having been performed in all material respects. Tempo’s obligation to consummate the Merger is also subject to, among other things, (i) the accuracy of the representations and warranties of ACE as of the date of the Original Merger Agreement and as of the Closing, (ii) ACE having performed each of the covenants in all material respects, (iii) the Domestication having been completed and (iv) the sum of (w) the amount of cash available in the Trust Account into which substantially all of the proceeds of ACE’s initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE’s initial public offering, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their rights to redeem their Class A ordinary shares pursuant to ACE’s amended and restated memorandum and articles of association (but prior to payment of (a) any deferred underwriting commissions being held in the Trust Account and (b) any transaction expenses of ACE or its affiliates), plus (x) the PIPE Investment Amount (as defined in the Merger Agreement) actually received by ACE prior to or substantially concurrently with the closing, plus (y) the Available Credit Amount (as defined in the Merger Agreement), plus (z) the Available Cash Amount (as defined in the Merger Agreement), being at least equal to $10,000,000. The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Tempo, (ii) by Tempo, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Tempo, to the extent required under the Merger Agreement, are not obtained within five business days of the effective date of the Proxy Statement/Registration Statement (as defined in the Merger Agreement), (iv) by either ACE or Tempo in certain other circumstances set forth in the Merger Agreement, including (a) if any Governmental Authority (as defined in the Merger Agreement) shall have issued or otherwise entered a final, non-appealable order making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger and (b) in the event of certain uncured breaches by the other party or if the Closing has not occurred on or before December 13, 2022 (the “Agreement End Date”), unless ACE is in material breach of the Merger Agreement. The Merger Agreement also provides that, if the proxy statement for ACE’s shareholder meeting to approve the Tempo Business Combination has not been mailed by August 30, 2022, then ACE will file a proxy statement to extend the date by which it must complete an initial business combination by at least three months, to such date as may be agreed in writing between ACE and Tempo. Concurrently with the execution of the original Agreement and Plan of Merger in October 2021 (the “Original Merger Agreement”), an affiliate of the Sponsor (such affiliate, the “Backstop Investor”) entered into a backstop subscription agreement (the “Backstop Subscription Agreement”) with ACE, pursuant to, and on the terms and subject to the conditions on which, the Backstop Investor committed to purchase, following the Domestication and prior to or substantially concurrently with the Closing, up to 2,500,000 shares of Domesticated ACE common stock, in a private placement for a purchase price of $10.00 per share and an aggregate purchase price of up to $25,000,000, to backstop certain redemptions by ACE shareholders. On March 16, 2022, ACE and the Backstop Investor terminated the Backstop Subscription Agreement in connection with the execution of the Cantor Purchase Agreement (as defined below). On October 13, 2021, ACE entered into a Support Agreement (the “Original Sponsor Support Agreement,” and, as amended, the “Sponsor Support Agreement”), by and among ACE, the Sponsor, certain of ACE’s directors and officers and Tempo, pursuant to which the Sponsor and each director and officer of ACE agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Original Sponsor Support Agreement. On July 6, 2022, the parties to the Original Sponsor Support Agreement entered into an Amendment to Sponsor Support Agreement (the “SSA Amendment”), pursuant to which, among other things, certain Sponsors (as defined in the Sponsor Support Agreement, and, each, an “Earnout Sponsor”) agreed, immediately prior to the Domestication, to contribute, transfer, assign, convey and deliver to ACE an aggregate of 5,595,000 founder shares in exchange for an aggregate of 3,595,000 Class A Ordinary Shares of ACE (the “SSA Exchange”). Pursuant to the SSA Amendment, the Earnout Sponsors also agreed to subject an aggregate of 2,000,000 shares of Domesticated ACE common stock (the “Sponsor Earnout Shares”) received in the SSA Exchange to certain earnout vesting conditions or, should such shares fail to vest, forfeiture to ACE for no consideration. On the earlier of (i) the date which is 15 months following the closing of the Tempo Business Combination and (ii) immediately prior to the closing of a strategic transaction, the Sponsor Earnout Shares will vest in an amount equal to (A) the number of Sponsor Earnout Shares, less (B) the number of Additional Period Shares, if any, issuable in the aggregate under the Second A&R Subscription Agreements. In the event of a strategic transaction, the holders of any vested Sponsor Earnout Shares will be eligible to participate in such strategic transaction with respect to such Sponsor Earnout Shares on the same terms, and subject to the same conditions, as the other holders of shares of Domesticated ACE common stock generally. On August 12, 2022, the parties to the SSA Amendment entered into a Second Amendment to Sponsor Support Agreement (the “Second SSA Amendment”), pursuant to which the SSA Exchange was amended such that the Earnout Sponsors agreed, immediately prior to the Domestication, to contribute, transfer, assign, convey and deliver to ACE an aggregate of 5,595,000 founder shares in exchange for an aggregate of 3,095,000 Class A Ordinary Shares. Pursuant to the Second SSA Amendment, the Earnout Sponsors also agreed to reduce the number of Sponsor Earnout Shares to 500,000. On the earlier of (i) the date which is fifteen (15) months following the closing of the Tempo Business Combination and (ii) immediately prior to the closing of a strategic transaction, the Sponsor Earnout Shares will vest in an amount equal to (A) the number of Sponsor Earnout Shares, less (B) the number of Additional Period Shares (as defined therein), if any, issuable in the aggregate un | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Registration Rights Pursuant to a registration rights agreement entered into on July 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Termination of Proposed Achronix Business Combination On January 7, 2021, we entered into an Agreement and Plan of Merger with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”), and Merger Sub (As defined in Note 1). On May 24, 2021, in our Form 10-Q for the quarter ended March 31, 2021, we disclosed that the SEC informed us that it was investigating certain disclosures made in the Form S-4 relating to our proposed business combination with Achronix. On July 11, 2021, we and Achronix entered into a termination and release agreement, pursuant to which the parties agreed to mutually terminate the merger agreement relating to the proposed business combination. On October 27, 2021, we received a letter from the SEC in connection with its investigation with the following response: “We have concluded the investigation as to ACE Convergence Acquisition Corp. (“ACE”). Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against ACE.” The SEC provided this notice pursuant to the guidelines set out in the final paragraph of Securities Act Release No. 5310 (the text of this release can be found at: http://www.sec.gov/divisions/enforce/wells-release.pdf). Business Combination Agreement On October 13, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Tempo Automation, Inc., a Delaware corporation (“Tempo”), and Merger Sub. Pursuant to the transactions contemplated by the terms of the Merger Agreement (the “Tempo Business Combination”), and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Tempo, with Tempo surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Prior to the closing of the Tempo Business Combination (the “Closing”), the Company shall domesticate as a Delaware corporation (the “Domestication” and, ACE, after the Domestication, “Domesticated ACE”) and shall immediately be renamed “Tempo Automation Holdings, Inc.” On August 13, 2021, Tempo Automation, Inc., a Delaware corporation (“Tempo”) entered into a Stock Purchase Agreement (the “Whizz Agreement”) with Whizz Systems, Inc., a Delaware corporation (“Whizz”), and on October 13, 2021, Tempo entered into an Agreement and Plan of Merger (the “Compass AC Agreement”) with Compass AC Holdings, Inc., a Delaware corporation (“Compass AC”), pursuant to which, and on the terms and subject to the conditions of which, Tempo will acquire all of the outstanding shares of capital stock of each Whizz and Compass AC (the “Tempo Add-On Acquisitions”) immediately following the closing of the Business Combination (as defined below). After the Effective Time, ACE will pay or issue to eligible Whizz equity holders and Compass AC equity holders their respective pro rata portion of the Whizz Consideration (as defined in the Merger Agreement) or the Compass AC Consideration (as defined in the Merger Agreement), including, for the avoidance of doubt, any applicable earnout consideration, upon the terms and subject to the conditions set forth in the Whizz Agreement or the Compass AC Agreement, as applicable. The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Tempo, (ii) effectiveness of the registration statement on Form S-4 (which will include a proxy statement for holders of ACE’s ordinary shares) initially filed by ACE with the SEC on November 12, 2021 in connection with the Business Combination (the “ Registration Statement Nasdaq ACE’s obligation to consummate the Business Combination is also subject to, among other things, (i) the accuracy of the representations and warranties of Tempo as of the date of the Merger Agreement and as of the Closing, (ii) each of the covenants of Tempo having been performed in all material respects and (iii) all conditions of the closing of each of the Tempo Add-On Acquisitions being satisfied or waived and each of the Tempo Add-On Acquisitions being prepared to be consummated immediately after the Closing. Tempo’s obligation to consummate the Merger is also subject to, among other things, (i) the accuracy of the representations and warranties of ACE as of the date of the Merger Agreement and as of the Closing, (ii) ACE having performed each of the covenants in all material respects, (iii) the Domestication having been completed and (iv) the sum of (w) the amount of cash available in the trust account into which substantially all of the proceeds of ACE’s initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE’s initial public offering (the “ Trust Account The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Tempo, (ii) by Tempo, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Tempo, to the extent required under the Merger Agreement, are not obtained within five business days after the Registration Statement has been declared effective by the SEC Agreement End Date On or prior to the execution of the Merger Agreement, ACE entered into subscription agreements with certain investors (collectively, the “ PIPE Investors PIPE Common Stock Subscription Agreements Sponsor PIPE Convertible Note Subscription Agreement PIPE Subscription Agreements PIPE Investment Concurrently with the execution of the Merger Agreement, an affiliate of the Sponsor (such affiliate, the “ Backstop Investor Backstop Subscription Agreement On October 13, 2021, ACE entered into a Support Agreement (the “ Sponsor Support Agreement On October 13, 2021, ACE entered into a Support Agreement (the “ Tempo Holders Support Agreement Tempo Stockholders The Merger Agreement contemplates that, at the Closing, ACE will enter into lock-up agreements with (i) the Sponsor and (ii) and certain former stockholders of Tempo and Compass AC, in each case, restricting the transfer of Domesticated ACE Common Stock from and after the Closing. The restrictions under the lock-up agreements begin at the Closing and end on, among other things, in the case of the Sponsor and certain former stockholders of Tempo, the date that is 365 days after the Closing, and in the case of certain former stockholders of Compass AC, the date that is 180 days after the Closing, or (in each case) upon the stock price of Domesticated ACE reaching $12.00 (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing Date. For more information about the Merger Agreement and the proposed Tempo Business Combination, see our Current Report on Form 8-K filed with the SEC on October 14, 2021, and in our preliminary prospectus/proxy statement included in the Registration Statement. Unless specifically stated, this Annual Report on Form 10-K does not give effect to the proposed Tempo Business Combination and does not contain the risks associated with the proposed Tempo Business Combination. Such risks and effects relating to the proposed Tempo Business Combination is included in the Registration Statement. Subscription Agreement On January 18, 2022, ACE entered into a Subscription Agreement (the “Subscription Agreement”) with Tempo, OCM Tempo Holdings, LLC (“OCM”) and Tor Asia Credit Opportunity Master Fund II LP (“Tor”). Pursuant to the Subscription Agreement, OCM, an affiliate of Oaktree Capital Management, L.P. (collectively with its affiliates or affiliated investment funds and/or managed or controlled accounts, “Oaktree”), has committed to purchase $175 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the closing (the “Closing”) of the previously announced business combination between ACE and Tempo, which Closing is subject to the satisfaction or waiver of the conditions stated in the Merger Agreement dated as of October 13, 2021, by and among ACE, Tempo Automation and ACE Convergence Subsidiary Corp., and other customary closing conditions. The Subscription Agreement also provides for the purchase of $25 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the Closing by Tor, an investment partner of ACE, which investment replaces the previously announced investment in ACE’s 12% convertible senior notes due 2025 by an affiliate of ACE’s sponsor, ACE Convergence Acquisition LLC, as disclosed in the Form 8-K, filed January 20, 2022. |
SHAREHOLDERS' DEFICIT
SHAREHOLDERS' DEFICIT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SHAREHOLDERS' DEFICIT | ||
SHAREHOLDERS' DEFICIT | NOTE 7 — SHAREHOLDERS’ DEFICIT Preference Shares Class A Ordinary Shares outstanding outstanding In connection with the extension of the date by which the Company must complete an initial business combination in January 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, $148,079,821 was paid out of the Trust Account in connection with the redemptions. In connection with the extension of the date by which the Company must complete an initial business combination in July 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 4,256,979 Class A Ordinary Shares. As a result, $43,349,494 was paid out of the Trust Account in connection with the redemptions. In connection with the extension of the date by which the Company must complete an initial business combination in October 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 1,202,070 Class A Ordinary Shares. As a result, $12,349,642 was paid out of the Trust Account in connection with the redemptions. Class B Ordinary Shares Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders, except as required by law. The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20% of the sum of all ordinary shares issued and outstanding upon completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination. | NOTE 7 — SHAREHOLDERS’ DEFICIT Preference Shares Class A Ordinary Shares Class B Ordinary Shares Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders, except as required by law. The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20% of the sum of all ordinary shares issued and outstanding upon completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination. |
WARRANTS
WARRANTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
WARRANTS | ||
WARRANTS | NOTE 8 — WARRANTS As of September 30, 2022, the Company had 11,500,000 Public Warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 15 Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30 - trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period (as it may be extended) and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 As of September 30, 2022, the Company had 6,600,000 Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. | NOTE 8 — WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a Public Warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30- trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period or any Extension Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | NOTE 9 — FAIR VALUE MEASUREMENTS The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320, “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. At September 30, 2022, assets held in the Trust Account were comprised of $40,293,597 in cash. During the three and nine months ended September 30, 2022, the Company did not withdraw any interest income from the Trust Account. At December 31, 2021, assets held in the Trust Account were comprised of $598 in cash and $230,157,661 in money market funds. In October 2022, public shareholders redeemed 1,202,070 public shares in connection with the shareholder vote to approve the extension of the date by which ACE must complete an initial business combination to January 30, 2023. As a result, approximately $12,349,642 was paid out of the trust account in connection with such redemptions. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2022, and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Markets September 30, Markets December 31, Description (level) 2022 (level) 2021 Assets: Cash and Marketable Securities held in Trust Account 1 $ 40,293,597 1 $ 230,158,259 Liabilities: PIPE derivative liability- PIPE Incentive Shares 3 $ 19,905,700 — $ — Warrant Liability – Public Warrants 1 $ 1,150,000 1 $ 7,820,000 Warrant Liability – Private Placement 2 $ 660,000 3 $ 4,946,082 The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Company’s condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of operations. At September 30, 2022, the Company valued the Private Placement Warrants using the value of the Public Warrants. The Public Warrants are priced using the active observable market quote. At September 30, 2022, the primary difference between the Private Placement Warrants and the Public Warrants of ACE is a redemption feature that caps the upside of the Public Warrants at $18.00 per share. As it is unlikely the value of the underlying security will exceed this threshold, it was determined that it would be reasonable to use the closing price of the Public Warrants as the value of the Private Placement Warrants as of the measurement date of September 30, 2022. At December 31, 2021, and previous reporting periods, the Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Public Warrants were initially classified as Level 3 due to the use of unobservable inputs. For periods subsequent to the detachment of the warrants from the Units, the close price of the Public Warrant price was used as the fair value as of each relevant date. The measurement of the Public Warrants is classified as Level 1 due to the use of an observable market quote in an active market. The key inputs in the modified Black Scholes model for the Private Placement Warrants were as follows at December 31, 2021: December 31, Input: 2021 Risk-free interest rate 1.26 % Expected term (years) 5.28 Expected volatility 18.8 % Exercise price $ 11.50 Stock Price $ 9.96 The following tables present the changes in the fair value of Level 3 warrant liabilities for the three and nine months ended September 30, 2022 and 2021: Private Placement Fair value as of January 1, 2022 $ 4,946,082 Change in fair value (295,793) Fair value as of March 31, 2022 4,650,289 Change in fair value (4,122,289) Fair value as of June 30, 2022 528,000 Change in fair value 132,000 Transfer to Level 2 (660,000) Fair value as of September 30, 2022 $ — Private Placement Fair value as of January 1, 2021 $ 9,504,000 Change in fair value 3,871,560 Fair value as of March 31, 2021 13,375,560 Change in fair value (115,675) Fair value as of June 30, 2021 13,259,885 Change in fair value (9,104,121) Fair value as of September 30, 2021 $ 4,155,764 During the three and nine months ended September 30, 2022 and 2021 $660,000 was transferred from Level 3 to Level 2. The PIPE Derivative was accounted for as a liability in accordance with ASC 815-40 and presented within current liabilities on the condensed consolidated balance sheet as of September 30, 2022. The PIPE derivative liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of PIPE derivative liability in the condensed statements of operations. The Additional PIPE Incentive Shares were initially and as of September 30, 2022 and September 7, 2022 (initial measurement), valued using a discounted cash flows model which is considered to be a Level 3 fair value measurement. A key assumption in this model and valuation is the certainty of the closing of the Business Combination. Present value factors were determined using November 22, 2022 as the estimated date of closing of the Business Combination. The key inputs into the Discounted Cash Flows Model for the PIPE Derivative Liability were as follows: As of As of September 30, September 7, 2022 2022 Incentive shares 2,000,000 2,000,000 Per share subscription price $ 10.00 $ 10.00 Discount period 0.210 0.150 Present value factor 0.994 0.995 The following table presents the changes in the fair value of the PIPE Derivative Liability: PIPE Derivative Liability Fair value as of September 7, 2022 $ 19,878,900 Change in fair value 26,800 Fair value as of September 30, 2022 $ 19,905,700 | NOTE 9 — FAIR VALUE MEASUREMENTS The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts. At December 31, 2021, assets held in the Trust Account were comprised of $598 in cash and $230,157,661 in money market funds. During the year ended December 31, 2021, the Company did not withdraw any interest income from the Trust Account. At December 31, 2020, assets held in the Trust Account were comprised of $82 in cash and $230,091,280 in U.S. Treasury Securities. The gross holding gains and fair value of held-to-maturity securities at December 31, 2020 is as follows: Gross Amortized Holding Held-To-Maturity Cost Gain Fair Value December 31, 2020 U.S. Treasury Securities (Matured on 1/28/21)* 230,091,280 7,515 230,098,795 * Upon maturity, the securities were reinvested into money market funds, which invest in U.S. Treasury Securities. As of December 31, 2021 there were no held-to-maturity securities. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2021 and 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Markets December 31, December 31, Description (level) 2021 2020 Assets: Cash and marketable securities held in Trust Account 1 $ 230,157,661 $ 230,098,795 Liabilities: Warrant Liability – Public Warrants 1 $ 7,820,000 $ 15,985,000 Warrant Liability – Private Placement 3 $ 4,946,082 $ 9,504,000 The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the Company’s consolidated balance sheets. The warrant liability are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the consolidated statements of operations. The Private Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Warrants were initially classified as Level 3 due to the use of unobservable inputs. The most significant input is volatility and significant increases (decreases) in the expected volatility in isolation would result in a significantly higher (lower) fair value measurement. For periods subsequent to the detachment of the warrants from the Units, the close price of the Public Warrant price was used as the fair value as of each relevant date. The measurement of the Public Warrants is classified as Level 1 due to the use of an observable market quote in an active market. The key inputs in the modified Black Scholes model for the Private Placement Warrants were as follows at the following measurement dates: December 31, December 31, Input: 2021 2020 Risk-free interest rate 1.26 % 0.36 % Expected term (years) 5.28 5.49 Expected volatility 18.8 % 22.7 % Exercise price $ 11.50 $ 11.50 Stock Price $ 9.96 $ 10.22 The following table presents the changes in the fair value of Level 3 warrant liabilities: Private Placement Public Fair value as of May 28, 2020 — — Initial measurement on July 30, 2020 $ 6,732,000 $ 11,270,000 Transfer from Level 3 to Level 1 — (11,270,000) Change in fair value 2,772,000 — Fair value as of December 31, 2020 $ 9,504,000 — Change in fair value (4,557,918) — Fair value as of December 31, 2021 $ 4,946,082 — Due to the use of quoted prices in an active market (Level 1) to measure the fair value of the Public Warrants, subsequent to initial measurement, the Company had transfers out of Level 3 totaling $11,270,000 during the period from July 30, 2020 through December 31, 2020 and no transfers in 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements other than as described below. On November 1, 2022, the proxy statement/prospectus was declared effective and on November 2, 2022, the Company commenced with mailing the proxy materials to the Company’s shareholders ahead of the extraordinary general meeting of the Company’s shareholders expected to be held on November 17, 2022. | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, except as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 13, 2022, in connection with extension of the business combination period, the Sponsor agreed to contribute to the Company as a loan $0.03 for each Class A ordinary share of the Company that is not redeemed in connection with the shareholder vote to approve the Extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the business combination between the Company and Tempo Automation, Inc. and (ii) $1.5 million has been loaned. The Contribution(s) will not bear any interest, and will be repayable by the Company to the Sponsor upon the earlier of the date by which the Company must complete an initial business combination and the consummation of the business combination between the Company and Tempo Automation, Inc. On January 21, 2022, in connection with the extension of time to complete a business combination, shareholders of Class A Ordinary shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, approximately $148,079,821 was paid out of the Trust in connection with the redemptions. On January 25, 2022 the Company voted to amend the Investment Management Trust Agreement entered into by the Company and the Trustee on July 27, 2020 (the “Trust Agreement”), to extend the business combination period from January 30, 2022, to July 13, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 10, 2022. The interim results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future periods. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. |
Asset Held In Trust Account | Marketable Securities Held in Trust Account At December 31, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2022, and December 31, 2021. | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2021 and 2020. |
Warrant Liability | Warrant Liability The Company accounts for the Warrants in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. The Private Warrants (and the Public Warrants for periods where no observable traded price was available) are valued using a Modified Black Scholes Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. | |
Class A Ordinary Shares Subject to Possible Redemption | Class A Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2021 and 2020, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit. At December 31, 2021 and 2020, the Class A ordinary shares reflected in the consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption $ 230,000,000 | |
Offering Costs | Offering Costs Offering costs consisted of underwriting, legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounted to $13,273,096, of which $12,737,837 were charged to temporary equity upon the completion of the Initial Public Offering, and the remaining $667,259 of offering costs allocated to the warrant liability was charged to operations. | |
Income Taxes | Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2022, and December 31, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. | Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2021 and 2020, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. |
Net Income (Loss) Per Ordinary Share | Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. For the three and nine months ended September 30, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 | Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared prorata between the two classes of shares. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. As of December 31, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limits of $250,000. The Company has not experienced losses on this account, and management believes the Company is not exposed to significant risks on such account. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature except derivative liabilities (see Note 9). | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature except warrant liabilities (see Note 9). |
Recent Accounting Standards | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements. | Recent Accounting Standards In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Summary of reconciliation of Class A common stock reflected on the balance sheet | Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption, December 31, 2021 $ 230,000,000 Less: Redemption of Class A Ordinary Shares (191,429,316) Add: Accretion of carrying value to redemption value 1,722,913 Class A ordinary shares subject to possible redemption, September 30, 2022 $ 40,293,597 | At December 31, 2021 and 2020, the Class A ordinary shares reflected in the consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption $ 230,000,000 |
Schedule of calculation of basic and diluted net loss per ordinary share | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 | The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | ||
Schedule of gross holding gains and fair value of held-to-maturity securities | The gross holding gains and fair value of held-to-maturity securities at December 31, 2020 is as follows: Gross Amortized Holding Held-To-Maturity Cost Gain Fair Value December 31, 2020 U.S. Treasury Securities (Matured on 1/28/21)* 230,091,280 7,515 230,098,795 * Upon maturity, the securities were reinvested into money market funds, which invest in U.S. Treasury Securities. As of December 31, 2021 there were no held-to-maturity securities. | |
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | Markets September 30, Markets December 31, Description (level) 2022 (level) 2021 Assets: Cash and Marketable Securities held in Trust Account 1 $ 40,293,597 1 $ 230,158,259 Liabilities: PIPE derivative liability- PIPE Incentive Shares 3 $ 19,905,700 — $ — Warrant Liability – Public Warrants 1 $ 1,150,000 1 $ 7,820,000 Warrant Liability – Private Placement 2 $ 660,000 3 $ 4,946,082 | Markets December 31, December 31, Description (level) 2021 2020 Assets: Cash and marketable securities held in Trust Account 1 $ 230,157,661 $ 230,098,795 Liabilities: Warrant Liability – Public Warrants 1 $ 7,820,000 $ 15,985,000 Warrant Liability – Private Placement 3 $ 4,946,082 $ 9,504,000 |
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | December 31, Input: 2021 Risk-free interest rate 1.26 % Expected term (years) 5.28 Expected volatility 18.8 % Exercise price $ 11.50 Stock Price $ 9.96 | December 31, December 31, Input: 2021 2020 Risk-free interest rate 1.26 % 0.36 % Expected term (years) 5.28 5.49 Expected volatility 18.8 % 22.7 % Exercise price $ 11.50 $ 11.50 Stock Price $ 9.96 $ 10.22 |
Schedule of changes in fair value of warrant liabilities | Private Placement Public Fair value as of May 28, 2020 — — Initial measurement on July 30, 2020 $ 6,732,000 $ 11,270,000 Transfer from Level 3 to Level 1 — (11,270,000) Change in fair value 2,772,000 — Fair value as of December 31, 2020 $ 9,504,000 — Change in fair value (4,557,918) — Fair value as of December 31, 2021 $ 4,946,082 — |
ORGANIZATION AND PLAN OF BUSI_2
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jul. 12, 2022 | Jan. 21, 2022 | Jul. 30, 2020 | Oct. 31, 2022 | Jul. 31, 2022 | Jan. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Transaction Costs | $ 13,273,096 | $ 13,273,096 | ||||||||
Underwriting fees | 4,600,000 | 4,600,000 | ||||||||
Deferred underwriting fees | $ 8,050,000 | 8,050,000 | 8,050,000 | |||||||
Other offering costs | 623,096 | $ 623,096 | ||||||||
Investment of Cash into Trust Account | 221,190 | $ 1,451,532 | ||||||||
Threshold minimum aggregate fair market value as a percentage of the assets held in the Trust Account | 80% | 80% | ||||||||
Threshold percentage of outstanding voting securities of the target to be acquired by post-transaction company to complete business combination | 50% | 50% | ||||||||
Redemption of shares calculated based on business days prior to consummation of business combination (in days) | 2 days | 2 days | ||||||||
Minimum net tangible assets upon consummation of the business combination | 5,000,001 | $ 5,000,001 | $ 5,000,001 | |||||||
Threshold percentage of public shares subject to redemption without the company's prior written consent | 15% | 15% | ||||||||
Obligation to redeem public shares if entity does not complete a business combination (as a percent) | 100% | 100% | ||||||||
Threshold business days for redemption of public shares | 10 days | 10 days | ||||||||
Maximum net interest to pay dissolution expenses | $ 100,000 | $ 100,000 | ||||||||
Amount of cash paid out of Trust Account for redemptions | $ 148,079,821 | $ 12,349,642 | $ 148,079,821 | |||||||
Temporary Equity Shares, Elected To Redeem, Upon Extension Of Business Combination Period | 1,202,070 | |||||||||
Payments for redemptions out of Trust Account per share | $ 10.21 | |||||||||
Percentage of security holders | 5% | |||||||||
Cash | 0 | $ 0 | 8,390 | $ 792,416 | ||||||
Cash and marketable securities held in Trust Account | 40,293,597 | 40,293,597 | 230,158,259 | $ 230,091,362 | ||||||
Working Capital | $ 18,720,557 | $ 18,720,557 | $ 6,666,868 | |||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | |||||||||
Cash withdrawn from Trust Account in connection with redemption | $ 148,079,821 | $ 12,349,642 | 148,079,821 | |||||||
Class A common stock [Member] | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Amount of cash paid out of Trust Account for redemptions | $ 43,349,494 | $ 12,349,642 | $ 43,349,494 | $ 148,079,821 | ||||||
Temporary Equity Shares, Elected To Redeem, Upon Extension Of Business Combination Period | 4,256,979 | 14,797,723 | 1,202,070 | 4,256,979 | 14,797,723 | |||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 4,256,979 | 14,797,723 | 1,202,070 | 4,256,979 | 14,797,723 | |||||
Cash withdrawn from Trust Account in connection with redemption | $ 43,349,494 | $ 12,349,642 | $ 43,349,494 | $ 148,079,821 | ||||||
Initial Public Offering | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of units issued | 23,000,000 | |||||||||
Unit price | $ 10 | $ 10 | $ 10 | $ 10 | ||||||
Proceeds from issuance of units | $ 230,000,000 | |||||||||
Investment of Cash into Trust Account | $ 230,000,000 | |||||||||
Over-allotment option | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of units issued | 3,000,000 | |||||||||
Private Placement | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Private placement warrants issued | 6,600,000 | |||||||||
Price of warrant | $ 1 | |||||||||
Proceeds from sale of Private Placement Warrants | $ 6,600,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Jul. 12, 2022 | Jan. 21, 2022 | Jan. 13, 2022 | Oct. 31, 2022 | Jul. 31, 2022 | Jan. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Aug. 28, 2022 | |
Offering costs allocated to the warrant liability was charged to operations | $ 667,259 | |||||||||||
Transaction Costs | $ 13,273,096 | 13,273,096 | ||||||||||
Offering costs charged to temporary equity and accreted to redemption value | 12,605,837 | |||||||||||
Amount of loan contributed | 523,743 | $ 309,210 | $ 62,558 | 527,756 | ||||||||
Amount contributed to Trust Account | $ 221,190 | 1,451,532 | ||||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | |||||||||||
Cash withdrawn from Trust Account in connection with redemption | $ 148,079,821 | $ 12,349,642 | $ 148,079,821 | |||||||||
Unrecognized tax benefits | 0 | 0 | 0 | 0 | ||||||||
Amount accrued for interest and penalties | 0 | 0 | 0 | 0 | ||||||||
Cash, FDIC insured amount | 250,000 | |||||||||||
Offering costs | 13,273,096 | |||||||||||
Offering costs charged to shareholders' equity | $ 12,737,837 | |||||||||||
Offering costs allocated to warrant liability | 667,259 | $ 667,259 | ||||||||||
Sponsor [Member] | ||||||||||||
Maximum borrowing capacity | 2,000,000 | 2,000,000 | $ 2,125,000 | |||||||||
Minimum borrowing capacity | $ 1,500,000 | $ 1,500,000 | $ 2,000,000 | |||||||||
Related Party Loans | ||||||||||||
Amount of loan contributed | $ 1,500,000 | |||||||||||
Class A common stock [Member] | ||||||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | |||||||||||
Cash withdrawn from Trust Account in connection with redemption | $ 12,349,642 | |||||||||||
Class A common stock [Member] | Warrants [Member] | ||||||||||||
Exclusion of shares in the calculation of diluted income (loss) per share | 18,100,000 | |||||||||||
Class A common stock [Member] | ||||||||||||
Sponsor loan amount per share of ordinary share upon extension of buisness combination period | $ 0.03 | |||||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 4,256,979 | 14,797,723 | 1,202,070 | 4,256,979 | 14,797,723 | |||||||
Cash withdrawn from Trust Account in connection with redemption | $ 43,349,494 | $ 12,349,642 | $ 43,349,494 | $ 148,079,821 | ||||||||
Class A common stock [Member] | Warrants [Member] | ||||||||||||
Exclusion of shares in the calculation of diluted income (loss) per share | 18,100,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Calculation of basic and diluted net loss per ordinary share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Class A common stock [Member] | ||||||
Numerator: | ||||||
Allocation of net income (loss) | $ (3,772,620) | $ 17,830,609 | $ 257,377 | $ 7,776,990 | $ (7,350,686) | $ 4,677,202 |
Denominator: | ||||||
Weighted average shares outstanding of ordinary shares, basic | 4,459,878 | 23,000,000 | 8,092,696 | 23,000,000 | 16,353,211 | 23,000,000 |
Weighted average shares outstanding of ordinary shares, diluted | 4,459,878 | 23,000,000 | 8,092,696 | 23,000,000 | 16,353,211 | 23,000,000 |
Basic net income (loss) ordinary per share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
Diluted net income (loss) per ordinary share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
Class B common stock | ||||||
Numerator: | ||||||
Allocation of net income (loss) | $ (4,863,938) | $ 4,457,652 | $ 182,870 | $ 1,944,248 | $ (1,837,671) | $ 1,169,301 |
Denominator: | ||||||
Weighted average shares outstanding of ordinary shares, basic | 5,750,000 | 5,750,000 | 5,750,000 | 5,750,000 | 5,529,817 | 5,750,000 |
Weighted average shares outstanding of ordinary shares, diluted | 5,750,000 | 5,750,000 | 5,750,000 | 5,750,000 | 5,529,817 | 5,750,000 |
Basic net income (loss) ordinary per share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
Diluted net income (loss) per ordinary share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated balance sheets (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Gross proceeds | $ 230,000,000 | ||
Proceeds allocated to Public Warrants | (11,270,000) | ||
Class A ordinary shares issuance costs | (12,737,837) | ||
Redemption of Class A Ordinary Shares | $ (191,429,316) | ||
Accretion of carrying value to redemption value | 1,722,913 | 24,007,837 | |
Class A ordinary shares subject to possible redemption | $ 40,293,597 | $ 230,000,000 | $ 230,000,000 |
INITIAL PUBLIC OFFERING (Detail
INITIAL PUBLIC OFFERING (Details) - $ / shares | Jul. 30, 2020 | Sep. 30, 2022 | Dec. 31, 2021 |
Initial Public Offering | |||
Subsidiary, Sale of Stock [Line Items] | |||
Sale of 23,000,000 Units, net of underwriting discounts, offering costs and warrant liability (in shares) | 23,000,000 | ||
Unit price | $ 10 | $ 10 | $ 10 |
Number of shares in a unit | 1 | ||
Number of warrants in a unit | 0.5 | ||
Number of shares issuable per warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Over-allotment option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Sale of 23,000,000 Units, net of underwriting discounts, offering costs and warrant liability (in shares) | 3,000,000 |
PRIVATE PLACEMENT (Details)
PRIVATE PLACEMENT (Details) - Private Placement. | 12 Months Ended |
Dec. 31, 2021 USD ($) $ / shares shares | |
Subsidiary, Sale of Stock [Line Items] | |
Number of warrants to purchase shares issued | shares | 6,600,000 |
Price of warrants | $ / shares | $ 1 |
Aggregate purchase price | $ | $ 6,600,000 |
Number of shares per warrant | shares | 1 |
Exercise price of warrant | $ / shares | $ 11.50 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 13, 2021 shares | May 29, 2020 shares | Jan. 31, 2022 shares | May 31, 2020 USD ($) shares | Sep. 30, 2022 $ / shares | Dec. 31, 2020 USD ($) | Dec. 31, 2021 D $ / shares | |
Related Party Transaction. [Line Items] | |||||||
Aggregate purchase price | $ | $ 25,000 | ||||||
Founder Shares | Sponsor [Member] | ACE SO5 | |||||||
Related Party Transaction. [Line Items] | |||||||
Number of shares transferred (in shares) | 755,930 | ||||||
Founder Shares | Sponsor [Member] | Class B common stock | |||||||
Related Party Transaction. [Line Items] | |||||||
Number of shares issued | 5,750,000 | ||||||
Aggregate purchase price | $ | $ 25,000 | ||||||
Number of shares transferred (in shares) | 1,678,500 | 155,000 | |||||
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination | 1 year | 1 year | |||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12 | $ 12 | |||||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 20 | ||||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 30 | ||||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | 150 days |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Aug. 12, 2020 USD ($) | Jul. 28, 2020 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) $ / shares | Aug. 28, 2022 USD ($) | Jan. 13, 2022 $ / shares | |
Related Party Transaction. [Line Items] | ||||||||||
Outstanding balance of related party note | $ 0 | $ 0 | ||||||||
Percentage of conversion price higher than value of warrants | 1,250 | 1,250 | ||||||||
Advance from related party | $ 427,857 | $ 427,857 | ||||||||
Administrative Services Agreement | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Expenses per month | $ 10,000 | 10,000 | ||||||||
Expense incurred | 30,000 | $ 30,000 | 90,000 | $ 90,000 | 20,000 | 120,000 | ||||
Accrued fee | 180,000 | 180,000 | 90,000 | |||||||
Administrative Services Agreement | Accounts payable and accrued expenses | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Amount due to related party | 90,000 | |||||||||
Related Party Loans | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Maximum loans convertible into warrants | $ 1,500,000 | |||||||||
Price of warrants (in dollars per share) | $ / shares | $ 1 | $ 1 | ||||||||
Advance from related party | 427,857 | 427,857 | $ 0 | |||||||
Amount deposited in trust account | 221,190 | 1,451,532 | ||||||||
Working Capital Loans | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Maximum borrowing capacity of related party promissory note | $ 2,125,000 | |||||||||
Outstanding balance of related party note | 1,500,000 | 1,500,000 | 2,000,000 | $ 2,000,000 | ||||||
Working Capital Facility | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Maximum borrowing capacity of related party promissory note | $ 1,500,000 | |||||||||
Outstanding balance of related party note | $ 1,051,499 | $ 1,051,499 | $ 0 | $ 527,756 | ||||||
Amount deposited | 900,000 | |||||||||
Maximum fund withdrawals | 1,500,000 | |||||||||
Maximum fund withdraw for lending facility deposits | $ 1,500,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended | 12 Months Ended | ||||||
Oct. 13, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) | Mar. 16, 2022 USD ($) | Jan. 18, 2022 USD ($) | Oct. 31, 2021 USD ($) $ / shares shares | Jul. 27, 2020 item | |
Maximum number of demands for registration of securities | item | 3 | |||||||
Cash underwriting discount per unit | $ / shares | $ 0.20 | $ 0.20 | ||||||
Cash underwriting discount paid | $ 4,600,000 | $ 4,600,000 | ||||||
Deferred fee per unit | $ / shares | $ 0.35 | $ 0.35 | ||||||
Deferred underwriting fee payable | $ 8,050,000 | $ 8,050,000 | ||||||
Sponsor [Member] | ||||||||
Interest rate | 12% | |||||||
Business Combination Agreement [Member] | PIPE Investors [Member] | 12.0% convertible senior notes [Member] | ||||||||
Interest rate | 12% | |||||||
Business Combination Agreement [Member] | PIPE Investors [Member] | 15.5% convertible notes [Member] | ||||||||
Aggregate Purchase Price | $ 200,000,000 | |||||||
Interest rate | 15.50% | |||||||
Business Combination Agreement [Member] | ACE SO3 SPV Limited [Member] | ||||||||
Aggregate Purchase Price | $ 20,000,000 | |||||||
Business Combination Agreement [Member] | Common stock [Member] | PIPE Investors [Member] | ||||||||
Price per share | $ / shares | $ 10 | |||||||
Additional number of shares issued | shares | 550,000 | |||||||
Aggregate Purchase Price | $ 5,500,000 | |||||||
Business Combination Agreement [Member] | Tempo [Member] | Whizz [Member] | ||||||||
Percentage of equity interest | 100% | |||||||
Business Combination Agreement [Member] | Tempo [Member] | Common stock [Member] | ||||||||
Aggregate Purchase Price | $ 235,000,000 | |||||||
Number of shares outstanding | shares | 23,500,000 | |||||||
Price per share | $ / shares | $ 10 | |||||||
Cantor purchase agreement [Member] | ||||||||
Aggregate Purchase Price | $ 100,000,000 | |||||||
Merger Agreement [Member] | ||||||||
Available Cash Amount | $ 10,000,000 | $ 320,000,000 | ||||||
Merger Agreement [Member] | Sponsor [Member] | ||||||||
Price per share | $ / shares | $ 12 | $ 12 | ||||||
Backstop Subscription Agreement [Member] | ||||||||
Purchase Of Common Stock | shares | 2,500,000 | 2,500,000 | ||||||
Aggregate Purchase Price | $ 25,000,000 | $ 25,000,000 | ||||||
purchase price per share | $ / shares | $ 10 | $ 10 | ||||||
PIPE Investment Under Subscription Agreement [Member] | ||||||||
Purchase Of Common Stock | shares | 8,200,000 | |||||||
Aggregate Purchase Price | $ 82,000,000 | |||||||
Tempo Holdings Llc [Member] | Subscription Agreement Member] | ||||||||
Aggregate Purchase Price | $ 175,000,000 | |||||||
Interest rate | 13% | |||||||
Tor Asia Credit Opportunity Master Fund Ii Lp [Member] | Subscription Agreement Member] | ||||||||
Aggregate Purchase Price | $ 25,000,000 | |||||||
Interest rate | 13% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | Aug. 12, 2022 USD ($) tranche $ / shares shares | Jul. 01, 2022 USD ($) tranche shares | Sep. 07, 2022 USD ($) | Jul. 06, 2022 $ / shares | Jan. 18, 2022 | Jan. 13, 2022 $ / shares | Oct. 13, 2021 $ / shares |
Sponsor [Member] | |||||||
Interest rate | 12% | ||||||
Business Combination Agreement [Member] | Common stock [Member] | PIPE Investors [Member] | |||||||
Price per share | $ / shares | $ 10 | ||||||
Business Combination Agreement [Member] | Common stock [Member] | Second A&R Subscription Agreements [Member] | PIPE Investors [Member] | |||||||
Price per share | $ / shares | $ 10 | ||||||
Business Combination Agreement [Member] | Tempo [Member] | Common stock [Member] | Merger Agreement Amendment [Member] | |||||||
Number of earnout shares to be issued | shares | 7,500,000 | ||||||
Number of tranches for vesting of earnout shares | tranche | 2 | 2 | |||||
Number of earnout shares in one tranche | shares | 3,500,000 | 5,000,000 | |||||
Amount of EBITDA to be earned for vesting of earnout shares | $ | $ 5,000,000 | $ 10,000,000 | |||||
Amount of revenue to be earned for vesting of earnout shares | $ | $ 15,000,000 | $ 50,000,000 | |||||
Period for EBITDA and revenue to be earned for vesting of earnout shares | 5 years | 5 years | |||||
Number of shares outstanding | shares | 23,500,000 | ||||||
Price per share | $ / shares | $ 10 | ||||||
Business Combination Agreement [Member] | Tempo [Member] | Common stock [Member] | Maximum [Member] | Merger Agreement Amendment [Member] | |||||||
Base purchase price | $ | $ 488,375,000 | $ 658,434,783 | $ 257,927,013 | ||||
Number of earnout shares to be issued | shares | 10,000,000 | 10,000,000 | |||||
Subsequent event [Member] | Class A common stock [Member] | Sponsor [Member] | |||||||
Price per share | $ / shares | $ 0.03 |
SHAREHOLDERS' DEFICIT - Prefere
SHAREHOLDERS' DEFICIT - Preference Shares (Details) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
SHAREHOLDERS' DEFICIT | |||
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preference shares, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preference shares, shares issued | 0 | 0 | 0 |
Preference shares, shares outstanding | 0 | 0 | 0 |
SHAREHOLDERS' DEFICIT - Ordinar
SHAREHOLDERS' DEFICIT - Ordinary shares (Details) | 1 Months Ended | ||||||||
Jul. 12, 2022 USD ($) shares | Jan. 21, 2022 USD ($) shares | Oct. 31, 2022 USD ($) shares | Jul. 31, 2022 USD ($) shares | Jan. 31, 2022 USD ($) shares | Sep. 30, 2022 Vote $ / shares shares | Dec. 31, 2021 Vote $ / shares shares | Dec. 31, 2020 Vote $ / shares shares | Jul. 30, 2020 $ / shares | |
Class of Stock [Line Items] | |||||||||
Threshold conversion ratio of stock | 20% | 20% | |||||||
Cash withdrawn from Trust Account in connection with redemption | $ | $ 148,079,821 | $ 12,349,642 | $ 148,079,821 | ||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | ||||||||
Class A common stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | ||||||
Ordinary shares, par value (per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common shares, votes per share | Vote | 1 | 1 | 1 | ||||||
Ordinary shares, subject to possible redemption issued | 3,945,298 | 23,000,000 | 23,000,000 | ||||||
Ordinary shares, shares subject to possible redemption | 8,202,277 | 23,000,000 | 23,000,000 | ||||||
Cash withdrawn from Trust Account in connection with redemption | $ | $ 43,349,494 | $ 12,349,642 | $ 43,349,494 | $ 148,079,821 | |||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 4,256,979 | 14,797,723 | 1,202,070 | 4,256,979 | 14,797,723 | ||||
Class B common stock | |||||||||
Class of Stock [Line Items] | |||||||||
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||
Ordinary shares, par value (per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Common shares, votes per share | Vote | 1 | 1 | 1 | ||||||
Ordinary shares, shares issued | 5,750,000 | 5,750,000 | 5,750,000 | ||||||
Ordinary shares, shares outstanding | 5,750,000 | 5,750,000 | 5,750,000 |
WARRANTS (Details)
WARRANTS (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 $ / shares shares | Dec. 31, 2021 D $ / shares | |
Class of Warrant or Right [Line Items] | ||
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | |
Public Warrant [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding | shares | 11,500,000 | |
Public Warrants exercisable term after the completion of a business combination | 30 days | 30 days |
Public Warrants exercisable term from the closing of the initial public offering | 12 months | 12 months |
Public Warrants expiration term | 5 years | 5 years |
Threshold period for filling registration statement after business combination | 15 days | 15 days |
Threshold period for registration statement to be effective after which warrants can be exercised on a cashless basis | 60 days | 60 days |
Redemption price per public warrant (in dollars per share) | $ 0.01 | $ 0.01 |
Minimum threshold written notice period for redemption of public warrants | 30 days | 30 days |
Threshold trading days for redemption of public warrants | D | 20 | |
Threshold consecutive trading days for redemption of public warrants | D | 30 | |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | $ 18 |
Threshold issue price for capital raising purposes in connection with the closing of a Business Combination | $ 9.20 | $ 9.20 |
Percentage of gross proceeds on total equity proceeds | 60% | 60% |
Threshold trading days for calculating Market Value | D | 20 | |
Adjustment of exercise price of warrants based on market value and newly issued price (as a percent) | 115% | 115% |
Adjustment one of redemption price of stock based on market value and newly issued price (as a percent) | 180% | 180% |
Private Placement Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding | shares | 6,600,000 | |
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination | 30 days | 30 days |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value on recurring basis (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 0 | |
U.S. Treasury Securities [Member] | ||
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 230,091,280 | |
Gross Holding Gains | 7,515 | |
Fair Value | $ 230,098,795 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and liabilities measured on recurring basis (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and marketable securities held in Trust Account | $ 40,293,597 | $ 230,158,259 | $ 230,091,362 |
Warrant liability | 1,810,000 | 12,766,082 | 25,489,000 |
Cash [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and marketable securities held in Trust Account | 40,293,597 | 598 | 82 |
U.S. Treasury Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and marketable securities held in Trust Account | 230,157,661 | 230,091,280 | |
Public Warrant [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liability | 7,820,000 | ||
Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and marketable securities held in Trust Account | 40,293,597 | 230,158,259 | 230,098,795 |
Level 1 [Member] | Public Warrant [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liability | 7,820,000 | 15,985,000 | |
Level 1 [Member] | Private Placement Warrants [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liability | 660,000 | 4,946,082 | |
Level 3 [Member] | Public Warrant [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liability | $ 1,150,000 | ||
Level 3 [Member] | Private Placement Warrants [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liability | $ 4,946,082 | $ 9,504,000 |
FAIR VALUE MEASUREMENTS - Initi
FAIR VALUE MEASUREMENTS - Initial measurement of key inputs for Private Placement Warrants and Public Warrants (Details) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2021 Y | Dec. 31, 2021 $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 Y $ / shares |
Risk-free interest rate [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Warrants initial measurement | 0.0126 | 0.0036 | ||||
Expected term (years) [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Warrants initial measurement | 5.28 | 5.49 | ||||
Expected volatility [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Warrants initial measurement | 61 | 0.188 | 0.227 | |||
Exercise price [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Warrants initial measurement | 11.50 | 11.50 | 11.50 | |||
Stock Price [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Warrants initial measurement | 9.96 | 9.96 | 10.22 |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair value of warrant liabilities (Details) - USD ($) | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants | Fair Value Adjustment of Warrants | ||||||||
Level 3 [Member] | ||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||
Transfer to Level 1 from Level 3 | $ 11,270,000 | $ 0 | ||||||||
Level 3 [Member] | Private Placement Warrants [Member] | ||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||
Fair value, beginning balance | $ 528,000 | $ 4,650,289 | $ 4,946,082 | $ 13,259,885 | $ 13,375,560 | $ 9,504,000 | $ 4,946,082 | $ 9,504,000 | 9,504,000 | |
Change in fair value | $ 132,000 | (4,122,289) | (295,793) | (9,104,121) | (115,675) | 3,871,560 | ||||
Fair value, ending balance | $ 528,000 | 4,650,289 | $ 4,155,764 | $ 13,259,885 | 13,375,560 | 9,504,000 | 4,155,764 | 4,946,082 | ||
Level 3 [Member] | Public Warrant [Member] | ||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||
Fair value, beginning balance | 0 | |||||||||
Initial measurement on July 30, 2020 | 11,270,000 | |||||||||
Transfer from Level 3 to Level 1 | (11,270,000) | |||||||||
Level 3 [Member] | Private Placement Warrants [Member] | ||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||||
Fair value, beginning balance | $ 4,946,082 | $ 9,504,000 | 0 | $ 4,946,082 | $ 9,504,000 | 9,504,000 | ||||
Initial measurement on July 30, 2020 | 6,732,000 | |||||||||
Change in fair value | 2,772,000 | (4,557,918) | ||||||||
Fair value, ending balance | $ 9,504,000 | $ 4,946,082 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Sep. 30, 2022 | Jan. 21, 2022 | Jan. 18, 2022 | Jan. 13, 2022 | Dec. 31, 2021 |
Sponsor [Member] | |||||
Subsequent Event [Line Items] | |||||
Stated percentage | 12% | ||||
PIPE Investment Under Subscription Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Aggregate purchase price/PIPE Investment | $ 82,000,000 | ||||
Merger Agreement [Member] | Sponsor [Member] | |||||
Subsequent Event [Line Items] | |||||
Loan for each share price | $ 12 | $ 12 | |||
Note Subscription Agreement | PIPE Investment Under Subscription Agreement [Member] | Sponsor [Member] | |||||
Subsequent Event [Line Items] | |||||
Aggregate purchase price/PIPE Investment | $ 25,000,000 | ||||
Stated percentage | 12% | ||||
Subsequent event [Member] | Sponsor [Member] | |||||
Subsequent Event [Line Items] | |||||
Loan amount | $ 1,500,000 | ||||
Payment of Trust in connection with redemptions | $ 148,079,821 | ||||
Subsequent event [Member] | Sponsor [Member] | Class A common stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Loan for each share price | $ 0.03 | ||||
Redeem an aggregate of shares | 14,797,723 |
CONDENSED CONSOLIDATED BALANC_3
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 0 | $ 8,390 |
Prepaid expenses | 15,597 | 113,140 |
Total Current Assets | 15,597 | 121,530 |
Cash and marketable securities held in Trust Account | 40,293,597 | 230,158,259 |
TOTAL ASSETS | 40,309,194 | 230,279,789 |
Current liabilities | ||
Accounts payable and accrued expenses | 15,756,798 | 6,260,642 |
Promissory note - related party | 1,051,499 | 527,756 |
Advance from related party | 427,857 | |
Convertible promissory note | 1,500,000 | |
Total current liabilities | 18,736,154 | 6,788,398 |
PIPE derivative liability | 19,905,700 | |
Warrant liability | 1,810,000 | 12,766,082 |
Deferred underwriting fee payable | 8,050,000 | 8,050,000 |
TOTAL LIABILITIES | 48,501,854 | 27,604,480 |
Class A ordinary shares subject to possible redemption, 8,202,277 and 23,000,000 shares issued and outstanding at redemption value of $10.21 and $10.00 per share at September 30, 2022 and December 31, 2021, respectively | 40,293,597 | 230,000,000 |
Shareholders' Deficit | ||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | ||
Additional paid-in capital | 0 | |
Accumulated deficit | (48,486,832) | (27,325,266) |
Total Shareholders' Deficit | (48,486,257) | (27,324,691) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 230,279,789 | |
Class A ordinary shares | ||
Shareholders' Deficit | ||
Ordinary shares | 0 | |
Class A ordinary shares subject to possible redemption | ||
Current liabilities | ||
Class A ordinary shares subject to possible redemption, 8,202,277 and 23,000,000 shares issued and outstanding at redemption value of $10.21 and $10.00 per share at September 30, 2022 and December 31, 2021, respectively | 40,293,597 | 230,000,000 |
Class A ordinary shares not subject to possible redemption | ||
Shareholders' Deficit | ||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 40,309,194 | 230,279,789 |
Class B ordinary shares | ||
Shareholders' Deficit | ||
Ordinary shares | $ 575 | $ 575 |
CONDENSED CONSOLIDATED BALANC_4
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preference shares, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preference shares, shares issued | 0 | 0 | 0 |
Preference shares, shares outstanding | 0 | 0 | 0 |
Class A ordinary shares | |||
Ordinary shares, par value (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 |
Class A ordinary shares subject to possible redemption, issued | 3,945,298 | 23,000,000 | 23,000,000 |
Class A ordinary shares subject to possible redemption, outstanding | 8,202,277 | 23,000,000 | 23,000,000 |
Class A ordinary shares subject to possible redemption | |||
Class A ordinary shares subject to possible redemption, issued | 3,945,298 | 23,000,000 | 23,000,000 |
Class A ordinary shares subject to possible redemption, outstanding | 3,945,298 | 23,000,000 | 23,000,000 |
Class A ordinary shares subject to possible redemption, redemption value per share | $ 10.21 | $ 10 | $ 10 |
Class A ordinary shares not subject to possible redemption | |||
Ordinary shares, shares issued | 0 | 0 | |
Ordinary shares, shares outstanding | 0 | 0 | |
Class B ordinary shares | |||
Ordinary shares, par value (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Ordinary shares, shares issued | 5,750,000 | 5,750,000 | 5,750,000 |
Ordinary shares, shares outstanding | 5,750,000 | 5,750,000 | 5,750,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Operating costs | $ 894,289 | $ 3,248,689 |
Loss from operations | (894,289) | (3,248,689) |
Other income (expense): | ||
Change in fair value of warrant liability | (362,000) | 10,956,082 |
Change in fair value of PIPE liability | (26,800) | (26,800) |
Interest earned on cash and marketable securities held in Trust Account | 113,123 | |
Termination Fees and Expenses | (7,353,469) | (7,353,469) |
Total other income (expense), net | (7,742,269) | 3,688,936 |
Net income (loss) | $ (8,636,558) | $ 440,247 |
Class A ordinary shares | ||
Other income (expense): | ||
Weighted average shares outstanding, basic | 4,459,878 | 8,092,696 |
Weighted average shares outstanding, diluted | 4,459,878 | 8,092,696 |
Basic net income (loss) per share | $ (0.85) | $ 0.03 |
Diluted net income (loss) per share | $ (0.85) | $ 0.03 |
Class B ordinary shares | ||
Other income (expense): | ||
Weighted average shares outstanding, basic | 5,750,000 | 5,750,000 |
Weighted average shares outstanding, diluted | 5,750,000 | 5,750,000 |
Basic net income (loss) per share | $ (0.85) | $ 0.03 |
Diluted net income (loss) per share | $ (0.85) | $ 0.03 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT - USD ($) | Class A ordinary shares not subject to possible redemption Common stock | Class B ordinary shares Common stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at the end at Dec. 31, 2020 | $ 0 | $ 575 | $ 0 | $ (33,171,769) | $ (33,171,194) |
Balance at the end (in shares) at Dec. 31, 2020 | 0 | 5,750,000 | |||
Balance at the beginning at Mar. 30, 2020 | $ 0 | 0 | 0 | 0 | |
Balance at the beginning (in shares) at Mar. 30, 2020 | 0 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Accretion for Class A ordinary shares to redemption amount | (24,425) | (23,983,412) | (24,007,837) | ||
Net income (loss) | (9,188,357) | (9,188,357) | |||
Balance at the end at Dec. 31, 2020 | $ 0 | $ 575 | 0 | (33,171,769) | (33,171,194) |
Balance at the end (in shares) at Dec. 31, 2020 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (11,524,429) | (11,524,429) | |||
Balance at the end at Mar. 31, 2021 | $ 575 | (44,696,198) | (44,695,623) | ||
Balance at the end (in shares) at Mar. 31, 2021 | 5,750,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 0 | $ 575 | 0 | (33,171,769) | (33,171,194) |
Balance at the beginning (in shares) at Dec. 31, 2020 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 9,721,238 | ||||
Balance at the end at Sep. 30, 2021 | $ 575 | (23,450,531) | (23,449,956) | ||
Balance at the end (in shares) at Sep. 30, 2021 | 5,750,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 0 | $ 575 | 0 | (33,171,769) | (33,171,194) |
Balance at the beginning (in shares) at Dec. 31, 2020 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 5,846,503 | 5,846,503 | |||
Balance at the end at Dec. 31, 2021 | $ 0 | $ 575 | 0 | (27,325,266) | (27,324,691) |
Balance at the end (in shares) at Dec. 31, 2021 | 0 | 5,750,000 | |||
Balance at the beginning at Mar. 31, 2021 | $ 575 | (44,696,198) | (44,695,623) | ||
Balance at the beginning (in shares) at Mar. 31, 2021 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (1,042,594) | (1,042,594) | |||
Balance at the end at Jun. 30, 2021 | $ 0 | $ 575 | 0 | (45,738,792) | (45,738,217) |
Balance at the end (in shares) at Jun. 30, 2021 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 22,288,261 | 22,288,261 | |||
Balance at the end at Sep. 30, 2021 | $ 575 | (23,450,531) | (23,449,956) | ||
Balance at the end (in shares) at Sep. 30, 2021 | 5,750,000 | ||||
Balance at the beginning at Dec. 31, 2021 | $ 0 | $ 575 | 0 | (27,325,266) | (27,324,691) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Accretion for Class A ordinary shares to redemption amount | (492,136) | (492,136) | |||
Net income (loss) | (1,058,490) | (1,058,490) | |||
Balance at the end at Mar. 31, 2022 | $ 575 | (28,875,892) | (28,875,317) | ||
Balance at the end (in shares) at Mar. 31, 2022 | 5,750,000 | ||||
Balance at the beginning at Dec. 31, 2021 | $ 0 | $ 575 | $ 0 | (27,325,266) | (27,324,691) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 0 | 5,750,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 440,247 | ||||
Balance at the end at Sep. 30, 2022 | $ 575 | (48,486,832) | (48,486,257) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 5,750,000 | ||||
Balance at the beginning at Mar. 31, 2022 | $ 575 | (28,875,892) | (28,875,317) | ||
Balance at the beginning (in shares) at Mar. 31, 2022 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Accretion for Class A ordinary shares to redemption amount | (1,009,587) | (1,009,587) | |||
Fair value of PIPE derivative liability at issuance | 19,878,900 | 19,878,900 | |||
Net income (loss) | 10,135,295 | 10,135,295 | |||
Balance at the end at Jun. 30, 2022 | $ 575 | (19,750,184) | (19,749,609) | ||
Balance at the end (in shares) at Jun. 30, 2022 | 5,750,000 | ||||
Balance at the beginning at Mar. 31, 2022 | $ 575 | (28,875,892) | (28,875,317) | ||
Balance at the beginning (in shares) at Mar. 31, 2022 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Accretion for Class A ordinary shares to redemption amount | (221,190) | (221,190) | |||
Balance at the end at Sep. 30, 2022 | $ 575 | (48,486,832) | (48,486,257) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 5,750,000 | ||||
Balance at the beginning at Jun. 30, 2022 | $ 575 | (19,750,184) | (19,749,609) | ||
Balance at the beginning (in shares) at Jun. 30, 2022 | 5,750,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (8,636,558) | (8,636,558) | |||
Balance at the end at Sep. 30, 2022 | $ 575 | $ (48,486,832) | $ (48,486,257) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 5,750,000 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Cash Flows from Operating Activities: | ||||||
Net income | $ 440,247 | $ 9,721,238 | $ (9,188,357) | $ 5,846,503 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||
Interest earned on cash and marketable securities held in Trust Account | (113,123) | (61,010) | (91,362) | (66,897) | ||
Change in fair value of warrant liability | $ 362,000 | $ (24,916,621) | (10,956,082) | (14,433,236) | 7,487,000 | (12,722,918) |
Change in fair value of PIPE derivative liability | $ 26,800 | 26,800 | ||||
Transaction cost allocated to warrants | (667,259) | |||||
Payment of formation costs through promissory note | 1,548 | |||||
Changes in operating assets and liabilities: | ||||||
Prepaid expenses | 97,543 | 171,117 | (343,839) | 230,699 | ||
Accounts payable and accrued expenses | 9,496,156 | 3,516,107 | (859,811) | (5,400,831) | ||
Net cash used in operating activities | (1,008,459) | (1,085,784) | (607,940) | (1,311,782) | ||
Cash Flows from Investing Activities: | ||||||
Investment of cash into Trust Account | (1,451,531) | (230,000,000) | ||||
Cash withdrawn from Trust Account in connection with redemption | 191,429,316 | |||||
Net cash provided by investing activities | (189,977,785) | (230,000,000) | ||||
Cash Flows from Financing Activities: | ||||||
Proceeds from promissory note - related party | 523,743 | 309,210 | 62,558 | 527,756 | ||
Advance from related party | 427,857 | |||||
Convertible promissory note | 1,500,000 | |||||
Redemption of ordinary shares | (191,429,316) | |||||
Proceeds from issuance of Class B ordinary shares to Sponsor | 25,000 | |||||
Proceeds from sale of Units, net of underwriting discounts paid | 225,400,000 | |||||
Proceeds from sale of Private Placement Warrants | 6,600,000 | |||||
Repayment of promissory note - related party | (186,760) | |||||
Payment of offering costs | (500,442) | |||||
Net cash provided by (used in) financing activities | (188,977,716) | 309,210 | 231,400,356 | 527,756 | ||
Net Change in Cash | 8,390 | 776,574 | (792,416) | 784,026 | ||
Cash - Beginning of period | $ 8,390 | 792,416 | 792,416 | |||
Cash - End of period | $ 15,842 | $ 15,842 | 792,416 | $ 8,390 | ||
Non-cash investing and financing activities: | ||||||
Offering costs paid through promissory note - related party | 122,654 | |||||
Deferred underwriting fee payable | $ 8,050,000 |
ORGANIZATION AND PLAN OF BUSI_3
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | ||
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | NOTE 1 — ORGANIZATION AND PLAN OF BUSINESS OPERATIONS ACE Convergence Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 31, 2020. The Company was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses (a “Business Combination”). On January 6, 2021, ACE Convergence Subsidiary Corp. (“Merger Sub”), a Delaware corporation and a wholly owned subsidiary of the Company, was formed. Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus on businesses in the IT infrastructure software and semiconductor sector. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of September 30, 2022, the Company had not commenced any operations. All activity through September 30, 2022, relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The registration statement for the Company’s Initial Public Offering was declared effective on July 27, 2020. On July 30, 2020, the Company consummated the Initial Public Offering of 23,000,000 units (the “Units,” and the Class A ordinary shares, par value $0.0001 per share, included in the Units offered, the “Public Shares” or the “Class A Ordinary Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,600,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, ACE Convergence Acquisition LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $6,600,000, which is described in Note 5. Transaction costs amounted to $13,273,096, consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $623,096 of other offering costs. Following the closing of the Initial Public Offering on July 30, 2020, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) which was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below. On June 22, 2022, the Company instructed Continental Stock Transfer & Trust Company, the trustee managing the Trust Account, to hold all funds in the Trust Account in cash until the earlier of the consummation of the Tempo Business Combination (as defined below) or the liquidation of the Company. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Nasdaq listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote in person or by proxy at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Fourth Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor and its permitted transferees have agreed to vote their Founder Shares (as defined in Note 5) in favor of approving a Business Combination. Subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor and its and the Company’s respective directors, officers, advisors or respective affiliates may (i) purchase public shares from institutional and other investors (including those who vote, or indicate an intention to vote, against any of the proposals presented in connection with a Business Combination, or elect to redeem, or indicate an intention to redeem, public shares), (ii) enter into transactions with such investors and others to provide them with incentives to not redeem their public shares, or (iii) execute agreements to purchase such public shares from such investors or enter into non-redemption agreements in the future. In the event that the Sponsor or its or the Company’s respective directors, officers, advisors or respective affiliates purchase public shares in situations in which the tender offer rules restrictions on purchases would apply, they (a) would purchase the public shares at a price no higher than the price offered through the Company’s redemption process (i.e., approximately $10.21 per share based on Trust Account figures as of September 30, 2022; (b) would represent in writing that such public shares will not be voted in favor of approving a Business Combination; and (c) would waive in writing any redemption rights with respect to the public shares so purchased. To the extent any such purchases are made by the Sponsor or its or the Company’s respective directors, officers, advisors or respective affiliates in situations in which the tender offer rules and restrictions on purchases apply, the Company will disclose in a Current Report on Form 8-K prior to the extraordinary general meeting the following: (i) the number of public shares purchased outside of the redemption offer, along with the purchase price(s) for such public shares; (ii) the purpose of any such purchases; (iii) the impact, if any, of the purchases on the likelihood that the Business Combination will be approved; (iv) the identities of the Company securityholders who sold to the Sponsor or its or the Company’s respective directors, officers, advisors or respective affiliates (if not purchased on the open market) or the nature of the securityholders (e.g., 5% security holders) who sold such public shares; and (v) the number of ordinary shares for which the Company has received redemption requests pursuant to its redemption offer. The purpose of such share purchases and other transactions would be to increase the likelihood of (x) satisfaction of a minimum cash condition in connection with a Business Combination, (y) otherwise limiting the number of public shares electing to redeem and (z) the Company’s net tangible assets (as determined in accordance with Rule 3a51(g)(1) of the Exchange Act) being at least $5,000,001. A purchase of warrants by the Sponsor or its or the Company’s respective directors, officers, advisors or respective affiliates may have the effect of increasing share ownership of the target company on a fully diluted basis. If such transactions are affected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Consistent with SEC guidance, purchases of shares by the persons described above would not be permitted to be voted for the Business Combination at the extraordinary general meeting and could decrease the chances that the Business Combination would be approved. In addition, if such purchases are made, the public “float” of the Company’s securities and the number of beneficial holders of its securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of its securities on a national securities exchange. Additionally, each Public Shareholder may elect to redeem their Public Shares, with or without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination. Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent. The Sponsor and its permitted transferees have agreed (a) to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Company’s Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares. The Company will have until January 30, 2023 (the “Combination Period”), to complete the Business Combination. On January 21, 2022, the shareholders of the Company voted to amend the Company’s Amended and Restated Memorandum and Articles of Association to extend the Combination Period to July 13, 2022, from January 30, 2022. On January 21, 2022, in connection with the extension of the business combination period, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, $148,079,821 was paid out of the Trust Account in connection with such redemptions. On July 12, 2022, the shareholders of the Company voted to amend the Company’s Second Amended and Restated Memorandum and Articles of Association to extend the Combination Period to October 13, 2022, and in connection therewith, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 4,256,979 Class A Ordinary Shares. As a result, $43,349,494 was paid out of the Trust Account in connection with such redemptions. On October 11, 2022, the shareholders of the Company voted to amend the Company’s Third Amended and Restated Memorandum and Articles of Association to extend the Combination Period to January 30, 2023, and in connection therewith, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 1,202,070 Class A Ordinary Shares. As a result, $12,324,919 was paid out of the Trust Account in connection with such redemptions. If the Company has not completed a Business Combination within the Combination Period (as it may be extended), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten The Sponsor and its permitted transferees have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period (as it may be extended). However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period (as it may be extended). The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period (as it may be extended), and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Going Concern As of September 30, 2022, the Company had no cash in its operating bank accounts, $40,293,597 in cash held in the Trust Account to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and a working capital deficit of $18,720,557. The Company intends to complete a Business Combination by January 30, 2023 (or, as such date may be extended, such extended date). However, in the absence of a completed Business Combination, the Company will require additional capital. The Company as of September 30, 2022, has no cash held outside of trust and will require further capital contribution from the Sponsor, management, or related parties. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of a Business Combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through one year from the date of these financial statements if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until January 30, 2023, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities as of September 30, 2022, should the Company be required to liquidate after January 30, 2023. The Company intends to complete its Business Combination before January 30, 2023. | NOTE 1 — ORGANIZATION AND PLAN OF BUSINESS OPERATIONS ACE Convergence Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 31, 2020. The Company was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses (a “Business Combination”). On January 6, 2021, ACE Convergence Subsidiary Corp. (“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of ACE Convergence Acquisition Corp., was formed. Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus on businesses in the IT infrastructure software and semiconductor sector. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2021, the Company had not commenced any operations. All activities from inception to December 31, 2021 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and, after the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on July 27, 2020. On July 30, 2020, the Company consummated the Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units offered, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000, which is described in Note 3. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,600,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, ACE Convergence Acquisition LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $6,600,000, which is described in Note 4. Transaction costs amounted to $13,273,096 consisting of $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $623,096 of other offering costs. Following the closing of the Initial Public Offering on July 30, 2020, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) which was invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Nasdaq listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote in person or by proxy at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination. Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent. The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares. The Company will have until July 13, 2022 (the “Combination Period”) to complete the Business Combination. On January 25, 2022 the Company voted to amended its Articles of Association to extend the Combination Period to July 13, 2022 from January 30, 2022. However, if the Company has not completed a Business Combination within the Combination Period or any Extension Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period or any Extension Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period or any Extension Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period or any Extension Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Going Concern As of December 31, 2021, the Company had $8,390 in its operating bank accounts, $230,158,259 in marketable securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and a working capital deficit of $6,666,868. The Company intends to complete a Business Combination by July 13, 2022 or during any Extension Period, as applicable. However, in the absence of a completed Business Combination, the Company may require additional capital. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of a Business Combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until July 13, 2022 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after July 13, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 10, 2022. The interim results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with those of another public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Marketable Securities Held in Trust Account At September 30, 2022, all of the assets held in the Trust Account were held in cash. At December 31, 2021, substantially all of the assets held in the Trust Account were held in cash and money market funds which were invested primarily in U.S. Treasury securities. All of the Company’s investments that were held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. With respect to the regulation of special purpose acquisition companies like the Company (“SPACs”), on March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating to, among other items, disclosures in business combination transactions involving SPACs and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. With regard to the SEC’s investment company proposals included in the SPAC Rule Proposals, while the funds in the Trust Account have, since the Company’s initial public offering, been held only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries, to mitigate the risk of being viewed as operating an unregistered investment company (including pursuant to the subjective test of Section 3(a)(1)(A) of the Investment Company Act of 1940), on June 22, 2022, the Company instructed Continental Stock Transfer & Trust Company, the trustee managing the Trust Account, to hold all funds in the Trust Account in cash until the earlier of consummation of the Tempo Business Combination or the liquidation of the Company. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2022, and December 31, 2021. Warrant Liability The Company accounts for the public warrants and the private placement warrants (collectively, the “Warrants”) in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s condensed consolidated statements of operations. The Private Placement Warrants (and the Public Warrants for periods where no observable traded price was available) are valued using a Modified Black Scholes Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. As of September 30, 2022 due to market conditions the Company is using the price of the Public Warrants to value the Private Warrants. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The PIPE Derivative is comprised of the Additional PIPE Incentive Shares (as defined in Note 6). The PIPE Derivative meets the criteria for derivative liability classification. As such, the PIPE derivative liability is recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivative liability is recognized as a non-cash gain or loss on the condensed statements of operations. The fair value of the derivative liability is discussed in Note 9. Class A Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2022, and December 31, 2021, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. On January 13, 2022, contingent upon the Company’s shareholders’ approval of the extension of the business combination period, the Sponsor agreed to contribute to the Company as a loan $0.03 for each Class A Ordinary Share of the Company that was not redeemed in connection with the shareholder vote to approve such extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the Tempo Business Combination and (ii) $1.5 million has been loaned, which amounts were to be deposited into the Trust Account. For the three and nine months ended September 30, 2022, the Company contributed an aggregate of $221,190 and $1,451,532 to the Trust Account, respectively. On June 30, 2022, the Sponsor and the Company agreed to, among other things, increase the aggregate principal amount available under such loan from $1,500,000 to $2,000,000, contingent upon the approval by the Company’s shareholders of the proposal to extend the date by which the Company must complete an initial business combination to October 13, 2022, which proposal was approved at an extraordinary general meeting on July 12, 2022. On August 28, 2022, the Company and the Sponsor agreed to, among other things, increase the aggregate principal amount available under such loan from $2,000,000 to $2,125,000, contingent upon the approval by the Company’s shareholders of the extension of the date by which the Company must consummate an initial business combination to January 30, 2023, which proposal was approved in October 2022. Monthly deposits into the Trust Account following the October 2022 redemptions are based on the number of Class A Ordinary Shares still outstanding following such redemptions. In connection with the extension of the business combination period in January 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, $148,079,821 was paid out of the Trust Account in connection with such redemptions. In connection with the extension of the business combination period in July 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 4,256,979 Class A Ordinary Shares. As a result, $43,349,494 was paid out of the Trust Account in connection with such redemptions. In connection with the extension of the business combination period in October 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 1,202,070 Class A Ordinary Shares. As a result, $12,349,642 was paid out of the Trust Account in connection with such redemptions. At September 30, 2022, and December 31, 2021, the Class A Ordinary Shares reflected in the condensed consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption, December 31, 2021 $ 230,000,000 Less: Redemption of Class A Ordinary Shares (191,429,316) Add: Accretion of carrying value to redemption value 1,722,913 Class A ordinary shares subject to possible redemption, September 30, 2022 $ 40,293,597 Offering Costs Offering costs consisted of underwriting, legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounted to $13,273,096, of which $12,605,837 were charged to temporary equity and accreted to redemption value upon the completion of the Initial Public Offering, and the remaining $667,259 of offering costs allocated to the warrant liability was charged to operations. Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2022, and December 31, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. For the three and nine months ended September 30, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limits of $250,000. The Company has not experienced losses on this account, and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature except derivative liabilities (see Note 9). Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements. | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2021 and 2020. Marketable Securities Held in Trust Account At December 31, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. Warrant Liability The Company accounts for the Warrants in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. The Private Warrants (and the Public Warrants for periods where no observable traded price was available) are valued using a Modified Black Scholes Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. Class A Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2021 and 2020, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit. At December 31, 2021 and 2020, the Class A ordinary shares reflected in the consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption $ 230,000,000 Offering Costs Offering costs consisted of underwriting, legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounted to $13,273,096, of which $12,737,837 were charged to temporary equity upon the completion of the Initial Public Offering, and the remaining $667,259 of offering costs allocated to the warrant liability was charged to operations. Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2021 and 2020, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared prorata between the two classes of shares. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. As of December 31, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature except warrant liabilities (see Note 9). Recent Accounting Standards In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
INITIAL PUBLIC OFFERING_2
INITIAL PUBLIC OFFERING | 9 Months Ended |
Sep. 30, 2022 | |
INITIAL PUBLIC OFFERING | |
INITIAL PUBLIC OFFERING | NOTE 3 — INITIAL PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 23,000,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one- half of one |
PRIVATE PLACEMENT_2
PRIVATE PLACEMENT | 9 Months Ended |
Sep. 30, 2022 | |
PRIVATE PLACEMENT | |
