SAN FRANCISCO – Tempo Automation Holdings, Inc. (NASDAQ: TMPO, “Tempo Automation” or “Tempo” or the “Company”), a leading software-accelerated electronics manufacturer, today announced the successful execution of a $7.0 million unsecured subordinated convertible promissory note (the “Convertible Promissory Note”) with Asia-IO Advanced Manufacturing Partners, L.P. (“Asia-IO”), a cross-border private equity fund specializing in advanced manufacturing and industrial technology opportunities.

"We are delighted to have secured financing that not only bolsters our financial stability but also equips us with the capital necessary to finalize the previously announced acquisition of Optimum Design Associates. Asia-IO shares our vision of strategic expansion by leveraging our unique data-driven factory automation technology to disrupt the industry," said Joy Weiss, CEO of Tempo Automation.

Under the terms of the Convertible Promissory Note, up to $4.0 million in aggregate principal amount may be drawn by the Company from time to time upon one or more written requests. Up to an additional $3.0 million in aggregate principal amount under the Convertible Promissory Note may be drawn by the Company from time to time for purposes of paying amounts payable by the Company in connection with the consummation of the previously announced acquisition of Optimum Design Associates, Inc. (together with the previously announced acquisition of Optimum Design Associates Pty. Ltd., the “Optimum Acquisition”). The Optimum Acquisition is anticipated to close in the second half of 2023, pending the satisfaction or waiver of certain customary closing conditions.

Amounts drawn under the Convertible Promissory Note are subject to a 3.0% original issue discount, accrue simple interest at a rate of 12.0% per annum, and will mature on June 20, 2024 (the “Maturity Date”). At any time and from time to time within 120 days of any drawdown under the Convertible Promissory Note, the Company will be able to prepay, in whole or in part, such drawdown amount upon payment of an additional amount equal to 4.0% of the prepayment amount. Any amounts that are prepaid will not be available for re-borrowing. After such 120-day period, Asia-IO has the right to convert all or any portion of the outstanding drawdown amount (together with accrued but unpaid interest, if any) equal to or greater than $500,000 into shares of the Company's common stock, par value $0.0001 per share (the "Common Stock"), at a conversion price equal to the greater of (i) $0.55 and (ii) the last reported closing sale price of a share of Common Stock on The Nasdaq Stock Market LLC as of such time (the “Last Reported Sale Price”). Additionally, subject to certain conditions, the Company has the right to force conversion of any outstanding drawdown amounts (together with accrued but unpaid interest, if any) under the Convertible Promissory Note into Common Stock (a) on the Maturity Date if the Last Reported Sale Price is equal to or greater than $1.10 or (b) prior to the Maturity Date, if the volume weighted average price of a share of Common Stock is equal to or greater than $1.10 for a period of at least 40 calendar days in any consecutive 60-calendar day period. If the Convertible Promissory Note has not been repaid or converted in full prior to the Maturity Date, the unpaid principal balance outstanding under the Convertible Promissory Note, along with all accrued and unpaid interest, if any, will become due and payable on the Maturity Date.

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