POS AM 1 tm2217905-9_posam.htm POS AM tm2217905-9_posam - block - 135.9380759s
As filed with the Securities and Exchange Commission on September 23, 2022
Registration No. 333-261055
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ACE Convergence Acquisition Corp.*
(Exact Name of Registrant as Specified in Its Charter)
Cayman Islands*
(State or other jurisdiction of
incorporation or organization)
6770
(Primary Standard Industrial
Classification Code Number)
N/A
(I.R.S. Employer
Identification Number)
1013 Centre Road, Suite 403S
Wilmington, DE 19805
Telephone: (302) 633-2102
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Behrooz Abdi
Chief Executive Officer
c/o ACE Convergence Acquisition Corp.
1013 Centre Road, Suite 403S
Wilmington, DE 19805
Telephone: (302) 633-2102
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Gregg A. Noel
Michael J. Mies
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 1400
Palo Alto, CA 94301
(650) 470-4500
Ryan J. Maierson
Thomas G. Brandt
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, TX 77002
(713) 546-5400
Patrick H. Shannon
Latham & Watkins LLP
555 Eleventh Street, NW, Suite 1000
Washington, D.C. 20004
(202) 637-2200
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and all other conditions to the Business Combination described in the enclosed proxy statement/prospectus have been satisfied or waived.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer) ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.
*
Prior to the consummation of the Merger described herein, the Registrant intends to effect a deregistration under Article 206 of the Cayman Islands Companies Act (as amended) and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which the Registrant’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. All securities being registered will be issued by ACE Convergence Acquisition Corp. (after its domestication as a corporation incorporated in the State of Delaware), the continuing entity following the Domestication, which will be renamed “Tempo Automation Holdings, Inc.”

 
EXPLANATORY NOTE
This Post-Effective Amendment No. 4 (this “Amendment”) to the registration statement on Form S-4 (File No. 333-261055) (the “Registration Statement”) is being filed to update and supplement the information contained in the proxy statement/prospectus that forms a part of the Registration Statement, as originally declared effective by the U.S. Securities and Exchange Commission (the “Commission”) on April 18, 2022, as amended by the Post-Effective Amendment No. 1 thereto, the Post-Effective Amendment No. 2 thereto, and the Post-Effective Amendment No. 3 thereto, filed with the Commission on July 5, 2022, August 12, 2022, and September 8, 2022, respectively. The former proxy statement/prospectus included in the Registration Statement is being replaced in its entirety by the proxy statement/prospectus filed with this Amendment.
No additional securities are being registered under this Amendment. All applicable registration fees payable in connection with the registration of the securities covered by the Registration Statement were paid by the registrant at the time of the initial filing of the Registration Statement.
 

The information in this preliminary proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities described in this preliminary proxy statement/ prospectus until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 23, 2022
PROXY STATEMENT FOR
EXTRAORDINARY GENERAL MEETING OF
ACE CONVERGENCE ACQUISITION CORP.
(A CAYMAN ISLANDS EXEMPTED COMPANY)
PROSPECTUS FOR
33,825,413 SHARES OF COMMON STOCK AND
11,500,000 WARRANTS OF
ACE CONVERGENCE ACQUISITION CORP.
(AFTER ITS DOMESTICATION AS A CORPORATION INCORPORATED IN THE STATE OF
DELAWARE), THE CONTINUING ENTITY FOLLOWING THE DOMESTICATION, WHICH WILL
BE RENAMED “TEMPO AUTOMATION HOLDINGS, INC.” IN CONNECTION WITH THE
BUSINESS COMBINATION DESCRIBED HEREIN
The disinterested members of the board of directors of ACE Convergence Acquisition Corp., a Cayman Islands exempted company (“ACE”), have approved (1) the domestication of ACE as a Delaware corporation (the “Domestication” and ACE, immediately after the Domestication, “New Tempo”); (2) the merger (the “Merger” and, together with the Domestication, the “Business Combination”) of ACE Convergence Subsidiary Corp. (“Merger Sub”), a Delaware corporation and a direct wholly owned subsidiary of ACE, with and into Tempo Automation, Inc., a Delaware corporation (“Tempo”), with Tempo surviving the Merger as a wholly owned subsidiary of New Tempo, pursuant to the terms of the Amended and Restated Agreement and Plan of Merger, dated as of August 12, 2022, by and among ACE, Merger Sub and Tempo, as amended on September 7, 2022 and September 23, 2022, attached to this proxy statement/prospectus as Annexes A-1, A-2 and A-3 (as may be further amended from time to time, the “Merger Agreement”), as more fully described elsewhere in this proxy statement/prospectus; and (3) the other transactions contemplated by the Merger Agreement and documents related thereto. In connection with the Business Combination, ACE will change its name to “Tempo Automation Holdings, Inc.” 
As a result of and upon the effective time of the Domestication, among other things, (1) each of the then issued and outstanding Class A ordinary shares, par value $0.0001 per share, of ACE (the “ACE Class A ordinary shares”), and Class B ordinary shares, par value $0.0001 per share, of ACE (the “ACE Class B ordinary shares”) will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of New Tempo (the “New Tempo common stock”); (2) each of the then issued and outstanding redeemable warrants of ACE (the “ACE warrants”) will convert automatically into a redeemable warrant to acquire one share of New Tempo common stock (the “New Tempo warrant”); and (3) each of the then issued and outstanding units of ACE that have not been previously separated into the underlying ACE Class A ordinary shares and underlying ACE warrants upon the request of the holder thereof (the “ACE units”), will be cancelled and will entitle the holder thereof to one share of New Tempo common stock and one-half of one New Tempo warrant. Accordingly, this proxy statement/prospectus covers (1) 9,695,298 shares of New Tempo common stock to be issued in the Domestication and (2) 11,500,000 New Tempo warrants to be issued in the Domestication.
As a result of and upon the Closing (as defined below), among other things, all outstanding shares of Tempo common stock (after giving effect to the Tempo Preferred Conversion (as defined below), as more fully described elsewhere in this proxy statement/prospectus) as of immediately prior to the Closing, outstanding options to purchase shares of Tempo common stock (“Tempo Options”) as of immediately prior to the Closing that will be converted into options to purchase shares of New Tempo common stock, and outstanding restricted stock units of Tempo (“Tempo RSUs”) as of immediately prior to the Closing that will be converted into restricted stock units covering shares of New Tempo common stock, in each case, will be cancelled in exchange for the right to receive (or, in the case of the Tempo Options and Tempo RSUs, New Tempo stock options and New Tempo restricted stock units, in each case, covering) (i) shares of New Tempo common stock and (ii) the right to receive a number of Tempo Earnout Shares (as defined below). See “Business Combination Proposal — Consideration — Treatment of Tempo Options and Tempo RSUs.” Additionally, Tempo has undertaken to use its commercially reasonable efforts to cause the holder of each outstanding and unexercised warrant of Tempo to purchase shares of Tempo common stock (“Tempo warrants”) 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 will be converted into warrants to purchase shares of New Tempo common stock on substantially similar terms to the Tempo warrants.
The ACE units, ACE Class A ordinary shares and ACE warrants are currently listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “ACEVU,” “ACEV” and “ACEVW,” respectively. ACE will apply for listing, to be effective at the time of the Business Combination, of New Tempo common stock and New Tempo warrants on Nasdaq under the proposed symbols “TMPO” and “TMPOW,” respectively.
This proxy statement/prospectus provides shareholders of ACE with detailed information about the proposed business combination and other matters to be considered at the extraordinary general meeting of ACE. We encourage you to read this entire document, including the Annexes and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 71 of this proxy statement/prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated           , 2022, and
is first being mailed to ACE’s shareholders on or about           , 2022.

 
ACE CONVERGENCE ACQUISITION CORP.
A Cayman Islands Exempted Company
(Company Number 361468)
1013 Centre Road, Suite 403S
Wilmington, Delaware 19805
Dear ACE Convergence Acquisition Corp. Shareholders: 
You are cordially invited to attend the extraordinary general meeting (the “extraordinary general meeting”) of ACE Convergence Acquisition Corp., a Cayman Islands exempted company (“ACE” and, after the Domestication, as described below, “New Tempo”), at            , Eastern Time, on ,            2022, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at 525 University Ave, Palo Alto, CA 94301, or virtually via live webcast at      or at such other time, on such other date and at such other place to which the meeting may be adjourned.
At the extraordinary general meeting, ACE shareholders will be asked to consider and vote upon a proposal, which is referred to herein as the “Business Combination Proposal,” to approve and adopt the 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 the same may further be amended from time to time, the “Merger Agreement”), by and among ACE, ACE Convergence Subsidiary Corp. (“Merger Sub”) and Tempo Automation, Inc. (“Tempo”), copies of which are attached to the accompanying proxy statement/prospectus as Annexes A-1, A-2 and A-3. The Merger Agreement provides for, among other things, following the Domestication of ACE to Delaware as described below, the merger of Merger Sub with and into Tempo (the “Merger”), with Tempo surviving the Merger as a wholly owned subsidiary of New Tempo, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in the accompanying proxy statement/prospectus.
As a condition to the consummation of the Merger, the disinterested members of the board of directors of ACE have approved a change of ACE’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication” and, together with the Merger, the “Business Combination”). As described in this proxy statement/prospectus, you will be asked to consider and vote upon a proposal to approve the Domestication (the “Domestication Proposal”). In connection with the consummation of the Business Combination, ACE will change its name to “Tempo Automation Holdings, Inc.” As used in the accompanying proxy statement/prospectus, “New Tempo” refers to ACE after the Domestication as well as after the Business Combination, including after such change of name, as applicable.
As a result of and upon the effective time of the Domestication, (1) each of the then issued and outstanding Class A ordinary shares, par value $0.0001 per share, of ACE (the “ACE Class A ordinary shares”), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of New Tempo (the “New Tempo common stock”), (2) each of the then issued and outstanding Class B ordinary shares, par value $0.0001 per share, of ACE (the “ACE Class B ordinary shares”), will convert automatically, on a one-for-one basis, into a share of New Tempo common stock, (3) each of the then issued and outstanding redeemable warrants of ACE (the “ACE warrants”) will convert automatically into a redeemable warrant to acquire one share of New Tempo common stock (the “New Tempo warrants”) pursuant to the Warrant Agreement, dated July 27, 2020, between ACE and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, and (4) each of the then issued and outstanding units of ACE that have not been previously separated into the underlying ACE Class A ordinary shares and underlying ACE warrants upon the request of the holder thereof (the “ACE units”), will be cancelled and will entitle the holder thereof to one share of New Tempo common stock and one-half of one New Tempo warrant. As used herein, “public shares” shall mean the ACE Class A ordinary shares (including those that underlie the ACE units) that were registered pursuant to the Registration Statement on Form S-1 (333-239716) and the shares of New Tempo common stock issued as a matter of law upon the conversion thereof on the effective date of the Domestication. For further details, see “Domestication Proposal.”
 

 
You will also be asked to consider and vote upon (1) four separate proposals to approve material differences between ACE’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) and the proposed certificate of incorporation and bylaws of New Tempo (collectively, the “Organizational Documents Proposals”), (2) a proposal to elect directors who, upon consummation of the Business Combination, will be the directors of New Tempo (the “Director Election Proposal”), (3) a proposal to approve, for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of New Tempo common stock to (a) the PIPE Investors pursuant to the PIPE Investment and (b) the Tempo Stockholders pursuant to the Merger Agreement, (4) a proposal to approve and adopt the Tempo Automation Holdings, Inc. 2022 Incentive Award Plan (the “Incentive Award Plan Proposal”) and (5) a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”). The Business Combination will be consummated only if the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Election Proposal, the Stock Issuance Proposal and the Incentive Award Plan Proposal (collectively, the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which each shareholder is encouraged to read carefully and in its entirety.
As a result of and upon the closing of the Business Combination (the “Closing”), among other things, all outstanding shares of Tempo common stock (after giving effect to the Tempo Preferred Conversion, as defined below and as described elsewhere in this proxy statement/prospectus) as of immediately prior to the Closing, and, together with shares of Tempo common stock reserved in respect of outstanding options to purchase shares of Tempo common stock (“Tempo Options”) and outstanding restricted stock units covering shares of Tempo common stock (“Tempo RSUs”), in each case, as of immediately prior to the Closing that will be converted into awards based on New Tempo common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of the Tempo Options and Tempo RSUs, if and to the extent earned and subject to their respective terms), an aggregate of approximately 25,792,701 shares of New Tempo common stock (at a deemed value of $10.00 per share) equal to the remainder of (a) the quotient obtained by dividing (i) $257,927,013 (the “Base Purchase Price”) by (ii) $10.00, including, as applicable, a number of Tempo Earnout Shares (as defined below and as described elsewhere in this proxy statement/prospectus). Additionally, Tempo has undertaken to use its commercially reasonable efforts to cause the holder of each outstanding and unexercised warrant of Tempo to purchase shares of Tempo common stock (“Tempo warrants”) 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 will be converted into warrants to purchase shares of New Tempo common stock on substantially similar terms to the Tempo warrants.
In connection with the Business Combination, certain related agreements have been, or will be, entered into on or prior to the date of the Closing of the Business Combination (the “Closing Date”), including (i) the Sponsor Support Agreement, (ii) the Tempo Holders Support Agreement, (iii) the Amended and Restated Registration Rights Agreement, (iv) the Lock-Up Agreements, (v) the Amended and Restated PIPE Common Stock Subscription Agreements and (vi) the Lender PIPE Common Stock Subscription Agreement. For additional information, see “Business Combination Proposal — Related Agreements” in the accompanying proxy statement/prospectus.
Pursuant to the Cayman Constitutional Documents, a holder of public shares (a “public shareholder”), which excludes shares held by the Sponsor, may request that ACE redeem all or a portion of such shareholder’s public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and
 

 
instruct it to do so. Public shareholders may elect to redeem their public shares even if they vote “for” the Business Combination Proposal or any other Condition Precedent Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, ACE’s transfer agent, New Tempo will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of June 30, 2022, this would have amounted to approximately $10.17 per issued and outstanding public share, and as of September 20, 2022, this would have amounted to approximately $10.21 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it is shares of New Tempo common stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of ACE — Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash. 
Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares without the prior consent of ACE. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash without the prior consent of ACE.
The Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees have 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 Sponsor Support Agreement, dated as of October 13, 2021, a copy of which is attached as Annex B-1 to this proxy statement/prospectus, as amended by the amendments thereto, dated as of July 6, 2022, August 12, 2022, and September 7, 2022, copies of which are attached as Annexes B-2, B-3 and B-4, respectively, to this proxy statement/prospectus (as may be further amended, the “Sponsor Support Agreement”), and to waive their redemption rights with respect to all of the founder shares and any ordinary shares held by them in connection with the consummation of the Business Combination, subject to the terms and conditions contemplated in the letter agreement, dated as of July 27, 2020. As of the date of the accompanying proxy statement/prospectus, and due to (i) the redemption of 14,797,723 public shares in connection with the shareholder vote in January 2022 and (ii) the redemption of 4,256,979 public shares in connection with the shareholder vote in July 2022, in each case to approve the extension of the date by which ACE must complete an initial business combination, the Sponsor (including ACE’s directors, officers, and initial shareholders and their permitted transferees) owns 59.31% of the issued and outstanding ordinary shares. If ACE is not able to complete the Business Combination with Tempo or another business combination by October 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), then the Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees will be entitled to liquidating distributions from the trust account with respect to any public shares they hold.
The Merger Agreement provides that the obligations of Tempo to consummate the Merger are conditioned on, among other things, that as of the Closing, (i) the amount of cash available in the trust account, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any (x) deferred underwriting commissions being held in the trust account and (y) transaction expenses of ACE and Tempo) (such amount, the “Trust Amount”), plus (ii) the PIPE Investment Amount (as defined herein) actually received by ACE prior to or substantially concurrently with the Closing Date (as defined herein), plus (iii) the Available Credit Amount (as defined herein), plus (iv) the Available Cash Amount (the sum of (i), (ii), (iii) and (iv), the “Available Acquiror Cash”), is at least equal to $10.0 million (the “Minimum Available Acquiror Cash Amount” and, such condition, the “Minimum Cash Condition”). This condition is for the sole benefit of Tempo. If such condition is not met, and such
 

 
condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, the Merger Agreement provides that the obligations of ACE, Merger Sub and Tempo to consummate the Merger are conditioned on, among other things, that pursuant to the Cayman Constitutional Documents, in no event will ACE redeem public shares in an amount that would cause ACE’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.
The Merger Agreement is also subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus (including the absence of a material adverse effect on Tempo and the approval of the Merger Agreement and the transactions contemplated thereby, by the (i) affirmative vote or written consent of the holders of at least a majority of the voting power of the outstanding Tempo capital stock voting as a single class and on an as-converted basis and (ii) the affirmative vote or written consent of the holders of at least a majority of the voting power of the outstanding Tempo Preferred Stock, voting as a single class and on an as-converted basis. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.
ACE’s shareholders should be aware that Citigroup Global Markets, Inc. (“Citi”) has resigned from its roles as financial advisor to Tempo and as a placement agent to ACE in connection with the Merger effective as of May 19, 2022 and has disclaimed any responsibility for any portion of this proxy statement/prospectus. ACE’s shareholders should not place any reliance on the participation of Citi prior to such resignation in the transactions contemplated by this proxy statement/prospectus.
ACE is providing the accompanying proxy statement/prospectus and accompanying proxy card to ACE’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary general meeting, the Business Combination and other related business to be considered by ACE’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the extraordinary general meeting, all of ACE’s shareholders are urged to read the accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 71 of this proxy statement/prospectus.
After careful consideration, the disinterested members of the board of directors of ACE have approved the Business Combination and recommend that shareholders vote “FOR” adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to ACE’s shareholders in the accompanying proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of ACE, you should keep in mind that ACE’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section titled “Business Combination Proposal — Interests of ACE’s Directors and Executive Officers in the Business Combination” in the accompanying proxy statement/prospectus for a further discussion of these considerations.
The approval of each of the Domestication Proposal and the Organizational Documents Proposals requires the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Business Combination Proposal, the Director Election Proposal, the Stock Issuance Proposal, the Incentive Award Plan Proposal and the Adjournment Proposal require the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
Your vote is very important.   Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition
 

 
Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in the accompanying proxy statement/prospectus.
If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO ACE’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE GENERAL MEETING. YOU MAY TENDER YOUR SHARES BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.
No demands for redemption in connection with the business combination proposal described in the registration statement on Form S-4 that was declared effective on April 18, 2022, have been received by Continental on behalf of ACE. All demands for redemption made in connection with the January 2022 and July 2022 shareholder votes to extend the date by which ACE must complete an initial business combination have been completed, and such shares have been redeemed.
On behalf of ACE’s board of directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.
Sincerely,
Behrooz Abdi
Chief Executive Officer and Chairman of the Board of Directors
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
The accompanying proxy statement/prospectus is dated            , 2022 and is first being mailed to shareholders on or about            , 2022.
 

 
ACE CONVERGENCE ACQUISITION CORP.
A Cayman Islands Exempted Company
(Company Number 361468)
1013 Centre Road, Suite 403S
Wilmington, Delaware 19805
NOTICE OF EXTRAORDINARY GENERAL MEETING
TO BE HELD ON       , 2022
TO THE SHAREHOLDERS OF ACE CONVERGENCE ACQUISITION CORP.:
NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “extraordinary general meeting”) of ACE Convergence Acquisition Corp., a Cayman Islands exempted company, company number 361468 (“ACE”), will be held at a.m., Eastern Time, on      , 2022, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at 525 University Ave, Palo Alto, CA 94301, or virtually via live webcast at      . You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes: 

Proposal No. 1 — The Business Combination Proposal — to consider and vote upon a proposal to approve by ordinary resolution and adopt the 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 further amended from time to time, the “Merger Agreement”), by and among ACE, Merger Sub and Tempo, copies of which are attached to this proxy statement/prospectus as Annex es A-1, A-2 and A-3. The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Tempo (the “Merger”), with Tempo surviving the Merger as a wholly owned subsidiary of ACE, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus (the “Business Combination Proposal”); 

Proposal No. 2 — The Domestication Proposal — to consider and vote upon a proposal to approve by special resolution, the change of ACE’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication” and, together with the Merger, the “Business Combination”) (the “Domestication Proposal”);

Organizational Documents Proposals — to consider and vote upon the following four separate proposals (collectively, the “Organizational Documents Proposals”) to approve by special resolution, the following material differences between ACE’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) and the proposed new certificate of incorporation (“Proposed Certificate of Incorporation”) and the proposed new bylaws (“Proposed Bylaws”) of ACE Convergence Acquisition Corp. (a corporation incorporated in the State of Delaware, each to be effective upon the Domestication and the filing with and acceptance by the Secretary of State of Delaware of the certificate of domestication in accordance with Section 388 of the Delaware General Corporation Law (the “DGCL”)), which will be renamed “Tempo Automation Holdings, Inc.” in connection with the Business Combination (ACE after the Domestication, including after such change of name, is referred to herein as “New Tempo”):
(A)
Proposal No. 3 — Organizational Documents Proposal A — to authorize the change in the authorized capital stock of ACE from 500,000,000 Class A ordinary shares, par value $0.0001 per share (the “ACE Class A ordinary shares”), 50,000,000 Class B ordinary shares, par value $0.0001 per share (the “ACE Class B ordinary shares” and, together with the ACE Class A ordinary shares, the “ordinary shares”), and 5,000,000 preference shares, par value $0.0001 per share (the “ACE preferred shares”), to 600,000,000 shares of common stock, par value $0.0001 per share, of New Tempo (the “New Tempo common stock”) and 20,000,000
 

 
shares of preferred stock, par value $0.0001 per share, of New Tempo (the “New Tempo preferred stock”) (“Organizational Documents Proposal A”);
(B)
Proposal No. 4 — Organizational Documents Proposal B — to authorize the board of directors of New Tempo (the “Board”) to issue any or all shares of New Tempo preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by the Board and as may be permitted by the DGCL (“Organizational Documents Proposal B”);
(C)
Proposal No. 5 — Organizational Documents Proposal C — to provide that the Board be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term (“Organizational Documents Proposal C”); and
(D)
Proposal No. 6 — Organizational Documents Proposal D — to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws in connection with the consummation of the Business Combination (copies of which are attached to this proxy statement/prospectus as Annex H and Annex I, respectively), including (1) changing the corporate name from “ACE Convergence Acquisition Corp.” to “Tempo Automation Holdings, Inc.,” ​(2) adopting Delaware as the exclusive forum for certain stockholder litigation, (3) removing certain provisions related to ACE’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which ACE’s board of directors believes is necessary to adequately address the needs of New Tempo after the Business Combination, (4) providing that no action shall be taken by stockholders of New Tempo, except at an annual or special meeting of stockholders, (5) removing limitations on the corporate opportunity doctrine, (6) requiring the approval of the holders of 66 2/3% of the then-outstanding capital stock of New Tempo to amend specified provisions of the Proposed Certificate of Incorporation, and (7) requiring the approval of the Board or the holders of 66 2/3% of the then-outstanding capital stock of New Tempo to amend the Proposed Bylaws (“Organizational Documents Proposal D”);

Proposal No. 7 — The Director Election Proposal — to consider and vote upon a proposal to approve by ordinary resolution, assuming the Business Combination Proposal, the Domestication Proposal and the Organizational Documents Proposals are approved, the election of directors who, upon consummation of the Business Combination, will be the directors of New Tempo (the “Director Election Proposal”), to be effective as of the Closing;

Proposal No. 8 — The Stock Issuance Proposal — to consider and vote upon a proposal to approve by ordinary resolution for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of New Tempo common stock to (a) the PIPE Investors pursuant to the PIPE Investment and (b) the Tempo Stockholders pursuant to the Merger Agreement, to be effective prior to or substantially concurrently with the Closing;

Proposal No. 9 — The Incentive Award Plan Proposal — to consider and vote upon a proposal to approve by ordinary resolution, the Tempo Automation Holdings, Inc. 2022 Incentive Award Plan (the “Incentive Award Plan Proposal”) attached to this proxy statement/prospectus as Annex J, to be effective prior to the Closing Date; and

Proposal No. 10 — The Adjournment Proposal — to consider and vote upon a proposal to approve by ordinary resolution, the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”), to be effective as of the date of the extraordinary general meeting.
Each of Proposals No. 1 through 9 is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.
These items of business are described in this proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting.
 

 
Only holders of record of ordinary shares at the close of business on       , 2022 are entitled to notice of and to vote and have their votes counted at the extraordinary general meeting and any adjournment of the extraordinary general meeting.
This proxy statement/prospectus and accompanying proxy card is being provided to ACE’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournment of the extraordinary general meeting. Whether or not you plan to attend the extraordinary general meeting, all of ACE’s shareholders are urged to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 71 of this proxy statement/prospectus.
After careful consideration, the disinterested members of the board of directors of ACE have approved the Business Combination and recommends that shareholders vote “FOR” adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to ACE’s shareholders in this proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of ACE, you should keep in mind that ACE’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section titled “Business Combination Proposal — Interests of ACE’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.
Pursuant to the Cayman Constitutional Documents, a holder of public shares (as defined herein) (a “public shareholder”) may request of ACE that New Tempo redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:
(i)
(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;
(ii)
submit a written request to Continental, ACE’s transfer agent, that New Tempo redeem all or a portion of your public shares for cash; and
(iii)
deliver your public shares to Continental, ACE’s transfer agent, electronically through The Depository Trust Company (“DTC”).
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on       , 2022 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
No demands for redemption in connection with the business combination proposal described in the registration statement on Form S-4 that was declared effective on April 18, 2022, have been received by Continental on behalf of ACE. All demands for redemption made in connection with the January 2022 and July 2022 shareholder votes to extend the date by which ACE must complete an initial business combination have been completed, and such shares have been redeemed.
Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental, ACE’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem public shares regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank.
If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, ACE’s transfer agent, New Tempo will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the
 

 
“trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of June 30, 2022, this would have amounted to approximately $10.17 per issued and outstanding public share, and as of September 20, 2022, this would have amounted to approximately $10.21 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it is shares of New Tempo common stock that will be redeemed promptly after consummation of the Business Combination. See “Extraordinary General Meeting of ACE — Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares without the prior consent of ACE. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash without the prior consent of ACE.
ACE Convergence Acquisition LLC, a Delaware limited liability company and shareholder of ACE (the “Sponsor”), and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, subject to the terms and conditions contemplated by the Sponsor Support Agreement, dated as of October 13, 2021, a copy of which is attached to this proxy statement/prospectus as Annex B-1, as amended by the amendments thereto, dated as of July 6, 2022 and August 12, 2022, copies of which are attached as Annexes B-2 and B-3 to this proxy statement/prospectus (as may be further amended, the “Sponsor Support Agreement”) and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any founder shares and ordinary shares held by them, in each case, subject to the terms and conditions contemplated in the letter agreement, dated as of July 27, 2020. As of the date of the accompanying proxy statement/prospectus, and due to (i) the redemption of 14,797,723 public shares in connection with the shareholder vote in January 2022 and (ii) the redemption of 4,256,979 public shares in connection with the shareholder vote in July 2022, in each case to approve the extension of the date by which ACE must complete an initial business combination, the Sponsor (including ACE’s directors, officers and initial shareholders and their permitted transferees) owns 59.31% of the issued and outstanding ordinary shares. If ACE is not able to complete the Business Combination with Tempo or another business combination by October 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), then the Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees will be entitled to liquidating distributions from the trust account with respect to any public shares they hold.
The Merger Agreement provides that the obligations of Tempo to consummate the Merger are conditioned on, among other things, that as of the Closing, (i) the amount of cash available in the trust account, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any (x) deferred underwriting commissions being held in the trust account and (y) transaction expenses of ACE and Tempo) (such amount, the “Trust Amount”), plus (ii) the PIPE Investment Amount (as defined herein) actually received by ACE prior to or substantially concurrently with the Closing Date (as defined herein), plus (iii) the Available Credit Amount (as defined herein), plus (iv) the Available Cash Amount (the sum of (i), (ii), (iii) and (iv), the “Available Acquiror Cash”), is at least equal to $10.0 million (the “Minimum Available Acquiror Cash Amount” and, such condition, the “Minimum Cash Condition”). This condition is for the sole benefit of Tempo. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, the Merger Agreement provides that the obligations of ACE, Merger Sub and Tempo to consummate the Merger are conditioned on, among other things, that pursuant to the Cayman Constitutional Documents, in no event will ACE redeem public shares in an amount that would cause ACE’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.
 