PRIVATE PLACEMENT | NOTE 4 — PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,600,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $6,600,000. Certain of the Private Placement Warrants have since been transferred to certain permitted transferees. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period (as it may be extended), the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 5 — RELATED PARTY TRANSACTIONS Founder Shares In May 2020, the Sponsor purchased 5,750,000 of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate consideration of $25,000. On May 29, 2020, the Sponsor transferred an aggregate of 155,000 Founder Shares to certain members of the Company’s management team. On October 13, 2021, the Sponsor distributed 1,678,500 Founder Shares to Sunny Siu. In January 2022, the Sponsor distributed 755,930 Founder Shares to ACE SO5 Holdings Limited (“ACE SO5”), an affiliate of the Sponsor, and ACE SO5 became a party to (i) the Letter Agreement, dated as of July 27, 2020, by and among ACE, the Sponsor and certain of ACE’s current and former officers, directors and director nominees, and (ii) the Sponsor Support Agreement (as defined below). The Sponsor, the initial shareholders and their respective permitted transferees have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like) for any 20 30 Working Capital Facility On August 12, 2020, the Company entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Company, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility shall be utilized to finance transaction costs in connection with a Business Combination. The Working Capital Facility is non-interest bearing, non-convertible and due to be repaid upon the consummation of a Business Combination. In return, the Company deposited $900,000 into an account held by ASIA-IO, from which the Company may make fund withdrawals for up to $1,500,000. Any outstanding amounts deposited with ASIA-IO upon the completion of a Business Combination or dissolution of the Company, shall be returned to the Company. As of September 30, 2022, and December 31, 2021, the Company had $1,051,499 and $527,756, respectively, borrowings under the working capital facility. Administrative Services Agreement The Company entered into an agreement, commencing on July 28, 2020, to pay the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and nine months ended September 30, 2022, the Company incurred $30,000 and $90,000, respectively, in fees for these services, of which such fee is included in accrued liabilities as of September 30, 2022, on the condensed consolidated balance sheet. For the three and nine months ended September 30, 2021, the Company incurred $30,000 and $90,000 in fees for these services. As of September 30, 2022, and December 31, 2021 the Company had accrued fees in the amount of $180,000 and $90,000, respectively. Related Party Loans On January 13, 2022, in connection with the Company’s extension of the date by which it must complete an initial business combination, the Sponsor agreed to contribute to the Company as a loan (as amended and restated on June 30, 2022, and August 28, 2022, the “Sponsor Loan”) $0.03 for each Class A Ordinary Share of the Company that was not redeemed in connection with the shareholder vote to approve such extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the Tempo Business Combination and (ii) $1.5 million has been loaned. Up to $1.5 million of the loans may be settled in whole warrants to purchase Class A Ordinary Shares of the Company at a conversion price equal to $1.00 per warrant. The loan will not bear any interest, and will be repayable by ACE to the Sponsor upon the earlier of the date by which ACE must complete an initial business combination and the consummation of the Tempo Business Combination. The maturity date of the Sponsor Loan may be accelerated upon the occurrence of an Event of Default (as defined therein). Any outstanding principal under the Sponsor Loan may be prepaid at any time by ACE, at its election and without penalty, provided, however, that the Sponsor shall have a right to first convert such principal balance as described in Section 6 of the Sponsor Loan upon notice of such prepayment. On June 30, 2022, ACE and the Sponsor amended and restated the Sponsor Loan in its entirety to, among other things, increase the aggregate principal amount available thereunder from $1,500,000 to $2,000,000, contingent upon the approval by the Company’s shareholders of the proposal to extend the date by which the Company must complete an initial business combination to October 13, 2022, which proposal was approved by special resolution at an extraordinary general meeting on July 12, 2022. On August 28, 2022, ACE and the Sponsor amended and restated the Sponsor Loan in its entirety to, among other things, increase the aggregate principal amount available thereunder from $2,000,000 to $2,125,000, contingent upon the approval by ACE’s shareholders of the extension of the date by which ACE must consummate an initial business combination to January 30, 2023, which extension was approved in October 2022. For the three and nine months ended September 30, 2022, the Company contributed $221,190 and $1,451,532 to the Trust Account, respectively. Monthly deposits into the Trust Account following the October 2022 redemptions are based on the number of Class A Ordinary Shares still outstanding following such redemptions. As of September 30, 2022, and December 31, 2021, the Company had $1,500,000 and $0 borrowings under the Sponsor Loan, respectively. Management has determined the fair value of the note is more accurately recorded at par since the conversion price is almost 1,250% higher than the value of the warrants. No arm’s-length transaction by a note holder would result in a conversion with this fact pattern, thus it is a more accurate depiction with recording at par. As such, no fair value change was booked to the condensed consolidated statements of operations. As of September 30, 2022, and December 31, 2021, members of the Sponsor, the Company’s management and certain other related parties advanced the Company an aggregate of $427,857 and $0, respectively, for expenses related to operations and completing a Business Combination. The amounts loaned are non-interest bearing and due to be repaid upon the consummation of a Business Combination. | NOTE 5 — RELATED PARTY TRANSACTIONS Founder Shares In May 2020, the Sponsor purchased 5,750,000 of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate consideration of $25,000. On May 29, 2020, the Sponsor transferred an aggregate of 155,000 Founder Shares to certain members of the Company’s management team. On October 13, 2021, the Sponsor transferred an aggregate of 1,678,500 Founder Shares to Sunny Siu. The Sponsor and the initial shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Working Capital Facility On August 12, 2020, the Company entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Company, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility shall be utilized to finance transaction costs in connection with a Business Combination. The Working Capital Facility is non-interest bearing, non-convertible and due to be repaid upon the consummation of a Business Combination. In return, the Company deposited $900,000 into an account held by ASIA-IO, from which the Company may make fund withdrawals for up to $1,500,000. Any outstanding amounts deposited with ASIA-IO upon the completion of a Business Combination or dissolution of the Company, shall be returned to the Company. As of December 31, 2021 and 2020, the Company had $527,756 and no borrowing, respectively, borrowings under the working capital facility. Administrative Services Agreement The Company entered into an agreement, commencing on July 28, 2020, to pay the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2021, the Company incurred $120,000, of which $90,000 is included in accounts payable and accrued expenses on the December 31, 2021 consolidated balance sheet. For the period from March 31, 2020 (inception) through December 31, 2020, the Company incurred and paid $20,000 in fees for these services. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of December 31, 2021 and 2020, the Company had no outstanding borrowings under the Working Capital Loans. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or close of a Business Combination, the specific impact is not readily determinable as of the date of these condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 2020 Registration Rights Agreement Pursuant to a registration rights agreement entered into on July 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of any working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of such working capital loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. In connection with the Tempo Business Combination, the registration rights agreement will be amended and restated. At the closing of the Tempo Business Combination, Domesticated ACE (as defined below), the Sponsor, the other parties to the Sponsor Support Agreement and certain former stockholders of Tempo Automation, Inc. will enter into an Amended and Restated Registration Rights Agreement, pursuant to which Domesticated ACE will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Domesticated ACE common stock and other equity securities of Domesticated ACE that are held by the parties thereto from time to time. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. On March 16, 2022, Cantor Fitzgerald & Co. agreed that the deferred fee may be paid in shares of common stock of Domesticated ACE, subject to certain terms and conditions. Termination of Proposed Achronix Business Combination On January 7, 2021, the Company entered into an Agreement and Plan of Merger (the “Achronix Merger Agreement”) with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”), and Merger Sub. On May 24, 2021, in the Form 10-Q for the quarter ended March 31, 2021, the Company disclosed that the SEC informed the Company that it was investigating certain disclosures made in the Form S-4 relating to the proposed business combination with Achronix. On July 11, 2021, the Company and Achronix entered into a termination and release agreement, pursuant to which the parties agreed to mutually terminate the Achronix Merger Agreement relating to the proposed business combination with Achronix. On October 27, 2021, the Company received a letter from the SEC in connection with its investigation with the following response: “We have concluded the investigation as to ACE Convergence Acquisition Corp. (“ACE”). Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against ACE.” Business Combination Agreement On October 13, 2021, the Company entered into an Agreement and Plan of Merger (as amended and restated on August 12, 2022, and as amended on September 7, 2022, and September 23, 2022, the “Merger Agreement”) with Tempo Automation, Inc., a Delaware corporation (“Tempo”), and Merger Sub. Pursuant to the transactions contemplated by the Merger Agreement (the “Tempo Business Combination”), and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Tempo, with Tempo surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Prior to the closing of the Tempo Business Combination (the “Closing”), the Company shall domesticate as a Delaware corporation (the “Domestication” and, ACE, after the Domestication, “Domesticated ACE”) and shall be renamed “Tempo Automation Holdings, Inc.” As a result of and upon the Closing, among other things, all outstanding shares of Tempo common stock (after giving effect to the Company Preferred Conversion (as defined in the Merger Agreement)) as of immediately prior to the Closing, and, together with shares of Tempo common stock reserved in respect of Tempo options outstanding as of immediately prior to the Closing that will be converted into awards based on Domesticated ACE common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of any earnout shares, if and to the extent earned, and in the case of the Tempo options, if and to the extent earned and subject to their respective terms), an aggregate of approximately 23,500,000 shares of Domesticated ACE common stock (at a deemed value of $10.00 per share) equal to the quotient obtained by dividing (i) $235,000,000 (the “Base Purchase Price”) by (ii) $10.00. On September 7, 2022, ACE and Tempo entered into the First Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, to increase the Base Purchase Price from $235,000,000 to $257,927,013. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Tempo Business Combination will, at the effective time of the Tempo Business Combination, be converted into (a) Domesticated ACE RSUs and (b) the right to receive a number of earnout shares. Additionally, Tempo has undertaken to use its commercially reasonable efforts to cause the holder of each outstanding and unexercised Tempo warrant to exercise such Tempo warrant in exchange for shares of Tempo common stock immediately prior to the effective time of the Merger. Holders of Tempo warrants may elect not to exercise such Tempo warrants in exchange for shares of Tempo common stock prior to the effective time of the Merger. Any Tempo warrants that remain issued and outstanding as of immediately prior to the effective time of the Tempo Business Combination will be converted into warrants to purchase shares of Domesticated ACE common stock on substantially similar terms to the Tempo warrants. An additional 550,000 shares of Domesticated ACE common stock will be purchased (at a price of $10.00 per share) at the Closing by certain third-party investors (“Third Party PIPE Investors”) and certain related parties of the Sponsor (collectively with the Third Party PIPE Investors, the “PIPE Investors”), for a total aggregate purchase price of up to $5.5 million (the “PIPE Investment”). In addition, the Company originally agreed to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the volume weighted average price per share of Domesticated ACE common stock during the 30 days commencing on the date on which a registration statement registering the resale of the shares of Domesticated ACE common stock acquired by the PIPE Investors is declared effective is less than $10.00 per share (which registration statement the Company has agreed to file pursuant to the subscription agreements entered into in connection with the PIPE Investment). Certain PIPE Investors originally subscribed for $25.0 million of ACE’s 12.0% convertible senior notes due 2025, but such subscription was terminated in January 2022 in connection with the subscription by certain parties for $200.0 million of 15.5% convertible notes. The latter subscription was terminated in July 2022; as a result of such termination, if ACE consummates an initial business combination with or among Tempo, Compass AC Holdings, Inc. (“Compass”), Whizz Systems, Inc. (“Whizz”) or any of their respective affiliates or subsidiaries, OCM Tempo Holdings, LLC (“OCM”) will be entitled to a termination fee of 3.5% of the aggregate principal amount of the subscribed notes (approximately $7.0 million), to be paid by ACE immediately following and as a condition subsequent to the closing of such initial business combination. On September 4, 2022, Tempo, ACE, OCM and Oaktree Capital Management, L.P. (“Oaktree”) agreed to reduce such termination fee to 0.6% of the aggregate principal amount of the subscribed notes (approximately $1.1 million) if the closing of the Tempo Business Combination occurs on or before October 15, 2022 (the “Specified Fee Date”), to be paid on the earlier of (i) six months after the closing of the Tempo Business Combination and (ii) the date on which either ACE or Tempo commence bankruptcy proceedings. In addition to the reduced termination fee, ACE and Tempo are required to pay approximately $1.2 million in fees and expenses to OCM on the earlier of (x) immediately following the closing of the Tempo Business Combination and (y) the Outside Business Combination Date (as defined below). The reduced termination fee and all other fees and expenses owed to OCM under such agreement will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. If the Tempo Business Combination has not been consummated prior to the Specified Fee Date, on the earliest of (I) the date on which the Merger Agreement is terminated, (II) the date on which either ACE or Tempo commence bankruptcy proceedings and (III) June 15, 2023 (the earliest date, the “Outside Business Combination Date”), ACE and Tempo will pay OCM the full 3.5% termination fee and all of its accrued and unpaid fees and expenses. To the extent the termination fee and accrued and unpaid fees and expenses are not paid on or prior to June 15, 2023, the unpaid portion of the termination fee (together with all other unpaid fees and expenses) will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. On October 11, 2022, Tempo, ACE, OCM and Oaktree entered into a letter agreement pursuant to which the Specified Fee Date was amended to November 15, 2022. Additionally, in March 2022, ACE SO3 SPV Limited agreed to purchase an unsecured subordinated convertible note in an aggregate principal amount of $20.0 million in connection with the Closing, which agreement was terminated in July 2022. On July 1, 2022, ACE and Tempo entered into that certain First Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”), pursuant to which the parties agreed, among other things, to (i) reduce the Base Purchase Price from $658,434,783 to $488,375,000, (ii) increase the number of earnout shares issuable to eligible Tempo equity holders (the “Tempo Earnout Shares”) from 7,500,000 to 10,000,000, which will vest in two equal tranches of 5,000,000 shares based on Domesticated ACE reaching $10.0 million in EBITDA and $50.0 million in revenue in any quarter during the five-year period following the closing date of the Tempo Business Combination, (iii) remove certain covenants and other obligations of the parties relating to the employee stock purchase plan contemplated by the Merger Agreement and (iv) extend the outside date of the Merger Agreement to November 13, 2022. On August 12, 2022, ACE, Merger Sub and Tempo entered into the Merger Agreement, pursuant to which the parties agreed, among other things, to (i) reduce the Base Purchase Price from $488,375,000 to $235,000,000, (ii) reduce the number of Tempo Earnout Shares from 10,000,000 to 7,000,000, which will vest in two equal tranches of 3,500,000 shares based on Domesticated ACE reaching $5.0 million in Adjusted EBITDA (as defined in the Merger Agreement) and $15.0 million in revenue in any quarter during the five-year period following the closing date, (iii) remove terms relating to the proposed acquisitions by Tempo of each of Whizz and Compass, (iv) reduce the minimum cash condition from $320.0 million to $10.0 million and (v) extend the outside date of the Merger Agreement to December 13, 2022. Pursuant to the Merger Agreement, all outstanding shares of Tempo common stock (after giving effect to the Company Preferred Conversion (as defined in the Merger Agreement)) as of immediately prior to the closing, and, together with shares of Tempo common stock reserved in respect of Tempo options as of immediately prior to the closing that will be converted into awards based on Domesticated ACE common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of Tempo options, if and to the extent earned and subject to their respective terms), an aggregate of approximately 23,500,000 shares of Domesticated ACE common stock (at a deemed value of $10.00 per share) equal to the quotient obtained by dividing (i) the Base Purchase Price by (ii) $10.00, including, as applicable, a number of Tempo Earnout Shares. On September 7, 2022, ACE and Tempo entered into the First Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, to increase the Base Purchase Price from $235,000,000 to $257,927,013. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Tempo Business Combination will, at the effective time of the Tempo Business Combination, be converted into (a) Domesticated ACE RSUs and (b) the right to receive a number of Tempo Earnout Shares. On July 6, 2022, the Company entered into Second Amended and Restated Subscription Agreements (the “Second A&R Subscription Agreements”) with each of the PIPE Investors. Pursuant to the Second A&R Subscription Agreements, among other things, the parties agreed to reduce the minimum Adjustment Period VWAP (as defined in the Second A&R Subscription Agreements) from $6.50 to $4.00. Additionally, ACE agreed (1) to issue 2,000,000 additional shares (the “PIPE Incentive Shares”) to the PIPE Investors on a pro rata basis as an incentive to subscribe for and purchase the shares under the Second A&R Subscription Agreements, (2) that if the Adjustment Period VWAP is less than $10.00 per share, the number of additional shares each PIPE Investor will be entitled to receive shall be (i) (A) (x) the number of shares issued to such PIPE Investor at the closing of the subscription and held by such PIPE Investor on the Measurement Date (as defined in the Second A&R Subscription Agreements), times (y) $10.00, minus the Adjustment Period VWAP, minus (B) the number of PIPE Incentive Shares, times the Adjustment Period VWAP, divided by (ii) the Adjustment Period VWAP, and (3) to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the Additional Period VWAP (as defined below) is less than the Adjustment Period VWAP. In such case, each PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock (such additional shares, if any, the “Additional Period Shares”) equal to the lesser of (1) such PIPE Investor’s pro rata portion of 2,000,000 shares, and (2) (i) (A) (x) the number of shares issued to such PIPE Investor pursuant to such subscription agreement and held by such PIPE Investor on the last day of the 30 calendar day period ending on the date that is 15 months following the closing of the subscriptions (such 30 calendar day period, the “Additional Period”), times (y) the Adjustment Period VWAP, minus the average of the volume weighted average price of a share of Domesticated ACE common stock determined for each of the trading days during the Additional Period (the “Additional Period VWAP”), minus (B) the number of PIPE Incentive Shares, times the Additional Period VWAP, divided by (ii) the Additional Period VWAP. Notwithstanding the foregoing, in the event that Domesticated ACE consummates a strategic transaction during the 15 consideration will be (a) with respect to any securities, (i) the average of the closing prices of the sales of such securities on all securities exchanges on which such securities are then listed, averaged over a period of 30 trading days ending on the day as of which such value is being determined and the 29 consecutive days preceding such day, or (ii) if the information contemplated by the preceding clause (i) is not practically available, then the fair value of such securities as of the date of valuation as determined in accordance with the succeeding clause (b), and (b) with respect to any other non-cash assets, the fair value thereof as of the date of valuation, as determined by an independent, nationally recognized valuation firm reasonably selected by Domesticated ACE, on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant (and giving effect to any transfer taxes payable in connection with such sale). On September 7, 2022, ACE entered into Third Amended and Restated Subscription Agreements (the “Third A&R PIPE Subscription Agreements”) with each of the PIPE Investors, which amend and restate the applicable Second A&R Subscription Agreements in their entirety. One of the Third Party PIPE Investors who entered into a Second A&R Subscription Agreement did not enter into a Third A&R PIPE Subscription Agreement and terminated its Second A&R Subscription Agreement on September 7, 2022. Pursuant to the Third A&R PIPE Subscription Agreements, ACE has agreed to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the volume weighted average price per share of Domesticated ACE common stock (the “Measurement Period VWAP”) during the 30 days commencing on the date on which a registration statement registering the resale of the shares of Domesticated ACE common stock acquired by such PIPE Investors (the “PIPE Resale Registration Statement”) is declared effective is less than $10.00 per share. In such case, each PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock equal to the product of (x) the number of shares of Domesticated ACE common stock issued to such PIPE Investor at the closing of the subscription and held by such PIPE Investor through the date that is 30 days after the effective date of the PIPE Resale Registration Statement (the “Measurement Date”) multiplied by (y) a fraction, (A) the numerator of which is $10.00 minus the Adjustment Period VWAP (as defined therein) and (B) the denominator of which is the Adjustment Period VWAP. In the event that the Adjustment Period VWAP is less than $4.00 (the “Price Floor Value”), the Adjustment Period VWAP shall be deemed to be the Price Floor Value. ACE has also agreed to issue up to 500,000 additional shares of Domesticated ACE common stock to each such PIPE Investor in the event that the Additional Period VWAP (as defined below) is less than the Adjustment Period VWAP. In such case, each such PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock equal to the lesser of (1) such PIPE Investor’s pro rata portion of 500,000 additional shares of Domesticated ACE common stock, and (2) (i) (A) (x) the number of shares issued to such PIPE Investor pursuant to such subscription agreement and held by such PIPE Investor on the last day of the 30 calendar day period ending on the date that is 15 months following the closing of the subscriptions (such 30 calendar day period, the “Additional Period”), times (y) the Adjustment Period VWAP, minus the average of the volume weighted average price of a share of Domesticated ACE common stock determined for each of the trading days during the Additional Period (the “Additional Period VWAP”), minus (B) the number of PIPE Incentive Shares (as defined below), times the Additional Period VWAP, divided by (ii) the Additional Period VWAP. Additionally, ACE has agreed to issue up to 2,000,000 additional shares (the “PIPE Incentive Shares”) to such PIPE Investors on a pro rata basis with respect to each PIPE Investor’s subscription amount as an incentive to subscribe for and purchase the shares under the Third A&R PIPE Subscription Agreements. Notwithstanding the foregoing, in the event that Domesticated ACE consummates a strategic transaction during the 15-month period beginning on the closing date, then the measurement date for the issuance of such additional shares shall be one day prior to the closing date of such strategic transaction, and the Additional Period VWAP will be deemed to equal the price per share paid or payable to the holders of outstanding shares of Domesticated ACE common stock in connection with such strategic transaction. If such price is payable in whole or in part in the form of consideration other than cash, the value of such consideration will be (a) with respect to any securities, (i) the average of the closing prices of the sales of such securities on all securities exchanges on which such securities are then listed, averaged over a period of 30 trading days ending on the day as of which such value is being determined and the 29 consecutive days preceding such day, or if the information contemplated by the preceding clause (i) is not practically available, then the fair value of such securities as of the date of valuation as determined in accordance with the succeeding clause (b), and (b) with respect to any other non-cash assets, the fair value thereof as of the date of valuation, as determined by an independent, nationally recognized valuation firm reasonably selected by Domesticated ACE, on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant (and giving effect to any transfer taxes payable in connection with such sale). One of the PIPE Investors’ subscription agreement provides that, if such PIPE Investor is an Eligible Investor (defined as any subscriber in the offering who is not a beneficial or record owner of ACE’s equity or an affiliate of ACE prior to the Initial Closing (as defined therein)), if, after the date of such subscription agreement, such PIPE Investor acquires ownership of Class A Ordinary Shares in the open market or in privately negotiated transactions with third parties (along with any related rights to redeem or convert such shares in connection with the redemption conducted by ACE in connection with the vote to approve the Tempo Business Combination (the “Tempo Redemption”)) at least five business days prior to ACE’s extraordinary general meeting to approve the Tempo Business Combination, and such PIPE Investor does not redeem or convert such shares in connection with the Tempo Redemption (including revoking any prior redemption or conversion elections made with respect to such shares) (such shares, “PIPE Non-Redeemed Shares”), the number of shares such PIPE Investor (only if an Eligible Investor) will be obligated to purchase under its subscription agreement shall be reduced by the number of PIPE Non-Redeemed Shares. The proceeds of the PIPE Investment, together with the amounts remaining in ACE’s trust account as of immediately following the effective time of the Tempo Business Combination, will be retained by Domesticated ACE following the Closing. In connection with the Tempo Business Combination and pursuant to separate agreements, Tempo was to acquire 100% of the issued The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Tempo, (ii) the absence of any legal restraints on the Closing, and (iii) receipt of approval for listing on The Nasdaq Stock Market LLC (“Nasdaq”) the shares of Domesticated ACE common stock to be issued in connection with the Merger. ACE’s obligation to consummate the Business Combination is also subject to, among other things, the accuracy of the representations and warranties of Tempo as of the date of the Original Merger Agreement (as defined below) and as of the Closing and each of the covenants of Tempo having been performed in all material respects. Tempo’s obligation to consummate the Merger is also subject to, among other things, (i) the accuracy of the representations and warranties of ACE as of the date of the Original Merger Agreement and as of the Closing, (ii) ACE having performed each of the covenants in all material respects, (iii) the Domestication having been completed and (iv) the sum of (w) the amount of cash available in the Trust Account into which substantially all of the proceeds of ACE’s initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE’s initial public offering, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their rights to redeem their Class A ordinary shares pursuant to ACE’s amended and restated memorandum and articles of association (but prior to payment of (a) any deferred underwriting commissions being held in the Trust Account and (b) any transaction expenses of ACE or its affiliates), plus (x) the PIPE Investment Amount (as defined in the Merger Agreement) actually received by ACE prior to or substantially concurrently with the closing, plus (y) the Available Credit Amount (as defined in the Merger Agreement), plus (z) the Available Cash Amount (as defined in the Merger Agreement), being at least equal to $10,000,000. The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Tempo, (ii) by Tempo, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Tempo, to the extent required under the Merger Agreement, are not obtained within five business days of the effective date of the Proxy Statement/Registration Statement (as defined in the Merger Agreement), (iv) by either ACE or Tempo in certain other circumstances set forth in the Merger Agreement, including (a) if any Governmental Authority (as defined in the Merger Agreement) shall have issued or otherwise entered a final, non-appealable order making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger and (b) in the event of certain uncured breaches by the other party or if the Closing has not occurred on or before December 13, 2022 (the “Agreement End Date”), unless ACE is in material breach of the Merger Agreement. The Merger Agreement also provides that, if the proxy statement for ACE’s shareholder meeting to approve the Tempo Business Combination has not been mailed by August 30, 2022, then ACE will file a proxy statement to extend the date by which it must complete an initial business combination by at least three months, to such date as may be agreed in writing between ACE and Tempo. Concurrently with the execution of the original Agreement and Plan of Merger in October 2021 (the “Original Merger Agreement”), an affiliate of the Sponsor (such affiliate, the “Backstop Investor”) entered into a backstop subscription agreement (the “Backstop Subscription Agreement”) with ACE, pursuant to, and on the terms and subject to the conditions on which, the Backstop Investor committed to purchase, following the Domestication and prior to or substantially concurrently with the Closing, up to 2,500,000 shares of Domesticated ACE common stock, in a private placement for a purchase price of $10.00 per share and an aggregate purchase price of up to $25,000,000, to backstop certain redemptions by ACE shareholders. On March 16, 2022, ACE and the Backstop Investor terminated the Backstop Subscription Agreement in connection with the execution of the Cantor Purchase Agreement (as defined below). On October 13, 2021, ACE entered into a Support Agreement (the “Original Sponsor Support Agreement,” and, as amended, the “Sponsor Support Agreement”), by and among ACE, the Sponsor, certain of ACE’s directors and officers and Tempo, pursuant to which the Sponsor and each director and officer of ACE agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Original Sponsor Support Agreement. On July 6, 2022, the parties to the Original Sponsor Support Agreement entered into an Amendment to Sponsor Support Agreement (the “SSA Amendment”), pursuant to which, among other things, certain Sponsors (as defined in the Sponsor Support Agreement, and, each, an “Earnout Sponsor”) agreed, immediately prior to the Domestication, to contribute, transfer, assign, convey and deliver to ACE an aggregate of 5,595,000 founder shares in exchange for an aggregate of 3,595,000 Class A Ordinary Shares of ACE (the “SSA Exchange”). Pursuant to the SSA Amendment, the Earnout Sponsors also agreed to subject an aggregate of 2,000,000 shares of Domesticated ACE common stock (the “Sponsor Earnout Shares”) received in the SSA Exchange to certain earnout vesting conditions or, should such shares fail to vest, forfeiture to ACE for no consideration. On the earlier of (i) the date which is 15 months following the closing of the Tempo Business Combination and (ii) immediately prior to the closing of a strategic transaction, the Sponsor Earnout Shares will vest in an amount equal to (A) the number of Sponsor Earnout Shares, less (B) the number of Additional Period Shares, if any, issuable in the aggregate under the Second A&R Subscription Agreements. In the event of a strategic transaction, the holders of any vested Sponsor Earnout Shares will be eligible to participate in such strategic transaction with respect to such Sponsor Earnout Shares on the same terms, and subject to the same conditions, as the other holders of shares of Domesticated ACE common stock generally. On August 12, 2022, the parties to the SSA Amendment entered into a Second Amendment to Sponsor Support Agreement (the “Second SSA Amendment”), pursuant to which the SSA Exchange was amended such that the Earnout Sponsors agreed, immediately prior to the Domestication, to contribute, transfer, assign, convey and deliver to ACE an aggregate of 5,595,000 founder shares in exchange for an aggregate of 3,095,000 Class A Ordinary Shares. Pursuant to the Second SSA Amendment, the Earnout Sponsors also agreed to reduce the number of Sponsor Earnout Shares to 500,000. On the earlier of (i) the date which is fifteen (15) months following the closing of the Tempo Business Combination and (ii) immediately prior to the closing of a strategic transaction, the Sponsor Earnout Shares will vest in an amount equal to (A) the number of Sponsor Earnout Shares, less (B) the number of Additional Period Shares (as defined therein), if any, issuable in the aggregate un | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Registration Rights Pursuant to a registration rights agreement entered into on July 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Termination of Proposed Achronix Business Combination On January 7, 2021, we entered into an Agreement and Plan of Merger with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”), and Merger Sub (As defined in Note 1). On May 24, 2021, in our Form 10-Q for the quarter ended March 31, 2021, we disclosed that the SEC informed us that it was investigating certain disclosures made in the Form S-4 relating to our proposed business combination with Achronix. On July 11, 2021, we and Achronix entered into a termination and release agreement, pursuant to which the parties agreed to mutually terminate the merger agreement relating to the proposed business combination. On October 27, 2021, we received a letter from the SEC in connection with its investigation with the following response: “We have concluded the investigation as to ACE Convergence Acquisition Corp. (“ACE”). Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against ACE.” The SEC provided this notice pursuant to the guidelines set out in the final paragraph of Securities Act Release No. 5310 (the text of this release can be found at: http://www.sec.gov/divisions/enforce/wells-release.pdf). Business Combination Agreement On October 13, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Tempo Automation, Inc., a Delaware corporation (“Tempo”), and Merger Sub. Pursuant to the transactions contemplated by the terms of the Merger Agreement (the “Tempo Business Combination”), and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Tempo, with Tempo surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Prior to the closing of the Tempo Business Combination (the “Closing”), the Company shall domesticate as a Delaware corporation (the “Domestication” and, ACE, after the Domestication, “Domesticated ACE”) and shall immediately be renamed “Tempo Automation Holdings, Inc.” On August 13, 2021, Tempo Automation, Inc., a Delaware corporation (“Tempo”) entered into a Stock Purchase Agreement (the “Whizz Agreement”) with Whizz Systems, Inc., a Delaware corporation (“Whizz”), and on October 13, 2021, Tempo entered into an Agreement and Plan of Merger (the “Compass AC Agreement”) with Compass AC Holdings, Inc., a Delaware corporation (“Compass AC”), pursuant to which, and on the terms and subject to the conditions of which, Tempo will acquire all of the outstanding shares of capital stock of each Whizz and Compass AC (the “Tempo Add-On Acquisitions”) immediately following the closing of the Business Combination (as defined below). After the Effective Time, ACE will pay or issue to eligible Whizz equity holders and Compass AC equity holders their respective pro rata portion of the Whizz Consideration (as defined in the Merger Agreement) or the Compass AC Consideration (as defined in the Merger Agreement), including, for the avoidance of doubt, any applicable earnout consideration, upon the terms and subject to the conditions set forth in the Whizz Agreement or the Compass AC Agreement, as applicable. The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Tempo, (ii) effectiveness of the registration statement on Form S-4 (which will include a proxy statement for holders of ACE’s ordinary shares) initially filed by ACE with the SEC on November 12, 2021 in connection with the Business Combination (the “ Registration Statement Nasdaq ACE’s obligation to consummate the Business Combination is also subject to, among other things, (i) the accuracy of the representations and warranties of Tempo as of the date of the Merger Agreement and as of the Closing, (ii) each of the covenants of Tempo having been performed in all material respects and (iii) all conditions of the closing of each of the Tempo Add-On Acquisitions being satisfied or waived and each of the Tempo Add-On Acquisitions being prepared to be consummated immediately after the Closing. Tempo’s obligation to consummate the Merger is also subject to, among other things, (i) the accuracy of the representations and warranties of ACE as of the date of the Merger Agreement and as of the Closing, (ii) ACE having performed each of the covenants in all material respects, (iii) the Domestication having been completed and (iv) the sum of (w) the amount of cash available in the trust account into which substantially all of the proceeds of ACE’s initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE’s initial public offering (the “ Trust Account The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Tempo, (ii) by Tempo, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Tempo, to the extent required under the Merger Agreement, are not obtained within five business days after the Registration Statement has been declared effective by the SEC Agreement End Date On or prior to the execution of the Merger Agreement, ACE entered into subscription agreements with certain investors (collectively, the “ PIPE Investors PIPE Common Stock Subscription Agreements Sponsor PIPE Convertible Note Subscription Agreement PIPE Subscription Agreements PIPE Investment Concurrently with the execution of the Merger Agreement, an affiliate of the Sponsor (such affiliate, the “ Backstop Investor Backstop Subscription Agreement On October 13, 2021, ACE entered into a Support Agreement (the “ Sponsor Support Agreement On October 13, 2021, ACE entered into a Support Agreement (the “ Tempo Holders Support Agreement Tempo Stockholders The Merger Agreement contemplates that, at the Closing, ACE will enter into lock-up agreements with (i) the Sponsor and (ii) and certain former stockholders of Tempo and Compass AC, in each case, restricting the transfer of Domesticated ACE Common Stock from and after the Closing. The restrictions under the lock-up agreements begin at the Closing and end on, among other things, in the case of the Sponsor and certain former stockholders of Tempo, the date that is 365 days after the Closing, and in the case of certain former stockholders of Compass AC, the date that is 180 days after the Closing, or (in each case) upon the stock price of Domesticated ACE reaching $12.00 (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing Date. For more information about the Merger Agreement and the proposed Tempo Business Combination, see our Current Report on Form 8-K filed with the SEC on October 14, 2021, and in our preliminary prospectus/proxy statement included in the Registration Statement. Unless specifically stated, this Annual Report on Form 10-K does not give effect to the proposed Tempo Business Combination and does not contain the risks associated with the proposed Tempo Business Combination. Such risks and effects relating to the proposed Tempo Business Combination is included in the Registration Statement. Subscription Agreement On January 18, 2022, ACE entered into a Subscription Agreement (the “Subscription Agreement”) with Tempo, OCM Tempo Holdings, LLC (“OCM”) and Tor Asia Credit Opportunity Master Fund II LP (“Tor”). Pursuant to the Subscription Agreement, OCM, an affiliate of Oaktree Capital Management, L.P. (collectively with its affiliates or affiliated investment funds and/or managed or controlled accounts, “Oaktree”), has committed to purchase $175 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the closing (the “Closing”) of the previously announced business combination between ACE and Tempo, which Closing is subject to the satisfaction or waiver of the conditions stated in the Merger Agreement dated as of October 13, 2021, by and among ACE, Tempo Automation and ACE Convergence Subsidiary Corp., and other customary closing conditions. The Subscription Agreement also provides for the purchase of $25 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the Closing by Tor, an investment partner of ACE, which investment replaces the previously announced investment in ACE’s 12% convertible senior notes due 2025 by an affiliate of ACE’s sponsor, ACE Convergence Acquisition LLC, as disclosed in the Form 8-K, filed January 20, 2022. |
SHAREHOLDERS' DEFICIT_2
SHAREHOLDERS' DEFICIT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SHAREHOLDERS' DEFICIT | ||
SHAREHOLDERS' DEFICIT | NOTE 7 — SHAREHOLDERS’ DEFICIT Preference Shares Class A Ordinary Shares outstanding outstanding In connection with the extension of the date by which the Company must complete an initial business combination in January 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, $148,079,821 was paid out of the Trust Account in connection with the redemptions. In connection with the extension of the date by which the Company must complete an initial business combination in July 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 4,256,979 Class A Ordinary Shares. As a result, $43,349,494 was paid out of the Trust Account in connection with the redemptions. In connection with the extension of the date by which the Company must complete an initial business combination in October 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 1,202,070 Class A Ordinary Shares. As a result, $12,349,642 was paid out of the Trust Account in connection with the redemptions. Class B Ordinary Shares Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders, except as required by law. The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20% of the sum of all ordinary shares issued and outstanding upon completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination. | NOTE 7 — SHAREHOLDERS’ DEFICIT Preference Shares Class A Ordinary Shares Class B Ordinary Shares Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders, except as required by law. The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20% of the sum of all ordinary shares issued and outstanding upon completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination. |
WARRANTS_2
WARRANTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
WARRANTS | ||
WARRANTS | NOTE 8 — WARRANTS As of September 30, 2022, the Company had 11,500,000 Public Warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 15 Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30 - trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period (as it may be extended) and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 As of September 30, 2022, the Company had 6,600,000 Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. | NOTE 8 — WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a Public Warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30- trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period or any Extension Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
FAIR VALUE MEASUREMENTS_2
FAIR VALUE MEASUREMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | NOTE 9 — FAIR VALUE MEASUREMENTS The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320, “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. At September 30, 2022, assets held in the Trust Account were comprised of $40,293,597 in cash. During the three and nine months ended September 30, 2022, the Company did not withdraw any interest income from the Trust Account. At December 31, 2021, assets held in the Trust Account were comprised of $598 in cash and $230,157,661 in money market funds. In October 2022, public shareholders redeemed 1,202,070 public shares in connection with the shareholder vote to approve the extension of the date by which ACE must complete an initial business combination to January 30, 2023. As a result, approximately $12,349,642 was paid out of the trust account in connection with such redemptions. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2022, and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Markets September 30, Markets December 31, Description (level) 2022 (level) 2021 Assets: Cash and Marketable Securities held in Trust Account 1 $ 40,293,597 1 $ 230,158,259 Liabilities: PIPE derivative liability- PIPE Incentive Shares 3 $ 19,905,700 — $ — Warrant Liability – Public Warrants 1 $ 1,150,000 1 $ 7,820,000 Warrant Liability – Private Placement 2 $ 660,000 3 $ 4,946,082 The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Company’s condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of operations. At September 30, 2022, the Company valued the Private Placement Warrants using the value of the Public Warrants. The Public Warrants are priced using the active observable market quote. At September 30, 2022, the primary difference between the Private Placement Warrants and the Public Warrants of ACE is a redemption feature that caps the upside of the Public Warrants at $18.00 per share. As it is unlikely the value of the underlying security will exceed this threshold, it was determined that it would be reasonable to use the closing price of the Public Warrants as the value of the Private Placement Warrants as of the measurement date of September 30, 2022. At December 31, 2021, and previous reporting periods, the Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Public Warrants were initially classified as Level 3 due to the use of unobservable inputs. For periods subsequent to the detachment of the warrants from the Units, the close price of the Public Warrant price was used as the fair value as of each relevant date. The measurement of the Public Warrants is classified as Level 1 due to the use of an observable market quote in an active market. The key inputs in the modified Black Scholes model for the Private Placement Warrants were as follows at December 31, 2021: December 31, Input: 2021 Risk-free interest rate 1.26 % Expected term (years) 5.28 Expected volatility 18.8 % Exercise price $ 11.50 Stock Price $ 9.96 The following tables present the changes in the fair value of Level 3 warrant liabilities for the three and nine months ended September 30, 2022 and 2021: Private Placement Fair value as of January 1, 2022 $ 4,946,082 Change in fair value (295,793) Fair value as of March 31, 2022 4,650,289 Change in fair value (4,122,289) Fair value as of June 30, 2022 528,000 Change in fair value 132,000 Transfer to Level 2 (660,000) Fair value as of September 30, 2022 $ — Private Placement Fair value as of January 1, 2021 $ 9,504,000 Change in fair value 3,871,560 Fair value as of March 31, 2021 13,375,560 Change in fair value (115,675) Fair value as of June 30, 2021 13,259,885 Change in fair value (9,104,121) Fair value as of September 30, 2021 $ 4,155,764 During the three and nine months ended September 30, 2022 and 2021 $660,000 was transferred from Level 3 to Level 2. The PIPE Derivative was accounted for as a liability in accordance with ASC 815-40 and presented within current liabilities on the condensed consolidated balance sheet as of September 30, 2022. The PIPE derivative liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of PIPE derivative liability in the condensed statements of operations. The Additional PIPE Incentive Shares were initially and as of September 30, 2022 and September 7, 2022 (initial measurement), valued using a discounted cash flows model which is considered to be a Level 3 fair value measurement. A key assumption in this model and valuation is the certainty of the closing of the Business Combination. Present value factors were determined using November 22, 2022 as the estimated date of closing of the Business Combination. The key inputs into the Discounted Cash Flows Model for the PIPE Derivative Liability were as follows: As of As of September 30, September 7, 2022 2022 Incentive shares 2,000,000 2,000,000 Per share subscription price $ 10.00 $ 10.00 Discount period 0.210 0.150 Present value factor 0.994 0.995 The following table presents the changes in the fair value of the PIPE Derivative Liability: PIPE Derivative Liability Fair value as of September 7, 2022 $ 19,878,900 Change in fair value 26,800 Fair value as of September 30, 2022 $ 19,905,700 | NOTE 9 — FAIR VALUE MEASUREMENTS The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts. At December 31, 2021, assets held in the Trust Account were comprised of $598 in cash and $230,157,661 in money market funds. During the year ended December 31, 2021, the Company did not withdraw any interest income from the Trust Account. At December 31, 2020, assets held in the Trust Account were comprised of $82 in cash and $230,091,280 in U.S. Treasury Securities. The gross holding gains and fair value of held-to-maturity securities at December 31, 2020 is as follows: Gross Amortized Holding Held-To-Maturity Cost Gain Fair Value December 31, 2020 U.S. Treasury Securities (Matured on 1/28/21)* 230,091,280 7,515 230,098,795 * Upon maturity, the securities were reinvested into money market funds, which invest in U.S. Treasury Securities. As of December 31, 2021 there were no held-to-maturity securities. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2021 and 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Markets December 31, December 31, Description (level) 2021 2020 Assets: Cash and marketable securities held in Trust Account 1 $ 230,157,661 $ 230,098,795 Liabilities: Warrant Liability – Public Warrants 1 $ 7,820,000 $ 15,985,000 Warrant Liability – Private Placement 3 $ 4,946,082 $ 9,504,000 The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the Company’s consolidated balance sheets. The warrant liability are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the consolidated statements of operations. The Private Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Warrants were initially classified as Level 3 due to the use of unobservable inputs. The most significant input is volatility and significant increases (decreases) in the expected volatility in isolation would result in a significantly higher (lower) fair value measurement. For periods subsequent to the detachment of the warrants from the Units, the close price of the Public Warrant price was used as the fair value as of each relevant date. The measurement of the Public Warrants is classified as Level 1 due to the use of an observable market quote in an active market. The key inputs in the modified Black Scholes model for the Private Placement Warrants were as follows at the following measurement dates: December 31, December 31, Input: 2021 2020 Risk-free interest rate 1.26 % 0.36 % Expected term (years) 5.28 5.49 Expected volatility 18.8 % 22.7 % Exercise price $ 11.50 $ 11.50 Stock Price $ 9.96 $ 10.22 The following table presents the changes in the fair value of Level 3 warrant liabilities: Private Placement Public Fair value as of May 28, 2020 — — Initial measurement on July 30, 2020 $ 6,732,000 $ 11,270,000 Transfer from Level 3 to Level 1 — (11,270,000) Change in fair value 2,772,000 — Fair value as of December 31, 2020 $ 9,504,000 — Change in fair value (4,557,918) — Fair value as of December 31, 2021 $ 4,946,082 — Due to the use of quoted prices in an active market (Level 1) to measure the fair value of the Public Warrants, subsequent to initial measurement, the Company had transfers out of Level 3 totaling $11,270,000 during the period from July 30, 2020 through December 31, 2020 and no transfers in 2021. |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements other than as described below. On November 1, 2022, the proxy statement/prospectus was declared effective and on November 2, 2022, the Company commenced with mailing the proxy materials to the Company’s shareholders ahead of the extraordinary general meeting of the Company’s shareholders expected to be held on November 17, 2022. | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, except as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 13, 2022, in connection with extension of the business combination period, the Sponsor agreed to contribute to the Company as a loan $0.03 for each Class A ordinary share of the Company that is not redeemed in connection with the shareholder vote to approve the Extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the business combination between the Company and Tempo Automation, Inc. and (ii) $1.5 million has been loaned. The Contribution(s) will not bear any interest, and will be repayable by the Company to the Sponsor upon the earlier of the date by which the Company must complete an initial business combination and the consummation of the business combination between the Company and Tempo Automation, Inc. On January 21, 2022, in connection with the extension of time to complete a business combination, shareholders of Class A Ordinary shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, approximately $148,079,821 was paid out of the Trust in connection with the redemptions. On January 25, 2022 the Company voted to amend the Investment Management Trust Agreement entered into by the Company and the Trustee on July 27, 2020 (the “Trust Agreement”), to extend the business combination period from January 30, 2022, to July 13, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 10, 2022. The interim results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future periods. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with those of another public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. |
Cash and Marketable Securities Held in Trust Account | Cash and Marketable Securities Held in Trust Account At September 30, 2022, all of the assets held in the Trust Account were held in cash. At December 31, 2021, substantially all of the assets held in the Trust Account were held in cash and money market funds which were invested primarily in U.S. Treasury securities. All of the Company’s investments that were held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. With respect to the regulation of special purpose acquisition companies like the Company (“SPACs”), on March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating to, among other items, disclosures in business combination transactions involving SPACs and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. With regard to the SEC’s investment company proposals included in the SPAC Rule Proposals, while the funds in the Trust Account have, since the Company’s initial public offering, been held only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries, to mitigate the risk of being viewed as operating an unregistered investment company (including pursuant to the subjective test of Section 3(a)(1)(A) of the Investment Company Act of 1940), on June 22, 2022, the Company instructed Continental Stock Transfer & Trust Company, the trustee managing the Trust Account, to hold all funds in the Trust Account in cash until the earlier of consummation of the Tempo Business Combination or the liquidation of the Company. | |
Asset Held In Trust Account | Marketable Securities Held in Trust Account At December 31, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2022, and December 31, 2021. | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2021 and 2020. |
Warrant Liability | Warrant Liability The Company accounts for the public warrants and the private placement warrants (collectively, the “Warrants”) in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s condensed consolidated statements of operations. The Private Placement Warrants (and the Public Warrants for periods where no observable traded price was available) are valued using a Modified Black Scholes Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. As of September 30, 2022 due to market conditions the Company is using the price of the Public Warrants to value the Private Warrants. | |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The PIPE Derivative is comprised of the Additional PIPE Incentive Shares (as defined in Note 6). The PIPE Derivative meets the criteria for derivative liability classification. As such, the PIPE derivative liability is recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the derivative liability is recognized as a non-cash gain or loss on the condensed statements of operations. The fair value of the derivative liability is discussed in Note 9. | |
Class A Ordinary Shares Subject to Possible Redemption | Class A Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2022, and December 31, 2021, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. On January 13, 2022, contingent upon the Company’s shareholders’ approval of the extension of the business combination period, the Sponsor agreed to contribute to the Company as a loan $0.03 for each Class A Ordinary Share of the Company that was not redeemed in connection with the shareholder vote to approve such extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the Tempo Business Combination and (ii) $1.5 million has been loaned, which amounts were to be deposited into the Trust Account. For the three and nine months ended September 30, 2022, the Company contributed an aggregate of $221,190 and $1,451,532 to the Trust Account, respectively. On June 30, 2022, the Sponsor and the Company agreed to, among other things, increase the aggregate principal amount available under such loan from $1,500,000 to $2,000,000, contingent upon the approval by the Company’s shareholders of the proposal to extend the date by which the Company must complete an initial business combination to October 13, 2022, which proposal was approved at an extraordinary general meeting on July 12, 2022. On August 28, 2022, the Company and the Sponsor agreed to, among other things, increase the aggregate principal amount available under such loan from $2,000,000 to $2,125,000, contingent upon the approval by the Company’s shareholders of the extension of the date by which the Company must consummate an initial business combination to January 30, 2023, which proposal was approved in October 2022. Monthly deposits into the Trust Account following the October 2022 redemptions are based on the number of Class A Ordinary Shares still outstanding following such redemptions. In connection with the extension of the business combination period in January 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, $148,079,821 was paid out of the Trust Account in connection with such redemptions. In connection with the extension of the business combination period in July 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 4,256,979 Class A Ordinary Shares. As a result, $43,349,494 was paid out of the Trust Account in connection with such redemptions. In connection with the extension of the business combination period in October 2022, shareholders of Class A Ordinary Shares elected to redeem an aggregate of 1,202,070 Class A Ordinary Shares. As a result, $12,349,642 was paid out of the Trust Account in connection with such redemptions. At September 30, 2022, and December 31, 2021, the Class A Ordinary Shares reflected in the condensed consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption, December 31, 2021 $ 230,000,000 Less: Redemption of Class A Ordinary Shares (191,429,316) Add: Accretion of carrying value to redemption value 1,722,913 Class A ordinary shares subject to possible redemption, September 30, 2022 $ 40,293,597 | |
Offering Costs | Offering Costs Offering costs consisted of underwriting, legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounted to $13,273,096, of which $12,605,837 were charged to temporary equity and accreted to redemption value upon the completion of the Initial Public Offering, and the remaining $667,259 of offering costs allocated to the warrant liability was charged to operations. | |
Income Taxes | Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2022, and December 31, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. | Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2021 and 2020, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. |
Net Income (Loss) Per Ordinary Share | Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. For the three and nine months ended September 30, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 | Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared prorata between the two classes of shares. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. As of December 31, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limits of $250,000. The Company has not experienced losses on this account, and management believes the Company is not exposed to significant risks on such account. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature except derivative liabilities (see Note 9). | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature except warrant liabilities (see Note 9). |
Recent Accounting Standards | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements. | Recent Accounting Standards In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Summary of reconciliation of Class A common stock reflected on the balance sheet | Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption, December 31, 2021 $ 230,000,000 Less: Redemption of Class A Ordinary Shares (191,429,316) Add: Accretion of carrying value to redemption value 1,722,913 Class A ordinary shares subject to possible redemption, September 30, 2022 $ 40,293,597 | At December 31, 2021 and 2020, the Class A ordinary shares reflected in the consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption $ 230,000,000 |
Schedule of calculation of basic and diluted net loss per ordinary share | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 | The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) |
FAIR VALUE MEASUREMENTS (Tabl_2
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of gross holding gains and fair value of held-to-maturity securities | The gross holding gains and fair value of held-to-maturity securities at December 31, 2020 is as follows: Gross Amortized Holding Held-To-Maturity Cost Gain Fair Value December 31, 2020 U.S. Treasury Securities (Matured on 1/28/21)* 230,091,280 7,515 230,098,795 * Upon maturity, the securities were reinvested into money market funds, which invest in U.S. Treasury Securities. As of December 31, 2021 there were no held-to-maturity securities. | |
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | Markets September 30, Markets December 31, Description (level) 2022 (level) 2021 Assets: Cash and Marketable Securities held in Trust Account 1 $ 40,293,597 1 $ 230,158,259 Liabilities: PIPE derivative liability- PIPE Incentive Shares 3 $ 19,905,700 — $ — Warrant Liability – Public Warrants 1 $ 1,150,000 1 $ 7,820,000 Warrant Liability – Private Placement 2 $ 660,000 3 $ 4,946,082 | Markets December 31, December 31, Description (level) 2021 2020 Assets: Cash and marketable securities held in Trust Account 1 $ 230,157,661 $ 230,098,795 Liabilities: Warrant Liability – Public Warrants 1 $ 7,820,000 $ 15,985,000 Warrant Liability – Private Placement 3 $ 4,946,082 $ 9,504,000 |
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | December 31, Input: 2021 Risk-free interest rate 1.26 % Expected term (years) 5.28 Expected volatility 18.8 % Exercise price $ 11.50 Stock Price $ 9.96 | December 31, December 31, Input: 2021 2020 Risk-free interest rate 1.26 % 0.36 % Expected term (years) 5.28 5.49 Expected volatility 18.8 % 22.7 % Exercise price $ 11.50 $ 11.50 Stock Price $ 9.96 $ 10.22 |
Schedule of changes in fair value of warrant liabilities | Private Placement Public Fair value as of May 28, 2020 — — Initial measurement on July 30, 2020 $ 6,732,000 $ 11,270,000 Transfer from Level 3 to Level 1 — (11,270,000) Change in fair value 2,772,000 — Fair value as of December 31, 2020 $ 9,504,000 — Change in fair value (4,557,918) — Fair value as of December 31, 2021 $ 4,946,082 — | |
Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of changes in fair value of warrant liabilities | Private Placement Fair value as of January 1, 2022 $ 4,946,082 Change in fair value (295,793) Fair value as of March 31, 2022 4,650,289 Change in fair value (4,122,289) Fair value as of June 30, 2022 528,000 Change in fair value 132,000 Transfer to Level 2 (660,000) Fair value as of September 30, 2022 $ — Private Placement Fair value as of January 1, 2021 $ 9,504,000 Change in fair value 3,871,560 Fair value as of March 31, 2021 13,375,560 Change in fair value (115,675) Fair value as of June 30, 2021 13,259,885 Change in fair value (9,104,121) Fair value as of September 30, 2021 $ 4,155,764 | |
Derivative [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | As of As of September 30, September 7, 2022 2022 Incentive shares 2,000,000 2,000,000 Per share subscription price $ 10.00 $ 10.00 Discount period 0.210 0.150 Present value factor 0.994 0.995 | |
Schedule of changes in fair value of warrant liabilities | PIPE Derivative Liability Fair value as of September 7, 2022 $ 19,878,900 Change in fair value 26,800 Fair value as of September 30, 2022 $ 19,905,700 |
ORGANIZATION AND PLAN OF BUSI_4
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Oct. 11, 2022 | Jul. 12, 2022 | Jan. 21, 2022 | Jul. 30, 2020 | Oct. 31, 2022 | Jul. 31, 2022 | Jan. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Transaction costs | $ 13,273,096 | $ 13,273,096 | |||||||||
Underwriting fees | 4,600,000 | 4,600,000 | |||||||||
Deferred underwriting fees | $ 8,050,000 | 8,050,000 | 8,050,000 | ||||||||
Other offering costs | 623,096 | $ 623,096 | |||||||||
Investment of Cash into Trust Account | 221,190 | $ 1,451,532 | |||||||||
Threshold minimum aggregate fair market value as a percentage of the assets held in the Trust Account | 80% | 80% | |||||||||
Threshold percentage of outstanding voting securities of the target to be acquired by post-transaction company to complete business combination | 50% | 50% | |||||||||
Redemption of shares calculated based on business days prior to consummation of business combination (in days) | 2 days | 2 days | |||||||||
Minimum net tangible assets upon consummation of the business combination | 5,000,001 | $ 5,000,001 | $ 5,000,001 | ||||||||
Threshold percentage of public shares subject to redemption without the company's prior written consent | 15% | 15% | |||||||||
Obligation to redeem public shares if entity does not complete a business combination (as a percent) | 100% | 100% | |||||||||
Threshold business days for redemption of public shares | 10 days | 10 days | |||||||||
Maximum net interest to pay dissolution expenses | $ 100,000 | $ 100,000 | |||||||||
Amount of cash paid out of Trust Account for redemptions | $ 148,079,821 | $ 12,349,642 | $ 148,079,821 | ||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | ||||||||||
Payments for redemptions out of Trust Account per share | $ 10.21 | ||||||||||
Percentage of security holders | 5% | ||||||||||
Cash | 0 | $ 0 | 8,390 | $ 792,416 | |||||||
Cash and marketable securities held in Trust Account | 40,293,597 | 40,293,597 | 230,158,259 | $ 230,091,362 | |||||||
Working capital | $ 18,720,557 | $ 18,720,557 | $ 6,666,868 | ||||||||
Class A common stock [Member] | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Amount of cash paid out of Trust Account for redemptions | $ 43,349,494 | $ 12,349,642 | $ 43,349,494 | $ 148,079,821 | |||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 4,256,979 | 14,797,723 | 1,202,070 | 4,256,979 | 14,797,723 | ||||||
Ordinary shares, par value (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Subsequent event [Member] | Class A common stock [Member] | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Amount of cash paid out of Trust Account for redemptions | $ 12,324,919 | ||||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | ||||||||||
Initial Public Offering | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Number of units issued | 23,000,000 | ||||||||||
Unit price | $ 10 | $ 10 | $ 10 | $ 10 | |||||||
Proceeds from issuance of units | $ 230,000,000 | ||||||||||
Investment of Cash into Trust Account | $ 230,000,000 | ||||||||||
Over-allotment option | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Number of units issued | 3,000,000 | ||||||||||
Private Placement | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Private placement warrants issued | 6,600,000 | ||||||||||
Price of warrant | $ 1 | ||||||||||
Proceeds from sale of Private Placement Warrants | $ 6,600,000 | ||||||||||
Private Placement | Private Placement Warrants [Member] | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Private placement warrants issued | 6,600,000 | 6,600,000 | 6,600,000 | ||||||||
Price of warrant | $ 1 | $ 1 | $ 1 | ||||||||
Proceeds from sale of Private Placement Warrants | $ 6,600,000 | $ 6,600,000 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Oct. 11, 2022 | Jul. 12, 2022 | Jan. 21, 2022 | Jan. 13, 2022 | Oct. 31, 2022 | Jul. 31, 2022 | Jan. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Aug. 28, 2022 | |
Significant Accounting Policies | |||||||||||||
Offering costs allocated to the warrant liability was charged to operations | $ 667,259 | ||||||||||||
Offering costs charged to temporary equity and accreted to redemption value | $ 12,605,837 | ||||||||||||
Amount of loan contributed | 523,743 | $ 309,210 | $ 62,558 | 527,756 | |||||||||
Amount contributed to Trust Account | $ 221,190 | 1,451,532 | |||||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | ||||||||||||
Cash withdrawn from Trust Account in connection with redemption | $ 148,079,821 | $ 12,349,642 | $ 148,079,821 | ||||||||||
Unrecognized tax benefits | 0 | 0 | 0 | 0 | |||||||||
Amount accrued for interest and penalties | 0 | 0 | 0 | 0 | |||||||||
Cash, FDIC insured amount | 250,000 | ||||||||||||
Offering costs | 13,273,096 | ||||||||||||
Offering costs charged to shareholders' equity | $ 12,737,837 | ||||||||||||
Offering costs allocated to warrant liability | 667,259 | $ 667,259 | |||||||||||
Sponsor [Member] | |||||||||||||
Significant Accounting Policies | |||||||||||||
Maximum borrowing capacity | 2,000,000 | 2,000,000 | $ 2,125,000 | ||||||||||
Minimum borrowing capacity | $ 1,500,000 | $ 1,500,000 | $ 2,000,000 | ||||||||||
Related Party Loans | |||||||||||||
Significant Accounting Policies | |||||||||||||
Amount of loan contributed | $ 1,500,000 | ||||||||||||
Class A common stock [Member] | |||||||||||||
Significant Accounting Policies | |||||||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | ||||||||||||
Cash withdrawn from Trust Account in connection with redemption | $ 12,349,642 | ||||||||||||
Class A common stock [Member] | Warrants [Member] | |||||||||||||
Significant Accounting Policies | |||||||||||||
Exclusion of shares in the calculation of diluted income (loss) per share | 18,100,000 | ||||||||||||
Class A common stock [Member] | |||||||||||||
Significant Accounting Policies | |||||||||||||
Sponsor loan amount per share of ordinary share upon extension of business combination period | $ 0.03 | ||||||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 4,256,979 | 14,797,723 | 1,202,070 | 4,256,979 | 14,797,723 | ||||||||
Cash withdrawn from Trust Account in connection with redemption | $ 43,349,494 | $ 12,349,642 | $ 43,349,494 | $ 148,079,821 | |||||||||
Class A common stock [Member] | Subsequent event [Member] | |||||||||||||
Significant Accounting Policies | |||||||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | ||||||||||||
Cash withdrawn from Trust Account in connection with redemption | $ 12,324,919 | ||||||||||||
Class A common stock [Member] | Warrants [Member] | |||||||||||||
Significant Accounting Policies | |||||||||||||
Exclusion of shares in the calculation of diluted income (loss) per share | 18,100,000 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Calculation of basic and diluted net loss per ordinary share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Class A common stock [Member] | ||||||
Numerator: | ||||||
Allocation of net income (loss) | $ (3,772,620) | $ 17,830,609 | $ 257,377 | $ 7,776,990 | $ (7,350,686) | $ 4,677,202 |
Denominator: | ||||||
Weighted average shares outstanding, basic | 4,459,878 | 23,000,000 | 8,092,696 | 23,000,000 | 16,353,211 | 23,000,000 |
Weighted average shares outstanding, diluted | 4,459,878 | 23,000,000 | 8,092,696 | 23,000,000 | 16,353,211 | 23,000,000 |
Basic net income (loss) ordinary per share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
Diluted net income (loss) per ordinary share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
Class B common stock | ||||||
Numerator: | ||||||
Allocation of net income (loss) | $ (4,863,938) | $ 4,457,652 | $ 182,870 | $ 1,944,248 | $ (1,837,671) | $ 1,169,301 |
Denominator: | ||||||
Weighted average shares outstanding, basic | 5,750,000 | 5,750,000 | 5,750,000 | 5,750,000 | 5,529,817 | 5,750,000 |
Weighted average shares outstanding, diluted | 5,750,000 | 5,750,000 | 5,750,000 | 5,750,000 | 5,529,817 | 5,750,000 |
Basic net income (loss) ordinary per share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
Diluted net income (loss) per ordinary share | $ (0.85) | $ 0.78 | $ 0.03 | $ 0.34 | $ (0.42) | $ 0.20 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated balance sheets (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Significant Accounting Policies | |||
Gross proceeds | $ 230,000,000 | ||
Proceeds allocated to Public Warrants | (11,270,000) | ||
Class A ordinary shares issuance costs | (12,737,837) | ||
Accretion of carrying value to redemption value | $ 1,722,913 | 24,007,837 | |
Redemption of Class A Ordinary Shares | (191,429,316) | ||
Class A ordinary shares subject to possible redemption | 40,293,597 | 230,000,000 | $ 230,000,000 |
Class A ordinary shares subject to possible redemption | |||
Significant Accounting Policies | |||
Class A ordinary shares subject to possible redemption | $ 40,293,597 | $ 230,000,000 |
INITIAL PUBLIC OFFERING (Deta_2
INITIAL PUBLIC OFFERING (Details) - $ / shares | Jul. 30, 2020 | Sep. 30, 2022 | Dec. 31, 2021 |
Initial Public Offering | |||
Subsidiary, Sale of Stock | |||
Number of units issued | 23,000,000 | ||
Unit price | $ 10 | $ 10 | $ 10 |
Number of shares in a unit | 1 | ||
Number of warrants in a unit | 0.5 | ||
Number of shares issuable per warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Over-allotment option | |||
Subsidiary, Sale of Stock | |||
Number of units issued | 3,000,000 |
PRIVATE PLACEMENT (Details)_2
PRIVATE PLACEMENT (Details) - Private Placement - USD ($) | 9 Months Ended | 12 Months Ended | |
Jul. 30, 2020 | Sep. 30, 2022 | Dec. 31, 2021 | |
Subsidiary, Sale of Stock | |||
Number of warrants to purchase shares issued | 6,600,000 | ||
Price of warrants | $ 1 | ||
Aggregate purchase price | $ 6,600,000 | ||
Number of shares per warrant | 1 | ||
Exercise price of warrant | $ 11.50 | ||
Private Placement Warrants | |||
Subsidiary, Sale of Stock | |||
Number of warrants to purchase shares issued | 6,600,000 | 6,600,000 | |
Price of warrants | $ 1 | $ 1 | |
Aggregate purchase price | $ 6,600,000 | $ 6,600,000 | |
Number of shares per warrant | 1 | ||
Exercise price of warrant | $ 11.50 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 13, 2021 shares | May 29, 2020 shares | Jan. 31, 2022 shares | May 31, 2020 USD ($) shares | Sep. 30, 2022 $ / shares | Dec. 31, 2020 USD ($) | Dec. 31, 2021 D $ / shares | |
Related Party Transaction | |||||||
Aggregate purchase price | $ | $ 25,000 | ||||||
Founder Shares | Sponsor | ACE SO5 | |||||||
Related Party Transaction | |||||||
Number of shares transferred (in shares) | 755,930 | ||||||
Founder Shares | Sponsor | Sunny Siu | |||||||
Related Party Transaction | |||||||
Number of shares transferred (in shares) | 1,678,500 | ||||||
Founder Shares | Sponsor | Class B ordinary shares | |||||||
Related Party Transaction | |||||||
Number of shares issued | 5,750,000 | ||||||
Aggregate purchase price | $ | $ 25,000 | ||||||
Number of shares transferred (in shares) | 1,678,500 | 155,000 | |||||
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination | 1 year | 1 year | |||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12 | $ 12 | |||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 30 | ||||||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 20 days | ||||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 30 days | ||||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | 150 days |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - Additional information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jan. 13, 2022 USD ($) $ / shares | Aug. 12, 2020 USD ($) | Jul. 28, 2020 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) $ / shares | Aug. 28, 2022 USD ($) | |
Related Party Transaction | ||||||||||
Outstanding balance of related party note | $ 0 | $ 0 | ||||||||
Amount of loan contributed | $ 523,743 | $ 309,210 | 62,558 | 527,756 | ||||||
Percentage of conversion price higher than value of warrants | 1,250 | 1,250 | ||||||||
Advance from related party | $ 427,857 | $ 427,857 | ||||||||
Convertible promissory note | 1,500,000 | 1,500,000 | ||||||||
Administrative Services Agreement | ||||||||||
Related Party Transaction | ||||||||||
Expenses per month | $ 10,000 | 10,000 | ||||||||
Expense incurred | 30,000 | $ 30,000 | 90,000 | $ 90,000 | 20,000 | 120,000 | ||||
Accrued fee | 180,000 | 180,000 | 90,000 | |||||||
Administrative Services Agreement | Accounts payable and accrued expenses | ||||||||||
Related Party Transaction | ||||||||||
Amount due to related party | 90,000 | |||||||||
Related Party Loans | ||||||||||
Related Party Transaction | ||||||||||
Amount of loan contributed | $ 1,500,000 | |||||||||
Maximum loans convertible into warrants | $ 1,500,000 | |||||||||
Price of warrants (in dollars per share) | $ / shares | $ 1 | $ 1 | ||||||||
Advance from related party | 427,857 | 427,857 | $ 0 | |||||||
Convertible promissory note | 1,500,000 | 1,500,000 | 0 | |||||||
Amount deposited in trust account | 221,190 | 1,451,532 | ||||||||
Working Capital Loans | ||||||||||
Related Party Transaction | ||||||||||
Maximum borrowing capacity of related party promissory note | $ 2,125,000 | |||||||||
Outstanding balance of related party note | 1,500,000 | 1,500,000 | 2,000,000 | $ 2,000,000 | ||||||
Sponsor loan amount per share of ordinary share upon extension of business combination period | $ / shares | $ 0.03 | |||||||||
Working Capital Facility | ||||||||||
Related Party Transaction | ||||||||||
Maximum borrowing capacity of related party promissory note | $ 1,500,000 | |||||||||
Outstanding balance of related party note | $ 1,051,499 | $ 1,051,499 | $ 0 | $ 527,756 | ||||||
Amount deposited | 900,000 | |||||||||
Maximum fund withdrawals | 1,500,000 | |||||||||
Maximum fund withdraw for lending facility deposits | $ 1,500,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended | 12 Months Ended | |||||||||
Oct. 13, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | Sep. 07, 2022 shares | Sep. 04, 2022 USD ($) | Jul. 01, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 16, 2022 USD ($) | Jan. 18, 2022 USD ($) | Oct. 31, 2021 USD ($) | Jul. 27, 2020 item | |
COMMITMENTS AND CONTINGENCIES | |||||||||||
Maximum number of demands for registration of securities | item | 3 | ||||||||||
Cash underwriting discount per unit | $ / shares | $ 0.20 | $ 0.20 | |||||||||
Cash underwriting discount paid | $ 4,600,000 | $ 4,600,000 | |||||||||
Deferred fee per unit | $ / shares | $ 0.35 | $ 0.35 | |||||||||
Deferred underwriting fee payable | $ 8,050,000 | $ 8,050,000 | |||||||||
Sponsor | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Interest rate | 12% | ||||||||||
Business Combination Agreement | PIPE Investors | 12.0% convertible senior notes | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Aggregate principal amount | $ 25,000,000 | ||||||||||
Interest rate | 12% | ||||||||||
Business Combination Agreement | PIPE Investors | 15.5% convertible notes [Member] | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Aggregate purchase price of additional shares issued | $ 200,000,000 | ||||||||||
Interest rate | 15.50% | ||||||||||
Business Combination Agreement | ACE SO3 SPV Limited | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Aggregate purchase price | $ 20,000,000 | ||||||||||
Business Combination Agreement | Common stock | PIPE Investors | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Price per share | $ / shares | $ 10 | ||||||||||
Additional number of shares issued | shares | 550,000 | ||||||||||
Aggregate purchase price of additional shares issued | $ 5,500,000 | ||||||||||
Business Combination Agreement | Tempo | Common stock | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Number of shares outstanding | shares | 23,500,000 | ||||||||||
Price per share | $ / shares | $ 10 | ||||||||||
Aggregate purchase price | $ 235,000,000 | ||||||||||
Cantor purchase agreement | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Aggregate purchase price | $ 100,000,000 | ||||||||||
Merger Agreement | Sponsor | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Price per share | $ / shares | $ 12 | $ 12 | |||||||||
Merger Agreement Amendment | Business Combination Agreement | Tempo | Common stock | Minimum | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Base purchase price | $ 235,000,000 | ||||||||||
Merger Agreement Amendment | Business Combination Agreement | Tempo | Common stock | Maximum | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Base purchase price | $ 257,927,013 | ||||||||||
Backstop Subscription Agreement | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Aggregate purchase price | $ 25,000,000 | $ 25,000,000 | |||||||||
Third Amended And Restated Subscription Agreements | Business Combination Agreement | Common stock | PIPE Investors | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Additional number of shares issued | shares | 500,000 | ||||||||||
PIPE Investment Under Subscription Agreement | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Aggregate purchase price | $ 82,000,000 | ||||||||||
Tempo Holdings Llc | Subscription Agreement | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Aggregate purchase price | $ 175,000,000 | ||||||||||
Aggregate principal amount | $ 1,100,000 | ||||||||||
Interest rate | 13% | ||||||||||
Tor Asia Credit Opportunity Master Fund Ii Lp | Subscription Agreement | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Aggregate purchase price | $ 25,000,000 | ||||||||||
Interest rate | 13% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | Jun. 15, 2023 | Sep. 07, 2022 USD ($) $ / shares shares | Sep. 04, 2022 USD ($) | Aug. 12, 2022 USD ($) tranche $ / shares shares | Jul. 30, 2022 USD ($) | Jul. 06, 2022 $ / shares shares | Jul. 05, 2022 $ / shares | Jul. 01, 2022 USD ($) tranche shares | Oct. 13, 2022 | Sep. 30, 2022 USD ($) $ / shares | Jan. 13, 2022 $ / shares | Dec. 31, 2021 USD ($) $ / shares shares | Oct. 31, 2021 USD ($) $ / shares shares | Oct. 13, 2021 $ / shares |
OCM | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Percentage of termination fee | 0.60% | 3.50% | ||||||||||||
Aggregate principal amount | $ | $ 1,100,000 | $ 7,000,000 | ||||||||||||
Threshold period for payment of termination fee | 6 months | |||||||||||||
Amount agreed to pay in terms of fees and expenses | $ | $ 1,200,000 | |||||||||||||
Accrued interest rate for termination fees and other fees and expenses (in percent) | 20% | |||||||||||||
Merger Agreement Amendment | Sponsor | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Number of trading days | 20 days | |||||||||||||
Number of consecutive trading days | 30 days | |||||||||||||
Backstop Subscription Agreement | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Number of shares subscribed by PIPE investors as a part of merger agreement | 2,500,000 | 2,500,000 | ||||||||||||
purchase price per share | $ / shares | $ 10 | $ 10 | ||||||||||||
Aggregate purchase price | $ | $ 25,000,000 | $ 25,000,000 | ||||||||||||
Merger Agreement | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Available cash amount | $ | $ 10,000,000 | $ 320,000,000 | ||||||||||||
Merger Agreement | Sponsor | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Price per share | $ / shares | $ 12 | $ 12 | ||||||||||||
Tempo | Compass | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Percentage of equity interest | 100% | |||||||||||||
Business Combination Agreement | Whizz Sellers | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
After closing date | 150 days | |||||||||||||
Business Combination Agreement | SSA Amendment | Sponsor | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Number of founder shares to contribute, transfer, assign, convey and deliver by Sponsored | 5,595,000 | 5,595,000 | ||||||||||||
Number of shares exchanged for founder shares | 3,095,000 | 3,595,000 | ||||||||||||
Number of Sponsor Earnout Shares to be issued | 500,000 | |||||||||||||
Business Combination Agreement | Minimum | Third Amended And Restated Subscription Agreements | Sponsor | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Number of shares exchanged for founder shares | 3,095,000 | |||||||||||||
Number of Sponsor Earnout Shares to be issued | 500,000 | |||||||||||||
Business Combination Agreement | Maximum | Third Amended And Restated Subscription Agreements | Sponsor | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Number of shares exchanged for founder shares | 3,595,000 | |||||||||||||
Number of Sponsor Earnout Shares to be issued | 1,000,000 | |||||||||||||
Business Combination Agreement | Common stock | PIPE Investors | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Price per share | $ / shares | $ 10 | |||||||||||||
Business Combination Agreement | Common stock | Third Amended And Restated Subscription Agreements | PIPE Investors | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Price per share | $ / shares | $ 10 | |||||||||||||
Minimum adjustment period VWAP | $ / shares | $ 4 | |||||||||||||
Additional number of shares to be issued | 2,000,000 | |||||||||||||
Period of holding from closing of subscription (in months) | 15 months | |||||||||||||
Number of trading days | 30 days | |||||||||||||
Number of consecutive trading days | 29 days | |||||||||||||
Measurement date | 30 days | |||||||||||||
Business Combination Agreement | Common stock | Second A&R Subscription Agreements | PIPE Investors | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Price per share | $ / shares | $ 10 | |||||||||||||
Minimum adjustment period VWAP | $ / shares | $ 4 | |||||||||||||
Additional number of shares to be issued | 2,000,000 | |||||||||||||
Number of trading days | 30 days | |||||||||||||
Number of consecutive trading days | 29 days | |||||||||||||
Business Combination Agreement | Common stock | SSA Amendment | PIPE Investors | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Period of holding from closing of subscription (in months) | 15 months | |||||||||||||
Business Combination Agreement | Common stock | Maximum | Second A&R Subscription Agreements | PIPE Investors | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Minimum adjustment period VWAP | $ / shares | $ 6.50 | |||||||||||||
Business Combination Agreement | Class A ordinary shares | SSA Amendment | Sponsor | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Number of Sponsor Earnout Shares to be issued | 2,000,000 | |||||||||||||
Business Combination Agreement | Tempo | Whizz | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Percentage of equity interest | 100% | |||||||||||||
Business Combination Agreement | Tempo | Common stock | Merger Agreement Amendment | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Number of earnout shares to be issued | 7,500,000 | |||||||||||||
Number of tranches for vesting of earnout shares | tranche | 2 | 2 | ||||||||||||
Number of earnout shares in one tranche | 3,500,000 | 5,000,000 | ||||||||||||
Amount of EBITDA to be earned for vesting of earnout shares | $ | $ 5,000,000 | $ 10,000,000 | ||||||||||||
Amount of revenue to be earned for vesting of earnout shares | $ | $ 15,000,000 | $ 50,000,000 | ||||||||||||
Period for EBITDA and revenue to be earned for vesting of earnout shares | 5 years | 5 years | ||||||||||||
Number of shares outstanding | 23,500,000 | |||||||||||||
Price per share | $ / shares | $ 10 | |||||||||||||
Business Combination Agreement | Tempo | Common stock | Minimum | Merger Agreement Amendment | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Base purchase price | $ | $ 235,000,000 | $ 235,000,000 | $ 488,375,000 | |||||||||||
Number of earnout shares to be issued | 7,000,000 | |||||||||||||
Reduce the minimum cash condition | $ | $ 10,000,000 | |||||||||||||
Business Combination Agreement | Tempo | Common stock | Maximum | Merger Agreement Amendment | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Base purchase price | $ | $ 257,927,013 | $ 488,375,000 | $ 658,434,783 | |||||||||||
Number of earnout shares to be issued | 10,000,000 | 10,000,000 | ||||||||||||
Reduce the minimum cash condition | $ | $ 320,000,000 | |||||||||||||
Business Combination Agreement | PIPE Promissory Notes | Common stock | Second A&R Subscription Agreements | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Period of holding from closing of subscription (in months) | 15 months | |||||||||||||
Subsequent event | OCM | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Percentage of termination fee | 3.50% | |||||||||||||
Accrued interest rate for termination fees and other fees and expenses (in percent) | 20% | |||||||||||||
Subsequent event | Class A ordinary shares | Sponsor | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Price per share | $ / shares | $ 0.03 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Subscription Agreement (Details) | Jun. 15, 2023 | Sep. 04, 2022 USD ($) | Jul. 30, 2022 USD ($) | Jan. 18, 2022 USD ($) item | Dec. 31, 2021 USD ($) |
OCM | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Percentage of termination fee | 0.60% | 3.50% | |||
Aggregate principal amount | $ 1,100,000 | $ 7,000,000 | |||
Amount agreed to pay in terms of fees and expenses | $ 1,200,000 | ||||
Threshold period for payment of termination fee | 6 months | ||||
Accrued interest rate for termination fees and other fees and expenses (in percent) | 20% | ||||
OCM | Subsequent event | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Percentage of termination fee | 3.50% | ||||
Accrued interest rate for termination fees and other fees and expenses (in percent) | 20% | ||||
Subscription Agreement | OCM | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Aggregate purchase price | $ 175,000,000 | ||||
Number of directors to be appointed | item | 2 | ||||
Percentage of aggregate principal amount of no longer holds or control notes | 50% | ||||
Subscription Agreement | OCM | 15.5% convertible notes | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Interest rate | 15.50% | ||||
Tempo Holdings Llc [Member] | Subscription Agreement | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Aggregate purchase price | $ 175,000,000 | ||||
Interest rate | 13% | ||||
Percentage of termination fee | 0.60% | ||||
Aggregate principal amount | $ 1,100,000 | ||||
Amount agreed to pay in terms of fees and expenses | $ 1,200,000 | ||||
Threshold period for payment of termination fee | 6 months | ||||
Accrued interest rate for termination fees and other fees and expenses (in percent) | 20% | ||||
PIPE Investment Under Subscription Agreement [Member] | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Aggregate purchase price | $ 82,000,000 | ||||
Tor Asia Credit Opportunity Master Fund Ii Lp | Subscription Agreement | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Aggregate purchase price | $ 25,000,000 | ||||
Interest rate | 13% | ||||
Tor Asia Credit Opportunity Master Fund Ii Lp | Subscription Agreement | 15.5% convertible notes | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Interest rate | 15.50% |
SHAREHOLDERS' DEFICIT - Prefe_2
SHAREHOLDERS' DEFICIT - Preference Shares (Details) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
SHAREHOLDERS' DEFICIT | |||
Preference shares, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preference shares, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preference shares, shares issued | 0 | 0 | 0 |
Preference shares, shares outstanding | 0 | 0 | 0 |
SHAREHOLDERS' DEFICIT - Ordin_2
SHAREHOLDERS' DEFICIT - Ordinary shares (Details) | 1 Months Ended | |||||||||
Oct. 11, 2022 USD ($) shares | Jul. 12, 2022 USD ($) shares | Jan. 21, 2022 USD ($) shares | Oct. 31, 2022 USD ($) shares | Jul. 31, 2022 USD ($) shares | Jan. 31, 2022 USD ($) shares | Sep. 30, 2022 Vote $ / shares shares | Dec. 31, 2021 Vote $ / shares shares | Dec. 31, 2020 Vote $ / shares shares | Jul. 30, 2020 $ / shares | |
Class of Stock [Line Items] | ||||||||||
Threshold conversion ratio of stock | 20% | 20% | ||||||||
Cash withdrawn from Trust Account in connection with redemption | $ | $ 148,079,821 | $ 12,349,642 | $ 148,079,821 | |||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | |||||||||
Class A ordinary shares | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |||||||
Ordinary shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Common shares, votes per share | Vote | 1 | 1 | 1 | |||||||
Ordinary shares, subject to possible redemption issued | 3,945,298 | 23,000,000 | 23,000,000 | |||||||
Ordinary shares, shares subject to possible redemption | 8,202,277 | 23,000,000 | 23,000,000 | |||||||
Cash withdrawn from Trust Account in connection with redemption | $ | $ 43,349,494 | $ 12,349,642 | $ 43,349,494 | $ 148,079,821 | ||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 4,256,979 | 14,797,723 | 1,202,070 | 4,256,979 | 14,797,723 | |||||
Class A ordinary shares | Subsequent event [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Cash withdrawn from Trust Account in connection with redemption | $ | $ 12,324,919 | |||||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | |||||||||
Class A ordinary shares subject to possible redemption | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ordinary shares, subject to possible redemption issued | 3,945,298 | 23,000,000 | 23,000,000 | |||||||
Ordinary shares, shares subject to possible redemption | 3,945,298 | 23,000,000 | 23,000,000 | |||||||
Class A ordinary shares not subject to possible redemption | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ordinary shares, shares issued | 0 | 0 | ||||||||
Ordinary shares, shares outstanding | 0 | 0 | ||||||||
Class B common stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |||||||
Ordinary shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Common shares, votes per share | Vote | 1 | 1 | 1 | |||||||
Ordinary shares, shares issued | 5,750,000 | 5,750,000 | 5,750,000 | |||||||
Ordinary shares, shares outstanding | 5,750,000 | 5,750,000 | 5,750,000 |
WARRANTS (Details)_2
WARRANTS (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
WARRANTS | ||
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | |
Public Warrant | ||
WARRANTS | ||
Warrants outstanding | 11,500,000 | |
Public Warrants exercisable term after the completion of a business combination | 30 days | 30 days |
Public Warrants exercisable term from the closing of the initial public offering | 12 months | 12 months |
Public Warrants expiration term | 5 years | 5 years |
Threshold period for filling registration statement after business combination | 15 days | 15 days |
Threshold period for registration statement to be effective after which warrants can be exercised on a cashless basis | 60 days | 60 days |
Redemption price per public warrant (in dollars per share) | $ 0.01 | $ 0.01 |
Minimum threshold written notice period for redemption of public warrants | 30 days | 30 days |
Threshold trading days for redemption of public warrants | 20 days | |
Threshold consecutive trading days for redemption of public warrants | 30 days | |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | $ 18 |
Threshold issue price for capital raising purposes in connection with the closing of a Business Combination | $ 9.20 | $ 9.20 |
Percentage of gross proceeds on total equity proceeds | 60% | 60% |
Threshold trading days for calculating market value | 20 days | |
Adjustment of exercise price of warrants based on market value and newly issued price (as a percent) | 115% | 115% |
Adjustment one of redemption price of stock based on market value and newly issued price (as a percent) | 180% | 180% |
Private Placement Warrants | ||
WARRANTS | ||
Warrants outstanding | 6,600,000 | |
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination | 30 days | 30 days |
FAIR VALUE MEASUREMENTS - Ass_2
FAIR VALUE MEASUREMENTS - Assets and liabilities measured on recurring basis (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | |||
Cash and marketable securities held in Trust Account | $ 40,293,597 | $ 230,158,259 | $ 230,091,362 |
Liabilities: | |||
PIPE derivative liability- PIPE Incentive Shares | 19,905,700 | ||
Warrant liability | 1,810,000 | 12,766,082 | 25,489,000 |
Public Warrant | |||
Liabilities: | |||
Warrant liability | 7,820,000 | ||
Level 1 | |||
Assets: | |||
Cash and marketable securities held in Trust Account | 40,293,597 | 230,158,259 | 230,098,795 |
Level 1 | Public Warrant | |||
Liabilities: | |||
Warrant liability | 7,820,000 | 15,985,000 | |
Level 1 | Private Placement Warrants | |||
Liabilities: | |||
Warrant liability | 660,000 | 4,946,082 | |
Level 3 | Public Warrant | |||
Liabilities: | |||
Warrant liability | $ 1,150,000 | ||
Level 3 | Private Placement Warrants | |||
Liabilities: | |||
Warrant liability | $ 4,946,082 | $ 9,504,000 |
FAIR VALUE MEASUREMENTS - Ini_2
FAIR VALUE MEASUREMENTS - Initial measurement of key inputs for Private Placement Warrants and Public Warrants (Details) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2021 Y | Dec. 31, 2021 $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 Y $ / shares |
Risk-free interest rate | ||||||
FAIR VALUE MEASUREMENTS | ||||||
Warrants initial measurement | 0.0126 | 0.0036 | ||||
Expected term (years) | ||||||
FAIR VALUE MEASUREMENTS | ||||||
Warrants initial measurement | 5.28 | 5.49 | ||||
Expected volatility | ||||||
FAIR VALUE MEASUREMENTS | ||||||
Warrants initial measurement | 61 | 0.188 | 0.227 | |||
Exercise price | ||||||
FAIR VALUE MEASUREMENTS | ||||||
Warrants initial measurement | 11.50 | 11.50 | 11.50 | |||
Stock Price | ||||||
FAIR VALUE MEASUREMENTS | ||||||
Warrants initial measurement | 9.96 | 9.96 | 10.22 |
FAIR VALUE MEASUREMENTS - Fai_3
FAIR VALUE MEASUREMENTS - Fair value of warrant liabilities (Details) - USD ($) | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | ||||||||||
Transfers to Level 2 | $ 660,000 | $ 660,000 | ||||||||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants | Fair Value Adjustment of Warrants | ||||||||
Level 3 | ||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||
Transfer to Level 1 from Level 3 | $ 11,270,000 | 0 | ||||||||
Level 3 | Private Placement Warrants | ||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||
Fair value, beginning balance | 528,000 | $ 4,650,289 | $ 4,946,082 | $ 13,259,885 | $ 13,375,560 | $ 9,504,000 | $ 4,946,082 | $ 9,504,000 | 9,504,000 | |
Change in fair value | 132,000 | (4,122,289) | (295,793) | (9,104,121) | (115,675) | 3,871,560 | ||||
Transfers to Level 2 | $ (660,000) | |||||||||
Fair value, ending balance | $ 528,000 | 4,650,289 | $ 4,155,764 | $ 13,259,885 | 13,375,560 | 9,504,000 | 4,155,764 | 4,946,082 | ||
Level 3 | Public Warrant | ||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||
Fair value, beginning balance | 0 | |||||||||
Initial measurement on July 30, 2020 | 11,270,000 | |||||||||
Transfer from Level 3 to Level 1 | (11,270,000) | |||||||||
Level 3 | Private Placement Warrants | ||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||
Fair value, beginning balance | $ 4,946,082 | $ 9,504,000 | 0 | $ 4,946,082 | $ 9,504,000 | 9,504,000 | ||||
Initial measurement on July 30, 2020 | 6,732,000 | |||||||||
Change in fair value | 2,772,000 | (4,557,918) | ||||||||
Fair value, ending balance | $ 9,504,000 | $ 4,946,082 |
FAIR VALUE MEASUREMENTS - Disco
FAIR VALUE MEASUREMENTS - Discounted Cash Flows Model for the PIPE Derivative Liability (Details) - PIPE Derivative Liability | Sep. 30, 2022 $ / shares | Sep. 07, 2022 $ / shares |
Incentive shares | ||
FAIR VALUE MEASUREMENTS | ||
Measurement input | 2,000,000 | 2,000,000 |
Per share subscription price | ||
FAIR VALUE MEASUREMENTS | ||
Measurement input | 10 | 10 |
Discount period | ||
FAIR VALUE MEASUREMENTS | ||
Measurement input | 0.00210 | 0.00150 |
Present value factor | ||
FAIR VALUE MEASUREMENTS | ||
Measurement input | 0.00994 | 0.00995 |
FAIR VALUE MEASUREMENTS - Fai_4
FAIR VALUE MEASUREMENTS - Fair value of the PIPE Derivative Liability (Details) - PIPE Derivative Liability | 1 Months Ended |
Sep. 30, 2022 USD ($) | |
FAIR VALUE MEASUREMENTS | |
Fair value, beginning balance | $ 19,878,900 |
Change in fair value | 26,800 |
Fair value, ending balance | $ 19,905,700 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 21, 2022 | Oct. 31, 2022 | Jan. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | |||||||
Assets held-in-trust, noncurrent | $ 40,293,597 | $ 40,293,597 | $ 230,158,259 | $ 230,091,362 | |||
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | ||||||
Class A Ordinary shares elected to redeem upon extension of business combination period | 1,202,070 | ||||||
Cash withdrawn from Trust Account in connection with redemption | $ 148,079,821 | $ 12,349,642 | $ 148,079,821 | ||||
Transferred from Level 3 to Level 2 | 660,000 | $ 660,000 | |||||
Public Warrant | |||||||
FAIR VALUE MEASUREMENTS | |||||||
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | $ 18 | |||||
Cash | |||||||
FAIR VALUE MEASUREMENTS | |||||||
Assets held-in-trust, noncurrent | $ 40,293,597 | $ 40,293,597 | $ 598 | 82 | |||
U.S. Treasury Securities | |||||||
FAIR VALUE MEASUREMENTS | |||||||
Assets held-in-trust, noncurrent | $ 230,157,661 | $ 230,091,280 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 30, 2020 | Dec. 31, 2019 |
Current assets | ||||||||||
Cash and cash equivalents | $ 0 | $ 8,390 | $ 792,416 | |||||||
Total Current Assets | 15,597 | 121,530 | 1,136,255 | |||||||
TOTAL ASSETS | 40,309,194 | 230,279,789 | 231,227,617 | |||||||
Current liabilities | ||||||||||
Loan payable, current | 10,486,000 | 1,978,000 | ||||||||
Total current liabilities | 18,736,154 | 6,788,398 | 859,811 | |||||||
Loan payable, noncurrent | 11,351,000 | 4,418,000 | ||||||||
TOTAL LIABILITIES | 48,501,854 | 27,604,480 | 34,398,811 | |||||||
Class A ordinary shares subject to possible redemption | 40,293,597 | 230,000,000 | 230,000,000 | |||||||
Stockholders' deficit | ||||||||||
Additional paid in capital | 0 | 0 | ||||||||
Accumulated deficit | (48,486,832) | (27,325,266) | (33,171,769) | |||||||
Total Shareholders' Deficit | (48,486,257) | $ (19,749,609) | $ (28,875,317) | (27,324,691) | $ (23,449,956) | $ (45,738,217) | $ (44,695,623) | (33,171,194) | $ 0 | |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 230,279,789 | 231,227,617 | ||||||||
TEMPO AUTOMATION INC | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | 533,000 | 2,864,000 | 23,524,000 | 17,340,000 | ||||||
Accounts receivable, net | 1,945,000 | 2,918,000 | 2,713,000 | |||||||
Inventory | 2,916,000 | 879,000 | 168,000 | |||||||
Contract assets | 990,000 | 1,219,000 | 608,000 | |||||||
Prepaid expenses and other current assets | 933,000 | 892,000 | 535,000 | |||||||
Total Current Assets | 7,317,000 | 8,772,000 | 21,364,000 | |||||||
Property and equipment, net | 7,031,000 | 8,891,000 | 10,602,000 | |||||||
Operating leases - right of use asset | 565,000 | 1,323,000 | 2,109,000 | |||||||
Restricted cash | 320,000 | 320,000 | 406,000 | |||||||
Other noncurrent assets | 6,208,000 | 2,925,000 | 257,000 | |||||||
TOTAL ASSETS | 21,441,000 | 22,231,000 | 34,738,000 | |||||||
Current liabilities | ||||||||||
Accounts payable | 4,994,000 | 1,583,000 | 467,000 | |||||||
Contract liabilities | 2,086,000 | 175,000 | 80,000 | |||||||
Accrued liabilities | 5,195,000 | 3,971,000 | 933,000 | |||||||
Accrued compensation and related benefits | 1,186,000 | 1,249,000 | 604,000 | |||||||
Operating lease liability, current | 801,000 | 1,111,000 | 987,000 | |||||||
Finance lease, current | 1,897,000 | 1,091,000 | 906,000 | |||||||
Loan payable, current | 10,486,000 | 1,978,000 | ||||||||
Total current liabilities | 98,745,000 | 19,666,000 | 5,955,000 | |||||||
Operating lease liability, noncurrent | 38,000 | 546,000 | 1,657,000 | |||||||
Finance lease, noncurrent | 1,606,000 | 2,697,000 | ||||||||
Loan payable, noncurrent | 880,000 | 11,351,000 | 4,418,000 | |||||||
Other noncurrent liabilities | 5,573,000 | 3,925,000 | 341,000 | |||||||
TOTAL LIABILITIES | 132,098,000 | 38,742,000 | 45,804,000 | 15,068,000 | ||||||
Commitment and contingencies (Note 15) | ||||||||||
Class A ordinary shares subject to possible redemption | 75,684,000 | 75,684,000 | 75,684,000 | 75,684,000 | $ 75,684,000 | |||||
Stockholders' deficit | ||||||||||
Common stock, $0.00001 par value. 63,299,666 and 66,000,000 shares authorized at December 31, 2021 and 2020, respectively; 10,037,305 and 9,773,097 shares issued and outstanding at December 31, 2021 and 2020, respectively | 0 | 0 | ||||||||
Additional paid in capital | 18,489,000 | 16,117,000 | 4,285,000 | |||||||
Accumulated deficit | (204,830,000) | (108,312,000) | (84,687,000) | (60,299,000) | ||||||
Total Shareholders' Deficit | (186,341,000) | (92,195,000) | $ (78,478,000) | (56,014,000) | $ (38,295,000) | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 21,441,000 | $ 22,231,000 | $ 34,738,000 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Convertible preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||
Shares authorized | 52,500,412 | 31,058,244 | 39,982,670 | ||
Ordinary shares, subject to possible redemption issued | 29,520,187 | 29,520,187 | 29,520,187 | ||
Ordinary shares, shares subject to possible redemption | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 |
Aggregate liquidation preference | $ 74,496 | $ 74,496 | $ 74,496 | ||
Ordinary shares, par value (per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||
Common stock, shares authorized | 125,000,000 | 63,299,666 | 66,000,000 | ||
Common stock, shares issued | 10,085,354 | 10,037,305 | 9,773,097 | ||
Common stock, shares outstanding | 10,085,354 | 10,037,305 | 9,773,097 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses | |||||||
Loss from operations | $ (894,289) | $ (2,634,162) | $ (3,248,689) | $ (4,773,008) | $ (1,125,460) | $ (6,943,312) | |
Other income (expense), net | |||||||
Change in fair value of warrants and derivatives | (362,000) | 24,916,621 | 10,956,082 | 14,433,236 | (7,487,000) | 12,722,918 | |
Total other income (expense), net | $ (7,742,269) | $ 24,922,423 | 3,688,936 | 14,494,246 | $ (8,062,897) | 12,789,815 | |
TEMPO AUTOMATION INC | |||||||
Revenue | 9,146,000 | 13,354,000 | 17,361,000 | $ 18,724,000 | |||
Cost of revenue | 8,141,000 | 10,696,000 | 14,578,000 | 14,098,000 | |||
Gross profit | 1,005,000 | 2,658,000 | 2,783,000 | 4,626,000 | |||
Operating expenses | |||||||
Research and development | 8,317,000 | 6,538,000 | 9,904,000 | 6,690,000 | |||
Sales and marketing | 7,363,000 | 6,504,000 | 9,817,000 | 7,892,000 | |||
General and administrative | 9,992,000 | 12,098,000 | 16,376,000 | 8,613,000 | |||
Total operating expenses | 25,969,000 | 25,140,000 | 36,097,000 | 23,195,000 | |||
Loss from operations | (24,964,000) | (22,482,000) | (33,314,000) | (18,569,000) | |||
Other income (expense), net | |||||||
Interest expense | (6,902,000) | (2,069,000) | (3,686,000) | (630,000) | |||
Other financing cost | (30,793,000) | (8,955,000) | |||||
Gain on PPP loan forgiveness | 2,500,000 | 2,500,000 | |||||
Loss on debt extinguishment | (38,939,000) | (319,000) | |||||
Interest income | 7,000 | 3,000 | 3,000 | 49,000 | |||
Change in fair value of warrants and derivatives | 5,674,000 | (2,340,000) | (4,242,000) | 47,000 | |||
Total other income (expense), net | (71,554,000) | (1,906,000) | (14,699,000) | (534,000) | |||
Loss before income taxes | (96,518,000) | (24,388,000) | (48,013,000) | (19,103,000) | |||
Income tax provision | 1,000 | ||||||
Net loss | $ (96,518,000) | $ (24,388,000) | $ (48,013,000) | $ (19,104,000) | |||
Basic net loss per share | $ (9.58) | $ (2.48) | $ (4.89) | $ (1.96) | |||
Diluted net loss per share | $ (9.58) | $ (2.48) | $ (4.89) | $ (1.96) | |||
Weighted average shares outstanding, basic | 10,072,318 | 9,815,806 | 9,819,576 | 9,755,174 | |||
Weighted average shares outstanding, diluted | 10,072,318 | 9,815,806 | 9,819,576 | 9,755,174 |
Statements of Convertible Prefe
Statements of Convertible Preferred Stock - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Balance at beginning of period | $ 230,000,000 | $ 230,000,000 | ||
Balance at end of period | $ 40,293,597 | $ 230,000,000 | $ 230,000,000 | |
TEMPO AUTOMATION INC | ||||
Balance at beginning of period, shares | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 |
Balance at beginning of period | $ 75,684,000 | $ 75,684,000 | $ 75,684,000 | $ 75,684,000 |
Balance at end of period, shares | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 |
Balance at end of period | $ 75,684,000 | $ 75,684,000 | $ 75,684,000 | $ 75,684,000 |
STATEMENTS OF CONVERTIBLE PRE_2
STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT - USD ($) | Common Stock TEMPO AUTOMATION INC | Additional Paid in Capital TEMPO AUTOMATION INC | Additional Paid in Capital | Accumulated Deficit TEMPO AUTOMATION INC | Accumulated Deficit | TEMPO AUTOMATION INC | Total |
Balance at the beginning at Dec. 31, 2019 | $ 2,900,000 | $ (41,195,000) | $ (38,295,000) | ||||
Balance at beginning of period, shares at Dec. 31, 2019 | 9,740,717 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (19,104,000) | (19,104,000) | |||||
Issuance of common stock upon exercise of stock options | 22,000 | 22,000 | |||||
Issuance of common stock upon exercise of stock options, shares | 18,681 | ||||||
Issuance of common stock awards, shares | 13,699 | ||||||
Issuance of common stock warrants | 107,000 | 107,000 | |||||
Stock-based compensation | 1,256,000 | 1,256,000 | |||||
Balance at the end at Dec. 31, 2020 | 4,285,000 | $ 0 | (60,299,000) | $ (33,171,769) | (56,014,000) | $ (33,171,194) | |
Balance at end of period, shares at Dec. 31, 2020 | 9,773,097 | ||||||
Balance at the beginning at Mar. 30, 2020 | 0 | 0 | 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (9,188,357) | ||||||
Balance at the end at Dec. 31, 2020 | 4,285,000 | 0 | (60,299,000) | (33,171,769) | (56,014,000) | (33,171,194) | |
Balance at end of period, shares at Dec. 31, 2020 | 9,773,097 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (24,388,000) | (24,388,000) | 9,721,238 | ||||
Issuance of common stock upon exercise of stock options | 27,000 | 27,000 | |||||
Issuance of common stock upon exercise of stock options, shares | 116,379 | ||||||
Issuance of common stock awards | 213,000 | 213,000 | |||||
Stock-based compensation | 1,684,000 | 1,684,000 | |||||
Balance at the end at Sep. 30, 2021 | 6,209,000 | (84,687,000) | (23,450,531) | (78,478,000) | (23,449,956) | ||
Balance at end of period, shares at Sep. 30, 2021 | 9,889,476 | ||||||
Balance at the beginning at Dec. 31, 2020 | 4,285,000 | 0 | (60,299,000) | (33,171,769) | (56,014,000) | (33,171,194) | |
Balance at beginning of period, shares at Dec. 31, 2020 | 9,773,097 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (48,013,000) | (48,013,000) | 5,846,503 | ||||
Issuance of common stock upon exercise of stock options | 126,000 | $ 126,000 | |||||
Issuance of common stock upon exercise of stock options, shares | 264,208 | 264,208 | |||||
Issuance of common stock warrants | 9,168,000 | $ 9,168,000 | |||||
Stock-based compensation | 2,538,000 | 2,538,000 | |||||
Balance at the end at Dec. 31, 2021 | 16,117,000 | 0 | (108,312,000) | (27,325,266) | (92,195,000) | (27,324,691) | |
Balance at end of period, shares at Dec. 31, 2021 | 10,037,305 | ||||||
Balance at the end at Jun. 30, 2022 | (19,750,184) | (19,749,609) | |||||
Balance at the beginning at Dec. 31, 2021 | 16,117,000 | $ 0 | (108,312,000) | (27,325,266) | (92,195,000) | (27,324,691) | |
Balance at beginning of period, shares at Dec. 31, 2021 | 10,037,305 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (96,518,000) | (96,518,000) | 440,247 | ||||
Issuance of common stock upon exercise of stock options | 49,000 | 49,000 | |||||
Issuance of common stock upon exercise of stock options, shares | 48,049 | ||||||
Issuance of common stock warrants | 4,000,000 | ||||||
Stock-based compensation | 2,323,000 | 2,323,000 | |||||
Balance at the end at Sep. 30, 2022 | $ 18,489,000 | $ (204,830,000) | $ (48,486,832) | $ (186,341,000) | $ (48,486,257) | ||
Balance at end of period, shares at Sep. 30, 2022 | 10,085,354 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Cash flows from financing activities: | |
Cash - End of period | $ 792,416 |
TEMPO AUTOMATION INC | |
Cash flows from operating activities | |
Net income (loss) | (19,104,000) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
Depreciation and amortization | 2,232,000 |
Stock-based compensation | 1,256,000 |
Noncash operating lease expense | 685,000 |
Bad debt expense | 175,000 |
Change in fair value of warrant liability | (47,000) |
Changes in operating assets and liabilities: | |
Accounts receivable | 2,789,000 |
Inventory | 355,000 |
Prepaid expenses and other current assets | 252,000 |
Other noncurrent assets | (207,000) |
Accounts payable | (1,217,000) |
Accrued liabilities | (467,000) |
Other noncurrent liabilities | 157,000 |
Operating lease liabilities | (763,000) |
Net cash used in operating activities | (13,904,000) |
Net Cash Provided by (Used in) Investing Activities [Abstract] | |
Purchases of property and equipment | (2,307,000) |
Net cash provided by investing activities | (2,307,000) |
Cash flows from financing activities: | |
Proceeds from financing lease | 4,000,000 |
Principal payments under finance lease obligations | (397,000) |
Proceeds from issuance of debt | 5,620,000 |
Payment of debt issuance costs | (37,000) |
Proceeds from PPP Loan | 2,500,000 |
Debt repayment | (1,620,000) |
Proceeds from exercise of stock options | 22,000 |
Net cash provided by (used in) financing activities | 10,088,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (6,123,000) |
Cash - Beginning of period | 23,869,000 |
Cash - End of period | 17,746,000 |
Supplemental disclosures of cash flow information | |
Cash paid for income taxes | 72,000 |
Cash paid for interest | 514,000 |
Noncash investing and financing activities | |
Issuance of common stock warrants | $ 107,000 |
Organization
Organization | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Organization | (1) Organization Tempo Automation (the “Company,” “us,” “our” or “we”) is a privately held Printed Circuit Board Assembly (“PCBA”) manufacturing company that was incorporated in Delaware in 2013. Tempo Automation provides turnkey PCBA services for low volume production. The Company’s proprietary automation software creates an unbroken digital thread from design to delivery. This makes it possible to execute a complex design and manufacturing process quickly and precisely. The Company provides real-time, reliable lead times based on supplier inventory and factory workload. The Company’s software provides transparent production and delivery tracking with live updates. On August 13, 2021, the Company entered into a Stock Purchase Agreement (the “Whizz Agreement”) to acquire Whizz Systems, Inc., a Delaware corporation (“Whizz”). On August 11, 2022, Tempo and Whizz entered into a mutual termination agreement, pursuant to which the Whizz Agreement was terminated in its entirety. On October 13, 2021, ACE Convergence Acquisition Corp. (“ACE”), a blank check company, entered into an Agreement and Plan of Merger (the “ACE Merger Agreement”) with ACE Convergence Subsidiary Corp., a Delaware corporation, and a direct wholly owned subsidiary of ACE (“Merger Sub”), and Tempo. The ACE Merger Agreement was later amended on July 6, 2022, August 12, 2022, and September 7, 2022. On October 13, 2021, Tempo entered into an Agreement and Plan of Merger (the “Compass AC Agreement”) with Advanced Circuits to acquire Compass AC Holdings, Inc., a Delaware corporation (“Compass AC”). On July 28, 2022, Advanced Circuits delivered notice to Tempo that Advanced Circuits was terminating the Agreement and Plan of Merger, dated as of October 13, 2021, by and among Tempo, Advanced Circuits and the other parties thereto in accordance with its terms. On November 22, 2022, ACE consummated the closing of the transactions contemplated by that certain Amended and Restated Agreement and Plan of Merger, dated as of August 12, 2022, as amended by that certain First Amendment to the Amended and Restated Agreement and Plan of Merger, dated as of September 7, 2022, and that certain Second Amendment to the Amended and Restated Agreement and Plan of Merger, dated as of September 23, 2022 (as amended, the “Merger Agreement”), by and among ACE, ACE Convergence Subsidiary Corp. (“Merger Sub”) and Tempo Automation, Inc. (“Legacy Tempo”), which provides for, among other things, the merger of Merger Sub with and into Legacy Tempo, with Legacy Tempo surviving as a wholly owned subsidiary of ACE (the transactions contemplated by the Merger Agreement, the “Business Combination”). With the closing ACE was renamed Tempo Automation Holdings, Inc. Refer to Note 15 for further discussion of the ACE Merger. | (1) Organization Tempo Automation (the “Company,” “us,” “our” or “we”) is a privately held Printed Circuit Board Assembly (“PCBA”) manufacturing company that was incorporated in Delaware in 2013. Tempo Automation provides turnkey PCBA services for low volume production. The Company’s proprietary automation software creates an unbroken digital thread from design to delivery. This makes it possible to execute a complex design and manufacturing process quickly and precisely. The Company provides real-time, reliable lead times based on supplier inventory and factory workload. The Company’s software provides transparent production and delivery tracking with live updates. On August 13, 2021, the Company entered into a Stock Purchase Agreement (the “Whizz Agreement”) to acquire Whizz Systems, Inc., a Delaware corporation (“Whizz”). The acquisition is anticipated to close concurrent with the closing of the merger with ACE Convergence Acquisition Corp. On October 13, 2021, ACE Convergence Acquisition Corp. (“ACE”), a blank check company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ACE Convergence Subsidiary Corp., a Delaware corporation, and a direct wholly owned subsidiary of ACE (“Merger Sub”), and Tempo. On October 13, 2021, Tempo entered into an Agreement and Plan of Merger (the “Compass AC Agreement”) with Compass AC Holdings, Inc., a Delaware corporation (“Compass AC”). The merger is anticipated to close concurrent with the closing of the merger with ACE. Pursuant to the above, and on the terms and subject to the conditions of which, Tempo will acquire all of the outstanding shares of capital stock of each Whizz and Compass AC (the “Tempo Add-On Acquisitions”) immediately following the closing of the business combination with ACE. After the close of the merger, ACE will pay or issue to eligible Whizz equity holders and Compass AC equity holders their respective pro rata portion of the Whizz Consideration (as defined in the Merger Agreement) or the Compass AC Consideration (as defined in the Merger Agreement), including, any applicable earnout consideration, upon the terms and subject to the conditions set forth in the Whizz Agreement or the Compass AC Agreement, as applicable. |
Summary of Significant Accou_13
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Basis of Presentation The unaudited interim condensed financial statements and accompanying unaudited notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Liquidity and Going Concern The Company has experienced negative cash flows from operations since inception and expects negative cash flows from operations to continue for the foreseeable future. The Company had an accumulated deficit of $204.8 million and cash, cash equivalents and restricted cash of $0.9 million as of September 30, 2022. During the nine months ended September 30, 2022, the Company used net cash of $20.2 million in operating activities and incurred a net loss of $96.5 In October 2021, Tempo entered into a loan and security agreement (the “LSA”) with a maximum borrowing capacity of $150.0 million consisting of four tranches. This agreement replaced Tempo’s existing SQN Venture Income Fund II, LP $20.0 million facility (the “June 2021 Credit Facility”), and $20.0 million was drawn on tranche 1 of the LSA. Borrowing capacity for tranche 2 is $20.0 million which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. Borrowing capacity for tranche 3 and tranche 4 is $40.0 million, and $70.0 million, respectively which shall be available to draw by the Company, upon the de-SPAC with ACE, subject to lender approval. The tranches have an earliest expiration date of December 23, 2022 (see Note 7). In January 2022, the Company entered into the first amendment to the LSA to convert $10.0 million of availability under tranche 2 of the loan to tranche 1 of the loan. This amendment expanded tranche 1 from $20.0 million to $30.0 million and reduced tranche 2 from $20.0 million to $10.0 million. The first amendment did not change the interest rates or maturity dates for tranche 1 (see Note 7). In January 2022, the Company issued convertible promissory notes (the “2022 Promissory Notes”) to existing investors for gross proceeds of $5.0 million. These shall be due and payable by the Company on demand at any time after November 15, 2022 (see Note 8). In May 2022, the Company entered into a bridge note (the “Bridge Note”) with ACE and ACE Equity Partners International Pte. Ltd. (“AEPI”), which was replaced in its entirety on substantially the same terms on July 1, 2022, pursuant to which AEPI agreed to loan to Tempo up to an aggregate principal amount of $5.0 million, $4.6 million of which was advanced to Tempo as of September 30, 2022. The Bridge Note is due on September 30, 2022 (see Note 8). In August, 2022, Tempo entered into a note purchase agreement with certain existing related party investors and with the lenders under the Loan and Security Agreement (collectively, the “Initial Bridge Investors”), pursuant to which Tempo agreed to issue up to $5.0 million in aggregate principal amount of convertible promissory notes (the “August 2022 Bridge Notes”) to the Initial Bridge Investors for aggregate cash proceeds of approximately $1.4 million and the cancellation of approximately $3.6 million of outstanding amounts owed under the LSA. Additionally, Tempo may, from time to time prior to October 9, 2022, issue up to $0.7 million in aggregate principal amount of additional August 2022 Bridge Notes to one or more additional investors (see Note 7). In May and August 2022, the Company announced reductions in workforce. In order to fund planned operations while meeting obligations as they come due, the Company will need to secure additional debt or equity financing. These plans for additional financings are intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of Management’s control, the Company cannot ensure they will be effectively implemented. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Failure to secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact additional operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives. The accompanying condensed financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course. Unaudited Interim Condensed Financial Statements The accompanying interim condensed balance sheet as of September 30, 2022, the interim condensed statements of operations, condensed statements of convertible preferred stock and stockholders’ equity, and condensed statements of cash flows for the nine months ended September 30, 2022 and 2021, and amounts relating to the interim periods included in the accompanying notes to the interim condensed financial statements are unaudited. The unaudited interim condensed financial statements have been prepared in accordance with U.S. GAAP and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s condensed balance sheet as of September 30, 2022, and the condensed statements of operations, condensed statements of convertible preferred stock and stockholders’ equity, and condensed statements of cash flows for the nine months ended September 30, 2022 and 2021. The results for the nine months ended September 30, 2022, are not necessarily indicative of the results expected for the fiscal year or any other periods. These interim condensed financial statements should be read in conjunction with the Company’s financial statements and related notes for the fiscal year ended December 31, 2021. The unaudited balance sheet as of December 31, 2021 has been derived from the Company’s audited financial statements. Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the condensed financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and contract liabilities; allowance for doubtful accounts; determination of fair value of our common stock; determination of fair value of debt; determination of fair value of warrants; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; accrued liabilities; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the financial statements. Risks and Uncertainties The Company is subject to a number of risks. The Company conducts business in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on its future financial position, results of operations, or cash flows: advances and trends in new technologies and industry standards; pressures resulting from new applications offered by competitors; delays in applications and functionality development; changes in certain strategic relationships or customer relationships; the Company’s ability to attract new customers or retain existing customers; the length of the Company’s sales cycles and expense related to sales efforts; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; changes in domestic and international economic or political conditions or regulations; the ability of the Company to finance its operations; and the Company’s ability to attract and retain employees necessary to support its growth. Additionally, the COVID-19 pandemic has negatively impacted the global economy, disrupted supply chains, constrained work force participation, and created significant volatility and disruption of financial markets. Further, the Company faces risks with respect to inflationary environment in the country and the related fluctuations in interest as well as currency exchange rates. As the scope and duration of the COVID-19 pandemic is unknown and the extent of its economic impact continues to evolve globally, there is uncertainty related to the ultimate impact it will have on the Company’s business, its employees, results of operations and financial condition. COVID-19 Impact On March 11, 2020, the World Health Organization declared that the worldwide spread and severity of a new coronavirus, referred to as COVID-19, was severe enough to be characterized as a pandemic. In response to the continued spread of COVID-19, governmental authorities around the world have imposed various restrictions designed to slow the pace of the pandemic, including restrictions on travel and other restrictions that prohibit employees from going to work causing severe disruptions in the worldwide economy. The COVID-19 pandemic has had and may continue to have an adverse impact on the Company’s employees, operations, supply chain and distribution system. In response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the Company’s business, certain employees worked remotely. In addition, in April 2020, the Company announced reductions in workforce. These decisions, as well as COVID-19 more generally, introduced new dynamics into the households of many employees. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for its services. If the Company’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, the Company may have difficulty sourcing materials necessary to fulfill production requirement. Due to the COVID-19 pandemic, Tempo has experienced some supply chain constraints, including with respect to semiconductor components, and has responded by ordering larger quantities of these components to ensure an adequate supply. COVID-19 has also impacted the Company’s customers and may create unpredictable reductions or increases in demand for Tempo’s manufacturing services. Management will continue to monitor the impact of the global situation on the Company’s financial condition, cash flows, operations, industry, workforce, and customer relationships. Revenue from Contracts with Customers Contract Balances The timing of revenue recognition, billings and cash collections can result in deferred revenue (contract liabilities), unbilled receivables (contract assets), and billed accounts receivable. a. Contract Liabilities A contract liability results when payments from customers are received in advance for assembly and manufacturing of the goods. The Company recognizes contract liabilities as revenues upon satisfaction of the underlying performance obligations. Deferred revenue that is expected to be recognized as revenue during the subsequent twelve-month period from the date of billing is recorded in contract liabilities and the remaining portion, if any, is recorded in contract liabilities, noncurrent on the accompanying balance sheets at the end of each reporting period. For the nine months ended September 30, 2022 and 2021, the Company recognized as revenue of $0.1 million and $0.1 million that was included in the contract liabilities balance at the beginning of the related periods, respectively. b. Contract Assets Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Unbilled receivables that are expected to be billed during the subsequent twelve-month period from the date of revenue recognition are recorded in contract assets, and the remaining portion, if any, is recorded in other noncurrent assets on the accompanying balance sheets at the end of each reporting period. As of September 30, 2022 and December 31, 2021, there were no amounts attributable to contract assets recorded within other noncurrent assets. Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. Below are the billed receivables, unbilled receivables, and deferred revenue (in thousands): September 30, December 31, 2022 2021 Accounts receivable, net $ 1,945 $ 2,918 Contract assets 990 1,219 Contract liabilities 2,086 175 Segment Reporting and Geographic Information For the nine months ended September 30, 2022 and 2021, the Company was managed as a single operating segment in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker as she is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions and managing the organization as a whole. All of the Company’s revenues are domestic sales and fixed assets are physically located in the United States. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities that mature within three months or less from the original date of purchase to be cash equivalents. The Company maintains the majority of its cash balances with commercial banks in interest bearing accounts. Cash and cash equivalents include cash held in checking and savings accounts and highly liquid securities with original maturity dates of three months or less from the original date of purchase. The restricted cash balance as of both September 30, 2022 and 2021 represents $0.3 million related to a letter of credit for the Company’s office space lease. September 30, September 30, 2022 2021 Cash and cash equivalents $ 533 $ 23,524 Restricted cash 320 320 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 853 $ 23,844 Long-Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. If the sum of the expected future cash flows (undiscounted and before interest) from the use of the assets is less than the net book value of the asset an impairment could exist and the amount of the impairment loss, if any, will generally be measured as the difference between the net book value of the assets and their estimated fair values. The Company identified a potential impairment indicator for long-lived assets and performed a recoverability test. The result of the recoverability test indicated that the sum of the expected future cash flows was greater than the carrying amount of the asset group and no impairment charges were recorded related to the recoverability test. Separately, the Company abandoned an asset and recorded an impairment charge of $0.3 million during the nine months ended September 30, 2022 (see Note 12). Fair Value of Financial Instruments Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1: Quoted prices for identical assets or liabilities in active markets at the measurement date. ● Level 2: Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. ● Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, term loans, convertible notes, convertible notes - related party and warrant liabilities. The Company has determined the carrying value of these assets and liabilities approximates the fair value due to their short maturities and has classified these assets and liabilities as Level 1 financial instruments. The balances outstanding under the loans payable agreements are considered to approximate their estimated fair values as the interest rates approximate market rates. The convertible notes, convertible notes - related party and warrant liabilities are carried at fair value. The Company classified the convertible debt and liability classified convertible preferred stock and common stock warrants as Level 3 financial instruments. The fair value of the convertible debt is $53.1 million as of September, 30, 2022 (see Note 7 and 8). The Company did not have convertible debt as of December 31, 2021. The fair value of liability classified convertible preferred stock and common stock warrants is $32.4 million and $5.6 million as of September 30, 2022 and December 31, 2021, respectively (see Note 10). During the nine months ended September 30, 2022 and year ended December 31, 2021, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. Fair Value Option (“FVO”) Election The Company accounts for certain convertible notes outstanding under the fair value option election of ASC 825, Financial Instruments (“ASC 825”) as discussed below. The convertible notes accounted for under the FVO election are each debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815. Notwithstanding, ASC 825-10-15-4 provides for the FVO election, to the extent not otherwise prohibited by ASC 825-10-15-5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment, as required by ASC 825-10-45-5, is recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying condensed statement of operations. With respect to the above convertible notes, as provided for by ASC 825-10-50-30 (b), the estimated fair value adjustment is presented as change in fair value of debt within other income (expense) in the accompanying condensed statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk during the nine months ended September 30, 2022. Deferred Transaction Costs Deferred transaction costs consist of direct incremental legal, consulting, and accounting fees relating to the merger transaction, as discussed in Note 1 — Organization, which are capitalized and will be recorded as a reduction to the issuance of equity arising from the consummation of the merger transaction. In the event the merger transaction is terminated, deferred transaction costs will be expensed. As of September 30, 2022 and December 31, 2021, the Company has deferred such costs amounting to $6.1 million and $1.9 million, respectively, which are included in other noncurrent assets in the condensed balance sheets. Net Loss Per Share of Common Stock Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its preferred stock to be participating securities. Net loss is attributed to common stockholders and participating securities based on their participation rights. Net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of preferred stock, stock options, preferred and common stock warrants and convertible notes. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. Related Parties As discussed in Note 1 — Organization, in October 2021, ACE entered into a Merger Agreement with ACE Convergence Subsidiary Corp. and a direct wholly owned Merger Sub, and Tempo. The Chief Financial Officer of Tempo is also a director of ACE and is considered an interested related party to the business combination. Additionally, the Company issued 2022 Promissory Notes to Point72 Ventures Investments, LLC (“P72) and Lux Ventures IV, L.P. (“Lux”) and entered into the Bridge Note with ACE and AEPI during the nine months ended September 30, 2022 (see Note 8). Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or ASU 2016-13. The amendments in ASU 2016-13 introduce an approach based on expected losses to estimated credit losses on certain types of financial instruments, modify the impairment model for available-for-sale debt securities and provide for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2023, with early application permitted. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC 606. The standard is effective for fiscal years beginning after December 15, 2022. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. | (2) Summary of Significant Accounting Policies Basis of Presentation The financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). Liquidity and Going Concern The Company has experienced negative cash flows from operations since inception and expects negative cash flows from operations to continue for the foreseeable future. The Company had an accumulated deficit of $108.3 million and cash, cash equivalents and restricted cash of $3.2 million as of December 31, 2021. During the year ended December 31, 2021, the Company used net cash of $30.2 million in operating activities and incurred a net loss of $48.0 million. Additionally, as of the date these financial statements were available for issuance the Company has $37.0 million of loans payable and finance lease obligations coming due within the next 12 months. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In October 2021, Tempo entered into a loan and security agreement (the “Loan and Security Agreement”) with a maximum borrowing capacity of $150.0 million consisting of four tranches. This agreement replaced Tempo’s existing SQN Venture Income Fund II, LP (the “June 2021 Credit Facility”) $20.0 million facility and $20.0 million was drawn on tranche 1 of the Loan and Security Agreement. Borrowing capacity for tranche 2, tranche 3 and tranche 4 is $20.0 million, $40.0 million, and $70.0 million, respectively which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. The tranches have an earliest expiration date of December 23, 2022 (see Note 10). In January 2022, the Company entered into first amendment to loan and security agreement to convert $10.0 million of availability under the tranche 2 loan to the tranche 1 loan. This amendment expanded the tranche 1 from $20.0 million to $30.0 million and reduced the tranche 2 loan from $20.0 million to $10.0 million. The first amendment did not change the interest rates or maturity dates for tranche 1 (see Note 18). In January 2022, the Company and ACE Convergence Acquisition secured principal amount of $200.0 million from the issuance of 15.5% Convertible Senior Notes due in 2025. The principal amount of notes consists of a $175.0 million investment from funds managed by Oaktree Capital Management and $25.0 million from an investment partner of ACE. The issuance of the notes is contingent on and is expected to fund the proposed business combination of the Company and ACE (see Note 18). In January 2022, the Company issued a convertible promissory notes to existing investors for gross proceeds of $5.0 million. These shall be due and payable by the Company on demand by at any time after November 15, 2022 (see Note 18). In order to fund planned operations while meeting obligations as they come due, the Company will need to secure additional debt or equity financing. These plans for additional financings are intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of Management’s control, the Company cannot ensure they will be effectively implemented. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Failure to secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives. The accompanying financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts; determination of fair value of our common stock; determination of fair value of our warrants; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; accrued liabilities; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the financial statements. Risks and Uncertainties The Company is subject to a number of risks. The Company conducts business in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on its future financial position, results of operations, or cash flows: advances and trends in new technologies and industry standards; pressures resulting from new applications offered by competitors; delays in applications and functionality development; changes in certain strategic relationships or customer relationships; the Company’s ability to attract new customers or retain existing customers; the length of the Company’s sales cycles and expense related to sales efforts; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; changes in domestic and international economic or political conditions or regulations; the ability of the Company to finance its operations; and the Company’s ability to attract and retain employees necessary to support its growth. Additionally, the COVID-19 pandemic has negatively impacted the global economy, disrupted supply chains, constrained work force participation, and created significant volatility and disruption of financial markets. As the scope and duration of the COVID-19 pandemic is unknown and the extent of its economic impact continues to evolve globally, there is uncertainty related to the ultimate impact it will have on the Company’s business, its employees, results of operations and financial condition. COVID-19 Impact On March 11, 2020, the World Health Organization declared that the worldwide spread and severity of a new coronavirus, referred to as COVID-19, was severe enough to be characterized as a pandemic. In response to the continued spread of COVID-19, governmental authorities around the world have imposed various restrictions designed to slow the pace of the pandemic, including restrictions on travel and other restrictions that prohibit employees from going to work causing severe disruptions in the worldwide economy. The COVID-19 pandemic has had and may continue to have an adverse impact on our employees, operations, supply chain and distribution system. In response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on our business, we asked our employees who were able to do so to work remotely. In addition, in April 2020, we announced reductions in workforce. These decisions, as well as COVID-19 more generally, introduced new dynamics into the households of many of our employees. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for its services. If the Company’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, the Company may have difficulty sourcing materials necessary to fulfill production requirement. Due to the COVID-19 pandemic, Tempo has experienced some supply chain constraints, including with respect to semiconductor components. COVID-19 has also impacted the Company’s customers and may create unpredictable reductions or increases in demand for Tempo’s manufacturing services. Management will continue to monitor the impact of the global situation on the Company’s financial condition, cash flows, operations, industry, workforce, and customer relationships. Reclassification For the year ended December 31, 2020, the Company previously presented the financial statement line item titled “Proceeds from issuance of debt” on net basis, with the gross proceeds of debt, net of cost of issuance for such debt raised. In order to conform to current year presentation the Company has disaggregated into two separate financial statement line items “Proceeds from issuance of debt” and “Payment of debt issuance costs” in the Company’s statements of cash flows.This change in presentation had no impact on the Company’s “Net cash provided by financing activities”, “Net decrease in cash, cash equivalents and restricted cash”, or “Cash, cash equivalents, and restricted cash at end of period”. Revenue from Contracts with Customers The Company manufactures electronics for prototyping and low volume production of Printed Circuit Board (“PCB”) assemblies and provides PCB assembly services for engineers with urgent, high — complexity projects. The Company owns the whole entire process from components and fabrication sourcing to assembly. To achieve the core principles of ASC 606, the Company accounts for revenue contracts with customers through the following steps: 1) Identify the contract with a customer: A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products and services to be transferred and identifies the payment terms related to these products and services, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for products and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company enters into a purchase order with each customer and ensures the purchase order is executed by all parties. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the date when the performance obligation is satisfied and include no general rights of return. 2) Identify the performance obligations in the contract: Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the products and services either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products and services is separately identifiable from other promises in the contract. The Company’s contracts consist of a single performance obligation of completed PCB assembly. As part of the term and conditions of the customer contract, the Company generally offers a warranty for a period of one year. This type of warranty provides the customers with assurance that the related assembled product will function as intended and complies with any agreed upon specifications. Therefore, as the warranty cannot be purchased separately and only provides assurance that the product complies with agreed-upon specifications, the warranty is not considered a separate performance obligation. 3) Determine the transaction price: The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products and services to the customer. The transaction price consists of fixed consideration as noted in each purchase order. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts do not include a significant financing component. The Company elected a practical expedient available under ASC 606, which permits the Company to not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less. 4) Allocate the transaction price to performance obligations in the contract: If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Each purchase order contains only one performance obligation and hence, the contract price per the purchase order is deemed to be reflective of the standalone selling price and the entire transaction price is allocated to the single performance obligation. All manufactured products are highly customized, and therefore, priced independently. 5) Recognize revenue when or as the Company satisfies a performance obligation: For each performance obligation identified, the Company determines at contract inception whether the performance obligation is satisfied over time or at a point in time. The transfer of control for the Company’s products qualify for over time revenue recognition because the products represent assets with no alternative use and the contracts include an enforceable right to payment for work completed to date. The Company has selected a cost incurred input method of measuring progress to recognize revenue over time, based on the status of work performed. The cost input method is representative of the value provided to the customer as it represents the Company’s performance completed to date. The Company typically satisfies its performance obligations in one month or less. The Company has elected to treat shipping and handling activities as fulfillment costs and the Company elected to record revenue net of sales and other similar taxes. Contract Balances The timing of revenue recognition, billings and cash collections can result in deferred revenue (contract liabilities), unbilled receivables (contract assets), and billed accounts receivable. a. Contract Liabilities A contract liability results when payments from customers are received in advance for assembly and manufacturing of the goods. The Company recognizes contract liabilities as revenues upon satisfaction of the underlying performance obligations. Deferred revenue that is expected to be recognized as revenue during the subsequent twelve-month period from the date of billing is recorded in contract liabilities and the remaining portion, if any, is recorded in contract liabilities, noncurrent on the accompanying balance sheets at the end of each reporting period. For years ended December 31, 2021 and 2020, the Company recognized as revenue $0.1 million and $0.5 million that was included in the contract liability balance at the beginning of the related periods, respectively. b. Contract Assets Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Unbilled receivables that are expected to be billed during the subsequent twelve-month period from the date of revenue recognition are recorded in contract assets, and the remaining portion, if any, is recorded in other noncurrent assets on the accompanying balance sheets at the end of each reporting period. Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. Below are the billed receivables, unbilled receivables, and deferred revenue (in thousands): As of December 31, 2021 2020 Accounts receivable, net $ 2,918 $ 2,713 Contract assets 1,219 608 Contract liabilities 175 80 Cost of Revenue Cost of revenue primarily include direct materials, direct labor, and manufacturing overhead incurred for revenue-producing units shipped. Cost of revenue also includes associated warranty costs, shipping and handling, and other miscellaneous costs. Research and Development Research and development costs are expensed as incurred and consist primarily of personnel and related costs for product development activities. Research and development costs also include professional fees payable to third parties, license and subscription fees for development tools, and manufacturing-related costs associated with product development. Advertising Costs Advertising costs are expensed as incurred. These amounts are included in selling and marketing expense in the accompanying statements of operations. Advertising costs were $0.5 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. Concentration of Risks Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable. The Company’s cash and cash equivalents and restricted cash are on deposit with major financial institutions. Such deposits may be in excess of insured limits. The Company believes that the financial institutions that hold the Company’s cash are financially sound, and accordingly, minimum credit risk exists with respect to these balances. The Company has not experienced any losses due to institutional failure or bankruptcy. The Company performs credit analyses and monitors the financial health of its customers to reduce credit risk. The Company reviews accounts receivable balances to determine if any receivables will potentially be uncollectible and includes any amounts that are determined to be uncollectible in the allowance for doubtful accounts. As of December 31, 2021, there was one customer who had outstanding balance accounting for 49% of the total accounts receivable balance. As of December 31, 2020, there was one customer who had outstanding balances accounting for 64% of the total accounts receivable balance. Concentration of customers For the year ended December 31, 2021, one customer represented 46% of revenue. For the year ended December 31, 2020, one customer represented 42% of revenue. Segment Reporting and Geographic Information For the years ended December 31, 2021 and 2020, the Company was managed as a single operating segment in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker as she is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions and managing the organization as a whole. All of the Company’s revenues are domestic sales and fixed assets are physically located in the United States. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities that mature within three months or less from the original date of purchase to be cash equivalents. The Company maintains the majority of its cash balances with commercial banks in interest bearing accounts. Cash and cash equivalents include cash held in checking and savings accounts and highly liquid securities with original maturity dates of three months or less from the original date of purchase. The restricted cash balance as of December 31, 2021 and 2020 represents $0.3 million and $0.4 million related to a letter of credit for the Company’s office space lease. As of December 31, 2021 2020 Cash and cash equivalents $ 2,864 $ 17,340 Restricted cash 320 406 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 3,184 $ 17,746 Accounts Receivable, Net Accounts receivable, net is recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance is based upon historical losses and an evaluation of the potential risk of loss associated with delinquent accounts. The Company evaluates the need for an allowance for doubtful accounts for estimated probable losses at each period end. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. The Company recorded an allowance for doubtful accounts of $0.4 million and $0.2 million and as of December 31, 2021 and 2020, respectively. Inventory Inventory consists of raw materials and work-in-progress representing the components that the Company produces. The Company uses actual cost to value inventory. In general, the Company procures materials from suppliers when a purchase order is received from its customers. The Company identifies these procured materials as raw material if work on the purchase order has not commenced and for any work that has been started on the materials procured are identified as work-in-progress. Fair Value of Financial Instruments Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1: Quoted prices for identical assets or liabilities in active markets at the measurement date. ● Level 2: Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. ● Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company applies fair value accounting to all financial assets and liabilities, which include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. The Company has determined the carrying value of these assets and liabilities to be equal to the fair value due to their short maturities and has classified these assets and liabilities as Level 1 financial instruments. Certain convertible preferred stock and common stock warrants are liability classified and are classified as Level 3 financial instruments. The fair value of the convertible preferred stock and common stock warrants which are liability classified is $5.6 million as of December 31, 2021, and $0.1 million as of December 31, 2020, and is included in other noncurrent liabilities on the accompanying balance sheets (see Note 13). During the years ended December 31, 2021 and 2020, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. Property and Equipment, Net Property and equipment, net are stated at cost less accumulated depreciation and amortization. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the current period. Repair and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives of the assets (in years): Useful Lives Computer equipment 3 Software 5 Furniture and fixtures 3 Leasehold improvements Shorter of useful life or remaining lease term Manufacturing equipment 10 Income Taxes The Company uses the asset-and-liability method for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized. The Company accounts for uncertain tax positions based on an evaluation as to whether it is more likely than not that a tax position will be sustained on audit, including resolution of any related appeals or litigation processes. This evaluation is based on all available evidence and assumes that the appropriate tax authorities have full knowledge of all relevant information concerning the tax position. The tax benefit recognized is based on the largest amount that is greater than 50% likely of being realized upon ultimate settlement. The Company includes interest expense and penalties related to its uncertain tax positions in interest expense and other expense, respectively. Stock-Based Compensation The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Equity-classified awards issued to employees, non-employees, and directors are measured at the grant-date fair value of the award. Forfeitures are recognized as they occur. For accounting purposes, the Company estimates grant-date fair value of stock options using the Black-Scholes-Merton ("BSM") option pricing model. The BSM option pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the risk-free interest rates, the expected term of the option, the expected volatility of the price of the Company’s common stock, and the expected dividend yield of the Company’s common stock. Convertible Preferred Stock The Company’s shares of preferred stock are assessed at issuance for classification and redemption features requiring bifurcation. The Company’s preferred stock is not mandatorily redeemable. The Company presents as temporary equity any stock that (i) the Company undertakes to redeem at a fixed or determinable price on the fixed or determinable date or dates, (ii) is redeemable at the option of the holders, or (iii) has conditions for redemption which are not solely within the control of the Company. The Company initially records redeemable convertible preferred stock at fair value, net of issuance costs. Because the occurrence of a deemed liquidation event is not currently probable, the carrying values of the shares of redeemable convertible preferred stock are not being accreted to their redemption values. Subsequent adjustments to the carrying values of the shares of redeemable convertible preferred stock would be made only when a deemed liquidation event becomes probable. Deferred Transaction Costs Deferred transaction costs consist of direct incremental legal, consulting, and accounting fees relating to the merger transaction, as discussed in Note 1 — Organization, which are capitalized and will be recorded as a reduction to the issuance of equity arising from the consummation of the merger transaction. In the event the merger transaction is terminated, deferred transaction costs will be expensed. As of December 31, 2021, the Company has deferred such costs amounting to $1.9 million, which are included in other noncurrent assets in the balance sheet, no such costs were incurred during the year ended December 31, 2020. Net Loss Per Share of Common Stock Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its preferred stock to be participating securities. Net loss is attributed to common stockholders and participating securities based on their participation rights. Net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of preferred stock, stock options, preferred and common stock warrants and convertible notes. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. Related Parties As discussed in Note 1 — Organization, in October, 2021, ACE entered into a Merger Agreement with ACE Convergence Subsidiary Corp. and a direct wholly owned Merger Sub, and Tempo. The chief financial officer of Tempo is also a director of ACE and is considered an interested related party to the business combination. Additionally, in October, 2021, Tempo entered into plan of merger with Compass AC Holdings, Inc. From the date of signing of the Compass AC Agreement through December 31, 2021, the Company purchased goods totaling $0.3 million, which are included in cost of revenue in the statement of operations. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The Company early adopted the ASU on January 1, 2021. Adoption of the ASU 2020-06 did not impact the Company’s financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize leases on their balance sheets and disclose key information about leasing arrangements. The standard is effective for small reporting companies and private companies for fiscal years beginning after December 15, 2021. In July 2018, the FASB approved an amendment to the new guidance that allows companies the option of using the effective date of the new standard as the initial application (at the beginning of the period in which it is adopted, rather than at the beginning of the earliest comparative period) and to recognize the effects of applying the new ASU as a cumulative effect adjustment to the opening balance sheet or retained earnings. The Company early adopted ASU 2016-02 on January 1, 2020 using the modified retrospective approach and, upon adoption, recorded a short-term lease liability of $0.8 million and long-term lease liability of $2.5 million, and a right-to-use asset of $2.7 million, and made no adjustment to the accumulated deficit. In connection with the adoption of the lease standard, the Company also derecognized deferred rent of $0.6 million. The adoption of Topic 842 did not have an impact on the statement of operations. The Company elected the practical expedients permitted under Topic 842, which among other things, |
Inventory
Inventory | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Inventory | (3) Inventory Inventory consists of the following (in thousands): September 30, December 31, 2022 2021 Raw materials $ 2,060 $ 158 Work in progress 856 721 Total inventory $ 2,916 $ 879 | (3) Inventory Inventory consists of the following (in thousands): As of December 31, 2021 2020 Raw materials $ 158 $ 111 Work in progress 721 57 Total inventory $ 879 $ 168 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Prepaid Expenses and Other Current Assets | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2022 2021 Prepaid expense $ 421 $ 650 Other current assets 512 242 Total prepaid expenses and other current assets $ 933 $ 892 | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consists of the following (in thousands): As of December 31, 2021 2020 Prepaid expense $ 650 $ 458 Other current assets 242 77 Total prepaid expenses and other current assets $ 892 $ 535 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2021 | |
TEMPO AUTOMATION INC | |
Property and Equipment, net | (5) Property and Equipment, net Property and equipment, net consists of the following (in thousands): As of December 31, 2021 2020 Manufacturing equipment $ 9,732 $ 9,197 Leasehold improvements 4,811 4,811 Computer equipment 489 395 Office furniture and fixtures 462 462 Software 248 248 Total property and equipment 15,742 15,113 Less accumulated depreciation (6,851) (4,511) Total property and equipment, net $ 8,891 $ 10,602 Depreciation expense for the years ended December 31, 2021 and 2020 was $2.3 million and $2.2 million, respectively. The following table summarizes depreciation expense and its allocation within the accompanying statements of operations (in thousands): Year ended December 31, 2021 2020 Cost of goods sold $ 530 $ 1,125 Research and development 574 901 Sales and marketing 137 124 General and administrative 1,101 42 Total depreciation expense $ 2,342 $ 2,192 |
Other Noncurrent Assets
Other Noncurrent Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Other Noncurrent Assets | (5) Other Noncurrent Assets Other noncurrent assets consist of the following (in thousands): September 30, December 31, 2022 2021 Deferred transaction costs $ 6,125 $ 1,926 Advance rent and prepaids 83 749 Deposits — 250 Total other noncurrent assets $ 6,208 $ 2,925 | (6) Other Noncurrent Assets Other noncurrent assets consist of the following (in thousands): As of December 31, 2021 2020 Deferred transaction costs $ 1,926 $ — Noncurrent prepaid expenses 749 7 Deposits 250 250 Total other noncurrent assets $ 2,925 $ 257 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Accrued Liabilities | (6) Accrued Liabilities Accrued liabilities consist of the following (in thousands): September 30, December 31, 2022 2021 Accrued legal fees (1) $ 4,272 $ 1,517 Accrued professional fees (1) 100 866 Accrued liabilities 410 774 Accrued sales and business taxes 176 241 Accrued cost of revenue 152 236 Customer refund liability — 205 Warranty liability 55 54 Other accrued liabilities 30 78 Total accrued expenses $ 5,195 $ 3,971 (1) These accrued legal and professional fees relate to the merger transaction, as discussed in Note 1 – Organization. | (7) Accrued Liabilities Accrued liabilities consist of the following (in thousands): As of December 31, 2021 2020 Accrued legal fees (1) $ 1,517 $ — Accrued professional fees 866 — Accrued liabilities 774 414 Accrued sales and business taxes 241 267 Accrued cost of revenue 236 — Customer refund liability 205 80 Warranty liability 54 56 Other accrued liabilities 78 116 Total accrued expenses $ 3,971 $ 933 (1) These accrued legal fees relate to the merger transaction, as discussed in Note 1 — Organization. |
Accrued Compensation and Relate
Accrued Compensation and Related Benefits | 12 Months Ended |
Dec. 31, 2021 | |
TEMPO AUTOMATION INC | |
Accrued Compensation and Related Benefits | (8) Accrued Compensation and Related Benefits Accrued compensation and related benefits consist of the following (in thousands): As of December 31, 2021 2020 Accrued payroll taxes $ 356 $ 254 Accrued commissions 121 109 Accrued payroll 41 79 Accrued bonus 647 49 Other accrued benefits 84 113 Total accrued compensation and related benefits $ 1,249 $ 604 |
Other Noncurrent Liabilities
Other Noncurrent Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
TEMPO AUTOMATION INC | |
Other Noncurrent Liabilities | (9) Other Noncurrent Liabilities Other noncurrent liabilities consist of the following (in thousands): As of December 31, 2021 2020 Warrant liabilities $ 5,573 $ 87 Other noncurrent liabilities — 254 Total other noncurrent liabilities $ 5,573 $ 341 |
Borrowing Arrangements
Borrowing Arrangements | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Borrowing Arrangements | (7) Borrowing Arrangements Term Loan and Credit Facility with Financial Institution In June 2020, the Company entered into a loan and security agreement with a financial institution where the Company drew down $4.0 million (the “Term Loan”) and secured up to $4.0 million in a revolving line of credit (the “Credit Facility”). During 2020, the Company drew down $1.6 million from the Credit Facility and repaid amount back in full. No other advances were drawn by the Company before it expired on June 3, 2021. In conjunction with the issuance of the Term Loan, the Company issued the lender a warrant to purchase 182,500 shares of the Company’s common stock. The Company allocated the $4.0 million proceeds between the Term Loan and the common stock warrant on a relative fair value basis, recording $0.1 million for the common stock warrant in additional paid-in capital, with the offset to debt discount, on the condensed balance sheets. The common stock warrant is not remeasured in future periods as it meets the conditions for equity classification. For further details on the warrants issued in conjunction with the term loans discussed, see Note 10. On June 23, 2021, the Company entered into an amended and restated loan and security agreement with the financial institution which expanded the Term Loan obligation from $4.0 million to $10.0 million, with the maturity date extended to September 1, 2022 and a loan commitment fee of $50 thousand. For the Term Loan the Company is required to make monthly interest only payments from January 2021 through December 2021, thereafter certain monthly principal plus interest payments for a period of 8 months beginning from January 2022 and a final payment of the balance principal and interest outstanding under the agreement in September 2022. The amended and restated term loan debt bears interest at the greater of (a) Wall Street Journal Prime plus 5.00%, floating or (b) 8.25% per annum. In addition, the Company issued 109,080 warrants to the lender which are exercisable to purchase the Company’s common stock at $1.51. For further details on the warrants issued in conjunction with the term loan, see Note 10. On October 14, 2021, the Company paid $10.3 million to settle the credit facility under the amended and restated loan and security agreement with Silicon Valley Bank including $0.3 million of interest. Equipment Loan and Security Agreement On January 29, 2021, the Company entered into an equipment loan and security agreement with SQN Venture Income Fund II, LP. The overall loan facility provides for a maximum borrowing capacity of $6.0 million consisting of two tranches, each tranche with a borrowing capacity up to $3.0 million. On January 29, 2021, the Company drew down $3.0 million under the first tranche of the facility. The Company is required to make monthly payments for a period of 42 months on this tranche plus end of term payment fee of $0.2 million which is accreted to interest expense over the term of the agreement. The loan has a maturity date of July 2024. An additional $3.0 million can be drawn by the Company, provided that certain criteria are met, such as the Company not having defaulted on the first tranche and there having not been a material adverse change (as defined in the Loan Agreement) as of the date for the borrowing request. The loan facility is used for financing certain equipment purchases. The equipment financed through the loans serves as collateral for the loan. The loan bears a cash interest of 8.95% per annum. Interest is payable on the first day of the month. If the loan is in default, it shall bear interest at a rate of an additional 5% per annum. The loan interest expense and discount amortization interest for the nine months ended September 30, 2022 was $0.1 million and $34 thousand, respectively. The Company was in compliance with the covenants as of September 30, 2022. In conjunction with entering into the equipment loan and security agreement, the Company entered into a warrant agreement with the lender and issued 108,000 warrants exercisable for the Company’s Series C preferred stock at $0.94. For further details on the warrants issued in conjunction with the equipment loan and security agreement, see Note 10. June 2021 Credit Facility On June 23, 2021, the Company entered into the June 2021 Credit Facility with SQN Venture Income Fund II, LP. The June 2021 Credit Facility provides for a maximum borrowing capacity of $20.0 million consisting of two tranches, each tranche with a borrowing capacity of $10.0 million. On June 23, 2021, the Company drew down $10.0 million of the facility. The Company is required to make monthly interest-only payments for a period of 18 months and thereafter, principal and interest outstanding under the agreement with a maturity date of December 2022. On August 13, 2021, the Company drew down the remaining $10.0 million. The second tranche has a maturity date of February 2023. The June 2021 Credit Facility is used for general working capital purposes. This loan bears a cash interest of 10% per annum. Interest is payable on the first day of the month. Additionally, this loan bears a Paid-in-Kind (PIK) interest of 2% per annum with PIK interest capitalized, compounded, and added to the principal balance monthly in arrears. The PIK interest becomes payable upon maturity. If the term loan is in default, it shall bear interest at an additional 5%. The Company paid a nonrefundable facility fee of $0.2 million. In conjunction with entering into the June 2021 Credit Facility, the Company entered into a warrant agreement with the lender and issued 533,333 warrants exercisable for the Company’s common stock at $1.51. For further details on the warrants issued in conjunction with the June 2021 Credit Facility, see Note 10. Loan and Security Agreement On October 13, 2021, the Company entered into the LSA with Structural Capital Investments III, LP, Series Structural DCO II, a series of Structural Capital DCO, LLC, SQN Tempo Automation, LLC, SQN Venture Income Fund II, LP, and Ocean II PLO LLC. The LSA replaced the June 2021 Credit Facility, providing for maximum borrowing capacity of $150.0 million consisting of four tranches. Per the LSA, borrowings of $20.0 million from tranches 1 and 2 from the June 2021 Credit Facility were replaced by a new tranche 1 in the amount of $20.0 million. Borrowing capacity for tranche 2 is $20.0 million which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. Borrowing capacity for tranche 3 and tranche 4 of the LSA is $40.0 million, and $70.0 million, respectively, which shall be available to draw by the Company upon the de-SPAC with ACE, subject to lender approval. The tranches have an earliest expiration date of December 23, 2022. The termination of the June 2021 Credit Facility and subsequent borrowings under tranche 1 of the LSA was accounted for as a partial extinguishment of debt. Specifically, upon entering into the LSA, the Company became indebted to a new lender in the amount of $6.0 million, while $14.0 million of obligations are due to the same lender group party to the June 2021 Credit Facility. The $6.0 million was reflected as a debt repayment with the old lender and was accounted for as an extinguishment of debt. Accordingly, the Company recorded a loss on extinguishment of $0.3 million related to the write off of unamortized debt discount. The Company also evaluated the $14.0 million of debt outstanding with continuing lenders and concluded the transaction should be treated as a modification of debt. Borrowings under tranches 2, 3 and 4 of the LSA bear interest equal to the greater of (i) 10.5%, and (ii) 7.25% plus the prime rate then in effect, provided however, for all advances made after the occurrence of the public trading trigger, a per annum rate of interest equal to the greater of (i) 9.5%, and (ii) 6.25% plus the prime rate then in effect shall apply. Borrowings under tranche 1 bear interest equal to 10%. In addition, interest will accrue at an additional 2% per annum rate on the outstanding borrowing made under the tranche 1, which shall be capitalized and be compounded and added to the principal balance of the Tranche 1 Loan monthly in advance on the next monthly payment date. For borrowings made pursuant to the LSA, the Company is further committed to a fee in an amount sufficient, if needed, to increase the lender’s minimum return to 1.20:1.00 if payable on or before the first anniversary of such borrowing, 1.30:1.00 if payable after the first anniversary of such borrowing but on or before the second anniversary of such borrowing, 1:35:1.00 if payable after the second anniversary of such borrowing but on or before the third anniversary of such borrowing, or 1.40:1.00 if payable after the third anniversary of such borrowing. On January 11, 2022, the Company entered into the first amendment to the LSA to convert $10.0 million of availability under the tranche 2 loan to the tranche 1 loan. This amendment expanded the tranche 1 from $20.0 million to $30.0 million and reduced the tranche 2 loan from $20.0 million to $10.0 million. For the original $20.0 million borrowed under tranche 1, the maturity date is December 23, 2022 and the $10.0 million borrowed under the expanded portion of tranche 1 provides for a maturity date of February 12, 2023. On May 1, 2022, the Company was in breach of its covenants under the LSA. As a result, the Company recorded $0.3 million of default interest expense in the Company’s condensed statement of operations during the nine months ended September 30, 2022. As of September 30, 2022, the Company was in breach of its covenants under the LSA and the debt including all interest due through maturity, is callable by the lender. On January 20, 2022, in conjunction with the LSA, the Company entered into warrant agreements with the various lenders involved under the LSA to issue a certain number of warrants to purchase Series C preferred stock based on the percentage of each tranche borrowing exercisable for the Company’s Series C preferred stock at the lowest of (i) $2.82 per share, (ii) the lowest price per share the Company receives for a share of the Series C preferred stock, and (iii) the lowest price the Company receives for a share of future round of preferred stock, see Note 10. On August 25, 2022, Tempo entered into an August 2022 Bridge Note Agreement (as defined in Note 8 below) with the lenders under the LSA (collectively, the “Initial Bridge Investors”), pursuant to which Tempo agreed to issue a $3.6 million note (“LSA Convertible Note”) which is comprised of accrued interest, PIK interest and future interest from August 2022 through maturity of the LSA. The fair value of the LSA Convertible Note was $13.1 million as of September 30, 2022. The following table sets forth the net carrying amount of borrowings as on September 30, 2022 (in thousands): Loan Payable, Loan Payable, Current Noncurrent Total SQN Equipment Loan $ 852 $ 880 940 LSA Term Loan 28,641 — 28,641 LSA Convertible Note (fair value) 13,052 — 13,052 Total loan payable $ 42,545 $ 880 43,425 SQN Equipment Loan As of September 30, 2022 Total notes payable $ 1,688 Add: accretion of final interest payable 93 Less: loan payable, current (852) Less: unamortized debt discount (49) Total loan payable, noncurrent $ 880 LSA Term Loan As of September 30, 2022 Total notes payable $ 30,000 Less: unamortized debt discount (1,359) Total loan payable, current $ 28,641 LSA Convertible Note Fair Value – Level 3 Balance, January 1, 2022 $ — Additions 12,903 Change in fair value 149 Balance, September 30, 2022 $ 13,052 The Company measures the LSA Convertible Note at fair value based on significant inputs not observable in the market, which caused it to be classified as Level 3 measurements within the fair value hierarchy. Changes in the fair value of the LSA Convertible Note related to updated assumptions and estimates were recognized as change in fair value of debt within the condensed statements of operations. In determining the fair value of the LSA Convertible Note as of September 30, 2022, the Company applied the probability-weighted expected return method (“PWERM”). The PWERM determines the value of an instrument based upon an analysis of future values for the potential instrument payouts under different future outcomes. The instrument value is based upon the present value of the probability of each future outcome becoming available to the instrument holders, and the rights of each security. Utilizing the PWERM, the Company assessed the probability that the related party borrowings would be converted to common stock through the consummation of a SPAC transaction or as a result of a Qualified Financing. Additional inputs used in applying the PWERM were: i) the expected timing of the conversion, ii) the amount subject to equity conversion, the sum of the notes’ principal and unpaid accrued interest, iii) the contractual conversion price adjustment, and iv) the discount rate. September 30, 2022 Expected term 0.15 years Discount rate 20.00 % Probability of Qualified Financing 90.00 % As of December 31, 2021 SQN LSA LSA Equipment Tranche 1.1 Tranche 1.2 Loan Total Total notes payable $ 10,000 $ 10,000 $ 2,302 $ 22,302 Add: accretion of final interest payable 108 79 56 243 Less: loan payable, current (9,702) — (784) (10,486) Less: unamortized debt discount (406) (218) (84) (708) Total loan payable, noncurrent $ — $ 9,861 $ 1,490 $ 11,351 The notes payable future principal payments are as follows during the years noted (in thousands): As of September 30, 2022 2022 (remaining) $ 20,214 2023 14,496 2024 567 Total future principal payments $ 35,277 | (10) Borrowing Arrangements Term Loan and Credit Facility with Financial Institution In June 2020, the Company entered into a loan and security agreement with a financial institution where the Company drew down $4.0 million (the “Term Loan”) and secured up to $4.0 million in a revolving line of credit (the “Credit Facility”). During 2020, the Company drew down $1.6 million from the Credit Facility and repaid amount back in full. As of December 31, 2020, the Company did not have any outstanding balance from the Credit Facility and subsequently, no other advances were drawn by the Company before it expired on June 3, 2021. In conjunction with the issuance of the Term Loan, the Company issued the lender a warrant to purchase 182,500 shares of the Company’s common stock. The Company allocated the $4.0 million proceeds between the Term Loan and the common stock warrant on a relative fair value basis, recording $0.1 million for the common stock warrant in additional paid-in capital, with the offset to debt discount, on the balance sheets. The common stock warrant is not remeasured in future periods as it meets the conditions for equity classification. For further details on the warrants issued in conjunction with the term loans discussed, see Note 13. On June 23, 2021, the Company entered into an amended and restated loan and security agreement with the financial institution which expanded the Term Loan obligation from $4.0 million to $10.0 million, with the maturity date extended to September 1, 2022 and a loan commitment fee of $50 thousand. For the Term Loan the Company is required to make monthly interest only payments from January 2021 through December 2021, thereafter certain monthly principal plus interest payments for a period of 8 months beginning from January 2022 and a final payment of the balance principal and interest outstanding under the agreement in September 2022. The amended and restated term loan debt bears interest at the greater of (a) Wall Street Journal Prime plus 5.00%, floating or (b) 8.25% per annum. In addition, the Company issued 109,080 warrants to the lender which are exercisable to purchase the Company's common stock at $1.51. For further details on the warrants issued in conjunction with the term loan, see Note 13. On October 14, 2021, the Company paid $10.3 million to settle the credit facility under the amended and restated loan and security agreement with Silicon Valley Bank including $0.3 million of interest and final payment reflected in interest expense section in the statement of operations. Equipment Loan and Security Agreement On January 29, 2021, the Company entered into an equipment loan and security agreement with SQN Venture Income Fund II, LP. The overall loan facility provides for a maximum borrowing capacity of $6.0 million consisting of two On January 29, 2021, the Company drew down $3.0 million under the first tranche of the facility. The Company is required to make monthly payments for a period of 42 months on this tranche plus end of term payment fee of $0.2 million which is accreted to interest expense over the term of the agreement. The loan has a maturity date of July 2024. An additional $3.0 million can be drawn by the Company, provided that certain criteria are met, such as the Company not having defaulted on the first tranche and there having not been a material adverse change (as defined in the Loan Agreement) as of the date for the borrowing request. The loan facility is used for financing certain equipment purchases. The equipment financed through the loans serves as collateral for the loan. The loan bears a cash interest of 8.95% per annum. Interest is payable on the first day of the month. If the loan is in default, it shall bear interest at a rate of an additional 5% per annum. The loan interest expense and discount amortization interest for year ended December 31, 2021 were $0.2 million and $46 thousand, respectively. In conjunction with entering into the equipment loan and security agreement, the Company entered into a warrant agreement with the lender and issued 108,000 warrants exercisable for the Company's Series C preferred stock at $0.94. For further details on the warrants in conjunction with the equipment loan and security agreement, see Note 13. Paycheck Protection Program Loan In May 2020, the Company was granted a loan under the Paycheck Protection Program offered by the Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), section 7(a)(36) of the Small Business Act for $2.5 million. The loan is evidenced by a promissory note and bears interest at 1% with no principal payments for the first 6 months. Monthly payments of principal and interest of approximately $0.1 million begin in December 2020, subject to deferral as the Company has applied for debt forgiveness, and continue through maturity in May 2022, if required. The loan is subject to partial or full forgiveness if the Company uses all proceeds for eligible purposes; maintains certain employment levels; and maintains certain compensation levels in accordance with and subject to the CARES Act and the rules, regulations, and guidance. For the years ended December 31, 2021 and 2020, interest expense recognized on the PPP loan was immaterial. The Company applied for forgiveness of the PPP loan and was notified that the entire $2.5 million PPP loan was forgiven in August 2021. Loan forgiveness of $2.5 million is reflected in other income and expense section in the statement of operations. Even though the PPP loan was forgiven, it remains subject to audit by the SBA. June 2021 Credit Facility On June 23, 2021, the Company entered into the June 2021 Credit Facility with SQN Venture Income Fund II, LP. The June 2021 Credit Facility provides for a maximum borrowing capacity of $20.0 million consisting of two tranches On June 23, 2021, the Company drew down $10.0 million of the facility. The Company is required to make monthly interest-only payments for a period of 18 months and thereafter, principal and interest outstanding under the agreement with a maturity date of December 2022. On August 13, 2021, the Company drew down the remaining $10.0 million. The second tranche has a maturity date of February 2023. The June 2021 Credit Facility is used for general working capital purposes. This loan bears a cash interest of 10% per annum. Interest is payable on the first day of the month. Additionally, this loan bears a Paid-in-Kind (PIK) interest of 2% per annum with PIK interest capitalized, compounded, and added to the principal balance monthly in arrears. The PIK interest becomes payable upon maturity. If the term loan is in default, it shall bear interest at an additional 5%. The Company paid a nonrefundable facility fee of $0.2 million. In conjunction with entering into the June 2021 Credit Facility, the Company entered into a warrant agreement with the lender and issued 533,333 warrants exercisable for the Company’s common stock at $1.51. For further details on the warrants issued in conjunction with the June 2021 Credit Facility, see Note 13. Loan and Security Agreement On October 13, 2021, the Company entered into a Loan and Security Agreement with Structural Capital Investments III, LP, Series Structural DCO II, a series of Structural Capital DCO, LLC, SQN Tempo Automation, LLC, SQN Venture Income Fund II, LP, and Ocean II PLO LLC. The Loan and Security Agreement replaced the June 2021 Credit Facility, providing for maximum borrowing capacity of $150.0 million consisting of four tranches. Per the Loan and Security Agreement, borrowings of $20.0 million from tranches 1 and 2 from the June 2021 Credit Facility were replaced by a new tranche 1 in the amount of $20.0 million. Borrowing capacity for tranche 2, tranche 3 and tranche 4 of the Loan and Security Agreement is $20.0 million, $40.0 million, and $70.0 million, respectively, which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. The loans have an earliest expiration date of December 23, 2022. The termination of the June 2021 Credit Facility and subsequent borrowings under tranche 1 of the Loan and Security Agreement was accounted for as a partial extinguishment of debt. Specifically, upon entering into the Loan and Security Agreement, the Company became indebted to a new lender in the amount of $6.0 million, while $14.0 million of obligations are due to the same lender group party to the June 2021 Credit Facility. The $6.0 million was reflected as a debt repayment with the old lender and was accounted for as an extinguishment of debt. Accordingly, the Company recorded a loss on extinguishment of $0.3 million related to the write off of unamortized debt discount. The extinguishment of $6.0 million with the old lender and subsequent borrowings of $6.0 million from the new lender did not involve the receipt or constructive receipt of cash and accordingly has been reflected as noncash financing activities in the statement of cash flows during the year ended December 31, 2021. The Company also evaluated the $14.0 million of debt outstanding with continuing lenders and concluded the transaction should be treated as a modification of debt. Borrowings under the Loan and Security Agreement bear interest equal to the greater of (i) 10.5%, and (ii) 7.25% plus the prime rate then in effect, provided however, for all advances made after the occurrence of the public trading trigger, a per annum rate of interest equal to the greater of (i) 9.5%, and (ii) 6.25% plus the prime rate then in effect shall apply. The Company’s notes payable balances were as follows (in thousands): As of December 31, 2021 SQN SQN Term Term SQN Loan Loan Equipment Tranche 1 Tranche 2 Loan Total Total notes payable $ 10,000 $ 10,000 $ 2,302 $ 22,302 Add: accretion of final interest payable 108 79 56 243 Less: loan payable, current (9,702) — (784) (10,486) Less: unamortized debt discount (406) (218) (84) (708) Total loan payable, noncurrent $ — $ 9,861 $ 1,490 $ 11,351 As of December 31, 2020 SVB Term PPP Loan Loan Total Total notes payable $ 2,500 $ 4,000 $ 6,500 Less: loan payable, current (972) (1,006) (1,978) Less: unamortized debt discount — (104) (104) Total loan payable, noncurrent $ 1,528 $ 2,890 $ 4,418 The notes payable future principal payments are as follows during the years noted (in thousands): As of December 31, 2021 2022 $ 10,829 2023 10,906 2024 567 Total future principal payments $ 22,302 |
Common Stock
Common Stock | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Common Stock | (9) Common Stock As of September 30, 2022 and December 31, 2021, the Company has authorized the issuance of 125,000,000 and 63,299,666 shares, respectively, of $0.00001 par value common stock and has 10,085,354 and 10,037,305 shares of common stock issued outstanding The Company has reserved shares of common stock for issuance related to the following convertible preferred stock, stock options, warrants, and future grants: As of September 30, 2022 December 31, 2021 Conversion of convertible preferred stock 29,520,187 29,520,187 Shares reserved for exercise of warrants 21,868,138 3,419,304 Outstanding stock options 23,896,897 16,508,725 Shares available for future issuance under 2015 Plan 3,114,353 1,050,574 Total shares of common stock reserved 78,399,575 50,498,790 | (11) Common Stock As of December 31, 2021 and 2020, the Company has authorized the issuance of 63,299,666 shares of $0.00001 par value common stock and has 10,037,305 and 9,773,097 shares of common stock issued outstanding The Company has reserved shares of common stock for issuance related to the following convertible preferred stock, stock options, warrants, and future grants: As of December 31, 2021 2020 Conversion of convertible preferred stock 29,520,187 29,520,187 Shares reserved for exercise of warrants 3,419,304 305,891 Outstanding stock options 16,508,725 10,364,039 Shares available for future issuance under 2015 Plan 1,050,574 859,468 Total shares of common stock reserved 50,498,790 41,049,585 |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2021 | |
TEMPO AUTOMATION INC | |
Convertible Preferred Stock | (12) Convertible Preferred Stock As of December 31, 2021 and 2020, the Company’s preferred stock of $0.00001 par value consisted of the following (in thousands, except share data): As of December 31, 2021 Aggregate Authorized Shares issued and Capital liquidation shares outstanding Raised preference Shares designated as: Series A Preferred Stock 7,048,031 6,963,183 $ 8,000 $ 8,000 Series A‑1 Preferred Stock 1,528,501 1,528,501 502 502 Series A‑2 Preferred Stock 1,541,170 1,541,170 760 760 Series B Preferred Stock 7,358,928 7,320,385 20,000 20,180 Series C Preferred Stock 12,083,866 10,669,200 40,000 40,000 Series C‑1 Preferred Stock 1,497,748 1,497,748 5,054 5,054 31,058,244 29,520,187 $ 74,316 $ 74,496 As of December 31, 2020 Aggregate Authorized Shares issued and Capital liquidation shares outstanding Raised preference Shares designated as: Series A Preferred Stock 7,048,031 6,963,183 $ 8,000 $ 8,000 Series A‑1 Preferred Stock 1,528,501 1,528,501 502 502 Series A‑2 Preferred Stock 1,541,170 1,541,170 760 760 Series B Preferred Stock 7,397,470 7,320,385 20,000 20,180 Series C Preferred Stock 10,669,200 10,669,200 40,000 40,000 Series C‑1 Preferred Stock (1) 1,497,748 1,497,748 5,054 5,054 Series C‑2 Preferred Stock 10,300,550 — — — 39,982,670 29,520,187 $ 74,316 $ 74,496 (1) These shares were issued through a conversion of the $ 5.0 million convertible note in April 2019. Significant rights and preferences of the outstanding preferred stock are as follows: Conversion – The conversion price shall mean $1.15 per share for each share of the Series A preferred stock, $0.33 per share for each share of the Series A-l preferred stock, $0.49 per share for each share of the Series A-2 preferred stock, $2.76 per share for each share of the Series B preferred stock, $3.75 per share for each share of the Series C preferred stock, $3.37 per share for each share of the Series C-l preferred stock, and $4.85 per share for each share of the Series C-2 preferred stock. Redemption Dividends Liquidation Preference – Voting |
Warrants_2_3
Warrants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Warrants | NOTE 8 — WARRANTS As of September 30, 2022, the Company had 11,500,000 Public Warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 15 Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30 - trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period (as it may be extended) and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 As of September 30, 2022, the Company had 6,600,000 Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. | NOTE 8 — WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a Public Warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30- trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period or any Extension Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
TEMPO AUTOMATION INC | ||
Warrants | (10) Warrants Common Stock Warrants The following common stock warrants were outstanding as of September 30, 2022: Warrants to purchase # of Shares Exercise Price Issuance Date Expiration Date Common Stock 182,500 $ 0.94 6/3/2020 6/3/2030 Common Stock 109,080 1.51 6/23/2021 6/22/2031 291,580 Liability Classified Warrants As of September 30, 2022, the Company has the following liability-classified warrants outstanding: Warrants to purchase # of Shares Exercise Price Issuance Date Expiration Date Series A Preferred Stock 58,736 $ 1.15 11/24/2015 11/24/2025 Series A Preferred Stock 26,112 1.15 11/22/2016 11/22/2026 Series B Preferred Stock 38,543 2.76 10/13/2017 10/13/2027 Series C Preferred Stock 108,000 0.94 * 1/29/2021 1/29/2031 Series C Preferred Stock 186,667 2.82 * 1/20/2022 1/20/2032 Series C Preferred Stock 10,000,000 2.82 * 8/25/2022 8/25/2032 Series C Preferred Stock 8,262,167 2.82 * 9/30/2022 9/30/2032 Common Stock 533,333 1.51 6/24/2021 6/24/2031 Common Stock** 2,363,000 2.82 * 10/11/2021 10/11/2024 21,576,558 * ** In October 2021, the Company issued 2,363,000 common stock warrants to an existing investor pursuant to negotiations with the investor to consider continued future investment. These warrants are exercisable for shares of common stock commencing the earliest of (i) the closing date of an initial public offering, or (b) the date of the Company’s completion of a transaction or series of related transactions (by merger, or consolidation, share exchange or otherwise) with a publicly traded special purpose acquisition company or its subsidiary. The warrant exercise price is $2.82 per share and the warrants expire in October 2024. On August 25, 2022, the Company entered into an amended and restated warrant agreement for the above warrants, which amended and restated that the warrants to purchase shares of common stock provide for the automatic conversion, with an amended exercise price of zero, of such warrant into shares of Tempo common stock upon the consummation of the business combination, a business combination or similar transaction with another special purpose acquisition company, the consummation of a qualified financing or the consummation of an initial public offering or direct listing. The amended common stock warrants are liability-classified instruments under ASC 815-40 due to these not being indexed to the Company’s equity. Consequently, the warrants are subject to be measured at fair value in subsequent periods with changes in fair value recognized in earnings. On August 25, 2022, the Company entered into a warrant purchase agreement with existing investors to issue 18,262,167 warrants to purchase common stock in conjunction with entering into various loans. The exercise price of these common stock warrants is $2.82 per share and upon a change in control transaction, the exercise price of these warrants resets to $0. The Company concluded that the common stock warrants are liability classified and shall be measured at fair value at grant date using the BSM option pricing model and subsequently remeasured at each reporting date. The fair value at time of issuance and as of September 30, 2022 was $27.6 million. The liability-classified warrants are remeasured on a recurring basis, primarily based on observable market data while the related theoretical warrant volatility assumption within the BSM option pricing model represents a Level 3 measurement within the ASC 820 fair value measurement hierarchy. The following table details the changes in fair value of the liability-classified warrants, for the nine months ended September 30, 2022 (in thousands): Fair Value Warrants outstanding - January 1, 2022 $ 5,573 Warrants issued and modified 32,514 Change in fair value, net (5,652) Warrants outstanding - September 30, 2022 $ 32,435 The change in fair value, net as shown in the table above is recorded as change in fair value of warrant liability in the condensed statements of operations. For warrants revalued during the period, the warrants were valued using a valuation technique which considers the value of the instruments under a SPAC scenario and a non-SPAC scenario, using the following assumptions: September 30, December 31, 2022 2021 Expected term 3.00 years 3.89 - 9.48 years Expected volatility 61.00 % 64.29% - 64.44 % Risk-free interest rate 3.46 % 1.12% - 1.52 % Expected dividends 0 % 0 % | (13) Warrants Common Stock Warrants The following common stock warrants were outstanding as of December 31, 2021: In June 2020, the Company issued 182,500 common stock warrants in conjunction with the Loan and Security Agreement between the Company and the certain lender. These warrants are exercisable for shares of common stock at $0.94 per share and expire in June 2030. The common stock warrants are valued using the Black-Scholes-Merton (“BSM”) option pricing model. The fair value of the warrants of $0.1 million was allocated to the common stock warrants which is included in additional paid-in capital on the balance sheets. The warrants are not remeasured in future periods as they meet the conditions for equity classification. In June 2021, the Company issued 109,080 common stock warrants in conjunction with the loan and security agreement between the Company and Silicon Valley Bank. These warrants are exercisable for shares of common stock at $1.51 per share and expire in June 2031. The common stock warrants are valued using the BSM option pricing model. The fair value of the warrants of $0.2 million was allocated to the common stock warrants which is included in additional paid-in capital on the balance sheets. The warrants are not remeasured in future periods as they meet the conditions for equity classification. In October , 2021, the Company issued 2,363,000 common stock warrants to an existing investor pursuant to negotiations with the investor to consider continued future investment. These warrants are exercisable for shares of common stock commencing the earliest of (i) the closing date of an initial public offering, or (b) the date of the Company’s completion of a transaction or series of related transactions (by merger, or consolidation, share exchange or otherwise) with a publicly traded special purpose acquisition company or its subsidiary. The warrant exercise price is $2.82 per share and the warrants expire in October , 2024. The warrants were measured at fair value on the issuance date. As the issuance of the warrants was a non-pro-rata transaction with a single existing shareholder, the fair value of $9.0 million was recognized as a credit to additional paid-in capital and an expense reflected in other financing cost section of the statement of operations. The following assumptions were used to calculate the fair value of the common stock warrants issued in 2021 and 2020: June, 2021 June, 2020 October, 2021 Expected term 10 years 10 years 3 years Expected volatility 64.01 % 56.49 % 48.5 % Risk-free interest rate 1.50 % 0.66 % 0.70 % Expected dividends 0.00 % 0.00 % 0.00 % Weighted average fair value of common stock warrant $ 1.07 $ 0.60 $ 3.79 Liability Classified Warrants As of December 31, 2021, the Company has the following liability-classified warrants outstanding: Equity-Type Shares Exercise Price Issuance Date Expiration Date Series A Preferred Stock 58,736 $ 1.15 11/24/2015 11/24/2025 Series A Preferred Stock 26,112 1.15 11/22/2016 11/22/2026 Series B Preferred Stock 38,543 2.76 10/13/2017 10/13/2027 Series C Preferred Stock 108,000 0.94 1/29/2021 1/29/2031 Common Stock 533,333 1.51 6/24/2021 6/24/2031 764,724 In January 2021, the Company entered into a warrant purchase agreement with SQN Venture Income Fund II, LP to issue 108,000 warrants to purchase Series C Preferred Stock in conjunction with entering into the credit facility. The exercise price of Series C warrants is $0.94 per share. The Company concluded that the Series C Preferred Stock warrants are liability classified and shall be measured at fair value at grant date using the BSM option pricing model and subsequently remeasured at each reporting date. The fair market value of the Series C Preferred Stock warrants were recorded to offset the debt discount and amortized to interest expense over the term of the debt using the straight-line amortization method. The fair value at time of issuance and as of December 31, 2021 was $0.2 million and $0.8 million, respectively. In June 2021, the Company entered into a warrant purchase agreement with SQN Venture Income Fund II, LP to issue 533,333 warrants to purchase Common Stock in conjunction with entering into the credit facility. The exercise price of these Common Stock warrants is $1.51 per share. The Company concluded that the common stock warrants are liability classified and shall be measured at fair value at grant date using the BSM option pricing model and subsequently remeasured at each reporting date. The fair value at time of issuance and as of December 31, 2021 was $1.0 million and $4.1 million, respectively. The liability-classified warrants are remeasured on a recurring basis, primarily based on observable market data while the related theoretical warrant volatility assumption within the BSM option pricing model represents a Level 3 measurement within the ASC 820 fair value measurement hierarchy. The following table details liability-classified warrant activity, i.e., the fair value of the related liability, for the years ended December 31, 2021 and 2020, respectively (in thousands): (in ’000s) Fair Value Warrants outstanding – January 1, 2020 $ 133 Change in fair value, net (47) Warrants outstanding - December 31, 2020 86 Warrants issued 1,245 Change in fair value, net 4,242 Warrants outstanding – December 31, 2021 $ 5,573 The change in fair value, net as shown in the table above is recorded as change in fair value of warrants in the statements of operations. The warrants were valued using the BSM option pricing model at issuance and revalued at each reporting date, using the following assumptions: December 31, 2021 December 31, 2020 Expected term 3.89 - 9.48 years 4.89‑6.78 years Expected volatility 64.29% - 64.44% 58.17% - 59.84% Risk-free interest rate 1.12% - 1.52% 0.36% - 0.51% Expected dividends 0% 0% Fair value of warrants $1.17 - $7.71 $1.16 - $1.56 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Stock-Based Compensation | (11) Stock-Based Compensation In April 2015, the board of directors adopted the 2015 Equity Incentive Plan (“the Plan”), which was subsequently approved by the Company’s stockholders. As of September 30, 2022, through multiple amendments approved by the Company’s stockholders, the share reserve was increased to 27,712,681 shares. The Plan permits the granting of incentive stock options, non-statutory stock options, and restricted stock to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants, and to promote the success of the Company’s business. The board of directors, at its sole discretion, shall determine the exercise price but subject to certain terms in the Plan. Options granted under the Plan expire 10 years from the date of grant. First time grants of incentive stock options and non-statutory options generally vest at a rate of 25% on the first anniversary of the grant date and then ratably monthly over the next three years. Upon termination of employment, any unvested options are automatically returned to the Company. In general, vested options that were not exercised within three months after termination are surrendered back to the Company. These options are added back to the Plan and made available for future grants. In general, the awards issued by the Company are service based options, however, in July 2020, the Company issued 258,368 performance-based options to the chief financial officer of the Company which vest 100% subject to the occurrence of a qualified transaction within 36 months of its date of grant. Additionally, in March 2021, the Company issued 1,245,641 performance-based options to management employees and board of directors which vest 100% subject to the occurrence of a qualified transaction. In November 2021, the Company’s board of directors approved to (i) reduce the July 2020 grant achievement period by approximately six months; and (ii) extend the March 2021 grants achievement period by 12 months. In March 2022, one of the Company’s executives was terminated and the 330,708 unvested options were modified to include a performance condition. The unvested options will vest upon a change of control within three months of the modification date. As of June 30, 2022, the performance condition was not met. As a result, no stock-based compensation was recorded and the unvested options were forfeited during the three months ended June 30, 2022. In August 2022, the Company’s board of directors approved the (i) modification of 867,461 unvested service based options of three terminated executives to include a performance condition; (ii) cancellation of 254,113 performance options issued in March 2021 and (iii) modification of 50,391 performance options granted in March 2021 to reduce the grant achievement period to November 2022. As a result of the modifications, the total fair value of the performance based options decreased from $8.8 million to $7.4 million primarily due to the decrease in Company’s common stock fair value. The Company recorded $0 compensation expense for these performance-based options for the nine months ended September 30, 2022 as achievement of the vesting condition was not deemed probable of occurring. Restricted Stock Unit Issuance On September 9, 2022, Tempo issued 9,500,000 retention awards in the form of restricted stock units of Tempo (“Tempo RSUs”) to certain eligible employees and directors of Tempo. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Business Combination will, at the Effective Time, be converted into (a) restricted stock unit awards covering shares of Tempo common stock (“Tempo RSUs”) and (b) the right to receive a number of Tempo Earnout Shares. Out of the above approved and issued RSUs, 4,750,000 RSUs were subject to service based conditions which shall vest at a rate of 33.33% on the first anniversary of the grant date and then ratably quarterly over the next two years. The Company recorded $29 thousand compensation expense for these service based RSUs for the nine months ended September 30, 2022. The remaining 4,750,000 RSUs were subject to performance based conditions, 50% of which will vest upon achieving $15.0 million in quarterly revenue of Tempo and the remaining 50% will vest upon achieving $5.0 million in adjusted EBITDA of Tempo. The total fair value of these performance based RSUs was $4.3 million. The Company recorded $0 compensation expense for these performance based RSUs for the nine months ended September 30, 2022 as achievement of the vesting condition was not deemed probable of occurring. As of September 30, 2022 and December 31, 2021, there were 3,114,353 and 1,050,574 common shares, respectively, available for issuance under the Plan. A summary of option activity under the Plan is as follows: Options outstanding Weighted Weighted average average Aggregate Number of exercise price contractual term intrinsic value shares per share (in years) (in thousands) Outstanding – January 1, 2022 16,457,475 $ 1.36 7.96 $ 104,554 Options granted 996,055 3.33 Options exercised (48,049) 1.03 Options forfeited (2,872,385) 2.24 Options expired (136,197) 1.06 Outstanding – September 30, 2022 14,396,899 1.32 6.89 $ 7,582 Vested during the period 2,137,947 1.62 7.13 817 Vested at end of period 9,643,506 1.11 5.90 5,500 Exercisable at the end of the period 9,648,520 1.12 5.90 5,501 Shares expected to vest 3,503,497 2.02 8.52 1,270 Vested and expected to vest 13,147,003 1.36 6.60 6,770 Determination of Fair Value The Company estimates the fair value of share-based compensation for stock options and restricted stock units utilizing the BSM option pricing model, which is dependent upon several variables, discussed below. These amounts are estimates and, thus, may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation using the straight-line basis over the requisite service period, which is generally the vesting period of the respective award. Fair Value of Common Stock: Expected Term: Expected Volatility: Risk-Free-Interest-Rate: Expected Dividend: The following assumptions were used to calculate the fair value of options granted during the nine months ended September 30, 2022: Nine Months Ended September 30, 2022 Expected term 0.50 - 5.86 years Expected volatility 55.92% - 66.32% Risk-free interest rate 1.54% - 3.00% Expected dividends 0% Stock-based compensation expense The following table summarizes stock-based compensation expense and its allocation within the accompanying statements of operations during the nine months ended September 30, 2022 and 2021 (in thousands): 2022 2021 Cost of goods sold $ 441 $ 119 Research and development 556 303 Sales and marketing 381 205 General and administrative 945 1,057 Total stock-based compensation expense $ 2,323 $ 1,684 As of September 30, 2022, there were a total of $5.8 million and $7.5 million of unrecognized employee compensation costs related to service based options and RSUs, respectively, excluding unrecognized costs associated with performance-based stock options and RSUs. Such compensation cost is expected to be recognized over a weighted-average period of approximately 2.24 years and 2.94 years for service based options and RSUs, respectively. | (14) Stock-Based Compensation In April 2015, the board of directors adopted the 2015 Equity Incentive Plan (“the Plan”), which was subsequently approved by the Company’s stockholders. The Company initially reserved a total of 1,902,688 shares of common stock for issuance under the Plan. Between August 2015 and December 2021, through multiple amendments approved by the Company’s stockholders, the share reserve was increased to 18,212,681 shares of common stock. The Plan permits the granting of incentive stock options, non-statutory stock options, and restricted stock to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants, and to promote the success of the Company’s business. The board of directors, at its sole discretion, shall determine the exercise price but subject to certain terms in the Plan. Options granted under the Plan expire 10 years from the date of grant. First time grants of incentive stock options and non-statutory options generally vest at a rate of 25% on the first anniversary of the grant date and then ratably monthly over the next three years. Upon termination of employment, any unvested options are automatically returned to the Company. In general, vested options that were not exercised within three months after termination are surrendered back to the Company. These options are added back to the Plan and made available for future grants. In general, the awards issued by the Company are service based options, however, in July 2020, the Company issued 258,368 performance-based options to the chief financial officer of the Company which vest 100% subject to the occurrence of a qualified transaction within 36 months of its date of grant. Additionally, in March 2021, the Company issued 1,245,641 performance-based options to management employees and board of directors which vest 100% subject to the occurrence of a qualified transaction. In November, 2021, the Company’s board of directors approved to (i) reduce the July 2020 grant achievement period by approximately six months; and (ii) extend the March 2021 grants achievement period by 12 months. As a result of the modifications, the total fair value of these performance-based options increased from $1.4 million to $8.8 million primarily due to the increase in Company's common stock fair value. The Company recorded $0 compensation expense for these performance-based options for the year ended December 31, 2021 and 2020 as achievement of the vesting condition was not deemed probable of occurring. As of December 31, 2021 and 2020, there were 1,050,574 and 859,468 shares, respectively, available for the Company for issuance under the Plan. A summary of option activity under the Plan is as follows: Options outstanding Weighted Weighted average average Aggregate Number of exercise price contractual term intrinsic value shares per share (in years) (in thousands) Outstanding – January 1, 2021 10,364,039 $ 0.98 Options granted 7,002,296 1.89 Options exercised (264,208) 0.48 Options forfeited (492,049) 1.37 Options expired (152,603) 1.23 Outstanding - December 31, 2021 16,457,475 $ 1.36 7.96 $ 104,554 Vested during the period 2,265,763 1.17 8.19 51,807 Vested at end of period 7,689,805 0.97 6.43 51,807 Exercisable at the end of the period 7,747,264 0.97 6.43 52,181 Shares expected to vest 7,263,661 1.85 9.20 42,565 Vested and expected to vest 14,953,466 1.40 7.77 94,372 Restricted Stock Awards In April 2015, as mentioned in the section above, the Company adopted the Plan to permit granting restricted stock to employees and consultants. Pursuant to the Plan, the Company entered into restricted stock award agreements with employees and consultants and the holder of the restricted stock has the rights equivalent to those of a holder of the Company’s common stock. In addition to the participant receiving the restricted stock under the Plan the agreements grants the Company a repurchase option exercisable upon the voluntary or involuntary termination of the participants’ continuous service for any reason at a purchase price for shares equal to the original purchase price paid by the purchaser to the Company for such shares and may be paid by cancellation of any indebtedness of the purchaser to the Company. There was no activity related to restricted stock during the year ended December 31, 2021. Determination of Fair Value The Company estimates the fair value of share-based compensation for stock options utilizing the BSM option pricing model, which is dependent upon several variables, discussed below. These amounts are estimates and, thus, may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation using the straight-line basis over the requisite service period, which is generally the vesting period of the respective award. Fair Value of Common Stock: Expected Term: Expected Volatility: Risk-Free-Interest-Rate: Expected Dividend: The following assumptions were used to calculate the fair value of option granted during the years ended December 31, 2021 and 2020: During the years ended December 31, 2021 2020 Expected term 5.00 - 6.08 years 5.15 – 6.53 years Expected volatility 61.44% - 67.12% 51.15% – 59.84% Risk-free interest rate 0.41% - 1.35% 0.27% – 1.63% Expected dividends 0.0% 0.0% Fair value of common stock $1.41 - $6.08 $1.01 - $1.46 Stock-based compensation expense The following table summarizes stock-based compensation expense and its allocation within the accompanying statements of operations during the years ended December 31, 2021 and 2020 (in thousands): 2021 2020 Cost of goods sold $ 276 $ 115 Research and development 540 87 Sales and marketing 402 169 General and administrative 1,320 885 Total stock-based compensation expense $ 2,538 $ 1,256 As of December 31, 2021 there was a total of $11.0 million of unrecognized employee compensation costs related to non-vested and non-performance-based stock option grants, which is expected to be recognized over a weighted-average period of approximately 2.87 years. Secondary Sale Transactions In June, 2021, an investor in the Company purchased shares from a founder and a former employee at a purchase price that was above the then-current fair value. Since the purchasing parties are holders of economic interest in the Company and acquired shares are at a price in excess of fair value of such shares, the amount paid in excess of the fair value at the time of the secondary sale was recognized as stock-based compensation expense. Total stock-based compensation expense related to this secondary sale transaction of $0.3 million is included in the statements of operations for the year ended December 31, 2021. In October, 2021, a growth fund purchased shares from a founder and a former employee at a purchase price that was below the then-current fair value. Accordingly, no incremental compensation expense was recognized by the Company for this secondary sale transaction. |
