Tempo Automation Holdings, Inc. Receives a Default Notice From its Senior Lender Consortium
September 21 2023 - 3:30PM
Tempo Automation Holdings, Inc. (NASDAQ: TMPO, the “Company”) has
received a default notice from its senior lender consortium.
As previously disclosed, Tempo Automation, Inc. (“Tempo OpCo”), a
Delaware corporation and wholly owned subsidiary of the Company,
previously entered into that certain First Amended and Restated
Loan and Security Agreement, dated as of November 22, 2022 (as
amended, the “Loan Agreement”) by and among Tempo OpCo, Structural
Capital Investments III, LP (“SCI”), Series Structural DCO II
series of Structural Capital DCO, LLC (“DCO”), CEOF Holdings LP
(“CEOF”), SQN Tempo Automation, LLC (“SQNTA”), SQN Venture Income
Fund II, LP (“SQNVIFII” and, together with SCI, DCO, CEOF and
SQNTA, the “Lenders”), and Ocean II PLO LLC, as administrative and
collateral agent for the Lenders (the “Agent”), and that certain
Forbearance Agreement and First Amendment to First Amended and
Restated Loan and Security Agreement, dated as of June 20, 2023
(the “Forbearance”), by and among the Company, Tempo OpCo, the
Lenders, and the Agent. The Loan Agreement is secured by the assets
of Tempo OpCo and its subsidiaries (the “Collateral”), and the
Company is a party to the Loan Agreement and has guaranteed Tempo
OpCo’s obligations thereunder. The Loan Agreement and Forbearance
were attached as exhibits to the Company’s Current Reports on Form
8-K filed with the Securities and Exchange Commission (the “SEC”)
on December 6, 2022 and June 21, 2023, respectively.
On September 15, 2023, Tempo OpCo received a notice from the
Agent stating that Tempo OpCo had breached the Loan Documents (as
defined in the Loan Agreement) and that an event of default under
the Loan Agreement had occurred as a result of, among other things,
(i) Tempo OpCo’s failure to make the monthly payments due for July
2023 and each month thereafter, (ii) the occurrence of a Material
Adverse Effect (as defined in the Loan Agreement), (iii) Ryan
Benton ceasing to serve as Tempo OpCo’s Chief Financial Officer and
(iv) Tempo OpCo suspending its business operations. As a result of
such events of default, the Agent declared all amounts owed under
the Loan Documents to be in default and demanded that Tempo OpCo
immediately pay such amounts, including, but not limited to, the
entire indebtedness under the Loan Agreement, plus accruing
interest, late charges and fees and any costs incurred by the
Lenders. Additionally, as a result of such events of default, the
Lenders terminated any and all commitments and obligations of the
Lenders under the Loan Documents, including without limitation, any
obligation for the Lenders to lend money or make other loan funds
available to or for the benefit of Tempo OpCo.
As of September 15, 2023, the outstanding principal plus accrued
and unpaid interest, plus late charges and fees and any costs
incurred by the Lenders and reimbursable by the Company, was
$29,065,017. Interest on such amount will continue to accrue daily.
The Company and its subsidiaries, including Tempo OpCo, are unable
to cure such defaults or to repay such indebtedness. In the event
that the Company and its subsidiaries, including Tempo OpCo, cannot
cure or obtain a waiver from the Lenders, the Lenders may, among
other things, commence foreclosure proceedings to seize the
Collateral, which could result in a dramatic decline in the value
of the Company’s securities.
About Tempo
Tempo is a leading software-accelerated electronics
manufacturer, transforming the way top companies innovate and bring
new products to market. Tempo’s unique automated manufacturing
platform optimizes the complex process of printed circuit board
manufacturing to deliver unmatched quality, speed and agility. The
platform’s all-digital process automation, data-driven
intelligence, and connected smart factory create a distinctive
competitive advantage for customers—to deliver tomorrow’s products
today. From rockets to robots, autonomous cars to drones, many of
the fastest-moving companies in industrial tech, medical
technology, space, and other industries partner with Tempo to
accelerate innovation and set a new tempo for progress. Learn more
at www.tempoautomation.com.
Forward-Looking Statements
This press release includes information that constitutes
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Words such as
“anticipate”, “estimate”, “expect”, “project”, “plan”, “intend”,
“believe”, “may”, “might”, “will”, “should”, “can have”, “likely”
and similar expressions are used to identify forward-looking
statements. These forward-looking statements are based on the
Company’s current beliefs, assumptions and expectations regarding
future events, which in turn are based on information currently
available to the Company. By their nature, forward-looking
statements address matters that are subject to risks and
uncertainties. A variety of factors could cause actual events and
results to differ materially from those expressed in or
contemplated by the forward-looking statements. These factors
include, without limitation, the Company’s ability to cure defaults
or repay indebtedness under the Loan Documents and the resulting
decline in the value of the Company’s securities in the event that
the Company cannot cure or obtain a waiver with respect to such
defaults from the Lenders. For additional information about factors
that could cause actual results to differ materially from those
described in the forward-looking statements, please refer to the
Company’s filings with the SEC, including the risk factors
contained in its most recent Annual Report on Form 10-K and the
Company’s other subsequent filings with the SEC. The Company
undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise, except to the extent required by
applicable laws.
Contact: Investor Relations ir@tempoautomation.com
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