 
The Merger Agreement is also subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.
ACE’s shareholders should be aware that Citigroup Global Markets, Inc. (“Citi”) has resigned from its roles as financial advisor to Tempo and as a placement agent to ACE in connection with the Merger effective as of May 19, 2022 and has disclaimed any responsibility for any portion of this proxy statement/prospectus. ACE’s shareholders should not place any reliance on the participation of Citi prior to such resignation in the transactions contemplated by this proxy statement/prospectus.
The approval of each of the Domestication Proposal and Organizational Documents Proposals requires the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Business Combination Proposal, the Director Election Proposal, the Stock Issuance Proposal, the Incentive Award Plan Proposal and the Adjournment Proposal require the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
Your vote is very important.   Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.
If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.
Your attention is directed to the remainder of the proxy statement/prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement/prospectus carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your ordinary shares, please contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200 or banks and brokers can call collect at (203) 658-9400, or by emailing ACEV.info@investor.morrowsodali.com.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors of ACE Convergence Acquisition Corp.,
                 , 2022
Behrooz Abdi
Chief Executive Officer and Chairman of the Board of Directors
 

 
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO ACE’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR SHARES BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.
NO DEMANDS FOR REDEMPTION IN CONNECTION WITH THE BUSINESS COMBINATION PROPOSAL DESCRIBED IN THE REGISTRATION STATEMENT ON FORM S-4 THAT WAS DECLARED EFFECTIVE ON APRIL 18, 2022, HAVE BEEN RECEIVED BY CONTINENTAL ON BEHALF OF ACE. ALL DEMANDS FOR REDEMPTION MADE IN CONNECTION WITH THE JANUARY 2022 AND JULY 2022 SHAREHOLDER VOTES TO EXTEND THE DATE BY WHICH ACE MUST COMPLETE AN INITIAL BUSINESS COMBINATION HAVE BEEN COMPLETED, AND SUCH SHARES HAVE BEEN REDEEMED.
 

 
TABLE OF CONTENTS
Page
1
2
3
8
10
36
68
70
71
117
126
186
189
202
204
206
211
212
222
251
260
271
278
300
302
309
320
325
337
340
349
350
351
352
353
354
355
356
F-1
II-1
 
i

 
ANNEXES
A-1-1
A-2-1
A-3-1
B-1-1
B-2-1
B-3-1
B-4-1
C-1
D-1
E-1
F-1
G-1
H-1
I-1
J-1
 
ii

 
REFERENCES TO ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and financial information that is not included in or delivered with this proxy statement/prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.
You may request copies of this proxy statement/prospectus and any of the publicly available documents or other information concerning ACE, without charge, by written request to Secretary at ACE Convergence Acquisition Corp., 1013 Centre Road, Suite 403S, Wilmington DE 19805, or by telephone request at (302) 633-2102; or Morrow Sodali LLC, ACE’s proxy solicitor, by calling (800) 662-5200 or banks and brokers can call collect at (203) 658-9400, or by emailing ACEV.info@investor.morrowsodali.com, or from the SEC through the SEC website at the address provided above.
In order for ACE’s shareholders to receive timely delivery of the documents in advance of the extraordinary general meeting of ACE to be held on           , 2022, you must request the information no later than           , 2022, five business days prior to the date of the extraordinary general meeting.
 
1

 
TRADEMARKS
This document contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. ACE does not intend its use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.
 
2

 
SELECTED DEFINITIONS
Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:

“2022 Plan” are to the Tempo Automation Holdings, Inc. 2022 Incentive Award Plan;

“2022 Promissory Notes” are to those certain convertible promissory notes issued on January 18, 2022 to existing investors for gross proceeds of $5.0 million;

“ACE” are to ACE Convergence Acquisition Corp. prior to its domestication as a corporation in the State of Delaware;

“ACE Class A ordinary shares” are to ACE’s Class A ordinary shares, par value $0.0001 per share (prior to the Domestication);

“ACE Class B ordinary shares” are to ACE’s Class B ordinary shares, par value $0.0001 per share (prior to the Domestication);

“ACE units” and “units” are to the units of ACE, each unit representing one ACE Class A ordinary share and one-half of one redeemable warrant to acquire one ACE Class A ordinary share, that were offered and sold by ACE in its initial public offering and registered pursuant to the IPO registration statement (less the number of units that have been separated into the underlying public shares and underlying warrants upon the request of the holder thereof);

“Aggregate Fully Diluted Tempo Common Stock” are to (a) the aggregate number of shares of Tempo common stock that are (i) issued and outstanding immediately prior to the Effective Time (after giving effect to the Tempo Preferred Conversion), (ii) issuable upon, or subject to, the settlement or exercise, as applicable, of Tempo Options that are issued and outstanding immediately prior to the Effective Time or (iii) issuable upon the settlement of Tempo RSUs that are issued and outstanding immediately prior to the Effective Time minus (b) the shares of Tempo common stock held in the treasury of Tempo, which treasury shares shall be cancelled as part of the Merger, outstanding immediately prior to the Effective Time;

“Aggregate Merger Consideration” are to the number of shares of New Tempo common stock equal to the remainder of (a) the quotient obtained by dividing (i) the Base Purchase Price by (ii) $10.00;

“Amended and Restated PIPE Common Stock Subscription Agreements” or “Third A&R PIPE Subscription Agreements” are to the Third Amended and Restated Subscription Agreements, pursuant to which the Company anticipates that the purchase of 550,000 shares of New Tempo common stock by the PIPE Investors will be consummated, in each case in the form attached as Annex E hereto;

“Available Acquiror Cash” are to the amount of cash calculated by adding the Trust Amount, the PIPE Investment, the Available Credit Amount and the Available Cash Amount;

“Available Cash Amount” are to the cash and cash equivalents of Tempo as of the Closing Date, as estimated in good faith by Tempo two (2) business days prior to the Closing Date;

“Available Credit Amount” are to the aggregate amount of funds available to be drawn under the Loan and Security Agreement, as estimated in good faith by Tempo two (2) business days prior to the Closing Date;

“Base Purchase Price” are to $257,927,013;

“Bridge Financing” are to, collectively, the issuance and sale of the August 2022 Bridge Note, the amendment and restatement of the 2022 Promissory Notes and the Bridge Note, the issuance of amended and restated warrant to Point72 Ventures Investments, LLC on August 25, 2022, the adoption of the Amended and Restated Fifth Amended and Restated Certificate of Incorporation of Tempo and the entry into the Repayment Term Sheet;

“Business Combination” are to the Domestication together with the Merger;

“Cayman Constitutional Documents” are to ACE’s Amended and Restated Memorandum and Articles of Association, as amended from time to time;

“Cayman Islands Companies Act” are to the Cayman Islands Companies Act (as amended);
 
3

 

“Closing” are to the closing of the Business Combination;

“Closing Date” are to the date of the Closing;

“Company,” “we,” “us” and “our” are to ACE prior to its domestication as a corporation in the State of Delaware and to New Tempo after its domestication as a corporation incorporated in the State of Delaware, including after its change of name to Tempo Automation Holdings, Inc.;

“Condition Precedent Approvals” are to approval at the extraordinary general meeting of the Condition Precedent Proposals;

“Condition Precedent Proposals” are to the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Election Proposal, the Stock Issuance Proposal and the Incentive Award Plan Proposal, collectively;

“Continental” are to Continental Stock Transfer & Trust Company;

“DGCL” are to the General Corporation Law of the State of Delaware;

“Domestication” are to the domestication of ACE Convergence Acquisition Corp. as a corporation incorporated in the State of Delaware in accordance with Section 388 of the DGCL;

“Earnout Exchange Ratio” are to the quotient obtained by dividing (i) the 7,000,000 shares of New Tempo common stock to be issued in connection with the Business Combination described herein by (ii) the aggregate fully-diluted number of shares of Tempo common stock issued and outstanding immediately prior to the Business Combination;

“Earnout Period” are to the time period between the Closing and the five-year anniversary of the Closing;

“Earnout Triggering Event I” are to the first date after the Closing Date, but within the Earnout Period, on which New Tempo has achieved $15.0 million in sales revenue during the previous fiscal quarter;

“Earnout Triggering Event II” are to the first date after the Closing Date, but within the Earnout Period, on which New Tempo has achieved an Adjusted EBITDA of $5.0 million during the previous fiscal quarter;

“Earnout Triggering Events” are to Earnout Triggering Event I and Earnout Triggering Event II;

“Effective Time” are to the date and time the Merger becomes effective;

“Eligible Tempo Equityholder” are to a holder of (a) a share of Tempo common stock (after giving effect to the Tempo Preferred Conversion) (b) an unexercised Tempo Option or (c) Tempo RSUs, in each case as of immediately prior to the Effective Time;

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

“founder shares” are to the ACE Class B ordinary shares purchased by the Sponsor in a private placement prior to the initial public offering, and the ACE Class A ordinary shares that will be issued upon the conversion thereof;

“GAAP” are to accounting principles generally accepted in the United States of America;

“HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

“initial public offering” or “IPO” are to ACE’s initial public offering that was consummated on July 30, 2020;

“IPO registration statement” are to the Registration Statement on Form S-1 (333-239716) filed by ACE in connection with its initial public offering, which was declared effective on July 27, 2020;

“IRS” are to the U.S. Internal Revenue Service;

“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

“Loan and Security Agreement” are to that certain Loan and Security Agreement, dated October 13, 2021, by and among Structural Capital Investments III, LP, Series Structural DCO II, a series of
 
4

 
Structural Capital DCO, LLC, SQN Tempo Automation, LLC, SQN Venture Income Fund II, LP, Ocean II PLO LLC and Tempo;

“Merger” are to the merger of Merger Sub with and into Tempo, with Tempo surviving the Merger as a wholly owned subsidiary of New Tempo;

“Minimum Available Acquiror Cash Amount” are to the Available Acquiror Cash being at least equal to $10.0 million;

“Minimum Cash Condition” are to the closing condition, for Tempo’s obligation to consummate the Merger, that the Available Acquiror Cash shall be no less than the Minimum Available Acquiror Cash Amount;

“Nasdaq” are to The Nasdaq Capital Market;

“New Tempo” or “Domesticated ACE” are to ACE immediately after the Domestication;

“New Tempo common stock” are to shares of New Tempo common stock, par value $0.0001 per share;

“New Tempo Options” are to options to purchase shares of New Tempo common stock;

“New Tempo RSUs” are to restricted stock units covering shares of New Tempo common stock;

“ordinary shares” are to the ACE Class A ordinary shares and the ACE Class B ordinary shares, collectively;

“Person” are to any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind;

“Per Share Merger Consideration” are to the quotient of (a) the remainder of (i) the Aggregate Merger Consideration minus (ii) 16,500,000 shares of New Tempo common stock, divided by (b) the Aggregate Fully Diluted Tempo Company Common Stock;

“PIPE Investment” are to (a) the purchase of up to 550,000 shares of New Tempo common stock pursuant to the Amended and Restated PIPE Common Stock Subscription Agreements and (b) the purchase of up to 500,000 shares of New Tempo common stock pursuant to the Lender PIPE Common Stock Subscription Agreement;

“PIPE Investment Amount” are to the aggregate gross purchase price actually received by ACE prior to or substantially concurrently with Closing for the purchase of shares of New Tempo common stock in the PIPE Investment;

“PIPE Investors” are to those certain investors participating in the PIPE Investment pursuant to the Amended and Restated PIPE Common Stock Subscription Agreements, including Third Party PIPE Investors and Sponsor Related PIPE Investors;

“private placement warrants” or “Private Placement Warrants” are to the ACE private placement warrants outstanding as of the date of this proxy statement/prospectus and the warrants of New Tempo issued as a matter of law upon the conversion thereof at the time of the Domestication;

“pro forma” are to giving pro forma effect to the Business Combination and the other related events contemplated by the Merger Agreement;

“Proposed Bylaws” are to the proposed bylaws of New Tempo upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex I;

“Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of New Tempo upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex H;

“Proposed Organizational Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws;
 
5

 

“public shareholders” are to holders of public shares, whether acquired in ACE’s initial public offering or acquired in the secondary market;

“public shares” are to the ACE Class A ordinary shares (including those that underlie the units) that were offered and sold by ACE in its initial public offering and registered pursuant to the IPO registration statement or the shares of New Tempo common stock issued as a matter of law upon the conversion thereof at the time of the Domestication, as context requires;

“public warrants” or “Public Warrants” are to the redeemable warrants (including those that underlie the units) that were offered and sold by ACE in its initial public offering and registered pursuant to the IPO registration statement or the redeemable warrants of New Tempo issued as a matter of law upon the conversion thereof at the time of the Domestication, as context requires;

“redemption” are to each redemption of public shares for cash pursuant to the Cayman Constitutional Documents and the Proposed Organizational Documents;

“Registration Rights Agreement” are to the Amended and Restated Registration Rights Agreement to be entered into at Closing, by and among New Tempo, the Sponsor, the other parties to the Sponsor Support Agreement and certain former stockholders of Tempo;

“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002, as amended;

“SEC” are to the United States Securities and Exchange Commission;

“Securities Act” are to the Securities Act of 1933, as amended;

“Sponsor” are to ACE Convergence Acquisition LLC, a Delaware limited liability company;

“Sponsor Related PIPE Investors” are to those certain related parties of the Sponsor participating in the PIPE Investment pursuant to the Third A&R PIPE Subscription Agreements;

“Sponsor Support Agreement” are to that certain Sponsor Support Agreement, dated as of October 13, 2021, by and among ACE, the Sponsor, certain of ACE’s directors, officers and initial shareholders and their permitted transferees and Tempo, as amended on July 6, 2022, August 12, 2022, and September 7, 2022, as may be further amended and modified from time to time;

“Tempo” are to Tempo Automation, Inc. prior to the Business Combination;

“Tempo common stock” are to shares of Tempo common stock, par value $0.00001 per share;

“Tempo Earnout Shares” are to those 7,000,000 shares of New Tempo common stock, comprised of two separate tranches of 3,500,000 shares per tranche, issuable to Eligible Tempo Equityholders during the Earnout Period upon the achievement of the applicable Earnout Triggering Events;

“Tempo Holders Support Agreement” are to that certain Support Agreement, dated October 13, 2021, by and among ACE, Tempo and certain Tempo Stockholders, as amended and modified from time to time;

“Tempo Options” are to options to purchase shares of Tempo common stock granted under the Tempo Automation, Inc. 2015 Incentive Award Plan;

“Tempo RSUs” are to restricted stock units covering shares of Tempo common stock granted under the Tempo Automation, Inc. 2015 Incentive Award Plan;

“Tempo Stockholders” are to the stockholders of Tempo and holders of Tempo Options and Tempo RSUs prior to the Closing;

“Tempo warrant” are to the common warrants, the Series A warrants, Series B warrants and the Series C warrants of Tempo;

“Third Party PIPE Investors” are to those certain investors, other than the Sponsor Related PIPE Investors, participating in the PIPE Investment pursuant to the Third A&R PIPE Subscription Agreements;

“trust account” are to the trust account established at the consummation of ACE’s initial public offering at JP Morgan Chase Bank, N.A. and maintained by Continental, acting as trustee;
 
6

 

“Trust Agreement” are to the Investment Management Trust Agreement, dated July 27, 2020, by and between ACE and Continental, as trustee;

“Trust Amount” are to the amount of cash available in the trust account, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any (x) deferred underwriting commissions being held in the trust account and (y) transaction expenses of ACE and Tempo); and

“warrants” or “Warrants” are to the public warrants and the private placement warrants.
Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, all references in this proxy statement/prospectus to ACE Class A ordinary shares, shares of New Tempo common stock or warrants include such securities underlying the units.
 
7

 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of our and Tempo’s management for future operations, including as they relate to the potential Business Combination. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this proxy statement/ prospectus, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When we and Tempo discuss strategies or plans, including as they relate to the potential Business Combination, we and Tempo are making projections, forecasts or forward- looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, our and Tempo’s management.
Forward-looking statements may include, for example, statements about:

ACE’s ability to complete the Business Combination or, if ACE does not consummate such Business Combination, any other initial business combination;

satisfaction or waiver (if applicable) of the conditions to the Merger, including, among other things:

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 of which this proxy statement/prospectus forms a part of, (iii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, (iv) receipt of approval for listing on Nasdaq of the shares of New Tempo common stock to be issued in connection with the Merger, (v) that ACE have at least $5,000,001 of net tangible assets upon Closing and (vi) the absence of any injunctions; and

that the amount of cash available in the trust account, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their rights to redeem their ACE Class A ordinary shares pursuant to the Cayman Constitutional Documents, plus the PIPE Investment Amount and the Available Credit Amount actually received by ACE at or prior to the Closing Date, and prior to the payment of any expenses relating to the Business Combination, is at least equal to the Minimum Available Acquiror Cash Amount;

the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement;

the projected financial information, business and operating metrics, anticipated growth rate, and market opportunity of New Tempo;

the ability to obtain or maintain the listing of New Tempo common stock and New Tempo warrants on Nasdaq following the Business Combination;

our public securities’ potential liquidity and trading;

our ability to raise financing in the future;

our success in retaining or recruiting, or changes required in, officers, key employees or directors following the completion of the Business Combination;

ACE officers and directors allocating their time to other businesses and potentially having conflicts of interest with ACE’s business or in approving the Business Combination;

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

the impact of the regulatory environment and complexities with compliance related to such environment;
 
8

 

the impact of the ongoing COVID-19 pandemic;

the success of strategic relationships with third parties;

Tempo’s ability to execute its business strategy;

Tempo’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

Tempo’s financial performance;

The ability of New Tempo to expand or maintain its existing customer base; and

other factors detailed under the section titled “Risk Factors.”
Forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effects on us or Tempo. There can be no assurance that future developments affecting us or Tempo will be those that ACE or Tempo have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond ACE’s control or the control of Tempo) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” beginning on page 71 of this proxy statement/prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. ACE and Tempo undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
In addition, statements that “ACE believes,” “Tempo believes,” “New Tempo believes,” “we believe” and similar statements reflect our and Tempo’s beliefs and opinions on the relevant subject. These statements are based upon information available to us or Tempo, as the case may be, as of the date of this proxy statement/prospectus, and while we or Tempo, as the case may be, believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that such party has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements as predictions of future events.
Before any ACE shareholder grants its proxy or instructs how its vote should be cast or votes on the proposals to be put to the extraordinary general meeting, such stockholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/ prospectus may adversely affect us.
 
9

 
QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF ACE
The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to ACE’s shareholders. ACE urges shareholders to read this proxy statement/prospectus, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the extraordinary general meeting, which will be held at     a.m., Eastern Time, on            , 2022,      at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at 525 University Ave, Palo Alto, CA 94301, or virtually via live webcast. To participate in the extraordinary general meeting, visit and enter the 12 digit control number included on your proxy card. You may register for the meeting as early as      , Eastern Time, on      , 2022. If you hold your shares through a bank, broker or other nominee, you will need to take additional steps to participate in the meeting, as described in this proxy statement.
Q:
Why am I receiving this proxy statement/prospectus?
A:
ACE shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve the Business Combination. The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Tempo, with Tempo surviving the Merger as a wholly owned subsidiary of New Tempo, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus. See the section titled “Business Combination Proposal” for more detail.
Copies of the Merger Agreement are attached to this proxy statement/prospectus as Annexes A-1, A-2 and A-3, and you are encouraged to read them in their entirety.
As a condition to the Merger, ACE will change its jurisdiction of incorporation by effecting a deregistration under the Cayman Islands Companies Act and a domestication under Section 388 of the DGCL, pursuant to which ACE’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. As a result of and upon the effective time of the Domestication, (1) each of the then issued and outstanding ACE Class A ordinary shares will convert automatically, on a one-for-one basis, into a share of New Tempo common stock; (2) each of the then issued and outstanding ACE Class B ordinary shares will convert automatically, on a one-for-one basis, into a share of New Tempo common stock; (3) each of the then issued and outstanding ACE warrants will convert automatically into a New Tempo warrant, pursuant to the Warrant Agreement, dated as of July 27, 2020, between ACE and Continental (the “Warrant Agreement”); and (4) each of the then issued and outstanding units of ACE will be cancelled and will entitle the holder thereof to one share of New Tempo common stock and one-half of one New Tempo warrant. See “Domestication Proposal” for additional information.
The provisions of the Proposed Organizational Documents will differ materially from the Cayman Constitutional Documents. Please see “What amendments will be made to the current constitutional documents of ACE?” below.
THE VOTE OF SHAREHOLDERS IS IMPORTANT. SHAREHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS, INCLUDING THE ANNEXES AND THE ACCOMPANYING FINANCIAL STATEMENTS OF ACE AND TEMPO, CAREFULLY AND IN ITS ENTIRETY.
Q:
What proposals are shareholders of ACE being asked to vote upon?
A:
At the extraordinary general meeting, ACE is asking holders of ordinary shares to consider and vote upon:

a proposal to approve by ordinary resolution the Merger and to adopt the Merger Agreement;

a proposal to approve by special resolution the Domestication;
 
10

 

the following four separate proposals to approve by special resolution the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents, each to be effective upon the Domestication:

to authorize the change in the authorized capital stock of ACE from (i) 500,000,000 ACE Class A ordinary shares, 50,000,000 ACE Class B ordinary shares and 5,000,000 preference shares, par value $0.0001 per share, to (ii) 600,000,000 shares of New Tempo common stock and 20,000,000 shares of New Tempo preferred stock;

to authorize the Board to issue any or all shares of New Tempo preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by the Board and as may be permitted by the DGCL;

to divide the Board into three classes with only one class of directors being elected in each year and each class serving a three-year term;

to authorize all other changes in connection with the replacement of the Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws as part of the Domestication, including, (1) changing the corporate name from “ACE Convergence Acquisition Corp.” to “Tempo Automation Holdings, Inc.,” ​(2) adopting Delaware as the exclusive forum for certain stockholder litigation, (3) removing certain provisions related to ACE’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which ACE’s board of directors believes is necessary to adequately address the needs of New Tempo after the Business Combination, (4) providing that no action shall be taken by stockholders of New Tempo, except at an annual or special meeting of stockholders, (5) removing limitations on the corporate opportunity doctrine, (6) requiring the approval of the holders of 6623% of the then-outstanding capital stock of New Tempo to amend specified provisions of the Proposed Certificate of Incorporation, and (7) requiring the approval of the Board or the holders of 6623% of the then-outstanding capital stock of New Tempo to amend the Proposed Bylaws;

a proposal to approve by ordinary resolution the election of directors to serve staggered terms, who, upon consummation of the Business Combination, will be the directors of New Tempo, to be effective as of the Closing;

a proposal to approve by ordinary resolution, for purposes of complying with applicable listing rules of Nasdaq, the issuance of shares of New Tempo common stock in connection with the Business Combination, to be effective prior to or substantially concurrently with the Closing;

a proposal to approve by ordinary resolution the 2022 Plan, to be effective prior to the Closing Date; and

a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting, to be effective as of the date of the extraordinary general meeting.
If ACE’s shareholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. See “Business Combination Proposal,” “Domestication Proposal,” “Organizational Documents Proposals,” “Director Election Proposal,” “Stock Issuance Proposal,” “Incentive Award Plan Proposal,” and “Adjournment Proposal.
ACE will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders of ACE should read it carefully.
After careful consideration, ACE’s board of directors have determined that the Business Combination Proposal, the Domestication Proposal, each of the Organizational Documents Proposals, the Director
 
11

 
Election Proposal, the Stock Issuance Proposal, the Incentive Award Plan Proposal and the Adjournment Proposal are in the best interests of ACE and its shareholders and recommends that you vote or give instruction to vote “FOR” each of those proposals.
The existence of financial and personal interests of one or more of ACE’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of ACE and its shareholders and what he, she or they may believe is best for himself, herself, or themselves in determining to recommend that shareholders vote for the proposals. In addition, ACE’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section titled “Business Combination Proposal — Interests of ACE’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
Q:
Are the proposals conditioned on one another?
A:
Yes. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. If our stockholders do not approve each of the proposals, the Merger may not be consummated.
Q:
Why is ACE proposing the Business Combination?
A:
ACE was organized to effect a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization, or similar business combination, with one or more businesses or entities.
Based on its due diligence investigations of Tempo and the industry in which it operates, including the financial and other information provided by Tempo in the course of ACE’s due diligence investigations, the ACE board of directors believes that the Business Combination with Tempo is in the best interests of ACE and its shareholders and presents an opportunity to increase shareholder value. However, there is no assurance of this. See “Business Combination Proposal — ACE’s Board of Directors’ Reasons for the Business Combination” for additional information.
Although ACE’s board of directors believes that the Business Combination with Tempo presents a unique business combination opportunity and is in the best interests of ACE and its shareholders, the board of directors did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the section titled “Business Combination Proposal — ACE’s Board of Director’s Reasons for the Business Combination,” as well as in the sections entitled “Risk Factors — Risks Relating to Tempo’s Business and Industry.”
Q:
What will Tempo Stockholders receive in return for ACE’s acquisition of all of the issued and outstanding equity interests of Tempo?
A:
As a result of and upon the Closing, among other things, all outstanding shares of Tempo common stock (after giving effect to the Tempo Preferred Conversion, as described elsewhere in this proxy statement/prospectus) as of immediately prior to the Closing, and, together with shares of Tempo common stock reserved in respect of Tempo Options and Tempo RSUs outstanding as of immediately prior to the Closing that will be converted into awards based on New Tempo common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of the Tempo Options and Tempo RSUs, if and to the extent earned and subject to their respective terms), an aggregate of approximately 25,792,701 shares of New Tempo common stock (at a deemed value of $10.00 per share) equal to the remainder of (a) the quotient obtained by dividing (i) the Base Purchase Price by (ii) $10.00, including, as applicable, a number of Tempo Earnout Shares (as defined below and as described elsewhere in this proxy statement/prospectus) (the “Aggregate Merger Consideration”). For further details, see “Business Combination Proposal — The Merger Agreement — Consideration — Aggregate Merger Consideration.” Additionally, Tempo has undertaken to use its commercially reasonable efforts to cause the holder of each outstanding and unexercised Tempo warrants 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
 