Commitments and Contingencies_6
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or close of a Business Combination, the specific impact is not readily determinable as of the date of these condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 2020 Registration Rights Agreement Pursuant to a registration rights agreement entered into on July 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of any working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of such working capital loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. In connection with the Tempo Business Combination, the registration rights agreement will be amended and restated. At the closing of the Tempo Business Combination, Domesticated ACE (as defined below), the Sponsor, the other parties to the Sponsor Support Agreement and certain former stockholders of Tempo Automation, Inc. will enter into an Amended and Restated Registration Rights Agreement, pursuant to which Domesticated ACE will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Domesticated ACE common stock and other equity securities of Domesticated ACE that are held by the parties thereto from time to time. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. On March 16, 2022, Cantor Fitzgerald & Co. agreed that the deferred fee may be paid in shares of common stock of Domesticated ACE, subject to certain terms and conditions. Termination of Proposed Achronix Business Combination On January 7, 2021, the Company entered into an Agreement and Plan of Merger (the “Achronix Merger Agreement”) with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”), and Merger Sub. On May 24, 2021, in the Form 10-Q for the quarter ended March 31, 2021, the Company disclosed that the SEC informed the Company that it was investigating certain disclosures made in the Form S-4 relating to the proposed business combination with Achronix. On July 11, 2021, the Company and Achronix entered into a termination and release agreement, pursuant to which the parties agreed to mutually terminate the Achronix Merger Agreement relating to the proposed business combination with Achronix. On October 27, 2021, the Company received a letter from the SEC in connection with its investigation with the following response: “We have concluded the investigation as to ACE Convergence Acquisition Corp. (“ACE”). Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against ACE.” Business Combination Agreement On October 13, 2021, the Company entered into an Agreement and Plan of Merger (as amended and restated on August 12, 2022, and as amended on September 7, 2022, and September 23, 2022, the “Merger Agreement”) with Tempo Automation, Inc., a Delaware corporation (“Tempo”), and Merger Sub. Pursuant to the transactions contemplated by the Merger Agreement (the “Tempo Business Combination”), and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Tempo, with Tempo surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Prior to the closing of the Tempo Business Combination (the “Closing”), the Company shall domesticate as a Delaware corporation (the “Domestication” and, ACE, after the Domestication, “Domesticated ACE”) and shall be renamed “Tempo Automation Holdings, Inc.” As a result of and upon the Closing, among other things, all outstanding shares of Tempo common stock (after giving effect to the Company Preferred Conversion (as defined in the Merger Agreement)) as of immediately prior to the Closing, and, together with shares of Tempo common stock reserved in respect of Tempo options outstanding as of immediately prior to the Closing that will be converted into awards based on Domesticated ACE common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of any earnout shares, if and to the extent earned, and in the case of the Tempo options, if and to the extent earned and subject to their respective terms), an aggregate of approximately 23,500,000 shares of Domesticated ACE common stock (at a deemed value of $10.00 per share) equal to the quotient obtained by dividing (i) $235,000,000 (the “Base Purchase Price”) by (ii) $10.00. On September 7, 2022, ACE and Tempo entered into the First Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, to increase the Base Purchase Price from $235,000,000 to $257,927,013. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Tempo Business Combination will, at the effective time of the Tempo Business Combination, be converted into (a) Domesticated ACE RSUs and (b) the right to receive a number of earnout shares. Additionally, Tempo has undertaken to use its commercially reasonable efforts to cause the holder of each outstanding and unexercised Tempo warrant to exercise such Tempo warrant in exchange for shares of Tempo common stock immediately prior to the effective time of the Merger. Holders of Tempo warrants may elect not to exercise such Tempo warrants in exchange for shares of Tempo common stock prior to the effective time of the Merger. Any Tempo warrants that remain issued and outstanding as of immediately prior to the effective time of the Tempo Business Combination will be converted into warrants to purchase shares of Domesticated ACE common stock on substantially similar terms to the Tempo warrants. An additional 550,000 shares of Domesticated ACE common stock will be purchased (at a price of $10.00 per share) at the Closing by certain third-party investors (“Third Party PIPE Investors”) and certain related parties of the Sponsor (collectively with the Third Party PIPE Investors, the “PIPE Investors”), for a total aggregate purchase price of up to $5.5 million (the “PIPE Investment”). In addition, the Company originally agreed to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the volume weighted average price per share of Domesticated ACE common stock during the 30 days commencing on the date on which a registration statement registering the resale of the shares of Domesticated ACE common stock acquired by the PIPE Investors is declared effective is less than $10.00 per share (which registration statement the Company has agreed to file pursuant to the subscription agreements entered into in connection with the PIPE Investment). Certain PIPE Investors originally subscribed for $25.0 million of ACE’s 12.0% convertible senior notes due 2025, but such subscription was terminated in January 2022 in connection with the subscription by certain parties for $200.0 million of 15.5% convertible notes. The latter subscription was terminated in July 2022; as a result of such termination, if ACE consummates an initial business combination with or among Tempo, Compass AC Holdings, Inc. (“Compass”), Whizz Systems, Inc. (“Whizz”) or any of their respective affiliates or subsidiaries, OCM Tempo Holdings, LLC (“OCM”) will be entitled to a termination fee of 3.5% of the aggregate principal amount of the subscribed notes (approximately $7.0 million), to be paid by ACE immediately following and as a condition subsequent to the closing of such initial business combination. On September 4, 2022, Tempo, ACE, OCM and Oaktree Capital Management, L.P. (“Oaktree”) agreed to reduce such termination fee to 0.6% of the aggregate principal amount of the subscribed notes (approximately $1.1 million) if the closing of the Tempo Business Combination occurs on or before October 15, 2022 (the “Specified Fee Date”), to be paid on the earlier of (i) six months after the closing of the Tempo Business Combination and (ii) the date on which either ACE or Tempo commence bankruptcy proceedings. In addition to the reduced termination fee, ACE and Tempo are required to pay approximately $1.2 million in fees and expenses to OCM on the earlier of (x) immediately following the closing of the Tempo Business Combination and (y) the Outside Business Combination Date (as defined below). The reduced termination fee and all other fees and expenses owed to OCM under such agreement will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. If the Tempo Business Combination has not been consummated prior to the Specified Fee Date, on the earliest of (I) the date on which the Merger Agreement is terminated, (II) the date on which either ACE or Tempo commence bankruptcy proceedings and (III) June 15, 2023 (the earliest date, the “Outside Business Combination Date”), ACE and Tempo will pay OCM the full 3.5% termination fee and all of its accrued and unpaid fees and expenses. To the extent the termination fee and accrued and unpaid fees and expenses are not paid on or prior to June 15, 2023, the unpaid portion of the termination fee (together with all other unpaid fees and expenses) will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. On October 11, 2022, Tempo, ACE, OCM and Oaktree entered into a letter agreement pursuant to which the Specified Fee Date was amended to November 15, 2022. Additionally, in March 2022, ACE SO3 SPV Limited agreed to purchase an unsecured subordinated convertible note in an aggregate principal amount of $20.0 million in connection with the Closing, which agreement was terminated in July 2022. On July 1, 2022, ACE and Tempo entered into that certain First Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”), pursuant to which the parties agreed, among other things, to (i) reduce the Base Purchase Price from $658,434,783 to $488,375,000, (ii) increase the number of earnout shares issuable to eligible Tempo equity holders (the “Tempo Earnout Shares”) from 7,500,000 to 10,000,000, which will vest in two equal tranches of 5,000,000 shares based on Domesticated ACE reaching $10.0 million in EBITDA and $50.0 million in revenue in any quarter during the five-year period following the closing date of the Tempo Business Combination, (iii) remove certain covenants and other obligations of the parties relating to the employee stock purchase plan contemplated by the Merger Agreement and (iv) extend the outside date of the Merger Agreement to November 13, 2022. On August 12, 2022, ACE, Merger Sub and Tempo entered into the Merger Agreement, pursuant to which the parties agreed, among other things, to (i) reduce the Base Purchase Price from $488,375,000 to $235,000,000, (ii) reduce the number of Tempo Earnout Shares from 10,000,000 to 7,000,000, which will vest in two equal tranches of 3,500,000 shares based on Domesticated ACE reaching $5.0 million in Adjusted EBITDA (as defined in the Merger Agreement) and $15.0 million in revenue in any quarter during the five-year period following the closing date, (iii) remove terms relating to the proposed acquisitions by Tempo of each of Whizz and Compass, (iv) reduce the minimum cash condition from $320.0 million to $10.0 million and (v) extend the outside date of the Merger Agreement to December 13, 2022. Pursuant to the Merger Agreement, all outstanding shares of Tempo common stock (after giving effect to the Company Preferred Conversion (as defined in the Merger Agreement)) as of immediately prior to the closing, and, together with shares of Tempo common stock reserved in respect of Tempo options as of immediately prior to the closing that will be converted into awards based on Domesticated ACE common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of Tempo options, if and to the extent earned and subject to their respective terms), an aggregate of approximately 23,500,000 shares of Domesticated ACE common stock (at a deemed value of $10.00 per share) equal to the quotient obtained by dividing (i) the Base Purchase Price by (ii) $10.00, including, as applicable, a number of Tempo Earnout Shares. On September 7, 2022, ACE and Tempo entered into the First Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, to increase the Base Purchase Price from $235,000,000 to $257,927,013. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Tempo Business Combination will, at the effective time of the Tempo Business Combination, be converted into (a) Domesticated ACE RSUs and (b) the right to receive a number of Tempo Earnout Shares. On July 6, 2022, the Company entered into Second Amended and Restated Subscription Agreements (the “Second A&R Subscription Agreements”) with each of the PIPE Investors. Pursuant to the Second A&R Subscription Agreements, among other things, the parties agreed to reduce the minimum Adjustment Period VWAP (as defined in the Second A&R Subscription Agreements) from $6.50 to $4.00. Additionally, ACE agreed (1) to issue 2,000,000 additional shares (the “PIPE Incentive Shares”) to the PIPE Investors on a pro rata basis as an incentive to subscribe for and purchase the shares under the Second A&R Subscription Agreements, (2) that if the Adjustment Period VWAP is less than $10.00 per share, the number of additional shares each PIPE Investor will be entitled to receive shall be (i) (A) (x) the number of shares issued to such PIPE Investor at the closing of the subscription and held by such PIPE Investor on the Measurement Date (as defined in the Second A&R Subscription Agreements), times (y) $10.00, minus the Adjustment Period VWAP, minus (B) the number of PIPE Incentive Shares, times the Adjustment Period VWAP, divided by (ii) the Adjustment Period VWAP, and (3) to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the Additional Period VWAP (as defined below) is less than the Adjustment Period VWAP. In such case, each PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock (such additional shares, if any, the “Additional Period Shares”) equal to the lesser of (1) such PIPE Investor’s pro rata portion of 2,000,000 shares, and (2) (i) (A) (x) the number of shares issued to such PIPE Investor pursuant to such subscription agreement and held by such PIPE Investor on the last day of the 30 calendar day period ending on the date that is 15 months following the closing of the subscriptions (such 30 calendar day period, the “Additional Period”), times (y) the Adjustment Period VWAP, minus the average of the volume weighted average price of a share of Domesticated ACE common stock determined for each of the trading days during the Additional Period (the “Additional Period VWAP”), minus (B) the number of PIPE Incentive Shares, times the Additional Period VWAP, divided by (ii) the Additional Period VWAP. Notwithstanding the foregoing, in the event that Domesticated ACE consummates a strategic transaction during the 15 consideration will be (a) with respect to any securities, (i) the average of the closing prices of the sales of such securities on all securities exchanges on which such securities are then listed, averaged over a period of 30 trading days ending on the day as of which such value is being determined and the 29 consecutive days preceding such day, or (ii) if the information contemplated by the preceding clause (i) is not practically available, then the fair value of such securities as of the date of valuation as determined in accordance with the succeeding clause (b), and (b) with respect to any other non-cash assets, the fair value thereof as of the date of valuation, as determined by an independent, nationally recognized valuation firm reasonably selected by Domesticated ACE, on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant (and giving effect to any transfer taxes payable in connection with such sale). On September 7, 2022, ACE entered into Third Amended and Restated Subscription Agreements (the “Third A&R PIPE Subscription Agreements”) with each of the PIPE Investors, which amend and restate the applicable Second A&R Subscription Agreements in their entirety. One of the Third Party PIPE Investors who entered into a Second A&R Subscription Agreement did not enter into a Third A&R PIPE Subscription Agreement and terminated its Second A&R Subscription Agreement on September 7, 2022. Pursuant to the Third A&R PIPE Subscription Agreements, ACE has agreed to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the volume weighted average price per share of Domesticated ACE common stock (the “Measurement Period VWAP”) during the 30 days commencing on the date on which a registration statement registering the resale of the shares of Domesticated ACE common stock acquired by such PIPE Investors (the “PIPE Resale Registration Statement”) is declared effective is less than $10.00 per share. In such case, each PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock equal to the product of (x) the number of shares of Domesticated ACE common stock issued to such PIPE Investor at the closing of the subscription and held by such PIPE Investor through the date that is 30 days after the effective date of the PIPE Resale Registration Statement (the “Measurement Date”) multiplied by (y) a fraction, (A) the numerator of which is $10.00 minus the Adjustment Period VWAP (as defined therein) and (B) the denominator of which is the Adjustment Period VWAP. In the event that the Adjustment Period VWAP is less than $4.00 (the “Price Floor Value”), the Adjustment Period VWAP shall be deemed to be the Price Floor Value. ACE has also agreed to issue up to 500,000 additional shares of Domesticated ACE common stock to each such PIPE Investor in the event that the Additional Period VWAP (as defined below) is less than the Adjustment Period VWAP. In such case, each such PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock equal to the lesser of (1) such PIPE Investor’s pro rata portion of 500,000 additional shares of Domesticated ACE common stock, and (2) (i) (A) (x) the number of shares issued to such PIPE Investor pursuant to such subscription agreement and held by such PIPE Investor on the last day of the 30 calendar day period ending on the date that is 15 months following the closing of the subscriptions (such 30 calendar day period, the “Additional Period”), times (y) the Adjustment Period VWAP, minus the average of the volume weighted average price of a share of Domesticated ACE common stock determined for each of the trading days during the Additional Period (the “Additional Period VWAP”), minus (B) the number of PIPE Incentive Shares (as defined below), times the Additional Period VWAP, divided by (ii) the Additional Period VWAP. Additionally, ACE has agreed to issue up to 2,000,000 additional shares (the “PIPE Incentive Shares”) to such PIPE Investors on a pro rata basis with respect to each PIPE Investor’s subscription amount as an incentive to subscribe for and purchase the shares under the Third A&R PIPE Subscription Agreements. Notwithstanding the foregoing, in the event that Domesticated ACE consummates a strategic transaction during the 15-month period beginning on the closing date, then the measurement date for the issuance of such additional shares shall be one day prior to the closing date of such strategic transaction, and the Additional Period VWAP will be deemed to equal the price per share paid or payable to the holders of outstanding shares of Domesticated ACE common stock in connection with such strategic transaction. If such price is payable in whole or in part in the form of consideration other than cash, the value of such consideration will be (a) with respect to any securities, (i) the average of the closing prices of the sales of such securities on all securities exchanges on which such securities are then listed, averaged over a period of 30 trading days ending on the day as of which such value is being determined and the 29 consecutive days preceding such day, or if the information contemplated by the preceding clause (i) is not practically available, then the fair value of such securities as of the date of valuation as determined in accordance with the succeeding clause (b), and (b) with respect to any other non-cash assets, the fair value thereof as of the date of valuation, as determined by an independent, nationally recognized valuation firm reasonably selected by Domesticated ACE, on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant (and giving effect to any transfer taxes payable in connection with such sale). One of the PIPE Investors’ subscription agreement provides that, if such PIPE Investor is an Eligible Investor (defined as any subscriber in the offering who is not a beneficial or record owner of ACE’s equity or an affiliate of ACE prior to the Initial Closing (as defined therein)), if, after the date of such subscription agreement, such PIPE Investor acquires ownership of Class A Ordinary Shares in the open market or in privately negotiated transactions with third parties (along with any related rights to redeem or convert such shares in connection with the redemption conducted by ACE in connection with the vote to approve the Tempo Business Combination (the “Tempo Redemption”)) at least five business days prior to ACE’s extraordinary general meeting to approve the Tempo Business Combination, and such PIPE Investor does not redeem or convert such shares in connection with the Tempo Redemption (including revoking any prior redemption or conversion elections made with respect to such shares) (such shares, “PIPE Non-Redeemed Shares”), the number of shares such PIPE Investor (only if an Eligible Investor) will be obligated to purchase under its subscription agreement shall be reduced by the number of PIPE Non-Redeemed Shares. The proceeds of the PIPE Investment, together with the amounts remaining in ACE’s trust account as of immediately following the effective time of the Tempo Business Combination, will be retained by Domesticated ACE following the Closing. In connection with the Tempo Business Combination and pursuant to separate agreements, Tempo was to acquire 100% of the issued The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Tempo, (ii) the absence of any legal restraints on the Closing, and (iii) receipt of approval for listing on The Nasdaq Stock Market LLC (“Nasdaq”) the shares of Domesticated ACE common stock to be issued in connection with the Merger. ACE’s obligation to consummate the Business Combination is also subject to, among other things, the accuracy of the representations and warranties of Tempo as of the date of the Original Merger Agreement (as defined below) and as of the Closing and each of the covenants of Tempo having been performed in all material respects. Tempo’s obligation to consummate the Merger is also subject to, among other things, (i) the accuracy of the representations and warranties of ACE as of the date of the Original Merger Agreement and as of the Closing, (ii) ACE having performed each of the covenants in all material respects, (iii) the Domestication having been completed and (iv) the sum of (w) the amount of cash available in the Trust Account into which substantially all of the proceeds of ACE’s initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE’s initial public offering, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their rights to redeem their Class A ordinary shares pursuant to ACE’s amended and restated memorandum and articles of association (but prior to payment of (a) any deferred underwriting commissions being held in the Trust Account and (b) any transaction expenses of ACE or its affiliates), plus (x) the PIPE Investment Amount (as defined in the Merger Agreement) actually received by ACE prior to or substantially concurrently with the closing, plus (y) the Available Credit Amount (as defined in the Merger Agreement), plus (z) the Available Cash Amount (as defined in the Merger Agreement), being at least equal to $10,000,000. The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Tempo, (ii) by Tempo, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Tempo, to the extent required under the Merger Agreement, are not obtained within five business days of the effective date of the Proxy Statement/Registration Statement (as defined in the Merger Agreement), (iv) by either ACE or Tempo in certain other circumstances set forth in the Merger Agreement, including (a) if any Governmental Authority (as defined in the Merger Agreement) shall have issued or otherwise entered a final, non-appealable order making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger and (b) in the event of certain uncured breaches by the other party or if the Closing has not occurred on or before December 13, 2022 (the “Agreement End Date”), unless ACE is in material breach of the Merger Agreement. The Merger Agreement also provides that, if the proxy statement for ACE’s shareholder meeting to approve the Tempo Business Combination has not been mailed by August 30, 2022, then ACE will file a proxy statement to extend the date by which it must complete an initial business combination by at least three months, to such date as may be agreed in writing between ACE and Tempo. Concurrently with the execution of the original Agreement and Plan of Merger in October 2021 (the “Original Merger Agreement”), an affiliate of the Sponsor (such affiliate, the “Backstop Investor”) entered into a backstop subscription agreement (the “Backstop Subscription Agreement”) with ACE, pursuant to, and on the terms and subject to the conditions on which, the Backstop Investor committed to purchase, following the Domestication and prior to or substantially concurrently with the Closing, up to 2,500,000 shares of Domesticated ACE common stock, in a private placement for a purchase price of $10.00 per share and an aggregate purchase price of up to $25,000,000, to backstop certain redemptions by ACE shareholders. On March 16, 2022, ACE and the Backstop Investor terminated the Backstop Subscription Agreement in connection with the execution of the Cantor Purchase Agreement (as defined below). On October 13, 2021, ACE entered into a Support Agreement (the “Original Sponsor Support Agreement,” and, as amended, the “Sponsor Support Agreement”), by and among ACE, the Sponsor, certain of ACE’s directors and officers and Tempo, pursuant to which the Sponsor and each director and officer of ACE agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Original Sponsor Support Agreement. On July 6, 2022, the parties to the Original Sponsor Support Agreement entered into an Amendment to Sponsor Support Agreement (the “SSA Amendment”), pursuant to which, among other things, certain Sponsors (as defined in the Sponsor Support Agreement, and, each, an “Earnout Sponsor”) agreed, immediately prior to the Domestication, to contribute, transfer, assign, convey and deliver to ACE an aggregate of 5,595,000 founder shares in exchange for an aggregate of 3,595,000 Class A Ordinary Shares of ACE (the “SSA Exchange”). Pursuant to the SSA Amendment, the Earnout Sponsors also agreed to subject an aggregate of 2,000,000 shares of Domesticated ACE common stock (the “Sponsor Earnout Shares”) received in the SSA Exchange to certain earnout vesting conditions or, should such shares fail to vest, forfeiture to ACE for no consideration. On the earlier of (i) the date which is 15 months following the closing of the Tempo Business Combination and (ii) immediately prior to the closing of a strategic transaction, the Sponsor Earnout Shares will vest in an amount equal to (A) the number of Sponsor Earnout Shares, less (B) the number of Additional Period Shares, if any, issuable in the aggregate under the Second A&R Subscription Agreements. In the event of a strategic transaction, the holders of any vested Sponsor Earnout Shares will be eligible to participate in such strategic transaction with respect to such Sponsor Earnout Shares on the same terms, and subject to the same conditions, as the other holders of shares of Domesticated ACE common stock generally. On August 12, 2022, the parties to the SSA Amendment entered into a Second Amendment to Sponsor Support Agreement (the “Second SSA Amendment”), pursuant to which the SSA Exchange was amended such that the Earnout Sponsors agreed, immediately prior to the Domestication, to contribute, transfer, assign, convey and deliver to ACE an aggregate of 5,595,000 founder shares in exchange for an aggregate of 3,095,000 Class A Ordinary Shares. Pursuant to the Second SSA Amendment, the Earnout Sponsors also agreed to reduce the number of Sponsor Earnout Shares to 500,000. On the earlier of (i) the date which is fifteen (15) months following the closing of the Tempo Business Combination and (ii) immediately prior to the closing of a strategic transaction, the Sponsor Earnout Shares will vest in an amount equal to (A) the number of Sponsor Earnout Shares, less (B) the number of Additional Period Shares (as defined therein), if any, issuable in the aggregate un | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Registration Rights Pursuant to a registration rights agreement entered into on July 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Termination of Proposed Achronix Business Combination On January 7, 2021, we entered into an Agreement and Plan of Merger with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”), and Merger Sub (As defined in Note 1). On May 24, 2021, in our Form 10-Q for the quarter ended March 31, 2021, we disclosed that the SEC informed us that it was investigating certain disclosures made in the Form S-4 relating to our proposed business combination with Achronix. On July 11, 2021, we and Achronix entered into a termination and release agreement, pursuant to which the parties agreed to mutually terminate the merger agreement relating to the proposed business combination. On October 27, 2021, we received a letter from the SEC in connection with its investigation with the following response: “We have concluded the investigation as to ACE Convergence Acquisition Corp. (“ACE”). Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against ACE.” The SEC provided this notice pursuant to the guidelines set out in the final paragraph of Securities Act Release No. 5310 (the text of this release can be found at: http://www.sec.gov/divisions/enforce/wells-release.pdf). Business Combination Agreement On October 13, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Tempo Automation, Inc., a Delaware corporation (“Tempo”), and Merger Sub. Pursuant to the transactions contemplated by the terms of the Merger Agreement (the “Tempo Business Combination”), and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Tempo, with Tempo surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Prior to the closing of the Tempo Business Combination (the “Closing”), the Company shall domesticate as a Delaware corporation (the “Domestication” and, ACE, after the Domestication, “Domesticated ACE”) and shall immediately be renamed “Tempo Automation Holdings, Inc.” On August 13, 2021, Tempo Automation, Inc., a Delaware corporation (“Tempo”) entered into a Stock Purchase Agreement (the “Whizz Agreement”) with Whizz Systems, Inc., a Delaware corporation (“Whizz”), and on October 13, 2021, Tempo entered into an Agreement and Plan of Merger (the “Compass AC Agreement”) with Compass AC Holdings, Inc., a Delaware corporation (“Compass AC”), pursuant to which, and on the terms and subject to the conditions of which, Tempo will acquire all of the outstanding shares of capital stock of each Whizz and Compass AC (the “Tempo Add-On Acquisitions”) immediately following the closing of the Business Combination (as defined below). After the Effective Time, ACE will pay or issue to eligible Whizz equity holders and Compass AC equity holders their respective pro rata portion of the Whizz Consideration (as defined in the Merger Agreement) or the Compass AC Consideration (as defined in the Merger Agreement), including, for the avoidance of doubt, any applicable earnout consideration, upon the terms and subject to the conditions set forth in the Whizz Agreement or the Compass AC Agreement, as applicable. The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Tempo, (ii) effectiveness of the registration statement on Form S-4 (which will include a proxy statement for holders of ACE’s ordinary shares) initially filed by ACE with the SEC on November 12, 2021 in connection with the Business Combination (the “ Registration Statement Nasdaq ACE’s obligation to consummate the Business Combination is also subject to, among other things, (i) the accuracy of the representations and warranties of Tempo as of the date of the Merger Agreement and as of the Closing, (ii) each of the covenants of Tempo having been performed in all material respects and (iii) all conditions of the closing of each of the Tempo Add-On Acquisitions being satisfied or waived and each of the Tempo Add-On Acquisitions being prepared to be consummated immediately after the Closing. Tempo’s obligation to consummate the Merger is also subject to, among other things, (i) the accuracy of the representations and warranties of ACE as of the date of the Merger Agreement and as of the Closing, (ii) ACE having performed each of the covenants in all material respects, (iii) the Domestication having been completed and (iv) the sum of (w) the amount of cash available in the trust account into which substantially all of the proceeds of ACE’s initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE’s initial public offering (the “ Trust Account The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Tempo, (ii) by Tempo, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Tempo, to the extent required under the Merger Agreement, are not obtained within five business days after the Registration Statement has been declared effective by the SEC Agreement End Date On or prior to the execution of the Merger Agreement, ACE entered into subscription agreements with certain investors (collectively, the “ PIPE Investors PIPE Common Stock Subscription Agreements Sponsor PIPE Convertible Note Subscription Agreement PIPE Subscription Agreements PIPE Investment Concurrently with the execution of the Merger Agreement, an affiliate of the Sponsor (such affiliate, the “ Backstop Investor Backstop Subscription Agreement On October 13, 2021, ACE entered into a Support Agreement (the “ Sponsor Support Agreement On October 13, 2021, ACE entered into a Support Agreement (the “ Tempo Holders Support Agreement Tempo Stockholders The Merger Agreement contemplates that, at the Closing, ACE will enter into lock-up agreements with (i) the Sponsor and (ii) and certain former stockholders of Tempo and Compass AC, in each case, restricting the transfer of Domesticated ACE Common Stock from and after the Closing. The restrictions under the lock-up agreements begin at the Closing and end on, among other things, in the case of the Sponsor and certain former stockholders of Tempo, the date that is 365 days after the Closing, and in the case of certain former stockholders of Compass AC, the date that is 180 days after the Closing, or (in each case) upon the stock price of Domesticated ACE reaching $12.00 (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing Date. For more information about the Merger Agreement and the proposed Tempo Business Combination, see our Current Report on Form 8-K filed with the SEC on October 14, 2021, and in our preliminary prospectus/proxy statement included in the Registration Statement. Unless specifically stated, this Annual Report on Form 10-K does not give effect to the proposed Tempo Business Combination and does not contain the risks associated with the proposed Tempo Business Combination. Such risks and effects relating to the proposed Tempo Business Combination is included in the Registration Statement. Subscription Agreement On January 18, 2022, ACE entered into a Subscription Agreement (the “Subscription Agreement”) with Tempo, OCM Tempo Holdings, LLC (“OCM”) and Tor Asia Credit Opportunity Master Fund II LP (“Tor”). Pursuant to the Subscription Agreement, OCM, an affiliate of Oaktree Capital Management, L.P. (collectively with its affiliates or affiliated investment funds and/or managed or controlled accounts, “Oaktree”), has committed to purchase $175 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the closing (the “Closing”) of the previously announced business combination between ACE and Tempo, which Closing is subject to the satisfaction or waiver of the conditions stated in the Merger Agreement dated as of October 13, 2021, by and among ACE, Tempo Automation and ACE Convergence Subsidiary Corp., and other customary closing conditions. The Subscription Agreement also provides for the purchase of $25 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the Closing by Tor, an investment partner of ACE, which investment replaces the previously announced investment in ACE’s 12% convertible senior notes due 2025 by an affiliate of ACE’s sponsor, ACE Convergence Acquisition LLC, as disclosed in the Form 8-K, filed January 20, 2022. |
TEMPO AUTOMATION INC | ||
Commitments and Contingencies | (12) Commitments and Contingencies Operating Leases The table below presents the operating lease-related assets and liabilities recorded on the condensed balance sheets (in thousands): Classifications on the condensed financial statements As of September 30, 2022 Operating lease assets Operating leases – right-of-use asset $ 565 Operating lease liability, current Operating lease liability, current 801 Operating lease liability, noncurrent Operating lease liability, noncurrent 38 Classifications on the condensed financial statements As of December 31, 2021 Operating lease assets Operating leases– right-of-use asset $ 1,323 Operating lease liability, current Operating lease liability, current 1,111 Operating lease liability, noncurrent Operating lease liability, noncurrent 546 The estimated incremental borrowing rate used to measure the lease liability is 8.95%. Prospectively, future rent expense under ASC 842 is calculated using the same methodology as required under ASC 840 in order to record straight line lease expense over the lease term. Rent expense recorded was $0.7 million for the nine months ended September 30, 2022 and 2021. Variable lease expenses for the nine months ended September 30, 2022 and 2021 were immaterial. On August 8, 2022, the Company abandoned a section of their operating lease for the remainder of the lease term and has no intention of subleasing the space. The Company reassessed their asset grouping as the deployment of the ROU asset had changed and determined the abandoned lease was a new asset group. The Company concluded the abandoned section of their ROU asset was not recoverable and recognized an impairment charge of $0.1 million to the right of use asset, and a $0.2 million impairment charge to the leasehold improvements. These impairment charges were recorded within impairment loss in the condensed statements of operations. Future minimum lease payments under non-cancelable operating leases as of September 30, 2022 are as follows (in thousands): As of September 30, 2022 2022 (remaining) $ 307 2023 531 2024 29 Total future lease payments 867 Less imputed interest (28) Total operating lease liability $ 839 Finance Leases The table below presents the finance lease-related assets and liabilities recorded on the condensed balance sheets and the condensed statement of operations (in thousands): Classification on the condensed financial statements As of September 30, 2022 Finance lease assets Property and equipment, net $ 3,519 Finance lease liability, current Finance lease, current 1,897 Finance lease liability, noncurrent Finance lease, noncurrent — Nine Months Ended September 30, 2022 Depreciation of the leased asset Cost of revenue $ 1,935 Lease interest expense Other income (expense), net 329 Classification on the condensed financial statements As of December 31, 2021 Finance lease assets Property and equipment, net $ 3,943 Finance lease liability, current Finance lease, current 1,091 Finance lease liability, noncurrent Finance lease, noncurrent 1,606 Nine Months Ended September 30, 2021 Depreciation of the leased asset Cost of revenue $ 409 Lease interest expense Other income (expense), net 464 Future minimum lease payments under finance lease are as follows (in thousands): As of September 30, 2022 2022 (remaining) $ 376 2023 1,731 Total future lease payments 2,107 Less: imputed interest (210) Total finance lease liability $ 1,897 The weighted average remaining lease term for our operating leases and finance leases Nine Months Ended September 30, 2022 2021 Operating cash flows paid for operating leases $ 908 $ 885 Financing cash flows paid for finance leases 1,128 1,128 | (15) Commitments and Contingencies The Company early adopted ASC 842 as of January 1, 2020 using the modified retrospective method (see Note 2). This ASC requires a lessee to evaluate its leases to determine whether they should be classified as operating or financing leases. The Company identified two operating leases and one finance lease. Operating Leases The Company leases office space in San Francisco, California under operating leases with lease term of sixty-five months beginning from January 2018. Additionally, the Company has an equipment lease agreement for forty-eight months beginning from June 2020. The table below presents the operating lease-related assets and liabilities recorded on the balance sheets (in thousands): Classifications on the financial statements December 31, 2021 Operating lease assets Operating leases – right-of-use asset $ 1,323 Operating lease liability, current Operating lease liability, current 1,111 Operating lease liability, noncurrent Operating lease liability, noncurrent 546 Classifications on the financial statements December 31, 2020 Operating lease assets Operating leases – right-of-use asset $ 2,109 Operating lease liability, current Operating lease liability, current 987 Operating lease liability, noncurrent Operating lease liability, noncurrent 1,657 The estimated incremental borrowing rate used to measure the lease liability is 8.95%. Prospectively, future rent expense under ASC 842 is calculated using the same methodology as required under ASC 840 in order to straight line lease expense over the lease term. Rent expense recorded was $1.0 million for the years ended December 31, 2021 and 2020. Variable lease expenses for the years ended December 31, 2021 and 2020 were $38 thousand and $0.3 million, respectively. Future minimum lease payments under non-cancelable operating leases as of December 31, 2021 are as follows (in thousands): As on December 31, 2021 2022 $ 1,215 2023 531 2024 29 Total future lease payments 1,775 Less imputed interest (118) Total operating lease liability $ 1,657 Finance Leases On June 23, 2020, the Company sold certain capital assets for cash proceeds of $4.0 million. Immediately before the transaction, the assets had a carrying amount of approximately $4.8 million and had a remaining useful life of approximately 6 to 10 years. At the same time, the Company entered into a contract with the vendor for the right to use the assets for 3 years with monthly payments and a 12 to 24 months’ renewal option at the end of the term. The contract also includes an option to repurchase the assets at the end of year three at the then-current fair market value, limited to 25% of the fair market value of the assets at inception date (or approximately $1.0 million). The Company plans to exercise the purchase option at the end of the 3-year lease. The repurchase option and the classification of the lease as a finance lease precludes accounting for the transfer of the assets as a sale. As such, this transaction is classified as a financing arrangement. The table below presents the finance lease-related assets and liabilities recorded on the balance sheet (in thousands): Classification on the financial statements December 31, 2021 Finance lease assets Property and equipment, net $ 3,943 Finance lease liability, current Finance lease, current 1,091 Finance lease liability, noncurrent Finance lease, noncurrent 1,606 Depreciation of the leased asset Cost of revenue 547 Lease interest expense Other income (expense), net 598 Classification on the financial statements December 31, 2020 Finance lease assets Property and equipment, net $ 4,490 Finance lease liability, current Finance lease, current 906 Finance lease liability, noncurrent Finance lease, noncurrent 2,697 Depreciation of the leased asset Cost of revenue 273 Lease interest expense Other income (expense), net 376 Future minimum lease payments under finance lease are as follows (in thousands): As of December 31, 2021 2022 $ 1,504 2023 1,731 Total future lease payments 3,235 Less: imputed interest (538) Total finance lease liability $ 2,697 The weighted average remaining lease term for our operating leases and finance leases is 1.5 years and the weighted average discount rate of our operating leases and finance leases is 8.95% and 18.71%, respectively. Supplemental disclosures of cash flow information related to leases were as follows (in thousands): Years Ended December 31, 2021 2020 Operating cash flows paid for operating leases $ 1,184 $ 689 Financing cash flows paid for finance leases 1,504 773 Non-cash activity: Lease liabilities arising from obtaining right-of-use assets — 107 |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Income Taxes | (13) Income Taxes The Company did not record a provision or benefit for income taxes during the nine months ended September 30, 2022 and 2021. The Company continues to maintain a full valuation allowance for its net U.S. federal and state deferred tax assets. On March 27, 2020, the U.S. federal government enacted the CARES Act, which changed several of the existing U.S. corporate income tax laws by, among other things, increasing the amount of deductible interest, allowing companies to carry back certain Net Operating Losses (“NOLs”), and increasing the amount of NOLs that corporations can use to offset income. The CARES Act did not have a material impact on the Company’s income tax provision, deferred tax assets and liabilities, and related taxes payable. The Company is currently assessing the future implications of these provisions within the CARES Act on the Company’s condensed financial statements but does not expect the impact to be material. | (16) Income Taxes The components of the Company’s provision for income taxes for the years ended December 31, 2021 and 2020 is as follows (in thousands): Years Ended December 31, 2021 2020 Current: Federal $ — $ — State — 1 Total current tax expense $ — $ 1 The following reconciles income tax expense computed at the federal statutory rate with income tax expense as reported: Years Ended December 31, 2021 2020 Statutory rate 21.0 % 21.0 % Federal net operating loss — 5.3 % Leases — 4.2 % Depreciation — (3.4) % State income tax 9.6 % (1.1) % Permanent differences (6.8) % (1.1) % Other — 0.3 % Valuation allowance (23.8) % (25.1) % Effective income tax rate 0.0 % 0.1 % The significant components of the Company’s deferred tax asset (liability) as of December 31, 2021 and 2020 are as follows: Years Ended December 31, 2021 2020 Deferred tax assets Net operating losses $ 26,070 $ 14,703 Accruals and other 982 309 Total deferred tax assets 27,052 15,012 Less valuation allowance (25,648) (14,223) Net deferred tax assets 1,404 789 Deferred tax liabilities Property, plant, equipment, and intangibles (1,404) (789) Total deferred tax liabilities (1,404) (789) Net deferred tax assets (liabilities) $ — $ — As of December 31, 2021 and 2020, the Company had $91.7 million and $59.5 million of gross federal net operating losses, respectively, of which $10.2 million were generated prior to 2018 and will begin expiring in 2033. The remaining $81.5 million can be carried forward indefinitely. As of December 31, 2021 and 2020, the Company also had $81.7 million and $46.3 million, respectively, of gross state net operating losses, which begin to expire in 2033. Utilization of the domestic net operating loss and tax credit carry forwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382, as well as similar state provisions. In general, an "ownership change," as defined by the code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all, or a portion of the net operating loss or tax credit carry forwards before utilization. The Company has established a valuation allowance for U.S. federal and state deferred tax assets. The valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. The Company intends to maintain a full valuation allowance until sufficient positive evidence exists to support reversal. The valuation allowance for deferred tax assets was $25.6 million and $14.2 million as of December 31, 2021 and 2020, respectively. The change in valuation allowance of $11.4 million and $4.8 million in 2021 and 2020, respectively, is primarily related to the Company’s activities that give rise to a net operating loss carryover. The Company’s income tax returns are routinely subject to examination by U.S. federal, state, and local tax authorities. None of the Company’s income tax returns are under examination as of December 31, 2021. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted and signed into law. The CARES Act, among other things, permits net operating loss (NOL) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021, if not otherwise limited under IRC Section 382. After evaluating the impact of the CARES Act, the Company does not expect that NOL provisions of the CARES act to result in a material benefit to the Company, since the Company has no historical tax years with taxable income. The American Rescue Plan Act of 2021 was passed March 11, 2021, which contained tax provisions, such as an extension to the Employee Retention Credit. The Company evaluated the impact of the Act and there were no material benefits from its passage. The unrecognized tax benefit is related to the Company’s reserves on Federal and California research and development tax credits. For the years ended December 31, 2021 and 2020, the activity related to the unrecognized tax benefits is as follows (in thousands): Years Ended December 31, 2021 2020 Unrecognized tax benefits, beginning of period $ 411 $ 411 Additions based on tax positions related to current year — — Reductions based on tax positions related to prior years — — Unrecognized tax benefits, end of period $ 411 $ 411 The Company is currently unaware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation in the next 12 months. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Net Loss Per Share | (14) Net Loss Per Share The Company uses the two-class method to calculate basic net loss per share and apply the more dilutive of the two-class method, treasury stock method or if-converted method to calculate diluted net loss per share. No dividends were declared or paid for the nine months ended September 30, 2022 and 2021. Undistributed earnings for each period are allocated to participating securities, including the preferred stock for applicable periods, based on the contractual participation rights of the security to share in the current earnings as if all current period earnings had been distributed. As there are no contractual obligations for the preferred stockholders to share in losses, the Company’s basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average shares of common stock outstanding during periods with undistributed losses. The table below sets forth the computation of basic and diluted net loss per share (in thousands, except share data and per share amounts): Nine Months Ended September 30, 2022 2021 Basic and diluted: Net loss $ (96,518) $ (24,388) Weighted-average number of shares of common stock outstanding 10,072,318 9,815,806 Basic and diluted net loss per share $ (9.58) $ (2.48) Basic and diluted net loss per share attributable to common stockholders is the same for the nine months ended September 30, 2022 and 2021 because the inclusion of potential shares of common stock would have been anti-dilutive for the periods presented. The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been antidilutive: As of September 30, 2022 2021 Shares of common stock issuable upon conversion of redeemable convertible preferred stock 29,520,187 29,520,187 Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants 18,680,225 231,391 Shares of common stock issuable from stock options 23,896,897 16,113,756 Shares of common stock issuable from common stock warrants 3,187,913 824,913 Potential common shares excluded from diluted net loss per share 75,285,222 46,690,247 | (17) Net Loss Per Share The Company uses the two-class method to calculate basic net loss per share and apply the more dilutive of the two-class method, treasury stock method or if-converted method to calculate diluted net loss per share. No dividends were declared or paid for the years ended December 31, 2021 and 2020. Undistributed earnings for each period are allocated to participating securities, including the preferred stock for applicable periods, based on the contractual participation rights of the security to share in the current earnings as if all current period earnings had been distributed. As there are no contractual obligations for the preferred stockholders to share in losses, the Company’s basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average shares of common stock outstanding during periods with undistributed losses. The table below sets forth the computation of basic and diluted net loss per share (in thousands, except share data and per share amounts): Years ended December 31, 2021 2020 Basic and diluted: Net loss $ (48,013) $ (19,104) Weighted-average number of shares of common stock outstanding 9,819,576 9,755,174 Basic and diluted net loss per share $ (4.89) $ (1.96) Basic and diluted net loss per share attributable to common stockholders is the same for the years ended December 31, 2021 and 2020 because the inclusion of potential shares of common stock would have been anti-dilutive for the periods presented. The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been antidilutive: As of December 31, 2021 2020 Shares of common stock issuable upon conversion of redeemable convertible preferred stock 29,520,187 29,520,187 Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants 231,391 123,391 Shares of common stock issuable from stock options 16,508,725 10,364,039 Shares of common stock issuable from common stock warrants 3,187,913 182,500 Potential common shares excluded from diluted net loss per share 49,448,216 40,190,117 |
Subsequent Events_2_3
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Subsequent Events | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements other than as described below. On November 1, 2022, the proxy statement/prospectus was declared effective and on November 2, 2022, the Company commenced with mailing the proxy materials to the Company’s shareholders ahead of the extraordinary general meeting of the Company’s shareholders expected to be held on November 17, 2022. | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, except as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 13, 2022, in connection with extension of the business combination period, the Sponsor agreed to contribute to the Company as a loan $0.03 for each Class A ordinary share of the Company that is not redeemed in connection with the shareholder vote to approve the Extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the business combination between the Company and Tempo Automation, Inc. and (ii) $1.5 million has been loaned. The Contribution(s) will not bear any interest, and will be repayable by the Company to the Sponsor upon the earlier of the date by which the Company must complete an initial business combination and the consummation of the business combination between the Company and Tempo Automation, Inc. On January 21, 2022, in connection with the extension of time to complete a business combination, shareholders of Class A Ordinary shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, approximately $148,079,821 was paid out of the Trust in connection with the redemptions. On January 25, 2022 the Company voted to amend the Investment Management Trust Agreement entered into by the Company and the Trustee on July 27, 2020 (the “Trust Agreement”), to extend the business combination period from January 30, 2022, to July 13, 2022. |
TEMPO AUTOMATION INC | ||
Subsequent Events | (15) Subsequent Events The Company has evaluated subsequent events for recognition and remeasurement purposes from September 30, 2022 through December 6, 2022, which is the date the condensed financial statements were available to be issued. The Company has determined that there are no subsequent events requiring adjustment to or disclosure in the condensed financial statements, other than: Business Combination The Business Combination closed on November 22, 2022 the (“Closing”). In connection with the closing of the Business Combination, the Company was renamed Tempo Automation Holdings, Inc. PIPE Investment On November 22, 2022, immediately following the Closing, Tempo issued (i) 1,230,000 shares of Common Stock to certain investors (the “Initial Subscribers”) (including 350,000 Initial Committed PIPE Shares and 880,000 PIPE Incentive Shares) and (ii) 1,820,000 shares of Common Stock to the LSA Subscribers (including 700,000 Committed PIPE Shares and 1,120,000 PIPE Incentive Shares) in accordance with the terms of the Subscription Agreements (collectively, the “PIPE Investment”). The shares of Common Stock issued in the Subscription Agreements were offered in a private placement under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Subscription Agreements. Earnout Following the closing, the eligible Tempo equityholders will have the right to receive up to 7,000,000 Tempo earnout shares in two tranches upon the occurrence of the earnout triggering events during the earnout period. A one-time aggregate issuance of 3.5 million Tempo shares will be made upon achieving $5.0 million in Adjusted EBITDA in a single quarter during the five-year period. A one-time aggregate issuance of the remaining 3.5 million New Tempo shares will be made upon achieving $15.0 million in sales in a single quarter during the five-year period. Amendment and Restatement of the LSA On November 22, 2022, in connection with the closing of the Business Combination, the Company entered into certain First Amended and Restated LSA, dated as of November 22, 2022, by and among, the Company, as borrower, Structural Capital Investments III, LP (“SCI”), Series Structural DCO II series of Structural Capital DCO, LLC (“DCO”), CEOF Holdings LP (“CEOF”), SQN Tempo Automation, LLC (“SQNTA”), SQN Venture Income Fund II, LP (“SQNVIFII” and, together with SCI, DCO, CEOF and SQNTA, the “Lenders” and each a “Lender”), and Ocean II PLO LLC, as administrative and collateral agent for the Lenders (the “Agent”), pursuant to which the Lenders committed to lend Legacy Tempo up to $20.0 million in term loan financing. The LSA amended and restated in its entirety the LSA dated as of October 13, 2021. The amended LSA facility matures on December 1, 2025. White Lion Stock Purchase Agreement On November 21, 2022, ACE and AEPI extinguished $4.4 million of August 2022 Bridge Notes. Subsequently, the Company issued $2.0 million of August 2022 Bridge Notes to White Lion Capital, LLC (“White Lion”) and $2.4 million to other investors. On November 21, 2022, ACE entered into a Common Stock Purchase Agreement and a related registration rights agreement with White Lion. Pursuant to the Common Stock Purchase Agreement, ACE has the right, but not the obligation to require White Lion to purchase, from time to time, up to the lesser of (i) $100.0 million in aggregate gross purchase price of newly issued shares of Common Stock and (ii) the exchange cap, in each case, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement. | (18) Subsequent Events The Company has evaluated subsequent events from December 31, 2021 through March 16, 2022, which is the date the financial statements were available for issuance and has determined that there are no subsequent events requiring adjustment to or disclosure in the financial statements, other than as follows: Loan and Security Agreement On January 11, 2022, the Company entered into the first amendment to the Loan and Security Agreement to convert $10.0 million of availability under the tranche 2 loan to the tranche 1 loan. This amendment expanded the tranche 1 from $20.0 million to $30.0 million and reduced the tranche 2 loan from $20.0 million to $10.0 million. For the original $20.0 million borrowed under tranche 1, the maturity date is December 23, 2022 and the $10.0 million borrowed under the expanded portion of tranche 1 provides for a maturity date of February 12, 2023. On January 20, 2022, in conjunction with the loan and security agreement, the Company entered into warrant agreements with the various lenders involved under the loan and security agreement to issue certain number of warrants based on the percentage of each tranche borrowing exercisable for the Company’s Series C preferred stock at the lowest of (i) $2.82 per share, (ii) the lowest price per share the Company receives for a share of the Series C preferred stock, and (iii) the lowest price the Company receives for a share of future round of preferred stock. Convertible Senior Notes On January 18, 2022, ACE entered into a Subscription Agreement (the “Subscription Agreement”) with the Company, OCM Tempo Holdings, LLC (“OCM”) and Tor Asia Credit Opportunity Master Fund II LP (“Tor”). Pursuant to the Subscription Agreement, OCM, an affiliate of Oaktree Capital Management, L.P., has committed to purchase $175.0 million in aggregate principal amount of ACE’s 15.5% convertible senior notes due 2025 concurrently with the closing (the “Closing”) of the previously announced business combination between ACE and the Company, which is subject to the satisfaction or waiver of the conditions stated in the agreement and Merger Agreement, dated as of October 13, 2021, by and among ACE, the Company and the Merger Sub., and other customary closing conditions. The Subscription Agreement also provides for the purchase of $25.0 million in aggregate principal amount of ACE’s 15.5% convertible senior notes due 2025 concurrently with the Closing by Tor, an investment partner of ACE. With the signing of the Subscription Agreement, the previously announced agreement allowing for investment in ACE’s 12% convertible senior notes due 2025 by an affiliate of ACE’s sponsor, ACE Convergence Acquisition LLC was terminated. Convertible Promissory Notes On January 18, 2022, the Company issued convertible promissory notes to existing investors for gross proceeds of $5.0 million (the “2022 Promissory Notes”). The 2022 Promissory Notes bear simple interest on the unpaid principal at a rate of 10% per year and are due and payable by the Company on demand any time after November 15, 2022. The outstanding amount will convert into securities of ACE upon the earlier to occur of the closing of the transactions and the closing of the first qualified financing following any termination of the business combination agreement as applicable. Convertible Junior Notes In March 2022, the Company and ACE entered into a Securities Purchase Agreement with ACE SO3, pursuant to which ACE SO3 agreed to purchase an unsecured subordinated convertible note in an aggregate principal amount of $20.0 million (the “ACE Convertible Note”) from Tempo in connection with the closing of the business combination. The ACE Convertible Note will bear interest at a rate of 18% per annum, payable in kind by increasing the outstanding principal amount of the ACE Convertible Note. Upon the earlier to occur of the conversion or payment in full of the principal amount hereof and all accrued but unpaid interest hereunder and the maturity date, Tempo will pay to the holder of the ACE Convertible an amount equal 5% of the initial principal amount thereof. Cantor Share Purchase Agreement In March 2022, the Company and ACE entered into the Cantor Purchase Agreement with CF Principal relating to a committed equity facility (the “Facility”). Pursuant to the Cantor Purchase Agreement, Tempo will have the right from time to time at its option following closing of the merger to sell to CF Principal up to $100.0 million of Tempo common stock subject to certain customary conditions and limitations set forth in the Cantor Purchase Agreement. While there are distinct differences, the Facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows Tempo to raise primary equity capital on a periodic basis outside the context of a traditional underwritten follow-on offering following the closing of the merger. |
Summary of Significant Accou_14
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 10, 2022. The interim results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future periods. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC. |
Use of estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. |
Concentration of Risks | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limits of $250,000. The Company has not experienced losses on this account, and management believes the Company is not exposed to significant risks on such account. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature except derivative liabilities (see Note 9). | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature except warrant liabilities (see Note 9). |
Income Taxes | Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2022, and December 31, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. | Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2021 and 2020, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. |
Net Loss Per Share of Common Stock | Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. For the three and nine months ended September 30, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 | Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared prorata between the two classes of shares. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. As of December 31, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) |
Accounting Pronouncements Not Yet Adopted | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements. | Recent Accounting Standards In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
TEMPO AUTOMATION INC | ||
Basis of Presentation | Basis of Presentation The unaudited interim condensed financial statements and accompanying unaudited notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). | Basis of Presentation The financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). |
Liquidity and Going Concern | Liquidity and Going Concern The Company has experienced negative cash flows from operations since inception and expects negative cash flows from operations to continue for the foreseeable future. The Company had an accumulated deficit of $204.8 million and cash, cash equivalents and restricted cash of $0.9 million as of September 30, 2022. During the nine months ended September 30, 2022, the Company used net cash of $20.2 million in operating activities and incurred a net loss of $96.5 In October 2021, Tempo entered into a loan and security agreement (the “LSA”) with a maximum borrowing capacity of $150.0 million consisting of four tranches. This agreement replaced Tempo’s existing SQN Venture Income Fund II, LP $20.0 million facility (the “June 2021 Credit Facility”), and $20.0 million was drawn on tranche 1 of the LSA. Borrowing capacity for tranche 2 is $20.0 million which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. Borrowing capacity for tranche 3 and tranche 4 is $40.0 million, and $70.0 million, respectively which shall be available to draw by the Company, upon the de-SPAC with ACE, subject to lender approval. The tranches have an earliest expiration date of December 23, 2022 (see Note 7). In January 2022, the Company entered into the first amendment to the LSA to convert $10.0 million of availability under tranche 2 of the loan to tranche 1 of the loan. This amendment expanded tranche 1 from $20.0 million to $30.0 million and reduced tranche 2 from $20.0 million to $10.0 million. The first amendment did not change the interest rates or maturity dates for tranche 1 (see Note 7). In January 2022, the Company issued convertible promissory notes (the “2022 Promissory Notes”) to existing investors for gross proceeds of $5.0 million. These shall be due and payable by the Company on demand at any time after November 15, 2022 (see Note 8). In May 2022, the Company entered into a bridge note (the “Bridge Note”) with ACE and ACE Equity Partners International Pte. Ltd. (“AEPI”), which was replaced in its entirety on substantially the same terms on July 1, 2022, pursuant to which AEPI agreed to loan to Tempo up to an aggregate principal amount of $5.0 million, $4.6 million of which was advanced to Tempo as of September 30, 2022. The Bridge Note is due on September 30, 2022 (see Note 8). In August, 2022, Tempo entered into a note purchase agreement with certain existing related party investors and with the lenders under the Loan and Security Agreement (collectively, the “Initial Bridge Investors”), pursuant to which Tempo agreed to issue up to $5.0 million in aggregate principal amount of convertible promissory notes (the “August 2022 Bridge Notes”) to the Initial Bridge Investors for aggregate cash proceeds of approximately $1.4 million and the cancellation of approximately $3.6 million of outstanding amounts owed under the LSA. Additionally, Tempo may, from time to time prior to October 9, 2022, issue up to $0.7 million in aggregate principal amount of additional August 2022 Bridge Notes to one or more additional investors (see Note 7). In May and August 2022, the Company announced reductions in workforce. In order to fund planned operations while meeting obligations as they come due, the Company will need to secure additional debt or equity financing. These plans for additional financings are intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of Management’s control, the Company cannot ensure they will be effectively implemented. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Failure to secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact additional operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives. The accompanying condensed financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course. | Liquidity and Going Concern The Company has experienced negative cash flows from operations since inception and expects negative cash flows from operations to continue for the foreseeable future. The Company had an accumulated deficit of $108.3 million and cash, cash equivalents and restricted cash of $3.2 million as of December 31, 2021. During the year ended December 31, 2021, the Company used net cash of $30.2 million in operating activities and incurred a net loss of $48.0 million. Additionally, as of the date these financial statements were available for issuance the Company has $37.0 million of loans payable and finance lease obligations coming due within the next 12 months. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In October 2021, Tempo entered into a loan and security agreement (the “Loan and Security Agreement”) with a maximum borrowing capacity of $150.0 million consisting of four tranches. This agreement replaced Tempo’s existing SQN Venture Income Fund II, LP (the “June 2021 Credit Facility”) $20.0 million facility and $20.0 million was drawn on tranche 1 of the Loan and Security Agreement. Borrowing capacity for tranche 2, tranche 3 and tranche 4 is $20.0 million, $40.0 million, and $70.0 million, respectively which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. The tranches have an earliest expiration date of December 23, 2022 (see Note 10). In January 2022, the Company entered into first amendment to loan and security agreement to convert $10.0 million of availability under the tranche 2 loan to the tranche 1 loan. This amendment expanded the tranche 1 from $20.0 million to $30.0 million and reduced the tranche 2 loan from $20.0 million to $10.0 million. The first amendment did not change the interest rates or maturity dates for tranche 1 (see Note 18). In January 2022, the Company and ACE Convergence Acquisition secured principal amount of $200.0 million from the issuance of 15.5% Convertible Senior Notes due in 2025. The principal amount of notes consists of a $175.0 million investment from funds managed by Oaktree Capital Management and $25.0 million from an investment partner of ACE. The issuance of the notes is contingent on and is expected to fund the proposed business combination of the Company and ACE (see Note 18). In January 2022, the Company issued a convertible promissory notes to existing investors for gross proceeds of $5.0 million. These shall be due and payable by the Company on demand by at any time after November 15, 2022 (see Note 18). In order to fund planned operations while meeting obligations as they come due, the Company will need to secure additional debt or equity financing. These plans for additional financings are intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of Management’s control, the Company cannot ensure they will be effectively implemented. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Failure to secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives. The accompanying financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course. |
Use of estimates | Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the condensed financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and contract liabilities; allowance for doubtful accounts; determination of fair value of our common stock; determination of fair value of debt; determination of fair value of warrants; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; accrued liabilities; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the financial statements. | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts; determination of fair value of our common stock; determination of fair value of our warrants; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; accrued liabilities; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the financial statements. |
Risks and uncertainties and Covid-19 impact | Risks and Uncertainties The Company is subject to a number of risks. The Company conducts business in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on its future financial position, results of operations, or cash flows: advances and trends in new technologies and industry standards; pressures resulting from new applications offered by competitors; delays in applications and functionality development; changes in certain strategic relationships or customer relationships; the Company’s ability to attract new customers or retain existing customers; the length of the Company’s sales cycles and expense related to sales efforts; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; changes in domestic and international economic or political conditions or regulations; the ability of the Company to finance its operations; and the Company’s ability to attract and retain employees necessary to support its growth. Additionally, the COVID-19 pandemic has negatively impacted the global economy, disrupted supply chains, constrained work force participation, and created significant volatility and disruption of financial markets. Further, the Company faces risks with respect to inflationary environment in the country and the related fluctuations in interest as well as currency exchange rates. As the scope and duration of the COVID-19 pandemic is unknown and the extent of its economic impact continues to evolve globally, there is uncertainty related to the ultimate impact it will have on the Company’s business, its employees, results of operations and financial condition. COVID-19 Impact On March 11, 2020, the World Health Organization declared that the worldwide spread and severity of a new coronavirus, referred to as COVID-19, was severe enough to be characterized as a pandemic. In response to the continued spread of COVID-19, governmental authorities around the world have imposed various restrictions designed to slow the pace of the pandemic, including restrictions on travel and other restrictions that prohibit employees from going to work causing severe disruptions in the worldwide economy. The COVID-19 pandemic has had and may continue to have an adverse impact on the Company’s employees, operations, supply chain and distribution system. In response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the Company’s business, certain employees worked remotely. In addition, in April 2020, the Company announced reductions in workforce. These decisions, as well as COVID-19 more generally, introduced new dynamics into the households of many employees. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for its services. If the Company’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, the Company may have difficulty sourcing materials necessary to fulfill production requirement. Due to the COVID-19 pandemic, Tempo has experienced some supply chain constraints, including with respect to semiconductor components, and has responded by ordering larger quantities of these components to ensure an adequate supply. COVID-19 has also impacted the Company’s customers and may create unpredictable reductions or increases in demand for Tempo’s manufacturing services. Management will continue to monitor the impact of the global situation on the Company’s financial condition, cash flows, operations, industry, workforce, and customer relationships. | Risks and Uncertainties The Company is subject to a number of risks. The Company conducts business in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on its future financial position, results of operations, or cash flows: advances and trends in new technologies and industry standards; pressures resulting from new applications offered by competitors; delays in applications and functionality development; changes in certain strategic relationships or customer relationships; the Company’s ability to attract new customers or retain existing customers; the length of the Company’s sales cycles and expense related to sales efforts; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; changes in domestic and international economic or political conditions or regulations; the ability of the Company to finance its operations; and the Company’s ability to attract and retain employees necessary to support its growth. Additionally, the COVID-19 pandemic has negatively impacted the global economy, disrupted supply chains, constrained work force participation, and created significant volatility and disruption of financial markets. As the scope and duration of the COVID-19 pandemic is unknown and the extent of its economic impact continues to evolve globally, there is uncertainty related to the ultimate impact it will have on the Company’s business, its employees, results of operations and financial condition. COVID-19 Impact On March 11, 2020, the World Health Organization declared that the worldwide spread and severity of a new coronavirus, referred to as COVID-19, was severe enough to be characterized as a pandemic. In response to the continued spread of COVID-19, governmental authorities around the world have imposed various restrictions designed to slow the pace of the pandemic, including restrictions on travel and other restrictions that prohibit employees from going to work causing severe disruptions in the worldwide economy. The COVID-19 pandemic has had and may continue to have an adverse impact on our employees, operations, supply chain and distribution system. In response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on our business, we asked our employees who were able to do so to work remotely. In addition, in April 2020, we announced reductions in workforce. These decisions, as well as COVID-19 more generally, introduced new dynamics into the households of many of our employees. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for its services. If the Company’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, the Company may have difficulty sourcing materials necessary to fulfill production requirement. Due to the COVID-19 pandemic, Tempo has experienced some supply chain constraints, including with respect to semiconductor components. COVID-19 has also impacted the Company’s customers and may create unpredictable reductions or increases in demand for Tempo’s manufacturing services. Management will continue to monitor the impact of the global situation on the Company’s financial condition, cash flows, operations, industry, workforce, and customer relationships. |
Reclassification | Reclassification For the year ended December 31, 2020, the Company previously presented the financial statement line item titled “Proceeds from issuance of debt” on net basis, with the gross proceeds of debt, net of cost of issuance for such debt raised. In order to conform to current year presentation the Company has disaggregated into two separate financial statement line items “Proceeds from issuance of debt” and “Payment of debt issuance costs” in the Company’s statements of cash flows.This change in presentation had no impact on the Company’s “Net cash provided by financing activities”, “Net decrease in cash, cash equivalents and restricted cash”, or “Cash, cash equivalents, and restricted cash at end of period”. | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Contract Balances The timing of revenue recognition, billings and cash collections can result in deferred revenue (contract liabilities), unbilled receivables (contract assets), and billed accounts receivable. a. Contract Liabilities A contract liability results when payments from customers are received in advance for assembly and manufacturing of the goods. The Company recognizes contract liabilities as revenues upon satisfaction of the underlying performance obligations. Deferred revenue that is expected to be recognized as revenue during the subsequent twelve-month period from the date of billing is recorded in contract liabilities and the remaining portion, if any, is recorded in contract liabilities, noncurrent on the accompanying balance sheets at the end of each reporting period. For the nine months ended September 30, 2022 and 2021, the Company recognized as revenue of $0.1 million and $0.1 million that was included in the contract liabilities balance at the beginning of the related periods, respectively. b. Contract Assets Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Unbilled receivables that are expected to be billed during the subsequent twelve-month period from the date of revenue recognition are recorded in contract assets, and the remaining portion, if any, is recorded in other noncurrent assets on the accompanying balance sheets at the end of each reporting period. As of September 30, 2022 and December 31, 2021, there were no amounts attributable to contract assets recorded within other noncurrent assets. Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. Below are the billed receivables, unbilled receivables, and deferred revenue (in thousands): September 30, December 31, 2022 2021 Accounts receivable, net $ 1,945 $ 2,918 Contract assets 990 1,219 Contract liabilities 2,086 175 | Revenue from Contracts with Customers The Company manufactures electronics for prototyping and low volume production of Printed Circuit Board (“PCB”) assemblies and provides PCB assembly services for engineers with urgent, high — complexity projects. The Company owns the whole entire process from components and fabrication sourcing to assembly. To achieve the core principles of ASC 606, the Company accounts for revenue contracts with customers through the following steps: 1) Identify the contract with a customer: A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products and services to be transferred and identifies the payment terms related to these products and services, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for products and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company enters into a purchase order with each customer and ensures the purchase order is executed by all parties. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the date when the performance obligation is satisfied and include no general rights of return. 2) Identify the performance obligations in the contract: Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the products and services either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products and services is separately identifiable from other promises in the contract. The Company’s contracts consist of a single performance obligation of completed PCB assembly. As part of the term and conditions of the customer contract, the Company generally offers a warranty for a period of one year. This type of warranty provides the customers with assurance that the related assembled product will function as intended and complies with any agreed upon specifications. Therefore, as the warranty cannot be purchased separately and only provides assurance that the product complies with agreed-upon specifications, the warranty is not considered a separate performance obligation. 3) Determine the transaction price: The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products and services to the customer. The transaction price consists of fixed consideration as noted in each purchase order. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts do not include a significant financing component. The Company elected a practical expedient available under ASC 606, which permits the Company to not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less. 4) Allocate the transaction price to performance obligations in the contract: If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Each purchase order contains only one performance obligation and hence, the contract price per the purchase order is deemed to be reflective of the standalone selling price and the entire transaction price is allocated to the single performance obligation. All manufactured products are highly customized, and therefore, priced independently. 5) Recognize revenue when or as the Company satisfies a performance obligation: For each performance obligation identified, the Company determines at contract inception whether the performance obligation is satisfied over time or at a point in time. The transfer of control for the Company’s products qualify for over time revenue recognition because the products represent assets with no alternative use and the contracts include an enforceable right to payment for work completed to date. The Company has selected a cost incurred input method of measuring progress to recognize revenue over time, based on the status of work performed. The cost input method is representative of the value provided to the customer as it represents the Company’s performance completed to date. The Company typically satisfies its performance obligations in one month or less. The Company has elected to treat shipping and handling activities as fulfillment costs and the Company elected to record revenue net of sales and other similar taxes. Contract Balances The timing of revenue recognition, billings and cash collections can result in deferred revenue (contract liabilities), unbilled receivables (contract assets), and billed accounts receivable. a. Contract Liabilities A contract liability results when payments from customers are received in advance for assembly and manufacturing of the goods. The Company recognizes contract liabilities as revenues upon satisfaction of the underlying performance obligations. Deferred revenue that is expected to be recognized as revenue during the subsequent twelve-month period from the date of billing is recorded in contract liabilities and the remaining portion, if any, is recorded in contract liabilities, noncurrent on the accompanying balance sheets at the end of each reporting period. For years ended December 31, 2021 and 2020, the Company recognized as revenue $0.1 million and $0.5 million that was included in the contract liability balance at the beginning of the related periods, respectively. b. Contract Assets Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Unbilled receivables that are expected to be billed during the subsequent twelve-month period from the date of revenue recognition are recorded in contract assets, and the remaining portion, if any, is recorded in other noncurrent assets on the accompanying balance sheets at the end of each reporting period. Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. Below are the billed receivables, unbilled receivables, and deferred revenue (in thousands): As of December 31, 2021 2020 Accounts receivable, net $ 2,918 $ 2,713 Contract assets 1,219 608 Contract liabilities 175 80 |
Cost of Revenue | Cost of Revenue Cost of revenue primarily include direct materials, direct labor, and manufacturing overhead incurred for revenue-producing units shipped. Cost of revenue also includes associated warranty costs, shipping and handling, and other miscellaneous costs. | |
Research and Development | Research and Development Research and development costs are expensed as incurred and consist primarily of personnel and related costs for product development activities. Research and development costs also include professional fees payable to third parties, license and subscription fees for development tools, and manufacturing-related costs associated with product development. | |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. These amounts are included in selling and marketing expense in the accompanying statements of operations. Advertising costs were $0.5 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. | |
Concentration of Risks | Concentration of Risks Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable. The Company’s cash and cash equivalents and restricted cash are on deposit with major financial institutions. Such deposits may be in excess of insured limits. The Company believes that the financial institutions that hold the Company’s cash are financially sound, and accordingly, minimum credit risk exists with respect to these balances. The Company has not experienced any losses due to institutional failure or bankruptcy. The Company performs credit analyses and monitors the financial health of its customers to reduce credit risk. The Company reviews accounts receivable balances to determine if any receivables will potentially be uncollectible and includes any amounts that are determined to be uncollectible in the allowance for doubtful accounts. As of December 31, 2021, there was one customer who had outstanding balance accounting for 49% of the total accounts receivable balance. As of December 31, 2020, there was one customer who had outstanding balances accounting for 64% of the total accounts receivable balance. Concentration of customers For the year ended December 31, 2021, one customer represented 46% of revenue. For the year ended December 31, 2020, one customer represented 42% of revenue. | |
Segment Reporting and Geographic Information | Segment Reporting and Geographic Information For the nine months ended September 30, 2022 and 2021, the Company was managed as a single operating segment in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker as she is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions and managing the organization as a whole. All of the Company’s revenues are domestic sales and fixed assets are physically located in the United States. | Segment Reporting and Geographic Information For the years ended December 31, 2021 and 2020, the Company was managed as a single operating segment in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker as she is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions and managing the organization as a whole. All of the Company’s revenues are domestic sales and fixed assets are physically located in the United States. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities that mature within three months or less from the original date of purchase to be cash equivalents. The Company maintains the majority of its cash balances with commercial banks in interest bearing accounts. Cash and cash equivalents include cash held in checking and savings accounts and highly liquid securities with original maturity dates of three months or less from the original date of purchase. The restricted cash balance as of both September 30, 2022 and 2021 represents $0.3 million related to a letter of credit for the Company’s office space lease. September 30, September 30, 2022 2021 Cash and cash equivalents $ 533 $ 23,524 Restricted cash 320 320 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 853 $ 23,844 | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities that mature within three months or less from the original date of purchase to be cash equivalents. The Company maintains the majority of its cash balances with commercial banks in interest bearing accounts. Cash and cash equivalents include cash held in checking and savings accounts and highly liquid securities with original maturity dates of three months or less from the original date of purchase. The restricted cash balance as of December 31, 2021 and 2020 represents $0.3 million and $0.4 million related to a letter of credit for the Company’s office space lease. As of December 31, 2021 2020 Cash and cash equivalents $ 2,864 $ 17,340 Restricted cash 320 406 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 3,184 $ 17,746 |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net is recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance is based upon historical losses and an evaluation of the potential risk of loss associated with delinquent accounts. The Company evaluates the need for an allowance for doubtful accounts for estimated probable losses at each period end. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. The Company recorded an allowance for doubtful accounts of $0.4 million and $0.2 million and as of December 31, 2021 and 2020, respectively. | |
Inventory | Inventory Inventory consists of raw materials and work-in-progress representing the components that the Company produces. The Company uses actual cost to value inventory. In general, the Company procures materials from suppliers when a purchase order is received from its customers. The Company identifies these procured materials as raw material if work on the purchase order has not commenced and for any work that has been started on the materials procured are identified as work-in-progress. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1: Quoted prices for identical assets or liabilities in active markets at the measurement date. ● Level 2: Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. ● Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, term loans, convertible notes, convertible notes - related party and warrant liabilities. The Company has determined the carrying value of these assets and liabilities approximates the fair value due to their short maturities and has classified these assets and liabilities as Level 1 financial instruments. The balances outstanding under the loans payable agreements are considered to approximate their estimated fair values as the interest rates approximate market rates. The convertible notes, convertible notes - related party and warrant liabilities are carried at fair value. The Company classified the convertible debt and liability classified convertible preferred stock and common stock warrants as Level 3 financial instruments. The fair value of the convertible debt is $53.1 million as of September, 30, 2022 (see Note 7 and 8). The Company did not have convertible debt as of December 31, 2021. The fair value of liability classified convertible preferred stock and common stock warrants is $32.4 million and $5.6 million as of September 30, 2022 and December 31, 2021, respectively (see Note 10). During the nine months ended September 30, 2022 and year ended December 31, 2021, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. | Fair Value of Financial Instruments Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1: Quoted prices for identical assets or liabilities in active markets at the measurement date. ● Level 2: Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. ● Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company applies fair value accounting to all financial assets and liabilities, which include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. The Company has determined the carrying value of these assets and liabilities to be equal to the fair value due to their short maturities and has classified these assets and liabilities as Level 1 financial instruments. Certain convertible preferred stock and common stock warrants are liability classified and are classified as Level 3 financial instruments. The fair value of the convertible preferred stock and common stock warrants which are liability classified is $5.6 million as of December 31, 2021, and $0.1 million as of December 31, 2020, and is included in other noncurrent liabilities on the accompanying balance sheets (see Note 13). During the years ended December 31, 2021 and 2020, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net are stated at cost less accumulated depreciation and amortization. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the current period. Repair and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives of the assets (in years): Useful Lives Computer equipment 3 Software 5 Furniture and fixtures 3 Leasehold improvements Shorter of useful life or remaining lease term Manufacturing equipment 10 | |
Income Taxes | Income Taxes The Company uses the asset-and-liability method for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized. The Company accounts for uncertain tax positions based on an evaluation as to whether it is more likely than not that a tax position will be sustained on audit, including resolution of any related appeals or litigation processes. This evaluation is based on all available evidence and assumes that the appropriate tax authorities have full knowledge of all relevant information concerning the tax position. The tax benefit recognized is based on the largest amount that is greater than 50% likely of being realized upon ultimate settlement. The Company includes interest expense and penalties related to its uncertain tax positions in interest expense and other expense, respectively. | |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Equity-classified awards issued to employees, non-employees, and directors are measured at the grant-date fair value of the award. Forfeitures are recognized as they occur. For accounting purposes, the Company estimates grant-date fair value of stock options using the Black-Scholes-Merton ("BSM") option pricing model. The BSM option pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the risk-free interest rates, the expected term of the option, the expected volatility of the price of the Company’s common stock, and the expected dividend yield of the Company’s common stock. | |
Convertible Preferred Stock | Convertible Preferred Stock The Company’s shares of preferred stock are assessed at issuance for classification and redemption features requiring bifurcation. The Company’s preferred stock is not mandatorily redeemable. The Company presents as temporary equity any stock that (i) the Company undertakes to redeem at a fixed or determinable price on the fixed or determinable date or dates, (ii) is redeemable at the option of the holders, or (iii) has conditions for redemption which are not solely within the control of the Company. The Company initially records redeemable convertible preferred stock at fair value, net of issuance costs. Because the occurrence of a deemed liquidation event is not currently probable, the carrying values of the shares of redeemable convertible preferred stock are not being accreted to their redemption values. Subsequent adjustments to the carrying values of the shares of redeemable convertible preferred stock would be made only when a deemed liquidation event becomes probable. | |
Deferred Transaction Costs | Deferred Transaction Costs Deferred transaction costs consist of direct incremental legal, consulting, and accounting fees relating to the merger transaction, as discussed in Note 1 — Organization, which are capitalized and will be recorded as a reduction to the issuance of equity arising from the consummation of the merger transaction. In the event the merger transaction is terminated, deferred transaction costs will be expensed. As of September 30, 2022 and December 31, 2021, the Company has deferred such costs amounting to $6.1 million and $1.9 million, respectively, which are included in other noncurrent assets in the condensed balance sheets. | Deferred Transaction Costs Deferred transaction costs consist of direct incremental legal, consulting, and accounting fees relating to the merger transaction, as discussed in Note 1 — Organization, which are capitalized and will be recorded as a reduction to the issuance of equity arising from the consummation of the merger transaction. In the event the merger transaction is terminated, deferred transaction costs will be expensed. As of December 31, 2021, the Company has deferred such costs amounting to $1.9 million, which are included in other noncurrent assets in the balance sheet, no such costs were incurred during the year ended December 31, 2020. |
Net Loss Per Share of Common Stock | Net Loss Per Share of Common Stock Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its preferred stock to be participating securities. Net loss is attributed to common stockholders and participating securities based on their participation rights. Net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of preferred stock, stock options, preferred and common stock warrants and convertible notes. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. | Net Loss Per Share of Common Stock Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its preferred stock to be participating securities. Net loss is attributed to common stockholders and participating securities based on their participation rights. Net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of preferred stock, stock options, preferred and common stock warrants and convertible notes. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. |
Related Parties | Related Parties As discussed in Note 1 — Organization, in October 2021, ACE entered into a Merger Agreement with ACE Convergence Subsidiary Corp. and a direct wholly owned Merger Sub, and Tempo. The Chief Financial Officer of Tempo is also a director of ACE and is considered an interested related party to the business combination. Additionally, the Company issued 2022 Promissory Notes to Point72 Ventures Investments, LLC (“P72) and Lux Ventures IV, L.P. (“Lux”) and entered into the Bridge Note with ACE and AEPI during the nine months ended September 30, 2022 (see Note 8). | Related Parties As discussed in Note 1 — Organization, in October, 2021, ACE entered into a Merger Agreement with ACE Convergence Subsidiary Corp. and a direct wholly owned Merger Sub, and Tempo. The chief financial officer of Tempo is also a director of ACE and is considered an interested related party to the business combination. Additionally, in October, 2021, Tempo entered into plan of merger with Compass AC Holdings, Inc. From the date of signing of the Compass AC Agreement through December 31, 2021, the Company purchased goods totaling $0.3 million, which are included in cost of revenue in the statement of operations. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or ASU 2016-13. The amendments in ASU 2016-13 introduce an approach based on expected losses to estimated credit losses on certain types of financial instruments, modify the impairment model for available-for-sale debt securities and provide for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2023, with early application permitted. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC 606. The standard is effective for fiscal years beginning after December 15, 2022. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. | Recently Adopted Accounting Pronouncements In August 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The Company early adopted the ASU on January 1, 2021. Adoption of the ASU 2020-06 did not impact the Company’s financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize leases on their balance sheets and disclose key information about leasing arrangements. The standard is effective for small reporting companies and private companies for fiscal years beginning after December 15, 2021. In July 2018, the FASB approved an amendment to the new guidance that allows companies the option of using the effective date of the new standard as the initial application (at the beginning of the period in which it is adopted, rather than at the beginning of the earliest comparative period) and to recognize the effects of applying the new ASU as a cumulative effect adjustment to the opening balance sheet or retained earnings. The Company early adopted ASU 2016-02 on January 1, 2020 using the modified retrospective approach and, upon adoption, recorded a short-term lease liability of $0.8 million and long-term lease liability of $2.5 million, and a right-to-use asset of $2.7 million, and made no adjustment to the accumulated deficit. In connection with the adoption of the lease standard, the Company also derecognized deferred rent of $0.6 million. The adoption of Topic 842 did not have an impact on the statement of operations. The Company elected the practical expedients permitted under Topic 842, which among other things, allowed the Company to carry forward the historical lease classification of those leases in place as of January 1, 2020. The Company elected to not separate lease components and non-lease components for its long-term real-estate leases. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or ASU 2016-13. The amendments in ASU 2016-13 introduce an approach based on expected losses to estimated credit losses on certain types of financial instruments, modify the impairment model for available-for-sale debt securities and provide for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2023, with early application permitted. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC 606. The standard is effective for fiscal years beginning after December 15, 2022. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. |
Revision for Immaterial Error Corrections | Revision for Immaterial Error Corrections The Company previously issued interim financial statements as of and for the nine months ended September 30, 2021 in the Form S-4/A filed by ACE on February 1, 2022. The Company subsequently identified and has corrected an immaterial error related to certain inaccurate inputs into the fair value of the Company’s liability classified warrants. The table below represents the corrected balances and subtotals for amounts related to the condensed balance sheet, statement of operations and cash flow statement as of and for the nine-month period ended September 30, 2021, respectively. As of September 30, 2021 Correction of As of As Originally Immaterial September 30, 2021 Reported Error As Corrected Balance Sheet Other noncurrent liabilities $ 3,160 $ 765 $ 3,925 Total liabilities 45,039 765 45,804 Accumulated deficit (83,922) (765) (84,687) Total stockholders’ deficit (77,713) (765) (78,478) Statement of Operations Other income (expense), net Change in fair value of warrants (1,575) (765) (2,340) Total other income (expense), net (1,141) (765) (1,906) Net loss $ (23,623) $ (765) $ (24,388) Net loss per share $ (2.41) $ (0.07) $ (2.48) Statement of Cash Flows Net loss $ (23,623) $ (765) $ (24,388) (Gain)/loss on change in fair value of warrant liabilities 1,575 765 2,340 Net cash used in operating activities $ (20,833) $ — $ (20,833) |
Summary of Significant Accou_15
Summary of Significant Accounting Policies (Tables) - TEMPO AUTOMATION INC | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of billed receivables, unbilled receivables, and deferred revenue | September 30, December 31, 2022 2021 Accounts receivable, net $ 1,945 $ 2,918 Contract assets 990 1,219 Contract liabilities 2,086 175 | As of December 31, 2021 2020 Accounts receivable, net $ 2,918 $ 2,713 Contract assets 1,219 608 Contract liabilities 175 80 |
Schedule of cash, cash equivalents and restricted cash shown in the statement of cash flows | September 30, September 30, 2022 2021 Cash and cash equivalents $ 533 $ 23,524 Restricted cash 320 320 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 853 $ 23,844 | As of December 31, 2021 2020 Cash and cash equivalents $ 2,864 $ 17,340 Restricted cash 320 406 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 3,184 $ 17,746 |
Schedule of Useful Lives of Property, Plant and Equipment | Useful Lives Computer equipment 3 Software 5 Furniture and fixtures 3 Leasehold improvements Shorter of useful life or remaining lease term Manufacturing equipment 10 | |
Schedule of corrected balances and subtotals for amounts related to the condensed balance sheet, statement of operations and cash flow statement | The table below represents the corrected balances and subtotals for amounts related to the condensed balance sheet, statement of operations and cash flow statement as of and for the nine-month period ended September 30, 2021, respectively. As of September 30, 2021 Correction of As of As Originally Immaterial September 30, 2021 Reported Error As Corrected Balance Sheet Other noncurrent liabilities $ 3,160 $ 765 $ 3,925 Total liabilities 45,039 765 45,804 Accumulated deficit (83,922) (765) (84,687) Total stockholders’ deficit (77,713) (765) (78,478) Statement of Operations Other income (expense), net Change in fair value of warrants (1,575) (765) (2,340) Total other income (expense), net (1,141) (765) (1,906) Net loss $ (23,623) $ (765) $ (24,388) Net loss per share $ (2.41) $ (0.07) $ (2.48) Statement of Cash Flows Net loss $ (23,623) $ (765) $ (24,388) (Gain)/loss on change in fair value of warrant liabilities 1,575 765 2,340 Net cash used in operating activities $ (20,833) $ — $ (20,833) |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of inventory components | Inventory consists of the following (in thousands): September 30, December 31, 2022 2021 Raw materials $ 2,060 $ 158 Work in progress 856 721 Total inventory $ 2,916 $ 879 | Inventory consists of the following (in thousands): As of December 31, 2021 2020 Raw materials $ 158 $ 111 Work in progress 721 57 Total inventory $ 879 $ 168 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2022 2021 Prepaid expense $ 421 $ 650 Other current assets 512 242 Total prepaid expenses and other current assets $ 933 $ 892 | Prepaid expenses and other current assets consists of the following (in thousands): As of December 31, 2021 2020 Prepaid expense $ 650 $ 458 Other current assets 242 77 Total prepaid expenses and other current assets $ 892 $ 535 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) - TEMPO AUTOMATION INC | 12 Months Ended |
Dec. 31, 2021 | |
Schedule of components of property and equipment, net | Property and equipment, net consists of the following (in thousands): As of December 31, 2021 2020 Manufacturing equipment $ 9,732 $ 9,197 Leasehold improvements 4,811 4,811 Computer equipment 489 395 Office furniture and fixtures 462 462 Software 248 248 Total property and equipment 15,742 15,113 Less accumulated depreciation (6,851) (4,511) Total property and equipment, net $ 8,891 $ 10,602 |
Summary of depreciation expense and its allocation within the statements of operations | Year ended December 31, 2021 2020 Cost of goods sold $ 530 $ 1,125 Research and development 574 901 Sales and marketing 137 124 General and administrative 1,101 42 Total depreciation expense $ 2,342 $ 2,192 |
Other Noncurrent Assets (Tables
Other Noncurrent Assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of other noncurrent assets | Other noncurrent assets consist of the following (in thousands): September 30, December 31, 2022 2021 Deferred transaction costs $ 6,125 $ 1,926 Advance rent and prepaids 83 749 Deposits — 250 Total other noncurrent assets $ 6,208 $ 2,925 | Other noncurrent assets consist of the following (in thousands): As of December 31, 2021 2020 Deferred transaction costs $ 1,926 $ — Noncurrent prepaid expenses 749 7 Deposits 250 250 Total other noncurrent assets $ 2,925 $ 257 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): September 30, December 31, 2022 2021 Accrued legal fees (1) $ 4,272 $ 1,517 Accrued professional fees (1) 100 866 Accrued liabilities 410 774 Accrued sales and business taxes 176 241 Accrued cost of revenue 152 236 Customer refund liability — 205 Warranty liability 55 54 Other accrued liabilities 30 78 Total accrued expenses $ 5,195 $ 3,971 (1) These accrued legal and professional fees relate to the merger transaction, as discussed in Note 1 – Organization. | Accrued liabilities consist of the following (in thousands): As of December 31, 2021 2020 Accrued legal fees (1) $ 1,517 $ — Accrued professional fees 866 — Accrued liabilities 774 414 Accrued sales and business taxes 241 267 Accrued cost of revenue 236 — Customer refund liability 205 80 Warranty liability 54 56 Other accrued liabilities 78 116 Total accrued expenses $ 3,971 $ 933 (1) These accrued legal fees relate to the merger transaction, as discussed in Note 1 — Organization. |
Accrued Compensation and Rela_2
Accrued Compensation and Related Benefits (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TEMPO AUTOMATION INC | |
Schedule of accrued compensation and related benefits | Accrued compensation and related benefits consist of the following (in thousands): As of December 31, 2021 2020 Accrued payroll taxes $ 356 $ 254 Accrued commissions 121 109 Accrued payroll 41 79 Accrued bonus 647 49 Other accrued benefits 84 113 Total accrued compensation and related benefits $ 1,249 $ 604 |
Other Noncurrent Liabilities (T
Other Noncurrent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TEMPO AUTOMATION INC | |
Schedule of other noncurrent liabilities | Other noncurrent liabilities consist of the following (in thousands): As of December 31, 2021 2020 Warrant liabilities $ 5,573 $ 87 Other noncurrent liabilities — 254 Total other noncurrent liabilities $ 5,573 $ 341 |
Borrowing Arrangements (Tables)
Borrowing Arrangements (Tables) - TEMPO AUTOMATION INC | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of notes payable balances | The Company’s notes payable balances were as follows (in thousands): As of December 31, 2021 SQN SQN Term Term SQN Loan Loan Equipment Tranche 1 Tranche 2 Loan Total Total notes payable $ 10,000 $ 10,000 $ 2,302 $ 22,302 Add: accretion of final interest payable 108 79 56 243 Less: loan payable, current (9,702) — (784) (10,486) Less: unamortized debt discount (406) (218) (84) (708) Total loan payable, noncurrent $ — $ 9,861 $ 1,490 $ 11,351 As of December 31, 2020 SVB Term PPP Loan Loan Total Total notes payable $ 2,500 $ 4,000 $ 6,500 Less: loan payable, current (972) (1,006) (1,978) Less: unamortized debt discount — (104) (104) Total loan payable, noncurrent $ 1,528 $ 2,890 $ 4,418 | |
Schedule of notes payable future principal payments | As of September 30, 2022 2022 (remaining) $ 20,214 2023 14,496 2024 567 Total future principal payments $ 35,277 | The notes payable future principal payments are as follows during the years noted (in thousands): As of December 31, 2021 2022 $ 10,829 2023 10,906 2024 567 Total future principal payments $ 22,302 |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of shares of common stock reserved for issuance | As of September 30, 2022 December 31, 2021 Conversion of convertible preferred stock 29,520,187 29,520,187 Shares reserved for exercise of warrants 21,868,138 3,419,304 Outstanding stock options 23,896,897 16,508,725 Shares available for future issuance under 2015 Plan 3,114,353 1,050,574 Total shares of common stock reserved 78,399,575 50,498,790 | As of December 31, 2021 2020 Conversion of convertible preferred stock 29,520,187 29,520,187 Shares reserved for exercise of warrants 3,419,304 305,891 Outstanding stock options 16,508,725 10,364,039 Shares available for future issuance under 2015 Plan 1,050,574 859,468 Total shares of common stock reserved 50,498,790 41,049,585 |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of shares of preferred stock | Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption, December 31, 2021 $ 230,000,000 Less: Redemption of Class A Ordinary Shares (191,429,316) Add: Accretion of carrying value to redemption value 1,722,913 Class A ordinary shares subject to possible redemption, September 30, 2022 $ 40,293,597 | At December 31, 2021 and 2020, the Class A ordinary shares reflected in the consolidated balance sheets are reconciled in the following table: Gross proceeds $ 230,000,000 Less: Proceeds allocated to Public Warrants (11,270,000) Class A ordinary shares issuance costs (12,737,837) Plus: Accretion of carrying value to redemption value 24,007,837 Class A ordinary shares subject to possible redemption $ 230,000,000 |
TEMPO AUTOMATION INC | ||
Schedule of shares of preferred stock | As of December 31, 2021 Aggregate Authorized Shares issued and Capital liquidation shares outstanding Raised preference Shares designated as: Series A Preferred Stock 7,048,031 6,963,183 $ 8,000 $ 8,000 Series A‑1 Preferred Stock 1,528,501 1,528,501 502 502 Series A‑2 Preferred Stock 1,541,170 1,541,170 760 760 Series B Preferred Stock 7,358,928 7,320,385 20,000 20,180 Series C Preferred Stock 12,083,866 10,669,200 40,000 40,000 Series C‑1 Preferred Stock 1,497,748 1,497,748 5,054 5,054 31,058,244 29,520,187 $ 74,316 $ 74,496 As of December 31, 2020 Aggregate Authorized Shares issued and Capital liquidation shares outstanding Raised preference Shares designated as: Series A Preferred Stock 7,048,031 6,963,183 $ 8,000 $ 8,000 Series A‑1 Preferred Stock 1,528,501 1,528,501 502 502 Series A‑2 Preferred Stock 1,541,170 1,541,170 760 760 Series B Preferred Stock 7,397,470 7,320,385 20,000 20,180 Series C Preferred Stock 10,669,200 10,669,200 40,000 40,000 Series C‑1 Preferred Stock (1) 1,497,748 1,497,748 5,054 5,054 Series C‑2 Preferred Stock 10,300,550 — — — 39,982,670 29,520,187 $ 74,316 $ 74,496 (1) These shares were issued through a conversion of the $ 5.0 million convertible note in April 2019. |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | December 31, Input: 2021 Risk-free interest rate 1.26 % Expected term (years) 5.28 Expected volatility 18.8 % Exercise price $ 11.50 Stock Price $ 9.96 | December 31, December 31, Input: 2021 2020 Risk-free interest rate 1.26 % 0.36 % Expected term (years) 5.28 5.49 Expected volatility 18.8 % 22.7 % Exercise price $ 11.50 $ 11.50 Stock Price $ 9.96 $ 10.22 |
TEMPO AUTOMATION INC | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | September 30, 2022 Expected term 0.15 years Discount rate 20.00 % Probability of Qualified Financing 90.00 % | |
Schedule of warrants outstanding | As of December 31, 2021, the Company has the following liability-classified warrants outstanding: Equity-Type Shares Exercise Price Issuance Date Expiration Date Series A Preferred Stock 58,736 $ 1.15 11/24/2015 11/24/2025 Series A Preferred Stock 26,112 1.15 11/22/2016 11/22/2026 Series B Preferred Stock 38,543 2.76 10/13/2017 10/13/2027 Series C Preferred Stock 108,000 0.94 1/29/2021 1/29/2031 Common Stock 533,333 1.51 6/24/2021 6/24/2031 764,724 | |
Schedule of liability-classified warrant activity | Fair Value Warrants outstanding - January 1, 2022 $ 5,573 Warrants issued and modified 32,514 Change in fair value, net (5,652) Warrants outstanding - September 30, 2022 $ 32,435 | (in ’000s) Fair Value Warrants outstanding – January 1, 2020 $ 133 Change in fair value, net (47) Warrants outstanding - December 31, 2020 86 Warrants issued 1,245 Change in fair value, net 4,242 Warrants outstanding – December 31, 2021 $ 5,573 |
Warrant Classified As Equity | TEMPO AUTOMATION INC | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | The following common stock warrants were outstanding as of September 30, 2022: Warrants to purchase # of Shares Exercise Price Issuance Date Expiration Date Common Stock 182,500 $ 0.94 6/3/2020 6/3/2030 Common Stock 109,080 1.51 6/23/2021 6/22/2031 291,580 | June, 2021 June, 2020 October, 2021 Expected term 10 years 10 years 3 years Expected volatility 64.01 % 56.49 % 48.5 % Risk-free interest rate 1.50 % 0.66 % 0.70 % Expected dividends 0.00 % 0.00 % 0.00 % Weighted average fair value of common stock warrant $ 1.07 $ 0.60 $ 3.79 |
Warrant Classified As Liability | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of warrants outstanding | As of September 30, 2022, the Company has the following liability-classified warrants outstanding: Warrants to purchase # of Shares Exercise Price Issuance Date Expiration Date Series A Preferred Stock 58,736 $ 1.15 11/24/2015 11/24/2025 Series A Preferred Stock 26,112 1.15 11/22/2016 11/22/2026 Series B Preferred Stock 38,543 2.76 10/13/2017 10/13/2027 Series C Preferred Stock 108,000 0.94 * 1/29/2021 1/29/2031 Series C Preferred Stock 186,667 2.82 * 1/20/2022 1/20/2032 Series C Preferred Stock 10,000,000 2.82 * 8/25/2022 8/25/2032 Series C Preferred Stock 8,262,167 2.82 * 9/30/2022 9/30/2032 Common Stock 533,333 1.51 6/24/2021 6/24/2031 Common Stock** 2,363,000 2.82 * 10/11/2021 10/11/2024 21,576,558 * ** | |
Warrant Classified As Liability | TEMPO AUTOMATION INC | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | September 30, December 31, 2022 2021 Expected term 3.00 years 3.89 - 9.48 years Expected volatility 61.00 % 64.29% - 64.44 % Risk-free interest rate 3.46 % 1.12% - 1.52 % Expected dividends 0 % 0 % | December 31, 2021 December 31, 2020 Expected term 3.89 - 9.48 years 4.89‑6.78 years Expected volatility 64.29% - 64.44% 58.17% - 59.84% Risk-free interest rate 1.12% - 1.52% 0.36% - 0.51% Expected dividends 0% 0% Fair value of warrants $1.17 - $7.71 $1.16 - $1.56 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) - TEMPO AUTOMATION INC | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Summary of option activity | Options outstanding Weighted Weighted average average Aggregate Number of exercise price contractual term intrinsic value shares per share (in years) (in thousands) Outstanding – January 1, 2022 16,457,475 $ 1.36 7.96 $ 104,554 Options granted 996,055 3.33 Options exercised (48,049) 1.03 Options forfeited (2,872,385) 2.24 Options expired (136,197) 1.06 Outstanding – September 30, 2022 14,396,899 1.32 6.89 $ 7,582 Vested during the period 2,137,947 1.62 7.13 817 Vested at end of period 9,643,506 1.11 5.90 5,500 Exercisable at the end of the period 9,648,520 1.12 5.90 5,501 Shares expected to vest 3,503,497 2.02 8.52 1,270 Vested and expected to vest 13,147,003 1.36 6.60 6,770 | Options outstanding Weighted Weighted average average Aggregate Number of exercise price contractual term intrinsic value shares per share (in years) (in thousands) Outstanding – January 1, 2021 10,364,039 $ 0.98 Options granted 7,002,296 1.89 Options exercised (264,208) 0.48 Options forfeited (492,049) 1.37 Options expired (152,603) 1.23 Outstanding - December 31, 2021 16,457,475 $ 1.36 7.96 $ 104,554 Vested during the period 2,265,763 1.17 8.19 51,807 Vested at end of period 7,689,805 0.97 6.43 51,807 Exercisable at the end of the period 7,747,264 0.97 6.43 52,181 Shares expected to vest 7,263,661 1.85 9.20 42,565 Vested and expected to vest 14,953,466 1.40 7.77 94,372 |
Schedule of assumptions used to calculate the fair value of options granted | Nine Months Ended September 30, 2022 Expected term 0.50 - 5.86 years Expected volatility 55.92% - 66.32% Risk-free interest rate 1.54% - 3.00% Expected dividends 0% | During the years ended December 31, 2021 2020 Expected term 5.00 - 6.08 years 5.15 – 6.53 years Expected volatility 61.44% - 67.12% 51.15% – 59.84% Risk-free interest rate 0.41% - 1.35% 0.27% – 1.63% Expected dividends 0.0% 0.0% Fair value of common stock $1.41 - $6.08 $1.01 - $1.46 |
Summary of stock-based compensation expense and its allocation within the accompanying statements of operations | The following table summarizes stock-based compensation expense and its allocation within the accompanying statements of operations during the nine months ended September 30, 2022 and 2021 (in thousands): 2022 2021 Cost of goods sold $ 441 $ 119 Research and development 556 303 Sales and marketing 381 205 General and administrative 945 1,057 Total stock-based compensation expense $ 2,323 $ 1,684 | 2021 2020 Cost of goods sold $ 276 $ 115 Research and development 540 87 Sales and marketing 402 169 General and administrative 1,320 885 Total stock-based compensation expense $ 2,538 $ 1,256 |
Commitments and Contingencies_7
Commitments and Contingencies (Tables) - TEMPO AUTOMATION INC | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of operating lease-related assets and liabilities recorded on the balance sheets | The table below presents the operating lease-related assets and liabilities recorded on the condensed balance sheets (in thousands): Classifications on the condensed financial statements As of September 30, 2022 Operating lease assets Operating leases – right-of-use asset $ 565 Operating lease liability, current Operating lease liability, current 801 Operating lease liability, noncurrent Operating lease liability, noncurrent 38 Classifications on the condensed financial statements As of December 31, 2021 Operating lease assets Operating leases– right-of-use asset $ 1,323 Operating lease liability, current Operating lease liability, current 1,111 Operating lease liability, noncurrent Operating lease liability, noncurrent 546 | Classifications on the financial statements December 31, 2021 Operating lease assets Operating leases – right-of-use asset $ 1,323 Operating lease liability, current Operating lease liability, current 1,111 Operating lease liability, noncurrent Operating lease liability, noncurrent 546 Classifications on the financial statements December 31, 2020 Operating lease assets Operating leases – right-of-use asset $ 2,109 Operating lease liability, current Operating lease liability, current 987 Operating lease liability, noncurrent Operating lease liability, noncurrent 1,657 |
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases as of September 30, 2022 are as follows (in thousands): As of September 30, 2022 2022 (remaining) $ 307 2023 531 2024 29 Total future lease payments 867 Less imputed interest (28) Total operating lease liability $ 839 | Future minimum lease payments under non-cancelable operating leases as of December 31, 2021 are as follows (in thousands): As on December 31, 2021 2022 $ 1,215 2023 531 2024 29 Total future lease payments 1,775 Less imputed interest (118) Total operating lease liability $ 1,657 |
Schedule of finance lease-related assets and liabilities recorded on the balance sheet | The table below presents the finance lease-related assets and liabilities recorded on the condensed balance sheets and the condensed statement of operations (in thousands): Classification on the condensed financial statements As of September 30, 2022 Finance lease assets Property and equipment, net $ 3,519 Finance lease liability, current Finance lease, current 1,897 Finance lease liability, noncurrent Finance lease, noncurrent — Nine Months Ended September 30, 2022 Depreciation of the leased asset Cost of revenue $ 1,935 Lease interest expense Other income (expense), net 329 Classification on the condensed financial statements As of December 31, 2021 Finance lease assets Property and equipment, net $ 3,943 Finance lease liability, current Finance lease, current 1,091 Finance lease liability, noncurrent Finance lease, noncurrent 1,606 Nine Months Ended September 30, 2021 Depreciation of the leased asset Cost of revenue $ 409 Lease interest expense Other income (expense), net 464 | Classification on the financial statements December 31, 2021 Finance lease assets Property and equipment, net $ 3,943 Finance lease liability, current Finance lease, current 1,091 Finance lease liability, noncurrent Finance lease, noncurrent 1,606 Depreciation of the leased asset Cost of revenue 547 Lease interest expense Other income (expense), net 598 Classification on the financial statements December 31, 2020 Finance lease assets Property and equipment, net $ 4,490 Finance lease liability, current Finance lease, current 906 Finance lease liability, noncurrent Finance lease, noncurrent 2,697 Depreciation of the leased asset Cost of revenue 273 Lease interest expense Other income (expense), net 376 |
Schedule of future minimum lease payments under finance lease | Future minimum lease payments under finance lease are as follows (in thousands): As of September 30, 2022 2022 (remaining) $ 376 2023 1,731 Total future lease payments 2,107 Less: imputed interest (210) Total finance lease liability $ 1,897 | Future minimum lease payments under finance lease are as follows (in thousands): As of December 31, 2021 2022 $ 1,504 2023 1,731 Total future lease payments 3,235 Less: imputed interest (538) Total finance lease liability $ 2,697 |
Schedule of supplemental disclosures of cash flow information related to leases | Nine Months Ended September 30, 2022 2021 Operating cash flows paid for operating leases $ 908 $ 885 Financing cash flows paid for finance leases 1,128 1,128 | Years Ended December 31, 2021 2020 Operating cash flows paid for operating leases $ 1,184 $ 689 Financing cash flows paid for finance leases 1,504 773 Non-cash activity: Lease liabilities arising from obtaining right-of-use assets — 107 |
Income Taxes (Tables)
Income Taxes (Tables) - TEMPO AUTOMATION INC | 12 Months Ended |
Dec. 31, 2021 | |
Schedule of the components of the Company's provision for income taxes | The components of the Company’s provision for income taxes for the years ended December 31, 2021 and 2020 is as follows (in thousands): Years Ended December 31, 2021 2020 Current: Federal $ — $ — State — 1 Total current tax expense $ — $ 1 |
Reconciliation of income tax expense computed at the federal statutory rate with income tax expense as reported | Years Ended December 31, 2021 2020 Statutory rate 21.0 % 21.0 % Federal net operating loss — 5.3 % Leases — 4.2 % Depreciation — (3.4) % State income tax 9.6 % (1.1) % Permanent differences (6.8) % (1.1) % Other — 0.3 % Valuation allowance (23.8) % (25.1) % Effective income tax rate 0.0 % 0.1 % |
Schedule of significant components of the Company's deferred tax asset (liability) | Years Ended December 31, 2021 2020 Deferred tax assets Net operating losses $ 26,070 $ 14,703 Accruals and other 982 309 Total deferred tax assets 27,052 15,012 Less valuation allowance (25,648) (14,223) Net deferred tax assets 1,404 789 Deferred tax liabilities Property, plant, equipment, and intangibles (1,404) (789) Total deferred tax liabilities (1,404) (789) Net deferred tax assets (liabilities) $ — $ — |
Schedule of activity related to the unrecognized tax benefits | Years Ended December 31, 2021 2020 Unrecognized tax benefits, beginning of period $ 411 $ 411 Additions based on tax positions related to current year — — Reductions based on tax positions related to prior years — — Unrecognized tax benefits, end of period $ 411 $ 411 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of the computation of basic and diluted net loss per share | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 | The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) |
TEMPO AUTOMATION INC | ||
Schedule of the computation of basic and diluted net loss per share | Nine Months Ended September 30, 2022 2021 Basic and diluted: Net loss $ (96,518) $ (24,388) Weighted-average number of shares of common stock outstanding 10,072,318 9,815,806 Basic and diluted net loss per share $ (9.58) $ (2.48) | The table below sets forth the computation of basic and diluted net loss per share (in thousands, except share data and per share amounts): Years ended December 31, 2021 2020 Basic and diluted: Net loss $ (48,013) $ (19,104) Weighted-average number of shares of common stock outstanding 9,819,576 9,755,174 Basic and diluted net loss per share $ (4.89) $ (1.96) |
Schedule of antidilutive shares | As of September 30, 2022 2021 Shares of common stock issuable upon conversion of redeemable convertible preferred stock 29,520,187 29,520,187 Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants 18,680,225 231,391 Shares of common stock issuable from stock options 23,896,897 16,113,756 Shares of common stock issuable from common stock warrants 3,187,913 824,913 Potential common shares excluded from diluted net loss per share 75,285,222 46,690,247 | As of December 31, 2021 2020 Shares of common stock issuable upon conversion of redeemable convertible preferred stock 29,520,187 29,520,187 Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants 231,391 123,391 Shares of common stock issuable from stock options 16,508,725 10,364,039 Shares of common stock issuable from common stock warrants 3,187,913 182,500 Potential common shares excluded from diluted net loss per share 49,448,216 40,190,117 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||
Jan. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2022 | Jan. 11, 2022 | Oct. 31, 2021 | Oct. 13, 2021 | Jun. 23, 2021 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||||||||||||||||
Accumulated deficit | $ 48,486,832 | $ 48,486,832 | $ 33,171,769 | $ 27,325,266 | $ 33,171,769 | |||||||||||||
Cash, cash equivalents and restricted cash | $ 15,842 | $ 15,842 | 792,416 | 8,390 | 792,416 | |||||||||||||
Cash used in operating activities | 1,008,459 | 1,085,784 | 607,940 | 1,311,782 | ||||||||||||||
Net loss from operations | 8,636,558 | $ (10,135,295) | $ 1,058,490 | (22,288,261) | $ 1,042,594 | $ 11,524,429 | (440,247) | (9,721,238) | 9,188,357 | (5,846,503) | ||||||||
Gross proceeds | 6,500,000 | 22,302,000 | 6,500,000 | |||||||||||||||
TEMPO AUTOMATION INC | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Accumulated deficit | 204,830,000 | 84,687,000 | 204,830,000 | 84,687,000 | 60,299,000 | 108,312,000 | 60,299,000 | |||||||||||
Cash, cash equivalents and restricted cash | 853,000 | $ 23,844,000 | 853,000 | 23,844,000 | $ 17,746,000 | 3,184,000 | 17,746,000 | $ 23,869,000 | ||||||||||
Cash used in operating activities | 20,182,000 | 20,883,000 | 30,228,000 | 13,904,000 | ||||||||||||||
Net loss from operations | 96,518,000 | $ 24,388,000 | 48,013,000 | $ 19,104,000 | ||||||||||||||
Loans payable and finance lease obligations | $ 31,700,000 | $ 31,700,000 | 37,000,000 | |||||||||||||||
Maximum borrowing capacity | $ 150,000,000 | $ 50,000 | ||||||||||||||||
Increase (decrease) in maximum borrowing capacity | $ 10,000,000 | |||||||||||||||||
Aggregate principal amount | $ 700,000 | |||||||||||||||||
Gross proceeds | $ 22,302,000 | |||||||||||||||||
TEMPO AUTOMATION INC | Subsequent event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 10,000,000 | |||||||||||||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | 150,000,000 | $ 150,000,000 | ||||||||||||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | Subsequent event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||||||||||||
Loan and Security Agreement, Tranche 1 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | 30,000,000 | |||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 10,000,000 | |||||||||||||||||
Loan and Security Agreement, Tranche 1 | TEMPO AUTOMATION INC | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | 20,000,000 | 30,000,000 | 20,000,000 | |||||||||||||||
Loan amount | 20,000,000 | |||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 20,000,000 | |||||||||||||||||
Loan and Security Agreement, Tranche 1 | TEMPO AUTOMATION INC | Subsequent event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Loan amount | 20,000,000 | |||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 30,000,000 | |||||||||||||||||
Loan and Security Agreement, Tranche 2 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | 10,000,000 | |||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 20,000,000 | |||||||||||||||||
Loan and Security Agreement, Tranche 2 | TEMPO AUTOMATION INC | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | 20,000,000 | 20,000,000 | ||||||||||||||||
Loan amount | 20,000,000 | |||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 30,000,000 | |||||||||||||||||
Loan and Security Agreement, Tranche 2 | TEMPO AUTOMATION INC | Subsequent event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | |||||||||||||||||
Loan amount | 20,000,000 | |||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 10,000,000 | |||||||||||||||||
Loan and Security Agreement, Tranche 3 | TEMPO AUTOMATION INC | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | 40,000,000 | 40,000,000 | ||||||||||||||||
Loan amount | 40,000,000 | |||||||||||||||||
Loan and Security Agreement, Tranche 4 | TEMPO AUTOMATION INC | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | $ 70,000,000 | $ 70,000,000 | ||||||||||||||||
Loan amount | 70,000,000 | |||||||||||||||||
June 2021 Credit Facility | TEMPO AUTOMATION INC | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | 20,000,000 | |||||||||||||||||
Loan amount | $ 20,000,000 | $ 10,000,000 | ||||||||||||||||
Convertible Senior Notes 15.5 Percent, Due 2025 | TEMPO AUTOMATION INC | Subsequent event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate principal amount | 200,000,000 | |||||||||||||||||
Convertible Senior Notes 15.5 Percent, Funded by Oaktree | TEMPO AUTOMATION INC | Subsequent event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate principal amount | 175,000,000 | |||||||||||||||||
Convertible Senior Notes 15.5 Percent, Funded by Investment partner of ACE | TEMPO AUTOMATION INC | Subsequent event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate principal amount | 25,000,000 | |||||||||||||||||
Convertible Promissory Notes to Existing Investors | TEMPO AUTOMATION INC | Subsequent event [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Gross proceeds | $ 5,000,000 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Contract Assets and Liabilities (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | |||
Revenue recognized from beginning contract liability balance | $ 100 | $ 500 | |
Accounts receivable, net | 2,918 | 2,713 | $ 1,945 |
Contract assets | 1,219 | 608 | 990 |
Contract liabilities | $ 175 | $ 80 | $ 2,086 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Advertising and Concentration of Risk (Details) - TEMPO AUTOMATION INC - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | ||
Advertising costs | $ 0.5 | $ 0.3 |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of risk percentage | 49% | 64% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of risk percentage | 46% | 42% |
Summary of Significant Accou_19
Summary of Significant Accounting Policies - Cash, Accounts Receivable (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||||
Cash and cash equivalents | $ 0 | $ 8,390 | $ 792,416 | ||
Cash, cash equivalents and restricted cash | 8,390 | $ 15,842 | 792,416 | ||
TEMPO AUTOMATION INC | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||||
Cash and cash equivalents | 533,000 | 2,864,000 | 23,524,000 | 17,340,000 | |
Restricted cash balance | 320,000 | 320,000 | 320,000 | 406,000 | |
Cash, cash equivalents and restricted cash | $ 853,000 | 3,184,000 | $ 23,844,000 | 17,746,000 | $ 23,869,000 |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||
Allowance for doubtful accounts | $ 400,000 | $ 200,000 |
Summary of Significant Accou_20
Summary of Significant Accounting Policies - Fair Value, Property (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2022 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Fair value of the convertible preferred stock and common stock warrants which are liability classified | $ 19,905,700 | ||
TEMPO AUTOMATION INC | |||
Property, Plant and Equipment [Line Items] | |||
Fair value of the convertible preferred stock and common stock warrants which are liability classified | $ 5,573,000 | $ 87,000 | |
Computer equipment | TEMPO AUTOMATION INC | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Software | TEMPO AUTOMATION INC | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Furniture and fixtures | TEMPO AUTOMATION INC | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Manufacturing equipment | TEMPO AUTOMATION INC | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years |
Summary of Significant Accou_21
Summary of Significant Accounting Policies - Deferred costs, Related parties (Details) - TEMPO AUTOMATION INC - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2022 | Dec. 31, 2020 | |
Deferred transaction costs | $ 1,926,000 | $ 6,125,000 | $ 0 |
Purchases from related party | $ 300,000 |
Summary of Significant Accou_22
Summary of Significant Accounting Policies - Recently Adopted Pronouncements (Details) - Cumulative Effect, Period of Adoption, Adjustment [Member] - TEMPO AUTOMATION INC $ in Millions | Jan. 01, 2020 USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Short-term lease liability | $ 0.8 |
Long-term lease liability | 2.5 |
Right to use asset | 2.7 |
Deferred rent derecognized | $ 0.6 |
Summary of Significant Accou_23
Summary of Significant Accounting Policies - Revision for Immaterial Error Corrections (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Mar. 30, 2020 | Dec. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Total liabilities | $ 48,501,854 | $ 48,501,854 | $ 34,398,811 | $ 27,604,480 | $ 34,398,811 | ||||||||
Accumulated deficit | (48,486,832) | (48,486,832) | (33,171,769) | (27,325,266) | (33,171,769) | ||||||||
Total stockholders' deficit | (48,486,257) | $ (23,449,956) | (48,486,257) | $ (23,449,956) | (33,171,194) | (27,324,691) | (33,171,194) | $ (19,749,609) | $ (28,875,317) | $ (45,738,217) | $ (44,695,623) | $ 0 | |
Change in fair value of warrants and derivatives | (362,000) | 24,916,621 | 10,956,082 | 14,433,236 | (7,487,000) | 12,722,918 | |||||||
Total other income (expense), net | (7,742,269) | 24,922,423 | 3,688,936 | 14,494,246 | (8,062,897) | 12,789,815 | |||||||
Net income (loss) | 440,247 | 9,721,238 | (9,188,357) | 5,846,503 | |||||||||
Net cash used in operating activities | (1,008,459) | (1,085,784) | (607,940) | (1,311,782) | |||||||||
TEMPO AUTOMATION INC | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Other noncurrent liabilities | 3,925,000 | 3,925,000 | 341,000 | 5,573,000 | 341,000 | ||||||||
Total liabilities | 132,098,000 | 45,804,000 | 132,098,000 | 45,804,000 | 15,068,000 | 38,742,000 | 15,068,000 | ||||||
Accumulated deficit | (204,830,000) | (84,687,000) | (204,830,000) | (84,687,000) | (60,299,000) | (108,312,000) | (60,299,000) | ||||||
Total stockholders' deficit | $ (186,341,000) | (78,478,000) | (186,341,000) | (78,478,000) | $ (56,014,000) | (92,195,000) | (56,014,000) | $ (38,295,000) | |||||
Change in fair value of warrants and derivatives | 5,674,000 | (2,340,000) | (4,242,000) | 47,000 | |||||||||
Total other income (expense), net | (71,554,000) | (1,906,000) | (14,699,000) | (534,000) | |||||||||
Net income (loss) | (96,518,000) | $ (24,388,000) | (48,013,000) | (19,104,000) | |||||||||
Net loss per share | $ (2.48) | ||||||||||||
Net cash used in operating activities | $ (20,182,000) | $ (20,883,000) | $ (30,228,000) | $ (13,904,000) | |||||||||
Previously Reported [Member] | TEMPO AUTOMATION INC | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Other noncurrent liabilities | 3,160,000 | 3,160,000 | |||||||||||
Total liabilities | 45,039,000 | 45,039,000 | |||||||||||
Accumulated deficit | (83,922,000) | (83,922,000) | |||||||||||
Total stockholders' deficit | (77,713,000) | (77,713,000) | |||||||||||
Change in fair value of warrants and derivatives | (1,575,000) | ||||||||||||
Total other income (expense), net | (1,141,000) | ||||||||||||
Net income (loss) | $ (23,623,000) | ||||||||||||
Net loss per share | $ (2.41) | ||||||||||||
Net cash used in operating activities | $ (20,833,000) | ||||||||||||
Revision of Prior Period, Error Correction, Adjustment [Member] | TEMPO AUTOMATION INC | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Other noncurrent liabilities | 765,000 | 765,000 | |||||||||||
Total liabilities | 765,000 | 765,000 | |||||||||||
Accumulated deficit | (765,000) | (765,000) | |||||||||||
Total stockholders' deficit | $ (765,000) | (765,000) | |||||||||||
Change in fair value of warrants and derivatives | (765,000) | ||||||||||||
Total other income (expense), net | (765,000) | ||||||||||||
Net income (loss) | $ (765,000) | ||||||||||||
Net loss per share | $ (0.07) |
Inventory (Details)
Inventory (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Raw materials | $ 2,060 | $ 158 | $ 111 |
Work in progress | 856 | 721 | 57 |
Total inventory | $ 2,916 | $ 879 | $ 168 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid expense | $ 15,597 | $ 113,140 | $ 343,839 |
TEMPO AUTOMATION INC | |||
Prepaid expense | 421,000 | 650,000 | 458,000 |
Other current assets | 512,000 | 242,000 | 77,000 |
Total prepaid expenses and other current assets | $ 933,000 | $ 892,000 | $ 535,000 |
Property and Equipment, net (De
Property and Equipment, net (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 15,742 | $ 15,113 | |
Less accumulated depreciation | (6,851) | (4,511) | |
Total property and equipment, net | $ 7,031 | 8,891 | 10,602 |
Manufacturing equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 9,732 | 9,197 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 4,811 | 4,811 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 489 | 395 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 462 | 462 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 248 | $ 248 |
Property and Equipment, net - D
Property and Equipment, net - Depreciation (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 2,342 | $ 2,192 |
Cost of goods sold | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | 530 | 1,125 |
Research and development | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | 574 | 901 |
Sales and marketing | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | 137 | 124 |
General and administrative | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 1,101 | $ 42 |
Other Noncurrent Assets (Detail
Other Noncurrent Assets (Details) - TEMPO AUTOMATION INC - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred transaction costs | $ 6,125,000 | $ 1,926,000 | $ 0 |
Noncurrent prepaid expenses | 749,000 | 7,000 | |
Deposits | 250,000 | 250,000 | |
Total other noncurrent assets | $ 6,208,000 | $ 2,925,000 | $ 257,000 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued legal fees | $ 4,272 | $ 1,517 | |
Accrued professional fees | 100 | 866 | |
Accrued liabilities | 410 | 774 | $ 414 |
Accrued sales and business taxes | 176 | 241 | 267 |
Accrued cost of revenue | 152 | 236 | |
Customer refund liability | 205 | 80 | |
Warranty liability | 55 | 54 | 56 |
Other accrued liabilities | 30 | 78 | 116 |
Total accrued expenses | $ 5,195 | $ 3,971 | $ 933 |
Accrued Compensation and Rela_3
Accrued Compensation and Related Benefits (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued payroll taxes | $ 356 | $ 254 | |
Accrued commissions | 121 | 109 | |
Accrued payroll | 41 | 79 | |
Accrued bonus | 647 | 49 | |
Other accrued benefits | 84 | 113 | |
Total accrued compensation and related benefits | $ 1,186 | $ 1,249 | $ 604 |
Other Noncurrent Liabilities (D
Other Noncurrent Liabilities (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Fair value of the convertible preferred stock and common stock warrants which are liability classified | $ 19,905,700 | |||
TEMPO AUTOMATION INC | ||||
Fair value of the convertible preferred stock and common stock warrants which are liability classified | $ 5,573,000 | $ 87,000 | ||
Other noncurrent liabilities | 254,000 | |||
Total other noncurrent liabilities | $ 5,573,000 | $ 3,925,000 | $ 341,000 |
Borrowing Arrangements (Details
Borrowing Arrangements (Details) - TEMPO AUTOMATION INC - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Oct. 14, 2021 | Jun. 23, 2021 | Jun. 30, 2020 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2022 | Aug. 25, 2022 | Oct. 31, 2021 | |
Borrowing Arrangements | |||||||||||
Aggregate principal amount | $ 700 | ||||||||||
Maximum borrowing capacity | $ 50 | $ 150,000 | |||||||||
Private placement warrants issued | 182,500 | 18,262,167 | |||||||||
Issuance of common stock warrants | $ 4,000 | $ 9,168 | $ 107 | ||||||||
Stated percentage | 8.95% | ||||||||||
Exercise price of warrants | $ 2.82 | $ 2.82 | |||||||||
Interest paid | $ 6,902 | $ 2,069 | 3,686 | 630 | |||||||
SVB Term Loan And Credit Facility | |||||||||||
Borrowing Arrangements | |||||||||||
Private placement warrants issued | 109,080 | 182,500 | |||||||||
Stated percentage | 8.25% | ||||||||||
Exercise price of warrants | $ 1.51 | ||||||||||
SVB Term Loan | |||||||||||
Borrowing Arrangements | |||||||||||
Aggregate principal amount | $ 4,000 | $ 4,000 | $ 10,000 | ||||||||
Issuance of common stock warrants | 100 | $ 100 | $ 4,000 | ||||||||
Loan commitment fee | $ 50 | ||||||||||
Period for payments of principal and interest on term loan | 8 months | ||||||||||
Rate in addition to prime | 5% | ||||||||||
Stated percentage | 8.25% | ||||||||||
SVB Credit Facility | |||||||||||
Borrowing Arrangements | |||||||||||
Aggregate principal amount | 4,000 | 1,600 | |||||||||
Maximum borrowing capacity | $ 4,000 | $ 1,600 | |||||||||
Repayment of debt | $ 10,300 | ||||||||||
Interest paid | $ 300 |
Borrowing Arrangements - Equipm
Borrowing Arrangements - Equipment Loan and Security Agreement (Details) - TEMPO AUTOMATION INC - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||||||
Jan. 29, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 25, 2022 | Oct. 31, 2021 | Jun. 23, 2021 | |
Borrowing Arrangements | ||||||||
Maximum borrowing capacity | $ 150,000 | $ 50 | ||||||
Monthly payment period | 42 months | |||||||
End of term payment fee | $ 200 | |||||||
Additional borrowing available, under certain conditions | 3,000 | |||||||
Stated percentage | 8.95% | |||||||
Interest paid | $ 6,902 | $ 2,069 | $ 3,686 | $ 630 | ||||
Private placement warrants issued | 182,500 | 18,262,167 | ||||||
Exercise price of warrants | $ 2.82 | $ 2.82 | ||||||
Equipment Loan And Security Agreement [Member] | ||||||||
Borrowing Arrangements | ||||||||
Maximum borrowing capacity | $ 6,000 | |||||||
Stated percentage | 8.95% | |||||||
Increase in interest rate in event of default | 5% | |||||||
Interest paid | $ 100 | 200 | ||||||
Discount amortization | $ 34 | $ 46 | ||||||
Private placement warrants issued | 108,000 | 108,000 | ||||||
Exercise price of warrants | $ 0.94 | $ 0.94 | ||||||
Equipment Loan And Security Agreement - Tranche 1 [Member] | ||||||||
Borrowing Arrangements | ||||||||
Maximum borrowing capacity | $ 3,000 | |||||||
Amount drawn | $ 3,000 | |||||||
Monthly payment period | 42 months | |||||||
End of term payment fee | $ 200 | |||||||
Additional borrowing available, under certain conditions | 3,000 | |||||||
Equipment Loan And Security Agreement - Tranche 2 [Member] | ||||||||
Borrowing Arrangements | ||||||||
Maximum borrowing capacity | $ 3,000 |
Borrowing Arrangements - Payche
Borrowing Arrangements - Paycheck Protection Program Loan (Details) - TEMPO AUTOMATION INC - USD ($) $ in Millions | 1 Months Ended | |||
Aug. 31, 2021 | May 31, 2020 | Sep. 30, 2022 | Aug. 31, 2022 | |
Borrowing Arrangements | ||||
Aggregate principal amount | $ 0.7 | |||
Interest rate | 8.95% | |||
Paycheck Protection Program Loan [Member] | ||||
Borrowing Arrangements | ||||
Aggregate principal amount | $ 2.5 | |||
Interest rate | 1% | |||
Monthly payment | $ 0.1 | |||
Loan forgiven | $ 2.5 |
Borrowing Arrangements - June 2
Borrowing Arrangements - June 2021 Credit Facility (Details) - TEMPO AUTOMATION INC - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |||||
Aug. 13, 2021 | Jun. 23, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Aug. 25, 2022 | Oct. 31, 2021 | |
Borrowing Arrangements | ||||||
Maximum borrowing capacity | $ 50 | $ 150,000 | ||||
Monthly interest-only payment period | 18 months | |||||
Stated percentage | 8.95% | |||||
Private placement warrants issued | 182,500 | 18,262,167 | ||||
Exercise price of warrants | $ 2.82 | $ 2.82 | ||||
June 2021 Credit Facility | ||||||
Borrowing Arrangements | ||||||
Maximum borrowing capacity | $ 20,000 | |||||
Monthly interest-only payment period | 18 months | |||||
Amount drawn | $ 10,000 | $ 10,000 | ||||
Stated percentage | 10% | 10% | ||||
Paid in kind interest rate | 2% | 2% | ||||
Increase in interest rate in event of default | 5% | 5% | ||||
Loan commitment fee | $ 200 | $ 200 | ||||
Private placement warrants issued | 533,333 | 533,333 | ||||
Exercise price of warrants | $ 1.51 | $ 1.51 | ||||
June 2021 Credit Facility - Tranche 1 | ||||||
Borrowing Arrangements | ||||||
Maximum borrowing capacity | $ 10,000 | |||||
June 2021 Credit Facility - Tranche 2 | ||||||
Borrowing Arrangements | ||||||
Maximum borrowing capacity | $ 10,000 |
Borrowing Arrangements - Loan a
Borrowing Arrangements - Loan and Security Agreement (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||||
Oct. 13, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Jan. 11, 2022 | Oct. 31, 2021 | Jun. 30, 2021 | Jun. 23, 2021 | |
TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements | |||||||
Maximum borrowing capacity | $ 150,000 | $ 50 | |||||
Extinguishment of debt amount | $ 6,000 | ||||||
Loss on extinguishment of debt | $ 38,939 | $ 319 | |||||
Noncash reduction in debt | 39,397 | 6,000 | |||||
Noncash increase in debt | $ 39,397 | 6,000 | |||||
Stated percentage | 8.95% | ||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements | |||||||
Maximum borrowing capacity | 150,000 | $ 150,000 | |||||
Extinguishment of debt amount | 6,000 | ||||||
Loss on extinguishment of debt | 300 | ||||||
Noncash reduction in debt | 6,000 | ||||||
Noncash increase in debt | 14,000 | $ 14,000 | |||||
Debt to same lender group treated as modification | 14,000 | ||||||
Stated percentage | 10% | ||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | Scenario Before The Occurrence Of The Public Trading Trigger | |||||||
Borrowing Arrangements | |||||||
Stated percentage | 10.50% | 10.50% | |||||
Rate in addition to prime | 7.25% | 7.25% | |||||
Loan and Security Agreement | TEMPO AUTOMATION INC | Scenario After The Occurrence Of The Public Trading Trigger | |||||||
Borrowing Arrangements | |||||||
Stated percentage | 9.50% | 9.50% | |||||
Rate in addition to prime | 6.25% | 6.25% | |||||
Loan and Security Agreement, Tranche 1 | |||||||
Borrowing Arrangements | |||||||
Maximum borrowing capacity | $ 30,000 | ||||||
Loan and Security Agreement, Tranche 1 | TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements | |||||||
Maximum borrowing capacity | 20,000 | 30,000 | $ 20,000 | ||||
Stated percentage | 2% | ||||||
Loan and Security Agreement, Tranche 2 | |||||||
Borrowing Arrangements | |||||||
Maximum borrowing capacity | $ 10,000 | ||||||
Loan and Security Agreement, Tranche 2 | TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements | |||||||
Maximum borrowing capacity | 20,000 | 20,000 | |||||
Loan and Security Agreement, Tranche 3 | TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements | |||||||
Maximum borrowing capacity | 40,000 | 40,000 | |||||
Loan and Security Agreement, Tranche 4 | TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements | |||||||
Maximum borrowing capacity | $ 70,000 | $ 70,000 |
Borrowing Arrangements - Balanc
Borrowing Arrangements - Balances and Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Borrowing Arrangements | |||
Total notes payable | $ 22,302 | $ 6,500 | |
Add: accretion of final interest payable | 243 | ||
Less: loan payable, current | (10,486) | (1,978) | |
Less: unamortized debt discount | (708) | (104) | |
Total loan payable, noncurrent | 11,351 | 4,418 | |
TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 22,302 | ||
Add: accretion of final interest payable | 243 | ||
Less: loan payable, current | (10,486) | (1,978) | |
Less: unamortized debt discount | (708) | ||
Total loan payable, noncurrent | $ 880 | 11,351 | 4,418 |
Future Principal Payments | |||
2022 | 14,496 | 10,829 | |
2023 | $ 567 | 10,906 | |
2024 | 567 | ||
Paycheck Protection Program Loan [Member] | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 2,500 | ||
Less: loan payable, current | (972) | ||
Total loan payable, noncurrent | 1,528 | ||
SVB Term Loan | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 4,000 | ||
Less: loan payable, current | (1,006) | ||
Less: unamortized debt discount | (104) | ||
Total loan payable, noncurrent | $ 2,890 | ||
June 2021 Credit Facility - Tranche 1 | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 10,000 | ||
Add: accretion of final interest payable | 108 | ||
Less: loan payable, current | (9,702) | ||
Less: unamortized debt discount | (406) | ||
June 2021 Credit Facility - Tranche 2 | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 10,000 | ||
Add: accretion of final interest payable | 79 | ||
Less: unamortized debt discount | (218) | ||
Total loan payable, noncurrent | 9,861 | ||
Equipment Loan And Security Agreement [Member] | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 2,302 | ||
Add: accretion of final interest payable | 56 | ||
Less: loan payable, current | (784) | ||
Less: unamortized debt discount | (84) | ||
Total loan payable, noncurrent | $ 1,490 |
Common Stock (Details)
Common Stock (Details) - TEMPO AUTOMATION INC - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 125,000,000 | 63,299,666 | 66,000,000 |
Ordinary shares, par value (per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 |
Common stock, shares issued | 10,085,354 | 10,037,305 | 9,773,097 |
Common stock, shares outstanding | 10,085,354 | 10,037,305 | 9,773,097 |
Common stock, shares reserved for issuance | 78,399,575 | 50,498,790 | 41,049,585 |
Conversion of convertible preferred stock | |||
Class of Stock [Line Items] | |||
Common stock, shares reserved for issuance | 29,520,187 | 29,520,187 | 29,520,187 |
Warrants | |||
Class of Stock [Line Items] | |||
Common stock, shares reserved for issuance | 21,868,138 | 3,419,304 | 305,891 |
Stock options | |||
Class of Stock [Line Items] | |||
Common stock, shares reserved for issuance | 23,896,897 | 16,508,725 | 10,364,039 |
Shares available for future issuance under 2015 Plan | |||
Class of Stock [Line Items] | |||
Common stock, shares reserved for issuance | 3,114,353 | 1,050,574 | 859,468 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - TEMPO AUTOMATION INC - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2019 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Temporary Equity [Line Items] | ||||||
Convertible preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Shares authorized | 31,058,244 | 52,500,412 | 39,982,670 | |||
Class A ordinary shares subject to possible redemption, outstanding | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 | |
Capital raised | $ 74,316 | $ 74,316 | ||||
Aggregate liquidation preference | 74,496 | $ 74,496 | $ 74,496 | |||
Gross cash proceeds to enable conversion | $ 50,000 | |||||
Series A1 Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Shares authorized | 1,528,501 | 1,528,501 | ||||
Class A ordinary shares subject to possible redemption, outstanding | 1,528,501 | 1,528,501 | ||||
Capital raised | $ 502 | $ 502 | ||||
Aggregate liquidation preference | $ 502 | $ 502 | ||||
Conversion price per share | $ 0.33 | |||||
Series A2 Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Shares authorized | 1,541,170 | 1,541,170 | ||||
Class A ordinary shares subject to possible redemption, outstanding | 1,541,170 | 1,541,170 | ||||
Capital raised | $ 760 | $ 760 | ||||
Aggregate liquidation preference | $ 760 | $ 760 | ||||
Conversion price per share | $ 0.49 | |||||
Series C1 Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Shares authorized | 1,497,748 | 1,497,748 | ||||
Class A ordinary shares subject to possible redemption, outstanding | 1,497,748 | 1,497,748 | ||||
Capital raised | $ 5,054 | $ 5,054 | ||||
Aggregate liquidation preference | $ 5,054 | $ 5,054 | ||||
Amount of debt converted | $ 5,000 | |||||
Conversion price per share | $ 3.37 | |||||
Series C2 Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Shares authorized | 10,300,550 | |||||
Conversion price per share | $ 4.85 | |||||
Series A Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Shares authorized | 7,048,031 | 7,048,031 | ||||
Class A ordinary shares subject to possible redemption, outstanding | 6,963,183 | 6,963,183 | ||||
Capital raised | $ 8,000 | $ 8,000 | ||||
Aggregate liquidation preference | $ 8,000 | $ 8,000 | ||||
Conversion price per share | $ 1.15 | |||||
Series B Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Shares authorized | 7,358,928 | 7,397,470 | ||||
Class A ordinary shares subject to possible redemption, outstanding | 7,320,385 | 7,320,385 | ||||
Capital raised | $ 20,000 | $ 20,000 | ||||
Aggregate liquidation preference | $ 20,180 | $ 20,180 | ||||
Conversion price per share | $ 2.76 | |||||
Series C Preferred Stock [Member] | ||||||
Temporary Equity [Line Items] | ||||||
Shares authorized | 12,083,866 | 10,669,200 | ||||
Class A ordinary shares subject to possible redemption, outstanding | 10,669,200 | 10,669,200 | ||||
Capital raised | $ 40,000 | $ 40,000 | ||||
Aggregate liquidation preference | $ 40,000 | $ 40,000 | ||||
Conversion price per share | $ 3.75 |
Warrants (Details)_2_3
Warrants (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 23, 2021 shares | Oct. 31, 2021 USD ($) Y $ / shares shares | Jun. 30, 2021 USD ($) Y $ / shares shares | Jun. 30, 2020 USD ($) Y $ / shares shares | Sep. 30, 2022 USD ($) Y $ / shares shares | Dec. 31, 2021 USD ($) Y | Dec. 31, 2020 USD ($) Y | Aug. 25, 2022 $ / shares | Jun. 03, 2020 $ / shares | |
Expected term (years) [Member] | |||||||||
Warrants | |||||||||
Measurement input, warrants | Y | 5.28 | 5.49 | |||||||
Expected volatility [Member] | |||||||||
Warrants | |||||||||
Measurement input, warrants | 61 | 0.188 | 0.227 | ||||||
Risk-free interest rate [Member] | |||||||||
Warrants | |||||||||
Measurement input, warrants | 0.0126 | 0.0036 | |||||||
TEMPO AUTOMATION INC | |||||||||
Warrants | |||||||||
Exercise price of warrants | $ / shares | $ 2.82 | $ 2.82 | |||||||
Issuance of common stock warrants | $ | $ 4,000 | $ 9,168 | $ 107 | ||||||
TEMPO AUTOMATION INC | Expected term (years) [Member] | |||||||||
Warrants | |||||||||
Measurement input, warrants | Y | 3 | 10 | 10 | 3 | |||||
TEMPO AUTOMATION INC | Expected volatility [Member] | |||||||||
Warrants | |||||||||
Measurement input, warrants | 48.5 | 64.01 | 56.49 | ||||||
TEMPO AUTOMATION INC | Risk-free interest rate [Member] | |||||||||
Warrants | |||||||||
Measurement input, warrants | 0.70 | 1.50 | 0.66 | 3.46 | |||||
TEMPO AUTOMATION INC | Measurement Input, Expected Dividend Rate [Member] | |||||||||
Warrants | |||||||||
Measurement input, warrants | 0 | 0 | 0 | 0 | 0 | 0 | |||
TEMPO AUTOMATION INC | Measurement Input, Appraised Value [Member] | |||||||||
Warrants | |||||||||
Measurement input, warrants | 3.79 | 1.07 | 0.60 | ||||||
Warrants | TEMPO AUTOMATION INC | |||||||||
Warrants | |||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 109,080 | 182,500 | |||||||
Warrant Classified As Equity | TEMPO AUTOMATION INC | |||||||||
Warrants | |||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 2,363,000 | 109,080 | 182,500 | 291,580 | |||||
Exercise price of warrants | $ / shares | $ 2.82 | $ 1.51 | $ 0.94 | $ 1.51 | $ 0.94 | ||||
Issuance of common stock warrants | $ | $ 9,000 | $ 200 | $ 100 |
Warrants - Liability classified
Warrants - Liability classified warrants (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Aug. 25, 2022 $ / shares shares | Jan. 20, 2022 $ / shares shares | Oct. 11, 2021 $ / shares shares | Jun. 23, 2021 shares | Jan. 29, 2021 $ / shares shares | Nov. 22, 2016 shares | Jun. 30, 2021 USD ($) Y $ / shares shares | Jan. 31, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) Y $ / shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) Y $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) $ / shares Y | Dec. 31, 2021 USD ($) Y $ / shares shares | Dec. 31, 2020 USD ($) $ / shares Y | Oct. 31, 2021 Y $ / shares | Jun. 30, 2020 Y | |
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Change in fair value of warrant liability | $ 362,000 | $ (24,916,621) | $ (10,956,082) | $ (14,433,236) | $ 7,487,000 | $ (12,722,918) | |||||||||||
Expected term (years) [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | Y | 5.49 | 5.28 | 5.49 | ||||||||||||||
Expected term (years) [Member] | Minimum [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | Y | 3.89 | ||||||||||||||||
Expected volatility [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 61 | 61 | 0.227 | 0.188 | 0.227 | ||||||||||||
Risk-free interest rate [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 0.0036 | 0.0126 | 0.0036 | ||||||||||||||
TEMPO AUTOMATION INC | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Exercise price of warrants | $ / shares | $ 2.82 | $ 2.82 | |||||||||||||||
Warrants outstanding-January 1 | $ 5,573,000 | ||||||||||||||||
Warrants outstanding-December 31 | $ 32,435,000 | 32,435,000 | $ 5,573,000 | ||||||||||||||
Change in fair value of warrant liability | (5,674,000) | 2,340,000 | $ 4,242,000 | $ (47,000) | |||||||||||||
Warrants issued, fair value | $ 27,600,000 | ||||||||||||||||
TEMPO AUTOMATION INC | Maximum | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | Y | 9.48 | ||||||||||||||||
TEMPO AUTOMATION INC | Expected term (years) [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | Y | 10 | 3 | 3 | 3 | 10 | ||||||||||||
TEMPO AUTOMATION INC | Expected term (years) [Member] | Minimum [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | Y | 4.89 | 3.89 | 4.89 | ||||||||||||||
TEMPO AUTOMATION INC | Expected term (years) [Member] | Maximum | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | Y | 6.78 | 9.48 | 6.78 | ||||||||||||||
TEMPO AUTOMATION INC | Expected volatility [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 64.01 | 48.5 | 56.49 | ||||||||||||||
TEMPO AUTOMATION INC | Expected volatility [Member] | Minimum [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 58.17 | 64.29 | 58.17 | ||||||||||||||
TEMPO AUTOMATION INC | Expected volatility [Member] | Maximum | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 59.84 | 64.44 | 59.84 | ||||||||||||||
TEMPO AUTOMATION INC | Risk-free interest rate [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 1.50 | 3.46 | 3.46 | 0.70 | 0.66 | ||||||||||||
TEMPO AUTOMATION INC | Risk-free interest rate [Member] | Minimum [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 0.36 | 1.12 | 0.36 | ||||||||||||||
TEMPO AUTOMATION INC | Risk-free interest rate [Member] | Maximum | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 0.51 | 1.52 | 0.51 | ||||||||||||||
TEMPO AUTOMATION INC | Measurement Input, Expected Dividend Rate [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
TEMPO AUTOMATION INC | Measurement Input, Appraised Value [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | 1.07 | 3.79 | 0.60 | ||||||||||||||
TEMPO AUTOMATION INC | Measurement Input, Appraised Value [Member] | Minimum [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | $ / shares | 1.16 | 1.17 | 1.16 | ||||||||||||||
TEMPO AUTOMATION INC | Measurement Input, Appraised Value [Member] | Maximum | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Measurement input, warrants | $ / shares | 1.56 | 7.71 | 1.56 | ||||||||||||||
TEMPO AUTOMATION INC | Series C Preferred Stock [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 108,000 | ||||||||||||||||
Warrants | TEMPO AUTOMATION INC | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 109,080 | 182,500 | |||||||||||||||
Warrants issued, fair value | $ 0 | ||||||||||||||||
Warrant Classified As Liability | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 21,576,558 | ||||||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 764,724 | ||||||||||||||||
Warrants outstanding-January 1 | $ 86,000 | $ 5,573,000 | $ 86,000 | $ 86,000 | $ 133,000 | ||||||||||||
Warrants outstanding-December 31 | $ 86,000 | 5,573,000 | 86,000 | ||||||||||||||
Change in fair value of warrant liability | 4,242,000 | $ (47,000) | |||||||||||||||
Warrants issued, fair value | $ 1,245,000 | ||||||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series A Preferred Stock | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 26,112 | 58,736 | |||||||||||||||
Exercise price of warrants | $ / shares | $ 1.15 | $ 1.15 | |||||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series A Preferred Stock Issued 2015 | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 58,736 | ||||||||||||||||
Exercise price of warrants | $ / shares | $ 1.15 | ||||||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series A Preferred Stock Issued 2016 | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 26,112 | ||||||||||||||||
Exercise price of warrants | $ / shares | $ 1.15 | ||||||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series B Preferred Stock | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 38,543 | 38,543 | |||||||||||||||
Exercise price of warrants | $ / shares | 2.76 | $ 2.76 | $ 2.76 | ||||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series C Preferred Stock [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 10,000,000 | 186,667 | 108,000 | 8,262,167 | 108,000 | ||||||||||||
Exercise price of warrants | $ / shares | $ 2.82 | $ 0.94 | $ 0.94 | 2.82 | $ 2.82 | $ 0.94 | |||||||||||
Warrants issued, fair value | $ 200,000 | $ 800,000 | |||||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Common stock [Member] | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 2,363,000 | 533,333 | 533,333 | 533,333 | |||||||||||||
Exercise price of warrants | $ / shares | $ 2.82 | $ 1.51 | $ 1.51 | $ 1.51 | $ 1.51 | ||||||||||||
Warrants issued, fair value | $ 1,000,000 | $ 4,100,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Mar. 31, 2021 | Jul. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2021 | Apr. 30, 2015 | |
Stock-Based Compensation | ||||||||
Vesting percentage per year | 25% | |||||||
Forfeiture period | 3 years | |||||||
TEMPO AUTOMATION INC | ||||||||
Stock-Based Compensation | ||||||||
Extension in grant achievement period | 12 months | |||||||
Stock-based compensation expense | $ 2,323,000 | $ 1,684,000 | $ 2,538,000 | $ 1,256,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||||
Outstanding, beginning of period, number | 16,457,475 | 10,364,039 | 10,364,039 | |||||
Stock options granted, number | 7,002,296 | |||||||
Stock options exercised, number | (264,208) | |||||||
Stock options forfeited, number | (492,049) | |||||||
Stock options expired, number | (152,603) | |||||||
Outstanding, end of period, number | 16,457,475 | 10,364,039 | ||||||
Vested during the period, number | 2,265,763 | |||||||
Vested at end of period, number | 7,689,805 | |||||||
Exercisable at the end of the period, number | 7,747,264 | |||||||
Shares expected to vest, number | 7,263,661 | |||||||
Vested and expected to vest, number | 14,953,466 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||||||
Balance at beginning of period, exercise price | $ 1.36 | $ 0.98 | $ 0.98 | |||||
Stock options granted, exercise price | 1.89 | |||||||
Stock options exercised, exercise price | 0.48 | |||||||
Stock options forfeited, exercise price | 1.37 | |||||||
Stock options expired, exercise price | 1.23 | |||||||
Balance at end of period, exercise price | 1.36 | $ 0.98 | ||||||
Vested during the period, exercise price | 1.17 | |||||||
Vested at end of period, exercise price | 0.97 | |||||||
Exercisable at the end of the period, exercise price | 0.97 | |||||||
Shares expected to vest, exercise price | 1.85 | |||||||
Vested and expected to vest, exercise price | $ 1.40 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||||||
Weighted average contractual term | 7 years 11 months 15 days | |||||||
Vested during the period, contractual term | 8 years 2 months 8 days | |||||||
Vested at end of period, number | 6 years 5 months 4 days | |||||||
Exercisable at the end of the period, contractual term | 6 years 5 months 4 days | |||||||
Shares expected to vest, contractual term | 9 years 2 months 12 days | |||||||
Vested and expected to vest, contractual term | 7 years 9 months 7 days | |||||||
Aggregate intrinsic value | $ 104,554,000 | |||||||
Vested during the period, aggregate intrinsic value | 51,807,000 | |||||||
Vested at end of period, aggregate intrinsic value | 51,807,000 | |||||||
Exercisable at the end of the period, aggregate intrinsic value | 52,181,000 | |||||||
Shares expected to vest, aggregate intrinsic value | 42,565,000 | |||||||
Vested and expected to vest, aggregate intrinsic value | $ 94,372,000 | |||||||
Stock options | TEMPO AUTOMATION INC | ||||||||
Stock-Based Compensation | ||||||||
Shares authorized | 27,712,681 | 18,212,681 | 1,902,688 | |||||
Expiration period | 10 years | 10 years | ||||||
Vesting percentage per year | 25% | 25% | ||||||
Forfeiture period | 3 years | 3 years | ||||||
Vesting period | 3 months | 3 months | ||||||
Stock-based compensation expense | $ 0 | $ 0 | ||||||
Shares outstanding | 1,050,574 | 859,468 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||||
Outstanding, beginning of period, number | 16,457,475 | |||||||
Stock options granted, number | 996,055 | |||||||
Stock options exercised, number | (48,049) | |||||||
Stock options forfeited, number | (2,872,385) | |||||||
Stock options expired, number | (136,197) | |||||||
Outstanding, end of period, number | 14,396,899 | 16,457,475 | ||||||
Vested during the period, number | 2,137,947 | |||||||
Vested at end of period, number | 9,643,506 | |||||||
Exercisable at the end of the period, number | 9,648,520 | |||||||
Shares expected to vest, number | 3,503,497 | |||||||
Vested and expected to vest, number | 13,147,003 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||||||
Balance at beginning of period, exercise price | $ 1.36 | |||||||
Stock options granted, exercise price | 3.33 | |||||||
Stock options exercised, exercise price | 1.03 | |||||||
Stock options forfeited, exercise price | 2.24 | |||||||
Stock options expired, exercise price | 1.06 | |||||||
Balance at end of period, exercise price | 1.32 | $ 1.36 | ||||||
Vested during the period, exercise price | 1.62 | |||||||
Vested at end of period, exercise price | 1.11 | |||||||
Exercisable at the end of the period, exercise price | 1.12 | |||||||
Shares expected to vest, exercise price | 2.02 | |||||||
Vested and expected to vest, exercise price | $ 1.36 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||||||
Weighted average contractual term | 6 years 10 months 20 days | 7 years 11 months 15 days | ||||||
Vested during the period, contractual term | 7 years 1 month 17 days | |||||||
Vested at end of period, number | 5 years 10 months 24 days | |||||||
Exercisable at the end of the period, contractual term | 5 years 10 months 24 days | |||||||
Shares expected to vest, contractual term | 8 years 6 months 7 days | |||||||
Vested and expected to vest, contractual term | 6 years 7 months 6 days | |||||||
Aggregate intrinsic value | $ 7,582,000 | $ 104,554,000 | ||||||
Vested during the period, aggregate intrinsic value | 817,000 | |||||||
Vested at end of period, aggregate intrinsic value | 5,500,000 | |||||||
Exercisable at the end of the period, aggregate intrinsic value | 5,501,000 | |||||||
Shares expected to vest, aggregate intrinsic value | 1,270,000 | |||||||
Vested and expected to vest, aggregate intrinsic value | $ 6,770,000 | |||||||
Stock options | TEMPO AUTOMATION INC | Minimum [Member] | ||||||||
Stock-Based Compensation | ||||||||
Fair value of options granted and later modified | $ 1,400,000 | |||||||
Stock options | TEMPO AUTOMATION INC | Maximum [Member] | ||||||||
Stock-Based Compensation | ||||||||
Fair value of options granted and later modified | $ 8,800,000 | |||||||
Stock options | TEMPO AUTOMATION INC | Chief Financial Officer | ||||||||
Stock-Based Compensation | ||||||||
Shares authorized | 258,368 | |||||||
Vesting percentage per year | 100% | |||||||
Vesting period | 36 months | |||||||
Stock options | TEMPO AUTOMATION INC | Management | ||||||||
Stock-Based Compensation | ||||||||
Shares authorized | 1,245,641 | |||||||
Vesting percentage per year | 100% |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options valuation (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
TEMPO AUTOMATION INC | |||
Fair value of option granted | |||
Expected dividends | 0% | 0% | |
TEMPO AUTOMATION INC | Stock options | |||
Fair value of option granted | |||
Expected dividends | 0% | ||
Minimum [Member] | |||
Fair value of option granted | |||
Expected term | 5 years | ||
Minimum [Member] | TEMPO AUTOMATION INC | |||
Fair value of option granted | |||
Expected term | 5 years 1 month 24 days | ||
Expected volatility | 61.44% | 51.15% | |
Risk free interest rate | 0.41% | 0.27% | |
Price per share | $ 1.41 | $ 1.01 | |
Minimum [Member] | TEMPO AUTOMATION INC | Stock options | |||
Fair value of option granted | |||
Expected term | 6 months | ||
Expected volatility | 55.92% | ||
Risk free interest rate | 1.54% | ||
Maximum [Member] | TEMPO AUTOMATION INC | |||
Fair value of option granted | |||
Expected term | 6 years 29 days | 6 years 6 months 10 days | |
Expected volatility | 67.12% | 59.84% | |
Risk free interest rate | 1.35% | 1.63% | |
Price per share | $ 6.08 | $ 1.46 | |
Maximum [Member] | TEMPO AUTOMATION INC | Stock options | |||
Fair value of option granted | |||
Expected term | 5 years 10 months 9 days | ||
Expected volatility | 66.32% | ||
Risk free interest rate | 3% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense allocation (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation expense | ||||
Total stock-based compensation expense | $ 2,323 | $ 1,684 | $ 2,538 | $ 1,256 |
Unrecognized stock-based compensation expense, options | $ 11,000 | |||
Period for recognition | 2 years 10 months 13 days | |||
Stock-based compensation expense related to secondary sale transaction | $ 300 | |||
Cost of goods sold | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | 441 | 119 | 276 | 115 |
Research and development | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | 556 | 303 | 540 | 87 |
Sales and marketing | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | 381 | 205 | 402 | 169 |
General and administrative | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | $ 945 | $ 1,057 | $ 1,320 | $ 885 |
Commitments and Contingencies_8
Commitments and Contingencies (Details) - TEMPO AUTOMATION INC $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) lease | Dec. 31, 2020 USD ($) | |
Leases [Abstract] | ||||
Number Of Operating Leases | lease | 2 | |||
Number Of Finance Leases | lease | 1 | |||
Operating lease-related assets and liabilities | ||||
Operating lease assets | $ 565 | $ 1,323 | $ 2,109 | |
Operating lease liability, current | 801 | 1,111 | 987 | |
Operating lease liability, noncurrent | $ 38 | $ 546 | 1,657 | |
Estimated incremental borrowing rate | 8.95% | 8.95% | ||
Operating lease-related income and expenses | ||||
Rent expense recorded | $ 700 | $ 700 | $ 1,000 | 1,000 |
Variable lease expenses | 38 | $ 300 | ||
Future minimum lease payments under non-cancelable operating leases | ||||
2022 | 1,215 | |||
2023 | 531 | 531 | ||
2024 | 29 | 29 | ||
Total future lease payments | 867 | 1,775 | ||
Less imputed interest | (28) | (118) | ||
Total operating lease liability | $ 839 | $ 1,657 |
Commitments and Contingencies_9
Commitments and Contingencies - Finance leases (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Jun. 23, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finance Leases | |||||
Cash proceeds | $ 4,000 | $ 4,000 | |||
Assets carrying amount | $ 4,800 | ||||
Period of right to use the assets | 3 years | ||||
Maximum percentage of fair market value | 25% | ||||
Fair market value of assets at inception date | $ 1,000 | ||||
Finance lease-related assets and liabilities | |||||
Finance lease assets | $ 3,519 | $ 3,943 | 4,490 | ||
Finance lease liability, current | 1,897 | 1,091 | 906 | ||
Finance lease liability, noncurrent | 1,606 | 2,697 | |||
Finance lease-related income and expenses | |||||
Depreciation of the leased asset | 1,935 | $ 409 | 547 | 273 | |
Lease interest expense | 329 | $ 464 | 598 | $ 376 | |
Future minimum lease payments under finance lease | |||||
2022 | 376 | 1,504 | |||
2023 | 1,731 | 1,731 | |||
Total future lease payments | 2,107 | 3,235 | |||
Less: imputed interest | (210) | (538) | |||
Total finance lease liability | $ 1,897 | $ 2,697 | |||
Minimum [Member] | |||||
Finance Leases | |||||
Period of right to use the assets | 6 years | ||||
Period of renewal option | 12 months | ||||
Maximum [Member] | |||||
Finance Leases | |||||
Period of right to use the assets | 10 years | ||||
Period of renewal option | 24 months |
Commitments and Contingencie_10
Commitments and Contingencies - Weighted average and cash flow information (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | ||||
Weighted average lease term, operating leases | 9 months 18 days | |||
Weighted average lease term, finance leases | 9 months 18 days | 1 year 6 months | ||
Weighted average discount rate, operating leases | 8.95% | 8.95% | ||
Weighted average discount rate, finance leases | 18.71% | 18.71% | ||
Operating cash flows paid for operating leases | $ 908 | $ 885 | $ 1,184 | $ 689 |
Financing cash flows paid for finance leases | $ 1,128 | $ 1,128 | $ 1,504 | 773 |
Non-cash activity: Lease liabilities arising from obtaining right-of-use assets | $ 107 |
Income Taxes (Details)
Income Taxes (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income tax provisions | ||
State | $ 1 | |
Total current tax expense | $ 1 | |
Effective Income Tax Rate Reconciliation | ||
Statutory rate | 21% | 21% |
Federal net operating loss | 5.30% | |
Leases | 4.20% | |
Depreciation | (3.40%) | |
State income tax | 9.60% | (1.10%) |
Permanent differences | (6.80%) | (1.10%) |
Other | 0.30% | |
Valuation allowance | (23.80%) | (25.10%) |
Effective income tax rate | (0.00%) | 0.10% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities, NOL, valuation allowance (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax asset (liability) | ||
Net operating losses | $ 26,070 | $ 14,703 |
Accruals and other | 982 | 309 |
Total deferred tax assets | 27,052 | 15,012 |
valuation allowance | (25,648) | (14,223) |
Net deferred tax assets | 1,404 | 789 |
Property, plant, equipment, and intangibles | (1,404) | (789) |
Change in valuation allowance | 11,400 | 4,800 |
Domestic Tax Authority [Member] | ||
Deferred tax asset (liability) | ||
Net operating losses | 91,700 | 59,500 |
Net operating losses subject to expiration | 10,200 | |
Net operating losses not subject to expiration | 81,500 | |
State and Local Jurisdiction [Member] | ||
Deferred tax asset (liability) | ||
Net operating losses | $ 81,700 | $ 46,300 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefit (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Unrecognized tax benefits | |||
Unrecognized tax benefits, beginning of period | $ 0 | $ 0 | |
Unrecognized tax benefits, end of period | 0 | 0 | $ 0 |
TEMPO AUTOMATION INC | |||
Unrecognized tax benefits | |||
Unrecognized tax benefits, beginning of period | $ 411,000 | 411,000 | 411,000 |
Unrecognized tax benefits, end of period | $ 411,000 | $ 411,000 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net income (loss) | $ (8,636,558) | $ 10,135,295 | $ (1,058,490) | $ 22,288,261 | $ (1,042,594) | $ (11,524,429) | $ 440,247 | $ 9,721,238 | $ (9,188,357) | $ 5,846,503 | |
Net loss, diluted | $ (19,104,000) | ||||||||||
TEMPO AUTOMATION INC | |||||||||||
Net income (loss) | (96,518,000) | (24,388,000) | $ (48,013,000) | $ (19,104,000) | |||||||
Net loss, diluted | $ (96,518) | $ (24,388) | |||||||||
Weighted average shares outstanding of ordinary shares, basic | 10,072,318 | 9,815,806 | 9,819,576 | 9,755,174 | |||||||
Weighted average shares outstanding of ordinary shares, diluted | 10,072,318 | 9,815,806 | 9,819,576 | 9,755,174 | |||||||
Net loss per share, basic | $ (9.58) | $ (2.48) | $ (4.89) | $ (1.96) | |||||||
Net loss per share, diluted | $ (9.58) | $ (2.48) | $ (4.89) | $ (1.96) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive shares (Details) - TEMPO AUTOMATION INC - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 75,285,222 | 46,690,247 | 49,448,216 | 40,190,117 |
Shares of common stock issuable upon conversion of redeemable convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 |
Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 18,680,225 | 231,391 | 231,391 | 123,391 |
Shares of common stock issuable from stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 23,896,897 | 16,113,756 | 16,508,725 | 10,364,039 |
Shares of common stock issuable from common stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 3,187,913 | 824,913 | 3,187,913 | 182,500 |
Subsequent Events (Details)_2
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | ||||||||||
Jan. 11, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Aug. 31, 2022 | Aug. 25, 2022 | Jan. 20, 2022 | Jan. 18, 2022 | Oct. 31, 2021 | Oct. 13, 2021 | Jun. 30, 2021 | Jun. 23, 2021 | |
TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | $ 150,000 | $ 50 | |||||||||
Exercise price of warrants | $ 2.82 | $ 2.82 | |||||||||
Aggregate principal amount | $ 700 | ||||||||||
Stated percentage | 8.95% | ||||||||||
Tor Asia Credit Opportunity Master Fund II LP | Subsequent event [Member] | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | $ 100,000 | ||||||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | $ 150,000 | $ 150,000 | |||||||||
Exercise price of warrants | $ 2.82 | ||||||||||
Stated percentage | 10% | ||||||||||
Loan and Security Agreement | Subsequent event [Member] | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | $ 10,000 | ||||||||||
Loan and Security Agreement, Tranche 1 | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | 30,000 | ||||||||||
Loan and Security Agreement, Tranche 1 | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | 30,000 | 20,000 | $ 20,000 | ||||||||
Stated percentage | 2% | ||||||||||
Loan and Security Agreement, Tranche 1 | Subsequent event [Member] | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Amount expanded | 10,000 | ||||||||||
Loan and Security Agreement, Tranche 2 | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | 10,000 | ||||||||||
Loan and Security Agreement, Tranche 2 | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | $ 20,000 | $ 20,000 | |||||||||
Loan and Security Agreement, Tranche 2 | Subsequent event [Member] | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Maximum borrowing capacity | $ 10,000 | ||||||||||
Convertible Senior Notes Under Subscription Agreement | Subsequent event [Member] | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Aggregate principal amount | $ 25,000 | ||||||||||
Stated percentage | 15.50% | ||||||||||
Convertible Senior Notes Under Subscription Agreement | OCM Tempo Holdings, LLC | Subsequent event [Member] | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Aggregate principal amount | $ 175,000 | ||||||||||
Stated percentage | 15.50% | ||||||||||
2022 Promissory Notes | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Aggregate principal amount | $ 5,000 | ||||||||||
Stated percentage | 10% | ||||||||||
A C E Convertible Note | Subsequent event [Member] | TEMPO AUTOMATION INC | |||||||||||
Subsequent Events | |||||||||||
Aggregate principal amount | $ 20,000 | ||||||||||
Stated percentage | 18% | ||||||||||
Additional amount on conversion or payment in full | 5% |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 0 | $ 8,390 |
Total Current Assets | 15,597 | 121,530 |
TOTAL ASSETS | 40,309,194 | 230,279,789 |
Current liabilities | ||
Loan payable - related party, current (measured at fair value) | 1,051,499 | 527,756 |
Total current liabilities | 18,736,154 | 6,788,398 |
Loan payable, noncurrent | 11,351,000 | |
TOTAL LIABILITIES | 48,501,854 | 27,604,480 |
Class A ordinary shares subject to possible redemption, 8,202,277 and 23,000,000 shares issued and outstanding at redemption value of $10.21 and $10.00 per share at September 30, 2022 and December 31, 2021, respectively | 40,293,597 | 230,000,000 |
Stockholders' deficit | ||
Additional paid in capital | 0 | |
Accumulated deficit | (48,486,832) | (27,325,266) |
Total Shareholders' Deficit | (48,486,257) | (27,324,691) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 230,279,789 | |
TEMPO AUTOMATION INC | ||
Current assets | ||
Cash and cash equivalents | 533,000 | 2,864,000 |
Accounts receivable, net | 1,945,000 | 2,918,000 |
Inventory | 2,916,000 | 879,000 |
Contract assets | 990,000 | 1,219,000 |
Prepaid expenses and other current assets | 933,000 | 892,000 |
Total Current Assets | 7,317,000 | 8,772,000 |
Property and equipment, net | 7,031,000 | 8,891,000 |
Operating leases - right of use asset | 565,000 | 1,323,000 |
Restricted cash | 320,000 | 320,000 |
Other noncurrent assets | 6,208,000 | 2,925,000 |
TOTAL ASSETS | 21,441,000 | 22,231,000 |
Current liabilities | ||
Accounts payable | 4,994,000 | 1,583,000 |
Contract liabilities | 2,086,000 | 175,000 |
Accrued liabilities | 5,195,000 | 3,971,000 |
Accrued compensation and related benefits | 1,186,000 | 1,249,000 |
Operating lease liability, current | 801,000 | 1,111,000 |
Finance lease, current | 1,897,000 | 1,091,000 |
Loan payable, current ($13,052 and $0 measured at fair value, respectively) | 42,545,000 | 10,486,000 |
Loan payable - related party, current (measured at fair value) | 40,041,000 | |
Total current liabilities | 98,745,000 | 19,666,000 |
Operating lease liability, noncurrent | 38,000 | 546,000 |
Finance lease, noncurrent | 1,606,000 | |
Loan payable, noncurrent | 880,000 | 11,351,000 |
Warrant liabilities | 32,435,000 | 5,573,000 |
TOTAL LIABILITIES | 132,098,000 | 38,742,000 |
Commitments and Contingencies | ||
Class A ordinary shares subject to possible redemption, 8,202,277 and 23,000,000 shares issued and outstanding at redemption value of $10.21 and $10.00 per share at September 30, 2022 and December 31, 2021, respectively | 75,684,000 | 75,684,000 |
Stockholders' deficit | ||
Ordinary shares | 0 | |
Additional paid in capital | 18,489,000 | 16,117,000 |
Accumulated deficit | (204,830,000) | (108,312,000) |
Total Shareholders' Deficit | (186,341,000) | (92,195,000) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 21,441,000 | $ 22,231,000 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Loan payable | $ 13,052 | $ 0 | |||
Convertible preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||
Shares authorized | 52,500,412 | 31,058,244 | 39,982,670 | ||
Ordinary shares, subject to possible redemption issued | 29,520,187 | 29,520,187 | 29,520,187 | ||
Ordinary shares, shares subject to possible redemption | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 |
Aggregate liquidation preference | $ 74,496 | $ 74,496 | $ 74,496 | ||
Ordinary shares, par value (per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||
Common stock, shares authorized | 125,000,000 | 63,299,666 | 66,000,000 | ||
Common stock, shares issued | 10,085,354 | 10,037,305 | 9,773,097 | ||
Common stock, shares outstanding | 10,085,354 | 10,037,305 | 9,773,097 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating expenses | ||
Loss from operations | $ (3,248,689) | $ (4,773,008) |
Other income (expense), net | ||
Change in fair value of warrants and derivatives | 10,956,082 | 14,433,236 |
Total other income (expense), net | 3,688,936 | 14,494,246 |
TEMPO AUTOMATION INC | ||
Revenue | 9,146,000 | 13,354,000 |
Cost of revenue | 8,141,000 | 10,696,000 |
Gross profit | 1,005,000 | 2,658,000 |
Operating expenses | ||
Research and development | 8,317,000 | 6,538,000 |
Sales and marketing | 7,363,000 | 6,504,000 |
General and administrative | 9,992,000 | 12,098,000 |
Impairment loss | 297,000 | |
Total operating expenses | 25,969,000 | 25,140,000 |
Loss from operations | (24,964,000) | (22,482,000) |
Other income (expense), net | ||
Interest expense | (6,902,000) | (2,069,000) |
Other financing cost | (30,793,000) | |
Interest income | 7,000 | 3,000 |
Loss on debt extinguishment | (38,939,000) | |
Other income (expense) | (4,000) | 2,500,000 |
Change in fair value of warrants and derivatives | 5,674,000 | (2,340,000) |
Change in fair value of debt | (597,000) | |
Total other income (expense), net | (71,554,000) | (1,906,000) |
Loss before income taxes | (96,518,000) | (24,388,000) |
Net loss | $ (96,518,000) | $ (24,388,000) |
Basic net loss per share | $ (9.58) | $ (2.48) |
Diluted net loss per share | $ (9.58) | $ (2.48) |
Weighted average shares outstanding, basic | 10,072,318 | 9,815,806 |
Weighted average shares outstanding, diluted | 10,072,318 | 9,815,806 |
CONDENSED STATEMENTS OF CONVERT
CONDENSED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - USD ($) | Common Stock TEMPO AUTOMATION INC | Additional Paid in Capital TEMPO AUTOMATION INC | Additional Paid in Capital | Accumulated Deficit TEMPO AUTOMATION INC | Accumulated Deficit | TEMPO AUTOMATION INC | Total |
Balance at the beginning at Dec. 31, 2019 | $ 2,900,000 | $ (41,195,000) | $ (38,295,000) | ||||
Balance at beginning of period, shares at Dec. 31, 2019 | 9,740,717 | ||||||
Balance at beginning of period at Dec. 31, 2019 | $ 75,684,000 | ||||||
Balance at beginning of period, shares at Dec. 31, 2019 | 29,520,187 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (19,104,000) | $ (19,104,000) | |||||
Issuance of common stock upon exercise of stock options | 22,000 | 22,000 | |||||
Issuance of common stock upon exercise of stock options, shares | 18,681 | ||||||
Issuance of common stock awards, shares | 13,699 | ||||||
Issuance of common stock warrants | 107,000 | 107,000 | |||||
Stock-based compensation | 1,256,000 | 1,256,000 | |||||
Balance at end of period at Dec. 31, 2020 | $ 75,684,000 | $ 230,000,000 | |||||
Balance at end of period, shares at Dec. 31, 2020 | 29,520,187 | ||||||
Balance at the end at Dec. 31, 2020 | 4,285,000 | $ 0 | (60,299,000) | $ (33,171,769) | $ (56,014,000) | (33,171,194) | |
Balance at end of period, shares at Dec. 31, 2020 | 9,773,097 | ||||||
Balance at the beginning at Mar. 30, 2020 | 0 | 0 | 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (9,188,357) | ||||||
Balance at end of period at Dec. 31, 2020 | $ 75,684,000 | 230,000,000 | |||||
Balance at end of period, shares at Dec. 31, 2020 | 29,520,187 | ||||||
Balance at the end at Dec. 31, 2020 | 4,285,000 | 0 | (60,299,000) | (33,171,769) | $ (56,014,000) | (33,171,194) | |
Balance at end of period, shares at Dec. 31, 2020 | 9,773,097 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (24,388,000) | (24,388,000) | 9,721,238 | ||||
Issuance of common stock upon exercise of stock options | 27,000 | 27,000 | |||||
Issuance of common stock upon exercise of stock options, shares | 116,379 | ||||||
Issuance of common stock awards | 213,000 | 213,000 | |||||
Stock-based compensation | 1,684,000 | 1,684,000 | |||||
Balance at end of period at Sep. 30, 2021 | $ 75,684,000 | ||||||
Balance at end of period, shares at Sep. 30, 2021 | 29,520,187 | ||||||
Balance at the end at Sep. 30, 2021 | 6,209,000 | (84,687,000) | (23,450,531) | $ (78,478,000) | (23,449,956) | ||
Balance at end of period, shares at Sep. 30, 2021 | 9,889,476 | ||||||
Balance at the beginning at Dec. 31, 2020 | 4,285,000 | 0 | (60,299,000) | (33,171,769) | (56,014,000) | (33,171,194) | |
Balance at beginning of period, shares at Dec. 31, 2020 | 9,773,097 | ||||||
Balance at beginning of period at Dec. 31, 2020 | $ 75,684,000 | 230,000,000 | |||||
Balance at beginning of period, shares at Dec. 31, 2020 | 29,520,187 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (48,013,000) | $ (48,013,000) | 5,846,503 | ||||
Issuance of common stock upon exercise of stock options | 126,000 | $ 126,000 | |||||
Issuance of common stock upon exercise of stock options, shares | 264,208 | 264,208 | |||||
Issuance of common stock warrants | 9,168,000 | $ 9,168,000 | |||||
Stock-based compensation | 2,538,000 | 2,538,000 | |||||
Balance at end of period at Dec. 31, 2021 | $ 75,684,000 | 230,000,000 | |||||
Balance at end of period, shares at Dec. 31, 2021 | 29,520,187 | ||||||
Balance at the end at Dec. 31, 2021 | 16,117,000 | 0 | (108,312,000) | (27,325,266) | $ (92,195,000) | (27,324,691) | |