12

 
of the Merger. Any Tempo warrants that remain issued and outstanding as of immediately prior to the Effective Time will be converted into warrants to purchase shares of New Tempo common stock on substantially similar terms to the Tempo warrants.
Q:
How will my Tempo Options be treated in the Business Combination?
A:
At the Effective Time, each outstanding Tempo Option, whether or not then vested and exercisable, will be converted into a New Tempo Option covering a number of shares of New Tempo common stock equal to the number of shares subject to such Tempo Option prior to the Effective Time multiplied by the Per Share Merger Consideration (rounded down to the nearest whole share), with a per share exercise price equal to the exercise price of such Tempo Option prior to the Effective Time divided by the Per Share Merger Consideration (rounded up to the nearest whole cent). In addition, following the Closing, Eligible Tempo Equityholders will be entitled to receive their pro rata share of the Tempo Earnout Shares if, during the Earnout Period, the applicable Earnout Triggering Events are attained and the applicable former holder continues to provide services to New Tempo or one of its subsidiaries at the time of such Earnout Triggering Event.
Q: How will my Tempo RSUs be treated in the Business Combination?
A:
At the Effective Time, each outstanding award of Tempo RSUs, whether or not then vested, will be converted into an award of New Tempo RSU covering a number of shares of New Tempo common stock equal to the number of shares subject to such award of Tempo RSUs prior to the Effective Time multiplied by the Per Share Merger Consideration (rounded down to the nearest whole share). In addition, following the Closing, Eligible Tempo Equityholders will be entitled to receive their pro rata share of the Tempo Earnout Shares if, during the Earnout Period, the applicable Earnout Triggering Events are attained and the applicable former holder continues to provide services to New Tempo or one of its subsidiaries at the time of such Earnout Triggering Event.
Q:
What equity stake will current shareholders hold in New Tempo immediately after the consummation of the Business Combination?
A:
As of the date of this proxy statement/prospectus, there are 9,695,298 ordinary shares issued and outstanding, which includes the 5,750,000 founder shares held by the Sponsor and initial shareholders and their permitted transferees and the 3,945,298 public shares. As of the date of this proxy statement/prospectus, there are 18,100,000 warrants outstanding, which include the 6,600,000 private placement warrants held by the Sponsor and initial shareholders and their permitted transferees and the 11,500,000 public warrants. Each whole warrant entitles the holder thereof to purchase one ACE Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of New Tempo common stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination), the ACE fully diluted share capital would be 27,795,298. 
Following the Business Combination, (1) ACE’s public shareholders are expected to own approximately 14.1% of the outstanding New Tempo common stock, (2) Tempo Stockholders (without taking into account any public shares held by Tempo Stockholders prior to the consummation of the Business Combination or shares of New Tempo stock issuable to holders of New Tempo Options or New Tempo RSUs) are expected to own approximately 51.8% of the outstanding New Tempo common stock, at a deemed value of $10.00 per share of New Tempo common stock and after giving effect to the Per Share Merger Consideration, (3) the Sponsor and related parties (including the Sponsor Related PIPE Investors) are expected to collectively own approximately 22.4% of the outstanding New Tempo common stock (taking into account the SSA Exchange), (4) Cantor is expected to own approximately 2.9% of the outstanding New Tempo common stock and (5) the Third Party PIPE Investors are expected to own approximately 8.8% of the outstanding New Tempo common stock. These percentages assume (i) that no public shareholders exercise their redemption rights in connection with the Business Combination and no exercise of the public and private warrants or options or issuance of any shares of New Tempo common stock in connection with the Tempo Earnout Shares, (iii) that (x) New Tempo issues or reserves for issuance 14,542,197 shares of New Tempo common stock to Tempo Stockholders as part of the Aggregate Merger Consideration pursuant to the Merger Agreement and (y) New Tempo issues 3,050,000 shares of New Tempo common stock to the PIPE Investors pursuant to the PIPE
 
13

 
Investment, and (iv) 805,000 shares of New Tempo to Cantor Fitzgerald & Co. (“Cantor”) to settle deferred underwriting commissions incurred during ACE’s IPO. If the actual facts are different from these assumptions, the percentage ownership retained by current ACE shareholders and Tempo Stockholders in New Tempo will be different.
The following table illustrates varying ownership levels in New Tempo immediately following the consummation of the Business Combination based on the assumptions above.
Share Ownership in New Tempo
Pro Forma Combined
(Assuming No Redemptions)
Pro Forma Combined
(Assuming Maximum
Redemptions)(1)
Number of
Shares
%
Ownership
Number of
Shares
%
Ownership
Tempo Stockholders(2)(3)(6)(7)
14,542,197 51.8% 14,542,197 55.8%
ACE’s public shareholders
3,945,298 14.1% 954,686 3.7%
Sponsor & related parties(4)(6)
6,288,755 22.4% 6,102,925 23.4%
Third Party PIPE Investors(7)
2,469,047 8.8% 3,654,878 14.0%
Cantor(5) 805,000 2.9% 805,000 3.1%
Total
28,050,297 100% 26,059,686 100%
(1)
Assumes maximum redemptions of 2,990,612 Class A ordinary shares of ACE in connection with the Business Combination at approximately $10.16 per share based on trust account figures as of June 30, 2022, and including the expected proceeds received from the Promissory Note with the Sponsor. As of September 21, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus, the Sponsor’s obligation is approximately $0.27 per public share. 
(2)
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. Because the Tempo Earnout Shares are contingently issuable based upon meeting certain operating metrics that have not yet been achieved, the pro forma New Tempo common stock issued and outstanding immediately after the Business Combination excludes the 7,000,000 Tempo Earnout Shares.
(3)
Includes an estimated 3,727,260 shares of New Tempo common stock expected to be issued to Tempo warrant holders, net of expected exercise proceeds, and excludes an estimated 610,197 shares of New Tempo common stock to be reserved for potential future issuance upon the exercise of New Tempo Options and an estimated 1,641,564 shares of New Tempo common stock to be reserved for potential future issuance upon settlement of New Tempo RSUs.
(4)
Includes 200,000 shares subscribed for by the Sponsor Related PIPE Investors and 3,750,000 shares beneficially owned by the directors and officers of ACE and initial shareholders and their permitted transferees (taking into account the SSA Exchange).
(5)
Includes 805,000 New Tempo shares issued to Cantor to settle ACE’s existing deferred underwriting commissions of $8.1 million as of June 30, 2022.
(6)
Includes New Tempo common stock issued to Tempo Stockholders and the Sponsor and related parties upon conversion of the August 2022 Bridge Notes. By virtue of the Merger, Tempo Stockholders and the Sponsor and related parties who hold August 2022 Bridge Notes, are expected to receive 3,973,827 and 1,957,803 shares of New Tempo common stock, respectively.
(7)
Certain Third Party PIPE Investors are also existing Tempo Stockholders. Accordingly, the same shareholders may be included in both shareholder categories.
For further details, see “Business Combination Proposal — The Merger Agreement — Consideration — Aggregate Merger Consideration.
 
14

 
Q:
How has the announcement of the Business Combination affected the trading price of the Company’s Class A common stock?
A:
On October 13, 2021, the trading date before the public announcement of the Business Combination, ACE’s public units, Class A ordinary shares and warrants closed at $10.14, $9.92 and $0.58, respectively. As of           , 2022, the record date for the extraordinary general meeting, the most recent closing price for each unit, common stock and redeemable warrant was $     , $      and $     , respectively.
Q:
Will the Company obtain new financing in connection with the Business Combination?
A:
Yes. Certain PIPE Investors have agreed to purchase an aggregate of 550,000 shares of New Tempo common stock in connection with the closing of the Business Combination, for aggregate gross proceeds of $5.5 million. The PIPE Investment is contingent upon, among other things, the Closing. See “Business Combination Proposal — Related Agreements — PIPE Subscription Agreements.” The Company intends to establish a committed equity facility with one or more investors following the closing of the Business Combination. There can be no guarantee that the Company will be able to obtain a commitment for such facility from an investor.
Q:
What are the material differences, if any, in the terms and price of securities issued at the time of the IPO as compared to the securities that will be issued as part of the PIPE Investment (including the issuance of the PIPE Incentive Shares) at the Effective Time?
A:
On July 30, 2020, ACE consummated its IPO, pursuant to which it issued and sold 23,000,000 ACE units at an offering price of $10.00 per ACE unit, with each ACE unit consisting of one ACE Class A ordinary share and one-half of one public warrant. At the Effective Time, each of the then issued and outstanding ACE units that have not been previously separated into the underlying ACE Class A ordinary shares and public warrants upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New Tempo common stock and one-half of one New Tempo warrant. As of September 21, 2022, the closing price on Nasdaq of ACE Class A ordinary shares was $10.24 per share, and the closing price of the ACE warrants was $0.10 per ACE warrant. Therefore, based on such closing price on September 21, 2022, each holder of an ACE unit at Closing would receive one share of New Tempo common stock, valued at $10.24, and one-half of one New Tempo warrant, valued at approximately $0.05, in exchange for the $10.00 ACE unit such holder originally purchased in the ACE IPO.
On September 7, 2022, ACE entered into the Third A&R PIPE Subscription Agreements with each of the PIPE Investors, pursuant to which the PIPE Investors have agreed to purchase an aggregate of 550,000 shares of New Tempo common stock.
Pursuant to the Third A&R PIPE Subscription Agreements, ACE will issue additional shares of New Tempo common stock to each PIPE Investor in the event that the volume weighted average price per share of New Tempo 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 New Tempo 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 New Tempo common stock equal to the product of (x) the number of shares of New Tempo 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 below) 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 will also issue up to 500,000 additional shares of New Tempo 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 New Tempo common stock equal to the lesser of (1) such PIPE Investor’s pro rata portion of 500,000
 
15

 
additional shares of New Tempo 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 New Tempo 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.
Additionally, ACE will 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.
The obligation of the parties to consummate the purchase and sale of the shares covered by the Third A&R PIPE Subscription Agreements is conditioned upon, among other things, there not being in force any injunction or order enjoining or prohibiting the issuance and sale of the shares covered by the Third A&R PIPE Subscription Agreements and satisfaction or waiver of all conditions precedent to the Closing under the Merger Agreement. The closings under the Third A&R PIPE Subscription Agreements will occur substantially concurrently with the Closing. For additional information, see “Business Combination Proposal — Related Agreements — PIPE Subscription Agreements.”
The shares of New Tempo common stock to be issued in the PIPE Investment will be identical to the shares of New Tempo common stock that will be held by ACE’s public stockholders at the time of Closing, except that the shares of New Tempo common stock issued in the PIPE Investment will not be registered with the SEC.
Q:
Why is ACE proposing the Domestication?
A:
Our board of directors believes that there are significant advantages to us that will arise as a result of a change of ACE’s domicile to Delaware. Further, ACE’s board of directors believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. ACE’s board of directors believes that there are several reasons why a reincorporation in Delaware is in the best interests of the Company and its shareholders, including, (i) the prominence, predictability, and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors. Each of the foregoing are discussed in greater detail in the section titled “Domestication Proposal — Reasons for the Domestication.
To effect the Domestication, ACE will file a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which ACE will be domesticated and continue as a Delaware corporation.
The approval of the Domestication Proposal is a condition to the closing of the Merger under the Merger Agreement. The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Act, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.
Q:
What amendments will be made to the current constitutional documents of ACE?
A:
The consummation of the Business Combination is conditioned, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, ACE’s shareholders are also being asked to consider and vote upon a proposal to approve the Domestication and replace ACE’s Cayman Constitutional Documents, in each case, under the Cayman Islands Companies Act, with the Proposed Organizational Documents, in each case, under the DGCL, which differ materially from the Cayman Constitutional Documents in several respects, including the following:
 
16

 
Cayman Constitutional Documents
Proposed Organizational Documents
Authorized Shares (Organizational Documents Proposal A) The Cayman Constitutional Documents authorize 555,000,000 shares, consisting of 500,000,000 ACE Class A ordinary shares, 50,000,000 ACE Class B ordinary shares and 5,000,000 preference shares. The Proposed Organizational Documents authorize 620,000,000 shares, consisting of 600,000,000 shares of New Tempo common stock and 20,000,000 shares of New Tempo preferred stock.
See paragraph 7 of the Existing Memorandum. See Article Fourth of the Proposed Certificate of Incorporation.
Authorize the Board of Directors to Issue Preferred Stock Without Stockholder Consent (Organizational Documents Proposal B) The Cayman Constitutional Documents authorize the issuance of 5,000,000 preference shares with such designation, rights and preferences as may be determined from time to time by ACE’s board of directors. Accordingly, ACE’s board of directors is empowered under the Cayman Constitutional Documents, without shareholder approval, to issue preferred shares with dividend, liquidation, redemption, voting or other rights which could adversely affect the voting power or other rights of the holders of ordinary shares (except to the extent it may affect the ability of ACE to carry out a conversion of ACE Class B ordinary shares on the Closing Date, as contemplated by the Existing Articles). The Proposed Organizational Documents authorize the Board to issue all or any shares of preferred stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations, or restrictions thereof, as the Board may determine.
See paragraph 7 of the Existing Memorandum and Articles 9 and 28 of the Existing Articles. See Article Fourth, subsection
(B) of the Proposed Certificate of Incorporation.
Classified Board (Organizational Documents Proposal C) The Cayman Constitutional Documents do not contain a provision that provides the number of classes of ACE’s board of directors.
The Proposed Organizational Documents provide that the Board be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term.
See Article Fifth, subsection (A) of the Proposed Certificate of Incorporation.
Corporate Name (Organizational Documents Proposal D) The Cayman Constitutional Documents provide that the name of the company is “ACE Convergence Acquisition Corp.” The Proposed Organizational Documents provide that the name of the corporation will be “Tempo Automation Holdings, Inc.”
See paragraph 1 of the Existing Memorandum. See Article First of the Proposed Certificate of Incorporation.
Perpetual Existence (Organizational Documents The Cayman Constitutional Documents provide that if ACE The Proposed Organizational Documents do not include any
 
17

 
Cayman Constitutional Documents
Proposed Organizational Documents
Proposal D) does not consummate a business combination (as defined in the Cayman Constitutional Documents) by October 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), ACE will cease all operations except for the purposes of winding up and will redeem the public shares and liquidate ACE’s trust account. provisions relating to New Tempo’s ongoing existence; the default under the DGCL will make New Tempo’s existence perpetual.
See Article 17 of the Cayman Constitutional Documents. Default rule under the DGCL.
Exclusive Forum (Organizational Documents Proposal D) The Cayman Constitutional Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation.
The Proposed Organizational Documents adopt Delaware as the exclusive forum for certain stockholder litigation.
See Article Tenth of the Proposed Certificate of Incorporation.
Takeovers by Interested Stockholders (Organizational Documents Proposal D) The Cayman Constitutional Documents do not provide restrictions on takeovers of ACE by a related shareholder following a business combination.
The Proposed Organizational Documents will have New Tempo governed by Section 203 of the DGCL relating to takeovers by interested stockholders.
Default rule under the DGCL.
Provisions Related to Status as Blank Check Company (Organizational Documents Proposal D) The Cayman Constitutional Documents include various provisions related to ACE’s status as a blank check company prior to the consummation of a business combination. The Proposed Organizational Documents do not include such provisions related to ACE’s status as a blank check company, which no longer will apply upon consummation of the Merger, as ACE will cease to be a blank check company at such time.
See Article 17 of the Cayman Constitutional Documents.
Q:
How will the Domestication affect my ordinary shares, warrants and units?
A:
As a result of and upon the effective time of the Domestication, (1) each of the then issued and outstanding ACE Class A ordinary shares will convert automatically, on a one-for-one basis, into a share of New Tempo common stock, (2) each of the then issued and outstanding ACE Class B ordinary shares will convert automatically, on a one-for-one basis, into a share of New Tempo common stock; (3) each of the then issued and outstanding ACE warrants will convert automatically into a New Tempo warrant, pursuant to the Warrant Agreement and (4) each of the then issued and outstanding units of ACE will be cancelled and will entitle the holder thereof to one share of New Tempo common stock and one-half of one New Tempo warrant. See “Domestication Proposal” for additional information.
Q:
What are the U.S. federal income tax consequences of the Domestication?
A:
As discussed more fully under “U.S. Federal Income Tax Considerations,” Skadden, Arps, Slate, Meagher & Flom LLP has delivered an opinion that the Domestication will qualify as a reorganization within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Assuming that the Domestication so qualifies, U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) will be subject to Section 367(b) of the Code and, as a result:
 
18

 

A U.S. Holder whose ACE Class A ordinary shares have a fair market value of less than $50,000 on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of ACE’s earnings in income;

A U.S. Holder whose ACE Class A ordinary shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) less than 10% of the total combined voting power of all classes of ACE stock entitled to vote and less than 10% of the total value of all classes of ACE stock will generally recognize gain (but not loss) on the exchange of ACE Class A ordinary shares for New Tempo common stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” ​(as defined in the Treasury Regulations under Section 367 of the Code) attributable to its ACE Class A ordinary shares provided certain other requirements are satisfied; and

A U.S. Holder whose ACE Class A ordinary shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of ACE stock entitled to vote or 10% or more of the total value of all classes of ACE stock will generally be required to include in income as a deemed dividend all earnings and profits amount attributable to its ACE Class A ordinary shares.
ACE does not expect to have significant cumulative earnings and profits, if any, on the date of the Domestication.
As discussed more fully under “U.S. Federal Income Tax Considerations,” ACE believes that it is likely classified as a “passive foreign investment company” ​(“PFIC”) for U.S. federal income tax purposes. In such case, notwithstanding the foregoing U.S. federal income tax consequences of the Domestication, proposed Treasury Regulations under Section 1291(f) of the Code (which have a retroactive effective date), if finalized in their current form, would generally require a U.S. Holder to recognize gain on the exchange of ACE Class A ordinary shares or warrants for New Tempo common stock or warrants pursuant to the Domestication. Any such gain would be taxable income with no corresponding receipt of cash in the Domestication. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on a complex set of rules. However, it is difficult to predict whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted and how any such Treasury Regulations would apply. Importantly, however, U.S. Holders that make or have made certain elections discussed further under “U.S. Federal Income Tax Considerations — PFIC Considerations — D. QEF Election and Mark-to-Market Election” with respect to their ACE Class A ordinary shares are generally not subject to the same gain recognition rules under the currently proposed Treasury Regulations under Section 1291(f) of the Code. Currently, there are no elections available that apply to ACE warrants, and the application of the PFIC rules to ACE warrants is unclear. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see “U.S. Federal Income Tax Considerations.
Each U.S. Holder of ACE Class A ordinary shares or warrants is urged to consult its own tax advisor concerning the application of the PFIC rules, including the proposed Treasury Regulations, to the exchange of ACE Class A ordinary shares and warrants for New Tempo common stock and warrants pursuant to the Domestication.
Additionally, the Domestication may cause non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) to become subject to U.S. federal income withholding taxes on any amounts treated as dividends paid in respect of such non-U.S. Holder’s New Tempo common stock after the Domestication.
The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor regarding the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “U.S. Federal Income Tax Considerations.
 
19

 
Q:
Do I have redemption rights?
A:
If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?
Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares without the prior consent of ACE. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash without the prior consent of ACE.
The Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees have agreed to waive their redemption rights with respect to all of the founder shares and ordinary shares held by them in connection with the consummation of the Business Combination, subject to the terms and conditions contemplated in the letter agreement, dated as of July 27, 2020.
Q:
How do I exercise my redemption rights?
A:
If you are a public shareholder and wish to exercise your right to redeem the public shares, you must:
(i)
(a) hold public shares, or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;
(ii)
submit a written request to Continental, ACE’s transfer agent, that New Tempo redeem all or a portion of your public shares for cash; and
(iii)
deliver your public shares to Continental, ACE’s transfer agent, electronically through the Depository Trust Company (“DTC”).
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on           , 2022 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
The address of Continental, ACE’s transfer agent, is listed under the question “Who can help answer my questions?” below.
Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, ACE’s transfer agent, directly and instruct them to do so.
Public shareholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the trust account calculated as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable). For illustrative purposes, as of June  30, 2022, this would have amounted to approximately $10.17 per issued and outstanding public share, and as of September 20, 2022, this would have amounted to approximately $10.21 per issued and outstanding public share. However, the proceeds deposited in the trust account could become subject to the claims of ACE’s creditors, if any, which could have priority over the claims of the public shareholders, regardless of whether such public shareholder votes or, if they do vote, irrespective of if they vote for or against the Business Combination Proposal. Therefore, the per share distribution from the trust account in such a situation may be less than originally expected due to such claims. Whether
 
20

 
you vote, and if you do vote irrespective of how you vote, on any proposal, including the Business Combination Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public shareholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.
Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the extraordinary general meeting. If you deliver your shares for redemption to Continental, ACE’s transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that ACE’s transfer agent return the shares (electronically) to you. You may make such request by contacting Continental, ACE’s transfer agent, at the phone number or address listed at the end of this section. Any corrected or changed written exercise of redemption rights must be received by Continental, ACE’s transfer agent, prior to the vote taken on the Business Combination Proposal at the extraordinary general meeting. If you deliver your public shares for redemption to Continental and later decide prior to the extraordinary general meeting not to elect redemption, you may request that Continental return the shares (electronically). No request for redemption will be honored unless the holder’s public shares have been delivered (electronically) to Continental, ACE’s agent, at least two business days prior to the vote at the extraordinary general meeting.
If a holder of public shares properly makes a request for redemption and the public shares are delivered as described above, then, if the Business Combination is consummated, New Tempo will redeem the public shares for a pro rata portion of funds deposited in the trust account, calculated as of two business days prior to the consummation of the Business Combination. The redemption will take place following the Domestication and, accordingly, it is shares of New Tempo common stock that will be redeemed immediately after consummation of the Business Combination.
If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.
No demands for redemption in connection with the business combination proposal described in the registration statement on Form S-4 that was declared effective on April 18, 2022, have been received by Continental on behalf of ACE. All demands for redemption made in connection with the January 2022 and July 2022 shareholder votes to extend the date by which ACE must complete an initial business combination have been completed, and such shares have been redeemed.
Q:
If I am a holder of units, can I exercise redemption rights with respect to my units?
A:
No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, ACE’s transfer agent, directly and instruct them to do so. You are requested to cause your public shares to be separated and delivered to Continental, ACE’s transfer agent, by 5:00 p.m., Eastern Time, on           , 2022 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares.
Q:
What are the U.S. federal income tax consequences of exercising my redemption rights?
A:
In most circumstances, it is expected that a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations”) that exercises its redemption rights to receive cash from the trust account in exchange for its New Tempo common stock will generally be treated as selling such New Tempo common stock resulting in the recognition of capital gain or capital loss. There may be certain circumstances, however, in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of New Tempo common stock that such U.S. Holder owns or is deemed to own under certain constructive attribution rules (including through the ownership of warrants). For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “U.S. Federal Income Tax Considerations.”
 
21

 
Additionally, because the Domestication will occur immediately prior to the redemption of any shareholder, holders exercising redemption rights will be subject to the potential tax consequences of Section 367 of the Code as well as potential tax consequences of the U.S. federal income tax rules relating to PFICs. The tax consequences of Section 367 of the Code and the PFIC rules are discussed more fully below under “U.S. Federal Income Tax Considerations.
All holders considering exercising redemption rights are urged to consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws.
Q:
What happens to the funds deposited in the trust account after consummation of the Business Combination?
A:
Following the closing of ACE’s initial public offering, an amount equal to $230.0 million ($10.00 per unit) of the net proceeds from ACE’s initial public offering and the sale of the private placement warrants was placed in the trust account. As of June 30, 2022, funds in the trust account totaled approximately $83.4 million in cash. As of September 20, 2022, the amount held in the trust account was $40,293,597.28. Taking into account the Sponsor’s monthly contributions pursuant to the Sponsor Loan, and without giving effect to any requests for redemption in connection with the extraordinary general meeting to be held on October 11, 2022, to extend the date by which ACE must complete an initial business combination, or any requests for redemption in connection with the extraordinary general meeting being held in connection with the Business Combination, the amount expected to be held in the trust account on October 13, 2022, is $40,530,315.16. Prior to June 2022, the funds in the trust account were comprised entirely of U.S. government treasury obligations with a maturity of 185 days or less or of money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the Closing), (2) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Cayman Constitutional Documents (A) to modify the substance or timing of ACE’s obligation to allow for redemption in connection with ACE’s initial business combination or to redeem 100% of the public shares if it does not complete a business combination by October 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date) or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity and (3) the redemption of all of the public shares if ACE is unable to complete a business combination by October 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), subject to applicable law.
With respect to the regulation of special purpose acquisition companies like ACE (“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 ACE’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, ACE 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 Business Combination and liquidation of ACE.
 