Balance at end of period, shares at Dec. 31, 2021 | 10,037,305 | ||||||
Balance at the end at Jun. 30, 2022 | (19,750,184) | (19,749,609) | |||||
Balance at the beginning at Dec. 31, 2021 | 16,117,000 | $ 0 | (108,312,000) | (27,325,266) | (92,195,000) | (27,324,691) | |
Balance at beginning of period, shares at Dec. 31, 2021 | 10,037,305 | ||||||
Balance at beginning of period at Dec. 31, 2021 | $ 75,684,000 | 230,000,000 | |||||
Balance at beginning of period, shares at Dec. 31, 2021 | 29,520,187 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (96,518,000) | $ (96,518,000) | 440,247 | ||||
Issuance of common stock upon exercise of stock options | 49,000 | 49,000 | |||||
Issuance of common stock upon exercise of stock options, shares | 48,049 | ||||||
Issuance of common stock warrants | 4,000,000 | ||||||
Stock-based compensation | 2,323,000 | 2,323,000 | |||||
Balance at end of period at Sep. 30, 2022 | $ 75,684,000 | 40,293,597 | |||||
Balance at end of period, shares at Sep. 30, 2022 | 29,520,187 | ||||||
Balance at the end at Sep. 30, 2022 | $ 18,489,000 | $ (204,830,000) | $ (48,486,832) | $ (186,341,000) | $ (48,486,257) | ||
Balance at end of period, shares at Sep. 30, 2022 | 10,085,354 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||||
Net income (loss) | $ 440,247 | $ 9,721,238 | $ 5,846,503 | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||
Change in fair value of warrant liability | (10,956,082) | (14,433,236) | (12,722,918) | |
Changes in operating assets and liabilities: | ||||
Net cash used in operating activities | (1,008,459) | (1,085,784) | (1,311,782) | |
Net Cash Provided by (Used in) Investing Activities [Abstract] | ||||
Net cash provided by investing activities | (189,977,785) | |||
Cash flows from financing activities: | ||||
Proceeds from promissory note - related party | 523,743 | 309,210 | 527,756 | |
Net cash provided by (used in) financing activities | (188,977,716) | 309,210 | 527,756 | |
Cash - Beginning of period | 8,390 | 792,416 | 792,416 | |
Cash - End of period | 15,842 | 8,390 | $ 792,416 | |
TEMPO AUTOMATION INC | ||||
Cash flows from operating activities | ||||
Net income (loss) | (96,518,000) | (24,388,000) | (48,013,000) | (19,104,000) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||
Depreciation and amortization | 5,945,000 | 2,437,000 | 3,770,000 | 2,232,000 |
Stock-based compensation | 2,323,000 | 1,684,000 | 2,538,000 | 1,256,000 |
Noncash other financing cost | 30,793,000 | 8,955,000 | ||
Impairment loss | 297,000 | |||
Loss on debt extinguishment | 38,939,000 | 319,000 | ||
Loss on disposal of property and equipment | 3,000 | |||
Noncash operating lease expense | 630,000 | 581,000 | 786,000 | 685,000 |
Bad debt expense | 5,000 | 4,000 | 91,000 | 175,000 |
Change in fair value of warrant liability | (5,674,000) | 2,340,000 | 4,242,000 | (47,000) |
Change in fair value of debt | 597,000 | |||
Gain on PPP loan forgiveness | (2,500,000) | (2,500,000) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | 968,000 | (2,030,000) | (297,000) | 2,789,000 |
Contract assets | 229,000 | (307,000) | ||
Inventory | (2,037,000) | (586,000) | (711,000) | 355,000 |
Prepaid expenses and other current assets | (340,000) | (291,000) | (1,244,000) | 252,000 |
Other noncurrent assets | (2,006,000) | (632,000) | (1,817,000) | (207,000) |
Accounts payable | 3,408,000 | 1,010,000 | 1,109,000 | (1,217,000) |
Contract liabilities | 1,911,000 | 277,000 | ||
Accrued liabilities | 1,163,000 | 2,239,000 | 3,776,000 | (467,000) |
Other noncurrent liabilities | 7,000 | (245,000) | 157,000 | |
Operating lease liabilities | (818,000) | (728,000) | (987,000) | (763,000) |
Net cash used in operating activities | (20,182,000) | (20,883,000) | (30,228,000) | (13,904,000) |
Net Cash Provided by (Used in) Investing Activities [Abstract] | ||||
Purchases of property and equipment | (24,000) | (453,000) | (622,000) | (2,307,000) |
Net cash provided by investing activities | (24,000) | (453,000) | (622,000) | (2,307,000) |
Cash flows from financing activities: | ||||
Proceeds from financing lease | 4,000,000 | |||
Principal payments under finance lease obligations | (800,000) | (665,000) | (906,000) | (397,000) |
Proceeds from issuance of debt | 10,000,000 | 33,000,000 | 33,000,000 | 5,620,000 |
Proceeds from promissory note - related party | 10,637,000 | |||
Payment of debt issuance costs | (111,000) | (426,000) | (765,000) | (37,000) |
Debt repayment | (623,000) | (4,502,000) | (14,998,000) | (1,620,000) |
Proceeds from exercise of stock options | 49,000 | 27,000 | 126,000 | 22,000 |
Payment of deferred transaction costs | (1,277,000) | (169,000) | ||
Net cash provided by (used in) financing activities | 17,875,000 | 27,434,000 | 16,288,000 | 10,088,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (2,331,000) | 6,098,000 | (14,562,000) | (6,123,000) |
Cash - Beginning of period | 3,184,000 | 17,746,000 | 17,746,000 | 23,869,000 |
Cash - End of period | 853,000 | 23,844,000 | 3,184,000 | 17,746,000 |
Supplemental disclosures of cash flow information | ||||
Cash paid for income taxes | 7,000 | 72,000 | ||
Cash paid for interest | 2,446,000 | 514,000 | ||
Noncash investing and financing activities | ||||
Unpaid deferred transaction costs | 4,679,000 | 1,757,000 | ||
Issuance of common stock warrants | $ 213,000 | 9,168,000 | $ 107,000 | |
Extinguishment of debt | 39,397,000 | 6,000,000 | ||
Borrowing of debt | $ 39,397,000 | $ 6,000,000 |
Organization_2
Organization | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Organization | (1) Organization Tempo Automation (the “Company,” “us,” “our” or “we”) is a privately held Printed Circuit Board Assembly (“PCBA”) manufacturing company that was incorporated in Delaware in 2013. Tempo Automation provides turnkey PCBA services for low volume production. The Company’s proprietary automation software creates an unbroken digital thread from design to delivery. This makes it possible to execute a complex design and manufacturing process quickly and precisely. The Company provides real-time, reliable lead times based on supplier inventory and factory workload. The Company’s software provides transparent production and delivery tracking with live updates. On August 13, 2021, the Company entered into a Stock Purchase Agreement (the “Whizz Agreement”) to acquire Whizz Systems, Inc., a Delaware corporation (“Whizz”). On August 11, 2022, Tempo and Whizz entered into a mutual termination agreement, pursuant to which the Whizz Agreement was terminated in its entirety. On October 13, 2021, ACE Convergence Acquisition Corp. (“ACE”), a blank check company, entered into an Agreement and Plan of Merger (the “ACE Merger Agreement”) with ACE Convergence Subsidiary Corp., a Delaware corporation, and a direct wholly owned subsidiary of ACE (“Merger Sub”), and Tempo. The ACE Merger Agreement was later amended on July 6, 2022, August 12, 2022, and September 7, 2022. On October 13, 2021, Tempo entered into an Agreement and Plan of Merger (the “Compass AC Agreement”) with Advanced Circuits to acquire Compass AC Holdings, Inc., a Delaware corporation (“Compass AC”). On July 28, 2022, Advanced Circuits delivered notice to Tempo that Advanced Circuits was terminating the Agreement and Plan of Merger, dated as of October 13, 2021, by and among Tempo, Advanced Circuits and the other parties thereto in accordance with its terms. On November 22, 2022, ACE consummated the closing of the transactions contemplated by that certain Amended and Restated Agreement and Plan of Merger, dated as of August 12, 2022, as amended by that certain First Amendment to the Amended and Restated Agreement and Plan of Merger, dated as of September 7, 2022, and that certain Second Amendment to the Amended and Restated Agreement and Plan of Merger, dated as of September 23, 2022 (as amended, the “Merger Agreement”), by and among ACE, ACE Convergence Subsidiary Corp. (“Merger Sub”) and Tempo Automation, Inc. (“Legacy Tempo”), which provides for, among other things, the merger of Merger Sub with and into Legacy Tempo, with Legacy Tempo surviving as a wholly owned subsidiary of ACE (the transactions contemplated by the Merger Agreement, the “Business Combination”). With the closing ACE was renamed Tempo Automation Holdings, Inc. Refer to Note 15 for further discussion of the ACE Merger. | (1) Organization Tempo Automation (the “Company,” “us,” “our” or “we”) is a privately held Printed Circuit Board Assembly (“PCBA”) manufacturing company that was incorporated in Delaware in 2013. Tempo Automation provides turnkey PCBA services for low volume production. The Company’s proprietary automation software creates an unbroken digital thread from design to delivery. This makes it possible to execute a complex design and manufacturing process quickly and precisely. The Company provides real-time, reliable lead times based on supplier inventory and factory workload. The Company’s software provides transparent production and delivery tracking with live updates. On August 13, 2021, the Company entered into a Stock Purchase Agreement (the “Whizz Agreement”) to acquire Whizz Systems, Inc., a Delaware corporation (“Whizz”). The acquisition is anticipated to close concurrent with the closing of the merger with ACE Convergence Acquisition Corp. On October 13, 2021, ACE Convergence Acquisition Corp. (“ACE”), a blank check company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ACE Convergence Subsidiary Corp., a Delaware corporation, and a direct wholly owned subsidiary of ACE (“Merger Sub”), and Tempo. On October 13, 2021, Tempo entered into an Agreement and Plan of Merger (the “Compass AC Agreement”) with Compass AC Holdings, Inc., a Delaware corporation (“Compass AC”). The merger is anticipated to close concurrent with the closing of the merger with ACE. Pursuant to the above, and on the terms and subject to the conditions of which, Tempo will acquire all of the outstanding shares of capital stock of each Whizz and Compass AC (the “Tempo Add-On Acquisitions”) immediately following the closing of the business combination with ACE. After the close of the merger, ACE will pay or issue to eligible Whizz equity holders and Compass AC equity holders their respective pro rata portion of the Whizz Consideration (as defined in the Merger Agreement) or the Compass AC Consideration (as defined in the Merger Agreement), including, any applicable earnout consideration, upon the terms and subject to the conditions set forth in the Whizz Agreement or the Compass AC Agreement, as applicable. |
Summary of Significant Accou_24
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Basis of Presentation The unaudited interim condensed financial statements and accompanying unaudited notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Liquidity and Going Concern The Company has experienced negative cash flows from operations since inception and expects negative cash flows from operations to continue for the foreseeable future. The Company had an accumulated deficit of $204.8 million and cash, cash equivalents and restricted cash of $0.9 million as of September 30, 2022. During the nine months ended September 30, 2022, the Company used net cash of $20.2 million in operating activities and incurred a net loss of $96.5 In October 2021, Tempo entered into a loan and security agreement (the “LSA”) with a maximum borrowing capacity of $150.0 million consisting of four tranches. This agreement replaced Tempo’s existing SQN Venture Income Fund II, LP $20.0 million facility (the “June 2021 Credit Facility”), and $20.0 million was drawn on tranche 1 of the LSA. Borrowing capacity for tranche 2 is $20.0 million which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. Borrowing capacity for tranche 3 and tranche 4 is $40.0 million, and $70.0 million, respectively which shall be available to draw by the Company, upon the de-SPAC with ACE, subject to lender approval. The tranches have an earliest expiration date of December 23, 2022 (see Note 7). In January 2022, the Company entered into the first amendment to the LSA to convert $10.0 million of availability under tranche 2 of the loan to tranche 1 of the loan. This amendment expanded tranche 1 from $20.0 million to $30.0 million and reduced tranche 2 from $20.0 million to $10.0 million. The first amendment did not change the interest rates or maturity dates for tranche 1 (see Note 7). In January 2022, the Company issued convertible promissory notes (the “2022 Promissory Notes”) to existing investors for gross proceeds of $5.0 million. These shall be due and payable by the Company on demand at any time after November 15, 2022 (see Note 8). In May 2022, the Company entered into a bridge note (the “Bridge Note”) with ACE and ACE Equity Partners International Pte. Ltd. (“AEPI”), which was replaced in its entirety on substantially the same terms on July 1, 2022, pursuant to which AEPI agreed to loan to Tempo up to an aggregate principal amount of $5.0 million, $4.6 million of which was advanced to Tempo as of September 30, 2022. The Bridge Note is due on September 30, 2022 (see Note 8). In August, 2022, Tempo entered into a note purchase agreement with certain existing related party investors and with the lenders under the Loan and Security Agreement (collectively, the “Initial Bridge Investors”), pursuant to which Tempo agreed to issue up to $5.0 million in aggregate principal amount of convertible promissory notes (the “August 2022 Bridge Notes”) to the Initial Bridge Investors for aggregate cash proceeds of approximately $1.4 million and the cancellation of approximately $3.6 million of outstanding amounts owed under the LSA. Additionally, Tempo may, from time to time prior to October 9, 2022, issue up to $0.7 million in aggregate principal amount of additional August 2022 Bridge Notes to one or more additional investors (see Note 7). In May and August 2022, the Company announced reductions in workforce. In order to fund planned operations while meeting obligations as they come due, the Company will need to secure additional debt or equity financing. These plans for additional financings are intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of Management’s control, the Company cannot ensure they will be effectively implemented. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Failure to secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact additional operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives. The accompanying condensed financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course. Unaudited Interim Condensed Financial Statements The accompanying interim condensed balance sheet as of September 30, 2022, the interim condensed statements of operations, condensed statements of convertible preferred stock and stockholders’ equity, and condensed statements of cash flows for the nine months ended September 30, 2022 and 2021, and amounts relating to the interim periods included in the accompanying notes to the interim condensed financial statements are unaudited. The unaudited interim condensed financial statements have been prepared in accordance with U.S. GAAP and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s condensed balance sheet as of September 30, 2022, and the condensed statements of operations, condensed statements of convertible preferred stock and stockholders’ equity, and condensed statements of cash flows for the nine months ended September 30, 2022 and 2021. The results for the nine months ended September 30, 2022, are not necessarily indicative of the results expected for the fiscal year or any other periods. These interim condensed financial statements should be read in conjunction with the Company’s financial statements and related notes for the fiscal year ended December 31, 2021. The unaudited balance sheet as of December 31, 2021 has been derived from the Company’s audited financial statements. Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the condensed financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and contract liabilities; allowance for doubtful accounts; determination of fair value of our common stock; determination of fair value of debt; determination of fair value of warrants; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; accrued liabilities; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the financial statements. Risks and Uncertainties The Company is subject to a number of risks. The Company conducts business in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on its future financial position, results of operations, or cash flows: advances and trends in new technologies and industry standards; pressures resulting from new applications offered by competitors; delays in applications and functionality development; changes in certain strategic relationships or customer relationships; the Company’s ability to attract new customers or retain existing customers; the length of the Company’s sales cycles and expense related to sales efforts; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; changes in domestic and international economic or political conditions or regulations; the ability of the Company to finance its operations; and the Company’s ability to attract and retain employees necessary to support its growth. Additionally, the COVID-19 pandemic has negatively impacted the global economy, disrupted supply chains, constrained work force participation, and created significant volatility and disruption of financial markets. Further, the Company faces risks with respect to inflationary environment in the country and the related fluctuations in interest as well as currency exchange rates. As the scope and duration of the COVID-19 pandemic is unknown and the extent of its economic impact continues to evolve globally, there is uncertainty related to the ultimate impact it will have on the Company’s business, its employees, results of operations and financial condition. COVID-19 Impact On March 11, 2020, the World Health Organization declared that the worldwide spread and severity of a new coronavirus, referred to as COVID-19, was severe enough to be characterized as a pandemic. In response to the continued spread of COVID-19, governmental authorities around the world have imposed various restrictions designed to slow the pace of the pandemic, including restrictions on travel and other restrictions that prohibit employees from going to work causing severe disruptions in the worldwide economy. The COVID-19 pandemic has had and may continue to have an adverse impact on the Company’s employees, operations, supply chain and distribution system. In response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the Company’s business, certain employees worked remotely. In addition, in April 2020, the Company announced reductions in workforce. These decisions, as well as COVID-19 more generally, introduced new dynamics into the households of many employees. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for its services. If the Company’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, the Company may have difficulty sourcing materials necessary to fulfill production requirement. Due to the COVID-19 pandemic, Tempo has experienced some supply chain constraints, including with respect to semiconductor components, and has responded by ordering larger quantities of these components to ensure an adequate supply. COVID-19 has also impacted the Company’s customers and may create unpredictable reductions or increases in demand for Tempo’s manufacturing services. Management will continue to monitor the impact of the global situation on the Company’s financial condition, cash flows, operations, industry, workforce, and customer relationships. Revenue from Contracts with Customers Contract Balances The timing of revenue recognition, billings and cash collections can result in deferred revenue (contract liabilities), unbilled receivables (contract assets), and billed accounts receivable. a. Contract Liabilities A contract liability results when payments from customers are received in advance for assembly and manufacturing of the goods. The Company recognizes contract liabilities as revenues upon satisfaction of the underlying performance obligations. Deferred revenue that is expected to be recognized as revenue during the subsequent twelve-month period from the date of billing is recorded in contract liabilities and the remaining portion, if any, is recorded in contract liabilities, noncurrent on the accompanying balance sheets at the end of each reporting period. For the nine months ended September 30, 2022 and 2021, the Company recognized as revenue of $0.1 million and $0.1 million that was included in the contract liabilities balance at the beginning of the related periods, respectively. b. Contract Assets Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Unbilled receivables that are expected to be billed during the subsequent twelve-month period from the date of revenue recognition are recorded in contract assets, and the remaining portion, if any, is recorded in other noncurrent assets on the accompanying balance sheets at the end of each reporting period. As of September 30, 2022 and December 31, 2021, there were no amounts attributable to contract assets recorded within other noncurrent assets. Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. Below are the billed receivables, unbilled receivables, and deferred revenue (in thousands): September 30, December 31, 2022 2021 Accounts receivable, net $ 1,945 $ 2,918 Contract assets 990 1,219 Contract liabilities 2,086 175 Segment Reporting and Geographic Information For the nine months ended September 30, 2022 and 2021, the Company was managed as a single operating segment in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker as she is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions and managing the organization as a whole. All of the Company’s revenues are domestic sales and fixed assets are physically located in the United States. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities that mature within three months or less from the original date of purchase to be cash equivalents. The Company maintains the majority of its cash balances with commercial banks in interest bearing accounts. Cash and cash equivalents include cash held in checking and savings accounts and highly liquid securities with original maturity dates of three months or less from the original date of purchase. The restricted cash balance as of both September 30, 2022 and 2021 represents $0.3 million related to a letter of credit for the Company’s office space lease. September 30, September 30, 2022 2021 Cash and cash equivalents $ 533 $ 23,524 Restricted cash 320 320 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 853 $ 23,844 Long-Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. If the sum of the expected future cash flows (undiscounted and before interest) from the use of the assets is less than the net book value of the asset an impairment could exist and the amount of the impairment loss, if any, will generally be measured as the difference between the net book value of the assets and their estimated fair values. The Company identified a potential impairment indicator for long-lived assets and performed a recoverability test. The result of the recoverability test indicated that the sum of the expected future cash flows was greater than the carrying amount of the asset group and no impairment charges were recorded related to the recoverability test. Separately, the Company abandoned an asset and recorded an impairment charge of $0.3 million during the nine months ended September 30, 2022 (see Note 12). Fair Value of Financial Instruments Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1: Quoted prices for identical assets or liabilities in active markets at the measurement date. ● Level 2: Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. ● Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, term loans, convertible notes, convertible notes - related party and warrant liabilities. The Company has determined the carrying value of these assets and liabilities approximates the fair value due to their short maturities and has classified these assets and liabilities as Level 1 financial instruments. The balances outstanding under the loans payable agreements are considered to approximate their estimated fair values as the interest rates approximate market rates. The convertible notes, convertible notes - related party and warrant liabilities are carried at fair value. The Company classified the convertible debt and liability classified convertible preferred stock and common stock warrants as Level 3 financial instruments. The fair value of the convertible debt is $53.1 million as of September, 30, 2022 (see Note 7 and 8). The Company did not have convertible debt as of December 31, 2021. The fair value of liability classified convertible preferred stock and common stock warrants is $32.4 million and $5.6 million as of September 30, 2022 and December 31, 2021, respectively (see Note 10). During the nine months ended September 30, 2022 and year ended December 31, 2021, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. Fair Value Option (“FVO”) Election The Company accounts for certain convertible notes outstanding under the fair value option election of ASC 825, Financial Instruments (“ASC 825”) as discussed below. The convertible notes accounted for under the FVO election are each debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815. Notwithstanding, ASC 825-10-15-4 provides for the FVO election, to the extent not otherwise prohibited by ASC 825-10-15-5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment, as required by ASC 825-10-45-5, is recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying condensed statement of operations. With respect to the above convertible notes, as provided for by ASC 825-10-50-30 (b), the estimated fair value adjustment is presented as change in fair value of debt within other income (expense) in the accompanying condensed statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk during the nine months ended September 30, 2022. Deferred Transaction Costs Deferred transaction costs consist of direct incremental legal, consulting, and accounting fees relating to the merger transaction, as discussed in Note 1 — Organization, which are capitalized and will be recorded as a reduction to the issuance of equity arising from the consummation of the merger transaction. In the event the merger transaction is terminated, deferred transaction costs will be expensed. As of September 30, 2022 and December 31, 2021, the Company has deferred such costs amounting to $6.1 million and $1.9 million, respectively, which are included in other noncurrent assets in the condensed balance sheets. Net Loss Per Share of Common Stock Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its preferred stock to be participating securities. Net loss is attributed to common stockholders and participating securities based on their participation rights. Net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of preferred stock, stock options, preferred and common stock warrants and convertible notes. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. Related Parties As discussed in Note 1 — Organization, in October 2021, ACE entered into a Merger Agreement with ACE Convergence Subsidiary Corp. and a direct wholly owned Merger Sub, and Tempo. The Chief Financial Officer of Tempo is also a director of ACE and is considered an interested related party to the business combination. Additionally, the Company issued 2022 Promissory Notes to Point72 Ventures Investments, LLC (“P72) and Lux Ventures IV, L.P. (“Lux”) and entered into the Bridge Note with ACE and AEPI during the nine months ended September 30, 2022 (see Note 8). Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or ASU 2016-13. The amendments in ASU 2016-13 introduce an approach based on expected losses to estimated credit losses on certain types of financial instruments, modify the impairment model for available-for-sale debt securities and provide for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2023, with early application permitted. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC 606. The standard is effective for fiscal years beginning after December 15, 2022. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. | (2) Summary of Significant Accounting Policies Basis of Presentation The financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). Liquidity and Going Concern The Company has experienced negative cash flows from operations since inception and expects negative cash flows from operations to continue for the foreseeable future. The Company had an accumulated deficit of $108.3 million and cash, cash equivalents and restricted cash of $3.2 million as of December 31, 2021. During the year ended December 31, 2021, the Company used net cash of $30.2 million in operating activities and incurred a net loss of $48.0 million. Additionally, as of the date these financial statements were available for issuance the Company has $37.0 million of loans payable and finance lease obligations coming due within the next 12 months. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In October 2021, Tempo entered into a loan and security agreement (the “Loan and Security Agreement”) with a maximum borrowing capacity of $150.0 million consisting of four tranches. This agreement replaced Tempo’s existing SQN Venture Income Fund II, LP (the “June 2021 Credit Facility”) $20.0 million facility and $20.0 million was drawn on tranche 1 of the Loan and Security Agreement. Borrowing capacity for tranche 2, tranche 3 and tranche 4 is $20.0 million, $40.0 million, and $70.0 million, respectively which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. The tranches have an earliest expiration date of December 23, 2022 (see Note 10). In January 2022, the Company entered into first amendment to loan and security agreement to convert $10.0 million of availability under the tranche 2 loan to the tranche 1 loan. This amendment expanded the tranche 1 from $20.0 million to $30.0 million and reduced the tranche 2 loan from $20.0 million to $10.0 million. The first amendment did not change the interest rates or maturity dates for tranche 1 (see Note 18). In January 2022, the Company and ACE Convergence Acquisition secured principal amount of $200.0 million from the issuance of 15.5% Convertible Senior Notes due in 2025. The principal amount of notes consists of a $175.0 million investment from funds managed by Oaktree Capital Management and $25.0 million from an investment partner of ACE. The issuance of the notes is contingent on and is expected to fund the proposed business combination of the Company and ACE (see Note 18). In January 2022, the Company issued a convertible promissory notes to existing investors for gross proceeds of $5.0 million. These shall be due and payable by the Company on demand by at any time after November 15, 2022 (see Note 18). In order to fund planned operations while meeting obligations as they come due, the Company will need to secure additional debt or equity financing. These plans for additional financings are intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of Management’s control, the Company cannot ensure they will be effectively implemented. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Failure to secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives. The accompanying financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts; determination of fair value of our common stock; determination of fair value of our warrants; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; accrued liabilities; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the financial statements. Risks and Uncertainties The Company is subject to a number of risks. The Company conducts business in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on its future financial position, results of operations, or cash flows: advances and trends in new technologies and industry standards; pressures resulting from new applications offered by competitors; delays in applications and functionality development; changes in certain strategic relationships or customer relationships; the Company’s ability to attract new customers or retain existing customers; the length of the Company’s sales cycles and expense related to sales efforts; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; changes in domestic and international economic or political conditions or regulations; the ability of the Company to finance its operations; and the Company’s ability to attract and retain employees necessary to support its growth. Additionally, the COVID-19 pandemic has negatively impacted the global economy, disrupted supply chains, constrained work force participation, and created significant volatility and disruption of financial markets. As the scope and duration of the COVID-19 pandemic is unknown and the extent of its economic impact continues to evolve globally, there is uncertainty related to the ultimate impact it will have on the Company’s business, its employees, results of operations and financial condition. COVID-19 Impact On March 11, 2020, the World Health Organization declared that the worldwide spread and severity of a new coronavirus, referred to as COVID-19, was severe enough to be characterized as a pandemic. In response to the continued spread of COVID-19, governmental authorities around the world have imposed various restrictions designed to slow the pace of the pandemic, including restrictions on travel and other restrictions that prohibit employees from going to work causing severe disruptions in the worldwide economy. The COVID-19 pandemic has had and may continue to have an adverse impact on our employees, operations, supply chain and distribution system. In response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on our business, we asked our employees who were able to do so to work remotely. In addition, in April 2020, we announced reductions in workforce. These decisions, as well as COVID-19 more generally, introduced new dynamics into the households of many of our employees. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for its services. If the Company’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, the Company may have difficulty sourcing materials necessary to fulfill production requirement. Due to the COVID-19 pandemic, Tempo has experienced some supply chain constraints, including with respect to semiconductor components. COVID-19 has also impacted the Company’s customers and may create unpredictable reductions or increases in demand for Tempo’s manufacturing services. Management will continue to monitor the impact of the global situation on the Company’s financial condition, cash flows, operations, industry, workforce, and customer relationships. Reclassification For the year ended December 31, 2020, the Company previously presented the financial statement line item titled “Proceeds from issuance of debt” on net basis, with the gross proceeds of debt, net of cost of issuance for such debt raised. In order to conform to current year presentation the Company has disaggregated into two separate financial statement line items “Proceeds from issuance of debt” and “Payment of debt issuance costs” in the Company’s statements of cash flows.This change in presentation had no impact on the Company’s “Net cash provided by financing activities”, “Net decrease in cash, cash equivalents and restricted cash”, or “Cash, cash equivalents, and restricted cash at end of period”. Revenue from Contracts with Customers The Company manufactures electronics for prototyping and low volume production of Printed Circuit Board (“PCB”) assemblies and provides PCB assembly services for engineers with urgent, high — complexity projects. The Company owns the whole entire process from components and fabrication sourcing to assembly. To achieve the core principles of ASC 606, the Company accounts for revenue contracts with customers through the following steps: 1) Identify the contract with a customer: A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products and services to be transferred and identifies the payment terms related to these products and services, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for products and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company enters into a purchase order with each customer and ensures the purchase order is executed by all parties. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the date when the performance obligation is satisfied and include no general rights of return. 2) Identify the performance obligations in the contract: Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the products and services either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products and services is separately identifiable from other promises in the contract. The Company’s contracts consist of a single performance obligation of completed PCB assembly. As part of the term and conditions of the customer contract, the Company generally offers a warranty for a period of one year. This type of warranty provides the customers with assurance that the related assembled product will function as intended and complies with any agreed upon specifications. Therefore, as the warranty cannot be purchased separately and only provides assurance that the product complies with agreed-upon specifications, the warranty is not considered a separate performance obligation. 3) Determine the transaction price: The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products and services to the customer. The transaction price consists of fixed consideration as noted in each purchase order. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts do not include a significant financing component. The Company elected a practical expedient available under ASC 606, which permits the Company to not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less. 4) Allocate the transaction price to performance obligations in the contract: If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Each purchase order contains only one performance obligation and hence, the contract price per the purchase order is deemed to be reflective of the standalone selling price and the entire transaction price is allocated to the single performance obligation. All manufactured products are highly customized, and therefore, priced independently. 5) Recognize revenue when or as the Company satisfies a performance obligation: For each performance obligation identified, the Company determines at contract inception whether the performance obligation is satisfied over time or at a point in time. The transfer of control for the Company’s products qualify for over time revenue recognition because the products represent assets with no alternative use and the contracts include an enforceable right to payment for work completed to date. The Company has selected a cost incurred input method of measuring progress to recognize revenue over time, based on the status of work performed. The cost input method is representative of the value provided to the customer as it represents the Company’s performance completed to date. The Company typically satisfies its performance obligations in one month or less. The Company has elected to treat shipping and handling activities as fulfillment costs and the Company elected to record revenue net of sales and other similar taxes. Contract Balances The timing of revenue recognition, billings and cash collections can result in deferred revenue (contract liabilities), unbilled receivables (contract assets), and billed accounts receivable. a. Contract Liabilities A contract liability results when payments from customers are received in advance for assembly and manufacturing of the goods. The Company recognizes contract liabilities as revenues upon satisfaction of the underlying performance obligations. Deferred revenue that is expected to be recognized as revenue during the subsequent twelve-month period from the date of billing is recorded in contract liabilities and the remaining portion, if any, is recorded in contract liabilities, noncurrent on the accompanying balance sheets at the end of each reporting period. For years ended December 31, 2021 and 2020, the Company recognized as revenue $0.1 million and $0.5 million that was included in the contract liability balance at the beginning of the related periods, respectively. b. Contract Assets Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Unbilled receivables that are expected to be billed during the subsequent twelve-month period from the date of revenue recognition are recorded in contract assets, and the remaining portion, if any, is recorded in other noncurrent assets on the accompanying balance sheets at the end of each reporting period. Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. Below are the billed receivables, unbilled receivables, and deferred revenue (in thousands): As of December 31, 2021 2020 Accounts receivable, net $ 2,918 $ 2,713 Contract assets 1,219 608 Contract liabilities 175 80 Cost of Revenue Cost of revenue primarily include direct materials, direct labor, and manufacturing overhead incurred for revenue-producing units shipped. Cost of revenue also includes associated warranty costs, shipping and handling, and other miscellaneous costs. Research and Development Research and development costs are expensed as incurred and consist primarily of personnel and related costs for product development activities. Research and development costs also include professional fees payable to third parties, license and subscription fees for development tools, and manufacturing-related costs associated with product development. Advertising Costs Advertising costs are expensed as incurred. These amounts are included in selling and marketing expense in the accompanying statements of operations. Advertising costs were $0.5 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. Concentration of Risks Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable. The Company’s cash and cash equivalents and restricted cash are on deposit with major financial institutions. Such deposits may be in excess of insured limits. The Company believes that the financial institutions that hold the Company’s cash are financially sound, and accordingly, minimum credit risk exists with respect to these balances. The Company has not experienced any losses due to institutional failure or bankruptcy. The Company performs credit analyses and monitors the financial health of its customers to reduce credit risk. The Company reviews accounts receivable balances to determine if any receivables will potentially be uncollectible and includes any amounts that are determined to be uncollectible in the allowance for doubtful accounts. As of December 31, 2021, there was one customer who had outstanding balance accounting for 49% of the total accounts receivable balance. As of December 31, 2020, there was one customer who had outstanding balances accounting for 64% of the total accounts receivable balance. Concentration of customers For the year ended December 31, 2021, one customer represented 46% of revenue. For the year ended December 31, 2020, one customer represented 42% of revenue. Segment Reporting and Geographic Information For the years ended December 31, 2021 and 2020, the Company was managed as a single operating segment in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker as she is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions and managing the organization as a whole. All of the Company’s revenues are domestic sales and fixed assets are physically located in the United States. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities that mature within three months or less from the original date of purchase to be cash equivalents. The Company maintains the majority of its cash balances with commercial banks in interest bearing accounts. Cash and cash equivalents include cash held in checking and savings accounts and highly liquid securities with original maturity dates of three months or less from the original date of purchase. The restricted cash balance as of December 31, 2021 and 2020 represents $0.3 million and $0.4 million related to a letter of credit for the Company’s office space lease. As of December 31, 2021 2020 Cash and cash equivalents $ 2,864 $ 17,340 Restricted cash 320 406 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 3,184 $ 17,746 Accounts Receivable, Net Accounts receivable, net is recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance is based upon historical losses and an evaluation of the potential risk of loss associated with delinquent accounts. The Company evaluates the need for an allowance for doubtful accounts for estimated probable losses at each period end. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. The Company recorded an allowance for doubtful accounts of $0.4 million and $0.2 million and as of December 31, 2021 and 2020, respectively. Inventory Inventory consists of raw materials and work-in-progress representing the components that the Company produces. The Company uses actual cost to value inventory. In general, the Company procures materials from suppliers when a purchase order is received from its customers. The Company identifies these procured materials as raw material if work on the purchase order has not commenced and for any work that has been started on the materials procured are identified as work-in-progress. Fair Value of Financial Instruments Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1: Quoted prices for identical assets or liabilities in active markets at the measurement date. ● Level 2: Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. ● Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company applies fair value accounting to all financial assets and liabilities, which include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. The Company has determined the carrying value of these assets and liabilities to be equal to the fair value due to their short maturities and has classified these assets and liabilities as Level 1 financial instruments. Certain convertible preferred stock and common stock warrants are liability classified and are classified as Level 3 financial instruments. The fair value of the convertible preferred stock and common stock warrants which are liability classified is $5.6 million as of December 31, 2021, and $0.1 million as of December 31, 2020, and is included in other noncurrent liabilities on the accompanying balance sheets (see Note 13). During the years ended December 31, 2021 and 2020, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. Property and Equipment, Net Property and equipment, net are stated at cost less accumulated depreciation and amortization. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the current period. Repair and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives of the assets (in years): Useful Lives Computer equipment 3 Software 5 Furniture and fixtures 3 Leasehold improvements Shorter of useful life or remaining lease term Manufacturing equipment 10 Income Taxes The Company uses the asset-and-liability method for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized. The Company accounts for uncertain tax positions based on an evaluation as to whether it is more likely than not that a tax position will be sustained on audit, including resolution of any related appeals or litigation processes. This evaluation is based on all available evidence and assumes that the appropriate tax authorities have full knowledge of all relevant information concerning the tax position. The tax benefit recognized is based on the largest amount that is greater than 50% likely of being realized upon ultimate settlement. The Company includes interest expense and penalties related to its uncertain tax positions in interest expense and other expense, respectively. Stock-Based Compensation The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Equity-classified awards issued to employees, non-employees, and directors are measured at the grant-date fair value of the award. Forfeitures are recognized as they occur. For accounting purposes, the Company estimates grant-date fair value of stock options using the Black-Scholes-Merton ("BSM") option pricing model. The BSM option pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the risk-free interest rates, the expected term of the option, the expected volatility of the price of the Company’s common stock, and the expected dividend yield of the Company’s common stock. Convertible Preferred Stock The Company’s shares of preferred stock are assessed at issuance for classification and redemption features requiring bifurcation. The Company’s preferred stock is not mandatorily redeemable. The Company presents as temporary equity any stock that (i) the Company undertakes to redeem at a fixed or determinable price on the fixed or determinable date or dates, (ii) is redeemable at the option of the holders, or (iii) has conditions for redemption which are not solely within the control of the Company. The Company initially records redeemable convertible preferred stock at fair value, net of issuance costs. Because the occurrence of a deemed liquidation event is not currently probable, the carrying values of the shares of redeemable convertible preferred stock are not being accreted to their redemption values. Subsequent adjustments to the carrying values of the shares of redeemable convertible preferred stock would be made only when a deemed liquidation event becomes probable. Deferred Transaction Costs Deferred transaction costs consist of direct incremental legal, consulting, and accounting fees relating to the merger transaction, as discussed in Note 1 — Organization, which are capitalized and will be recorded as a reduction to the issuance of equity arising from the consummation of the merger transaction. In the event the merger transaction is terminated, deferred transaction costs will be expensed. As of December 31, 2021, the Company has deferred such costs amounting to $1.9 million, which are included in other noncurrent assets in the balance sheet, no such costs were incurred during the year ended December 31, 2020. Net Loss Per Share of Common Stock Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its preferred stock to be participating securities. Net loss is attributed to common stockholders and participating securities based on their participation rights. Net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of preferred stock, stock options, preferred and common stock warrants and convertible notes. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. Related Parties As discussed in Note 1 — Organization, in October, 2021, ACE entered into a Merger Agreement with ACE Convergence Subsidiary Corp. and a direct wholly owned Merger Sub, and Tempo. The chief financial officer of Tempo is also a director of ACE and is considered an interested related party to the business combination. Additionally, in October, 2021, Tempo entered into plan of merger with Compass AC Holdings, Inc. From the date of signing of the Compass AC Agreement through December 31, 2021, the Company purchased goods totaling $0.3 million, which are included in cost of revenue in the statement of operations. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The Company early adopted the ASU on January 1, 2021. Adoption of the ASU 2020-06 did not impact the Company’s financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize leases on their balance sheets and disclose key information about leasing arrangements. The standard is effective for small reporting companies and private companies for fiscal years beginning after December 15, 2021. In July 2018, the FASB approved an amendment to the new guidance that allows companies the option of using the effective date of the new standard as the initial application (at the beginning of the period in which it is adopted, rather than at the beginning of the earliest comparative period) and to recognize the effects of applying the new ASU as a cumulative effect adjustment to the opening balance sheet or retained earnings. The Company early adopted ASU 2016-02 on January 1, 2020 using the modified retrospective approach and, upon adoption, recorded a short-term lease liability of $0.8 million and long-term lease liability of $2.5 million, and a right-to-use asset of $2.7 million, and made no adjustment to the accumulated deficit. In connection with the adoption of the lease standard, the Company also derecognized deferred rent of $0.6 million. The adoption of Topic 842 did not have an impact on the statement of operations. The Company elected the practical expedients permitted under Topic 842, which among other things, |
Inventory_2
Inventory | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Inventory | (3) Inventory Inventory consists of the following (in thousands): September 30, December 31, 2022 2021 Raw materials $ 2,060 $ 158 Work in progress 856 721 Total inventory $ 2,916 $ 879 | (3) Inventory Inventory consists of the following (in thousands): As of December 31, 2021 2020 Raw materials $ 158 $ 111 Work in progress 721 57 Total inventory $ 879 $ 168 |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Prepaid Expenses and Other Current Assets | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2022 2021 Prepaid expense $ 421 $ 650 Other current assets 512 242 Total prepaid expenses and other current assets $ 933 $ 892 | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consists of the following (in thousands): As of December 31, 2021 2020 Prepaid expense $ 650 $ 458 Other current assets 242 77 Total prepaid expenses and other current assets $ 892 $ 535 |
Other Noncurrent Assets_2
Other Noncurrent Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Other Noncurrent Assets | (5) Other Noncurrent Assets Other noncurrent assets consist of the following (in thousands): September 30, December 31, 2022 2021 Deferred transaction costs $ 6,125 $ 1,926 Advance rent and prepaids 83 749 Deposits — 250 Total other noncurrent assets $ 6,208 $ 2,925 | (6) Other Noncurrent Assets Other noncurrent assets consist of the following (in thousands): As of December 31, 2021 2020 Deferred transaction costs $ 1,926 $ — Noncurrent prepaid expenses 749 7 Deposits 250 250 Total other noncurrent assets $ 2,925 $ 257 |
Accrued Liabilities_2
Accrued Liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Accrued Liabilities | (6) Accrued Liabilities Accrued liabilities consist of the following (in thousands): September 30, December 31, 2022 2021 Accrued legal fees (1) $ 4,272 $ 1,517 Accrued professional fees (1) 100 866 Accrued liabilities 410 774 Accrued sales and business taxes 176 241 Accrued cost of revenue 152 236 Customer refund liability — 205 Warranty liability 55 54 Other accrued liabilities 30 78 Total accrued expenses $ 5,195 $ 3,971 (1) These accrued legal and professional fees relate to the merger transaction, as discussed in Note 1 – Organization. | (7) Accrued Liabilities Accrued liabilities consist of the following (in thousands): As of December 31, 2021 2020 Accrued legal fees (1) $ 1,517 $ — Accrued professional fees 866 — Accrued liabilities 774 414 Accrued sales and business taxes 241 267 Accrued cost of revenue 236 — Customer refund liability 205 80 Warranty liability 54 56 Other accrued liabilities 78 116 Total accrued expenses $ 3,971 $ 933 (1) These accrued legal fees relate to the merger transaction, as discussed in Note 1 — Organization. |
Borrowing Arrangements_2
Borrowing Arrangements | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Borrowing Arrangements | ||
Borrowing Arrangements | (7) Borrowing Arrangements Term Loan and Credit Facility with Financial Institution In June 2020, the Company entered into a loan and security agreement with a financial institution where the Company drew down $4.0 million (the “Term Loan”) and secured up to $4.0 million in a revolving line of credit (the “Credit Facility”). During 2020, the Company drew down $1.6 million from the Credit Facility and repaid amount back in full. No other advances were drawn by the Company before it expired on June 3, 2021. In conjunction with the issuance of the Term Loan, the Company issued the lender a warrant to purchase 182,500 shares of the Company’s common stock. The Company allocated the $4.0 million proceeds between the Term Loan and the common stock warrant on a relative fair value basis, recording $0.1 million for the common stock warrant in additional paid-in capital, with the offset to debt discount, on the condensed balance sheets. The common stock warrant is not remeasured in future periods as it meets the conditions for equity classification. For further details on the warrants issued in conjunction with the term loans discussed, see Note 10. On June 23, 2021, the Company entered into an amended and restated loan and security agreement with the financial institution which expanded the Term Loan obligation from $4.0 million to $10.0 million, with the maturity date extended to September 1, 2022 and a loan commitment fee of $50 thousand. For the Term Loan the Company is required to make monthly interest only payments from January 2021 through December 2021, thereafter certain monthly principal plus interest payments for a period of 8 months beginning from January 2022 and a final payment of the balance principal and interest outstanding under the agreement in September 2022. The amended and restated term loan debt bears interest at the greater of (a) Wall Street Journal Prime plus 5.00%, floating or (b) 8.25% per annum. In addition, the Company issued 109,080 warrants to the lender which are exercisable to purchase the Company’s common stock at $1.51. For further details on the warrants issued in conjunction with the term loan, see Note 10. On October 14, 2021, the Company paid $10.3 million to settle the credit facility under the amended and restated loan and security agreement with Silicon Valley Bank including $0.3 million of interest. Equipment Loan and Security Agreement On January 29, 2021, the Company entered into an equipment loan and security agreement with SQN Venture Income Fund II, LP. The overall loan facility provides for a maximum borrowing capacity of $6.0 million consisting of two tranches, each tranche with a borrowing capacity up to $3.0 million. On January 29, 2021, the Company drew down $3.0 million under the first tranche of the facility. The Company is required to make monthly payments for a period of 42 months on this tranche plus end of term payment fee of $0.2 million which is accreted to interest expense over the term of the agreement. The loan has a maturity date of July 2024. An additional $3.0 million can be drawn by the Company, provided that certain criteria are met, such as the Company not having defaulted on the first tranche and there having not been a material adverse change (as defined in the Loan Agreement) as of the date for the borrowing request. The loan facility is used for financing certain equipment purchases. The equipment financed through the loans serves as collateral for the loan. The loan bears a cash interest of 8.95% per annum. Interest is payable on the first day of the month. If the loan is in default, it shall bear interest at a rate of an additional 5% per annum. The loan interest expense and discount amortization interest for the nine months ended September 30, 2022 was $0.1 million and $34 thousand, respectively. The Company was in compliance with the covenants as of September 30, 2022. In conjunction with entering into the equipment loan and security agreement, the Company entered into a warrant agreement with the lender and issued 108,000 warrants exercisable for the Company’s Series C preferred stock at $0.94. For further details on the warrants issued in conjunction with the equipment loan and security agreement, see Note 10. June 2021 Credit Facility On June 23, 2021, the Company entered into the June 2021 Credit Facility with SQN Venture Income Fund II, LP. The June 2021 Credit Facility provides for a maximum borrowing capacity of $20.0 million consisting of two tranches, each tranche with a borrowing capacity of $10.0 million. On June 23, 2021, the Company drew down $10.0 million of the facility. The Company is required to make monthly interest-only payments for a period of 18 months and thereafter, principal and interest outstanding under the agreement with a maturity date of December 2022. On August 13, 2021, the Company drew down the remaining $10.0 million. The second tranche has a maturity date of February 2023. The June 2021 Credit Facility is used for general working capital purposes. This loan bears a cash interest of 10% per annum. Interest is payable on the first day of the month. Additionally, this loan bears a Paid-in-Kind (PIK) interest of 2% per annum with PIK interest capitalized, compounded, and added to the principal balance monthly in arrears. The PIK interest becomes payable upon maturity. If the term loan is in default, it shall bear interest at an additional 5%. The Company paid a nonrefundable facility fee of $0.2 million. In conjunction with entering into the June 2021 Credit Facility, the Company entered into a warrant agreement with the lender and issued 533,333 warrants exercisable for the Company’s common stock at $1.51. For further details on the warrants issued in conjunction with the June 2021 Credit Facility, see Note 10. Loan and Security Agreement On October 13, 2021, the Company entered into the LSA with Structural Capital Investments III, LP, Series Structural DCO II, a series of Structural Capital DCO, LLC, SQN Tempo Automation, LLC, SQN Venture Income Fund II, LP, and Ocean II PLO LLC. The LSA replaced the June 2021 Credit Facility, providing for maximum borrowing capacity of $150.0 million consisting of four tranches. Per the LSA, borrowings of $20.0 million from tranches 1 and 2 from the June 2021 Credit Facility were replaced by a new tranche 1 in the amount of $20.0 million. Borrowing capacity for tranche 2 is $20.0 million which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. Borrowing capacity for tranche 3 and tranche 4 of the LSA is $40.0 million, and $70.0 million, respectively, which shall be available to draw by the Company upon the de-SPAC with ACE, subject to lender approval. The tranches have an earliest expiration date of December 23, 2022. The termination of the June 2021 Credit Facility and subsequent borrowings under tranche 1 of the LSA was accounted for as a partial extinguishment of debt. Specifically, upon entering into the LSA, the Company became indebted to a new lender in the amount of $6.0 million, while $14.0 million of obligations are due to the same lender group party to the June 2021 Credit Facility. The $6.0 million was reflected as a debt repayment with the old lender and was accounted for as an extinguishment of debt. Accordingly, the Company recorded a loss on extinguishment of $0.3 million related to the write off of unamortized debt discount. The Company also evaluated the $14.0 million of debt outstanding with continuing lenders and concluded the transaction should be treated as a modification of debt. Borrowings under tranches 2, 3 and 4 of the LSA bear interest equal to the greater of (i) 10.5%, and (ii) 7.25% plus the prime rate then in effect, provided however, for all advances made after the occurrence of the public trading trigger, a per annum rate of interest equal to the greater of (i) 9.5%, and (ii) 6.25% plus the prime rate then in effect shall apply. Borrowings under tranche 1 bear interest equal to 10%. In addition, interest will accrue at an additional 2% per annum rate on the outstanding borrowing made under the tranche 1, which shall be capitalized and be compounded and added to the principal balance of the Tranche 1 Loan monthly in advance on the next monthly payment date. For borrowings made pursuant to the LSA, the Company is further committed to a fee in an amount sufficient, if needed, to increase the lender’s minimum return to 1.20:1.00 if payable on or before the first anniversary of such borrowing, 1.30:1.00 if payable after the first anniversary of such borrowing but on or before the second anniversary of such borrowing, 1:35:1.00 if payable after the second anniversary of such borrowing but on or before the third anniversary of such borrowing, or 1.40:1.00 if payable after the third anniversary of such borrowing. On January 11, 2022, the Company entered into the first amendment to the LSA to convert $10.0 million of availability under the tranche 2 loan to the tranche 1 loan. This amendment expanded the tranche 1 from $20.0 million to $30.0 million and reduced the tranche 2 loan from $20.0 million to $10.0 million. For the original $20.0 million borrowed under tranche 1, the maturity date is December 23, 2022 and the $10.0 million borrowed under the expanded portion of tranche 1 provides for a maturity date of February 12, 2023. On May 1, 2022, the Company was in breach of its covenants under the LSA. As a result, the Company recorded $0.3 million of default interest expense in the Company’s condensed statement of operations during the nine months ended September 30, 2022. As of September 30, 2022, the Company was in breach of its covenants under the LSA and the debt including all interest due through maturity, is callable by the lender. On January 20, 2022, in conjunction with the LSA, the Company entered into warrant agreements with the various lenders involved under the LSA to issue a certain number of warrants to purchase Series C preferred stock based on the percentage of each tranche borrowing exercisable for the Company’s Series C preferred stock at the lowest of (i) $2.82 per share, (ii) the lowest price per share the Company receives for a share of the Series C preferred stock, and (iii) the lowest price the Company receives for a share of future round of preferred stock, see Note 10. On August 25, 2022, Tempo entered into an August 2022 Bridge Note Agreement (as defined in Note 8 below) with the lenders under the LSA (collectively, the “Initial Bridge Investors”), pursuant to which Tempo agreed to issue a $3.6 million note (“LSA Convertible Note”) which is comprised of accrued interest, PIK interest and future interest from August 2022 through maturity of the LSA. The fair value of the LSA Convertible Note was $13.1 million as of September 30, 2022. The following table sets forth the net carrying amount of borrowings as on September 30, 2022 (in thousands): Loan Payable, Loan Payable, Current Noncurrent Total SQN Equipment Loan $ 852 $ 880 940 LSA Term Loan 28,641 — 28,641 LSA Convertible Note (fair value) 13,052 — 13,052 Total loan payable $ 42,545 $ 880 43,425 SQN Equipment Loan As of September 30, 2022 Total notes payable $ 1,688 Add: accretion of final interest payable 93 Less: loan payable, current (852) Less: unamortized debt discount (49) Total loan payable, noncurrent $ 880 LSA Term Loan As of September 30, 2022 Total notes payable $ 30,000 Less: unamortized debt discount (1,359) Total loan payable, current $ 28,641 LSA Convertible Note Fair Value – Level 3 Balance, January 1, 2022 $ — Additions 12,903 Change in fair value 149 Balance, September 30, 2022 $ 13,052 The Company measures the LSA Convertible Note at fair value based on significant inputs not observable in the market, which caused it to be classified as Level 3 measurements within the fair value hierarchy. Changes in the fair value of the LSA Convertible Note related to updated assumptions and estimates were recognized as change in fair value of debt within the condensed statements of operations. In determining the fair value of the LSA Convertible Note as of September 30, 2022, the Company applied the probability-weighted expected return method (“PWERM”). The PWERM determines the value of an instrument based upon an analysis of future values for the potential instrument payouts under different future outcomes. The instrument value is based upon the present value of the probability of each future outcome becoming available to the instrument holders, and the rights of each security. Utilizing the PWERM, the Company assessed the probability that the related party borrowings would be converted to common stock through the consummation of a SPAC transaction or as a result of a Qualified Financing. Additional inputs used in applying the PWERM were: i) the expected timing of the conversion, ii) the amount subject to equity conversion, the sum of the notes’ principal and unpaid accrued interest, iii) the contractual conversion price adjustment, and iv) the discount rate. September 30, 2022 Expected term 0.15 years Discount rate 20.00 % Probability of Qualified Financing 90.00 % As of December 31, 2021 SQN LSA LSA Equipment Tranche 1.1 Tranche 1.2 Loan Total Total notes payable $ 10,000 $ 10,000 $ 2,302 $ 22,302 Add: accretion of final interest payable 108 79 56 243 Less: loan payable, current (9,702) — (784) (10,486) Less: unamortized debt discount (406) (218) (84) (708) Total loan payable, noncurrent $ — $ 9,861 $ 1,490 $ 11,351 The notes payable future principal payments are as follows during the years noted (in thousands): As of September 30, 2022 2022 (remaining) $ 20,214 2023 14,496 2024 567 Total future principal payments $ 35,277 | (10) Borrowing Arrangements Term Loan and Credit Facility with Financial Institution In June 2020, the Company entered into a loan and security agreement with a financial institution where the Company drew down $4.0 million (the “Term Loan”) and secured up to $4.0 million in a revolving line of credit (the “Credit Facility”). During 2020, the Company drew down $1.6 million from the Credit Facility and repaid amount back in full. As of December 31, 2020, the Company did not have any outstanding balance from the Credit Facility and subsequently, no other advances were drawn by the Company before it expired on June 3, 2021. In conjunction with the issuance of the Term Loan, the Company issued the lender a warrant to purchase 182,500 shares of the Company’s common stock. The Company allocated the $4.0 million proceeds between the Term Loan and the common stock warrant on a relative fair value basis, recording $0.1 million for the common stock warrant in additional paid-in capital, with the offset to debt discount, on the balance sheets. The common stock warrant is not remeasured in future periods as it meets the conditions for equity classification. For further details on the warrants issued in conjunction with the term loans discussed, see Note 13. On June 23, 2021, the Company entered into an amended and restated loan and security agreement with the financial institution which expanded the Term Loan obligation from $4.0 million to $10.0 million, with the maturity date extended to September 1, 2022 and a loan commitment fee of $50 thousand. For the Term Loan the Company is required to make monthly interest only payments from January 2021 through December 2021, thereafter certain monthly principal plus interest payments for a period of 8 months beginning from January 2022 and a final payment of the balance principal and interest outstanding under the agreement in September 2022. The amended and restated term loan debt bears interest at the greater of (a) Wall Street Journal Prime plus 5.00%, floating or (b) 8.25% per annum. In addition, the Company issued 109,080 warrants to the lender which are exercisable to purchase the Company's common stock at $1.51. For further details on the warrants issued in conjunction with the term loan, see Note 13. On October 14, 2021, the Company paid $10.3 million to settle the credit facility under the amended and restated loan and security agreement with Silicon Valley Bank including $0.3 million of interest and final payment reflected in interest expense section in the statement of operations. Equipment Loan and Security Agreement On January 29, 2021, the Company entered into an equipment loan and security agreement with SQN Venture Income Fund II, LP. The overall loan facility provides for a maximum borrowing capacity of $6.0 million consisting of two On January 29, 2021, the Company drew down $3.0 million under the first tranche of the facility. The Company is required to make monthly payments for a period of 42 months on this tranche plus end of term payment fee of $0.2 million which is accreted to interest expense over the term of the agreement. The loan has a maturity date of July 2024. An additional $3.0 million can be drawn by the Company, provided that certain criteria are met, such as the Company not having defaulted on the first tranche and there having not been a material adverse change (as defined in the Loan Agreement) as of the date for the borrowing request. The loan facility is used for financing certain equipment purchases. The equipment financed through the loans serves as collateral for the loan. The loan bears a cash interest of 8.95% per annum. Interest is payable on the first day of the month. If the loan is in default, it shall bear interest at a rate of an additional 5% per annum. The loan interest expense and discount amortization interest for year ended December 31, 2021 were $0.2 million and $46 thousand, respectively. In conjunction with entering into the equipment loan and security agreement, the Company entered into a warrant agreement with the lender and issued 108,000 warrants exercisable for the Company's Series C preferred stock at $0.94. For further details on the warrants in conjunction with the equipment loan and security agreement, see Note 13. Paycheck Protection Program Loan In May 2020, the Company was granted a loan under the Paycheck Protection Program offered by the Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), section 7(a)(36) of the Small Business Act for $2.5 million. The loan is evidenced by a promissory note and bears interest at 1% with no principal payments for the first 6 months. Monthly payments of principal and interest of approximately $0.1 million begin in December 2020, subject to deferral as the Company has applied for debt forgiveness, and continue through maturity in May 2022, if required. The loan is subject to partial or full forgiveness if the Company uses all proceeds for eligible purposes; maintains certain employment levels; and maintains certain compensation levels in accordance with and subject to the CARES Act and the rules, regulations, and guidance. For the years ended December 31, 2021 and 2020, interest expense recognized on the PPP loan was immaterial. The Company applied for forgiveness of the PPP loan and was notified that the entire $2.5 million PPP loan was forgiven in August 2021. Loan forgiveness of $2.5 million is reflected in other income and expense section in the statement of operations. Even though the PPP loan was forgiven, it remains subject to audit by the SBA. June 2021 Credit Facility On June 23, 2021, the Company entered into the June 2021 Credit Facility with SQN Venture Income Fund II, LP. The June 2021 Credit Facility provides for a maximum borrowing capacity of $20.0 million consisting of two tranches On June 23, 2021, the Company drew down $10.0 million of the facility. The Company is required to make monthly interest-only payments for a period of 18 months and thereafter, principal and interest outstanding under the agreement with a maturity date of December 2022. On August 13, 2021, the Company drew down the remaining $10.0 million. The second tranche has a maturity date of February 2023. The June 2021 Credit Facility is used for general working capital purposes. This loan bears a cash interest of 10% per annum. Interest is payable on the first day of the month. Additionally, this loan bears a Paid-in-Kind (PIK) interest of 2% per annum with PIK interest capitalized, compounded, and added to the principal balance monthly in arrears. The PIK interest becomes payable upon maturity. If the term loan is in default, it shall bear interest at an additional 5%. The Company paid a nonrefundable facility fee of $0.2 million. In conjunction with entering into the June 2021 Credit Facility, the Company entered into a warrant agreement with the lender and issued 533,333 warrants exercisable for the Company’s common stock at $1.51. For further details on the warrants issued in conjunction with the June 2021 Credit Facility, see Note 13. Loan and Security Agreement On October 13, 2021, the Company entered into a Loan and Security Agreement with Structural Capital Investments III, LP, Series Structural DCO II, a series of Structural Capital DCO, LLC, SQN Tempo Automation, LLC, SQN Venture Income Fund II, LP, and Ocean II PLO LLC. The Loan and Security Agreement replaced the June 2021 Credit Facility, providing for maximum borrowing capacity of $150.0 million consisting of four tranches. Per the Loan and Security Agreement, borrowings of $20.0 million from tranches 1 and 2 from the June 2021 Credit Facility were replaced by a new tranche 1 in the amount of $20.0 million. Borrowing capacity for tranche 2, tranche 3 and tranche 4 of the Loan and Security Agreement is $20.0 million, $40.0 million, and $70.0 million, respectively, which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. The loans have an earliest expiration date of December 23, 2022. The termination of the June 2021 Credit Facility and subsequent borrowings under tranche 1 of the Loan and Security Agreement was accounted for as a partial extinguishment of debt. Specifically, upon entering into the Loan and Security Agreement, the Company became indebted to a new lender in the amount of $6.0 million, while $14.0 million of obligations are due to the same lender group party to the June 2021 Credit Facility. The $6.0 million was reflected as a debt repayment with the old lender and was accounted for as an extinguishment of debt. Accordingly, the Company recorded a loss on extinguishment of $0.3 million related to the write off of unamortized debt discount. The extinguishment of $6.0 million with the old lender and subsequent borrowings of $6.0 million from the new lender did not involve the receipt or constructive receipt of cash and accordingly has been reflected as noncash financing activities in the statement of cash flows during the year ended December 31, 2021. The Company also evaluated the $14.0 million of debt outstanding with continuing lenders and concluded the transaction should be treated as a modification of debt. Borrowings under the Loan and Security Agreement bear interest equal to the greater of (i) 10.5%, and (ii) 7.25% plus the prime rate then in effect, provided however, for all advances made after the occurrence of the public trading trigger, a per annum rate of interest equal to the greater of (i) 9.5%, and (ii) 6.25% plus the prime rate then in effect shall apply. The Company’s notes payable balances were as follows (in thousands): As of December 31, 2021 SQN SQN Term Term SQN Loan Loan Equipment Tranche 1 Tranche 2 Loan Total Total notes payable $ 10,000 $ 10,000 $ 2,302 $ 22,302 Add: accretion of final interest payable 108 79 56 243 Less: loan payable, current (9,702) — (784) (10,486) Less: unamortized debt discount (406) (218) (84) (708) Total loan payable, noncurrent $ — $ 9,861 $ 1,490 $ 11,351 As of December 31, 2020 SVB Term PPP Loan Loan Total Total notes payable $ 2,500 $ 4,000 $ 6,500 Less: loan payable, current (972) (1,006) (1,978) Less: unamortized debt discount — (104) (104) Total loan payable, noncurrent $ 1,528 $ 2,890 $ 4,418 The notes payable future principal payments are as follows during the years noted (in thousands): As of December 31, 2021 2022 $ 10,829 2023 10,906 2024 567 Total future principal payments $ 22,302 |
Borrowing Arrangements - Relate
Borrowing Arrangements - Related Party | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Borrowing Arrangements Related Party | NOTE 5 — RELATED PARTY TRANSACTIONS Founder Shares In May 2020, the Sponsor purchased 5,750,000 of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate consideration of $25,000. On May 29, 2020, the Sponsor transferred an aggregate of 155,000 Founder Shares to certain members of the Company’s management team. On October 13, 2021, the Sponsor distributed 1,678,500 Founder Shares to Sunny Siu. In January 2022, the Sponsor distributed 755,930 Founder Shares to ACE SO5 Holdings Limited (“ACE SO5”), an affiliate of the Sponsor, and ACE SO5 became a party to (i) the Letter Agreement, dated as of July 27, 2020, by and among ACE, the Sponsor and certain of ACE’s current and former officers, directors and director nominees, and (ii) the Sponsor Support Agreement (as defined below). The Sponsor, the initial shareholders and their respective permitted transferees have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like) for any 20 30 Working Capital Facility On August 12, 2020, the Company entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Company, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility shall be utilized to finance transaction costs in connection with a Business Combination. The Working Capital Facility is non-interest bearing, non-convertible and due to be repaid upon the consummation of a Business Combination. In return, the Company deposited $900,000 into an account held by ASIA-IO, from which the Company may make fund withdrawals for up to $1,500,000. Any outstanding amounts deposited with ASIA-IO upon the completion of a Business Combination or dissolution of the Company, shall be returned to the Company. As of September 30, 2022, and December 31, 2021, the Company had $1,051,499 and $527,756, respectively, borrowings under the working capital facility. Administrative Services Agreement The Company entered into an agreement, commencing on July 28, 2020, to pay the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and nine months ended September 30, 2022, the Company incurred $30,000 and $90,000, respectively, in fees for these services, of which such fee is included in accrued liabilities as of September 30, 2022, on the condensed consolidated balance sheet. For the three and nine months ended September 30, 2021, the Company incurred $30,000 and $90,000 in fees for these services. As of September 30, 2022, and December 31, 2021 the Company had accrued fees in the amount of $180,000 and $90,000, respectively. Related Party Loans On January 13, 2022, in connection with the Company’s extension of the date by which it must complete an initial business combination, the Sponsor agreed to contribute to the Company as a loan (as amended and restated on June 30, 2022, and August 28, 2022, the “Sponsor Loan”) $0.03 for each Class A Ordinary Share of the Company that was not redeemed in connection with the shareholder vote to approve such extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the Tempo Business Combination and (ii) $1.5 million has been loaned. Up to $1.5 million of the loans may be settled in whole warrants to purchase Class A Ordinary Shares of the Company at a conversion price equal to $1.00 per warrant. The loan will not bear any interest, and will be repayable by ACE to the Sponsor upon the earlier of the date by which ACE must complete an initial business combination and the consummation of the Tempo Business Combination. The maturity date of the Sponsor Loan may be accelerated upon the occurrence of an Event of Default (as defined therein). Any outstanding principal under the Sponsor Loan may be prepaid at any time by ACE, at its election and without penalty, provided, however, that the Sponsor shall have a right to first convert such principal balance as described in Section 6 of the Sponsor Loan upon notice of such prepayment. On June 30, 2022, ACE and the Sponsor amended and restated the Sponsor Loan in its entirety to, among other things, increase the aggregate principal amount available thereunder from $1,500,000 to $2,000,000, contingent upon the approval by the Company’s shareholders of the proposal to extend the date by which the Company must complete an initial business combination to October 13, 2022, which proposal was approved by special resolution at an extraordinary general meeting on July 12, 2022. On August 28, 2022, ACE and the Sponsor amended and restated the Sponsor Loan in its entirety to, among other things, increase the aggregate principal amount available thereunder from $2,000,000 to $2,125,000, contingent upon the approval by ACE’s shareholders of the extension of the date by which ACE must consummate an initial business combination to January 30, 2023, which extension was approved in October 2022. For the three and nine months ended September 30, 2022, the Company contributed $221,190 and $1,451,532 to the Trust Account, respectively. Monthly deposits into the Trust Account following the October 2022 redemptions are based on the number of Class A Ordinary Shares still outstanding following such redemptions. As of September 30, 2022, and December 31, 2021, the Company had $1,500,000 and $0 borrowings under the Sponsor Loan, respectively. Management has determined the fair value of the note is more accurately recorded at par since the conversion price is almost 1,250% higher than the value of the warrants. No arm’s-length transaction by a note holder would result in a conversion with this fact pattern, thus it is a more accurate depiction with recording at par. As such, no fair value change was booked to the condensed consolidated statements of operations. As of September 30, 2022, and December 31, 2021, members of the Sponsor, the Company’s management and certain other related parties advanced the Company an aggregate of $427,857 and $0, respectively, for expenses related to operations and completing a Business Combination. The amounts loaned are non-interest bearing and due to be repaid upon the consummation of a Business Combination. | NOTE 5 — RELATED PARTY TRANSACTIONS Founder Shares In May 2020, the Sponsor purchased 5,750,000 of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate consideration of $25,000. On May 29, 2020, the Sponsor transferred an aggregate of 155,000 Founder Shares to certain members of the Company’s management team. On October 13, 2021, the Sponsor transferred an aggregate of 1,678,500 Founder Shares to Sunny Siu. The Sponsor and the initial shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Working Capital Facility On August 12, 2020, the Company entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Company, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility shall be utilized to finance transaction costs in connection with a Business Combination. The Working Capital Facility is non-interest bearing, non-convertible and due to be repaid upon the consummation of a Business Combination. In return, the Company deposited $900,000 into an account held by ASIA-IO, from which the Company may make fund withdrawals for up to $1,500,000. Any outstanding amounts deposited with ASIA-IO upon the completion of a Business Combination or dissolution of the Company, shall be returned to the Company. As of December 31, 2021 and 2020, the Company had $527,756 and no borrowing, respectively, borrowings under the working capital facility. Administrative Services Agreement The Company entered into an agreement, commencing on July 28, 2020, to pay the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2021, the Company incurred $120,000, of which $90,000 is included in accounts payable and accrued expenses on the December 31, 2021 consolidated balance sheet. For the period from March 31, 2020 (inception) through December 31, 2020, the Company incurred and paid $20,000 in fees for these services. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of December 31, 2021 and 2020, the Company had no outstanding borrowings under the Working Capital Loans. |
TEMPO AUTOMATION INC | ||
Borrowing Arrangements Related Party | (8) Borrowing Arrangements – Related Party Convertible Promissory Notes On January 18, 2022, the Company issued convertible promissory notes to P72 and Lux for gross proceeds of $5.0 million (the “2022 Promissory Notes”). The 2022 Promissory Notes bear simple interest on the unpaid principal at a rate of 10% per year and are due and payable by the Company on demand any time after November 15, 2022. The outstanding amount will convert into securities of ACE upon the earlier to occur of the closing of the transactions and the closing of the first qualified financing following any termination of the business combination agreement as applicable. The exchange feature of the 2022 Promissory Notes was deemed an embedded derivative requiring bifurcation from the 2022 Promissory Notes (the “host contract”) and separate accounting as an embedded derivative liability. The proceeds from the 2022 Promissory Notes were first allocated to the embedded derivative liability, resulting in an embedded derivative liability of $0.1 million on issuance, with the remaining proceeds were then allocated to the host contract. On August 25, 2022, the Company recorded a loss on extinguishment of $13.8 million which was equivalent to the difference between the carrying value of the 2022 Promissory Notes and the fair value on the modification date. Bridge Note In May 2022, the Company entered into the Bridge Note with ACE and AEPI, which was replaced in its entirety on substantially the same terms on July 1, 2022, pursuant to which AEPI agreed to loan to Tempo up to an aggregate principal amount of $5.0 million, $4.6 million of which was advanced to Tempo as of September 30, 2022. The Bridge Note has an interest rate of 12% per annum, payable in-kind by increasing the outstanding principal amount of the Bridge Note. Interest shall be deemed to have commenced on May 19, 2022. The Bridge Note replaced a May 2022 loan on substantially the same terms in its entirety. The conversion option of the Bridge Note was deemed an embedded derivative requiring bifurcation from the Bridge Note (the “host contract”) and is separately accounted for as an embedded derivative liability. The proceeds from the Bridge Note were first allocated to the embedded derivative liability, resulting in an embedded derivative liability of $0.1 million on issuance, with the remaining proceeds then allocated to the host contract. On August 25, 2022, the Bridge Note was amended and restated on substantially similar terms to the August 2022 Bridge Notes (as defined below). The amended and restated convertible bridge notes do not embody bifurcated exchange feature described above. As such, the extinguishment date fair value of exchange feature was included in the calculation of the debt extinguishment to derecognize the previously bifurcated derivative liability. The Company recognized $0.2 million and $22 thousand as gain on debt extinguishment and fair value change on derivatives, respectively, during the nine months ended September 30, 2022 in the accompanying condensed statements of operations. The Company recorded a loss on extinguishment of $11.6 million which was equivalent to the difference between the carrying value of the Bridge Notes and the fair value on the modification date. August 2022 Bridge Notes On August 25, 2022, Tempo entered into a note purchase agreement with the Initial Bridge Investors under the Loan and Security Agreement, pursuant to which Tempo agreed to issue up to $5.0 million in aggregate principal amount of August 2022 Bridge Notes to the Initial Bridge Investors for aggregate cash proceeds of approximately $1.4 million and the cancellation of approximately $3.6 million of outstanding amounts owed under the Loan and Security Agreement. Additionally, Tempo may, from time to time prior to October 9, 2022, issue up to $0.7 million in aggregate principal amount of additional August 2022 Bridge Notes to one or more additional investors. The August 2022 Bridge Notes initially bear interest at a rate of 10% per annum. The August 2022 Bridge Notes will mature, and all outstanding principal and accrued but unpaid interest thereunder will be due and payable by Tempo, on the earlier of August 25, 2023 and the time at which such outstanding amount becomes due and payable upon an event of default under the August 2022 Bridge Notes. Unless an event of default has occurred and is continuing at such time, upon the closing of the business combination, the consummation of another SPAC transaction, the consummation of a qualified financing or the consummation of an initial public offering or direct listing (“Qualified Financing”), all outstanding amounts under the August 2022 Bridge Notes, together with all accrued and unpaid interest thereon, as of such time will automatically convert in full into a number of shares of (i) Tempo common stock or (ii) Tempo preferred stock having terms equivalent to the terms of Tempo’s most senior preferred stock, in each case in accordance with the terms of the August 2022 Bridge Notes, such that the value of the securities received by the holder of any August 2022 Bridge Note will equal the product of (x) the aggregate principal amount, together with any accrued but unpaid interest, outstanding under such August 2022 Bridge Note as of the time of such conversion multiplied by (y) four. If an event of default has occurred and is continuing at such time, then upon the closing of the Business Combination, the consummation of another SPAC Transaction, the consummation of a qualified financing, the consummation of an initial public offering or direct listing or the consummation of any Change of Control, the August 2022 Bridge Notes will only be converted as set forth above if the holder of such note provides its written consent to such conversion. Upon the consummation of any change of control prior to the conversion of the August 2022 Bridge Notes, Tempo will pay to the holder of such August 2022 Bridge Note, upon the closing of such change of control and in full satisfaction of the applicable August 2022 Bridge Note, a cash amount equal to the sum of (i) the product of (a) the outstanding principal balance under the applicable August 2022 Bridge Note multiplied by (b) four, plus (ii) accrued and unpaid interest. On August 25, 2022, as a condition to closing the issuance and sale of the August 2022 Bridge Notes, Tempo: ● amended and restated the 2022 Promissory Notes on substantially similar terms to the August 2022 Bridge Notes. ● entered into an amended and restated warrant with existing investors, which amended and restated that certain Warrant to Purchase Shares of Common Stock, dated as of October 11, 2021, to, among other things, provide for the automatic conversion, with an amended exercise price of zero, of such warrant into shares of Tempo common stock upon the consummation of the business combination, a business combination or similar transaction with another special purpose acquisition company, the consummation of a qualified financing or the consummation of an initial public offering or direct listing; and ● adopted that certain Amended and Restated Fifth Amended and Restated Certificate of Incorporation of Tempo, to, among other things, (i) increase the authorized capital of Tempo for purposes of reserving for issuance an adequate number of shares of Tempo common stock and Tempo preferred stock for issuance upon conversion of the August 2022 Bridge Notes; and (ii) create a new series of Tempo preferred stock designated as “Series C-3 Preferred Stock” and establish the rights, preferences and privileges of such series of Tempo preferred stock for purposes of issuing shares of such series of Tempo preferred stock upon conversion of the August 2022 Bridge Notes. Unless an event of default has occurred and is continuing at such time, upon the closing of the business combination, the consummation of another SPAC transaction, the consummation of a qualified financing or the consummation of an initial public offering or direct listing, all outstanding amounts under the August 2022 Bridge Notes, together with all accrued and unpaid interest thereon as of such time will automatically convert in full into a number of shares of (i) Tempo common stock or (ii) Tempo preferred stock having terms equivalent to the terms of Tempo’s most senior preferred stock, in each case in accordance with the terms of the August 2022 Bridge Notes, such that the value of the securities received by the holder of any August 2022 Bridge Note will equal the product of (x) the aggregate principal amount, together with any accrued but unpaid interest, outstanding under such August 2022 Bridge Note as of the time of such conversion multiplied by (y) four. If an event of default has occurred and is continuing at such time, then upon the closing of the Business Combination, the consummation of another SPAC Transaction, the consummation of a qualified financing, the consummation of an initial public offering or direct listing or the consummation of any Change of Control, the August 2022 Bridge Notes will only be converted as set forth above if the holder of such note provides its written consent to such conversion. Upon the consummation of any change of control prior to the conversion of the August 2022 Bridge Notes, Tempo will pay to the holder of such August 2022 Bridge Note, upon the closing of such change of control and in full satisfaction of the applicable August 2022 Bridge Note, a cash amount equal to the sum of (i) the product of (a) the outstanding principal balance under the applicable August 2022 Bridge Note multiplied by (b) four, plus (ii) accrued and unpaid interest. The following table sets forth the net carrying amount of related party borrowings as on September 30, 2022 (in thousands): Fair Value – Level 3 Balance, January 1, 2022 $ — Additions 39,593 Change in fair value 448 Balance, September 30, 2022 $ 40,041 The Company measures its related party borrowings at fair value based on significant inputs not observable in the market, which caused them to be classified as Level 3 measurements within the fair value hierarchy. Changes in the fair value of related party borrowings related to updated assumptions and estimates were recognized as change in fair value of debt within the condensed statements of operations. In determining the fair value of the related party borrowings as of September 30, 2022, the Company applied the PWERM. The PWERM determines the value of an instrument based upon an analysis of future values for the potential instrument payouts under different future outcomes. The instrument value is based upon the present value of the probability of each future outcome becoming available to the instrument holders, and the rights of each security. Utilizing the PWERM, the Company assessed the probability that the related party borrowings would be converted to common stock through the consummation of a SPAC transaction or as a result of a Qualified Financing. Additional inputs used in applying the PWERM were: i) the expected timing of the conversion, ii) the amount subject to equity conversion, the sum of the notes’ principal and unpaid accrued interest, iii) the contractual conversion price adjustment, and iv) the discount rate. September 30, 2022 Expected term 0.15 years Discount rate 20.00 % Probability of Qualified Financing 90.00 % The notes payable – related party future principal payments are as follows during the years noted (in thousands): As of September 30, 2022 2022 (remaining) $ 9,397 2023 1,240 Total future principal payments $ 10,637 |
Common Stock_2
Common Stock | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Common Stock | (9) Common Stock As of September 30, 2022 and December 31, 2021, the Company has authorized the issuance of 125,000,000 and 63,299,666 shares, respectively, of $0.00001 par value common stock and has 10,085,354 and 10,037,305 shares of common stock issued outstanding The Company has reserved shares of common stock for issuance related to the following convertible preferred stock, stock options, warrants, and future grants: As of September 30, 2022 December 31, 2021 Conversion of convertible preferred stock 29,520,187 29,520,187 Shares reserved for exercise of warrants 21,868,138 3,419,304 Outstanding stock options 23,896,897 16,508,725 Shares available for future issuance under 2015 Plan 3,114,353 1,050,574 Total shares of common stock reserved 78,399,575 50,498,790 | (11) Common Stock As of December 31, 2021 and 2020, the Company has authorized the issuance of 63,299,666 shares of $0.00001 par value common stock and has 10,037,305 and 9,773,097 shares of common stock issued outstanding The Company has reserved shares of common stock for issuance related to the following convertible preferred stock, stock options, warrants, and future grants: As of December 31, 2021 2020 Conversion of convertible preferred stock 29,520,187 29,520,187 Shares reserved for exercise of warrants 3,419,304 305,891 Outstanding stock options 16,508,725 10,364,039 Shares available for future issuance under 2015 Plan 1,050,574 859,468 Total shares of common stock reserved 50,498,790 41,049,585 |
Warrants_2_3_4
Warrants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Warrants | NOTE 8 — WARRANTS As of September 30, 2022, the Company had 11,500,000 Public Warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 15 Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30 - trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period (as it may be extended) and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 As of September 30, 2022, the Company had 6,600,000 Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. | NOTE 8 — WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a Public Warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30- trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period or any Extension Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
TEMPO AUTOMATION INC | ||