22

 
On January 13, 2022, ACE entered into a Convertible Promissory Note (the “Sponsor Loan”) with the Sponsor, pursuant to which the Sponsor agreed to contribute to ACE as a loan $0.03 for each Class A ordinary share of ACE that was not redeemed in connection with the shareholder vote to approve the extension of the date by which ACE must complete an initial business combination (which extension was approved at an annual general meeting of shareholders of ACE on January 21, 2022) 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 and (ii) $1.5 million has been loaned. Such contributions will be deposited into the trust account. Additionally, in connection with the shareholder approval of such extension in January 2022, certain shareholders elected to redeem an aggregate of 14,797,723 public shares, or approximately 64.34%. Such redemption demands have been completed and such shares have been redeemed. As a result, approximately $148,079,821 was paid out of the trust account in connection with such redemptions.
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 ACE’s shareholders of the extension of the date by which ACE must complete an initial business combination to October 13, 2022 (the “Extension Proposal”), which proposal was approved in July 2022. Monthly deposits into the trust account following the July 2022 redemptions are based on the number of public shares still outstanding following such redemptions. Therefore, assuming the Sponsor makes the maximum amount of monthly contributions, ACE estimates that the per-share price at which public shares could be redeemed from cash held in the trust account would be approximately $10.27 at the time of the extraordinary general meeting to be held in connection with the Business Combination. Additionally, in connection with the shareholder approval of such extension in July 2022, certain shareholders elected to redeem an aggregate of 4,256,979 public shares, or approximately 51.90%. Such redemption demands have been completed and such shares have been redeemed. As a result, approximately $43,349,494 was paid out of the trust account in connection with such redemptions, which payments are reflected in the estimated per-share price above.
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, the effectiveness of which is conditioned upon the approval by ACE’s shareholders of the proposal to amend ACE’s Third Amended and Restated Memorandum and Articles of Association to extend the date by which ACE must consummate an initial business combination from October 13, 2022, to January 30, 2023. Monthly deposits into ACE’s trust account following such extension will be based on the number of public shares still outstanding following such extension. Therefore, assuming such extension is approved and assuming the Sponsor makes the maximum amount of monthly contributions, ACE estimates that the per-share price at which public shares could be redeemed from cash held in the trust account would be approximately $10.37 on January 30, 2023.
There have been two redemption events: one in January 2022, in which 14,797,723 shares were redeemed, and one in July 2022, in which 4,256,979 shares were redeemed. As of September 21, 2022, there are 3,945,298 ACE Class A ordinary shares issued and outstanding All demands for redemption made in connection with the shareholder votes to extend the date by which ACE must complete an initial business combination have been completed, and such shares have been redeemed.
Upon consummation of the Business Combination, the funds deposited in the trust account will be released to pay holders of ACE public shares who properly exercise their redemption rights; to pay certain transaction fees and expenses associated with the Business Combination; and for working capital and general corporate purposes of New Tempo following the Business Combination. See “Summary of the Proxy Statement/Prospectus — Sources and Uses of Funds for the Business Combination.”
Q:
What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?
A:
Our public shareholders are not required to vote in respect of the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even
 
23

 
though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders.
The Merger Agreement provides that the obligations of Tempo to consummate the Merger are conditioned on, among other things, that as of the Closing, the Available Acquiror Cash is at least equal to the Minimum Available Cash Amount. If such conditions are not met, and such conditions are not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, in no event will we redeem public shares in an amount that would cause ACE’s net tangible assets (as determined in accordance with Rule 3a5 1-1(g)(1) of the Exchange Act) to be less than $5,000,001.
Q:
What conditions must be satisfied to complete the Business Combination?
A:
The Merger Agreement 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 of which this proxy statement/prospectus forms a part of, (iii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, (iv) receipt of approval for listing on Nasdaq the shares of New Tempo common stock to be issued in connection with the Merger, (v) that ACE have at least $5,000,001 of net tangible assets upon Closing and (vi) the absence of any injunctions.
For more information about conditions to the consummation of the Business Combination, see “Business Combination Proposal — The Merger Agreement.”
Q:
When do you expect the Business Combination to be completed?
A:
It is currently expected that the Business Combination will be consummated in the fourth quarter of 2022. This date depends, among other things, on the approval of the proposals to be put to ACE shareholders at the extraordinary general meeting. However, such meeting could be adjourned if the Adjournment Proposal is adopted by ACE’s shareholders at the extraordinary general meeting and ACE elects to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. For a description of the conditions for the completion of the Business Combination, see “Business Combination Proposal — The Merger Agreement.”
Q:
What happens if the Business Combination is not consummated?
A:
ACE will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Merger Agreement. If ACE is not able to complete the Business Combination with Tempo or another business combination by October 13, 2022, in each case, as such date may be extended pursuant to the Cayman Constitutional Documents, ACE will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
Pursuant to the Letter Agreement, the Sponsor and directors and officers of ACE at the time of ACE’s initial public offering agreed to waive their redemption rights with respect to all of the Founder Shares and any public shares held by them.
 
24

 
Q:
Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication?
A:
Neither ACE’s shareholders nor ACE’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Act or under the DGCL.
Q:
What do I need to do now?
A:
ACE urges you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder or warrant holder. ACE’s shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.
Q:
How do I vote?
A:
If you are a holder of record of ordinary shares on the record date for the extraordinary general meeting, you may vote in person at the extraordinary general meeting or by submitting a proxy for the extraordinary general meeting. While you will be permitted to observe the proceedings of the extraordinary general meeting virtually via live webcast, you will not be able to vote via live webcast, and such virtual participation will not be counted for the purpose of establishing a quorum. You may submit your proxy by completing, signing, dating, and returning the enclosed proxy card in the accompanying pre-addressed postage-paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote in person, obtain a valid proxy from your broker, bank or nominee.
Q:
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
A:
No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker, bank or nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the shareholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank, or other nominee as to how to vote your shares and you should instruct your broker to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal.
Q:
When and where will the extraordinary general meeting be held?
A:
The extraordinary general meeting will be held at          a.m., Eastern Time, on           , 2022, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at 525 University Ave, Palo Alto, CA 94301, or virtually via live webcast at           ,unless the extraordinary general meeting is adjourned.
 
25

 
Q:
Who is entitled to vote at the extraordinary general meeting?
A:
ACE has fixed           , 2022 as the record date for the extraordinary general meeting. If you were a shareholder of ACE at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the extraordinary general meeting.
Q:
How many votes do I have?
A:
ACE shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 9,695,298 ordinary shares issued and outstanding, of which 3,945,298 were issued and outstanding public shares.
Q:
What constitutes a quorum?
A:
A quorum of ACE shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. While ACE shareholders will be permitted to observe the proceedings of the extraordinary general meeting virtually via live webcast, such shareholders will not be able to vote via live webcast, and such virtual participation will not be counted for the purposes of establishing a quorum. As of the record date for the extraordinary general meeting, 6,976,139 ordinary shares would be required to achieve a quorum.
Q:
What vote is required to approve each proposal at the extraordinary general meeting?
A:
The following votes are required for each proposal at the extraordinary general meeting:
(i)
Business Combination Proposal:   The Business Combination Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to vote their shares in favor of each of the proposals presented herein. As a result, assuming all outstanding shares are represented in person or by proxy, the affirmative vote of additional public shares is not required to approve this proposal.
(ii)
Domestication Proposal:   The approval of the Domestication Proposal requires a special resolution under Cayman Islands Companies Act, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to vote their shares in favor of each of the proposals presented herein. As a result, assuming all outstanding shares are represented in person or by proxy, only the affirmative vote of 713,532 additional public shares, or approximately 18.09%, is required to approve this proposal.
(iii)
Organizational Documents Proposals:   The separate approval of each of the Organizational Documents Proposals requires a special resolution under Cayman Islands Companies Act, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to vote their shares in favor of each of the proposals presented herein. As a result, assuming all outstanding shares are represented in person or by proxy, only the affirmative vote of 713,532 additional public shares, or approximately 18.09%, is required to approve this proposal.
(iv)
Director Election Proposal:   The Director Election Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to vote their shares in favor of each of the proposals presented
 
26

 
herein. As a result, assuming all outstanding shares are represented in person or by proxy, the affirmative vote of additional public shares is not required to approve this proposal.
(v)
Stock Issuance Proposal:   The Stock Issuance Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to vote their shares in favor of each of the proposals presented herein. As a result, assuming all outstanding shares are represented in person or by proxy, the affirmative vote of additional public shares is not required to approve this proposal.
(vi)
Incentive Award Plan Proposal:   The Incentive Award Plan Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to vote their shares in favor of each of the proposals presented herein. As a result, assuming all outstanding shares are represented in person or by proxy, the affirmative vote of additional public shares is not required to approve this proposal.
(vii)
Adjournment Proposal:    The Adjournment Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to vote their shares in favor of each of the proposals presented herein. As a result, assuming all outstanding shares are represented in person or by proxy, the affirmative vote of additional public shares is not required to approve this proposal.
Q:
What are the recommendations of ACE’s board of directors?
A:
ACE’s board of directors believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of ACE’s shareholders and recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Incentive Award Plan Proposal, and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.
The existence of financial and personal interests of one or more of ACE’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of ACE and its shareholders and what he, she or they may believe is best for himself, herself, or themselves in determining to recommend that shareholders vote for the proposals. In addition, ACE’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section titled “Business Combination Proposal — Interests of ACE’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
Q:
Who is ACE’s Sponsor?
A:
ACE’s sponsor is ACE Convergence Acquisition LLC, a Delaware limited liability company. The Sponsor currently owns 3,160,570 Class B ordinary shares of ACE. The Sponsor is indirectly owned by ACE Equity Partners LLC, a limited liability company formed in South Korea, and Behrooz Abdi, a United States citizen. ACE Equity Partners LLC is owned and controlled by David Young Ko, a United States citizen and resident of South Korea. In January 2022, the Sponsor distributed 755,930 founder shares to ACE SO5 Holdings Limited (“ACE SO5”), a company formed in the British Virgin Islands. ACE Equity Partners International Pte Ltd. (“AEPI”), a company formed in Singapore, is the sole owner of the voting equity of ACE SO5. The sole shareholder of AEPI is ACE Equity Partners LLC, which is wholly owned and controlled by Mr. Ko, a U.S. citizen.
 
27

 
To ACE’s knowledge, the only non-U.S. citizens who are associated with or otherwise involved in the transaction are as follows:

Denis Tse, a citizen of Hong Kong and Secretary and a director of ACE, is the sole director and manager of ACE SO5. Mr. Tse disclaims beneficial ownership of securities held by ACE SO5. Mr. Tse is also a director and the Executive Director (Chief Executive Officer) of AEPI. Mr. Tse will not be a director of the post-closing combined entity.

1,678,500 Class B ordinary shares are held by Mr. Sunny Siu, a citizen of Hong Kong. Upon consummation of the Business Combination, Mr. Siu is expected to own less than a 5 percent interest in the combined companies.
Each of the individuals who will serve as directors of the post-closing combined entity upon the closing of the Business Combination is a U.S. citizen.
ACE does not believe that any of the above facts or relationships would subject the proposed Business Combination to regulatory review, including review by the Committee on Foreign Investment in the United States (CFIUS). Nor does ACE believe that if such a review were conceivable that the proposed Business Combination ultimately would be prohibited.
However, if the proposed Business Combination were to become subject to CFIUS review, CFIUS could decide to block or delay ACE’s proposed initial business combination, impose conditions with respect to such initial business combination or request the President of the United States to order ACE to divest all or a portion of the U.S. target business of its initial business combination that it acquired without first obtaining CFIUS approval. The time required for CFIUS to conduct its review and any remedy imposed by CFIUS could prevent ACE from completing its initial business combination and require ACE to liquidate. In that case, investors would be entitled to redemption of 100% of the public shares, at a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the trust account, including interest not previously released to ACE to pay its income taxes (less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then-issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any). Moreover, investors would lose the investment opportunity in a target company, any price appreciation in the combined companies, and the warrants would expire worthless.
Q:
How does the Sponsor intend to vote their shares?
A:
Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees have agreed to vote all the founder shares and any other public shares they may hold in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, and due to (i) the redemption of 14,797,723 public shares in connection with the shareholder vote in January 2022 and (ii) the redemption of 4,256,979 public shares in connection with the shareholder vote in July 2022, in each case to approve the extension of the date by which ACE must complete an initial business combination, the Sponsor (including ACE’s directors, officers, and initial shareholders and their permitted transferees) owns 59.31% of the issued and outstanding ordinary shares.
Subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor, the existing stockholders of Tempo or our or their 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 Condition Precedent Proposals, 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 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, the existing stockholders of Tempo or our or their 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
 
28

 
shares at a price no higher than the price offered through the ACE redemption process (i.e., approximately $10.17 per share based on trust account figures as of June 30, 2022, and approximately $10.21 per share based on trust account figures as of September 20, 2022); (b) would represent in writing that such public shares will not be voted in favor of approving the 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, the existing stockholders of Tempo or our or their respective directors, officers, advisors or respective affiliates in situations in which the tender offer rules and restrictions on purchases apply, ACE will disclose in a Current Report on Form 8-K prior to the extraordinary general meeting the following: (i) the number of ACE 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 Proposal will be approved; (iv) the identities of the ACE securityholders who sold to the Sponsor, the existing stockholders of Tempo or our or their 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 ACE 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 the Minimum Cash Condition, (y) otherwise limiting the number of public shares electing to redeem and (z) ACE’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, the existing stockholders of Tempo or our or their respective directors, officers, advisors or respective affiliates may have the effect of increasing share ownership of Tempo on a fully diluted basis.
If such transactions are effected, 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 our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
The existence of financial and personal interests of one or more of ACE’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of ACE and its shareholders and what he, she or they may believe is best for himself, herself, or themselves in determining to recommend that shareholders vote for the proposals. In addition, ACE’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section titled “Business Combination Proposal — Interests of ACE’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
Q:
What do the Sponsor, its affiliates, and ACE’s directors and officers have at risk that depends on the completion of a business combination?
A:
When you consider the recommendation of ACE’s board of directors in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor, its affiliates, and ACE’s directors and officers have certain amounts at risk that depend on the completion of a business combination. Such amounts include the following:

On May 28, 2020, the Sponsor purchased 5,750,000 ACE Class B ordinary shares for an aggregate purchase price of $25,000, or approximately $0.004 per share (“Founder Shares”). On May 29, 2020, the Sponsor transferred an aggregate of 155,000 Founder Shares to certain members of the Company’s management team. The Founder Shares included an aggregate of up to 750,000 shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised, so that the number of Founder Shares would equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. As a result of the underwriters’ election to fully exercise their over-allotment option
 
29

 
on July 30, 2020, 750,000 Founder Shares are no longer subject to forfeiture. Simultaneously with the closing of the initial public offering of ACE, the Sponsor purchased 6,600,000 Private Placement Warrants at a price of $1.00 per warrant, or $6,600,000 in the aggregate, in a private placement. On October 13, 2021, the Sponsor distributed 1,678,500 Founder Shares and 948,750 Private Placement Warrants to Sunny Siu. In January 2022, the Sponsor distributed 755,930 founder shares and 891,714 private placement warrants to ACE SO5 Holdings Limited, an affiliate of the Sponsor. If ACE does not consummate a business combination by October 13, 2022 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Act to provide for claims of creditors and the requirements of other applicable law. In such event, the 5,595,000 ACE Class B ordinary shares owned by the Sponsor and initial shareholders and their permitted transferees, and the 155,000 ACE Class B ordinary shares directly owned by ACE’s independent directors and certain of its officers, in aggregate, would be worthless because following the redemption of the public shares, ACE would likely have few, if any, net assets and because the Sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to the Sponsor if ACE fails to complete a business combination within the required period. In addition the 6,600,000 Private Placement Warrants would expire worthless. The Sponsor purchased the ACE Class B ordinary shares prior to ACE’s initial public offering for approximately $0.004 per share and certain of ACE’s directors and executive officers, including Behrooz Abdi, have an economic interest in such shares. Each of the initial shareholders of ACE and their permitted transferees acquired their ACE Class B ordinary shares at $0.004 per share. The 3,750,000 shares of New Tempo common stock that the Sponsor and initial shareholders of ACE (including the independent directors and certain officers of ACE, and excluding the Sponsor Related PIPE Investors) and their permitted transferees, are expected to hold following the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of approximately $38.40 million based upon the closing price of $10.24 per public share on Nasdaq on September 21, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. Given such shares of New Tempo common stock will be subject to certain restrictions, including those described above, ACE believes such shares have less value. The 6,600,000 New Tempo warrants into which the 6,600,000 Private Placement Warrants held by the Sponsor and initial shareholders and their permitted transferees, will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of approximately $660,000 based upon the closing price of $0.10 per public warrant on Nasdaq on September 21, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus.

The Sponsor will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to ACE shareholders rather than liquidate.

Given the differential in purchase price that the Sponsor and initial shareholders and their permitted transferees paid for the Founder Shares as compared to the price of the units sold in ACE’s initial public offering and the substantial number of shares of New Tempo Common Stock that the Sponsor and initial shareholders and their permitted transferees will receive upon conversion of the Founder Shares in connection with the Business Combination, the Sponsor and initial shareholders and their permitted transferees may realize a positive rate of return on such investments even if other shareholders of ACE experience a negative rate of return following the Business Combination.

The Sponsor and its affiliates are active investors across a number of different investment platforms, which ACE and the Sponsor believe improved the volume and quality of opportunities that were available to ACE. However, it also creates potential conflicts and the need to allocate investment opportunities across multiple investment vehicles. In order to provide the Sponsor with the flexibility to evaluate opportunities across these platforms, ACE’s Cayman
 
30

 
Constitutional Documents currently provide that certain business opportunities are not subject to the “corporate opportunity” doctrine. This waiver allows the Sponsor and its affiliates to allocate opportunities based on a combination of the objectives and fundraising needs of the target, as well as the investment objectives of the investment vehicle. ACE does not believe that the waiver of the corporate opportunities doctrine otherwise had a material impact on its search for an acquisition target.

On May 28, 2020, ACE issued an unsecured promissory note to the Sponsor, pursuant to which ACE borrowed an aggregate principal amount of $186,760. The note was non-interest bearing and payable on the earlier of (i) December 31, 2020, and (ii) the completion of the initial public offering. The borrowings outstanding under the note in the amount of $186,760 were repaid upon the consummation of the initial public offering on July 30, 2020. In addition, in order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the Sponsor or an affiliate of the Sponsor or certain of ACE’s officers and directors may, but are not obligated to, loan ACE funds as may be required. In the event that ACE’s initial business combination does not close, ACE may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment, and the applicable related party lender or lenders may not be able to recover the value it or they have loaned to ACE pursuant to such loans. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsor. ACE does not expect to seek loans from parties other than the Sponsor or an affiliate of the Sponsor as ACE does not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the trust account. As of December 31, 2020, ACE had no outstanding borrowings under the working capital loans.

On August 12, 2020, ACE entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Sponsor, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility will be utilized to finance transaction costs in connection with ACE’s initial 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, ACE deposited $900,000 into an account held by ASIA-IO, from which ACE may make fund withdrawals for up to $1,500,000. As part of the Working Capital Facility, ASIA-IO waived the right to convert the working capital loan into private placement warrants. Any outstanding amounts deposited with ASIA-IO upon the completion of a business combination or dissolution of ACE, will be returned to ACE. In November 2020, the deposit amount was reduced by $850,000. As of June 30, 2022, ACE had $829,295 of outstanding borrowings under the Working Capital Facility. If the Business Combination is not completed and ACE winds up, there will not be sufficient assets to repay the Working Capital Facility and it will be worthless.

On January 13, 2022, ACE entered into a Convertible Promissory Note (the “Promissory Note”) with the Sponsor. Pursuant to the Promissory Note, the Sponsor has agreed that it will contribute to ACE as a loan (each loan being referred to herein as a “Contribution”) $0.03 for each Class A ordinary share of ACE that was not redeemed in connection with the shareholder vote to approve the extension of the deadline by which ACE must complete its initial business combination, 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 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 ACE at a conversion price equal to $1.00 per warrant. The Contribution(s) 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 Business Combination. ACE’s board of directors will have the sole discretion whether to continue extending for additional months until $1.5 million in the aggregate has been loaned, and if ACE’s board of directors determines not to continue extending for additional months, the Sponsor’s obligation to make additional Contributions will terminate. If this occurs, ACE would wind up ACE’s affairs and
 
31

 
redeem 100% of the outstanding public shares in accordance with the procedures set forth in ACE’s Third Amended and Restated Memorandum and Articles of Association. The maturity date of the Promissory Note may be accelerated upon the occurrence of an Event of Default (as defined therein). Any outstanding principal under the Promissory Note 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 Promissory Note upon notice of such prepayment. If the Business Combination is not completed and ACE winds up, there will not be sufficient assets to repay the Promissory Note and it will be worthless. On June 30, 2022, ACE and the Sponsor amended and restated the Promissory Note 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 ACE’s shareholders of the extension of the date by which ACE must complete an initial business combination to October 13, 2022. Monthly deposits into the trust account following the July 2022 redemptions are based on the number of public shares still outstanding following such redemptions. 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, the effectiveness of which is conditioned upon the approval by ACE’s shareholders of the proposal to amend ACE’s Third Amended and Restated Memorandum and Articles of Association to extend the date by which ACE must consummate an initial business combination from October 13, 2022, to January 30, 2023. Monthly deposits into ACE’s trust account following such extension will be based on the number of public shares still outstanding following such extension.

In the event that ACE fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, ACE will be required to provide for payment of claims of creditors that were not waived that may be brought against ACE within the ten years following such redemption. In order to protect the amounts held in ACE’s trust account, the Sponsor has agreed that it will be liable to ACE if and to the extent any claims by a third party (other than ACE’s independent auditors) for services rendered or products sold to ACE, or a prospective target business with which ACE has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) 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 value of the trust assets, in each case, net of the amount of 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 indemnity of the underwriters of ACE’s IPO against certain liabilities, including liabilities under the Securities Act.
See the section titled “Business Combination Proposal — Interests of ACE’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
Q:
What are the potential impacts on the Business Combination and related transactions resulting from the resignation of Citi?
A:
On May 19, 2022, Citigroup Global Markets Inc. (“Citi”) resigned from its role as financial advisor to Tempo and as a placement agent to the Company for the proposed PIPE Investment. Citi’s resignation was not the result of any dispute or disagreement with the Company or Tempo or any matter relating to the Company’s or Tempo’s respective operations, policies, procedures or practices. In connection with its resignation, Citi waived any claim it may have to any fees under the engagement letters entered into with each of the Company and Tempo and, accordingly, neither the Company nor Tempo has paid to Citi, and neither the Company nor Tempo is liable to Citi for, any fees, despite Citi’s having rendered substantially all applicable services at the time of its resignation. Citi did not provide specific reasons for its resignation, and neither the Company nor Tempo will speculate about the reasons why Citi withdrew from its role as financial advisor to Tempo and as a placement agent to the Company for the PIPE Investment and forfeited its fees after doing substantially all of the work necessary to earn those fees. Neither the Company nor Tempo intends to engage any additional advisors or placement agents as a result of Citi’s resignation, and the fees previously owed to Citi will not be paid or reallocated to any
 
32

 
other advisor or placement agent. Citi was not expected to have a significant role in the closing of the Business Combination, and the Company does not believe that Citi’s resignation will impact the transactions described in this proxy statement/prospectus or the consummation of the Business Combination.
As is customary, certain provisions of Citi’s engagement letters with each of the Company and Tempo will survive Citi’s resignation. These provisions include the obligations of the Company and Tempo to indemnify and hold harmless Citi and its officers, directors, employees and agents from and against any losses and claims arising in any manner out of or in connection with the services that Citi provided to the Company or Tempo under the engagement letters and certain obligations of the Company and Tempo to maintain the confidentiality of information or advice rendered by Citi or any of its representatives to the Company or Tempo, as applicable, in connection with the evaluation of the Business Combination.
The Company does not expect that the PIPE Investment will be impacted by Citi’s resignation. Committed and potential investors in the PIPE Investment have been informed of Citi’s resignation, and no investors have revised or withdrawn their respective commitments in light of that information. The PIPE Investment is not contingent upon any continued involvement by Citi in the transactions and, pursuant to the subscription agreements relating to the PIPE Investment, each investor in the PIPE Investment specifically has disclaimed reliance on any statement, representation or warranty made by, among others, each of the placement agents, including Citi, in connection with such investment.
The disclosure in this proxy statement/prospectus pertaining to Citi’s engagement as financial advisor to Tempo and as a placement agent to the Company for the proposed equity and convertible note private placement investments to be consummated in connection with the Business Combination, as well as Citi’s subsequent resignation, has been provided to Citi. Citi’s confirmation that Citi agrees with this disclosure was requested, but Citi has indicated that it does not intend to provide a response to this request.
Some investors may believe that when a financial institution, such as Citi, is named in a registration or proxy statement, the involvement of such institution implies a level of due diligence and independent analysis on the part of such financial institution and that the naming of such financial institution generally means that the financial institution has completed a level of due diligence ordinarily associated with a professional engagement. However, in connection with its resignation, Citi has disclaimed responsibility for any portion of the disclosure included in this proxy statement/prospectus. Neither the Company nor Tempo can provide any assurance that Citi agrees with the disclosure in this proxy statement/prospectus, and no inference should be drawn to this effect. Investors should not place any reliance on the fact that Citi was involved with any aspect of the transactions described in this proxy statement/prospectus.
At no time prior to or after its resignation through the date of this filing did Citi indicate that it had any specific concerns with the Business Combination. Citi did not prepare or provide any of the disclosures in this proxy statement/prospectus, any analysis underlying the disclosures or any other materials or work product to the Company or Tempo that have been provided to the Company’s shareholders or the investors in the PIPE Investment. As with other members of the transaction working group, Citi did receive drafts of proxy statement/prospectus prepared by the Company and Tempo and provided limited comments in the ordinary course.
The Company did not rely on Citi, in its role as a placement agent to the Company for the proposed equity and convertible note private placement investments to be consummated in connection with the Business Combination, in the preparation and analysis of the materials, including projections, provided to the board of directors of the Company for use as a component of its overall evaluation of Tempo. The board of directors of the Company did not receive or rely upon any financial or valuation analyses conducted or prepared by Citi in making its determination that the Merger Agreement, and the transactions contemplated thereby, including the Business Combination, were just, equitable and fair as to the Company and that it is in the best interests of the Company and its shareholders to enter into the Merger Agreement subject to the terms and conditions agreed upon by the parties thereto.
The Company believes that the resignation of Citi and the waiver of fees for services that have already been rendered is unusual. It is possible that the Company’s shareholders may be more likely to elect to
 
33

 
redeem their shares as a result of this resignation and as a result, the Company may not have sufficient funds to meet the Minimum Cash Condition in the Merger Agreement.
Q:
What happens if I sell my ACE ordinary shares before the extraordinary general meeting?
A:
The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting but the transferee, and not you, will have the ability to redeem such shares (if time permits).
Q:
May I change my vote after I have mailed my signed proxy card?
A:
Yes. Shareholders may send a later-dated, signed proxy card to ACE’s Secretary at ACE’s address set forth below so that it is received by ACE’s Secretary prior to the vote at the extraordinary general meeting (which is scheduled to take place on            , 2022) or attend the extraordinary general meeting and vote in person. Shareholders also may revoke their proxy by sending a notice of revocation to ACE’s Secretary, which must be received by ACE’s Secretary prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank, or other nominee to change your vote.
Q:
What happens if I fail to take any action with respect to the extraordinary general meeting?
A:
If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder or warrant holder of New Tempo. If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder or warrant holder of ACE. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination (if time permits).
Q:
What should I do with my share certificates, warrant certificates or unit certificates?
A:
Our shareholders who exercise their redemption rights must deliver (electronically) their share certificates to Continental, ACE’s transfer agent, prior to the extraordinary general meeting.
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on            , 2022 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. No demands for redemption in connection with the business combination proposal described in the registration statement on Form S-4 that was declared effective on April 18, 2022, have been received by Continental on behalf of ACE. All demands for redemption made in connection with the January 2022 and July 2022 shareholder votes to extend the date by which ACE must complete an initial business combination have been completed, and such shares have been redeemed.
Our warrant holders should not submit the certificates relating to their warrants. Public shareholders who do not elect to have their public shares redeemed for the pro rata share of the trust account should not submit the certificates relating to their public shares.
Upon the Domestication, holders of ACE units, ACE Class A ordinary shares, ACE Class B ordinary shares and ACE warrants will receive shares of New Tempo common stock and warrants, as the case may be, without needing to take any action and, accordingly, such holders should not submit any certificates relating to their units, ACE Class A ordinary shares (unless such holder elects to redeem the public shares in accordance with the procedures set forth above), ACE Class B ordinary shares or ACE warrants.
Q:
What should I do if I receive more than one set of voting materials?
A:
Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date
 
34

 
and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares.
Q:
Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting?
A:
ACE will pay the cost of soliciting proxies for the extraordinary general meeting. ACE has engaged Morrow Sodali LLC (“Morrow”) to assist in the solicitation of proxies for the extraordinary general meeting. ACE has agreed to pay Morrow a fee of $25,000, plus disbursements (to be paid with non-trust account funds). ACE will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of ACE Class A ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of ACE Class A ordinary shares and in obtaining voting instructions from those owners. ACE’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
Q:
Where can I find the voting results of the extraordinary general meeting?
A:
The preliminary voting results will be expected to be announced at the extraordinary general meeting. ACE will publish final voting results of the extraordinary general meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting.
Q:
Who can help answer my questions?
A:
If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card, you should contact:
Morrow Sodali LLC
470 West Avenue, 3rd Floor
Stamford, Connecticut 06902
Individuals call toll-free: (800) 662-5200
Banks and Brokerage Firms, please call (203) 658-9400
Email: ACEV.info@investor.morrowsodali.com
You also may obtain additional information about ACE from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your public shares (electronically) to Continental, ACE’s transfer agent, at the address below prior to the extraordinary general meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on            , 2022 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. No demands for redemption in connection with the business combination proposal described in the registration statement on Form S-4 that was declared effective on April 18, 2022, have been received by Continental on behalf of ACE. All demands for redemption made in connection with the January 2022 and July 2022 shareholder votes to extend the date by which ACE must complete an initial business combination have been completed, and such shares have been redeemed. If you have questions regarding the certification of your position or delivery of your stock, please contact:
Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, NY 10004
Attention: Mark Zimkind
E-mail: mzimkind@continentalstock.com
 
35

 
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the extraordinary general meeting, including the Business Combination, you should read this proxy statement/ prospectus, including the Annexes and other documents referred to herein, carefully and in their entirety. The Merger Agreement is the primary legal document that governs the Business Combination and the other transactions that will be undertaken in connection with the Business Combination. The Merger Agreement is also described in detail in this proxy statement/prospectus in the section titled “Business Combination Proposal — The Merger Agreement.”
Unless otherwise specified, all share calculations (1) assume no exercise of redemption rights by the public shareholders in connection with the Business Combination and (2) do not include any shares issuable upon the exercise of the warrants.
The Parties to the Business Combination
ACE
ACE Convergence Acquisition Corp. is a blank check company incorporated on March 31, 2020 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. ACE has neither engaged in any operations nor generated any revenue to date. Based on ACE’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.
On July 30, 2020, ACE consummated its initial public offering of its units, with each unit consisting of one ACE Class A ordinary share and one-half of one public warrant. Simultaneously with the closing of the initial public offering, ACE completed the private sale of 6,600,000 private placement warrants at a purchase price of $1.00 per private placement warrant, to the Sponsor generating gross proceeds to us of $6.6 million. The private placement warrants are identical to the warrants sold as part of the units in ACE’s initial public offering except that, so long as they are held by the Sponsor or its permitted transferees: (1) they will not be redeemable by the Company; (2) they (including the shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of ACE’s initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the shares issuable upon exercise of these warrants) are entitled to registration rights.
Following the closing of ACE’s initial public offering, a total of $230.0 million ($10.00 per unit) of the net proceeds from its initial public offering and the sale of the private placement warrants was placed in the trust account. The proceeds held in the trust account may be invested by the trustee only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. As of June 30, 2022, funds in the trust account totaled approximately $83.4 million. As of September 20, 2022, the amount held in the trust account was $40,293,597.28. Taking into account the Sponsor’s monthly contributions pursuant to the Sponsor Loan, and without giving effect to any requests for redemption in connection with the extraordinary general meeting to be held on October 11, 2022, to extend the date by which ACE must complete an initial business combination, or any requests for redemption in connection with the extraordinary general meeting being held in connection with the Business Combination, the amount expected to be held in the trust account on October 13, 2022, is $40,530,315.16. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the Closing), (2) the redemption of any public shares properly tendered in connection with a shareholder vote to amend ACE’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) (A) to modify the substance or timing of ACE’s obligation to allow for redemption in connection with ACE’s initial business combination or to redeem 100% of the public shares if it does not complete a business combination by October 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date) or (B) with respect to any other provision relating
 
36

 
to shareholders’ rights or pre-initial business combination activity, and (3) the redemption of all of the public shares if ACE is unable to complete a business combination by October 13, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), subject to applicable law.
With respect to the regulation of special purpose acquisition companies like ACE (“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 ACE’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, ACE 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 Business Combination and liquidation of ACE.
The ACE units, ACE Class A ordinary shares and ACE warrants are currently listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “ACEVU,” “ACEV” and “ACEVW,” respectively.
ACE’s principal executive office is located at 1013 Centre Road, Suite 403S, Wilmington, Delaware 19805. Its telephone number is (302) 633-2102. ACE’s corporate website address is www.acev.io. ACE’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement/prospectus.
Merger Sub
ACE Convergence Subsidiary Corp. (“Merger Sub”) is a Delaware corporation and a wholly owned subsidiary of ACE. The Merger Sub does not own any material assets or operate any business.
Tempo Automation, Inc.
Tempo Automation, Inc., a Delaware corporation founded in 2013, is a leading software-accelerated electronics manufacturer that transforms the product development process for the world’s innovators. Tempo’s proprietary software platform, with AI that learns from every order, redefines the customer journey and accelerates time-to-market.
Tempo’s principal executive office is located at 2460 Alameda St., San Francisco, CA 94103. Its telephone number is (415) 320-1261. Its website is tempoautomation.com.
Combined Business Summary
Tempo is a leading software-accelerated electronics manufacturer that aims to transform the product development process for the world’s innovators. Tempo believes that its proprietary software platform, with artificial intelligence (“AI”) that learns from every order, redefines the customer journey and accelerates time-to-market. Tempo’s profit, growth, and strong margins are unlocked by a differentiated customer experience and software-enabled efficiencies. Tempo anticipates that its growth and data accrual will be accelerated via tech-enabled M&A in its highly fragmented industry.
Founded in 2013, Tempo is headquartered in San Francisco, California and serves more than 100 customers out of one manufacturing facility.
 
37

 
Tempo works with companies across industries, including space, semiconductor, aviation and defense, medical device, as well as industrials and e-commerce. Its customers include hardware engineers, engineering program managers, and procurement and supply chain personnel from businesses of a variety of sizes, ranging from Fortune 500 companies to start-ups. The electronics within Tempo’s products are most often manufactured as Printed Circuit Board Assemblies (“PCBAs”). The PCBA manufacturing process typically takes two inputs: (1) semiconductor components, and (2) a Printed Circuit Board (“PCB”), which consists of pads that receive the components and traces that connect them. The assembly process typically consists of attaching the semiconductor components to the PCB using a paste (solder paste), then curing the paste in an oven such that a strong electrical and mechanical bond is formed. Given the varied requirements of different contexts, customers typically will design different, custom PCBAs for each of their products.
During the initial phases of product development, up until a product is deemed production worthy (or, in the case where production quantities are less than 1,000, through production), customers demand quick turnaround times and the highest quality from their vendors to ensure they are not slowed down in their ramp to release new products. Based on the 2012-2013, 2018, and 2019 Annual Reports and Forecasts for the North American EMS Industry published by IPC International, Inc. (“IPC”), the estimated size of this electronics prototyping and on-demand production market in the United States is approximately $290 billion. Yet, most of these electronics have historically been produced by small manufacturers who have been largely ignored by software and AI and therefore struggle to consistently satisfy customer demands manually.
Tempo has developed a technology-enabled manufacturing platform to streamline this electronic product realization process, thereby helping our customers bring new products to market faster. Tempo believes that its platform offers customer benefits that are highly desired by the market and not available from alternative solutions through its:

Front-end customer portal, which provides frictionless quoting, ordering, and complex data ingestion via a secure cloud-based interface. Tempo’s front-end customer portal offers analysis, interpretation, and visual rendering of engineering, design, and supply chain data with minimal human involvement, which ultimately allows hardware engineers to reach a manufacturable design quickly and efficiently.

Back-end manufacturing software, which is a continuous, bi-directional digital thread that connects Tempo’s customers to our smart factories, weaving together manufacturing processes and design data. In it, Tempo’s data-experienced AI flags and prevents potential production issues. It is extendable and manageable across multiple sites and locations.

Connected network of smart factories, which deliver turnkey printed circuit board fabrication and assembly. Data from every build fuels the Tempo AI, increasing efficiencies and streamlining processes.
[MISSING IMAGE: tm2130093d1-pht_front4clr.jpg]
 
38

 
Tempo’s software platform helps companies iterate faster. In the status quo, each of quoting, manufacturability review, procurement, setup, and manufacturing are manual processes. Tempo estimates that, on average, these production process steps collectively take approximately 20 days when executed manually. By contrast, with Tempo’s automated approach, these processes could be completed in approximately five days.
Proposals to be Put to the Shareholders of ACE at the Extraordinary General Meeting
The following is a summary of the proposals to be put to the extraordinary general meeting of ACE and certain transactions contemplated by the Merger Agreement. Each of the proposals below, except the Adjournment Proposal, is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. 
Business Combination Proposal
As discussed in this proxy statement/prospectus, ACE is asking its shareholders to approve by ordinary resolution and adopt the Amended and Restated Agreement and Plan of Merger, dated as of August 12, 2022, by and among ACE, Merger Sub and Tempo, as amended on September 7, 2022 and September 23, 2022, and as may be amended from time to time, copies of which are attached to the accompanying proxy statement/prospectus as Annexes A-1, A-2 and A-3. The Merger Agreement provides for, among other things, following the Domestication of ACE to Delaware as described below, the merger of Merger Sub with and into Tempo (the “Merger”), with Tempo surviving the Merger as a wholly owned subsidiary of New Tempo, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus. After consideration of the factors identified and discussed in the section titled “Business Combination Proposal — ACE’s Board of Directors’ Reasons for the Business Combination,” ACE’s board of directors concluded that the Business Combination met all of the requirements disclosed in the prospectus for ACE’s initial public offering, including that the business of Tempo had a fair market value equal to at least 80% of the net assets held in trust (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account). For more information about the transactions contemplated by the Merger Agreement, see “Business Combination Proposal.”
Aggregate Merger Consideration
As a result of and upon the Closing, among other things, all outstanding shares of Tempo common stock (after giving effect to the Tempo Preferred Conversion, as more fully described elsewhere in this proxy statement/prospectus) as of immediately prior to the Closing, and, together with shares of Tempo common stock reserved in respect of Tempo Options or Tempo RSUs outstanding as of immediately prior to the Closing that will be converted into awards based on New Tempo common stock, will be cancelled in exchange for the right to receive, or the reservation of (in the case of the Tempo Options and Tempo RSUs, if and to the extent earned and subject to their respective terms), an aggregate of approximately 25,792,701 shares of New Tempo common stock (at a deemed value of $10.00 per share) equal to the remainder of (a) the quotient obtained by dividing (i) the Base Purchase Price by (ii) $10.00, including, as applicable, a number of Tempo Earnout Shares. For further details, see “Business Combination Proposal — The Merger Agreement — Consideration — Aggregate Merger Consideration.” Additionally, Tempo has undertaken to use its commercially reasonable efforts to cause the holder of each outstanding and unexercised Tempo warrants 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 will be converted into warrants to purchase shares of New Tempo common stock on substantially similar terms to the Tempo warrants.
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.
 
39

 
On September 9, 2022, Tempo issued 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 New Tempo common stock (“New Tempo RSUs”) and (b) the right to receive a number of Tempo Earnout Shares. 
Tempo Earnout Shares
During the Earnout Period, New Tempo may issue to Eligible Tempo Equityholders up to 7,000,000 additional shares of New Tempo common stock in the aggregate, referred to herein as the Tempo Earnout Shares, in two equal tranches upon the occurrence of each Earnout Triggering Event. For further details, see “Business Combination Proposal — The Merger Agreement — Consideration — Tempo Earnout Shares.
Closing Conditions
The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval by ACE’s shareholders of the Business Combination and related agreements and transactions, (ii) the effectiveness of the registration statement of which this proxy statement/ prospectus forms a part, (iii) the receipt of certain regulatory approvals (including, but not limited to, approval for listing on Nasdaq of the shares of New Tempo common stock to be issued in connection with the Merger), (iv) that New Tempo has at least $5,000,001 of net tangible assets upon Closing and (v) the absence of any injunctions.
Other conditions to Tempo’s obligations to consummate the Merger include, among others, that as of the Closing, (i) the Domestication has been completed, and (ii) the amount of cash available in the trust account, after deducting the amount required to satisfy ACE’s obligations to its shareholders (if any) that exercise their redemption rights pursuant to the Cayman Constitutional Documents, or the Trust Amount, the PIPE Investment, the Available Credit Amount and Available Cash Amount, in the aggregate, is at least equal to $10.0 million (the “Minimum Available Acquiror Cash Amount”).
If the Available Acquiror Cash (the sum of the Trust Amount, PIPE Investment, Available Credit Amount and the Available Cash Amount) is equal to or greater than the Minimum Available Acquiror Cash Amount, then the Minimum Cash Condition will be deemed to have been satisfied. This condition is for the sole benefit of Tempo. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, the obligations of ACE, Merger Sub and Tempo to consummate the Merger are conditioned on, among other things, that pursuant to the Cayman Constitutional Documents, in no event will ACE redeem public shares in an amount that would cause New Tempo’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.
For further details, see “Business Combination Proposal — The Merger Agreement.
Domestication Proposal
As discussed in this proxy statement/prospectus, if the Business Combination Proposal is approved, then ACE will ask its shareholders to approve by special resolution the Domestication Proposal. As a condition to closing the Business Combination pursuant to the terms of the Merger Agreement, the disinterested members of the board of directors of ACE have approved the Domestication Proposal. The Domestication Proposal, if approved, will authorize a change of ACE’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while ACE is currently governed by the Cayman Islands Companies Act, upon the Domestication, New Tempo will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law as well as the Cayman Constitutional Documents and the Proposed Organizational Documents. Accordingly, ACE encourages shareholders to carefully review the information in “Comparison of Corporate Governance and Shareholder Rights.”
 
40

 
As a result of and upon the effective time of the Domestication, (1) each of the then issued and outstanding Class A ordinary shares, par value $0.0001 per share, of ACE (the “ACE Class A ordinary shares”), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of New Tempo (the “New Tempo common stock”), (2) each of the then issued and outstanding Class B ordinary shares, par value $0.0001 per share, of ACE (the “ACE Class B ordinary shares”), will convert automatically, on a one-for-one basis, into a share of New Tempo common stock, (3) each of the then issued and outstanding redeemable warrants of ACE (the “ACE warrants”) will convert automatically into a redeemable warrant to acquire one share of New Tempo common stock (the “New Tempo warrants”) pursuant to the Warrant Agreement, dated July 27, 2020, between ACE and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, and (4) each of the then issued and outstanding units of ACE that have not been previously separated into the underlying ACE Class A ordinary shares and underlying ACE warrants upon the request of the holder thereof (the “ACE units”), will be cancelled and will entitle the holder thereof to one share of New Tempo common stock and one-half of one New Tempo warrant. As used herein, “public shares” shall mean the ACE Class A ordinary shares (including those that underlie the ACE units) that were registered pursuant to the Registration Statement on Form S-1 (333-239716) and the shares of New Tempo common stock issued as a matter of law upon the conversion thereof on the effective date of the Domestication.
For further details, see “Domestication Proposal.”
Organizational Documents Proposals
If the Business Combination Proposal and the Domestication Proposal are approved, ACE will ask its shareholders to approve by special resolution four separate proposals (collectively, the “Organizational Documents Proposals”) in connection with the replacement of the Cayman Constitutional Documents, under the Cayman Islands Companies Act, with the Proposed Organizational Documents, under the DGCL, each to be effective upon the Domestication. The disinterested members of ACE’s board have approved each of the Organizational Documents Proposals and believes such proposals are necessary to adequately address the needs of New Tempo after the Business Combination. Approval of each of the Organizational Documents Proposals is a condition to the consummation of the Business Combination. A brief summary of each of the Organizational Documents Proposals is set forth below. These summaries are qualified in their entirety by reference to the complete text of the Proposed Organizational Documents.
(A)
Organizational Documents Proposal A — to authorize the change in the authorized capital stock of ACE from 500,000,000 Class A ordinary shares, par value $0.0001 per share (the “ACE Class A ordinary shares”), 50,000,000 Class B ordinary shares, par value $0.0001 per share (the “ACE Class B ordinary shares” and, together with the ACE Class A ordinary shares, the “ordinary shares”), and 5,000,000 preference shares, par value $0.0001 per share (the “ACE preferred shares”), to 600,000,000 shares of common stock, par value $0.0001 per share, of New Tempo (the “New Tempo common stock”) and 20,000,000 shares of preferred stock, par value $0.0001 per share, of New Tempo (the “New Tempo preferred stock”);
(B)
Organizational Documents Proposal B — to authorize the board of directors of New Tempo (the “Board”) to issue any or all shares of New Tempo preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by the Board and as may be permitted by the DGCL;
(C)
Organizational Documents Proposal C — to provide that the Board be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term; and
(D)
Organizational Documents Proposal D — to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws in connection with the consummation of the Business Combination (copies of which are attached to this proxy statement/prospectus as Annex H and Annex I, respectively), including (1) changing the corporate name from “ACE Convergence Acquisition Corp.” to “Tempo Automation Holdings, Inc.,” ​(2) adopting Delaware as the exclusive forum for certain stockholder litigation, (3) removing certain provisions related to ACE’s status as a blank
 
41

 
check company that will no longer be applicable upon consummation of the Business Combination, all of which ACE’s board of directors believes is necessary to adequately address the needs of New Tempo after the Business Combination, (4) providing that no action shall be taken by stockholders of New Tempo, except at an annual or special meeting of stockholders, (5) removing limitations on the corporate opportunity doctrine, (6) requiring the approval of the holders of 66 2/3% of the then-outstanding capital stock of New Tempo to amend specified provisions of the Proposed Certificate of Incorporation, and (7) requiring the approval of the Board or the holders of 66 2/3% of the then-outstanding capital stock of New Tempo to amend the Proposed Bylaws.
The Proposed Organizational Documents differ in certain material respects from the Cayman Constitutional Documents and ACE encourages shareholders to carefully review the information set out in the section titled “Organizational Documents Proposals” and the full text of the Proposed Organizational Documents of New Tempo.
Director Election Proposal
Assuming the Business Combination Proposal, the Domestication Proposal, each of the Organizational Documents Proposals, the Stock Issuance Proposal and the Incentive Award Plan Proposal are approved, ACE’s shareholders are also being asked to approve by ordinary resolution the Director Election Proposal, to be effective as of the Closing. Upon the consummation of the Business Combination, the Board will consist of up to nine directors. For additional information on the proposed directors, see “Director Election Proposal.”
Stock Issuance Proposal
Assuming the Business Combination Proposal, the Domestication Proposal, each of the Organizational Documents Proposals, the Director Election Proposal and the Incentive Award Plan Proposal are approved, ACE’s shareholders are also being asked to approve by ordinary resolution the Stock Issuance Proposal, to be effective prior to or substantially concurrently with the Closing. For additional information, see “Stock Issuance Proposal.”
Incentive Award Plan Proposal
Assuming the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Election Proposal and the Stock Issuance Proposal are approved, ACE’s shareholders are also being asked to approve by ordinary resolution the 2022 Plan, to be effective prior to the Closing Date, in order to comply with Nasdaq Listing Rule 5635(c) and the Internal Revenue Code. For additional information, see “Incentive Award Plan Proposal.”
Adjournment Proposal
If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to authorize ACE to consummate the Business Combination (because any of the Condition Precedent Proposals have not been approved (including as a result of the failure of any other cross-conditioned Condition Precedent Proposals to be approved), ACE’s board of directors may submit a proposal to be effective as of the date of the extraordinary general meeting, to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies. For additional information, see “Adjournment Proposal.”
ACE’s Board of Directors’ Reasons for the Business Combination
ACE was organized for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
In evaluating the Business Combination, the ACE board of directors consulted with ACE’s management and considered a number of factors. In particular, the ACE board of directors considered, among other things, the following factors, although not weighted or in any order of significance:
 
42

 

Tempo’s Large and Fragmented Addressable Market.   Tempo aims to transform the U.S. prototyping and on-demand electronic manufacturing market with the deployment of its artificial intelligence-enhanced, software-accelerated intelligent digital manufacturing platform. This targeted market is significantly large, estimated at $290 billion, based on IPC’s 2012-2013, 2018, and 2019 Annual Reports and Forecasts for the North American EMS Industry. It is also highly fragmented: approximately 77% of the outsourced electronic manufacturing facilities in the U.S. are operated by approximately 1,100 manufacturing service providers, each with estimated annual revenues of less than $50 million. By delivering faster turnaround time and enhancing product reliability through software and AI, the ACE board of directors believes Tempo is in an advantageous position to gain market share in this large, fragmented market.

Tempo’s Unique Product Offering.   The ACE board of directors believes that Tempo’s software-driven offering is transformative in the U.S. prototyping and on-demand electronic manufacturing markets, where industry players have traditionally underinvested in technology, at least when compared to Tempo.

Tempo’s Readiness for the Public Market.   Tempo has senior finance leadership with extensive public company experience. This includes Ryan Benton, the Chief Financial Officer of Tempo who has in the last ten years served as Chief Financial Officer, audit committee chair, or Chief Executive Officer in four publicly traded technology companies where he was in particular involved in initial public offerings, mergers, acquisitions, trade-sales, and various other capital market transactions. Tempo’s Vice President of Business Operations and Finance, Keith Tainsky, has extensive business process, strategic planning, ERP systems experience, and previously served as the Vice President of Finance at Revasum, Inc. and as the Chief Financial Officer of Exar Corporation. Additionally, Tempo’s Vice President and Corporate Controller, Sherry Lin, after five years in public accounting, has spent approximately twelve years in various controllership positions at several public companies. The ACE board of directors believes these factors will help Tempo successfully operate as a public company while maintaining the capabilities to execute on additional business acquisitions.

Tempo’s Growth Strategies.   Tempo intends to deliver revenue and earnings improvement organically. Tempo also intends to pursue strategic acquisitions in order to accumulate additional manufacturing data, gain market share, realize benefits of greater scale, acquire additional customer relationships and increase its strategic capabilities.

Experienced and Proven Management Team.   The ACE board of directors believes that Tempo’s management team has extensive experience critical to succeeding in the industrial software and electronics manufacturing market. Tempo’s management team is led by its Chief Executive Officer, Joy Weiss, who is a seasoned semiconductor entrepreneur and, most recently, served as Vice President of Data Center with Analog Devices, Inc. Tempo’s Chief Financial Officer, Ryan Benton, has experience as Chief Financial Officer of several technology companies, most prominently at Exar Corporation, a semiconductor company, where he led major acquisitions and dispositions, and, after promotion to Chief Executive Officer, led the eventual trade-sale of Exar Corporation. Ralph Richart, Tempo’s Chief Technology and Manufacturing Officer, was formerly a director of Compass AC Holdings, Inc. (“Advanced Circuits” or “Compass”), a premier manufacturer of printed circuit boards. Keith Tainsky, Tempo’s VP of Finance and Business Operations, has extensive business process, strategic planning and ERP systems experience, and previously served as the Vice President of Finance at Revasum, Inc. and as the Chief Financial Officer of Exar Corporation. The ACE board of directors believes that under the leadership of these foregoing individuals, Tempo has built a digital manufacturing company that offers customers the proposition of faster and more reliable outcomes, capable of strong growth. The ACE board of directors expects that Tempo’s executives will continue with New Tempo following the Business Combination and that they are aligned with ACE’s culture and goal of creating post-combination value. For additional information regarding Tempo’s executive officers, see the section titled “Management of New Tempo Following the Business Combination — Executive Officers.”
For a more complete description of the ACE board of directors’ reasons for approving the Business Combination, including other factors and risks considered by the ACE board of directors, see the section titled “Business Combination Proposal — ACE’s Board of Directors’ Reasons for the Business Combination.”
 
43

 
Related Agreements
This section describes certain additional agreements entered into or to be entered into pursuant to the Merger Agreement. For additional information, see “Business Combination Proposal — Related Agreements.”
Sponsor Support Agreement
In connection with the execution of the Merger Agreement, ACE entered into a sponsor support agreement with the Sponsor, certain of ACE’s directors, officers and initial shareholders and their permitted transferees, and Tempo, a copy of which is attached to the accompanying proxy statement/prospectus as Annex B-1, as amended by the amendments thereto, dated as of July 6, 2022 (the “First SSA Amendment”), August 12, 2022 (the “Second SSA Amendment”), and September 7, 2022 (the “Third SSA Amendment”), copies of which are attached as Annexes B-2, B-3 and B-4, respectively, to this proxy statement/prospectus (as may be further amended, the “Sponsor Support Agreement”). Pursuant to the Sponsor Support Agreement, the Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees 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 Sponsor Support Agreement. The Sponsor also agreed to waive any and all anti-dilution rights. For additional information, see “Business Combination Proposal — Related Agreements — Sponsor Support Agreement.
On July 6, 2022, the parties to the Sponsor Support Agreement entered into the First SSA Amendment, pursuant to which 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 First SSA Amendment, the Earnout Sponsors also agreed to subject an aggregate of 2,000,000 shares of New Tempo 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 fifteen (15) months following the closing of the 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 under such Amended and Restated PIPE Common Stock 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 New Tempo common stock generally.
On August 12, 2022, the parties to the Sponsor Support Agreement entered into the Second SSA Amendment, pursuant to which 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 of ACE (the “SSA Exchange”). Pursuant to the First SSA Amendment, the Earnout Sponsors also agreed to subject an aggregate of 500,000 shares of New Tempo 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 fifteen (15) months following the closing of the Business Combination and 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 under such Amended and Restated PIPE Common Stock 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 New Tempo common stock generally.
On September 7, 2022, the parties to the Sponsor Support Agreement entered into the Third SSA Amendment, pursuant to which the parties agreed to increase the number of shares issued in the aggregate in the SSA Exchange from 3,095,000 to 3,595,000, and to increase the number of Sponsor Earnout Shares from 500,000 to 1,000,000.
 