Warrants | (10) Warrants Common Stock Warrants The following common stock warrants were outstanding as of September 30, 2022: Warrants to purchase # of Shares Exercise Price Issuance Date Expiration Date Common Stock 182,500 $ 0.94 6/3/2020 6/3/2030 Common Stock 109,080 1.51 6/23/2021 6/22/2031 291,580 Liability Classified Warrants As of September 30, 2022, the Company has the following liability-classified warrants outstanding: Warrants to purchase # of Shares Exercise Price Issuance Date Expiration Date Series A Preferred Stock 58,736 $ 1.15 11/24/2015 11/24/2025 Series A Preferred Stock 26,112 1.15 11/22/2016 11/22/2026 Series B Preferred Stock 38,543 2.76 10/13/2017 10/13/2027 Series C Preferred Stock 108,000 0.94 * 1/29/2021 1/29/2031 Series C Preferred Stock 186,667 2.82 * 1/20/2022 1/20/2032 Series C Preferred Stock 10,000,000 2.82 * 8/25/2022 8/25/2032 Series C Preferred Stock 8,262,167 2.82 * 9/30/2022 9/30/2032 Common Stock 533,333 1.51 6/24/2021 6/24/2031 Common Stock** 2,363,000 2.82 * 10/11/2021 10/11/2024 21,576,558 * ** In October 2021, the Company issued 2,363,000 common stock warrants to an existing investor pursuant to negotiations with the investor to consider continued future investment. These warrants are exercisable for shares of common stock commencing the earliest of (i) the closing date of an initial public offering, or (b) the date of the Company’s completion of a transaction or series of related transactions (by merger, or consolidation, share exchange or otherwise) with a publicly traded special purpose acquisition company or its subsidiary. The warrant exercise price is $2.82 per share and the warrants expire in October 2024. On August 25, 2022, the Company entered into an amended and restated warrant agreement for the above warrants, which amended and restated that the warrants to purchase shares of common stock provide for the automatic conversion, with an amended exercise price of zero, of such warrant into shares of Tempo common stock upon the consummation of the business combination, a business combination or similar transaction with another special purpose acquisition company, the consummation of a qualified financing or the consummation of an initial public offering or direct listing. The amended common stock warrants are liability-classified instruments under ASC 815-40 due to these not being indexed to the Company’s equity. Consequently, the warrants are subject to be measured at fair value in subsequent periods with changes in fair value recognized in earnings. On August 25, 2022, the Company entered into a warrant purchase agreement with existing investors to issue 18,262,167 warrants to purchase common stock in conjunction with entering into various loans. The exercise price of these common stock warrants is $2.82 per share and upon a change in control transaction, the exercise price of these warrants resets to $0. The Company concluded that the common stock warrants are liability classified and shall be measured at fair value at grant date using the BSM option pricing model and subsequently remeasured at each reporting date. The fair value at time of issuance and as of September 30, 2022 was $27.6 million. The liability-classified warrants are remeasured on a recurring basis, primarily based on observable market data while the related theoretical warrant volatility assumption within the BSM option pricing model represents a Level 3 measurement within the ASC 820 fair value measurement hierarchy. The following table details the changes in fair value of the liability-classified warrants, for the nine months ended September 30, 2022 (in thousands): Fair Value Warrants outstanding - January 1, 2022 $ 5,573 Warrants issued and modified 32,514 Change in fair value, net (5,652) Warrants outstanding - September 30, 2022 $ 32,435 The change in fair value, net as shown in the table above is recorded as change in fair value of warrant liability in the condensed statements of operations. For warrants revalued during the period, the warrants were valued using a valuation technique which considers the value of the instruments under a SPAC scenario and a non-SPAC scenario, using the following assumptions: September 30, December 31, 2022 2021 Expected term 3.00 years 3.89 - 9.48 years Expected volatility 61.00 % 64.29% - 64.44 % Risk-free interest rate 3.46 % 1.12% - 1.52 % Expected dividends 0 % 0 % | (13) Warrants Common Stock Warrants The following common stock warrants were outstanding as of December 31, 2021: In June 2020, the Company issued 182,500 common stock warrants in conjunction with the Loan and Security Agreement between the Company and the certain lender. These warrants are exercisable for shares of common stock at $0.94 per share and expire in June 2030. The common stock warrants are valued using the Black-Scholes-Merton (“BSM”) option pricing model. The fair value of the warrants of $0.1 million was allocated to the common stock warrants which is included in additional paid-in capital on the balance sheets. The warrants are not remeasured in future periods as they meet the conditions for equity classification. In June 2021, the Company issued 109,080 common stock warrants in conjunction with the loan and security agreement between the Company and Silicon Valley Bank. These warrants are exercisable for shares of common stock at $1.51 per share and expire in June 2031. The common stock warrants are valued using the BSM option pricing model. The fair value of the warrants of $0.2 million was allocated to the common stock warrants which is included in additional paid-in capital on the balance sheets. The warrants are not remeasured in future periods as they meet the conditions for equity classification. In October , 2021, the Company issued 2,363,000 common stock warrants to an existing investor pursuant to negotiations with the investor to consider continued future investment. These warrants are exercisable for shares of common stock commencing the earliest of (i) the closing date of an initial public offering, or (b) the date of the Company’s completion of a transaction or series of related transactions (by merger, or consolidation, share exchange or otherwise) with a publicly traded special purpose acquisition company or its subsidiary. The warrant exercise price is $2.82 per share and the warrants expire in October , 2024. The warrants were measured at fair value on the issuance date. As the issuance of the warrants was a non-pro-rata transaction with a single existing shareholder, the fair value of $9.0 million was recognized as a credit to additional paid-in capital and an expense reflected in other financing cost section of the statement of operations. The following assumptions were used to calculate the fair value of the common stock warrants issued in 2021 and 2020: June, 2021 June, 2020 October, 2021 Expected term 10 years 10 years 3 years Expected volatility 64.01 % 56.49 % 48.5 % Risk-free interest rate 1.50 % 0.66 % 0.70 % Expected dividends 0.00 % 0.00 % 0.00 % Weighted average fair value of common stock warrant $ 1.07 $ 0.60 $ 3.79 Liability Classified Warrants As of December 31, 2021, the Company has the following liability-classified warrants outstanding: Equity-Type Shares Exercise Price Issuance Date Expiration Date Series A Preferred Stock 58,736 $ 1.15 11/24/2015 11/24/2025 Series A Preferred Stock 26,112 1.15 11/22/2016 11/22/2026 Series B Preferred Stock 38,543 2.76 10/13/2017 10/13/2027 Series C Preferred Stock 108,000 0.94 1/29/2021 1/29/2031 Common Stock 533,333 1.51 6/24/2021 6/24/2031 764,724 In January 2021, the Company entered into a warrant purchase agreement with SQN Venture Income Fund II, LP to issue 108,000 warrants to purchase Series C Preferred Stock in conjunction with entering into the credit facility. The exercise price of Series C warrants is $0.94 per share. The Company concluded that the Series C Preferred Stock warrants are liability classified and shall be measured at fair value at grant date using the BSM option pricing model and subsequently remeasured at each reporting date. The fair market value of the Series C Preferred Stock warrants were recorded to offset the debt discount and amortized to interest expense over the term of the debt using the straight-line amortization method. The fair value at time of issuance and as of December 31, 2021 was $0.2 million and $0.8 million, respectively. In June 2021, the Company entered into a warrant purchase agreement with SQN Venture Income Fund II, LP to issue 533,333 warrants to purchase Common Stock in conjunction with entering into the credit facility. The exercise price of these Common Stock warrants is $1.51 per share. The Company concluded that the common stock warrants are liability classified and shall be measured at fair value at grant date using the BSM option pricing model and subsequently remeasured at each reporting date. The fair value at time of issuance and as of December 31, 2021 was $1.0 million and $4.1 million, respectively. The liability-classified warrants are remeasured on a recurring basis, primarily based on observable market data while the related theoretical warrant volatility assumption within the BSM option pricing model represents a Level 3 measurement within the ASC 820 fair value measurement hierarchy. The following table details liability-classified warrant activity, i.e., the fair value of the related liability, for the years ended December 31, 2021 and 2020, respectively (in thousands): (in ’000s) Fair Value Warrants outstanding – January 1, 2020 $ 133 Change in fair value, net (47) Warrants outstanding - December 31, 2020 86 Warrants issued 1,245 Change in fair value, net 4,242 Warrants outstanding – December 31, 2021 $ 5,573 The change in fair value, net as shown in the table above is recorded as change in fair value of warrants in the statements of operations. The warrants were valued using the BSM option pricing model at issuance and revalued at each reporting date, using the following assumptions: December 31, 2021 December 31, 2020 Expected term 3.89 - 9.48 years 4.89‑6.78 years Expected volatility 64.29% - 64.44% 58.17% - 59.84% Risk-free interest rate 1.12% - 1.52% 0.36% - 0.51% Expected dividends 0% 0% Fair value of warrants $1.17 - $7.71 $1.16 - $1.56 |
Stock-Based Compensation_2
Stock-Based Compensation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Stock-Based Compensation | (11) Stock-Based Compensation In April 2015, the board of directors adopted the 2015 Equity Incentive Plan (“the Plan”), which was subsequently approved by the Company’s stockholders. As of September 30, 2022, through multiple amendments approved by the Company’s stockholders, the share reserve was increased to 27,712,681 shares. The Plan permits the granting of incentive stock options, non-statutory stock options, and restricted stock to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants, and to promote the success of the Company’s business. The board of directors, at its sole discretion, shall determine the exercise price but subject to certain terms in the Plan. Options granted under the Plan expire 10 years from the date of grant. First time grants of incentive stock options and non-statutory options generally vest at a rate of 25% on the first anniversary of the grant date and then ratably monthly over the next three years. Upon termination of employment, any unvested options are automatically returned to the Company. In general, vested options that were not exercised within three months after termination are surrendered back to the Company. These options are added back to the Plan and made available for future grants. In general, the awards issued by the Company are service based options, however, in July 2020, the Company issued 258,368 performance-based options to the chief financial officer of the Company which vest 100% subject to the occurrence of a qualified transaction within 36 months of its date of grant. Additionally, in March 2021, the Company issued 1,245,641 performance-based options to management employees and board of directors which vest 100% subject to the occurrence of a qualified transaction. In November 2021, the Company’s board of directors approved to (i) reduce the July 2020 grant achievement period by approximately six months; and (ii) extend the March 2021 grants achievement period by 12 months. In March 2022, one of the Company’s executives was terminated and the 330,708 unvested options were modified to include a performance condition. The unvested options will vest upon a change of control within three months of the modification date. As of June 30, 2022, the performance condition was not met. As a result, no stock-based compensation was recorded and the unvested options were forfeited during the three months ended June 30, 2022. In August 2022, the Company’s board of directors approved the (i) modification of 867,461 unvested service based options of three terminated executives to include a performance condition; (ii) cancellation of 254,113 performance options issued in March 2021 and (iii) modification of 50,391 performance options granted in March 2021 to reduce the grant achievement period to November 2022. As a result of the modifications, the total fair value of the performance based options decreased from $8.8 million to $7.4 million primarily due to the decrease in Company’s common stock fair value. The Company recorded $0 compensation expense for these performance-based options for the nine months ended September 30, 2022 as achievement of the vesting condition was not deemed probable of occurring. Restricted Stock Unit Issuance On September 9, 2022, Tempo issued 9,500,000 retention awards in the form of restricted stock units of Tempo (“Tempo RSUs”) to certain eligible employees and directors of Tempo. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Business Combination will, at the Effective Time, be converted into (a) restricted stock unit awards covering shares of Tempo common stock (“Tempo RSUs”) and (b) the right to receive a number of Tempo Earnout Shares. Out of the above approved and issued RSUs, 4,750,000 RSUs were subject to service based conditions which shall vest at a rate of 33.33% on the first anniversary of the grant date and then ratably quarterly over the next two years. The Company recorded $29 thousand compensation expense for these service based RSUs for the nine months ended September 30, 2022. The remaining 4,750,000 RSUs were subject to performance based conditions, 50% of which will vest upon achieving $15.0 million in quarterly revenue of Tempo and the remaining 50% will vest upon achieving $5.0 million in adjusted EBITDA of Tempo. The total fair value of these performance based RSUs was $4.3 million. The Company recorded $0 compensation expense for these performance based RSUs for the nine months ended September 30, 2022 as achievement of the vesting condition was not deemed probable of occurring. As of September 30, 2022 and December 31, 2021, there were 3,114,353 and 1,050,574 common shares, respectively, available for issuance under the Plan. A summary of option activity under the Plan is as follows: Options outstanding Weighted Weighted average average Aggregate Number of exercise price contractual term intrinsic value shares per share (in years) (in thousands) Outstanding – January 1, 2022 16,457,475 $ 1.36 7.96 $ 104,554 Options granted 996,055 3.33 Options exercised (48,049) 1.03 Options forfeited (2,872,385) 2.24 Options expired (136,197) 1.06 Outstanding – September 30, 2022 14,396,899 1.32 6.89 $ 7,582 Vested during the period 2,137,947 1.62 7.13 817 Vested at end of period 9,643,506 1.11 5.90 5,500 Exercisable at the end of the period 9,648,520 1.12 5.90 5,501 Shares expected to vest 3,503,497 2.02 8.52 1,270 Vested and expected to vest 13,147,003 1.36 6.60 6,770 Determination of Fair Value The Company estimates the fair value of share-based compensation for stock options and restricted stock units utilizing the BSM option pricing model, which is dependent upon several variables, discussed below. These amounts are estimates and, thus, may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation using the straight-line basis over the requisite service period, which is generally the vesting period of the respective award. Fair Value of Common Stock: Expected Term: Expected Volatility: Risk-Free-Interest-Rate: Expected Dividend: The following assumptions were used to calculate the fair value of options granted during the nine months ended September 30, 2022: Nine Months Ended September 30, 2022 Expected term 0.50 - 5.86 years Expected volatility 55.92% - 66.32% Risk-free interest rate 1.54% - 3.00% Expected dividends 0% Stock-based compensation expense The following table summarizes stock-based compensation expense and its allocation within the accompanying statements of operations during the nine months ended September 30, 2022 and 2021 (in thousands): 2022 2021 Cost of goods sold $ 441 $ 119 Research and development 556 303 Sales and marketing 381 205 General and administrative 945 1,057 Total stock-based compensation expense $ 2,323 $ 1,684 As of September 30, 2022, there were a total of $5.8 million and $7.5 million of unrecognized employee compensation costs related to service based options and RSUs, respectively, excluding unrecognized costs associated with performance-based stock options and RSUs. Such compensation cost is expected to be recognized over a weighted-average period of approximately 2.24 years and 2.94 years for service based options and RSUs, respectively. | (14) Stock-Based Compensation In April 2015, the board of directors adopted the 2015 Equity Incentive Plan (“the Plan”), which was subsequently approved by the Company’s stockholders. The Company initially reserved a total of 1,902,688 shares of common stock for issuance under the Plan. Between August 2015 and December 2021, through multiple amendments approved by the Company’s stockholders, the share reserve was increased to 18,212,681 shares of common stock. The Plan permits the granting of incentive stock options, non-statutory stock options, and restricted stock to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants, and to promote the success of the Company’s business. The board of directors, at its sole discretion, shall determine the exercise price but subject to certain terms in the Plan. Options granted under the Plan expire 10 years from the date of grant. First time grants of incentive stock options and non-statutory options generally vest at a rate of 25% on the first anniversary of the grant date and then ratably monthly over the next three years. Upon termination of employment, any unvested options are automatically returned to the Company. In general, vested options that were not exercised within three months after termination are surrendered back to the Company. These options are added back to the Plan and made available for future grants. In general, the awards issued by the Company are service based options, however, in July 2020, the Company issued 258,368 performance-based options to the chief financial officer of the Company which vest 100% subject to the occurrence of a qualified transaction within 36 months of its date of grant. Additionally, in March 2021, the Company issued 1,245,641 performance-based options to management employees and board of directors which vest 100% subject to the occurrence of a qualified transaction. In November, 2021, the Company’s board of directors approved to (i) reduce the July 2020 grant achievement period by approximately six months; and (ii) extend the March 2021 grants achievement period by 12 months. As a result of the modifications, the total fair value of these performance-based options increased from $1.4 million to $8.8 million primarily due to the increase in Company's common stock fair value. The Company recorded $0 compensation expense for these performance-based options for the year ended December 31, 2021 and 2020 as achievement of the vesting condition was not deemed probable of occurring. As of December 31, 2021 and 2020, there were 1,050,574 and 859,468 shares, respectively, available for the Company for issuance under the Plan. A summary of option activity under the Plan is as follows: Options outstanding Weighted Weighted average average Aggregate Number of exercise price contractual term intrinsic value shares per share (in years) (in thousands) Outstanding – January 1, 2021 10,364,039 $ 0.98 Options granted 7,002,296 1.89 Options exercised (264,208) 0.48 Options forfeited (492,049) 1.37 Options expired (152,603) 1.23 Outstanding - December 31, 2021 16,457,475 $ 1.36 7.96 $ 104,554 Vested during the period 2,265,763 1.17 8.19 51,807 Vested at end of period 7,689,805 0.97 6.43 51,807 Exercisable at the end of the period 7,747,264 0.97 6.43 52,181 Shares expected to vest 7,263,661 1.85 9.20 42,565 Vested and expected to vest 14,953,466 1.40 7.77 94,372 Restricted Stock Awards In April 2015, as mentioned in the section above, the Company adopted the Plan to permit granting restricted stock to employees and consultants. Pursuant to the Plan, the Company entered into restricted stock award agreements with employees and consultants and the holder of the restricted stock has the rights equivalent to those of a holder of the Company’s common stock. In addition to the participant receiving the restricted stock under the Plan the agreements grants the Company a repurchase option exercisable upon the voluntary or involuntary termination of the participants’ continuous service for any reason at a purchase price for shares equal to the original purchase price paid by the purchaser to the Company for such shares and may be paid by cancellation of any indebtedness of the purchaser to the Company. There was no activity related to restricted stock during the year ended December 31, 2021. Determination of Fair Value The Company estimates the fair value of share-based compensation for stock options utilizing the BSM option pricing model, which is dependent upon several variables, discussed below. These amounts are estimates and, thus, may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation using the straight-line basis over the requisite service period, which is generally the vesting period of the respective award. Fair Value of Common Stock: Expected Term: Expected Volatility: Risk-Free-Interest-Rate: Expected Dividend: The following assumptions were used to calculate the fair value of option granted during the years ended December 31, 2021 and 2020: During the years ended December 31, 2021 2020 Expected term 5.00 - 6.08 years 5.15 – 6.53 years Expected volatility 61.44% - 67.12% 51.15% – 59.84% Risk-free interest rate 0.41% - 1.35% 0.27% – 1.63% Expected dividends 0.0% 0.0% Fair value of common stock $1.41 - $6.08 $1.01 - $1.46 Stock-based compensation expense The following table summarizes stock-based compensation expense and its allocation within the accompanying statements of operations during the years ended December 31, 2021 and 2020 (in thousands): 2021 2020 Cost of goods sold $ 276 $ 115 Research and development 540 87 Sales and marketing 402 169 General and administrative 1,320 885 Total stock-based compensation expense $ 2,538 $ 1,256 As of December 31, 2021 there was a total of $11.0 million of unrecognized employee compensation costs related to non-vested and non-performance-based stock option grants, which is expected to be recognized over a weighted-average period of approximately 2.87 years. Secondary Sale Transactions In June, 2021, an investor in the Company purchased shares from a founder and a former employee at a purchase price that was above the then-current fair value. Since the purchasing parties are holders of economic interest in the Company and acquired shares are at a price in excess of fair value of such shares, the amount paid in excess of the fair value at the time of the secondary sale was recognized as stock-based compensation expense. Total stock-based compensation expense related to this secondary sale transaction of $0.3 million is included in the statements of operations for the year ended December 31, 2021. In October, 2021, a growth fund purchased shares from a founder and a former employee at a purchase price that was below the then-current fair value. Accordingly, no incremental compensation expense was recognized by the Company for this secondary sale transaction. |
Commitments and Contingencie_11
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or close of a Business Combination, the specific impact is not readily determinable as of the date of these condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 2020 Registration Rights Agreement Pursuant to a registration rights agreement entered into on July 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of any working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of such working capital loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. In connection with the Tempo Business Combination, the registration rights agreement will be amended and restated. At the closing of the Tempo Business Combination, Domesticated ACE (as defined below), the Sponsor, the other parties to the Sponsor Support Agreement and certain former stockholders of Tempo Automation, Inc. will enter into an Amended and Restated Registration Rights Agreement, pursuant to which Domesticated ACE will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Domesticated ACE common stock and other equity securities of Domesticated ACE that are held by the parties thereto from time to time. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. On March 16, 2022, Cantor Fitzgerald & Co. agreed that the deferred fee may be paid in shares of common stock of Domesticated ACE, subject to certain terms and conditions. Termination of Proposed Achronix Business Combination On January 7, 2021, the Company entered into an Agreement and Plan of Merger (the “Achronix Merger Agreement”) with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”), and Merger Sub. On May 24, 2021, in the Form 10-Q for the quarter ended March 31, 2021, the Company disclosed that the SEC informed the Company that it was investigating certain disclosures made in the Form S-4 relating to the proposed business combination with Achronix. On July 11, 2021, the Company and Achronix entered into a termination and release agreement, pursuant to which the parties agreed to mutually terminate the Achronix Merger Agreement relating to the proposed business combination with Achronix. On October 27, 2021, the Company received a letter from the SEC in connection with its investigation with the following response: “We have concluded the investigation as to ACE Convergence Acquisition Corp. (“ACE”). Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against ACE.” Business Combination Agreement On October 13, 2021, the Company entered into an Agreement and Plan of Merger (as amended and restated on August 12, 2022, and as amended on September 7, 2022, and September 23, 2022, the “Merger Agreement”) with Tempo Automation, Inc., a Delaware corporation (“Tempo”), and Merger Sub. Pursuant to the transactions contemplated by the Merger Agreement (the “Tempo Business Combination”), and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Tempo, with Tempo surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Prior to the closing of the Tempo Business Combination (the “Closing”), the Company shall domesticate as a Delaware corporation (the “Domestication” and, ACE, after the Domestication, “Domesticated ACE”) and shall be renamed “Tempo Automation Holdings, Inc.” As a result of and upon the Closing, among other things, all outstanding shares of Tempo common stock (after giving effect to the Company Preferred Conversion (as defined in the Merger Agreement)) as of immediately prior to the Closing, and, together with shares of Tempo common stock reserved in respect of Tempo options outstanding as of immediately prior to the Closing that will be converted into awards based on Domesticated ACE common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of any earnout shares, if and to the extent earned, and in the case of the Tempo options, if and to the extent earned and subject to their respective terms), an aggregate of approximately 23,500,000 shares of Domesticated ACE common stock (at a deemed value of $10.00 per share) equal to the quotient obtained by dividing (i) $235,000,000 (the “Base Purchase Price”) by (ii) $10.00. On September 7, 2022, ACE and Tempo entered into the First Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, to increase the Base Purchase Price from $235,000,000 to $257,927,013. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Tempo Business Combination will, at the effective time of the Tempo Business Combination, be converted into (a) Domesticated ACE RSUs and (b) the right to receive a number of earnout shares. Additionally, Tempo has undertaken to use its commercially reasonable efforts to cause the holder of each outstanding and unexercised Tempo warrant to exercise such Tempo warrant in exchange for shares of Tempo common stock immediately prior to the effective time of the Merger. Holders of Tempo warrants may elect not to exercise such Tempo warrants in exchange for shares of Tempo common stock prior to the effective time of the Merger. Any Tempo warrants that remain issued and outstanding as of immediately prior to the effective time of the Tempo Business Combination will be converted into warrants to purchase shares of Domesticated ACE common stock on substantially similar terms to the Tempo warrants. An additional 550,000 shares of Domesticated ACE common stock will be purchased (at a price of $10.00 per share) at the Closing by certain third-party investors (“Third Party PIPE Investors”) and certain related parties of the Sponsor (collectively with the Third Party PIPE Investors, the “PIPE Investors”), for a total aggregate purchase price of up to $5.5 million (the “PIPE Investment”). In addition, the Company originally agreed to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the volume weighted average price per share of Domesticated ACE common stock during the 30 days commencing on the date on which a registration statement registering the resale of the shares of Domesticated ACE common stock acquired by the PIPE Investors is declared effective is less than $10.00 per share (which registration statement the Company has agreed to file pursuant to the subscription agreements entered into in connection with the PIPE Investment). Certain PIPE Investors originally subscribed for $25.0 million of ACE’s 12.0% convertible senior notes due 2025, but such subscription was terminated in January 2022 in connection with the subscription by certain parties for $200.0 million of 15.5% convertible notes. The latter subscription was terminated in July 2022; as a result of such termination, if ACE consummates an initial business combination with or among Tempo, Compass AC Holdings, Inc. (“Compass”), Whizz Systems, Inc. (“Whizz”) or any of their respective affiliates or subsidiaries, OCM Tempo Holdings, LLC (“OCM”) will be entitled to a termination fee of 3.5% of the aggregate principal amount of the subscribed notes (approximately $7.0 million), to be paid by ACE immediately following and as a condition subsequent to the closing of such initial business combination. On September 4, 2022, Tempo, ACE, OCM and Oaktree Capital Management, L.P. (“Oaktree”) agreed to reduce such termination fee to 0.6% of the aggregate principal amount of the subscribed notes (approximately $1.1 million) if the closing of the Tempo Business Combination occurs on or before October 15, 2022 (the “Specified Fee Date”), to be paid on the earlier of (i) six months after the closing of the Tempo Business Combination and (ii) the date on which either ACE or Tempo commence bankruptcy proceedings. In addition to the reduced termination fee, ACE and Tempo are required to pay approximately $1.2 million in fees and expenses to OCM on the earlier of (x) immediately following the closing of the Tempo Business Combination and (y) the Outside Business Combination Date (as defined below). The reduced termination fee and all other fees and expenses owed to OCM under such agreement will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. If the Tempo Business Combination has not been consummated prior to the Specified Fee Date, on the earliest of (I) the date on which the Merger Agreement is terminated, (II) the date on which either ACE or Tempo commence bankruptcy proceedings and (III) June 15, 2023 (the earliest date, the “Outside Business Combination Date”), ACE and Tempo will pay OCM the full 3.5% termination fee and all of its accrued and unpaid fees and expenses. To the extent the termination fee and accrued and unpaid fees and expenses are not paid on or prior to June 15, 2023, the unpaid portion of the termination fee (together with all other unpaid fees and expenses) will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. On October 11, 2022, Tempo, ACE, OCM and Oaktree entered into a letter agreement pursuant to which the Specified Fee Date was amended to November 15, 2022. Additionally, in March 2022, ACE SO3 SPV Limited agreed to purchase an unsecured subordinated convertible note in an aggregate principal amount of $20.0 million in connection with the Closing, which agreement was terminated in July 2022. On July 1, 2022, ACE and Tempo entered into that certain First Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”), pursuant to which the parties agreed, among other things, to (i) reduce the Base Purchase Price from $658,434,783 to $488,375,000, (ii) increase the number of earnout shares issuable to eligible Tempo equity holders (the “Tempo Earnout Shares”) from 7,500,000 to 10,000,000, which will vest in two equal tranches of 5,000,000 shares based on Domesticated ACE reaching $10.0 million in EBITDA and $50.0 million in revenue in any quarter during the five-year period following the closing date of the Tempo Business Combination, (iii) remove certain covenants and other obligations of the parties relating to the employee stock purchase plan contemplated by the Merger Agreement and (iv) extend the outside date of the Merger Agreement to November 13, 2022. On August 12, 2022, ACE, Merger Sub and Tempo entered into the Merger Agreement, pursuant to which the parties agreed, among other things, to (i) reduce the Base Purchase Price from $488,375,000 to $235,000,000, (ii) reduce the number of Tempo Earnout Shares from 10,000,000 to 7,000,000, which will vest in two equal tranches of 3,500,000 shares based on Domesticated ACE reaching $5.0 million in Adjusted EBITDA (as defined in the Merger Agreement) and $15.0 million in revenue in any quarter during the five-year period following the closing date, (iii) remove terms relating to the proposed acquisitions by Tempo of each of Whizz and Compass, (iv) reduce the minimum cash condition from $320.0 million to $10.0 million and (v) extend the outside date of the Merger Agreement to December 13, 2022. Pursuant to the Merger Agreement, all outstanding shares of Tempo common stock (after giving effect to the Company Preferred Conversion (as defined in the Merger Agreement)) as of immediately prior to the closing, and, together with shares of Tempo common stock reserved in respect of Tempo options as of immediately prior to the closing that will be converted into awards based on Domesticated ACE common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of Tempo options, if and to the extent earned and subject to their respective terms), an aggregate of approximately 23,500,000 shares of Domesticated ACE common stock (at a deemed value of $10.00 per share) equal to the quotient obtained by dividing (i) the Base Purchase Price by (ii) $10.00, including, as applicable, a number of Tempo Earnout Shares. On September 7, 2022, ACE and Tempo entered into the First Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, to increase the Base Purchase Price from $235,000,000 to $257,927,013. On September 23, 2022, ACE and Tempo entered into the Second Amendment to the Amended and Restated Agreement and Plan of Merger, pursuant to which the parties agreed, among other things, that all awards of Tempo RSUs that are outstanding at the closing of the Tempo Business Combination will, at the effective time of the Tempo Business Combination, be converted into (a) Domesticated ACE RSUs and (b) the right to receive a number of Tempo Earnout Shares. On July 6, 2022, the Company entered into Second Amended and Restated Subscription Agreements (the “Second A&R Subscription Agreements”) with each of the PIPE Investors. Pursuant to the Second A&R Subscription Agreements, among other things, the parties agreed to reduce the minimum Adjustment Period VWAP (as defined in the Second A&R Subscription Agreements) from $6.50 to $4.00. Additionally, ACE agreed (1) to issue 2,000,000 additional shares (the “PIPE Incentive Shares”) to the PIPE Investors on a pro rata basis as an incentive to subscribe for and purchase the shares under the Second A&R Subscription Agreements, (2) that if the Adjustment Period VWAP is less than $10.00 per share, the number of additional shares each PIPE Investor will be entitled to receive shall be (i) (A) (x) the number of shares issued to such PIPE Investor at the closing of the subscription and held by such PIPE Investor on the Measurement Date (as defined in the Second A&R Subscription Agreements), times (y) $10.00, minus the Adjustment Period VWAP, minus (B) the number of PIPE Incentive Shares, times the Adjustment Period VWAP, divided by (ii) the Adjustment Period VWAP, and (3) to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the Additional Period VWAP (as defined below) is less than the Adjustment Period VWAP. In such case, each PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock (such additional shares, if any, the “Additional Period Shares”) equal to the lesser of (1) such PIPE Investor’s pro rata portion of 2,000,000 shares, and (2) (i) (A) (x) the number of shares issued to such PIPE Investor pursuant to such subscription agreement and held by such PIPE Investor on the last day of the 30 calendar day period ending on the date that is 15 months following the closing of the subscriptions (such 30 calendar day period, the “Additional Period”), times (y) the Adjustment Period VWAP, minus the average of the volume weighted average price of a share of Domesticated ACE common stock determined for each of the trading days during the Additional Period (the “Additional Period VWAP”), minus (B) the number of PIPE Incentive Shares, times the Additional Period VWAP, divided by (ii) the Additional Period VWAP. Notwithstanding the foregoing, in the event that Domesticated ACE consummates a strategic transaction during the 15 consideration will be (a) with respect to any securities, (i) the average of the closing prices of the sales of such securities on all securities exchanges on which such securities are then listed, averaged over a period of 30 trading days ending on the day as of which such value is being determined and the 29 consecutive days preceding such day, or (ii) if the information contemplated by the preceding clause (i) is not practically available, then the fair value of such securities as of the date of valuation as determined in accordance with the succeeding clause (b), and (b) with respect to any other non-cash assets, the fair value thereof as of the date of valuation, as determined by an independent, nationally recognized valuation firm reasonably selected by Domesticated ACE, on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant (and giving effect to any transfer taxes payable in connection with such sale). On September 7, 2022, ACE entered into Third Amended and Restated Subscription Agreements (the “Third A&R PIPE Subscription Agreements”) with each of the PIPE Investors, which amend and restate the applicable Second A&R Subscription Agreements in their entirety. One of the Third Party PIPE Investors who entered into a Second A&R Subscription Agreement did not enter into a Third A&R PIPE Subscription Agreement and terminated its Second A&R Subscription Agreement on September 7, 2022. Pursuant to the Third A&R PIPE Subscription Agreements, ACE has agreed to issue additional shares of Domesticated ACE common stock to each PIPE Investor in the event that the volume weighted average price per share of Domesticated ACE common stock (the “Measurement Period VWAP”) during the 30 days commencing on the date on which a registration statement registering the resale of the shares of Domesticated ACE common stock acquired by such PIPE Investors (the “PIPE Resale Registration Statement”) is declared effective is less than $10.00 per share. In such case, each PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock equal to the product of (x) the number of shares of Domesticated ACE common stock issued to such PIPE Investor at the closing of the subscription and held by such PIPE Investor through the date that is 30 days after the effective date of the PIPE Resale Registration Statement (the “Measurement Date”) multiplied by (y) a fraction, (A) the numerator of which is $10.00 minus the Adjustment Period VWAP (as defined therein) and (B) the denominator of which is the Adjustment Period VWAP. In the event that the Adjustment Period VWAP is less than $4.00 (the “Price Floor Value”), the Adjustment Period VWAP shall be deemed to be the Price Floor Value. ACE has also agreed to issue up to 500,000 additional shares of Domesticated ACE common stock to each such PIPE Investor in the event that the Additional Period VWAP (as defined below) is less than the Adjustment Period VWAP. In such case, each such PIPE Investor will be entitled to receive a number of shares of Domesticated ACE common stock equal to the lesser of (1) such PIPE Investor’s pro rata portion of 500,000 additional shares of Domesticated ACE common stock, and (2) (i) (A) (x) the number of shares issued to such PIPE Investor pursuant to such subscription agreement and held by such PIPE Investor on the last day of the 30 calendar day period ending on the date that is 15 months following the closing of the subscriptions (such 30 calendar day period, the “Additional Period”), times (y) the Adjustment Period VWAP, minus the average of the volume weighted average price of a share of Domesticated ACE common stock determined for each of the trading days during the Additional Period (the “Additional Period VWAP”), minus (B) the number of PIPE Incentive Shares (as defined below), times the Additional Period VWAP, divided by (ii) the Additional Period VWAP. Additionally, ACE has agreed to issue up to 2,000,000 additional shares (the “PIPE Incentive Shares”) to such PIPE Investors on a pro rata basis with respect to each PIPE Investor’s subscription amount as an incentive to subscribe for and purchase the shares under the Third A&R PIPE Subscription Agreements. Notwithstanding the foregoing, in the event that Domesticated ACE consummates a strategic transaction during the 15-month period beginning on the closing date, then the measurement date for the issuance of such additional shares shall be one day prior to the closing date of such strategic transaction, and the Additional Period VWAP will be deemed to equal the price per share paid or payable to the holders of outstanding shares of Domesticated ACE common stock in connection with such strategic transaction. If such price is payable in whole or in part in the form of consideration other than cash, the value of such consideration will be (a) with respect to any securities, (i) the average of the closing prices of the sales of such securities on all securities exchanges on which such securities are then listed, averaged over a period of 30 trading days ending on the day as of which such value is being determined and the 29 consecutive days preceding such day, or if the information contemplated by the preceding clause (i) is not practically available, then the fair value of such securities as of the date of valuation as determined in accordance with the succeeding clause (b), and (b) with respect to any other non-cash assets, the fair value thereof as of the date of valuation, as determined by an independent, nationally recognized valuation firm reasonably selected by Domesticated ACE, on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant (and giving effect to any transfer taxes payable in connection with such sale). One of the PIPE Investors’ subscription agreement provides that, if such PIPE Investor is an Eligible Investor (defined as any subscriber in the offering who is not a beneficial or record owner of ACE’s equity or an affiliate of ACE prior to the Initial Closing (as defined therein)), if, after the date of such subscription agreement, such PIPE Investor acquires ownership of Class A Ordinary Shares in the open market or in privately negotiated transactions with third parties (along with any related rights to redeem or convert such shares in connection with the redemption conducted by ACE in connection with the vote to approve the Tempo Business Combination (the “Tempo Redemption”)) at least five business days prior to ACE’s extraordinary general meeting to approve the Tempo Business Combination, and such PIPE Investor does not redeem or convert such shares in connection with the Tempo Redemption (including revoking any prior redemption or conversion elections made with respect to such shares) (such shares, “PIPE Non-Redeemed Shares”), the number of shares such PIPE Investor (only if an Eligible Investor) will be obligated to purchase under its subscription agreement shall be reduced by the number of PIPE Non-Redeemed Shares. The proceeds of the PIPE Investment, together with the amounts remaining in ACE’s trust account as of immediately following the effective time of the Tempo Business Combination, will be retained by Domesticated ACE following the Closing. In connection with the Tempo Business Combination and pursuant to separate agreements, Tempo was to acquire 100% of the issued The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Tempo, (ii) the absence of any legal restraints on the Closing, and (iii) receipt of approval for listing on The Nasdaq Stock Market LLC (“Nasdaq”) the shares of Domesticated ACE common stock to be issued in connection with the Merger. ACE’s obligation to consummate the Business Combination is also subject to, among other things, the accuracy of the representations and warranties of Tempo as of the date of the Original Merger Agreement (as defined below) and as of the Closing and each of the covenants of Tempo having been performed in all material respects. Tempo’s obligation to consummate the Merger is also subject to, among other things, (i) the accuracy of the representations and warranties of ACE as of the date of the Original Merger Agreement and as of the Closing, (ii) ACE having performed each of the covenants in all material respects, (iii) the Domestication having been completed and (iv) the sum of (w) the amount of cash available in the Trust Account into which substantially all of the proceeds of ACE’s initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE’s initial public offering, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their rights to redeem their Class A ordinary shares pursuant to ACE’s amended and restated memorandum and articles of association (but prior to payment of (a) any deferred underwriting commissions being held in the Trust Account and (b) any transaction expenses of ACE or its affiliates), plus (x) the PIPE Investment Amount (as defined in the Merger Agreement) actually received by ACE prior to or substantially concurrently with the closing, plus (y) the Available Credit Amount (as defined in the Merger Agreement), plus (z) the Available Cash Amount (as defined in the Merger Agreement), being at least equal to $10,000,000. The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Tempo, (ii) by Tempo, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Tempo, to the extent required under the Merger Agreement, are not obtained within five business days of the effective date of the Proxy Statement/Registration Statement (as defined in the Merger Agreement), (iv) by either ACE or Tempo in certain other circumstances set forth in the Merger Agreement, including (a) if any Governmental Authority (as defined in the Merger Agreement) shall have issued or otherwise entered a final, non-appealable order making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger and (b) in the event of certain uncured breaches by the other party or if the Closing has not occurred on or before December 13, 2022 (the “Agreement End Date”), unless ACE is in material breach of the Merger Agreement. The Merger Agreement also provides that, if the proxy statement for ACE’s shareholder meeting to approve the Tempo Business Combination has not been mailed by August 30, 2022, then ACE will file a proxy statement to extend the date by which it must complete an initial business combination by at least three months, to such date as may be agreed in writing between ACE and Tempo. Concurrently with the execution of the original Agreement and Plan of Merger in October 2021 (the “Original Merger Agreement”), an affiliate of the Sponsor (such affiliate, the “Backstop Investor”) entered into a backstop subscription agreement (the “Backstop Subscription Agreement”) with ACE, pursuant to, and on the terms and subject to the conditions on which, the Backstop Investor committed to purchase, following the Domestication and prior to or substantially concurrently with the Closing, up to 2,500,000 shares of Domesticated ACE common stock, in a private placement for a purchase price of $10.00 per share and an aggregate purchase price of up to $25,000,000, to backstop certain redemptions by ACE shareholders. On March 16, 2022, ACE and the Backstop Investor terminated the Backstop Subscription Agreement in connection with the execution of the Cantor Purchase Agreement (as defined below). On October 13, 2021, ACE entered into a Support Agreement (the “Original Sponsor Support Agreement,” and, as amended, the “Sponsor Support Agreement”), by and among ACE, the Sponsor, certain of ACE’s directors and officers and Tempo, pursuant to which the Sponsor and each director and officer of ACE agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Original Sponsor Support Agreement. On July 6, 2022, the parties to the Original Sponsor Support Agreement entered into an Amendment to Sponsor Support Agreement (the “SSA Amendment”), pursuant to which, among other things, certain Sponsors (as defined in the Sponsor Support Agreement, and, each, an “Earnout Sponsor”) agreed, immediately prior to the Domestication, to contribute, transfer, assign, convey and deliver to ACE an aggregate of 5,595,000 founder shares in exchange for an aggregate of 3,595,000 Class A Ordinary Shares of ACE (the “SSA Exchange”). Pursuant to the SSA Amendment, the Earnout Sponsors also agreed to subject an aggregate of 2,000,000 shares of Domesticated ACE common stock (the “Sponsor Earnout Shares”) received in the SSA Exchange to certain earnout vesting conditions or, should such shares fail to vest, forfeiture to ACE for no consideration. On the earlier of (i) the date which is 15 months following the closing of the Tempo Business Combination and (ii) immediately prior to the closing of a strategic transaction, the Sponsor Earnout Shares will vest in an amount equal to (A) the number of Sponsor Earnout Shares, less (B) the number of Additional Period Shares, if any, issuable in the aggregate under the Second A&R Subscription Agreements. In the event of a strategic transaction, the holders of any vested Sponsor Earnout Shares will be eligible to participate in such strategic transaction with respect to such Sponsor Earnout Shares on the same terms, and subject to the same conditions, as the other holders of shares of Domesticated ACE common stock generally. On August 12, 2022, the parties to the SSA Amendment entered into a Second Amendment to Sponsor Support Agreement (the “Second SSA Amendment”), pursuant to which the SSA Exchange was amended such that the Earnout Sponsors agreed, immediately prior to the Domestication, to contribute, transfer, assign, convey and deliver to ACE an aggregate of 5,595,000 founder shares in exchange for an aggregate of 3,095,000 Class A Ordinary Shares. Pursuant to the Second SSA Amendment, the Earnout Sponsors also agreed to reduce the number of Sponsor Earnout Shares to 500,000. On the earlier of (i) the date which is fifteen (15) months following the closing of the Tempo Business Combination and (ii) immediately prior to the closing of a strategic transaction, the Sponsor Earnout Shares will vest in an amount equal to (A) the number of Sponsor Earnout Shares, less (B) the number of Additional Period Shares (as defined therein), if any, issuable in the aggregate un | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Registration Rights Pursuant to a registration rights agreement entered into on July 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Termination of Proposed Achronix Business Combination On January 7, 2021, we entered into an Agreement and Plan of Merger with Achronix Semiconductor Corp., a Delaware corporation (“Achronix”), and Merger Sub (As defined in Note 1). On May 24, 2021, in our Form 10-Q for the quarter ended March 31, 2021, we disclosed that the SEC informed us that it was investigating certain disclosures made in the Form S-4 relating to our proposed business combination with Achronix. On July 11, 2021, we and Achronix entered into a termination and release agreement, pursuant to which the parties agreed to mutually terminate the merger agreement relating to the proposed business combination. On October 27, 2021, we received a letter from the SEC in connection with its investigation with the following response: “We have concluded the investigation as to ACE Convergence Acquisition Corp. (“ACE”). Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against ACE.” The SEC provided this notice pursuant to the guidelines set out in the final paragraph of Securities Act Release No. 5310 (the text of this release can be found at: http://www.sec.gov/divisions/enforce/wells-release.pdf). Business Combination Agreement On October 13, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Tempo Automation, Inc., a Delaware corporation (“Tempo”), and Merger Sub. Pursuant to the transactions contemplated by the terms of the Merger Agreement (the “Tempo Business Combination”), and subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Tempo, with Tempo surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Prior to the closing of the Tempo Business Combination (the “Closing”), the Company shall domesticate as a Delaware corporation (the “Domestication” and, ACE, after the Domestication, “Domesticated ACE”) and shall immediately be renamed “Tempo Automation Holdings, Inc.” On August 13, 2021, Tempo Automation, Inc., a Delaware corporation (“Tempo”) entered into a Stock Purchase Agreement (the “Whizz Agreement”) with Whizz Systems, Inc., a Delaware corporation (“Whizz”), and on October 13, 2021, Tempo entered into an Agreement and Plan of Merger (the “Compass AC Agreement”) with Compass AC Holdings, Inc., a Delaware corporation (“Compass AC”), pursuant to which, and on the terms and subject to the conditions of which, Tempo will acquire all of the outstanding shares of capital stock of each Whizz and Compass AC (the “Tempo Add-On Acquisitions”) immediately following the closing of the Business Combination (as defined below). After the Effective Time, ACE will pay or issue to eligible Whizz equity holders and Compass AC equity holders their respective pro rata portion of the Whizz Consideration (as defined in the Merger Agreement) or the Compass AC Consideration (as defined in the Merger Agreement), including, for the avoidance of doubt, any applicable earnout consideration, upon the terms and subject to the conditions set forth in the Whizz Agreement or the Compass AC Agreement, as applicable. The Closing is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of ACE and Tempo, (ii) effectiveness of the registration statement on Form S-4 (which will include a proxy statement for holders of ACE’s ordinary shares) initially filed by ACE with the SEC on November 12, 2021 in connection with the Business Combination (the “ Registration Statement Nasdaq ACE’s obligation to consummate the Business Combination is also subject to, among other things, (i) the accuracy of the representations and warranties of Tempo as of the date of the Merger Agreement and as of the Closing, (ii) each of the covenants of Tempo having been performed in all material respects and (iii) all conditions of the closing of each of the Tempo Add-On Acquisitions being satisfied or waived and each of the Tempo Add-On Acquisitions being prepared to be consummated immediately after the Closing. Tempo’s obligation to consummate the Merger is also subject to, among other things, (i) the accuracy of the representations and warranties of ACE as of the date of the Merger Agreement and as of the Closing, (ii) ACE having performed each of the covenants in all material respects, (iii) the Domestication having been completed and (iv) the sum of (w) the amount of cash available in the trust account into which substantially all of the proceeds of ACE’s initial public offering and private placements of its warrants have been deposited for the benefit of ACE, certain of its public shareholders and the underwriters of ACE’s initial public offering (the “ Trust Account The Merger Agreement may be terminated at any time prior to the Closing (i) by mutual written consent of ACE and Tempo, (ii) by Tempo, if certain approvals of the shareholders of ACE, to the extent required under the Merger Agreement, are not obtained as set forth therein or if there is a Modification in Recommendation (as defined in the Merger Agreement), (iii) by ACE, if certain approvals of the stockholders of Tempo, to the extent required under the Merger Agreement, are not obtained within five business days after the Registration Statement has been declared effective by the SEC Agreement End Date On or prior to the execution of the Merger Agreement, ACE entered into subscription agreements with certain investors (collectively, the “ PIPE Investors PIPE Common Stock Subscription Agreements Sponsor PIPE Convertible Note Subscription Agreement PIPE Subscription Agreements PIPE Investment Concurrently with the execution of the Merger Agreement, an affiliate of the Sponsor (such affiliate, the “ Backstop Investor Backstop Subscription Agreement On October 13, 2021, ACE entered into a Support Agreement (the “ Sponsor Support Agreement On October 13, 2021, ACE entered into a Support Agreement (the “ Tempo Holders Support Agreement Tempo Stockholders The Merger Agreement contemplates that, at the Closing, ACE will enter into lock-up agreements with (i) the Sponsor and (ii) and certain former stockholders of Tempo and Compass AC, in each case, restricting the transfer of Domesticated ACE Common Stock from and after the Closing. The restrictions under the lock-up agreements begin at the Closing and end on, among other things, in the case of the Sponsor and certain former stockholders of Tempo, the date that is 365 days after the Closing, and in the case of certain former stockholders of Compass AC, the date that is 180 days after the Closing, or (in each case) upon the stock price of Domesticated ACE reaching $12.00 (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing Date. For more information about the Merger Agreement and the proposed Tempo Business Combination, see our Current Report on Form 8-K filed with the SEC on October 14, 2021, and in our preliminary prospectus/proxy statement included in the Registration Statement. Unless specifically stated, this Annual Report on Form 10-K does not give effect to the proposed Tempo Business Combination and does not contain the risks associated with the proposed Tempo Business Combination. Such risks and effects relating to the proposed Tempo Business Combination is included in the Registration Statement. Subscription Agreement On January 18, 2022, ACE entered into a Subscription Agreement (the “Subscription Agreement”) with Tempo, OCM Tempo Holdings, LLC (“OCM”) and Tor Asia Credit Opportunity Master Fund II LP (“Tor”). Pursuant to the Subscription Agreement, OCM, an affiliate of Oaktree Capital Management, L.P. (collectively with its affiliates or affiliated investment funds and/or managed or controlled accounts, “Oaktree”), has committed to purchase $175 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the closing (the “Closing”) of the previously announced business combination between ACE and Tempo, which Closing is subject to the satisfaction or waiver of the conditions stated in the Merger Agreement dated as of October 13, 2021, by and among ACE, Tempo Automation and ACE Convergence Subsidiary Corp., and other customary closing conditions. The Subscription Agreement also provides for the purchase of $25 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the Closing by Tor, an investment partner of ACE, which investment replaces the previously announced investment in ACE’s 12% convertible senior notes due 2025 by an affiliate of ACE’s sponsor, ACE Convergence Acquisition LLC, as disclosed in the Form 8-K, filed January 20, 2022. |
TEMPO AUTOMATION INC | ||
Commitments and Contingencies | (12) Commitments and Contingencies Operating Leases The table below presents the operating lease-related assets and liabilities recorded on the condensed balance sheets (in thousands): Classifications on the condensed financial statements As of September 30, 2022 Operating lease assets Operating leases – right-of-use asset $ 565 Operating lease liability, current Operating lease liability, current 801 Operating lease liability, noncurrent Operating lease liability, noncurrent 38 Classifications on the condensed financial statements As of December 31, 2021 Operating lease assets Operating leases– right-of-use asset $ 1,323 Operating lease liability, current Operating lease liability, current 1,111 Operating lease liability, noncurrent Operating lease liability, noncurrent 546 The estimated incremental borrowing rate used to measure the lease liability is 8.95%. Prospectively, future rent expense under ASC 842 is calculated using the same methodology as required under ASC 840 in order to record straight line lease expense over the lease term. Rent expense recorded was $0.7 million for the nine months ended September 30, 2022 and 2021. Variable lease expenses for the nine months ended September 30, 2022 and 2021 were immaterial. On August 8, 2022, the Company abandoned a section of their operating lease for the remainder of the lease term and has no intention of subleasing the space. The Company reassessed their asset grouping as the deployment of the ROU asset had changed and determined the abandoned lease was a new asset group. The Company concluded the abandoned section of their ROU asset was not recoverable and recognized an impairment charge of $0.1 million to the right of use asset, and a $0.2 million impairment charge to the leasehold improvements. These impairment charges were recorded within impairment loss in the condensed statements of operations. Future minimum lease payments under non-cancelable operating leases as of September 30, 2022 are as follows (in thousands): As of September 30, 2022 2022 (remaining) $ 307 2023 531 2024 29 Total future lease payments 867 Less imputed interest (28) Total operating lease liability $ 839 Finance Leases The table below presents the finance lease-related assets and liabilities recorded on the condensed balance sheets and the condensed statement of operations (in thousands): Classification on the condensed financial statements As of September 30, 2022 Finance lease assets Property and equipment, net $ 3,519 Finance lease liability, current Finance lease, current 1,897 Finance lease liability, noncurrent Finance lease, noncurrent — Nine Months Ended September 30, 2022 Depreciation of the leased asset Cost of revenue $ 1,935 Lease interest expense Other income (expense), net 329 Classification on the condensed financial statements As of December 31, 2021 Finance lease assets Property and equipment, net $ 3,943 Finance lease liability, current Finance lease, current 1,091 Finance lease liability, noncurrent Finance lease, noncurrent 1,606 Nine Months Ended September 30, 2021 Depreciation of the leased asset Cost of revenue $ 409 Lease interest expense Other income (expense), net 464 Future minimum lease payments under finance lease are as follows (in thousands): As of September 30, 2022 2022 (remaining) $ 376 2023 1,731 Total future lease payments 2,107 Less: imputed interest (210) Total finance lease liability $ 1,897 The weighted average remaining lease term for our operating leases and finance leases Nine Months Ended September 30, 2022 2021 Operating cash flows paid for operating leases $ 908 $ 885 Financing cash flows paid for finance leases 1,128 1,128 | (15) Commitments and Contingencies The Company early adopted ASC 842 as of January 1, 2020 using the modified retrospective method (see Note 2). This ASC requires a lessee to evaluate its leases to determine whether they should be classified as operating or financing leases. The Company identified two operating leases and one finance lease. Operating Leases The Company leases office space in San Francisco, California under operating leases with lease term of sixty-five months beginning from January 2018. Additionally, the Company has an equipment lease agreement for forty-eight months beginning from June 2020. The table below presents the operating lease-related assets and liabilities recorded on the balance sheets (in thousands): Classifications on the financial statements December 31, 2021 Operating lease assets Operating leases – right-of-use asset $ 1,323 Operating lease liability, current Operating lease liability, current 1,111 Operating lease liability, noncurrent Operating lease liability, noncurrent 546 Classifications on the financial statements December 31, 2020 Operating lease assets Operating leases – right-of-use asset $ 2,109 Operating lease liability, current Operating lease liability, current 987 Operating lease liability, noncurrent Operating lease liability, noncurrent 1,657 The estimated incremental borrowing rate used to measure the lease liability is 8.95%. Prospectively, future rent expense under ASC 842 is calculated using the same methodology as required under ASC 840 in order to straight line lease expense over the lease term. Rent expense recorded was $1.0 million for the years ended December 31, 2021 and 2020. Variable lease expenses for the years ended December 31, 2021 and 2020 were $38 thousand and $0.3 million, respectively. Future minimum lease payments under non-cancelable operating leases as of December 31, 2021 are as follows (in thousands): As on December 31, 2021 2022 $ 1,215 2023 531 2024 29 Total future lease payments 1,775 Less imputed interest (118) Total operating lease liability $ 1,657 Finance Leases On June 23, 2020, the Company sold certain capital assets for cash proceeds of $4.0 million. Immediately before the transaction, the assets had a carrying amount of approximately $4.8 million and had a remaining useful life of approximately 6 to 10 years. At the same time, the Company entered into a contract with the vendor for the right to use the assets for 3 years with monthly payments and a 12 to 24 months’ renewal option at the end of the term. The contract also includes an option to repurchase the assets at the end of year three at the then-current fair market value, limited to 25% of the fair market value of the assets at inception date (or approximately $1.0 million). The Company plans to exercise the purchase option at the end of the 3-year lease. The repurchase option and the classification of the lease as a finance lease precludes accounting for the transfer of the assets as a sale. As such, this transaction is classified as a financing arrangement. The table below presents the finance lease-related assets and liabilities recorded on the balance sheet (in thousands): Classification on the financial statements December 31, 2021 Finance lease assets Property and equipment, net $ 3,943 Finance lease liability, current Finance lease, current 1,091 Finance lease liability, noncurrent Finance lease, noncurrent 1,606 Depreciation of the leased asset Cost of revenue 547 Lease interest expense Other income (expense), net 598 Classification on the financial statements December 31, 2020 Finance lease assets Property and equipment, net $ 4,490 Finance lease liability, current Finance lease, current 906 Finance lease liability, noncurrent Finance lease, noncurrent 2,697 Depreciation of the leased asset Cost of revenue 273 Lease interest expense Other income (expense), net 376 Future minimum lease payments under finance lease are as follows (in thousands): As of December 31, 2021 2022 $ 1,504 2023 1,731 Total future lease payments 3,235 Less: imputed interest (538) Total finance lease liability $ 2,697 The weighted average remaining lease term for our operating leases and finance leases is 1.5 years and the weighted average discount rate of our operating leases and finance leases is 8.95% and 18.71%, respectively. Supplemental disclosures of cash flow information related to leases were as follows (in thousands): Years Ended December 31, 2021 2020 Operating cash flows paid for operating leases $ 1,184 $ 689 Financing cash flows paid for finance leases 1,504 773 Non-cash activity: Lease liabilities arising from obtaining right-of-use assets — 107 |
Income Taxes_2
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Income Taxes | ||
Income Taxes | (13) Income Taxes The Company did not record a provision or benefit for income taxes during the nine months ended September 30, 2022 and 2021. The Company continues to maintain a full valuation allowance for its net U.S. federal and state deferred tax assets. On March 27, 2020, the U.S. federal government enacted the CARES Act, which changed several of the existing U.S. corporate income tax laws by, among other things, increasing the amount of deductible interest, allowing companies to carry back certain Net Operating Losses (“NOLs”), and increasing the amount of NOLs that corporations can use to offset income. The CARES Act did not have a material impact on the Company’s income tax provision, deferred tax assets and liabilities, and related taxes payable. The Company is currently assessing the future implications of these provisions within the CARES Act on the Company’s condensed financial statements but does not expect the impact to be material. | (16) Income Taxes The components of the Company’s provision for income taxes for the years ended December 31, 2021 and 2020 is as follows (in thousands): Years Ended December 31, 2021 2020 Current: Federal $ — $ — State — 1 Total current tax expense $ — $ 1 The following reconciles income tax expense computed at the federal statutory rate with income tax expense as reported: Years Ended December 31, 2021 2020 Statutory rate 21.0 % 21.0 % Federal net operating loss — 5.3 % Leases — 4.2 % Depreciation — (3.4) % State income tax 9.6 % (1.1) % Permanent differences (6.8) % (1.1) % Other — 0.3 % Valuation allowance (23.8) % (25.1) % Effective income tax rate 0.0 % 0.1 % The significant components of the Company’s deferred tax asset (liability) as of December 31, 2021 and 2020 are as follows: Years Ended December 31, 2021 2020 Deferred tax assets Net operating losses $ 26,070 $ 14,703 Accruals and other 982 309 Total deferred tax assets 27,052 15,012 Less valuation allowance (25,648) (14,223) Net deferred tax assets 1,404 789 Deferred tax liabilities Property, plant, equipment, and intangibles (1,404) (789) Total deferred tax liabilities (1,404) (789) Net deferred tax assets (liabilities) $ — $ — As of December 31, 2021 and 2020, the Company had $91.7 million and $59.5 million of gross federal net operating losses, respectively, of which $10.2 million were generated prior to 2018 and will begin expiring in 2033. The remaining $81.5 million can be carried forward indefinitely. As of December 31, 2021 and 2020, the Company also had $81.7 million and $46.3 million, respectively, of gross state net operating losses, which begin to expire in 2033. Utilization of the domestic net operating loss and tax credit carry forwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382, as well as similar state provisions. In general, an "ownership change," as defined by the code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all, or a portion of the net operating loss or tax credit carry forwards before utilization. The Company has established a valuation allowance for U.S. federal and state deferred tax assets. The valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. The Company intends to maintain a full valuation allowance until sufficient positive evidence exists to support reversal. The valuation allowance for deferred tax assets was $25.6 million and $14.2 million as of December 31, 2021 and 2020, respectively. The change in valuation allowance of $11.4 million and $4.8 million in 2021 and 2020, respectively, is primarily related to the Company’s activities that give rise to a net operating loss carryover. The Company’s income tax returns are routinely subject to examination by U.S. federal, state, and local tax authorities. None of the Company’s income tax returns are under examination as of December 31, 2021. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted and signed into law. The CARES Act, among other things, permits net operating loss (NOL) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021, if not otherwise limited under IRC Section 382. After evaluating the impact of the CARES Act, the Company does not expect that NOL provisions of the CARES act to result in a material benefit to the Company, since the Company has no historical tax years with taxable income. The American Rescue Plan Act of 2021 was passed March 11, 2021, which contained tax provisions, such as an extension to the Employee Retention Credit. The Company evaluated the impact of the Act and there were no material benefits from its passage. The unrecognized tax benefit is related to the Company’s reserves on Federal and California research and development tax credits. For the years ended December 31, 2021 and 2020, the activity related to the unrecognized tax benefits is as follows (in thousands): Years Ended December 31, 2021 2020 Unrecognized tax benefits, beginning of period $ 411 $ 411 Additions based on tax positions related to current year — — Reductions based on tax positions related to prior years — — Unrecognized tax benefits, end of period $ 411 $ 411 The Company is currently unaware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation in the next 12 months. |
Net Loss Per Share_2
Net Loss Per Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Net Loss Per Share [Line item] | ||
Net Loss Per Share | (14) Net Loss Per Share The Company uses the two-class method to calculate basic net loss per share and apply the more dilutive of the two-class method, treasury stock method or if-converted method to calculate diluted net loss per share. No dividends were declared or paid for the nine months ended September 30, 2022 and 2021. Undistributed earnings for each period are allocated to participating securities, including the preferred stock for applicable periods, based on the contractual participation rights of the security to share in the current earnings as if all current period earnings had been distributed. As there are no contractual obligations for the preferred stockholders to share in losses, the Company’s basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average shares of common stock outstanding during periods with undistributed losses. The table below sets forth the computation of basic and diluted net loss per share (in thousands, except share data and per share amounts): Nine Months Ended September 30, 2022 2021 Basic and diluted: Net loss $ (96,518) $ (24,388) Weighted-average number of shares of common stock outstanding 10,072,318 9,815,806 Basic and diluted net loss per share $ (9.58) $ (2.48) Basic and diluted net loss per share attributable to common stockholders is the same for the nine months ended September 30, 2022 and 2021 because the inclusion of potential shares of common stock would have been anti-dilutive for the periods presented. The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been antidilutive: As of September 30, 2022 2021 Shares of common stock issuable upon conversion of redeemable convertible preferred stock 29,520,187 29,520,187 Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants 18,680,225 231,391 Shares of common stock issuable from stock options 23,896,897 16,113,756 Shares of common stock issuable from common stock warrants 3,187,913 824,913 Potential common shares excluded from diluted net loss per share 75,285,222 46,690,247 | (17) Net Loss Per Share The Company uses the two-class method to calculate basic net loss per share and apply the more dilutive of the two-class method, treasury stock method or if-converted method to calculate diluted net loss per share. No dividends were declared or paid for the years ended December 31, 2021 and 2020. Undistributed earnings for each period are allocated to participating securities, including the preferred stock for applicable periods, based on the contractual participation rights of the security to share in the current earnings as if all current period earnings had been distributed. As there are no contractual obligations for the preferred stockholders to share in losses, the Company’s basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average shares of common stock outstanding during periods with undistributed losses. The table below sets forth the computation of basic and diluted net loss per share (in thousands, except share data and per share amounts): Years ended December 31, 2021 2020 Basic and diluted: Net loss $ (48,013) $ (19,104) Weighted-average number of shares of common stock outstanding 9,819,576 9,755,174 Basic and diluted net loss per share $ (4.89) $ (1.96) Basic and diluted net loss per share attributable to common stockholders is the same for the years ended December 31, 2021 and 2020 because the inclusion of potential shares of common stock would have been anti-dilutive for the periods presented. The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been antidilutive: As of December 31, 2021 2020 Shares of common stock issuable upon conversion of redeemable convertible preferred stock 29,520,187 29,520,187 Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants 231,391 123,391 Shares of common stock issuable from stock options 16,508,725 10,364,039 Shares of common stock issuable from common stock warrants 3,187,913 182,500 Potential common shares excluded from diluted net loss per share 49,448,216 40,190,117 |
Subsequent Events_2_3_4
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Subsequent Events | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements other than as described below. On November 1, 2022, the proxy statement/prospectus was declared effective and on November 2, 2022, the Company commenced with mailing the proxy materials to the Company’s shareholders ahead of the extraordinary general meeting of the Company’s shareholders expected to be held on November 17, 2022. | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, except as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 13, 2022, in connection with extension of the business combination period, the Sponsor agreed to contribute to the Company as a loan $0.03 for each Class A ordinary share of the Company that is not redeemed in connection with the shareholder vote to approve the Extension, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve the business combination between the Company and Tempo Automation, Inc. and (ii) $1.5 million has been loaned. The Contribution(s) will not bear any interest, and will be repayable by the Company to the Sponsor upon the earlier of the date by which the Company must complete an initial business combination and the consummation of the business combination between the Company and Tempo Automation, Inc. On January 21, 2022, in connection with the extension of time to complete a business combination, shareholders of Class A Ordinary shares elected to redeem an aggregate of 14,797,723 Class A Ordinary Shares. As a result, approximately $148,079,821 was paid out of the Trust in connection with the redemptions. On January 25, 2022 the Company voted to amend the Investment Management Trust Agreement entered into by the Company and the Trustee on July 27, 2020 (the “Trust Agreement”), to extend the business combination period from January 30, 2022, to July 13, 2022. |
TEMPO AUTOMATION INC | ||
Subsequent Events | (15) Subsequent Events The Company has evaluated subsequent events for recognition and remeasurement purposes from September 30, 2022 through December 6, 2022, which is the date the condensed financial statements were available to be issued. The Company has determined that there are no subsequent events requiring adjustment to or disclosure in the condensed financial statements, other than: Business Combination The Business Combination closed on November 22, 2022 the (“Closing”). In connection with the closing of the Business Combination, the Company was renamed Tempo Automation Holdings, Inc. PIPE Investment On November 22, 2022, immediately following the Closing, Tempo issued (i) 1,230,000 shares of Common Stock to certain investors (the “Initial Subscribers”) (including 350,000 Initial Committed PIPE Shares and 880,000 PIPE Incentive Shares) and (ii) 1,820,000 shares of Common Stock to the LSA Subscribers (including 700,000 Committed PIPE Shares and 1,120,000 PIPE Incentive Shares) in accordance with the terms of the Subscription Agreements (collectively, the “PIPE Investment”). The shares of Common Stock issued in the Subscription Agreements were offered in a private placement under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Subscription Agreements. Earnout Following the closing, the eligible Tempo equityholders will have the right to receive up to 7,000,000 Tempo earnout shares in two tranches upon the occurrence of the earnout triggering events during the earnout period. A one-time aggregate issuance of 3.5 million Tempo shares will be made upon achieving $5.0 million in Adjusted EBITDA in a single quarter during the five-year period. A one-time aggregate issuance of the remaining 3.5 million New Tempo shares will be made upon achieving $15.0 million in sales in a single quarter during the five-year period. Amendment and Restatement of the LSA On November 22, 2022, in connection with the closing of the Business Combination, the Company entered into certain First Amended and Restated LSA, dated as of November 22, 2022, by and among, the Company, as borrower, Structural Capital Investments III, LP (“SCI”), Series Structural DCO II series of Structural Capital DCO, LLC (“DCO”), CEOF Holdings LP (“CEOF”), SQN Tempo Automation, LLC (“SQNTA”), SQN Venture Income Fund II, LP (“SQNVIFII” and, together with SCI, DCO, CEOF and SQNTA, the “Lenders” and each a “Lender”), and Ocean II PLO LLC, as administrative and collateral agent for the Lenders (the “Agent”), pursuant to which the Lenders committed to lend Legacy Tempo up to $20.0 million in term loan financing. The LSA amended and restated in its entirety the LSA dated as of October 13, 2021. The amended LSA facility matures on December 1, 2025. White Lion Stock Purchase Agreement On November 21, 2022, ACE and AEPI extinguished $4.4 million of August 2022 Bridge Notes. Subsequently, the Company issued $2.0 million of August 2022 Bridge Notes to White Lion Capital, LLC (“White Lion”) and $2.4 million to other investors. On November 21, 2022, ACE entered into a Common Stock Purchase Agreement and a related registration rights agreement with White Lion. Pursuant to the Common Stock Purchase Agreement, ACE has the right, but not the obligation to require White Lion to purchase, from time to time, up to the lesser of (i) $100.0 million in aggregate gross purchase price of newly issued shares of Common Stock and (ii) the exchange cap, in each case, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement. | (18) Subsequent Events The Company has evaluated subsequent events from December 31, 2021 through March 16, 2022, which is the date the financial statements were available for issuance and has determined that there are no subsequent events requiring adjustment to or disclosure in the financial statements, other than as follows: Loan and Security Agreement On January 11, 2022, the Company entered into the first amendment to the Loan and Security Agreement to convert $10.0 million of availability under the tranche 2 loan to the tranche 1 loan. This amendment expanded the tranche 1 from $20.0 million to $30.0 million and reduced the tranche 2 loan from $20.0 million to $10.0 million. For the original $20.0 million borrowed under tranche 1, the maturity date is December 23, 2022 and the $10.0 million borrowed under the expanded portion of tranche 1 provides for a maturity date of February 12, 2023. On January 20, 2022, in conjunction with the loan and security agreement, the Company entered into warrant agreements with the various lenders involved under the loan and security agreement to issue certain number of warrants based on the percentage of each tranche borrowing exercisable for the Company’s Series C preferred stock at the lowest of (i) $2.82 per share, (ii) the lowest price per share the Company receives for a share of the Series C preferred stock, and (iii) the lowest price the Company receives for a share of future round of preferred stock. Convertible Senior Notes On January 18, 2022, ACE entered into a Subscription Agreement (the “Subscription Agreement”) with the Company, OCM Tempo Holdings, LLC (“OCM”) and Tor Asia Credit Opportunity Master Fund II LP (“Tor”). Pursuant to the Subscription Agreement, OCM, an affiliate of Oaktree Capital Management, L.P., has committed to purchase $175.0 million in aggregate principal amount of ACE’s 15.5% convertible senior notes due 2025 concurrently with the closing (the “Closing”) of the previously announced business combination between ACE and the Company, which is subject to the satisfaction or waiver of the conditions stated in the agreement and Merger Agreement, dated as of October 13, 2021, by and among ACE, the Company and the Merger Sub., and other customary closing conditions. The Subscription Agreement also provides for the purchase of $25.0 million in aggregate principal amount of ACE’s 15.5% convertible senior notes due 2025 concurrently with the Closing by Tor, an investment partner of ACE. With the signing of the Subscription Agreement, the previously announced agreement allowing for investment in ACE’s 12% convertible senior notes due 2025 by an affiliate of ACE’s sponsor, ACE Convergence Acquisition LLC was terminated. Convertible Promissory Notes On January 18, 2022, the Company issued convertible promissory notes to existing investors for gross proceeds of $5.0 million (the “2022 Promissory Notes”). The 2022 Promissory Notes bear simple interest on the unpaid principal at a rate of 10% per year and are due and payable by the Company on demand any time after November 15, 2022. The outstanding amount will convert into securities of ACE upon the earlier to occur of the closing of the transactions and the closing of the first qualified financing following any termination of the business combination agreement as applicable. Convertible Junior Notes In March 2022, the Company and ACE entered into a Securities Purchase Agreement with ACE SO3, pursuant to which ACE SO3 agreed to purchase an unsecured subordinated convertible note in an aggregate principal amount of $20.0 million (the “ACE Convertible Note”) from Tempo in connection with the closing of the business combination. The ACE Convertible Note will bear interest at a rate of 18% per annum, payable in kind by increasing the outstanding principal amount of the ACE Convertible Note. Upon the earlier to occur of the conversion or payment in full of the principal amount hereof and all accrued but unpaid interest hereunder and the maturity date, Tempo will pay to the holder of the ACE Convertible an amount equal 5% of the initial principal amount thereof. Cantor Share Purchase Agreement In March 2022, the Company and ACE entered into the Cantor Purchase Agreement with CF Principal relating to a committed equity facility (the “Facility”). Pursuant to the Cantor Purchase Agreement, Tempo will have the right from time to time at its option following closing of the merger to sell to CF Principal up to $100.0 million of Tempo common stock subject to certain customary conditions and limitations set forth in the Cantor Purchase Agreement. While there are distinct differences, the Facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows Tempo to raise primary equity capital on a periodic basis outside the context of a traditional underwritten follow-on offering following the closing of the merger. |
Summary of Significant Accou_25
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 10, 2022. The interim results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future periods. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature except derivative liabilities (see Note 9). | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature except warrant liabilities (see Note 9). |
Net Loss Per Share of Common Stock | Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. For the three and nine months ended September 30, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 | Net Income (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared prorata between the two classes of shares. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 18,100,000 Class A ordinary shares in the aggregate. As of December 31, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) |
Accounting Pronouncements Not Yet Adopted | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements. | Recent Accounting Standards In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
TEMPO AUTOMATION INC | ||
Basis of Presentation | Basis of Presentation The unaudited interim condensed financial statements and accompanying unaudited notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). | Basis of Presentation The financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). |
Liquidity and Going Concern | Liquidity and Going Concern The Company has experienced negative cash flows from operations since inception and expects negative cash flows from operations to continue for the foreseeable future. The Company had an accumulated deficit of $204.8 million and cash, cash equivalents and restricted cash of $0.9 million as of September 30, 2022. During the nine months ended September 30, 2022, the Company used net cash of $20.2 million in operating activities and incurred a net loss of $96.5 In October 2021, Tempo entered into a loan and security agreement (the “LSA”) with a maximum borrowing capacity of $150.0 million consisting of four tranches. This agreement replaced Tempo’s existing SQN Venture Income Fund II, LP $20.0 million facility (the “June 2021 Credit Facility”), and $20.0 million was drawn on tranche 1 of the LSA. Borrowing capacity for tranche 2 is $20.0 million which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. Borrowing capacity for tranche 3 and tranche 4 is $40.0 million, and $70.0 million, respectively which shall be available to draw by the Company, upon the de-SPAC with ACE, subject to lender approval. The tranches have an earliest expiration date of December 23, 2022 (see Note 7). In January 2022, the Company entered into the first amendment to the LSA to convert $10.0 million of availability under tranche 2 of the loan to tranche 1 of the loan. This amendment expanded tranche 1 from $20.0 million to $30.0 million and reduced tranche 2 from $20.0 million to $10.0 million. The first amendment did not change the interest rates or maturity dates for tranche 1 (see Note 7). In January 2022, the Company issued convertible promissory notes (the “2022 Promissory Notes”) to existing investors for gross proceeds of $5.0 million. These shall be due and payable by the Company on demand at any time after November 15, 2022 (see Note 8). In May 2022, the Company entered into a bridge note (the “Bridge Note”) with ACE and ACE Equity Partners International Pte. Ltd. (“AEPI”), which was replaced in its entirety on substantially the same terms on July 1, 2022, pursuant to which AEPI agreed to loan to Tempo up to an aggregate principal amount of $5.0 million, $4.6 million of which was advanced to Tempo as of September 30, 2022. The Bridge Note is due on September 30, 2022 (see Note 8). In August, 2022, Tempo entered into a note purchase agreement with certain existing related party investors and with the lenders under the Loan and Security Agreement (collectively, the “Initial Bridge Investors”), pursuant to which Tempo agreed to issue up to $5.0 million in aggregate principal amount of convertible promissory notes (the “August 2022 Bridge Notes”) to the Initial Bridge Investors for aggregate cash proceeds of approximately $1.4 million and the cancellation of approximately $3.6 million of outstanding amounts owed under the LSA. Additionally, Tempo may, from time to time prior to October 9, 2022, issue up to $0.7 million in aggregate principal amount of additional August 2022 Bridge Notes to one or more additional investors (see Note 7). In May and August 2022, the Company announced reductions in workforce. In order to fund planned operations while meeting obligations as they come due, the Company will need to secure additional debt or equity financing. These plans for additional financings are intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of Management’s control, the Company cannot ensure they will be effectively implemented. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Failure to secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact additional operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives. The accompanying condensed financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course. | Liquidity and Going Concern The Company has experienced negative cash flows from operations since inception and expects negative cash flows from operations to continue for the foreseeable future. The Company had an accumulated deficit of $108.3 million and cash, cash equivalents and restricted cash of $3.2 million as of December 31, 2021. During the year ended December 31, 2021, the Company used net cash of $30.2 million in operating activities and incurred a net loss of $48.0 million. Additionally, as of the date these financial statements were available for issuance the Company has $37.0 million of loans payable and finance lease obligations coming due within the next 12 months. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In October 2021, Tempo entered into a loan and security agreement (the “Loan and Security Agreement”) with a maximum borrowing capacity of $150.0 million consisting of four tranches. This agreement replaced Tempo’s existing SQN Venture Income Fund II, LP (the “June 2021 Credit Facility”) $20.0 million facility and $20.0 million was drawn on tranche 1 of the Loan and Security Agreement. Borrowing capacity for tranche 2, tranche 3 and tranche 4 is $20.0 million, $40.0 million, and $70.0 million, respectively which shall be available to draw by the Company upon sooner of the de-SPAC with ACE or closing of the acquisition with Whizz. The tranches have an earliest expiration date of December 23, 2022 (see Note 10). In January 2022, the Company entered into first amendment to loan and security agreement to convert $10.0 million of availability under the tranche 2 loan to the tranche 1 loan. This amendment expanded the tranche 1 from $20.0 million to $30.0 million and reduced the tranche 2 loan from $20.0 million to $10.0 million. The first amendment did not change the interest rates or maturity dates for tranche 1 (see Note 18). In January 2022, the Company and ACE Convergence Acquisition secured principal amount of $200.0 million from the issuance of 15.5% Convertible Senior Notes due in 2025. The principal amount of notes consists of a $175.0 million investment from funds managed by Oaktree Capital Management and $25.0 million from an investment partner of ACE. The issuance of the notes is contingent on and is expected to fund the proposed business combination of the Company and ACE (see Note 18). In January 2022, the Company issued a convertible promissory notes to existing investors for gross proceeds of $5.0 million. These shall be due and payable by the Company on demand by at any time after November 15, 2022 (see Note 18). In order to fund planned operations while meeting obligations as they come due, the Company will need to secure additional debt or equity financing. These plans for additional financings are intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern, however as the plans are outside of Management’s control, the Company cannot ensure they will be effectively implemented. As a result, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Failure to secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives. The accompanying financial statements have been prepared in conformity with U.S. GAAP, assuming the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course. |
Unaudited Interim Condensed Financial Statements | Unaudited Interim Condensed Financial Statements The accompanying interim condensed balance sheet as of September 30, 2022, the interim condensed statements of operations, condensed statements of convertible preferred stock and stockholders’ equity, and condensed statements of cash flows for the nine months ended September 30, 2022 and 2021, and amounts relating to the interim periods included in the accompanying notes to the interim condensed financial statements are unaudited. The unaudited interim condensed financial statements have been prepared in accordance with U.S. GAAP and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s condensed balance sheet as of September 30, 2022, and the condensed statements of operations, condensed statements of convertible preferred stock and stockholders’ equity, and condensed statements of cash flows for the nine months ended September 30, 2022 and 2021. The results for the nine months ended September 30, 2022, are not necessarily indicative of the results expected for the fiscal year or any other periods. These interim condensed financial statements should be read in conjunction with the Company’s financial statements and related notes for the fiscal year ended December 31, 2021. The unaudited balance sheet as of December 31, 2021 has been derived from the Company’s audited financial statements. | |
Use of Estimates | Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the condensed financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and contract liabilities; allowance for doubtful accounts; determination of fair value of our common stock; determination of fair value of debt; determination of fair value of warrants; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; accrued liabilities; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the financial statements. | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts; determination of fair value of our common stock; determination of fair value of our warrants; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; accrued liabilities; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the financial statements. |