44

 
Tempo Holders Support Agreement
In connection with the execution of the Merger Agreement, ACE entered into a support agreement with Tempo and certain stockholders of Tempo (the “Tempo Stockholders”), a copy of which is attached to this proxy statement/prospectus as Annex C (the “Tempo Holders Support Agreement”). Pursuant to the Tempo Holders Support Agreement, certain Tempo Stockholders agreed to, among other things, vote to adopt and approve, upon the effectiveness of the Registration Statement, the Merger Agreement and all other documents and transactions contemplated thereby, in each case, subject to the terms and conditions of the Tempo Holders Support Agreement. For additional information, see “Business Combination Proposal — Related Agreements — Tempo Holders Support Agreement.
Lock-up Agreement
Pursuant to the terms of the lock-up agreement between New Tempo, the Sponsor and certain former stockholders of Tempo (the “Lock-Up Agreement”), each party to the agreement has agreed that it will not, without the prior written consent of New Tempo during a lock-up period of 365 days, unless earlier released, and subject to customary exceptions, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position any shares of New Tempo common stock or any securities convertible into or exercisable or exchangeable for New Tempo common stock issued or issuable to such party pursuant to the Merger Agreement (collectively, the “Lock-Up Shares”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii). Notwithstanding the foregoing, if at any time before 365 days after the Closing, (x) the closing of a merger, liquidation, stock exchange, reorganization or other similar transaction after the Closing results in all of the public stockholders of Tempo having the right to exchange their shares of New Tempo common stock for cash securities or other property, or (y) the closing price of the New Tempo common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any twenty trading days within any thirty-trading day period commencing at least 150 days after the Closing, then each party’s Lock-Up Shares will be automatically released from the lock-up restrictions, in the case of clause (y) above, as of the last day of such thirty-trading day period. The lock-up restrictions contain customary exceptions, including for estate planning transfers, affiliates transfers, and transfers upon death or by will. For additional information, see “Business Combination Proposal — Related Agreements — Lock-Up Agreements.
Registration Rights Agreement
The Merger Agreement contemplates that, at the Closing, New Tempo, the Sponsor, other parties to the Sponsor Support Agreement and certain former stockholders of Tempo (the “Tempo Holders”), will enter into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which New Tempo will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of New Tempo common stock and other equity securities of New Tempo that are held by the parties thereto from time to time. For additional information, see “Business Combination Proposal — Related Agreements — Registration Rights Agreement.
PIPE Subscription Agreements
In connection with the execution of the Merger Agreement, ACE entered into (i) the Original PIPE Common Stock Subscription Agreements with certain investors pursuant to which such investors agreed to purchase 8.2 million shares of New Tempo common stock at $10.00 per share for an aggregate commitment amount of $82.0 million, and (ii) the Affiliate Subscription Agreement.
In January 2022, the Affiliate Subscription Agreement was terminated in its entirety in accordance with its terms, and ACE and Tempo entered into a subscription agreement with OCM Tempo Holdings, LLC (“OCM”) and Tor Asia Credit Opportunity Master Fund II LP (“Tor Asia”), pursuant to which Tor Asia and OCM agreed to purchase $200.0 million of ACE’s 15.5% convertible senior notes (the “Oaktree
 
45

 
Subscription Agreement”). On July 30, 2022, OCM delivered notice of termination of the Oaktree Subscription Agreement, effective immediately.
On September 4, 2022, Tempo, ACE, OCM and Oaktree Capital Management, L.P. (“Oaktree”) entered into a letter agreement (the “Oaktree Termination Letter”) pursuant to which the termination fee in connection with the Oaktree Subscription Agreement was reduced from 3.5% of the aggregate principal amount of the subscribed notes (approximately $7.0 million) to 0.6% of the aggregate principal amount of the subscribed notes (approximately $1.1 million) if the closing of the Business Combination occurs on or before October 15, 2022 (the “Reduced Termination Fee”), to be paid on the earlier of (i) six months after the Closing 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 and (y) the Outside Business Combination Date (as defined below). The Reduced Termination Fee and all other fees and expenses owed to OCM under the Oaktree Termination Letter will accrue interest at a rate of 20% per year, compounding monthly, starting on October 15, 2022. The Oaktree Termination Letter states that if the Business Combination has not been consummated prior to October 15, 2022, 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 March 16, 2022, ACE entered into Amended and Restated Subscription Agreements, which amended and restated the Original PIPE Common Stock Subscription Agreements in their entirety, pursuant to which certain investors agreed to purchase 10.2 million shares of New Tempo common stock at $10.00 per share for an aggregate commitment of $102.0 million.
On July 6, 2022, ACE entered into Second Amended and Restated Subscription Agreements (the “Second A&R Subscription Agreements”) with certain investors, which amended and restated the Amended and Restated Subscription Agreements in their entirety.
On September 7, 2022, ACE entered into Third A&R PIPE Subscription Agreements with each of the PIPE Investors, which amend and restate the applicable Second Amended and Restated Subscription Agreements in their entirety. One of the Third Party PIPE Investors who entered into the Second A&R Subscription Agreement did not enter into the 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 New Tempo common stock to each PIPE Investor in the event that the volume weighted average price per share of New Tempo 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 New Tempo 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 New Tempo common stock equal to the product of (x) the number of shares of New Tempo 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 below) 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 New Tempo 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 New Tempo common stock equal to the lesser of (1) such PIPE Investor’s pro rata portion of 500,000 additional shares of New Tempo 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
 
46

 
(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 New Tempo 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.
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 New Tempo 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 New Tempo 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 New Tempo, 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’ Third A&R PIPE 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 the Third A&R PIPE Subscription Agreements, such PIPE Investor acquires ownership of Class A Ordinary Shares of ACE 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 Business Combination (the “Redemption”)) at least five business days prior to ACE’s extraordinary general meeting to approve the Business Combination, and such PIPE Investor does not redeem or convert such shares in connection with the 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) is obligated to purchase under its Third A&R PIPE Subscription Agreement shall be reduced by the number of PIPE Non-Redeemed Shares.
The obligation of the parties to consummate the purchase and sale of the shares covered by the Third A&R PIPE Subscription Agreements is conditioned upon, among other things, (i) there not being in force any injunction or order enjoining or prohibiting the issuance and sale of the shares covered by the Third A&R PIPE Subscription Agreements and (ii) satisfaction or waiver of all conditions precedent to the Closing under the Merger Agreement. The closings under the Third A&R PIPE Subscription Agreements will occur substantially concurrently with the Closing. For additional information, see “Business Combination Proposal — Related Agreements — PIPE Subscription Agreements.”
We note that Citi, in its role as a placement agent that advised ACE in connection with the PIPE Investment, has resigned from its role in such capacity and waived all fees associated with such engagement. The placement agency services being provided by Citi in connection with the PIPE Investment were substantially complete at the time of its resignation, with any fees payable to Citi for such services contingent upon the closing of the Merger. The Company does not expect that the PIPE Investment will be impacted by Citi’s resignation. Committed and potential investors in the PIPE Investment have been informed of Citi’s resignation, and no investors have revised or withdrawn their respective commitments in light of that information. The PIPE Investment is not contingent upon any continued involvement by Citi in the transactions and, pursuant to the subscription agreements relating to the PIPE Investment, each investor in
 
47

 
the PIPE Investment specifically has disclaimed reliance on any statement, representation or warranty made by, among others, each of the placement agents, including Citi, in connection with such investment. See “— Recent Developments.”
Cantor Share Purchase Agreement
On March 16, 2022, ACE entered into a common stock purchase agreement (the “Cantor Purchase Agreement”) with Tempo and CF Principal Investments LLC (“CFPI”), an affiliate of Cantor, pursuant to which New Tempo would have the right from time to time at its option following closing of the Business Combination to sell to CFPI up to $100.0 million of New Tempo common stock subject to certain customary conditions and limitations set forth in the Cantor Purchase Agreement (the “Cantor Facility”). In connection with ACE’s entry into the Cantor Purchase Agreement, on March 16, 2022, ACE and CFPI entered into a registration rights agreement (the “Cantor Registration Rights Agreement”), pursuant to which New Tempo agreed to register for resale, pursuant to Rule 415 under the Securities Act, the shares of New Tempo common stock sold to CFPI under the Facility. On September 23, 2022, ACE, Tempo and CFPI entered into a termination agreement, pursuant to which the parties mutually agreed to terminate the Cantor Purchase Agreement and the Cantor Registration Rights Agreement in their entirety. The Company intends to establish a committed equity facility with one or more alternative investors following the closing of the Business Combination. There can be no guarantee that the Company will be able to obtain a commitment for such facility from an alternative investor on similar terms to the Cantor Facility or at all. 
ACE Securities Purchase Agreement
On March 16, 2022, ACE entered into that certain Securities Purchase Agreement, dated as of March 16, 2022, by and between the Company and ACE SO3 (the “ACE Securities Purchase Agreement”), pursuant to which ACE SO3 agreed to purchase an unsecured subordinated convertible note due 39 months from its date of issuance in the principal amount of $20,000,000 from the Company in connection with the closing of the Business Combination.
On July 1, 2022, ACE and ACE SO3 terminated the ACE Securities Purchase Agreement.
Backstop Subscription Agreement
In connection with the execution of the Merger Agreement, ACE entered into a Backstop Subscription Agreement with ACE SO3 (the “Backstop Investor”), pursuant to which the Backstop Investor committed to purchase up to an additional 3,000,000 shares of New Tempo common stock, for an aggregate amount of up to $30.0 million, to backstop the Minimum Available Acquiror Cash Amount. On March 16, 2022, ACE and the Backstop Investor terminated the Backstop Subscription Agreement. For additional information, see “Business Combination Proposal — Related Agreements — Backstop Subscription Agreement.
Bridge Notes
On July 1, 2022, ACE, Tempo and ACE Equity Partners International Pte. Ltd. (“AEPI”) entered into an Unsecured Subordinated Convertible Note (the “Bridge Note”) due September 30, 2022, pursuant to which AEPI agreed to loan to Tempo up to an aggregate principal amount of $5.0 million, $2.5 million of which was advanced to Tempo as of June 30, 2022. On August 25, 2022, in connection with the Bridge Financing (as defined herein), the Bridge Note was amended and restated on substantially similar terms to the August 2022 Bridge Notes (as defined herein). On August 25, 2022, Tempo entered into a note purchase agreement (the “Bridge Note Purchase Agreement”), with each of ACE, AEPI, Point72 Ventures Investments, LLC, Lux Ventures IV, L.P. and 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 Loan and Security Agreement. Additionally, Tempo may, from time to time prior to October 9, 2022, issue up to $700,000 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. Upon the occurrence of any event of
 
48

 
default under the August 2022 Bridge Notes until the earlier of the conversion of such August 2022 Bridge Note or the first date on which such event of default is cured or waived, the interest rate will be 15% per annum. Interest began accruing on August 25, 2022 and will continue to accrue on the outstanding unpaid principal until paid in full or converted in accordance with the terms of the August 2022 Bridge Notes. 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. The August 2022 Bridge Notes may not be prepaid, in whole or in part, prior to maturity without the prior written consent of the holders of a majority of the aggregate principal amount of all outstanding August 2022 Bridge Notes, which majority must include (i) on or before October 31, 2022, each of Structural Capital Investments III, LP and its successors and assigns (collectively, “SCI”) and Point72 Ventures Investments, LLC and (ii) after October 31, 2022, SCI only, in each case, for so long as such entity is the registered holder of an August 2022 Bridge Note (the “Requisite Holders”). The August 2022 Bridge Notes are subordinated in right of payment to all current and future indebtedness of Tempo to banks, leasing or equipment financing institutions and other financial institutions engaged in the business of lending money, including the Loan and Security Agreement. 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 (as defined in the Bridge Note Purchase Agreement), 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 (as defined in the Bridge Note Purchase Agreement) prior to the conversion of the August 2022 Bridge Notes, the Company 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 August 2022 Bridge Notes contain customary events of default, including the failure of Tempo to pay any of the principal, interest or any other amounts payable under the August 2022 Bridge Notes when due and payable, the breach by Tempo of any provision of the August 2022 Bridge Notes or the Bridge Note Purchase Agreement and any event of default under the Loan and Security Agreement that has occurred and is continuing after October 31, 2022. The Bridge Note Purchase Agreement contains customary representations and warranties, covenants and closing conditions.
On August 25, in connection with the issuance and sale of the August 2022 Bridge Notes, and as a condition to closing the issuance and sale of the August 2022 Bridge Notes in accordance with the terms of the Bridge Note Purchase Agreement, Tempo:

amended and restated the 2022 Promissory Notes (as defined herein) and the Bridge Note, in each case, on substantially similar terms to the August 2022 Bridge Notes;

entered into an amended and restated warrant with Point72 Ventures Investments, LLC, 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 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
 
49

 

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.
On August 25, 2022, in connection with the issuance and sale of the August 2022 Bridge Notes, and as a condition to closing the issuance and sale of the August 2022 Bridge Notes in accordance with the terms of the Bridge Note Purchase Agreement, Tempo also entered into a non-binding term sheet with the lenders under the Loan and Security Agreement with respect to the repayment of amounts outstanding under the Loan and Security Agreement (the “Repayment Term Sheet”). The Repayment Term Sheet contemplates that, in connection with the closing of the Business Combination, the lenders under the Loan and Security Agreement (i) will convert up to $15.0 million in outstanding amounts under the Loan and Security Agreement as of such time into shares of New Tempo common stock pursuant to the Lender PIPE Common Stock Subscription Agreement (such conversion, the “Lender PIPE Conversion”), (ii) will receive up to $3.0 million in cash from the net proceeds of the Trust Account over $15.0 million (such amount, the “Cash Amount”); and (iii) will convert $15.0 million in outstanding amounts under the Loan and Security Agreement as of such time into senior notes of New Tempo (“New Tempo Senior Notes”) (such conversion, the “Lender Debt Conversion”), provided, that, (x) the Lender PIPE Conversion will be decreased by the Cash Amount, if any, and (y) for every $1.00 in net proceeds available from the Trust Account above $18.0 million, the Lender PIPE Conversion will be decreased and the Lender Debt Conversion will be increased, in each case, in like amount up to an aggregate decrease in the Lender PIPE Conversion and an aggregate increase in the Lender Debt Conversion of, in each case, $7.0 million. The New Tempo Senior Notes are expected to mature 36 months after the closing date of the Business Combination, and will be secured by a blanket lien on all assets of New Tempo and its subsidiaries. The New Tempo Senior Notes are anticipated to be issued at an original issuance discount of 1.50%, and will bear interest at a floating rate based on the Wall Street Journal Prime Rate plus 4.25%, with a floor of 9.75%. A portion of the interest is anticipated to be payable in kind by increasing the aggregate principal amount under the New Tempo Senior Notes. All payments under the New Tempo Senior Notes for the first twelve months are expected to be credited towards interest only. Upon the final payment under the New Tempo Senior Notes, New Tempo anticipates that it will be required to pay an exit payment of 3.00% of the aggregate principal amount converted in the Lender Debt Conversion. The New Tempo Senior Notes are expected to be subject to customary covenants and events of default.
Bridge Subscription Agreement
In connection with the entry into the Bridge Note, on July 1, 2022, AEPI and ACE entered into a Subscription Agreement (the “Bridge Subscription Agreement”), pursuant to which AEPI agreed, at the closing of the Business Combination, to subscribe for up to 500,000 shares of New Tempo common stock at a purchase price of $10.00 per share. The number of shares AEPI committed to purchase would be automatically reduced in an amount equal to (a) the difference between $5,000,000 and the Drawn Amount (as defined therein, the “Bridge Note Drawn Amount”), divided by (b) $10.00, rounded up to the nearest whole share.
The Bridge Subscription Agreement replaced a May 2022 subscription agreement on substantially the same terms in its entirety. On September 7, 2022, the Bridge Subscription Agreement was terminated in its entirety in connection with the amendment and restatement by ACE, Tempo and AEPI of the Bridge Note in connection with the Bridge Financing.
Ownership of New Tempo following Business Combination
As of the date of this proxy statement/prospectus, there are 9,695,298 ordinary shares issued and outstanding, which includes the 5,750,000 founder shares held by the Sponsor and initial shareholders and their permitted transferees, and the 3,945,298 public shares. As of the date of this proxy statement/prospectus, there is outstanding an aggregate of 18,100,000 warrants, which includes the 6,600,000 private placement
 
50

 
warrants held by the Sponsor and the 11,500,000 public warrants. Each whole warrant entitles the holder thereof to purchase one ACE Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of New Tempo common stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination) the ACE fully diluted share capital would be 27,795,298.
Following the Business Combination (assuming consummation of the transactions contemplated by the Merger Agreement), (1) ACE’s public shareholders are expected to own approximately 14.1% of the outstanding New Tempo common stock (2) Tempo Stockholders (without taking into account any public shares held by Tempo Stockholders prior to the consummation of the Business Combination or shares of New Tempo stock issuable to holders of New Tempo Options or New Tempo RSUs) are expected to own approximately 51.8% of the outstanding New Tempo common stock, at a deemed value of $10.00 per share of New Tempo common stock and after giving effect to the Per Share Merger Consideration, (3) the Sponsor and related parties (including the Sponsor Related PIPE Investors) are expected to collectively own approximately 22.4% of the outstanding New Tempo common stock (taking into account the SSA Exchange), (4) Cantor is expected to own approximately 2.9% of the outstanding New Tempo common stock and (5) the Third Party PIPE Investors are expected to own approximately 8.8% of the outstanding New Tempo common stock . These percentages assume (i) that no public shareholders exercise their redemption rights in connection with the Business Combination, (ii) no exercise of the public and private warrants or options or issuance of any shares of New Tempo common stock in connection with the Tempo Earnout Shares, (iii) that (x) New Tempo issues or reserves 14,542,197 shares of New Tempo common stock to Tempo Stockholders as part of the Aggregate Merger Consideration pursuant to the Merger Agreement and (y) New Tempo issues 3,050,000 shares of New Tempo common stock to the PIPE Investors pursuant to the PIPE Investment and (iv) 805,000 shares of New Tempo to Cantor to settle deferred underwriting commissions incurred during ACE’s IPO. If the actual facts are different from these assumptions, the percentage ownership retained by current ACE shareholders and Tempo Stockholders in New Tempo will be different.
The following table illustrates varying ownership levels in New Tempo immediately following the consummation of the Business Combination based on the assumptions above.
Share Ownership in New Tempo
Pro Forma Combined
(Assuming No Redemptions)
Pro Forma Combined
(Assuming Maximum
Redemptions)(1)
Number of
Shares
%
Ownership
Number of
Shares
%
Ownership
Tempo Stockholders(2)(3)(6)(7)
14,542,197 51.8% 14,542,197 55.8%
ACE’s public shareholders
3,945,298 14.1% 954,686 3.7%
Sponsor & related parties(4)(6)
6,288,755 22.4% 6,102,925 23.4%
Third Party PIPE Investors(7)
2,469,047 8.8% 3,654,878 14.0%
Cantor(5) 805,000 2.9% 805,000 3.1%
Total
28,050,297 100% 26,059,686 100%
(1)
Assumes maximum redemptions of 2,990,612 Class A ordinary shares of ACE in connection with the Business Combination at approximately $10.16 per share based on trust account figures as of June 30, 2022, and including the expected proceeds received from the Promissory Note with the Sponsor. As of September 21, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus, the Sponsor’s obligation is approximately $0.27 per public share.  
(2)
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. Because the Tempo Earnout Shares are contingently issuable based upon meeting certain operating metrics that have not yet been achieved, the pro forma New Tempo common stock issued and outstanding immediately after the Business Combination excludes the 7,000,000 Tempo Earnout Shares.
 
51

 
(3)
Includes an estimated 3,727,260 shares of New Tempo common stock expected to be issued to Tempo warrant holders, net of expected exercise proceeds, and excludes an estimated 610,197 shares of New Tempo common stock to be reserved for potential future issuance upon the exercise of New Tempo Options and an estimated 1,641,564 shares of New Tempo common stock to be reserved for potential future issuance upon settlement of New Tempo RSUs.
(4)
Includes 200,000 shares subscribed for by the Sponsor Related PIPE Investors and 3,750,000 shares beneficially owned by the directors and officers of ACE and initial shareholders and their permitted transferees (taking into account the SSA Exchange).
(5)
Includes 805,000 New Tempo shares issued to Cantor to settle ACE’s existing deferred underwriting commissions of $8.1 million as of June 30, 2022.
(6)
Includes New Tempo common stock issued to Tempo Stockholders and the Sponsor and related parties upon conversion of the August 2022 Bridge Notes. Concurrently with the closing of the Business Combination, the principal balance and all accrued and unpaid interest on the August 2022 Bridge Notes will convert into shares of New Tempo common stock. Tempo Stockholders and the Sponsor and related parties are expected to receive3,973,827 and 1,957,803 shares of New Tempo common stock, respectively.
(7)
Certain Third Party PIPE Investors are also existing Tempo Stockholders. Accordingly, the same shareholders may be included in both shareholder categories.
Date, Time and Place of Extraordinary General Meeting of ACE’s Shareholders
The extraordinary general meeting of the shareholders of ACE will be held at    a.m., Eastern Time, on , 2022, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, located at 525 University Ave, Palo Alto, CA 94301, or virtually via live webcast at     , to consider and vote upon the proposals to be put to the extraordinary general meeting, including if necessary, the Adjournment Proposal, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, each of the Condition Precedent Proposals have not been approved.
Voting Power; Record Date
ACE shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on          , 2022, which is the “record date” for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. ACE warrants do not have voting rights. As of the close of business on the record date, there were 9,695,298 ordinary shares issued and outstanding, of which 3,945,298 were issued and outstanding public shares.
Quorum and Vote of ACE Shareholders
A quorum of ACE shareholders is necessary to hold a valid meeting. A quorum will be present at the ACE extraordinary general meeting if a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. While ACE shareholders will be permitted to observe the proceedings of the extraordinary general meeting virtually via live webcast, such shareholders will not be able to vote via live webcast, and such virtual participation will not be counted for the purposes of establishing a quorum. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 6,976,139 ordinary shares would be required to achieve a quorum.
The Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees have agreed to vote all of their founder shares and any other public shares held by them in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, and due to (i) the redemption of 14,797,723 public shares in January 2022 and (ii) the redemption of 4,256,979 public shares in connection with the shareholder vote in July 2022, in each case in connection with the
 
52

 
shareholder vote to approve the extension of the date by which ACE must complete an initial business combination, the Sponsor (including ACE’s directors, officers, and initial shareholders and their permitted transferees) owns 59.31% of the issued and outstanding ordinary shares.
The proposals presented at the extraordinary general meeting require the following votes:

Business Combination Proposal:   The Business Combination Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Domestication Proposal:   The approval of the Domestication Proposal requires a special resolution under Cayman Islands Companies Act, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Organizational Documents Proposals:   The separate approval of each of the Organizational Documents Proposals requires a special resolution under Cayman Islands Companies Act, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Director Election Proposal:   The Director Election Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Stock Issuance Proposal:   The Stock Issuance Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Incentive Award Plan Proposal:   The Incentive Award Plan Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Adjournment Proposal:   The Adjournment Proposal may be approved by an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
Redemption Rights
Pursuant to the Cayman Constitutional Documents, a public shareholder may request of ACE that New Tempo redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

either (a) hold public shares or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

submit a written request to Continental, ACE’s transfer agent, that New Tempo redeem all or a portion of your public shares for cash; and

deliver your public shares to Continental, ACE’s transfer agent, electronically through DTC.
Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on      , 2022 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
No demands for redemption in connection with the business combination proposal described in the registration statement on Form S-4 that was declared effective on April 18, 2022, have been received by
 
53

 
Continental on behalf of ACE. All demands for redemption made in connection with the January 2022 and July 2022 shareholder votes to extend the date by which ACE must complete an initial business combination have been completed, and such shares have been redeemed.
Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, ACE’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, ACE’s transfer agent, New Tempo will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of June 30, 2022, this would have amounted to approximately $10.17 per issued and outstanding public share, and as of September 20, 2022, this would have amounted to approximately $10.21 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it is shares of New Tempo common stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of ACE — Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares without the prior consent of ACE. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash without the prior consent of ACE.
Pursuant to the Letter Agreement, the Sponsor and directors and officers of ACE at the time of ACE’s initial public offering agreed to waive their redemption rights with respect to all of the Founder Shares and any public shares held by them.
The Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees have agreed to vote in favor of the Business Combination, regardless of how our public shareholders vote. Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees have 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 Sponsor Support Agreement. As of the date of this proxy statement/prospectus, and due to (i) the redemption of 14,797,723 public shares in January 2022 and (ii) the redemption of 4,256,979 public shares in connection with the shareholder vote in July 2022, in each case in connection with the shareholder vote to approve the extension of the date by which ACE must complete an initial business combination, the Sponsor (including ACE’s directors, officers, and initial shareholders and their permitted transferees) owns 59.31% of the issued and outstanding ordinary shares.
Holders of the warrants will not have redemption rights with respect to the warrants.
Appraisal Rights
Neither ACE shareholders nor ACE warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Act or under the DGCL.
 
54

 
Proxy Solicitation
Proxies may be solicited by mail, telephone or in person. ACE has engaged Morrow Sodali LLC to assist in the solicitation of proxies.
If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the extraordinary general meeting. A shareholder also may change its vote by submitting a later-dated proxy as described in the section titled “extraordinary general meeting of ACE — Revoking Your Proxy.”
Interests of ACE’s Directors and Executive Officers in the Business Combination
When you consider the recommendation of ACE’s board of directors in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor and ACE’s directors and executive officers have interests in such proposal that are different from, or in addition to, those of ACE shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

On May 28, 2020, the Sponsor purchased 5,750,000 ACE Class B ordinary shares for an aggregate purchase price of $25,000, or approximately $0.004 per share (“Founder Shares”). On May 29, 2020, the Sponsor transferred an aggregate of 155,000 Founder Shares to certain members of the Company’s management team. The Founder Shares included an aggregate of up to 750,000 shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised, so that the number of Founder Shares would equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. As a result of the underwriters’ election to fully exercise their over-allotment option on July 30, 2020, 750,000 Founder Shares are no longer subject to forfeiture. Simultaneously with the closing of the initial public offering of ACE, the Sponsor purchased 6,600,000 Private Placement Warrants at a price of $1.00 per warrant, or $6,600,000 in the aggregate, in a private placement. On October 13, 2021, the Sponsor distributed 1,678,500 Founder Shares and 948,750 Private Placement Warrants to Sunny Siu. In January 2022, the Sponsor distributed 755,930 founder shares and 891,714 private placement warrants to ACE SO5 Holdings Limited, an affiliate of the Sponsor. If ACE does not consummate a business combination by October 13, 2022 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Act to provide for claims of creditors and the requirements of other applicable law. In such event, the 5,595,000 ACE Class B ordinary shares owned by the Sponsor and initial shareholders and their permitted transferees, and the 155,000 ACE Class B ordinary shares directly owned by ACE’s independent directors and certain of its officers, in aggregate, would be worthless because following the redemption of the public shares, ACE would likely have few, if any, net assets and because the Sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to the Sponsor if ACE fails to complete a business combination within the required period. In addition the 6,600,000 Private Placement Warrants would expire worthless. The Sponsor purchased the ACE Class B ordinary shares prior to ACE’s initial public offering for approximately $0.004 per share and certain of ACE’s directors and executive officers, including Behrooz Abdi, have an economic interest in such shares. Each of the initial shareholders of ACE and their permitted transferees acquired their ACE Class B ordinary shares at $0.004 per share. The 3,750,000 shares of New Tempo common stock that the Sponsor and initial shareholders of ACE (including the independent directors and certain officers of ACE, and excluding the Sponsor Related PIPE Investors) and their permitted transferees, are expected to hold following the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of approximately $38.40 million based upon the closing price of $10.24 per public share on Nasdaq on September 21, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. Given such shares of New Tempo common stock will be subject to certain restrictions, including those described above, ACE believes such shares have less value. The 6,600,000 New Tempo warrants into which the 6,600,000 Private Placement Warrants held by the Sponsor and initial shareholders and their permitted transferees, will automatically convert in
 
55

 
connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of approximately $660,000 based upon the closing price of $0.10 per public warrant on Nasdaq on September 21, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus.

The Sponsor will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to ACE shareholders rather than liquidate.

Given the differential in purchase price that the Sponsor and initial shareholders and their permitted transferees paid for the Founder Shares as compared to the price of the units sold in ACE’s initial public offering and the substantial number of shares of New Tempo Common Stock that the Sponsor and initial shareholders and their permitted transferees will receive upon conversion of the Founder Shares in connection with the Business Combination, the Sponsor and initial shareholders and their permitted transferees may realize a positive rate of return on such investments even if other shareholders of ACE experience a negative rate of return following the Business Combination.

The Sponsor and its affiliates are active investors across a number of different investment platforms, which ACE and the Sponsor believe improved the volume and quality of opportunities that were available to ACE. However, it also creates potential conflicts and the need to allocate investment opportunities across multiple investment vehicles. In order to provide the Sponsor with the flexibility to evaluate opportunities across these platforms, ACE’s Cayman Constitutional Documents currently provide that certain business opportunities are not subject to the “corporate opportunity” doctrine. This waiver allows the Sponsor and its affiliates to allocate opportunities based on a combination of the objectives and fundraising needs of the target, as well as the investment objectives of the investment vehicle. ACE does not believe that the waiver of the corporate opportunities doctrine otherwise had a material impact on its search for an acquisition target.

On May 28, 2020, ACE issued an unsecured promissory note to the Sponsor, pursuant to which ACE borrowed an aggregate principal amount of $186,760. The note was non-interest bearing and payable on the earlier of (i) December 31, 2020, and (ii) the completion of the initial public offering. The borrowings outstanding under the note in the amount of $186,760 were repaid upon the consummation of the initial public offering on July 30, 2020. In addition, in order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the Sponsor or an affiliate of the Sponsor or certain of ACE’s officers and directors may, but are not obligated to, loan ACE funds as may be required. In the event that ACE’s initial business combination does not close, ACE may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment, and the applicable related party lender or lenders may not be able to recover the value it or they have loaned to ACE pursuant to such loans. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsor. ACE does not expect to seek loans from parties other than the Sponsor or an affiliate of the Sponsor as ACE does not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the trust account. As of December 31, 2020, ACE had no outstanding borrowings under the working capital loans.

On August 12, 2020, ACE entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Sponsor, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility will be utilized to finance transaction costs in connection with ACE’s initial 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, ACE deposited $900,000 into an account held by ASIA-IO, from which ACE may make fund withdrawals for up to $1,500,000. As part of the Working Capital Facility, ASIA-IO waived the right to convert the working capital loan into private placement warrants. Any outstanding amounts deposited with ASIA-IO upon the completion of a business combination or dissolution of ACE, will be returned to ACE. In November 2020, the deposit amount was reduced by $850,000. As of June 30, 2022, ACE had $829,295 of outstanding borrowings under the Working Capital Facility. If
 
56

 
the Business Combination is not completed and ACE winds up, there will not be sufficient assets to repay the Working Capital Facility and it will be worthless.

Ryan Benton, a director of ACE, is also Chief Financial Officer of Tempo and as such is considered an interested party to the Business Combination. Mr. Benton recused himself from the ACE board of directors meetings and certain votes regarding the Merger Agreement and the Business Combination.

The Sponsor (including its representatives and affiliates) and ACE’s directors and officers, may, in the future, become affiliated with entities that are engaged in a similar business to ACE. The Sponsor and ACE’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to ACE completing its initial business combination (assuming ACE has entered into the Merger Agreement). Moreover, certain of ACE’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. ACE’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to ACE, and the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in ACE’s favor and such potential business opportunities may be presented to other entities prior to their presentation to ACE, subject to applicable fiduciary duties under Cayman Islands Companies Act and Cayman Islands common law. ACE’s Cayman Constitutional Documents provide that ACE renounces its interest in any corporate opportunity offered to any director or officer of ACE which may be an opportunity for such director, on the one hand, or ACE, on the other.

ACE’s existing directors and officers will be eligible for continued indemnification and continued coverage under ACE’s directors’ and officers’ liability insurance after the Merger and pursuant to the Merger Agreement.

The Sponsor Related PIPE Investors have subscribed for $2,000,000 of the PIPE Investment, for which they will receive 200,000 shares of New Tempo common stock. The 200,000 shares which the Sponsor Related PIPE Investors have subscribed for in the PIPE Investment, if unrestricted and freely tradable, would have had an aggregate market value of approximately $2.05 million based upon the closing price of $10.24 per public share on Nasdaq on September 21, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. See “Certain Relationships and Related Person Transactions — ACE Convergence Acquisition Corp. — PIPE Subscription Agreements” for additional information.

In the event that ACE fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, ACE will be required to provide for payment of claims of creditors that were not waived that may be brought against ACE within the ten years following such redemption. In order to protect the amounts held in ACE’s trust account, the Sponsor has agreed that it will be liable to ACE if and to the extent any claims by a third party (other than ACE’s independent auditors) for services rendered or products sold to ACE, or a prospective target business with which ACE has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) 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 value of the trust assets, in each case, net of the amount of 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 indemnity of the underwriters of ACE’s IPO against certain liabilities, including liabilities under the Securities Act.

In order to finance transaction costs in connection with ACE’s initial business combination (including any amounts which are currently outstanding), the Sponsor or an affiliate of the Sponsor, or certain of ACE’s officers and directors may, but are not obligated to, loan funds to ACE as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes that would each become due and payable in full, without interest, upon completion of ACE’s initial business combination, or, at the lender’s discretion, up to $1,500,000 of notes may be converted
 
57

 
upon completion of a business combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to ACE’s private placement warrants. In the event that ACE does not complete its initial business combination within the prescribed time frame, ACE may use a portion of its working capital held outside of its trust account to repay any Working Capital Loans made to ACE, but no proceeds held in the trust account would be used to repay such Working Capital Loans, and the applicable related party lender or lenders may not be able to recover the value it or they have loaned to ACE pursuant to such Working Capital Loans. On August 12, 2020, ACE entered into a working capital facility (the “Working Capital Facility”) with ASIA-IO Advisors Limited (“ASIA-IO”), an affiliate of the Sponsor, in the aggregate amount of $1,500,000. The funds from the Working Capital Facility will be utilized to finance transaction costs in connection with the 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, ACE deposited $900,000 into an account held by ASIA-IO, from which the Company may make fund withdrawals for up to $1,500,000. As part of the Working Capital Facility, ASIA-IO waived the right to convert the Working Capital Loan into private placement warrants. Any outstanding amounts deposited with ASIA-IO upon the completion of a Business Combination or dissolution of ACE, will be returned to ACE. In November 2020, the deposit amount was reduced by $850,000. As of June 30, 2022, ACE had $829,295 of borrowings under the Working Capital Facility.

On January 13, 2022, ACE entered into a Convertible Promissory Note (as amended and restated on June 30, 2022, the “Promissory Note”) with the Sponsor. Pursuant to the Promissory Note, the Sponsor has agreed that it will contribute to ACE as a loan (each loan being referred to herein as a “Contribution”) $0.03 for each Class A ordinary share of ACE that was not redeemed in connection with the shareholder vote to approve the extension of the deadline by which ACE must complete its initial business combination, 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 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 ACE at a conversion price equal to $1.00 per warrant. The Contribution(s) 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 Business Combination. ACE’s board of directors will have the sole discretion whether to continue extending for additional months until $1.5 million in the aggregate has been loaned, and if ACE’s board of directors determines not to continue extending for additional months, the Sponsor’s obligation to make additional Contributions will terminate. If this occurs, ACE would wind up ACE’s affairs and redeem 100% of the outstanding public shares in accordance with the procedures set forth in ACE’s Third Amended and Restated Memorandum and Articles of Association. The maturity date of the Promissory Note may be accelerated upon the occurrence of an Event of Default (as defined therein). Any outstanding principal under the Promissory Note 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 Promissory Note upon notice of such prepayment. If the Business Combination is not completed and ACE winds up, there will not be sufficient assets to repay the Promissory Note and it will be worthless. On June 30, 2022, ACE and the Sponsor amended and restated the Promissory Note 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 ACE’s shareholders of the extension of the date by which ACE must complete an initial business combination to October 13, 2022. Monthly deposits into the trust account following the July 2022 redemptions are based on the number of public shares still outstanding following such redemptions. 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, the effectiveness of which is conditioned upon the approval by ACE’s shareholders of the proposal to amend ACE’s Third Amended and Restated Memorandum and Articles of Association to extend the date by which ACE must consummate an initial business combination from October 13, 2022, to January 30, 2023. Monthly deposits into ACE’s trust account following such extension will be based on the number of public shares still outstanding following such extension.
 
58

 

Pursuant to the Registration Rights Agreement, the Sponsor and ACE’s directors and officers will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of New Tempo’s common stock and warrants held by such parties following the consummation of the Business Combination.

On July 1, 2022, ACE, Tempo and AEPI entered into the Bridge Note, pursuant to which AEPI agreed to loan to Tempo up to an aggregate principal amount of $5.0 million, $2.5 million of which was advanced to Tempo as of June 30, 2022. On August 25, 2022, in connection with the Bridge Financing, the Bridge Note was amended and restated on substantially similar terms to the August 2022 Bridge Notes. In connection with the entry into the Bridge Note, on July 1, 2022, AEPI and ACE entered into a Subscription Agreement (the “Bridge Subscription Agreement”), pursuant to which AEPI agreed, at the closing of the Business Combination, to subscribe for up to 500,000 shares of New Tempo common stock at a purchase price of $10.00 per share. The number of shares AEPI committed to purchase would be automatically reduced in an amount equal to (a) the difference between $5,000,000 and the Bridge Note Drawn Amount, divided by (b) $10.00, rounded up to the nearest whole share. On September 7, 2022, the Bridge Subscription Agreement was terminated in its entirety in connection with the amendment and restatement by ACE, Tempo and AEPI of the Bridge Note in connection with the Bridge Financing.
The Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees have agreed to vote in favor of the Business Combination, regardless of how our public shareholders vote. Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and ACE’s directors, officers, and initial shareholders and their permitted transferees have 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 Sponsor Support Agreement. As of the date of this proxy statement/prospectus, and due to the redemption of (i) 14,797,723 public shares in January 2022 and (ii) the redemption of 4,256,979 public shares in connection with the shareholder vote in July 2022, in each case in connection with the shareholder vote to approve the extension of the date by which ACE must complete an initial business combination, the Sponsor (including ACE’s directors, officers, and initial shareholders and their permitted transferees) owns 59.31% of the issued and outstanding ordinary shares.
Subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor, the existing stockholders of Tempo or our or their 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 Condition Precedent Proposals, 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 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, the existing stockholders of Tempo or our or their 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 ACE redemption process (i.e., approximately $10.17 per share based on trust account figures as of June 30, 2022, and approximately $10.21 per share based on trust account figures as of September 20, 2022); (b) would represent in writing that such public shares will not be voted in favor of approving the 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, the existing stockholders of Tempo or our or their respective directors, officers, advisors or respective affiliates in situations in which the tender offer rules and restrictions on purchases apply, ACE will disclose in a Current Report on Form 8-K prior to the extraordinary general meeting the following: (i) the number of ACE 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 Proposal will be approved; (iv) the identities of the ACE securityholders who sold to the Sponsor, the existing stockholders of Tempo or our or their 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 ACE has received redemption requests pursuant to its redemption offer.
 
59

 
The purpose of such share purchases and other transactions would be to increase the likelihood of (x) satisfaction of the Minimum Cash Condition, (y) otherwise limiting the number of public shares electing to redeem and (z) ACE’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, the existing stockholders of Tempo or our or their respective directors, officers, advisors or respective affiliates may have the effect of increasing share ownership of Tempo on a fully diluted basis.
If such transactions are effected, 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 our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
The existence of financial and personal interests of one or more of ACE’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of ACE and its shareholders and what he, she or they may believe is best for himself, herself, or themselves in determining to recommend that shareholders vote for the proposals. In addition, ACE’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section titled “Business Combination Proposal — Interests of ACE’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
Interests of Tempo’s Directors and Executive Officers in the Business Combination
In considering the approval, and recommendation of stockholder approval, by the Tempo board of directors with respect to the Merger Agreement, Tempo stockholders should keep in mind that Tempo’s directors and officers have interests in the Business Combination that are different from, or in addition to (and that may conflict with), those of Tempo stockholders. The Tempo board of directors was aware of such interests during its deliberations on the merits of the Business Combination. These interests include, among other things, the interests listed below:

Certain of Tempo’s directors and executive officers are expected to become directors and/or executive officers of New Tempo upon the Closing. Specifically, the following individuals who are currently executive officers of Tempo are expected to become executive officers of New Tempo upon the Closing, serving in the offices set forth opposite their names below:
Name
Position
Joy Weiss President, Chief Executive Officer and Director Nominee
Ryan Benton Chief Financial Officer and Secretary and Director Nominee

Ryan Benton, the Chief Financial Officer of Tempo, is also a director of ACE and as such is considered an interested party to the Business Combination. Mr. Benton recused himself from the ACE board of directors meetings and certain votes regarding the Merger Agreement and the Business Combination.

Upon the Closing, Joy Weiss, President and Chief Executive Officer of Tempo, Ryan Benton, Chief Financial Officer of Tempo, Matthew Granade, Director of Tempo, Jacqueline Dee Schneider, Director of Tempo, Behrooz Abdi, Chairman and Chief Executive Officer of ACE, and Omid Tahernia, Director of ACE, are expected to become members of the Board. In addition to these current members of both Tempo and ACE’s boards, other parties, are being evaluated to become members of the Board upon the Closing.
 
60

 
Certain of Tempo’s executive officers and directors as of the date of the Merger Agreement hold Tempo Options and Tempo RSUs. The treatment of such Tempo Options and Tempo RSUs in connection with the Business Combination is described in “Business Combination Proposal — Consideration — Treatment of Tempo Options and Tempo RSUs,” which description is incorporated by reference herein. The holding of such Tempo Options and Tempo RSUs by such executive officers and directors as of September 22, 2022, is set forth in the table below. 
Tempo Options
Tempo RSUs
Executive Officers and Directors
Vested
Unvested
Vested
Unvested
Joy Weiss
2,176,329 1,058,807 1,500,000
Ryan Benton
500,162 808,676 1,500,000
Ralph Richart
290,265 475,912 1,500,000
Matthew Granade
90,189 215,394 250,000
Jacqueline Dee Schneider
97,689 31,137 250,000
Jeffrey McAlvay
881,297 250,000
Sri Chandrasekar
Zavain Dar
Recommendation to Shareholders of ACE
ACE’s board of directors believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of ACE’s shareholders and recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the Stock Issuance Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Incentive Award Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.
The existence of financial and personal interests of one or more of ACE’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of ACE and its shareholders and what he, she or they may believe is best for himself, herself, or themselves in determining to recommend that shareholders vote for the proposals. In addition, ACE’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section titled “Business Combination Proposal — Interests of ACE’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.
Sources and Uses of Funds for the Business Combination
The following table summarizes the sources and uses for funding the Business Combination. These figures assume (i) that no public shareholders exercise their redemption rights in connection with the Business Combination or our extension proposal and (ii) that New Tempo issues or reserves for issuance 14,542,197 shares of New Tempo common stock to the Tempo Stockholders as part of the Aggregate Merger Consideration. If the actual facts are different from these assumptions, the below figures will be different.
Sources
Uses
($ in millions)
Cash and investments held in trust
account(1)
$ 40.1
Repayment of existing indebtedness(3)
35.7
PIPE Investment(2)
10.5
Fees paid through issuance of equity to
Cantor
8.1
New Tempo Senior Note(6)
22.0
Transaction expenses(5)
3.6
August 2022 Bridge Notes(7)
3.6
Equity Issuance to Cantor
8.1
Cash to balance sheet(4)
36.9
Shareholder Rollover Equity
228.6
Equity to Shareholders
228.6
Total sources
$ 312.9
Total uses
$ 312.9
 
61

 
(1)
Calculated using amounts as of June 30, 2022, net against the July 2022 redemption of 4,256,979 public shares.
(2)
1.1 million shares issued in the PIPE Investment are at a deemed value of $10.00 per share. Included in this amount are 500,000 shares of New Tempo common stock which are converted from existing indebtedness held by lenders under the Loan and Security Agreement. The conversion is in accordance with the Repayment Term Sheet.
(3)
Reflects the settlement of Tempo’s outstanding debt under the Loan and Security Agreement of $31.3 million at closing plus make whole payments of $2.3 million related to the prepayment of debt. Also reflects $2.1 million to repay the ACE Working Capital Facility and Promissory Note. Of the total settlement of Tempo’s outstanding debt, $5.0 million will be converted into New Tempo common stock, $22.0 million will be converted into New Tempo Senior Notes, $3.6 million will be converted into the August 2022 Bridge Notes and the remaining $5.1 million will be repaid in cash upon the closing of the Business Combination.
(4)
If we assume redemptions of 2,990,612 Class A ordinary shares of ACE in connection with the Business Combination at approximately $10.16 per share based on trust account figures as of June 30, 2022, and including the expected proceeds received from the Promissory Note with the Sponsor, which is the maximum redemptions scenario described under the section titled “Unaudited Pro Forma Condensed Combined Financial Information — Basis of Pro Forma Presentation,” we expect to satisfy the Minimum Available Acquiror Cash Amount required to consummate the Business Combination of at least $10.0 million, after giving effect to the PIPE Investment and before giving effect to the payment of the estimated transaction costs of $37.0 million, including ACE’s deferred underwriting commissions from its IPO which will be settled through the issuance of New Tempo shares, incurred in connection with the Business Combination. As of September 21, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus, the Sponsor’s obligation is approximately $0.27 per public share. 
(5)
Includes transaction costs due at Closing, including approximately $1.2 million in fees owed under the Oaktree Termination, but does not include the deferred termination fee of approximately $1.1 million to be paid six months after the Closing. The remaining $33.4 million in transaction costs are deferred until after Closing with the exception of $8.1 million in deferred underwriting commissions that are paid upon Closing and settled through the issuance of New Tempo shares.
(6)
Amount reflects the conversion of existing indebtedness held by lenders under the Loan and Security Agreement into New Tempo Senior Notes of $22.0 million. The conversion is in accordance with the Repayment Term Sheet.
(7)
Amount reflects the August 2022 Bridge Notes held by the lenders under the Loan and Security Agreement. Upon the closing of the Business Combination, the lenders will convert $3.6 million of their existing indebtedness into the August 2022 Bridge Notes.
U.S. Federal Income Tax Considerations
For a discussion summarizing the U.S. federal income tax considerations of the Domestication and exercise of redemption rights, please see “U.S. Federal Income Tax Considerations.”
Expected Accounting Treatment
The Domestication
There will be no accounting effect or change in the carrying amount of the consolidated assets and liabilities of the Company as a result of the Domestication. The business, capitalization, assets and liabilities and financial statements of New Tempo immediately following the Domestication will be the same as those of ACE immediately prior to the Domestication.
The Business Combination
We expect the Business Combination to be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, ACE is expected to be treated as the “acquired” company
 
62

 
for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of New Tempo will represent a continuation of the financial statements of Tempo with the Business Combination treated as the equivalent of Tempo issuing stock for the net assets of ACE, accompanied by a recapitalization. The net assets of ACE will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Tempo in future reports of the New Tempo. See the subsection titled “The Business Combination — Expected Accounting Treatment of the Business Combination.”
Regulatory Matters
Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (“FTC”), certain transactions may not be consummated unless an HSR Notification and Report Form has been furnished to the Antitrust Division of the Department of Justice (“Antitrust Division”) and the FTC by each party and certain waiting period requirements have been satisfied. The Business Combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the two filings of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. On October 27, 2021, ACE and Tempo filed the required forms under the HSR Act with respect to the Business Combination with the Antitrust Division and the FTC and requested early termination.
At any time before or after consummation of the Business Combination, notwithstanding expiration or termination of the waiting period under the HSR Act, the Antitrust Division or the FTC, or any state, foreign or other governmental authority could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of assets or other remedies, and/or subjecting the completion of the Business Combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.
ACE cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, ACE cannot assure you as to its result.
Neither ACE nor Tempo is aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.
Recent Developments
On May 19, 2022, Citi resigned from its role as financial advisor to Tempo and as a placement agent to the Company for the proposed PIPE Investment. Citi’s resignation was not the result of any dispute or disagreement with the Company or Tempo or any matter relating to the Company’s or Tempo’s respective operations, policies, procedures or practices. In connection with its resignation, Citi waived any claim it may have to any fees under the engagement letters entered into with each of the Company and Tempo and, accordingly, neither the Company nor Tempo has paid to Citi, and neither the Company nor Tempo is liable to Citi for, any fees, despite Citi’s having rendered substantially all applicable services at the time of its resignation. Citi did not provide specific reasons for its resignation, and neither the Company nor Tempo will speculate about the reasons why Citi withdrew from its role as financial advisor to Tempo and as a placement agent to the Company for the PIPE Investment and forfeited its fees after doing substantially all of the work necessary to earn those fees. Neither the Company nor Tempo intends to engage any additional advisors or placement agents as a result of Citi’s resignation, and the fees previously owed to Citi will not be paid or reallocated to any other advisor or placement agent. Citi was not expected to have a significant role in the closing of the Business Combination, and the Company does not believe that Citi’s resignation will impact the transactions described in this proxy statement/prospectus or the consummation of the Business Combination.
 
63

 
As is customary, certain provisions of Citi’s engagement letters with each of the Company and Tempo will survive Citi’s resignation. These provisions include the obligations of the Company and Tempo to indemnify and hold harmless Citi and its officers, directors, employees and agents from and against any losses and claims arising in any manner out of or in connection with the services that Citi provided to the Company or Tempo under the engagement letters and certain obligations of the Company and Tempo to maintain the confidentiality of information or advice rendered by Citi or any of its representatives to the Company or Tempo, as applicable, in connection with the evaluation of the Business Combination.
The Company does not expect that the PIPE Investment will be impacted by Citi’s resignation. Committed and potential investors in the PIPE Investment have been informed of Citi’s resignation, and no investors have revised or withdrawn their respective commitments in light of that information. The PIPE Investment is not contingent upon any continued involvement by Citi in the transactions and, pursuant to the subscription agreements relating to the PIPE Investment, each investor in the PIPE Investment specifically has disclaimed reliance on any statement, representation or warranty made by, among others, each of the placement agents, including Citi, in connection with such investment.
The disclosure in this proxy statement/prospectus pertaining to Citi’s engagement as financial advisor to Tempo and as a placement agent to the Company for the proposed equity and convertible note private placement investments to be consummated in connection with the Business Combination, as well as Citi’s subsequent resignation, has been provided to Citi. Citi’s confirmation that Citi agrees with this disclosure was requested, but Citi has indicated that it does not intend to provide a response to this request.
Some investors may believe that when a financial institution, such as Citi, is named in a registration or proxy statement, the involvement of such institution implies a level of due diligence and independent analysis on the part of such financial institution and that the naming of such financial institution generally means that the financial institution has completed a level of due diligence ordinarily associated with a professional engagement. However, in connection with its resignation, Citi has disclaimed responsibility for any portion of the disclosure included in this proxy statement/prospectus. Neither the Company nor Tempo can provide any assurance that Citi agrees with the disclosure in this proxy statement/prospectus, and no inference should be drawn to this effect. Investors should not place any reliance on the fact that Citi was involved with any aspect of the transactions described in this proxy statement/prospectus.
At no time prior to or after its resignation through the date of this filing did Citi indicate that it had any specific concerns with the Business Combination. Citi did not prepare or provide any of the disclosures in this proxy statement/prospectus, any analysis underlying the disclosures or any other materials or work product to the Company or Tempo that have been provided to the Company’s shareholders or the investors in the PIPE Investment. As with other members of the transaction working group, Citi did receive drafts of proxy statement/prospectus prepared by the Company and Tempo and provided limited comments in the ordinary course.
The Company did not rely on Citi, in its role as a placement agent to the Company for the proposed equity and convertible note private placement investments to be consummated in connection with the Business Combination, in the preparation and analysis of the materials, including projections, provided to the board of directors of the Company for use as a component of its overall evaluation of Tempo. The board of directors of the Company did not receive or rely upon any financial or valuation analyses conducted or prepared by Citi in making its determination that the Merger Agreement, and the transactions contemplated thereby, including the Business Combination, were just, equitable and fair as to the Company and that it is in the best interests of the Company and its shareholders to enter into the Merger Agreement subject to the terms and conditions agreed upon by the parties thereto.
The Company believes that the resignation of Citi and the waiver of fees for services that have already been rendered is unusual. It is possible that the Company’s shareholders may be more likely to elect to redeem their shares as a result of this resignation and as a result, the Company may not have sufficient funds to meet the Minimum Cash Condition in the Merger Agreement.
Emerging Growth Company
ACE is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and for so long as it remains an emerging growth company it may take advantage of certain
 
64

 
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 auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

reduced disclosure obligations regarding executive compensation in ACE’s periodic reports, proxy statements, and registration statements;

exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved; and

an extended transition period for complying with new or revised accounting standards by allowing an emerging growth company to delay the adoption of such accounting standards until those standards would otherwise apply to private companies that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act.
We have elected to take advantage of certain of the reduced disclosure obligations in this proxy statement/prospectus and may elect to take advantage of other reduced reporting requirements in future filings and reports. Accordingly, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.
We have also elected under the JOBS Act to use the extended transition period for complying with new or revised accounting standards. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the completion of ACE’s initial public offering. If certain events occur prior to the end of such five-year period, including if (i) we become a “large accelerated filer” which means at least $700.0 million of equity securities are held by non-affiliates as of the last business day of our second fiscal quarter; our annual gross revenue exceeds $1.07 billion; or (ii) we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.
Smaller Reporting Company
ACE is also a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We will remain a smaller reporting company and may take advantage of certain scaled disclosures available to smaller reporting companies for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our equity securities held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
Summary of Risk Factors
In evaluating the proposals to be presented at the ACE extraordinary general meeting, a shareholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section titled “Risk Factors.” Below are some of these risks, any one of which could adversely affect our business, financial condition, results of operations, and prospects.

The success of New Tempo’s business is dependent on New Tempo’s ability to keep pace with technological changes and competitive conditions in New Tempo’s industry and New Tempo’s ability to effectively adapt New Tempo’s services as New Tempo’s customers react to technological changes and competitive conditions in their respective industries. New Tempo may not timely and effectively scale and adapt New Tempo’s existing technology, processes, and infrastructure to meet the needs of New Tempo’s business.

New Tempo’s operating results and financial condition may fluctuate from period to period and may fall below expectations in any particular period, which could adversely affect the market price of New Tempo common stock.
 
65

 

Tempo currently competes, and New Tempo will compete, with numerous other diversified manufacturing service providers, electronic manufacturing services and design providers and others, and may face increasing competition, which could cause its operating results to suffer.

Because Tempo’s industry is, and New Tempo’s industry is expected to continue to be, rapidly evolving, forecasts of market growth may not be accurate, and even if these markets achieve the forecasted growth, there can be no assurance that New Tempo’s business will grow at similar rates, or at all.

New Tempo’s gross profit and gross margin will be dependent on a number of factors, including its mix of services, market prices, labor costs and availability, acquisitions it may make and its ability to achieve cost synergies, level of capacity utilization and component, material, and other services prices.

Tempo purchases, and New Tempo will purchase, a significant amount of the materials and components it uses from a limited number of suppliers, and if such suppliers become unavailable or inadequate, its customer relationships, results of operations and financial condition may be adversely affected.

Third-party lawsuits and assertions to which New Tempo may become subject alleging its infringement of patents, trade secrets or other intellectual property rights may have a significant adverse effect on its financial condition.

New Tempo may be involved in legal proceedings, including intellectual property (“IP”), anti-competition and securities litigation, employee-related claims and regulatory investigations, which could, among other things, divert efforts of management and result in significant expense and loss of Tempo’s existing IP rights.

An inability to successfully manage the procurement, development, implementation, or execution of IT systems, or to adequately maintain these systems and their security, as well as to protect data and other confidential information, may adversely affect New Tempo’s business and reputation.