Risks and Uncertainties and COVID 19 Impact | Risks and Uncertainties The Company is subject to a number of risks. The Company conducts business in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on its future financial position, results of operations, or cash flows: advances and trends in new technologies and industry standards; pressures resulting from new applications offered by competitors; delays in applications and functionality development; changes in certain strategic relationships or customer relationships; the Company’s ability to attract new customers or retain existing customers; the length of the Company’s sales cycles and expense related to sales efforts; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; changes in domestic and international economic or political conditions or regulations; the ability of the Company to finance its operations; and the Company’s ability to attract and retain employees necessary to support its growth. Additionally, the COVID-19 pandemic has negatively impacted the global economy, disrupted supply chains, constrained work force participation, and created significant volatility and disruption of financial markets. Further, the Company faces risks with respect to inflationary environment in the country and the related fluctuations in interest as well as currency exchange rates. As the scope and duration of the COVID-19 pandemic is unknown and the extent of its economic impact continues to evolve globally, there is uncertainty related to the ultimate impact it will have on the Company’s business, its employees, results of operations and financial condition. COVID-19 Impact On March 11, 2020, the World Health Organization declared that the worldwide spread and severity of a new coronavirus, referred to as COVID-19, was severe enough to be characterized as a pandemic. In response to the continued spread of COVID-19, governmental authorities around the world have imposed various restrictions designed to slow the pace of the pandemic, including restrictions on travel and other restrictions that prohibit employees from going to work causing severe disruptions in the worldwide economy. The COVID-19 pandemic has had and may continue to have an adverse impact on the Company’s employees, operations, supply chain and distribution system. In response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the Company’s business, certain employees worked remotely. In addition, in April 2020, the Company announced reductions in workforce. These decisions, as well as COVID-19 more generally, introduced new dynamics into the households of many employees. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for its services. If the Company’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, the Company may have difficulty sourcing materials necessary to fulfill production requirement. Due to the COVID-19 pandemic, Tempo has experienced some supply chain constraints, including with respect to semiconductor components, and has responded by ordering larger quantities of these components to ensure an adequate supply. COVID-19 has also impacted the Company’s customers and may create unpredictable reductions or increases in demand for Tempo’s manufacturing services. Management will continue to monitor the impact of the global situation on the Company’s financial condition, cash flows, operations, industry, workforce, and customer relationships. | Risks and Uncertainties The Company is subject to a number of risks. The Company conducts business in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse effect on its future financial position, results of operations, or cash flows: advances and trends in new technologies and industry standards; pressures resulting from new applications offered by competitors; delays in applications and functionality development; changes in certain strategic relationships or customer relationships; the Company’s ability to attract new customers or retain existing customers; the length of the Company’s sales cycles and expense related to sales efforts; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; changes in domestic and international economic or political conditions or regulations; the ability of the Company to finance its operations; and the Company’s ability to attract and retain employees necessary to support its growth. Additionally, the COVID-19 pandemic has negatively impacted the global economy, disrupted supply chains, constrained work force participation, and created significant volatility and disruption of financial markets. As the scope and duration of the COVID-19 pandemic is unknown and the extent of its economic impact continues to evolve globally, there is uncertainty related to the ultimate impact it will have on the Company’s business, its employees, results of operations and financial condition. COVID-19 Impact On March 11, 2020, the World Health Organization declared that the worldwide spread and severity of a new coronavirus, referred to as COVID-19, was severe enough to be characterized as a pandemic. In response to the continued spread of COVID-19, governmental authorities around the world have imposed various restrictions designed to slow the pace of the pandemic, including restrictions on travel and other restrictions that prohibit employees from going to work causing severe disruptions in the worldwide economy. The COVID-19 pandemic has had and may continue to have an adverse impact on our employees, operations, supply chain and distribution system. In response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on our business, we asked our employees who were able to do so to work remotely. In addition, in April 2020, we announced reductions in workforce. These decisions, as well as COVID-19 more generally, introduced new dynamics into the households of many of our employees. The full extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for its services. If the Company’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, the Company may have difficulty sourcing materials necessary to fulfill production requirement. Due to the COVID-19 pandemic, Tempo has experienced some supply chain constraints, including with respect to semiconductor components. COVID-19 has also impacted the Company’s customers and may create unpredictable reductions or increases in demand for Tempo’s manufacturing services. Management will continue to monitor the impact of the global situation on the Company’s financial condition, cash flows, operations, industry, workforce, and customer relationships. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Contract Balances The timing of revenue recognition, billings and cash collections can result in deferred revenue (contract liabilities), unbilled receivables (contract assets), and billed accounts receivable. a. Contract Liabilities A contract liability results when payments from customers are received in advance for assembly and manufacturing of the goods. The Company recognizes contract liabilities as revenues upon satisfaction of the underlying performance obligations. Deferred revenue that is expected to be recognized as revenue during the subsequent twelve-month period from the date of billing is recorded in contract liabilities and the remaining portion, if any, is recorded in contract liabilities, noncurrent on the accompanying balance sheets at the end of each reporting period. For the nine months ended September 30, 2022 and 2021, the Company recognized as revenue of $0.1 million and $0.1 million that was included in the contract liabilities balance at the beginning of the related periods, respectively. b. Contract Assets Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Unbilled receivables that are expected to be billed during the subsequent twelve-month period from the date of revenue recognition are recorded in contract assets, and the remaining portion, if any, is recorded in other noncurrent assets on the accompanying balance sheets at the end of each reporting period. As of September 30, 2022 and December 31, 2021, there were no amounts attributable to contract assets recorded within other noncurrent assets. Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. Below are the billed receivables, unbilled receivables, and deferred revenue (in thousands): September 30, December 31, 2022 2021 Accounts receivable, net $ 1,945 $ 2,918 Contract assets 990 1,219 Contract liabilities 2,086 175 | Revenue from Contracts with Customers The Company manufactures electronics for prototyping and low volume production of Printed Circuit Board (“PCB”) assemblies and provides PCB assembly services for engineers with urgent, high — complexity projects. The Company owns the whole entire process from components and fabrication sourcing to assembly. To achieve the core principles of ASC 606, the Company accounts for revenue contracts with customers through the following steps: 1) Identify the contract with a customer: A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products and services to be transferred and identifies the payment terms related to these products and services, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for products and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company enters into a purchase order with each customer and ensures the purchase order is executed by all parties. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the date when the performance obligation is satisfied and include no general rights of return. 2) Identify the performance obligations in the contract: Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the products and services either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products and services is separately identifiable from other promises in the contract. The Company’s contracts consist of a single performance obligation of completed PCB assembly. As part of the term and conditions of the customer contract, the Company generally offers a warranty for a period of one year. This type of warranty provides the customers with assurance that the related assembled product will function as intended and complies with any agreed upon specifications. Therefore, as the warranty cannot be purchased separately and only provides assurance that the product complies with agreed-upon specifications, the warranty is not considered a separate performance obligation. 3) Determine the transaction price: The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products and services to the customer. The transaction price consists of fixed consideration as noted in each purchase order. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts do not include a significant financing component. The Company elected a practical expedient available under ASC 606, which permits the Company to not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less. 4) Allocate the transaction price to performance obligations in the contract: If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Each purchase order contains only one performance obligation and hence, the contract price per the purchase order is deemed to be reflective of the standalone selling price and the entire transaction price is allocated to the single performance obligation. All manufactured products are highly customized, and therefore, priced independently. 5) Recognize revenue when or as the Company satisfies a performance obligation: For each performance obligation identified, the Company determines at contract inception whether the performance obligation is satisfied over time or at a point in time. The transfer of control for the Company’s products qualify for over time revenue recognition because the products represent assets with no alternative use and the contracts include an enforceable right to payment for work completed to date. The Company has selected a cost incurred input method of measuring progress to recognize revenue over time, based on the status of work performed. The cost input method is representative of the value provided to the customer as it represents the Company’s performance completed to date. The Company typically satisfies its performance obligations in one month or less. The Company has elected to treat shipping and handling activities as fulfillment costs and the Company elected to record revenue net of sales and other similar taxes. Contract Balances The timing of revenue recognition, billings and cash collections can result in deferred revenue (contract liabilities), unbilled receivables (contract assets), and billed accounts receivable. a. Contract Liabilities A contract liability results when payments from customers are received in advance for assembly and manufacturing of the goods. The Company recognizes contract liabilities as revenues upon satisfaction of the underlying performance obligations. Deferred revenue that is expected to be recognized as revenue during the subsequent twelve-month period from the date of billing is recorded in contract liabilities and the remaining portion, if any, is recorded in contract liabilities, noncurrent on the accompanying balance sheets at the end of each reporting period. For years ended December 31, 2021 and 2020, the Company recognized as revenue $0.1 million and $0.5 million that was included in the contract liability balance at the beginning of the related periods, respectively. b. Contract Assets Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Unbilled receivables that are expected to be billed during the subsequent twelve-month period from the date of revenue recognition are recorded in contract assets, and the remaining portion, if any, is recorded in other noncurrent assets on the accompanying balance sheets at the end of each reporting period. Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. Below are the billed receivables, unbilled receivables, and deferred revenue (in thousands): As of December 31, 2021 2020 Accounts receivable, net $ 2,918 $ 2,713 Contract assets 1,219 608 Contract liabilities 175 80 |
Segment Reporting and Geographic Information | Segment Reporting and Geographic Information For the nine months ended September 30, 2022 and 2021, the Company was managed as a single operating segment in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker as she is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions and managing the organization as a whole. All of the Company’s revenues are domestic sales and fixed assets are physically located in the United States. | Segment Reporting and Geographic Information For the years ended December 31, 2021 and 2020, the Company was managed as a single operating segment in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker as she is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions and managing the organization as a whole. All of the Company’s revenues are domestic sales and fixed assets are physically located in the United States. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities that mature within three months or less from the original date of purchase to be cash equivalents. The Company maintains the majority of its cash balances with commercial banks in interest bearing accounts. Cash and cash equivalents include cash held in checking and savings accounts and highly liquid securities with original maturity dates of three months or less from the original date of purchase. The restricted cash balance as of both September 30, 2022 and 2021 represents $0.3 million related to a letter of credit for the Company’s office space lease. September 30, September 30, 2022 2021 Cash and cash equivalents $ 533 $ 23,524 Restricted cash 320 320 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 853 $ 23,844 | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities that mature within three months or less from the original date of purchase to be cash equivalents. The Company maintains the majority of its cash balances with commercial banks in interest bearing accounts. Cash and cash equivalents include cash held in checking and savings accounts and highly liquid securities with original maturity dates of three months or less from the original date of purchase. The restricted cash balance as of December 31, 2021 and 2020 represents $0.3 million and $0.4 million related to a letter of credit for the Company’s office space lease. As of December 31, 2021 2020 Cash and cash equivalents $ 2,864 $ 17,340 Restricted cash 320 406 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 3,184 $ 17,746 |
Long-Lived Assets | Long-Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. If the sum of the expected future cash flows (undiscounted and before interest) from the use of the assets is less than the net book value of the asset an impairment could exist and the amount of the impairment loss, if any, will generally be measured as the difference between the net book value of the assets and their estimated fair values. The Company identified a potential impairment indicator for long-lived assets and performed a recoverability test. The result of the recoverability test indicated that the sum of the expected future cash flows was greater than the carrying amount of the asset group and no impairment charges were recorded related to the recoverability test. Separately, the Company abandoned an asset and recorded an impairment charge of $0.3 million during the nine months ended September 30, 2022 (see Note 12). | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1: Quoted prices for identical assets or liabilities in active markets at the measurement date. ● Level 2: Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. ● Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, term loans, convertible notes, convertible notes - related party and warrant liabilities. The Company has determined the carrying value of these assets and liabilities approximates the fair value due to their short maturities and has classified these assets and liabilities as Level 1 financial instruments. The balances outstanding under the loans payable agreements are considered to approximate their estimated fair values as the interest rates approximate market rates. The convertible notes, convertible notes - related party and warrant liabilities are carried at fair value. The Company classified the convertible debt and liability classified convertible preferred stock and common stock warrants as Level 3 financial instruments. The fair value of the convertible debt is $53.1 million as of September, 30, 2022 (see Note 7 and 8). The Company did not have convertible debt as of December 31, 2021. The fair value of liability classified convertible preferred stock and common stock warrants is $32.4 million and $5.6 million as of September 30, 2022 and December 31, 2021, respectively (see Note 10). During the nine months ended September 30, 2022 and year ended December 31, 2021, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. | Fair Value of Financial Instruments Assets and liabilities recorded at fair value on the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1: Quoted prices for identical assets or liabilities in active markets at the measurement date. ● Level 2: Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. ● Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company applies fair value accounting to all financial assets and liabilities, which include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. The Company has determined the carrying value of these assets and liabilities to be equal to the fair value due to their short maturities and has classified these assets and liabilities as Level 1 financial instruments. Certain convertible preferred stock and common stock warrants are liability classified and are classified as Level 3 financial instruments. The fair value of the convertible preferred stock and common stock warrants which are liability classified is $5.6 million as of December 31, 2021, and $0.1 million as of December 31, 2020, and is included in other noncurrent liabilities on the accompanying balance sheets (see Note 13). During the years ended December 31, 2021 and 2020, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value. |
Fair Value Option ("FVO") Election | Fair Value Option (“FVO”) Election The Company accounts for certain convertible notes outstanding under the fair value option election of ASC 825, Financial Instruments (“ASC 825”) as discussed below. The convertible notes accounted for under the FVO election are each debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815. Notwithstanding, ASC 825-10-15-4 provides for the FVO election, to the extent not otherwise prohibited by ASC 825-10-15-5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment, as required by ASC 825-10-45-5, is recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying condensed statement of operations. With respect to the above convertible notes, as provided for by ASC 825-10-50-30 (b), the estimated fair value adjustment is presented as change in fair value of debt within other income (expense) in the accompanying condensed statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk during the nine months ended September 30, 2022. | |
Deferred Transaction Costs | Deferred Transaction Costs Deferred transaction costs consist of direct incremental legal, consulting, and accounting fees relating to the merger transaction, as discussed in Note 1 — Organization, which are capitalized and will be recorded as a reduction to the issuance of equity arising from the consummation of the merger transaction. In the event the merger transaction is terminated, deferred transaction costs will be expensed. As of September 30, 2022 and December 31, 2021, the Company has deferred such costs amounting to $6.1 million and $1.9 million, respectively, which are included in other noncurrent assets in the condensed balance sheets. | Deferred Transaction Costs Deferred transaction costs consist of direct incremental legal, consulting, and accounting fees relating to the merger transaction, as discussed in Note 1 — Organization, which are capitalized and will be recorded as a reduction to the issuance of equity arising from the consummation of the merger transaction. In the event the merger transaction is terminated, deferred transaction costs will be expensed. As of December 31, 2021, the Company has deferred such costs amounting to $1.9 million, which are included in other noncurrent assets in the balance sheet, no such costs were incurred during the year ended December 31, 2020. |
Net Loss Per Share of Common Stock | Net Loss Per Share of Common Stock Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its preferred stock to be participating securities. Net loss is attributed to common stockholders and participating securities based on their participation rights. Net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of preferred stock, stock options, preferred and common stock warrants and convertible notes. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. | Net Loss Per Share of Common Stock Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its preferred stock to be participating securities. Net loss is attributed to common stockholders and participating securities based on their participation rights. Net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of preferred stock, stock options, preferred and common stock warrants and convertible notes. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. |
Related Parties | Related Parties As discussed in Note 1 — Organization, in October 2021, ACE entered into a Merger Agreement with ACE Convergence Subsidiary Corp. and a direct wholly owned Merger Sub, and Tempo. The Chief Financial Officer of Tempo is also a director of ACE and is considered an interested related party to the business combination. Additionally, the Company issued 2022 Promissory Notes to Point72 Ventures Investments, LLC (“P72) and Lux Ventures IV, L.P. (“Lux”) and entered into the Bridge Note with ACE and AEPI during the nine months ended September 30, 2022 (see Note 8). | Related Parties As discussed in Note 1 — Organization, in October, 2021, ACE entered into a Merger Agreement with ACE Convergence Subsidiary Corp. and a direct wholly owned Merger Sub, and Tempo. The chief financial officer of Tempo is also a director of ACE and is considered an interested related party to the business combination. Additionally, in October, 2021, Tempo entered into plan of merger with Compass AC Holdings, Inc. From the date of signing of the Compass AC Agreement through December 31, 2021, the Company purchased goods totaling $0.3 million, which are included in cost of revenue in the statement of operations. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or ASU 2016-13. The amendments in ASU 2016-13 introduce an approach based on expected losses to estimated credit losses on certain types of financial instruments, modify the impairment model for available-for-sale debt securities and provide for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2023, with early application permitted. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC 606. The standard is effective for fiscal years beginning after December 15, 2022. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. | Recently Adopted Accounting Pronouncements In August 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The Company early adopted the ASU on January 1, 2021. Adoption of the ASU 2020-06 did not impact the Company’s financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize leases on their balance sheets and disclose key information about leasing arrangements. The standard is effective for small reporting companies and private companies for fiscal years beginning after December 15, 2021. In July 2018, the FASB approved an amendment to the new guidance that allows companies the option of using the effective date of the new standard as the initial application (at the beginning of the period in which it is adopted, rather than at the beginning of the earliest comparative period) and to recognize the effects of applying the new ASU as a cumulative effect adjustment to the opening balance sheet or retained earnings. The Company early adopted ASU 2016-02 on January 1, 2020 using the modified retrospective approach and, upon adoption, recorded a short-term lease liability of $0.8 million and long-term lease liability of $2.5 million, and a right-to-use asset of $2.7 million, and made no adjustment to the accumulated deficit. In connection with the adoption of the lease standard, the Company also derecognized deferred rent of $0.6 million. The adoption of Topic 842 did not have an impact on the statement of operations. The Company elected the practical expedients permitted under Topic 842, which among other things, allowed the Company to carry forward the historical lease classification of those leases in place as of January 1, 2020. The Company elected to not separate lease components and non-lease components for its long-term real-estate leases. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or ASU 2016-13. The amendments in ASU 2016-13 introduce an approach based on expected losses to estimated credit losses on certain types of financial instruments, modify the impairment model for available-for-sale debt securities and provide for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2023, with early application permitted. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires accounting for contract assets and liabilities from contracts with customers in a business combination to be accounted for in accordance with ASC 606. The standard is effective for fiscal years beginning after December 15, 2022. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements. |
Summary of Significant Accou_26
Summary of Significant Accounting Policies (Tables) - TEMPO AUTOMATION INC | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of billed receivables, unbilled receivables, and deferred revenue | September 30, December 31, 2022 2021 Accounts receivable, net $ 1,945 $ 2,918 Contract assets 990 1,219 Contract liabilities 2,086 175 | As of December 31, 2021 2020 Accounts receivable, net $ 2,918 $ 2,713 Contract assets 1,219 608 Contract liabilities 175 80 |
Schedule of cash, cash equivalents and restricted cash shown in the statement of cash flows | September 30, September 30, 2022 2021 Cash and cash equivalents $ 533 $ 23,524 Restricted cash 320 320 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 853 $ 23,844 | As of December 31, 2021 2020 Cash and cash equivalents $ 2,864 $ 17,340 Restricted cash 320 406 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 3,184 $ 17,746 |
Inventory (Tables)_2
Inventory (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of inventory components | Inventory consists of the following (in thousands): September 30, December 31, 2022 2021 Raw materials $ 2,060 $ 158 Work in progress 856 721 Total inventory $ 2,916 $ 879 | Inventory consists of the following (in thousands): As of December 31, 2021 2020 Raw materials $ 158 $ 111 Work in progress 721 57 Total inventory $ 879 $ 168 |
Prepaid Expenses and Other Cu_5
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2022 2021 Prepaid expense $ 421 $ 650 Other current assets 512 242 Total prepaid expenses and other current assets $ 933 $ 892 | Prepaid expenses and other current assets consists of the following (in thousands): As of December 31, 2021 2020 Prepaid expense $ 650 $ 458 Other current assets 242 77 Total prepaid expenses and other current assets $ 892 $ 535 |
Other Noncurrent Assets (Tabl_2
Other Noncurrent Assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of other noncurrent assets | Other noncurrent assets consist of the following (in thousands): September 30, December 31, 2022 2021 Deferred transaction costs $ 6,125 $ 1,926 Advance rent and prepaids 83 749 Deposits — 250 Total other noncurrent assets $ 6,208 $ 2,925 | Other noncurrent assets consist of the following (in thousands): As of December 31, 2021 2020 Deferred transaction costs $ 1,926 $ — Noncurrent prepaid expenses 749 7 Deposits 250 250 Total other noncurrent assets $ 2,925 $ 257 |
Accrued Liabilities (Tables)_2
Accrued Liabilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): September 30, December 31, 2022 2021 Accrued legal fees (1) $ 4,272 $ 1,517 Accrued professional fees (1) 100 866 Accrued liabilities 410 774 Accrued sales and business taxes 176 241 Accrued cost of revenue 152 236 Customer refund liability — 205 Warranty liability 55 54 Other accrued liabilities 30 78 Total accrued expenses $ 5,195 $ 3,971 (1) These accrued legal and professional fees relate to the merger transaction, as discussed in Note 1 – Organization. | Accrued liabilities consist of the following (in thousands): As of December 31, 2021 2020 Accrued legal fees (1) $ 1,517 $ — Accrued professional fees 866 — Accrued liabilities 774 414 Accrued sales and business taxes 241 267 Accrued cost of revenue 236 — Customer refund liability 205 80 Warranty liability 54 56 Other accrued liabilities 78 116 Total accrued expenses $ 3,971 $ 933 (1) These accrued legal fees relate to the merger transaction, as discussed in Note 1 — Organization. |
Borrowing Arrangements (Table_2
Borrowing Arrangements (Tables) - TEMPO AUTOMATION INC | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Borrowing Arrangements | ||
Schedule of net carrying amount of borrowings | The following table sets forth the net carrying amount of borrowings as on September 30, 2022 (in thousands): Loan Payable, Loan Payable, Current Noncurrent Total SQN Equipment Loan $ 852 $ 880 940 LSA Term Loan 28,641 — 28,641 LSA Convertible Note (fair value) 13,052 — 13,052 Total loan payable $ 42,545 $ 880 43,425 SQN Equipment Loan As of September 30, 2022 Total notes payable $ 1,688 Add: accretion of final interest payable 93 Less: loan payable, current (852) Less: unamortized debt discount (49) Total loan payable, noncurrent $ 880 LSA Term Loan As of September 30, 2022 Total notes payable $ 30,000 Less: unamortized debt discount (1,359) Total loan payable, current $ 28,641 LSA Convertible Note Fair Value – Level 3 Balance, January 1, 2022 $ — Additions 12,903 Change in fair value 149 Balance, September 30, 2022 $ 13,052 | |
Schedule of notes payable balances | The Company’s notes payable balances were as follows (in thousands): As of December 31, 2021 SQN SQN Term Term SQN Loan Loan Equipment Tranche 1 Tranche 2 Loan Total Total notes payable $ 10,000 $ 10,000 $ 2,302 $ 22,302 Add: accretion of final interest payable 108 79 56 243 Less: loan payable, current (9,702) — (784) (10,486) Less: unamortized debt discount (406) (218) (84) (708) Total loan payable, noncurrent $ — $ 9,861 $ 1,490 $ 11,351 As of December 31, 2020 SVB Term PPP Loan Loan Total Total notes payable $ 2,500 $ 4,000 $ 6,500 Less: loan payable, current (972) (1,006) (1,978) Less: unamortized debt discount — (104) (104) Total loan payable, noncurrent $ 1,528 $ 2,890 $ 4,418 | |
Schedule of notes payable future principal payments | As of September 30, 2022 2022 (remaining) $ 20,214 2023 14,496 2024 567 Total future principal payments $ 35,277 | The notes payable future principal payments are as follows during the years noted (in thousands): As of December 31, 2021 2022 $ 10,829 2023 10,906 2024 567 Total future principal payments $ 22,302 |
LSA Convertible Note | ||
Borrowing Arrangements | ||
Schedule of notes payable balances | September 30, 2022 Expected term 0.15 years Discount rate 20.00 % Probability of Qualified Financing 90.00 % As of December 31, 2021 SQN LSA LSA Equipment Tranche 1.1 Tranche 1.2 Loan Total Total notes payable $ 10,000 $ 10,000 $ 2,302 $ 22,302 Add: accretion of final interest payable 108 79 56 243 Less: loan payable, current (9,702) — (784) (10,486) Less: unamortized debt discount (406) (218) (84) (708) Total loan payable, noncurrent $ — $ 9,861 $ 1,490 $ 11,351 |
Borrowing Arrangements - Rela_2
Borrowing Arrangements - Related Party (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of fair value related party borrowings | December 31, Input: 2021 Risk-free interest rate 1.26 % Expected term (years) 5.28 Expected volatility 18.8 % Exercise price $ 11.50 Stock Price $ 9.96 | December 31, December 31, Input: 2021 2020 Risk-free interest rate 1.26 % 0.36 % Expected term (years) 5.28 5.49 Expected volatility 18.8 % 22.7 % Exercise price $ 11.50 $ 11.50 Stock Price $ 9.96 $ 10.22 |
TEMPO AUTOMATION INC | ||
Schedule of net carrying amount of related party borrowings | The following table sets forth the net carrying amount of related party borrowings as on September 30, 2022 (in thousands): Fair Value – Level 3 Balance, January 1, 2022 $ — Additions 39,593 Change in fair value 448 Balance, September 30, 2022 $ 40,041 | |
Schedule of fair value related party borrowings | September 30, 2022 Expected term 0.15 years Discount rate 20.00 % Probability of Qualified Financing 90.00 % | |
Schedule of notes payable related party future principal payments | As of September 30, 2022 2022 (remaining) $ 9,397 2023 1,240 Total future principal payments $ 10,637 |
Common Stock (Tables)_2
Common Stock (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
TEMPO AUTOMATION INC | ||
Schedule of shares of common stock reserved for issuance | As of September 30, 2022 December 31, 2021 Conversion of convertible preferred stock 29,520,187 29,520,187 Shares reserved for exercise of warrants 21,868,138 3,419,304 Outstanding stock options 23,896,897 16,508,725 Shares available for future issuance under 2015 Plan 3,114,353 1,050,574 Total shares of common stock reserved 78,399,575 50,498,790 | As of December 31, 2021 2020 Conversion of convertible preferred stock 29,520,187 29,520,187 Shares reserved for exercise of warrants 3,419,304 305,891 Outstanding stock options 16,508,725 10,364,039 Shares available for future issuance under 2015 Plan 1,050,574 859,468 Total shares of common stock reserved 50,498,790 41,049,585 |
Warrants (Tables)_2
Warrants (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | December 31, Input: 2021 Risk-free interest rate 1.26 % Expected term (years) 5.28 Expected volatility 18.8 % Exercise price $ 11.50 Stock Price $ 9.96 | December 31, December 31, Input: 2021 2020 Risk-free interest rate 1.26 % 0.36 % Expected term (years) 5.28 5.49 Expected volatility 18.8 % 22.7 % Exercise price $ 11.50 $ 11.50 Stock Price $ 9.96 $ 10.22 |
TEMPO AUTOMATION INC | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | September 30, 2022 Expected term 0.15 years Discount rate 20.00 % Probability of Qualified Financing 90.00 % | |
Schedule of warrants outstanding | As of December 31, 2021, the Company has the following liability-classified warrants outstanding: Equity-Type Shares Exercise Price Issuance Date Expiration Date Series A Preferred Stock 58,736 $ 1.15 11/24/2015 11/24/2025 Series A Preferred Stock 26,112 1.15 11/22/2016 11/22/2026 Series B Preferred Stock 38,543 2.76 10/13/2017 10/13/2027 Series C Preferred Stock 108,000 0.94 1/29/2021 1/29/2031 Common Stock 533,333 1.51 6/24/2021 6/24/2031 764,724 | |
Schedule of liability-classified warrant activity | Fair Value Warrants outstanding - January 1, 2022 $ 5,573 Warrants issued and modified 32,514 Change in fair value, net (5,652) Warrants outstanding - September 30, 2022 $ 32,435 | (in ’000s) Fair Value Warrants outstanding – January 1, 2020 $ 133 Change in fair value, net (47) Warrants outstanding - December 31, 2020 86 Warrants issued 1,245 Change in fair value, net 4,242 Warrants outstanding – December 31, 2021 $ 5,573 |
Warrant Classified As Equity | TEMPO AUTOMATION INC | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | The following common stock warrants were outstanding as of September 30, 2022: Warrants to purchase # of Shares Exercise Price Issuance Date Expiration Date Common Stock 182,500 $ 0.94 6/3/2020 6/3/2030 Common Stock 109,080 1.51 6/23/2021 6/22/2031 291,580 | June, 2021 June, 2020 October, 2021 Expected term 10 years 10 years 3 years Expected volatility 64.01 % 56.49 % 48.5 % Risk-free interest rate 1.50 % 0.66 % 0.70 % Expected dividends 0.00 % 0.00 % 0.00 % Weighted average fair value of common stock warrant $ 1.07 $ 0.60 $ 3.79 |
Warrant Classified As Liability | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of warrants outstanding | As of September 30, 2022, the Company has the following liability-classified warrants outstanding: Warrants to purchase # of Shares Exercise Price Issuance Date Expiration Date Series A Preferred Stock 58,736 $ 1.15 11/24/2015 11/24/2025 Series A Preferred Stock 26,112 1.15 11/22/2016 11/22/2026 Series B Preferred Stock 38,543 2.76 10/13/2017 10/13/2027 Series C Preferred Stock 108,000 0.94 * 1/29/2021 1/29/2031 Series C Preferred Stock 186,667 2.82 * 1/20/2022 1/20/2032 Series C Preferred Stock 10,000,000 2.82 * 8/25/2022 8/25/2032 Series C Preferred Stock 8,262,167 2.82 * 9/30/2022 9/30/2032 Common Stock 533,333 1.51 6/24/2021 6/24/2031 Common Stock** 2,363,000 2.82 * 10/11/2021 10/11/2024 21,576,558 * ** | |
Warrant Classified As Liability | TEMPO AUTOMATION INC | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Schedule of initial measurement of key inputs for Private Placement Warrants and Public Warrants | September 30, December 31, 2022 2021 Expected term 3.00 years 3.89 - 9.48 years Expected volatility 61.00 % 64.29% - 64.44 % Risk-free interest rate 3.46 % 1.12% - 1.52 % Expected dividends 0 % 0 % | December 31, 2021 December 31, 2020 Expected term 3.89 - 9.48 years 4.89‑6.78 years Expected volatility 64.29% - 64.44% 58.17% - 59.84% Risk-free interest rate 1.12% - 1.52% 0.36% - 0.51% Expected dividends 0% 0% Fair value of warrants $1.17 - $7.71 $1.16 - $1.56 |
Stock-Based Compensation (Tab_2
Stock-Based Compensation (Tables) - TEMPO AUTOMATION INC | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Summary of option activity | Options outstanding Weighted Weighted average average Aggregate Number of exercise price contractual term intrinsic value shares per share (in years) (in thousands) Outstanding – January 1, 2022 16,457,475 $ 1.36 7.96 $ 104,554 Options granted 996,055 3.33 Options exercised (48,049) 1.03 Options forfeited (2,872,385) 2.24 Options expired (136,197) 1.06 Outstanding – September 30, 2022 14,396,899 1.32 6.89 $ 7,582 Vested during the period 2,137,947 1.62 7.13 817 Vested at end of period 9,643,506 1.11 5.90 5,500 Exercisable at the end of the period 9,648,520 1.12 5.90 5,501 Shares expected to vest 3,503,497 2.02 8.52 1,270 Vested and expected to vest 13,147,003 1.36 6.60 6,770 | Options outstanding Weighted Weighted average average Aggregate Number of exercise price contractual term intrinsic value shares per share (in years) (in thousands) Outstanding – January 1, 2021 10,364,039 $ 0.98 Options granted 7,002,296 1.89 Options exercised (264,208) 0.48 Options forfeited (492,049) 1.37 Options expired (152,603) 1.23 Outstanding - December 31, 2021 16,457,475 $ 1.36 7.96 $ 104,554 Vested during the period 2,265,763 1.17 8.19 51,807 Vested at end of period 7,689,805 0.97 6.43 51,807 Exercisable at the end of the period 7,747,264 0.97 6.43 52,181 Shares expected to vest 7,263,661 1.85 9.20 42,565 Vested and expected to vest 14,953,466 1.40 7.77 94,372 |
Schedule of assumptions used to calculate the fair value of options granted | Nine Months Ended September 30, 2022 Expected term 0.50 - 5.86 years Expected volatility 55.92% - 66.32% Risk-free interest rate 1.54% - 3.00% Expected dividends 0% | During the years ended December 31, 2021 2020 Expected term 5.00 - 6.08 years 5.15 – 6.53 years Expected volatility 61.44% - 67.12% 51.15% – 59.84% Risk-free interest rate 0.41% - 1.35% 0.27% – 1.63% Expected dividends 0.0% 0.0% Fair value of common stock $1.41 - $6.08 $1.01 - $1.46 |
Summary of stock-based compensation expense and its allocation within the accompanying statements of operations | The following table summarizes stock-based compensation expense and its allocation within the accompanying statements of operations during the nine months ended September 30, 2022 and 2021 (in thousands): 2022 2021 Cost of goods sold $ 441 $ 119 Research and development 556 303 Sales and marketing 381 205 General and administrative 945 1,057 Total stock-based compensation expense $ 2,323 $ 1,684 | 2021 2020 Cost of goods sold $ 276 $ 115 Research and development 540 87 Sales and marketing 402 169 General and administrative 1,320 885 Total stock-based compensation expense $ 2,538 $ 1,256 |
Commitments and Contingencie_12
Commitments and Contingencies (Tables) - TEMPO AUTOMATION INC | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of operating lease-related assets and liabilities recorded on the balance sheets | The table below presents the operating lease-related assets and liabilities recorded on the condensed balance sheets (in thousands): Classifications on the condensed financial statements As of September 30, 2022 Operating lease assets Operating leases – right-of-use asset $ 565 Operating lease liability, current Operating lease liability, current 801 Operating lease liability, noncurrent Operating lease liability, noncurrent 38 Classifications on the condensed financial statements As of December 31, 2021 Operating lease assets Operating leases– right-of-use asset $ 1,323 Operating lease liability, current Operating lease liability, current 1,111 Operating lease liability, noncurrent Operating lease liability, noncurrent 546 | Classifications on the financial statements December 31, 2021 Operating lease assets Operating leases – right-of-use asset $ 1,323 Operating lease liability, current Operating lease liability, current 1,111 Operating lease liability, noncurrent Operating lease liability, noncurrent 546 Classifications on the financial statements December 31, 2020 Operating lease assets Operating leases – right-of-use asset $ 2,109 Operating lease liability, current Operating lease liability, current 987 Operating lease liability, noncurrent Operating lease liability, noncurrent 1,657 |
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases as of September 30, 2022 are as follows (in thousands): As of September 30, 2022 2022 (remaining) $ 307 2023 531 2024 29 Total future lease payments 867 Less imputed interest (28) Total operating lease liability $ 839 | Future minimum lease payments under non-cancelable operating leases as of December 31, 2021 are as follows (in thousands): As on December 31, 2021 2022 $ 1,215 2023 531 2024 29 Total future lease payments 1,775 Less imputed interest (118) Total operating lease liability $ 1,657 |
Schedule of finance lease-related assets and liabilities recorded on the balance sheet | The table below presents the finance lease-related assets and liabilities recorded on the condensed balance sheets and the condensed statement of operations (in thousands): Classification on the condensed financial statements As of September 30, 2022 Finance lease assets Property and equipment, net $ 3,519 Finance lease liability, current Finance lease, current 1,897 Finance lease liability, noncurrent Finance lease, noncurrent — Nine Months Ended September 30, 2022 Depreciation of the leased asset Cost of revenue $ 1,935 Lease interest expense Other income (expense), net 329 Classification on the condensed financial statements As of December 31, 2021 Finance lease assets Property and equipment, net $ 3,943 Finance lease liability, current Finance lease, current 1,091 Finance lease liability, noncurrent Finance lease, noncurrent 1,606 Nine Months Ended September 30, 2021 Depreciation of the leased asset Cost of revenue $ 409 Lease interest expense Other income (expense), net 464 | Classification on the financial statements December 31, 2021 Finance lease assets Property and equipment, net $ 3,943 Finance lease liability, current Finance lease, current 1,091 Finance lease liability, noncurrent Finance lease, noncurrent 1,606 Depreciation of the leased asset Cost of revenue 547 Lease interest expense Other income (expense), net 598 Classification on the financial statements December 31, 2020 Finance lease assets Property and equipment, net $ 4,490 Finance lease liability, current Finance lease, current 906 Finance lease liability, noncurrent Finance lease, noncurrent 2,697 Depreciation of the leased asset Cost of revenue 273 Lease interest expense Other income (expense), net 376 |
Schedule of future minimum lease payments under finance lease | Future minimum lease payments under finance lease are as follows (in thousands): As of September 30, 2022 2022 (remaining) $ 376 2023 1,731 Total future lease payments 2,107 Less: imputed interest (210) Total finance lease liability $ 1,897 | Future minimum lease payments under finance lease are as follows (in thousands): As of December 31, 2021 2022 $ 1,504 2023 1,731 Total future lease payments 3,235 Less: imputed interest (538) Total finance lease liability $ 2,697 |
Schedule of supplemental disclosures of cash flow information related to leases | Nine Months Ended September 30, 2022 2021 Operating cash flows paid for operating leases $ 908 $ 885 Financing cash flows paid for finance leases 1,128 1,128 | Years Ended December 31, 2021 2020 Operating cash flows paid for operating leases $ 1,184 $ 689 Financing cash flows paid for finance leases 1,504 773 Non-cash activity: Lease liabilities arising from obtaining right-of-use assets — 107 |
Net Loss Per Share (Tables)_2
Net Loss Per Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Net Loss Per Share [Line item] | ||
Schedule of the computation of basic and diluted net loss per share | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss) $ (3,772,620) $ (4,863,938) $ 17,830,609 4,457,652 $ 257,377 $ 182,870 $ 7,776,990 1,944,248 Denominator: Basic and diluted weighted average shares outstanding 4,459,878 5,750,000 23,000,000 5,750,000 8,092,696 5,750,000 23,000,000 5,750,000 Basic and diluted net income (loss) per ordinary share $ (0.85) $ (0.85) $ 0.78 0.78 $ 0.03 $ 0.03 $ 0.34 0.34 | The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts): For the Period from March 31, 2020 Year Ended (Inception) through December 31, 2021 December 31, 2020 Class A Class B Class A Class B Basic and diluted net income (loss) per ordinary share Numerator: Allocation of net income (loss), as adjusted $ 4,677,202 $ 1,169,301 $ (7,350,686) $ (1,837,671) Denominator: Basic and diluted weighted average shares outstanding 23,000,000 5,750,000 16,353,211 5,529,817 Basic and diluted net income (loss) per ordinary share $ 0.20 $ 0.20 $ (0.42) $ (0.42) |
TEMPO AUTOMATION INC | ||
Net Loss Per Share [Line item] | ||
Schedule of the computation of basic and diluted net loss per share | Nine Months Ended September 30, 2022 2021 Basic and diluted: Net loss $ (96,518) $ (24,388) Weighted-average number of shares of common stock outstanding 10,072,318 9,815,806 Basic and diluted net loss per share $ (9.58) $ (2.48) | The table below sets forth the computation of basic and diluted net loss per share (in thousands, except share data and per share amounts): Years ended December 31, 2021 2020 Basic and diluted: Net loss $ (48,013) $ (19,104) Weighted-average number of shares of common stock outstanding 9,819,576 9,755,174 Basic and diluted net loss per share $ (4.89) $ (1.96) |
Schedule of antidilutive shares | As of September 30, 2022 2021 Shares of common stock issuable upon conversion of redeemable convertible preferred stock 29,520,187 29,520,187 Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants 18,680,225 231,391 Shares of common stock issuable from stock options 23,896,897 16,113,756 Shares of common stock issuable from common stock warrants 3,187,913 824,913 Potential common shares excluded from diluted net loss per share 75,285,222 46,690,247 | As of December 31, 2021 2020 Shares of common stock issuable upon conversion of redeemable convertible preferred stock 29,520,187 29,520,187 Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants 231,391 123,391 Shares of common stock issuable from stock options 16,508,725 10,364,039 Shares of common stock issuable from common stock warrants 3,187,913 182,500 Potential common shares excluded from diluted net loss per share 49,448,216 40,190,117 |
Summary of Significant Accou_27
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||
Aug. 31, 2022 | Jan. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 01, 2022 | Jan. 11, 2022 | Oct. 31, 2021 | Oct. 13, 2021 | Jun. 23, 2021 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||||||||||||||||
Accumulated deficit | $ 48,486,832 | $ 48,486,832 | $ 33,171,769 | $ 27,325,266 | $ 33,171,769 | ||||||||||||||
Cash, cash equivalents and restricted cash | $ 15,842 | $ 15,842 | 792,416 | 8,390 | 792,416 | ||||||||||||||
Cash used in operating activities | 1,008,459 | 1,085,784 | 607,940 | 1,311,782 | |||||||||||||||
Net loss from operations | 8,636,558 | $ (10,135,295) | $ 1,058,490 | (22,288,261) | $ 1,042,594 | $ 11,524,429 | (440,247) | (9,721,238) | 9,188,357 | (5,846,503) | |||||||||
Gross proceeds | 6,500,000 | 22,302,000 | 6,500,000 | ||||||||||||||||
Conversion of convertible preferred stock | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Aggregate principal amount | $ 5,000,000 | ||||||||||||||||||
TEMPO AUTOMATION INC | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Accumulated deficit | 204,830,000 | 84,687,000 | 204,830,000 | 84,687,000 | 60,299,000 | 108,312,000 | 60,299,000 | ||||||||||||
Cash, cash equivalents and restricted cash | 853,000 | 23,844,000 | 853,000 | 23,844,000 | 17,746,000 | 3,184,000 | 17,746,000 | $ 23,869,000 | |||||||||||
Cash used in operating activities | 20,182,000 | 20,883,000 | 30,228,000 | 13,904,000 | |||||||||||||||
Net loss from operations | 96,518,000 | 24,388,000 | 48,013,000 | 19,104,000 | |||||||||||||||
Loans payable and finance lease obligations | 31,700,000 | 31,700,000 | 37,000,000 | ||||||||||||||||
Maximum borrowing capacity | $ 150,000,000 | $ 50,000 | |||||||||||||||||
Increase (decrease) in maximum borrowing capacity | $ 10,000,000 | ||||||||||||||||||
Aggregate principal amount | 700,000 | ||||||||||||||||||
Gross proceeds | 22,302,000 | ||||||||||||||||||
Deferred transaction costs | 6,125,000 | 6,125,000 | $ 0 | 1,926,000 | $ 0 | ||||||||||||||
Aggregate cash proceeds from debt | 1,400,000 | ||||||||||||||||||
Cancellation of remaining debt facility | $ 3,600,000 | ||||||||||||||||||
Contract assets recorded within other noncurrent assets | 100,000 | $ 100,000 | 100,000 | $ 100,000 | |||||||||||||||
Impairment charge on long lived assets | 300,000 | ||||||||||||||||||
Fair value of the convertible debt | 53,100,000 | 53,100,000 | |||||||||||||||||
Fair value of liability | 32,400,000 | 32,400,000 | $ 5,600,000 | ||||||||||||||||
TEMPO AUTOMATION INC | ACE and ACE Equity Partners International Pte. Ltd | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Aggregate principal amount | $ 4,600,000 | $ 4,600,000 | $ 5,000,000 | ||||||||||||||||
TEMPO AUTOMATION INC | Convertible promissory notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Gross proceeds | 5,000,000 | ||||||||||||||||||
TEMPO AUTOMATION INC | Subsequent event [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 10,000,000 | ||||||||||||||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | 150,000,000 | $ 150,000,000 | |||||||||||||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | Subsequent event [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | ||||||||||||||||||
Loan and Security Agreement, Tranche 1 | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | 30,000,000 | ||||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 10,000,000 | ||||||||||||||||||
Loan and Security Agreement, Tranche 1 | TEMPO AUTOMATION INC | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | 20,000,000 | 30,000,000 | 20,000,000 | ||||||||||||||||
Loan amount | 20,000,000 | ||||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 20,000,000 | ||||||||||||||||||
Loan and Security Agreement, Tranche 1 | TEMPO AUTOMATION INC | Subsequent event [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Loan amount | 20,000,000 | ||||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 30,000,000 | ||||||||||||||||||
Loan and Security Agreement, Tranche 2 | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | 10,000,000 | ||||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 20,000,000 | ||||||||||||||||||
Loan and Security Agreement, Tranche 2 | TEMPO AUTOMATION INC | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | 20,000,000 | 20,000,000 | |||||||||||||||||
Loan amount | 20,000,000 | ||||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 30,000,000 | ||||||||||||||||||
Loan and Security Agreement, Tranche 2 | TEMPO AUTOMATION INC | Subsequent event [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | ||||||||||||||||||
Loan amount | 20,000,000 | ||||||||||||||||||
Increase (decrease) in maximum borrowing capacity | 10,000,000 | ||||||||||||||||||
Loan and Security Agreement, Tranche 3 | TEMPO AUTOMATION INC | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | 40,000,000 | 40,000,000 | |||||||||||||||||
Loan amount | 40,000,000 | ||||||||||||||||||
Loan and Security Agreement, Tranche 4 | TEMPO AUTOMATION INC | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | $ 70,000,000 | $ 70,000,000 | |||||||||||||||||
Loan amount | 70,000,000 | ||||||||||||||||||
June 2021 Credit Facility | TEMPO AUTOMATION INC | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | 20,000,000 | ||||||||||||||||||
Loan amount | $ 20,000,000 | $ 10,000,000 | |||||||||||||||||
Convertible Senior Notes 15.5 Percent, Due 2025 | TEMPO AUTOMATION INC | Subsequent event [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Aggregate principal amount | 200,000,000 | ||||||||||||||||||
Convertible Senior Notes 15.5 Percent, Funded by Oaktree | TEMPO AUTOMATION INC | Subsequent event [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Aggregate principal amount | 175,000,000 | ||||||||||||||||||
Convertible Senior Notes 15.5 Percent, Funded by Investment partner of ACE | TEMPO AUTOMATION INC | Subsequent event [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Aggregate principal amount | 25,000,000 | ||||||||||||||||||
Convertible Promissory Notes to Existing Investors | TEMPO AUTOMATION INC | Subsequent event [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Gross proceeds | $ 5,000,000 |
Summary of Significant Accou_28
Summary of Significant Accounting Policies - Contract Assets and Liabilities (Details) - TEMPO AUTOMATION INC - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |||
Revenue recognized from beginning contract liability balance | $ 100,000 | $ 500,000 | |
Accounts receivable, net | 2,918,000 | 2,713,000 | $ 1,945,000 |
Contract assets | 1,219,000 | 608,000 | 990,000 |
Contract liabilities | 175,000 | $ 80,000 | 2,086,000 |
Other noncurrent assets | |||
Summary of Significant Accounting Policies | |||
Contract assets | $ 0 | $ 0 |
Summary of Significant Accou_29
Summary of Significant Accounting Policies - Cash, Accounts Receivable (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents and Restricted Cash | |||||
Cash and cash equivalents | $ 0 | $ 8,390 | $ 792,416 | ||
Cash, cash equivalents and restricted cash | 8,390 | $ 15,842 | 792,416 | ||
TEMPO AUTOMATION INC | |||||
Cash and Cash Equivalents and Restricted Cash | |||||
Cash and cash equivalents | 533,000 | 2,864,000 | 23,524,000 | 17,340,000 | |
Restricted cash balance | 320,000 | 320,000 | 320,000 | 406,000 | |
Cash, cash equivalents and restricted cash | $ 853,000 | 3,184,000 | $ 23,844,000 | 17,746,000 | $ 23,869,000 |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||
Allowance for doubtful accounts | $ 400,000 | $ 200,000 |
Inventory (Details)_2
Inventory (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Raw materials | $ 2,060 | $ 158 | $ 111 |
Work in progress | 856 | 721 | 57 |
Total inventory | $ 2,916 | $ 879 | $ 168 |
Prepaid Expenses and Other Cu_6
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid expense | $ 15,597 | $ 113,140 | $ 343,839 |
TEMPO AUTOMATION INC | |||
Prepaid expense | 421,000 | 650,000 | 458,000 |
Other current assets | 512,000 | 242,000 | 77,000 |
Total prepaid expenses and other current assets | $ 933,000 | $ 892,000 | $ 535,000 |
Other Noncurrent Assets (Deta_2
Other Noncurrent Assets (Details) - TEMPO AUTOMATION INC - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred transaction costs | $ 6,125,000 | $ 1,926,000 | $ 0 |
Advance rent and prepaids | 83,000 | 749,000 | |
Noncurrent prepaid expenses | 749,000 | 7,000 | |
Deposits | 250,000 | 250,000 | |
Total other noncurrent assets | $ 6,208,000 | $ 2,925,000 | $ 257,000 |
Accrued Liabilities (Details)_2
Accrued Liabilities (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued legal fees | $ 4,272 | $ 1,517 | |
Accrued professional fees | 100 | 866 | |
Accrued liabilities | 410 | 774 | $ 414 |
Accrued sales and business taxes | 176 | 241 | 267 |
Accrued cost of revenue | 152 | 236 | |
Customer refund liability | 205 | 80 | |
Warranty liability | 55 | 54 | 56 |
Other accrued liabilities | 30 | 78 | 116 |
Total accrued expenses | $ 5,195 | $ 3,971 | $ 933 |
Borrowing Arrangements (Detai_2
Borrowing Arrangements (Details) - TEMPO AUTOMATION INC - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Oct. 14, 2021 | Jun. 23, 2021 | Jun. 30, 2020 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2022 | Aug. 25, 2022 | Oct. 31, 2021 | |
Borrowing Arrangements | |||||||||||
Aggregate principal amount | $ 700 | ||||||||||
Maximum borrowing capacity | $ 50 | $ 150,000 | |||||||||
Private placement warrants issued | 182,500 | 18,262,167 | |||||||||
Issuance of common stock warrants | $ 4,000 | $ 9,168 | $ 107 | ||||||||
Stated percentage | 8.95% | ||||||||||
Exercise price of warrants | $ 2.82 | $ 2.82 | |||||||||
Interest paid | $ 6,902 | $ 2,069 | 3,686 | 630 | |||||||
SVB Term Loan And Credit Facility | |||||||||||
Borrowing Arrangements | |||||||||||
Private placement warrants issued | 109,080 | 182,500 | |||||||||
Stated percentage | 8.25% | ||||||||||
Exercise price of warrants | $ 1.51 | ||||||||||
SVB Term Loan | |||||||||||
Borrowing Arrangements | |||||||||||
Aggregate principal amount | $ 4,000 | $ 4,000 | $ 10,000 | ||||||||
Issuance of common stock warrants | 100 | $ 100 | $ 4,000 | ||||||||
Loan commitment fee | $ 50 | ||||||||||
Period for payments of principal and interest on term loan | 8 months | ||||||||||
Rate in addition to prime | 5% | ||||||||||
Stated percentage | 8.25% | ||||||||||
SVB Credit Facility | |||||||||||
Borrowing Arrangements | |||||||||||
Aggregate principal amount | 4,000 | 1,600 | |||||||||
Maximum borrowing capacity | $ 4,000 | $ 1,600 | |||||||||
Repayment of debt | $ 10,300 | ||||||||||
Interest paid | $ 300 |
Borrowing Arrangements - Equi_2
Borrowing Arrangements - Equipment Loan and Security Agreement (Details) - TEMPO AUTOMATION INC - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||||||
Jan. 29, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 25, 2022 | Oct. 31, 2021 | Jun. 23, 2021 | |
Borrowing Arrangements | ||||||||
Maximum borrowing capacity | $ 150,000 | $ 50 | ||||||
Monthly payment period | 42 months | |||||||
End of term payment fee | $ 200 | |||||||
Additional borrowing available, under certain conditions | 3,000 | |||||||
Stated percentage | 8.95% | |||||||
Interest paid | $ 6,902 | $ 2,069 | $ 3,686 | $ 630 | ||||
Private placement warrants issued | 182,500 | 18,262,167 | ||||||
Exercise price of warrants | $ 2.82 | $ 2.82 | ||||||
Equipment Loan And Security Agreement [Member] | ||||||||
Borrowing Arrangements | ||||||||
Maximum borrowing capacity | $ 6,000 | |||||||
Stated percentage | 8.95% | |||||||
Increase in interest rate in event of default | 5% | |||||||
Interest paid | $ 100 | 200 | ||||||
Discount amortization | $ 34 | $ 46 | ||||||
Private placement warrants issued | 108,000 | 108,000 | ||||||
Exercise price of warrants | $ 0.94 | $ 0.94 | ||||||
Equipment Loan And Security Agreement - Tranche 1 [Member] | ||||||||
Borrowing Arrangements | ||||||||
Maximum borrowing capacity | $ 3,000 | |||||||
Amount drawn | $ 3,000 | |||||||
Monthly payment period | 42 months | |||||||
End of term payment fee | $ 200 | |||||||
Additional borrowing available, under certain conditions | 3,000 | |||||||
Equipment Loan And Security Agreement - Tranche 2 [Member] | ||||||||
Borrowing Arrangements | ||||||||
Maximum borrowing capacity | $ 3,000 |
Borrowing Arrangements - June_2
Borrowing Arrangements - June 2021 Credit Facility (Details) - TEMPO AUTOMATION INC - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |||||
Aug. 13, 2021 | Jun. 23, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Aug. 25, 2022 | Oct. 31, 2021 | |
Borrowing Arrangements | ||||||
Maximum borrowing capacity | $ 50 | $ 150,000 | ||||
Monthly interest-only payment period | 18 months | |||||
Stated percentage | 8.95% | |||||
Private placement warrants issued | 182,500 | 18,262,167 | ||||
Exercise price of warrants | $ 2.82 | $ 2.82 | ||||
June 2021 Credit Facility | ||||||
Borrowing Arrangements | ||||||
Maximum borrowing capacity | $ 20,000 | |||||
Loan amount | $ 10,000 | $ 20,000 | ||||
Monthly interest-only payment period | 18 months | |||||
Amount drawn | $ 10,000 | $ 10,000 | ||||
Stated percentage | 10% | 10% | ||||
Paid in kind interest rate | 2% | 2% | ||||
Increase in interest rate in event of default | 5% | 5% | ||||
Loan commitment fee | $ 200 | $ 200 | ||||
Private placement warrants issued | 533,333 | 533,333 | ||||
Exercise price of warrants | $ 1.51 | $ 1.51 | ||||
June 2021 Credit Facility - Tranche 1 | ||||||
Borrowing Arrangements | ||||||
Maximum borrowing capacity | $ 10,000 | |||||
June 2021 Credit Facility - Tranche 2 | ||||||
Borrowing Arrangements | ||||||
Maximum borrowing capacity | $ 10,000 |
Borrowing Arrangements - Loan_2
Borrowing Arrangements - Loan and Security Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||||||||||
May 01, 2022 | Jan. 20, 2022 | Oct. 13, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2022 | Aug. 25, 2022 | Jan. 11, 2022 | Oct. 31, 2021 | Jun. 30, 2021 | Jun. 23, 2021 | |
TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Maximum borrowing capacity | $ 150,000 | $ 50 | |||||||||||
Extinguishment of debt amount | $ 6,000 | ||||||||||||
Loss on debt extinguishment | $ 38,939 | $ 319 | |||||||||||
Noncash reduction in debt | 39,397 | 6,000 | |||||||||||
Noncash increase in debt | $ 39,397 | 6,000 | |||||||||||
Stated percentage | 8.95% | ||||||||||||
Interest expense | $ 6,902 | $ 2,069 | 3,686 | $ 630 | |||||||||
Aggregate principal amount | $ 700 | ||||||||||||
TEMPO AUTOMATION INC | Scenario commitment fee payable before first anniversary of such borrowing but on or before second anniversary of such borrowing | |||||||||||||
Borrowing Arrangements | |||||||||||||
Debt instrument, increase decrease in lender's minimum return | 1.20 | ||||||||||||
TEMPO AUTOMATION INC | Scenario commitment fee payable after first anniversary of such borrowing but on or before second anniversary of such borrowing | |||||||||||||
Borrowing Arrangements | |||||||||||||
Debt instrument, increase decrease in lender's minimum return | 1.30 | ||||||||||||
TEMPO AUTOMATION INC | Scenario commitment fee payable before first anniversary of such borrowing but on third anniversary of such borrowing | |||||||||||||
Borrowing Arrangements | |||||||||||||
Debt instrument, increase decrease in lender's minimum return | 1.40 | ||||||||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Maximum borrowing capacity | 150,000 | 150,000 | |||||||||||
Extinguishment of debt amount | 6,000 | ||||||||||||
Loss on debt extinguishment | 300 | ||||||||||||
Noncash reduction in debt | 6,000 | ||||||||||||
Noncash increase in debt | 14,000 | $ 14,000 | |||||||||||
Debt to same lender group treated as modification | 14,000 | ||||||||||||
Stated percentage | 10% | ||||||||||||
Interest expense | $ 300 | ||||||||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | Scenario Before The Occurrence Of The Public Trading Trigger | |||||||||||||
Borrowing Arrangements | |||||||||||||
Stated percentage | 10.50% | 10.50% | |||||||||||
Rate in addition to prime | 7.25% | 7.25% | |||||||||||
Loan and Security Agreement | TEMPO AUTOMATION INC | Scenario After The Occurrence Of The Public Trading Trigger | |||||||||||||
Borrowing Arrangements | |||||||||||||
Stated percentage | 9.50% | 9.50% | |||||||||||
Rate in addition to prime | 6.25% | 6.25% | |||||||||||
Loan and Security Agreement | August 2022 Bridge Note Agreement | TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Aggregate principal amount | $ 13,100 | $ 3,600 | |||||||||||
Loan and Security Agreement | Series C preferred stock | TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Warrant excise price per share | $ 2.82 | ||||||||||||
Loan and Security Agreement, Tranche 1 | |||||||||||||
Borrowing Arrangements | |||||||||||||
Maximum borrowing capacity | $ 30,000 | ||||||||||||
Loan and Security Agreement, Tranche 1 | TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Maximum borrowing capacity | 20,000 | 30,000 | $ 20,000 | ||||||||||
Stated percentage | 2% | ||||||||||||
Convertible debt | $ 30,000 | 20,000 | |||||||||||
Borrowing capacity | 10,000 | ||||||||||||
Borrowed debt | 20,000 | ||||||||||||
Loan and Security Agreement, Tranche 2 | |||||||||||||
Borrowing Arrangements | |||||||||||||
Maximum borrowing capacity | 10,000 | ||||||||||||
Loan and Security Agreement, Tranche 2 | TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Maximum borrowing capacity | 20,000 | 20,000 | |||||||||||
Convertible debt | $ 10,000 | 20,000 | |||||||||||
Borrowed debt | 20,000 | ||||||||||||
Loan and Security Agreement, Tranche 3 | TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Maximum borrowing capacity | 40,000 | 40,000 | |||||||||||
Borrowed debt | 40,000 | ||||||||||||
Loan and Security Agreement, Tranche 4 | TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Maximum borrowing capacity | $ 70,000 | $ 70,000 | |||||||||||
Borrowed debt | $ 70,000 | ||||||||||||
Amendment Expanded Tranche 1 | TEMPO AUTOMATION INC | |||||||||||||
Borrowing Arrangements | |||||||||||||
Convertible debt | $ 10,000 |
Borrowing Arrangements - Net ca
Borrowing Arrangements - Net carrying amount of borrowings (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Borrowing Arrangements | |||
Total notes payable | $ 22,302 | $ 6,500 | |
Add: accretion of final interest payable | 243 | ||
Less: unamortized debt discount | (708) | (104) | |
Total loan payable, noncurrent | 11,351 | 4,418 | |
TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Loan Payable, Current | $ 13,052 | 0 | |
Loan Payable, Noncurrent | 880 | ||
Loans Payable, Fair Value Disclosure | 42,545 | 10,486 | |
Total loan payable | 43,425 | ||
Total notes payable | 22,302 | ||
Add: accretion of final interest payable | 243 | ||
Less: unamortized debt discount | (708) | ||
Total loan payable, noncurrent | 880 | 11,351 | $ 4,418 |
SQN Equipment Loan | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Loan Payable, Current | 852 | ||
Loan Payable, Noncurrent | 880 | ||
Total loan payable | 940 | ||
Total notes payable | 1,688 | 2,302 | |
Add: accretion of final interest payable | 93 | 56 | |
Less: unamortized debt discount | (49) | (84) | |
Total loan payable, noncurrent | 880 | $ 1,490 | |
LSA Term Loan | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Loan Payable, Current | 28,641 | ||
Total loan payable | 28,641 | ||
Total notes payable | 30,000 | ||
Less: unamortized debt discount | (1,359) | ||
Total loan payable, noncurrent | 28,641 | ||
LSA Convertible Note (fair value) | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Loan Payable, Current | 13,052 | ||
Total loan payable | $ 13,052 |
Borrowing Arrangements - LSA Co
Borrowing Arrangements - LSA Convertible Note (Details) - LSA Convertible Note (fair value) - TEMPO AUTOMATION INC $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Additions | $ 12,903 |
Change in fair value | 149 |
Fair value, ending balance | $ 13,052 |
Borrowing Arrangements - Conver
Borrowing Arrangements - Convertible note, fair value (Details) - TEMPO AUTOMATION INC - LSA Convertible Note (fair value) | Sep. 30, 2022 item Y |
Expected term | |
Borrowing Arrangements | |
Convertible note, fair value | Y | 0.15 |
Discount rate | |
Borrowing Arrangements | |
Convertible note, fair value | 0.2000 |
Probability of Qualified Financing | |
Borrowing Arrangements | |
Convertible note, fair value | 0.9000 |
Borrowing Arrangements - Notes
Borrowing Arrangements - Notes balances (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Borrowing Arrangements | |||
Total notes payable | $ 22,302 | $ 6,500 | |
Add: accretion of final interest payable | 243 | ||
Less: loan payable, current | (10,486) | (1,978) | |
Less: unamortized debt discount | (708) | (104) | |
Total loan payable, noncurrent | 11,351 | 4,418 | |
TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 22,302 | ||
Add: accretion of final interest payable | 243 | ||
Less: loan payable, current | (10,486) | (1,978) | |
Less: unamortized debt discount | (708) | ||
Total loan payable, noncurrent | $ 880 | 11,351 | $ 4,418 |
LSA Tranche 1.1 | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 10,000 | ||
Add: accretion of final interest payable | 108 | ||
Less: loan payable, current | (9,702) | ||
Less: unamortized debt discount | (406) | ||
LSA Tranche 1.2 | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 10,000 | ||
Add: accretion of final interest payable | 79 | ||
Less: unamortized debt discount | (218) | ||
Total loan payable, noncurrent | 9,861 | ||
SQN Equipment Loan | TEMPO AUTOMATION INC | |||
Borrowing Arrangements | |||
Total notes payable | 1,688 | 2,302 | |
Add: accretion of final interest payable | 93 | 56 | |
Less: loan payable, current | (784) | ||
Less: unamortized debt discount | (49) | (84) | |
Total loan payable, noncurrent | $ 880 | $ 1,490 |
Borrowing Arrangements - Note_2
Borrowing Arrangements - Notes payable future principal payments (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Future Principal Payments | ||
2022 (remaining) | $ 20,214 | |
2023 | 14,496 | $ 10,829 |
2024 | 567 | $ 10,906 |
Total future principal payments | $ 35,277 |
Borrowing Arrangements - Rela_3
Borrowing Arrangements - Related Party - Convertible Promissory Notes (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Aug. 25, 2022 | Jan. 18, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Related Party Transaction. [Line Items] | ||||
Gross proceeds of convertible promissory notes | $ 1,500,000 | |||
TEMPO AUTOMATION INC | ||||
Related Party Transaction. [Line Items] | ||||
Loss on extinguishment | $ (38,939,000) | $ (319,000) | ||
2022 Promissory Notes | TEMPO AUTOMATION INC | ||||
Related Party Transaction. [Line Items] | ||||
Gross proceeds of convertible promissory notes | $ 5,000,000 | |||
Interest Rate of per annum | 10% | |||
Embedded Derivative, Fair Value of Embedded Derivative Liability | $ 100,000 | |||
Loss on extinguishment | $ 13,800,000 |
Borrowing Arrangements - Rela_4
Borrowing Arrangements - Related Party - Bridge Note (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
May 19, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2022 | Jul. 01, 2022 | |
Related Party Transaction. [Line Items] | ||||||||||
Fair value change on derivatives | $ 362,000 | $ (24,916,621) | $ (10,956,082) | $ (14,433,236) | $ 7,487,000 | $ (12,722,918) | ||||
TEMPO AUTOMATION INC | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Aggregate principal amount | $ 700,000 | |||||||||
Fair value change on derivatives | (5,674,000) | $ 2,340,000 | 4,242,000 | $ (47,000) | ||||||
Loss on extinguishment | (38,939,000) | $ (319,000) | ||||||||
Bridge Note | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Emdedded derivative liability | $ 100,000 | 100,000 | ||||||||
Bridge Note | TEMPO AUTOMATION INC | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Aggregate principal amount | $ 5,000,000 | |||||||||
Advanced from principal amount | 4,600,000 | |||||||||
Interest Rate of per annum | 12% | |||||||||
Bridge Note | TEMPO AUTOMATION INC | Convertible Debt [Member] | ||||||||||
Related Party Transaction. [Line Items] | ||||||||||
Gain on extinguishment | 200,000 | |||||||||
Fair value change on derivatives | 22,000 | |||||||||
Loss on extinguishment | $ 11,600,000 |
Borrowing Arrangements - Rela_5
Borrowing Arrangements - Related Party - August 2022 Bridge Notes (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Aug. 25, 2022 | Aug. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Oct. 09, 2022 | |
Borrowing Arrangements Related Party | |||||||
Amount of loan contributed | $ 523,743 | $ 309,210 | $ 62,558 | $ 527,756 | |||
TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements Related Party | |||||||
Aggregate principal amount | $ 700,000 | ||||||
Amount of loan contributed | $ 10,637,000 | ||||||
Cancellation of remaining debt facility | $ 3,600,000 | ||||||
August 2022 Bridge Notes | TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements Related Party | |||||||
Aggregate principal amount | $ 700,000 | ||||||
Amount of loan contributed | $ 1,400,000 | ||||||
Cancellation of remaining debt facility | 3,600,000 | ||||||
Interest Rate of per annum | 10% | ||||||
August 2022 Bridge Notes | Loan and Security Agreement | TEMPO AUTOMATION INC | |||||||
Borrowing Arrangements Related Party | |||||||
Aggregate principal amount | $ 5,000,000 |
Borrowing Arrangements - Rela_6
Borrowing Arrangements - Related Party - Net carrying amount of related party borrowings (Details) - August 2022 Bridge Notes - Level 3 - TEMPO AUTOMATION INC $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Borrowing Arrangements | |
Fair value, beginning balance | $ 0 |
Additions | 39,593 |
Change in fair value | 448 |
Fair value, ending balance | $ 40,041 |
Borrowing Arrangements - Rela_7
Borrowing Arrangements - Related Party - Summary of discount rate (Details) - August 2022 Bridge Notes - TEMPO AUTOMATION INC | Sep. 30, 2022 Y |
Expected term | |
FAIR VALUE MEASUREMENTS | |
Convertible note, fair value | 0.15 |
Discount rate | |
FAIR VALUE MEASUREMENTS | |
Convertible note, fair value | 20 |
Probability of Qualified Financing | |
FAIR VALUE MEASUREMENTS | |
Convertible note, fair value | 90 |
Borrowing Arrangements - Rela_8
Borrowing Arrangements - Related Party - Related party future principal payments (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Notes Payable | ||
2022 (remaining) | $ 20,214 | |
2023 | 14,496 | $ 10,829 |
Total future principal payments | 35,277 | |
August 2022 Bridge Notes | ||
Notes Payable | ||
2022 (remaining) | 9,397 | |
2023 | 1,240 | |
Total future principal payments | $ 10,637 |
Common Stock (Details)_2
Common Stock (Details) - TEMPO AUTOMATION INC - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 125,000,000 | 63,299,666 | 66,000,000 |
Ordinary shares, par value (per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 |
Common stock, shares issued | 10,085,354 | 10,037,305 | 9,773,097 |
Common stock, shares outstanding | 10,085,354 | 10,037,305 | 9,773,097 |
Common stock, shares reserved for issuance | 78,399,575 | 50,498,790 | 41,049,585 |
Conversion of convertible preferred stock | |||
Class of Stock [Line Items] | |||
Common stock, shares reserved for issuance | 29,520,187 | 29,520,187 | 29,520,187 |
Shares reserved for exercise of warrants | |||
Class of Stock [Line Items] | |||
Common stock, shares reserved for issuance | 21,868,138 | 3,419,304 | 305,891 |
Stock options | |||
Class of Stock [Line Items] | |||
Common stock, shares reserved for issuance | 23,896,897 | 16,508,725 | 10,364,039 |
Shares available for future issuance under 2015 Plan | |||
Class of Stock [Line Items] | |||
Common stock, shares reserved for issuance | 3,114,353 | 1,050,574 | 859,468 |
Warrants (Details)_2_3_4
Warrants (Details) - TEMPO AUTOMATION INC - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 23, 2021 | Oct. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 25, 2022 | Jun. 03, 2020 | |
Warrants | |||||||||
Exercise price of warrants | $ 2.82 | $ 2.82 | |||||||
Issuance of common stock warrants | $ 4,000 | $ 9,168 | $ 107 | ||||||
Exercise price of warrants upon change in control transaction | $ 0 | ||||||||
Common stock warrants issued | 2,363,000 | ||||||||
Number of warrants to purchase shares issued | 182,500 | 18,262,167 | |||||||
Value of warrants outstanding | $ 32,435 | $ 5,573 | |||||||
Warrants | |||||||||
Warrants | |||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | 109,080 | 182,500 | |||||||
Warrant Classified As Equity | |||||||||
Warrants | |||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | 2,363,000 | 109,080 | 182,500 | 291,580 | |||||
Exercise price of warrants | $ 2.82 | $ 1.51 | $ 0.94 | $ 1.51 | $ 0.94 | ||||
Issuance of common stock warrants | $ 9,000 | $ 200 | $ 100 |
Warrants - Liability classifi_2
Warrants - Liability classified warrants (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Aug. 25, 2022 $ / shares shares | Jan. 20, 2022 $ / shares shares | Oct. 11, 2021 $ / shares shares | Jun. 23, 2021 shares | Jan. 29, 2021 $ / shares shares | Nov. 22, 2016 shares | Jun. 30, 2021 USD ($) Y $ / shares shares | Jan. 31, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) Y $ / shares shares | Dec. 31, 2020 USD ($) $ / shares Y | Dec. 31, 2021 USD ($) Y $ / shares shares | Oct. 31, 2021 Y $ / shares | Jun. 30, 2020 Y | |
Expected term (years) [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | Y | 5.49 | 5.28 | |||||||||||
Expected term (years) [Member] | Minimum [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | Y | 3.89 | ||||||||||||
Expected volatility [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 61 | 0.227 | 0.188 | ||||||||||
Risk-free interest rate [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 0.0036 | 0.0126 | |||||||||||
TEMPO AUTOMATION INC | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Exercise price of warrants | $ / shares | $ 2.82 | $ 2.82 | |||||||||||
Warrants outstanding-January 1 | $ 5,573,000 | ||||||||||||
Warrants issued and modified | 32,514,000 | ||||||||||||
Change in fair value, net | (5,652,000) | ||||||||||||
Warrants outstanding-December 31 | 32,435,000 | $ 5,573,000 | |||||||||||
Warrants issued, fair value | $ 27,600,000 | ||||||||||||
TEMPO AUTOMATION INC | Maximum | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | Y | 9.48 | ||||||||||||
TEMPO AUTOMATION INC | Expected term (years) [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | Y | 10 | 3 | 3 | 10 | |||||||||
TEMPO AUTOMATION INC | Expected term (years) [Member] | Minimum [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | Y | 4.89 | 3.89 | |||||||||||
TEMPO AUTOMATION INC | Expected term (years) [Member] | Maximum | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | Y | 6.78 | 9.48 | |||||||||||
TEMPO AUTOMATION INC | Expected volatility [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 64.01 | 48.5 | 56.49 | ||||||||||
TEMPO AUTOMATION INC | Expected volatility [Member] | Minimum [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 58.17 | 64.29 | |||||||||||
TEMPO AUTOMATION INC | Expected volatility [Member] | Maximum | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 59.84 | 64.44 | |||||||||||
TEMPO AUTOMATION INC | Risk-free interest rate [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 1.50 | 3.46 | 0.70 | 0.66 | |||||||||
TEMPO AUTOMATION INC | Risk-free interest rate [Member] | Minimum [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 0.36 | 1.12 | |||||||||||
TEMPO AUTOMATION INC | Risk-free interest rate [Member] | Maximum | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 0.51 | 1.52 | |||||||||||
TEMPO AUTOMATION INC | Measurement Input, Expected Dividend Rate [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
TEMPO AUTOMATION INC | Measurement Input, Appraised Value [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | 1.07 | 3.79 | 0.60 | ||||||||||
TEMPO AUTOMATION INC | Measurement Input, Appraised Value [Member] | Minimum [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | $ / shares | 1.16 | 1.17 | |||||||||||
TEMPO AUTOMATION INC | Measurement Input, Appraised Value [Member] | Maximum | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Measurement input, warrants | $ / shares | 1.56 | 7.71 | |||||||||||
TEMPO AUTOMATION INC | Series C Preferred Stock [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 108,000 | ||||||||||||
Warrants | TEMPO AUTOMATION INC | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 109,080 | 182,500 | |||||||||||
Warrants issued, fair value | $ 0 | ||||||||||||
Warrant Classified As Liability | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 21,576,558 | ||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 764,724 | ||||||||||||
Warrants outstanding-January 1 | $ 86,000 | $ 5,573,000 | $ 86,000 | ||||||||||
Warrants outstanding-December 31 | $ 86,000 | 5,573,000 | |||||||||||
Warrants issued, fair value | $ 1,245,000 | ||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series A Preferred Stock | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 26,112 | 58,736 | |||||||||||
Exercise price of warrants | $ / shares | $ 1.15 | ||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series A Preferred Stock Issued 2015 | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 58,736 | ||||||||||||
Exercise price of warrants | $ / shares | $ 1.15 | ||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series A Preferred Stock Issued 2016 | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 26,112 | ||||||||||||
Exercise price of warrants | $ / shares | $ 1.15 | ||||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series B Preferred Stock | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 38,543 | 38,543 | |||||||||||
Exercise price of warrants | $ / shares | $ 2.76 | $ 2.76 | |||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Series C Preferred Stock [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 10,000,000 | 186,667 | 108,000 | 8,262,167 | 108,000 | ||||||||
Exercise price of warrants | $ / shares | $ 2.82 | $ 0.94 | $ 0.94 | $ 2.82 | $ 0.94 | ||||||||
Warrants issued, fair value | $ 200,000 | $ 800,000 | |||||||||||
Warrant Classified As Liability | TEMPO AUTOMATION INC | Common stock [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||
Issuance of Class B ordinary shares to Sponsor (in shares) | shares | 2,363,000 | 533,333 | 533,333 | 533,333 | |||||||||
Exercise price of warrants | $ / shares | $ 2.82 | $ 1.51 | $ 1.51 | $ 1.51 | |||||||||
Warrants issued, fair value | $ 1,000,000 | $ 4,100,000 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Aug. 31, 2022 item shares | Mar. 31, 2022 item shares | Nov. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) shares | Jul. 31, 2020 shares | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Apr. 30, 2015 shares | |
Stock-Based Compensation | |||||||||||
Vesting percentage per year | 25% | ||||||||||
Forfeiture period | 3 years | ||||||||||
TEMPO AUTOMATION INC | |||||||||||
Stock-Based Compensation | |||||||||||
Number of options cancelled | 492,049 | ||||||||||
Extension in grant achievement period | 12 months | ||||||||||
Stock-based compensation expense | $ | $ 2,323,000 | $ 1,684,000 | $ 2,538,000 | $ 1,256,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||||||||
Outstanding, beginning of period, number | 16,457,475 | 10,364,039 | 10,364,039 | ||||||||
Stock options granted, number | 7,002,296 | ||||||||||
Stock options exercised, number | (264,208) | ||||||||||
Stock options forfeited, number | (492,049) | ||||||||||
Stock options expired, number | (152,603) | ||||||||||
Outstanding, end of period, number | 16,457,475 | 10,364,039 | |||||||||
Vested during the period, number | 2,265,763 | ||||||||||
Vested at end of period, number | 7,689,805 | ||||||||||
Exercisable at the end of the period, number | 7,747,264 | ||||||||||
Shares expected to vest, number | 7,263,661 | ||||||||||
Vested and expected to vest, number | 14,953,466 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||||||||
Balance at beginning of period, exercise price | $ / shares | $ 1.36 | $ 0.98 | $ 0.98 | ||||||||
Stock options granted, exercise price | $ / shares | 1.89 | ||||||||||
Stock options exercised, exercise price | $ / shares | 0.48 | ||||||||||
Stock options forfeited, exercise price | $ / shares | 1.37 | ||||||||||
Stock options expired, exercise price | $ / shares | 1.23 | ||||||||||
Balance at end of period, exercise price | $ / shares | 1.36 | $ 0.98 | |||||||||
Vested during the period, exercise price | $ / shares | 1.17 | ||||||||||
Vested at end of period, exercise price | $ / shares | 0.97 | ||||||||||
Exercisable at the end of the period, exercise price | $ / shares | 0.97 | ||||||||||
Shares expected to vest, exercise price | $ / shares | 1.85 | ||||||||||
Vested and expected to vest, exercise price | $ / shares | $ 1.40 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||||||||||
Weighted average contractual term | 7 years 11 months 15 days | ||||||||||
Vested during the period, contractual term | 8 years 2 months 8 days | ||||||||||
Vested at end of period, number | 6 years 5 months 4 days | ||||||||||
Exercisable at the end of the period, contractual term | 6 years 5 months 4 days | ||||||||||
Shares expected to vest, contractual term | 9 years 2 months 12 days | ||||||||||
Vested and expected to vest, contractual term | 7 years 9 months 7 days | ||||||||||
Aggregate intrinsic value | $ | $ 104,554,000 | ||||||||||
Vested during the period, aggregate intrinsic value | $ | 51,807,000 | ||||||||||
Vested at end of period, aggregate intrinsic value | $ | 51,807,000 | ||||||||||
Exercisable at the end of the period, aggregate intrinsic value | $ | 52,181,000 | ||||||||||
Shares expected to vest, aggregate intrinsic value | $ | 42,565,000 | ||||||||||
Vested and expected to vest, aggregate intrinsic value | $ | $ 94,372,000 | ||||||||||
Stock options | TEMPO AUTOMATION INC | |||||||||||
Stock-Based Compensation | |||||||||||
Shares authorized | 27,712,681 | 18,212,681 | 1,902,688 | ||||||||
Expiration period | 10 years | 10 years | |||||||||
Vesting percentage per year | 25% | 25% | |||||||||
Forfeiture period | 3 years | 3 years | |||||||||
Vesting period | 3 months | 3 months | |||||||||
Number of options cancelled | 2,872,385 | ||||||||||
Stock-based compensation expense | $ | $ 0 | $ 0 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||||||||
Outstanding, beginning of period, number | 16,457,475 | ||||||||||
Stock options granted, number | 996,055 | ||||||||||
Stock options exercised, number | (48,049) | ||||||||||
Stock options forfeited, number | (2,872,385) | ||||||||||
Stock options expired, number | (136,197) | ||||||||||
Outstanding, end of period, number | 14,396,899 | 16,457,475 | |||||||||
Vested during the period, number | 2,137,947 | ||||||||||
Vested at end of period, number | 9,643,506 | ||||||||||
Exercisable at the end of the period, number | 9,648,520 | ||||||||||
Shares expected to vest, number | 3,503,497 | ||||||||||
Vested and expected to vest, number | 13,147,003 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||||||||
Balance at beginning of period, exercise price | $ / shares | $ 1.36 | ||||||||||
Stock options granted, exercise price | $ / shares | 3.33 | ||||||||||
Stock options exercised, exercise price | $ / shares | 1.03 | ||||||||||
Stock options forfeited, exercise price | $ / shares | 2.24 | ||||||||||
Stock options expired, exercise price | $ / shares | 1.06 | ||||||||||
Balance at end of period, exercise price | $ / shares | 1.32 | $ 1.36 | |||||||||
Vested during the period, exercise price | $ / shares | 1.62 | ||||||||||
Vested at end of period, exercise price | $ / shares | 1.11 | ||||||||||
Exercisable at the end of the period, exercise price | $ / shares | 1.12 | ||||||||||
Shares expected to vest, exercise price | $ / shares | 2.02 | ||||||||||
Vested and expected to vest, exercise price | $ / shares | $ 1.36 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||||||||||
Weighted average contractual term | 6 years 10 months 20 days | 7 years 11 months 15 days | |||||||||
Vested during the period, contractual term | 7 years 1 month 17 days | ||||||||||
Vested at end of period, number | 5 years 10 months 24 days | ||||||||||
Exercisable at the end of the period, contractual term | 5 years 10 months 24 days | ||||||||||
Shares expected to vest, contractual term | 8 years 6 months 7 days | ||||||||||
Vested and expected to vest, contractual term | 6 years 7 months 6 days | ||||||||||
Aggregate intrinsic value | $ | $ 7,582,000 | $ 104,554,000 | |||||||||
Vested during the period, aggregate intrinsic value | $ | 817,000 | ||||||||||
Vested at end of period, aggregate intrinsic value | $ | 5,500,000 | ||||||||||
Exercisable at the end of the period, aggregate intrinsic value | $ | 5,501,000 | ||||||||||
Shares expected to vest, aggregate intrinsic value | $ | 1,270,000 | ||||||||||
Vested and expected to vest, aggregate intrinsic value | $ | 6,770,000 | ||||||||||
Stock options | TEMPO AUTOMATION INC | Minimum [Member] | |||||||||||
Stock-Based Compensation | |||||||||||
Fair value of options granted and later modified | $ | $ 1,400,000 | ||||||||||
Stock options | TEMPO AUTOMATION INC | Maximum [Member] | |||||||||||
Stock-Based Compensation | |||||||||||
Fair value of options granted and later modified | $ | $ 8,800,000 | ||||||||||
Stock options | TEMPO AUTOMATION INC | Chief Financial Officer | |||||||||||
Stock-Based Compensation | |||||||||||
Shares authorized | 258,368 | ||||||||||
Vesting percentage per year | 100% | ||||||||||
Vesting period | 36 months | ||||||||||
Stock options | TEMPO AUTOMATION INC | Management | |||||||||||
Stock-Based Compensation | |||||||||||
Shares authorized | 1,245,641 | ||||||||||
Vesting percentage per year | 100% | ||||||||||
Performance options | TEMPO AUTOMATION INC | |||||||||||
Stock-Based Compensation | |||||||||||
Number of executives terminated | item | 3 | 1 | |||||||||
Number of unvested options modified | 867,461 | 330,708 | 50,391 | ||||||||
Vesting period | 3 months | ||||||||||
Stock-based compensation on modified award | $ | $ 0 | ||||||||||
Number of options cancelled | 254,113 | ||||||||||
Stock-based compensation expense | $ | 0 | ||||||||||
Fair value of options granted and later modified | $ | $ 7,400,000 | $ 8,800,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||||||||
Stock options forfeited, number | (254,113) | ||||||||||
Performance options | TEMPO AUTOMATION INC | Chief Financial Officer | |||||||||||
Stock-Based Compensation | |||||||||||
Shares authorized | 258,368 | ||||||||||
Vesting percentage per year | 100% | ||||||||||
Vesting period | 36 months | ||||||||||
Performance options | TEMPO AUTOMATION INC | Management | |||||||||||
Stock-Based Compensation | |||||||||||
Shares authorized | 1,245,641 | ||||||||||
Vesting percentage per year | 100% | ||||||||||
Reduce in grant achievement period | 6 months | ||||||||||
Extension in grant achievement period | 12 months |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Issuance (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 09, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation | |||||
Vesting percentage | 25% | ||||
TEMPO AUTOMATION INC | |||||
Stock-Based Compensation | |||||
Compensation expense | $ 2,323 | $ 1,684 | $ 2,538 | $ 1,256 | |
Common shares available for issuance | 3,114,353 | 1,050,574 | |||
Restricted Stock Unit | TEMPO AUTOMATION INC | |||||
Stock-Based Compensation | |||||
Number of award issued | 9,500,000 | ||||
Service based RSUs | TEMPO AUTOMATION INC | |||||
Stock-Based Compensation | |||||
Number of award issued | 4,750,000 | ||||
Vesting percentage | 33.33% | ||||
Vesting period | 2 years | ||||
Compensation expense | $ 29 | ||||
Performance based RSUs | TEMPO AUTOMATION INC | |||||
Stock-Based Compensation | |||||
Total fair value of RSUs | 4,300 | ||||
Compensation expense | $ 0 | ||||
Performance based RSUs | TEMPO AUTOMATION INC | Tranche one | |||||
Stock-Based Compensation | |||||
Number of award issued | 4,750,000 | ||||
Vesting percentage | 50% | ||||
Compensation expense | $ 15,000 | ||||
Performance based RSUs | TEMPO AUTOMATION INC | Tranche two | |||||
Stock-Based Compensation | |||||
Vesting percentage | 50% | ||||
Compensation expense | $ 5,000 |
Stock-Based Compensation - Op_2
Stock-Based Compensation - Options valuation (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
TEMPO AUTOMATION INC | |||
Fair value of option granted | |||
Expected dividends | 0% | 0% | |
TEMPO AUTOMATION INC | Stock options | |||
Fair value of option granted | |||
Expected dividends | 0% | ||
Minimum [Member] | |||
Fair value of option granted | |||
Expected term | 5 years | ||
Minimum [Member] | TEMPO AUTOMATION INC | |||
Fair value of option granted | |||
Expected term | 5 years 1 month 24 days | ||
Expected volatility | 61.44% | 51.15% | |
Risk free interest rate | 0.41% | 0.27% | |
Price per share | $ 1.41 | $ 1.01 | |
Minimum [Member] | TEMPO AUTOMATION INC | Stock options | |||
Fair value of option granted | |||
Expected term | 6 months | ||
Expected volatility | 55.92% | ||
Risk free interest rate | 1.54% | ||
Maximum [Member] | TEMPO AUTOMATION INC | |||
Fair value of option granted | |||
Expected term | 6 years 29 days | 6 years 6 months 10 days | |
Expected volatility | 67.12% | 59.84% | |
Risk free interest rate | 1.35% | 1.63% | |
Price per share | $ 6.08 | $ 1.46 | |
Maximum [Member] | TEMPO AUTOMATION INC | Stock options | |||
Fair value of option granted | |||
Expected term | 5 years 10 months 9 days | ||
Expected volatility | 66.32% | ||
Risk free interest rate | 3% |
Stock-Based Compensation - Ex_2
Stock-Based Compensation - Expense allocation (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation expense | ||||
Total stock-based compensation expense | $ 2,323 | $ 1,684 | $ 2,538 | $ 1,256 |
Unrecognized stock-based compensation expense, options | $ 11,000 | |||
Period for recognition | 2 years 10 months 13 days | |||
Stock-based compensation expense related to secondary sale transaction | $ 300 | |||
Service based options | ||||
Stock-based compensation expense | ||||
Unrecognized stock-based compensation expense, options | $ 5,800 | |||
Period for recognition | 2 years 2 months 26 days | |||
RSUs | ||||
Stock-based compensation expense | ||||
Unrecognized stock-based compensation expense, options | $ 7,500 | |||
Period for recognition | 2 years 11 months 8 days | |||
Cost of goods sold | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | $ 441 | 119 | 276 | 115 |
Research and development | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | 556 | 303 | 540 | 87 |
Sales and marketing | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | 381 | 205 | 402 | 169 |
General and administrative | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | $ 945 | $ 1,057 | $ 1,320 | $ 885 |
Commitments and Contingencie_13
Commitments and Contingencies (Details) - TEMPO AUTOMATION INC $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Aug. 08, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) lease | Dec. 31, 2020 USD ($) | |
Leases [Abstract] | |||||
Number Of Operating Leases | lease | 2 | ||||
Number Of Finance Leases | lease | 1 | ||||
Operating lease-related assets and liabilities | |||||
Operating lease assets | $ 565 | $ 1,323 | $ 2,109 | ||
Operating lease liability, current | 801 | 1,111 | 987 | ||
Operating lease liability, noncurrent | $ 38 | $ 546 | 1,657 | ||
Estimated incremental borrowing rate | 8.95% | 8.95% | |||
Impairment charge on right of use assets | $ 100 | $ 297 | |||
Operating lease-related income and expenses | |||||
Rent expense recorded | 700 | $ 700 | $ 1,000 | 1,000 | |
Variable lease expenses | 38 | $ 300 | |||
Future minimum lease payments under non-cancelable operating leases | |||||
2022 | 1,215 | ||||
2023 | 307 | ||||
2024 | 531 | 531 | |||
2024 | 29 | 29 | |||
Total future lease payments | 867 | 1,775 | |||
Less imputed interest | (28) | (118) | |||
Total operating lease liability | $ 839 | $ 1,657 | |||
Leasehold improvements | |||||
Operating lease-related assets and liabilities | |||||
Impairment charge of assets | $ 200 |
Commitments and Contingencie_14
Commitments and Contingencies - Finance leases (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Jun. 23, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finance Leases | |||||
Cash proceeds | $ 4,000 | $ 4,000 | |||
Assets carrying amount | $ 4,800 | ||||
Period of right to use the assets | 3 years | ||||
Maximum percentage of fair market value | 25% | ||||
Fair market value of assets at inception date | $ 1,000 | ||||
Finance lease-related assets and liabilities | |||||
Finance lease assets | $ 3,519 | $ 3,943 | 4,490 | ||
Finance lease liability, current | 1,897 | 1,091 | 906 | ||
Finance lease liability, noncurrent | 1,606 | 2,697 | |||
Finance lease-related income and expenses | |||||
Depreciation of the leased asset | 1,935 | $ 409 | 547 | 273 | |
Lease interest expense | 329 | $ 464 | 598 | $ 376 | |
Future minimum lease payments under finance lease | |||||
2022 | 376 | 1,504 | |||
2023 | 1,731 | 1,731 | |||
Total future lease payments | 2,107 | 3,235 | |||
Less: imputed interest | (210) | (538) | |||
Total finance lease liability | $ 1,897 | $ 2,697 | |||
Minimum [Member] | |||||
Finance Leases | |||||
Period of right to use the assets | 6 years | ||||
Period of renewal option | 12 months | ||||
Maximum [Member] | |||||
Finance Leases | |||||
Period of right to use the assets | 10 years | ||||
Period of renewal option | 24 months |
Commitments and Contingencie_15
Commitments and Contingencies - Weighted average and cash flow information (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | ||||
Weighted average lease term, operating leases | 9 months 18 days | |||
Weighted average lease term, finance leases | 9 months 18 days | 1 year 6 months | ||
Weighted average discount rate, operating leases | 8.95% | 8.95% | ||
Weighted average discount rate, finance leases | 18.71% | 18.71% | ||
Operating cash flows paid for operating leases | $ 908 | $ 885 | $ 1,184 | $ 689 |
Financing cash flows paid for finance leases | $ 1,128 | $ 1,128 | $ 1,504 | 773 |
Non-cash activity: Lease liabilities arising from obtaining right-of-use assets | $ 107 |
Net Loss Per Share (Details)_2
Net Loss Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net Loss Per Share [Line item] | |||||||||||
Net income (loss) | $ (8,636,558) | $ 10,135,295 | $ (1,058,490) | $ 22,288,261 | $ (1,042,594) | $ (11,524,429) | $ 440,247 | $ 9,721,238 | $ (9,188,357) | $ 5,846,503 | |
Net loss, diluted | $ (19,104,000) | ||||||||||
TEMPO AUTOMATION INC | |||||||||||
Net Loss Per Share [Line item] | |||||||||||
Net income (loss) | (96,518,000) | (24,388,000) | $ (48,013,000) | $ (19,104,000) | |||||||
Net loss, diluted | $ (96,518) | $ (24,388) | |||||||||
Weighted average shares outstanding of ordinary shares, basic | 10,072,318 | 9,815,806 | 9,819,576 | 9,755,174 | |||||||
Weighted average shares outstanding of ordinary shares, diluted | 10,072,318 | 9,815,806 | 9,819,576 | 9,755,174 | |||||||
Net loss per share, basic | $ (9.58) | $ (2.48) | $ (4.89) | $ (1.96) | |||||||
Net loss per share, diluted | $ (9.58) | $ (2.48) | $ (4.89) | $ (1.96) |
Net Loss Per Share - Antidilu_2
Net Loss Per Share - Antidilutive shares (Details) - TEMPO AUTOMATION INC - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 75,285,222 | 46,690,247 | 49,448,216 | 40,190,117 |
Shares of common stock issuable upon conversion of redeemable convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 29,520,187 | 29,520,187 | 29,520,187 | 29,520,187 |
Shares of common stock issuable upon conversion of redeemable convertible preferred stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 18,680,225 | 231,391 | 231,391 | 123,391 |
Shares of common stock issuable from stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 23,896,897 | 16,113,756 | 16,508,725 | 10,364,039 |
Shares of common stock issuable from common stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 3,187,913 | 824,913 | 3,187,913 | 182,500 |
Subsequent Events (Details)_2_3
Subsequent Events (Details) - Subsequent event [Member] - TEMPO AUTOMATION INC | Nov. 22, 2022 shares |
Initial Subscribers | |
Subsequent Event [Line Items] | |
Issuance of Class B ordinary shares to Sponsor (in shares) | 1,230,000 |
Initial Subscribers | Committed PIPE Shares | |
Subsequent Event [Line Items] | |
Issuance of Class B ordinary shares to Sponsor (in shares) | 350,000 |
Initial Subscribers | PIPE Incentive Shares | |
Subsequent Event [Line Items] | |
Issuance of Class B ordinary shares to Sponsor (in shares) | 880,000 |
LSA Subscribers | |
Subsequent Event [Line Items] | |
Issuance of Class B ordinary shares to Sponsor (in shares) | 1,820,000 |
LSA Subscribers | Committed PIPE Shares | |
Subsequent Event [Line Items] | |
Issuance of Class B ordinary shares to Sponsor (in shares) | 700,000 |
LSA Subscribers | PIPE Incentive Shares | |
Subsequent Event [Line Items] | |
Issuance of Class B ordinary shares to Sponsor (in shares) | 1,120,000 |
Subsequent Events - earnout (De
Subsequent Events - earnout (Details) - Subsequent event [Member] - Earnout shares - TEMPO AUTOMATION INC $ in Millions | Nov. 22, 2022 USD ($) tranche shares |
Subsequent Event [Line Items] | |
Right to receive number of shares | shares | 7,000,000 |
Number of tranches | tranche | 2 |
Number of shares issued upon achieving Adjusted EBITDA in a single quarter | shares | 3,500,000 |
Term for issuing shares upon achieving adjusted EBITDA | 5 years |
Achieving $5.0 million Adjusted EBITDA | |
Subsequent Event [Line Items] | |
Adjusted EBITDA to issue shares | $ | $ 5 |
Achieving $15.0 million Adjusted EBITDA | |
Subsequent Event [Line Items] | |
Adjusted EBITDA to issue shares | $ | $ 15 |
Subsequent Events - amen (Detai
Subsequent Events - amen (Details) - TEMPO AUTOMATION INC - USD ($) $ in Thousands | Nov. 22, 2022 | Oct. 31, 2021 | Jun. 23, 2021 |
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 150,000 | $ 50 | |
Subsequent event [Member] | First Amended and Restated Loan And Security Agreement | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 20,000 |
Subsequent Events - White (Deta
Subsequent Events - White (Details) - TEMPO AUTOMATION INC - USD ($) shares in Millions, $ in Millions | Nov. 21, 2022 | Oct. 13, 2021 | Aug. 31, 2022 |
Subsequent Event [Line Items] | |||
Extinguishment of debt amount | $ 6 | ||
Aggregate principal amount | $ 0.7 | ||
Subsequent event [Member] | |||
Subsequent Event [Line Items] | |||
Number of shares issuable | 100 | ||
Subsequent event [Member] | August 2022 Bridge Notes | White Lion Capital, LLC | |||
Subsequent Event [Line Items] | |||
Extinguishment of debt amount | $ 4.4 | ||
Aggregate principal amount | 2 | ||
Subsequent event [Member] | August 2022 Bridge Notes | Other investors | |||
Subsequent Event [Line Items] | |||
Aggregate principal amount | $ 2.4 |