Tempo’s industry routinely experiences cyclical market patterns and Tempo’s services are, and New Tempo’s services are expected to be, used across different end markets, and a significant downturn in the industry or in any of these end markets could cause a meaningful reduction in demand for New Tempo’s services and harm its operating results.

Tempo will incur increased costs as a result of operating as a public company, and New Tempo’s management will be required to devote substantial time to new compliance and investor relations initiatives.

The Sponsor and ACE’s directors, officers and initial shareholders and their permitted transferees have agreed to vote in favor of the Business Combination, regardless of how ACE’s public shareholders vote.

Since the Sponsor and ACE’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of ACE’s shareholders, a conflict of interest may have existed in determining whether the Business Combination with Tempo is appropriate as ACE’s initial business combination. Such interests include that the Sponsor will lose its entire investment in ACE if the Business Combination is not completed.

Following the consummation of the Business Combination, ACE’s only significant asset will be its ownership interest in Tempo and such ownership may not be sufficient to pay dividends or make distributions or loans to enable ACE to pay any dividends on New Tempo common stock or satisfy ACE’s other financial obligations.

ACE’s public stockholders will experience immediate dilution as a consequence of the issuance of New Tempo common stock as consideration in the Business Combination and the PIPE Investment and due to future issuances pursuant to the 2022 Plan.

Tempo and ACE previously identified material weaknesses in their internal control over financial reporting and may face litigation and other risks as a result of the material weakness in their internal control over financial reporting.
 
66

 

If analysts do not publish research about New Tempo’s business or if they publish inaccurate or unfavorable research, New Tempo’s stock price and trading volume could decline.

New Tempo’s Proposed Certificate of Incorporation will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between New Tempo and its stockholders and that the federal district courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the U.S. Securities Act of 1933, as amended, which could limit New Tempo’s stockholders’ ability to obtain a favorable judicial forum for disputes with New Tempo or New Tempo’s directors, officers or employees.

Tempo is an early-stage company with a history of losses. Tempo has not been profitable historically and New Tempo may not achieve or maintain profitability in the future.

Tempo’s limited operating history makes evaluating Tempo’s current business and New Tempo’s future prospects difficult and may increase the risk of your investment. Tempo is dependent on a limited number of customers and end markets, and a decline in revenue from, or the loss of, any significant customer, could have a material adverse effect on its financial condition and operating results.
The summary risk factors described above should be read together with the text of the full risk factors in the section titled “Risk Factors” and the other information set forth in this proxy statement/prospectus. The risks summarized above or described in full under the section titled “Risk Factors” are not the only risks that we face. Additional risks and uncertainties not precisely known to us, or that we currently deem to be immaterial may also harm our business, financial condition, results of operations and future growth prospects.
 
67

 
COMPARATIVE PER SHARE INFORMATION
The comparative per share information sets forth summary historical per share information for ACE and Tempo and unaudited pro forma condensed combined per share information after giving effect to the Business Combination, presented under two assumed redemption scenarios as follows:

Assuming No Redemptions — this scenario assumes that no public stockholders of ACE exercise their redemption rights with respect to their public shares for a pro rata share of the funds in the trust account.

Assuming Maximum Redemptions — this scenario assumes 2,990,612 of the public shares are redeemed for their pro rata share of the funds in ACE’s trust account for an aggregate payment of $30.4 million, which is derived from the number of shares that could be redeemed in connection with the Business Combination at an assumed redemption price of approximately $10.16 per share based on funds held in the trust account as of June 30, 2022, including the expected proceeds received from the Promissory Note with the Sponsor, and still satisfy the Minimum Available Acquiror Cash Amount required to consummate the Business Combination of at least $10.0 million, after giving effect to the PIPE Investment and before giving effect to the payment of the estimated transaction costs of $37.1 million, including ACE’s deferred underwriting commissions from its IPO, incurred in connection with the Business Combination.
The selected unaudited pro forma condensed combined book value information as of June 30, 2022, gives pro forma effect to the Business Combination as if it had occurred on June 30, 2022. The selected unaudited pro forma condensed combined net income (loss) per share and weighted average shares outstanding information for the year ended December 31, 2021 and for the six months ended June 30, 2022, gives pro forma effect to the Business Combination as if it had occurred on January 1, 2021.
The two alternative levels of redemptions assumed in the selected unaudited pro forma condensed combined per share information are based on the assumption that there are no adjustments for the outstanding Warrants issued in connection with the IPO as such securities are not exercisable until 30 days after the Closing. There are also no adjustments for the estimated 610,197 shares reserved for the potential future issuance of New Tempo common stock upon the exercise of the New Tempo Options to be issued to holders of Tempo Options or for the estimated 1,641,564 shares of New Tempo common stock reserved for the potential future issuance of New Tempo common stock upon the settlement of the New Tempo RSUs to be issued to holders of Tempo RSUs, in each case, upon the consummation of the Business Combination, as such events have not yet occurred.
This information is only a summary and should be read in conjunction with the historical financial statements of ACE and Tempo and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma condensed combined per share information of ACE and Tempo is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement/prospectus in the section titled “Unaudited Pro Forma Condensed Combined Financial Information.”
The unaudited pro forma condensed combined income (loss) per share information below does not purport to represent the income (loss) per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma condensed combined book value per share information below does not purport to represent what the value of ACE and Tempo would have been had the companies been combined during the periods presented.
 
68

 
ACE is providing the following comparative per share information to assist you in your analysis of the financial aspects of the Business Combination.
Pro Forma Condensed Combined
(in thousands, except share and per share data)
ACE
Tempo
No
Redemptions
Max
Redemptions
As of and for the year ended December 31, 2021
Book value per share
$(1.19) and $(4.75)
$ (9.39) N/A N/A
Weighted average shares outstanding – basic and diluted
23,000,000 and 5,750,000
9,819,576 28,050,297 26,059,686
Net income (loss) per share – basic and diluted
$0.20 and $0.20
$ (4.89) $ (4.47) $ (4.77)
As of and for the six months ended June 30, 2022
Book value per share
$(1.99) and $(3.43)
$ (10.97) $ (0.15) $ (0.94)
Weighted average shares outstanding – basic and diluted
9,928,678 and 5,750,000
10,065,695 28,050,297 26,059,686
Net income (loss) per share – basic and diluted
$0.58 and $0.58
$ (1.99) $ (0.53) $ (0.55)
 
69

 
MARKET PRICE AND DIVIDEND INFORMATION
ACE units, Class A ordinary shares and public warrants are currently listed on The Nasdaq Capital Market under the symbols “ACEVU” and “ACEV” and “ACEVW,” respectively.
The most recent closing price of the units, common stock, and redeemable warrants as of October 13, 2021, the last trading day before announcement of the execution of the Merger Agreement, was $10.14, $9.92 and $0.58, respectively. As of     , 2022, the record date for the extraordinary general meeting, the most recent closing price for each unit, common stock and redeemable warrant was $         , $     and $    , respectively.
Holders of the units, public shares and public warrants should obtain current market quotations for their securities. The market price of ACE’s securities could vary at any time before the Business Combination.
Holders
As of the date of this proxy statement/prospectus there was one holder of record of ACE’s Class A ordinary shares, six holders of record of ACE’s Class B ordinary shares, one holder of record of ACE units and three holders of ACE warrants. See “Beneficial Ownership of Securities.”
Dividend Policy
ACE has not paid any cash dividends on its Class A ordinary shares to date and does not intend to pay cash dividends prior to the completion of the Business Combination. The payment of cash dividends in the future will be dependent upon the revenues and earnings, if any, capital requirements and general financial condition of New Tempo subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of New Tempo’s board of directors. ACE’s board of directors is not currently contemplating and does not anticipate declaring stock dividends nor is it currently expected that New Tempo’s board of directors will declare any dividends in the foreseeable future. Further, the ability of New Tempo to declare dividends may be limited by the terms of financing or other agreements entered into by New Tempo or its subsidiaries from time to time.
Price Range of Tempo’s Securities
Historical market price information regarding Tempo is not provided because there is no public market for Tempo’s securities. For information regarding Tempo’s liquidity and capital resources, see “Tempo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”
 
70

 
RISK FACTORS
ACE shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus.
Risks Relating to Tempo’s Business and Industry
The success of New Tempo’s business is dependent on New Tempo’s ability to keep pace with technological changes and competitive conditions in New Tempo’s industry, and New Tempo’s ability to effectively adapt New Tempo’s services as New Tempo’s customers react to technological changes and competitive conditions in their respective industries. New Tempo may not timely and effectively scale and adapt New Tempo’s existing technology, processes, and infrastructure to meet the needs of New Tempo’s business.
The success of New Tempo’s business is dependent on New Tempo’s ability to keep pace with technological changes and competitive conditions in New Tempo’s industry, and New Tempo’s ability to effectively adapt New Tempo’s services as New Tempo’s customers react to technological changes and competitive conditions in their respective industries. New Tempo may not timely and effectively scale and adapt New Tempo’s existing technology, processes, and infrastructure to meet the needs of New Tempo’s business. If New Tempo is unable to offer technologically advanced, high quality, quick turnaround, cost effective manufacturing services that are differentiated from New Tempo’s competition, or if New Tempo is unable to adapt those services as New Tempo’s customers’ requirements change, demand for New Tempo’s services may decline.
New Tempo’s operating results and financial condition may fluctuate from period to period and may fall below expectations in any particular period, which could adversely affect the market price of New Tempo’s common stock.
Tempo’s operating results and financial condition have historically fluctuated, and New Tempo’s operating results and financial condition are expected to continue to fluctuate, from quarter-to-quarter and year-to-year due to a number of factors, many of which will not be within New Tempo’s control.
Both Tempo’s business and the electronics manufacturing industry are changing and evolving rapidly, and Tempo’s historical operating results may not be useful in predicting New Tempo’s future operating results. If New Tempo’s operating results do not meet the guidance that it provides to the marketplace or the expectations of securities analysts or investors, the market price of New Tempo’s common stock will likely decline. Fluctuations in New Tempo’s operating results and financial condition may be due to a number of factors, including:

the degree of market acceptance of its services;

its ability to compete with competitors and new entrants into New Tempo’s markets;

the mix of services that it sells during any period;

the timing of its sales and deliveries to customers;

the geographic distribution of its sales;

changes in its pricing policies or those of its competitors, including its response to price competition;

changes in the amount that it spends to develop and manufacture new services or technologies;

changes in the amounts that it spends to promote its services;

changes in the cost of satisfying its warranty obligations;

expenses and/or liabilities resulting from litigation;

unforeseen liabilities or difficulties in integrating its acquisitions or newly acquired businesses;

disruptions to its information technology systems;

general economic and industry conditions that affect customer demand;
 
71

 

the impact of the COVID-19 pandemic on its customers, suppliers, manufacturers, and operations; and

changes in accounting rules and tax laws.
Due to the foregoing factors, and the other risks discussed in this proxy statement/prospectus, you should not rely on quarter-over-quarter and year-over-year comparisons of Tempo’s operating results as an indicator of New Tempo’s future performance.
Tempo currently competes, and New Tempo will compete, with numerous other diversified manufacturing service providers, electronic manufacturing services and design providers and others, and may face increasing competition, which could cause New Tempo’s operating results to suffer.
Tempo’s industry is, and New Tempo’s industry will continue to be, highly competitive. Tempo competes, and New Tempo will compete, against numerous domestic and foreign electronic manufacturers, manufacturing service providers, and design providers. These companies could decrease their pricing, thereby increasing competitive pressures for New Tempo. Additionally, these competitors may:

respond more quickly to new or emerging technologies or changes in customer requirements;

have engineering capabilities and/or manufacturing resources that are greater than New Tempo’s;

have greater name recognition, critical mass, and geographic market presence;

be better able to take advantage of acquisition opportunities;

devote greater resources to the development, promotion and sale of their services and execution of their strategy;

be better positioned to compete on price for their services;

have excess capacity, and be better able to utilize such excess capacity;

have greater direct buying power from component suppliers, distributors, and raw material suppliers;

have lower cost structures as a result of their geographic location or the services they provide;

be willing or able to make sales or provide services at lower margins than New Tempo does;

have increased vertical capabilities providing them greater cost savings.
Tempo also faces, and New Tempo will continue to face, competition from the manufacturing operations of its current and potential customers, some of whom may be evaluating the merits of manufacturing products internally against the advantages of outsourcing.
The actions of competitors and current and potential customers could cause a decline New in Tempo’s sales and/or compression of New Tempo’s profits.
Customer relationships with emerging companies may present more risks than with established companies.
Customer relationships with emerging companies present special risks because Tempo does not have, and New Tempo will not have, an extensive services or customer relationship history. Tempo’s credit risk on these customers, especially in trade accounts receivable and inventories, and the risk that these customers will be unable to fulfill indemnification obligations to Tempo is potentially increased. Tempo sometimes offers these customers extended payment terms and other support and financial accommodations which may increase New Tempo’s financial exposure.
New Tempo may be adversely affected by supply chain issues, including shortages of required electronic components and raw materials.
In the past there have been, and presently there are, industry wide conditions, natural disasters, and global events that have caused component and material shortages. These have increased the time between booking and billing, increased component and material costs (though we have been able to pass those on to our customers), and increased the frequency of customers pre-ordering components and materials with us
 
72

 
in anticipation of future assembly orders (though customers who pre-order components and materials with us are more likely to place future assembly orders with us). While we make efforts to consider these factors in our forecasts, it’s difficult to judge the duration of the global semiconductor shortage, the degree to which it will continue to have these effects, and the degree to which the aforementioned mitigating factors will continue to persist.
More broadly, strategic and efficient component and materials purchasing is an aspect of Tempo’s, and will continue to be an aspect of New Tempo’s, strategy. When prices rise, they may impact New Tempo’s margins and results of operations if New Tempo is not able to pass the increases through to New Tempo’s customers or otherwise offset them. Some of the products Tempo manufactures, and New Tempo will manufacture, require one or more components that are only available from a single source. Some of these components or materials are subject to supply shortages from time to time. In some cases, supply shortages will substantially curtail production of all assemblies using a particular component. A supply shortage can also increase New Tempo’s cost of goods sold if New Tempo has to pay higher prices for components or materials in limited supply or cause New Tempo to have to reconfigure products to accommodate a substitute component or material. New Tempo’s production of a customer’s product could be negatively impacted by any quality, reliability, or availability issues with any of New Tempo’s components and material suppliers. The financial condition of Tempo’s or New Tempo’s suppliers could affect their ability to supply components or materials and their ability to satisfy any warranty obligations they may have, which could have a material adverse effect on New Tempo’s results of operations.
If a component or material shortage is threatened or anticipated, Tempo or New Tempo may purchase its components or materials early to avoid a delay or interruption in Tempo’s operations. Purchasing components or materials early may materially increase inventory carrying costs and may result in inventory obsolescence, which could materially adversely affect New Tempo’s results of operations. A component shortage may also require to the use of second tier vendors or the procurement of components or materials through new and untested brokers. These components or materials may be of lesser quality than those Tempo has historically purchased and could result in material costs to bring such components or materials up to necessary quality levels or to replace defective ones.
New Tempo’s gross profit and gross margin will be dependent on a number of factors, including New Tempo’s services mix, market prices, labor costs and availability, acquisitions New Tempo may make and New Tempo’s ability to achieve cost synergies, level of capacity utilization and component, material, and other services prices.
New Tempo’s gross margin will be highly dependent on service mix, which is susceptible to seasonal and other fluctuations in New Tempo’s markets. A shift in sales mix away from New Tempo’s higher margin services could adversely affect New Tempo’s future gross margin percentages. In addition, increased competition and the existence of service alternatives, more complex engineering requirements, lower demand or reductions in New Tempo’s technological lead compared to New Tempo’s competitors, and other factors may lead to further price erosion, lower revenue and lower margin.
In addition, prototype and on-demand electronics manufacturing requires significant capital investment, leading to high fixed costs, including depreciation expense. If New Tempo is unable to utilize New Tempo’s owned manufacturing facilities at a high level, the fixed costs associated with these facilities will not be fully absorbed, resulting in higher average unit costs and a lower gross margin. Furthermore, fluctuations in commodity prices could negatively impact New Tempo’s margins.
New Tempo’s gross margin may also be adversely affected if businesses or companies that Tempo acquires have different gross margin profiles and by expenses related to such acquisitions.
Many of New Tempo’s anticipated customers operate in industries that experience rapid technological change resulting in short product life cycles and as a result, if the product life cycles of its customers slow materially, and research and development expenditures are reduced, its financial condition, business and results of operations will be materially adversely affected.
Many of New Tempo’s anticipated customers compete in markets that are characterized by rapidly changing technology, evolving industry standards and continuous improvement in products and services.
 
73

 
These conditions frequently result in short product life cycles. As professionals operating in research and development departments are expected to represent the majority of New Tempo’s net sales, the rapid development of electronic products will be a key driver of New Tempo’s sales and operating performance. Any decline in the development and introduction of new electronic products could slow the demand for New Tempo’s services and could have a material adverse effect on its financial condition, business and results of operations.
If demand for New Tempo’s services does not grow as expected, or develops more slowly than expected, New Tempo’s revenues may stagnate or decline, and New Tempo’s business may be adversely affected.
New Tempo may not be able to develop effective strategies to raise awareness among potential customers of the benefits of software-accelerated electronics manufacturing or New Tempo’s services may not address the specific needs or provide the level of functionality or economics required by potential customers to encourage the electronics market to shift towards software-accelerated electronics manufacturing. If software-accelerated electronics manufacturing technology does not gain broader market acceptance as an alternative to conventional manufacturing processes, or does so more slowly than anticipated, or if the marketplace adopts electronics manufacturing technologies that differ from New Tempo’s technologies, New Tempo may not be able to increase or sustain the level of sales of New Tempo’s services, and New Tempo’s operating results would be adversely affected as a result.
Defects in shipped products that give rise to returns or warranty or other claims could result in material expenses, diversion of management time and attention, adversely affect customer relationships, and damage to New Tempo’s reputation.
New Tempo’s printed circuit board assemblies may be complex and may contain undetected defects or errors. This could result in delayed market acceptance of services New Tempo offers or claims from customers or others, which may result in litigation, increased end user warranty, support and repair or replacement costs, damage to New Tempo’s reputation and business, or significant costs and diversion of support and engineering personnel to correct the defect or error. New Tempo may from time to time become subject to warranty claims related to product quality issues that could lead New Tempo to incur significant expenses.
Tempo attempts to include provisions in Tempo’s agreements with customers that are designed to limit Tempo’s exposure to potential liability for damages arising from defects or errors in Tempo’s products. However, it is possible that these limitations may not be effective as a result of unfavorable judicial decisions or laws enacted in the future.
The sale and support of New Tempo’s products entails the risk of product liability claims. Any product liability claim brought against Tempo or New Tempo, regardless of its merit, could result in material expense, diversion of management time and attention, damage to New Tempo’s business and reputation and brand, and cause New Tempo to fail to retain existing customers or to fail to attract new customers.
New Tempo may be involved in legal proceedings, including intellectual property (“IP”), anti-competition and securities litigation, employee-related claims, and regulatory investigations, which could, among other things, divert efforts of management and result in significant expense and loss of New Tempo’s IP rights.
New Tempo may be involved in legal proceedings, including cases involving New Tempo’s IP rights and those of others, anti-competition and commercial matters, acquisition-related suits, securities class action suits, employee-related claims and other actions. From time to time, New Tempo may also be involved or required to participate in regulatory investigations or inquiries which may evolve into legal or other administrative proceedings. Litigation or settlement of such actions, regardless of their merit, or involvement in regulatory investigations or inquiries, can be costly, lengthy, complex and time consuming, diverting the attention and energies of New Tempo’s management and technical personnel.
From time to time, third parties may assert against New Tempo and New Tempo’s customers their IP rights to technologies that are important to New Tempo’s business.
Many of New Tempo’s customer agreements and/or the laws of certain jurisdictions may require New Tempo to indemnify its customers or purchasers for third-party IP infringement claims, including costs to
 
74

 
defend those claims, and payment of damages in the case of adverse rulings. However, New Tempo’s suppliers may or may not be required to indemnify New Tempo should New Tempo or its customers be subject to such third-party claims. Claims of this sort could also harm New Tempo’s relationships with its customers and might deter future customers from doing business with us. If any pending or future proceedings result in an adverse outcome, Tempo or New Tempo could be required to:

cease the sale of the infringing services, processes, or technology and/or make changes to Tempo’s or New Tempo’s services, processes or technology;

pay substantial damages for past, present and future use of the infringing technology, including up to treble damages if willful infringement is found;

pay fines or disgorge profits or other payments, and/or cease certain conduct and/or modify Tempo’s or New Tempo’s contracting or business practices, in connection with any unfavorable resolution of a governmental investigation;

expend significant resources to develop non-infringing technology;

license technology from the third-party claiming infringement, which license may not be available on commercially reasonable terms, or at all;

enter into cross-licenses with Tempo’s or New Tempo’s competitors, which could weaken Tempo’s or New Tempo’s overall IP portfolio and Tempo’s or New Tempo’s ability to compete in particular product categories; or

relinquish IP rights associated with one or more of Tempo’s or New Tempo’s patent claims.
Any of the foregoing results could have a material adverse effect on Tempo’s or New Tempo’s business, financial condition and results of operations.
In addition, New Tempo may be obligated to indemnify Tempo’s current or former directors or employees, or former directors or employees of companies that Tempo has acquired, in connection with litigation or regulatory investigations. These liabilities could be substantial and may include, among other things, the cost of defending lawsuits against these individuals, as well as stockholder derivative suits; the cost of government, law enforcement or regulatory investigations; civil or criminal fines and penalties; legal and other expenses; and expenses associated with the remedial measure, if any, which may be imposed.
New Tempo’s operations could suffer if New Tempo is unable to attract and retain key management or other key employees.
Tempo believes Tempo’s success has depended, and New Tempo’s success will continue to depend, on the efforts and talents of Tempo’s senior management and other key personnel. Tempo’s executive team is critical to the management of Tempo’s business and operations and will continue to be critical to the development of New Tempo’s strategy. Members of Tempo’s existing senior management team may resign at any time. The loss of the services of any members of Tempo’s senior management team could delay or prevent the successful implementation of New Tempo’s strategy or New Tempo’s commercialization of new services, or could otherwise adversely affect New Tempo’s ability to carry out New Tempo’s business plan. There is no assurance that if any senior executive leaves in the future, New Tempo will be able to rapidly replace him or her or them and transition smoothly towards his or her or their successor, without any adverse impact on New Tempo’s operations.
To support the continued growth of New Tempo’s business, New Tempo will also be required to effectively recruit, hire, integrate, develop, motivate, and retain additional new employees. High demand exists for senior management and other key personnel (including scientific, technical, engineering, financial, manufacturing, and sales personnel) in the prototype and on-demand electronics manufacturing industry, and there can be no assurance that New Tempo will be able to retain Tempo’s current key personnel. Tempo experiences, and New Tempo will experience, intense competition for qualified personnel. While New Tempo intends to provide competitive compensation packages to attract and retain key personnel, some of its competitors for these employees have greater resources and more experience, which may make it difficult for New Tempo to compete successfully for key personnel. Moreover, new employees may not become as productive as New Tempo expects since New Tempo may face challenges in adequately integrating them into
 
75

 
Tempo’s workforce and culture. Since March 2020, Tempo has had many non-manufacturing employees working remotely to protect the health and safety of Tempo’s employees, contractors, customers, and visitors. Tempo also shifted customer, industry, and other stakeholder events to virtual-only experiences, and may similarly alter, postpone, or cancel other events in the future. Given Tempo’s limited history with remote operations, the long-term impacts are uncertain.
All of Tempo’s U.S. employees are, and all of New Tempo’s U.S. employees will be, at-will employees, meaning that they may terminate their employment relationship with Tempo or New Tempo at any time, and their knowledge of Tempo’s or New Tempo’s business and industry would be extremely difficult to replace. It may be difficult for New Tempo to restrict its competitors from benefiting from the expertise that New Tempo’s former employees or consultants developed while working for Tempo or New Tempo.
The effect of COVID-19 on Tempo’s operations and the operations of Tempo’s customers, suppliers and logistics providers has had, and may continue to have, an adverse impact on Tempo’s financial condition and results of operations.
Tempo’s operations expose Tempo, and are expected to expose New Tempo, to the COVID-19 pandemic, which has had, and with respect to New Tempo may continue to have, an adverse impact on employees, operations, supply chain and distribution system. While Tempo has taken numerous steps to mitigate the impact of the pandemic on its results of operations, there can be no assurance that these efforts will be successful. To date, COVID-19 has increased Tempo’s expenses, primarily related to additional labor costs and the procurement of personal protection equipment for Tempo’s employees, and has caused a reduction in factory utilization due to disruptions and restrictions. COVID-19 has now spread across the globe and is impacting worldwide economic activity, including Tempo’s manufacturing production sites. Public and private sector policies and initiatives to reduce the transmission of COVID-19, including travel restrictions and quarantines, are impacting Tempo’s operations, including affecting the ability of Tempo’s employees to get to Tempo’s facilities, reducing capacity utilization levels, causing certain facility or intermittent business closures, and interrupting the movement or increasing the cost of moving components and products through Tempo’s supply chain. If additional factory closures are required or reductions in capacity utilization levels occur, New Tempo will likely incur additional direct costs and lost revenue. If New Tempo’s suppliers experience additional closures or reductions in their capacity utilization levels in the future, New Tempo may have difficulty sourcing materials necessary to fulfill production requirements. COVID-19 has also impacted Tempo’s customers and may create unpredictable reductions or increases in demand for New Tempo’s manufacturing services. New Tempo’s ability to continue to offer manufacturing services is highly dependent on its ability to maintain the safety and health of its factory employees. The ability of New Tempo’s employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19. While Tempo is, and New Tempo will be, following the requirements of governmental authorities and taking preventative and protective measures to prioritize the safety of its employees, these measures may not be successful, and Tempo or New Tempo may be required to temporarily close facilities or take other measures. In addition, responding to the continuing pandemic could divert management’s attention from New Tempo’s key strategic priorities, cause New Tempo to reduce, delay, alter or abandon initiatives that may otherwise increase New Tempo’s long-term value or otherwise disrupt New Tempo’s business operations. While Tempo is staying in close communication with its sites, employees, customers, suppliers, and logistics partners and acting to mitigate the impact of this dynamic and evolving situation, the duration and extent of the effect of COVID-19 on Tempo and New Tempo is not determinable. COVID-19 may continue to have an adverse impact on New Tempo’s consolidated financial position, results of operations, and cash flows in the near term. In addition, the impact of the COVID-19 pandemic could exacerbate the other risks that New Tempo is expected to face.
Tempo purchases, and New Tempo will purchase, a significant amount of the materials and components it uses from a limited number of suppliers and if such suppliers become unavailable or inadequate, its customer relationships, results of operations, and financial condition may be adversely affected.
Tempo’s manufacturing processes rely, and New Tempo’s manufacturing processes will rely, on many materials. Tempo purchases, and New Tempo will purchase, a significant portion of its materials, components and finished goods used in its production facilities from a few suppliers, some of which are single source suppliers. As certain materials are highly specialized, the lead time needed to identify and qualify a new
 
76

 
supplier is typically lengthy and there is often no readily availabl