Item 1.01 Entry into a Material Definitive Agreement.
ACE Convergence Acquisition Corp. ("ACE") is a blank check company incorporated
as a Cayman Islands exempted company and formed for the purpose of effecting a
merger, share exchange, asset acquisition, share purchase, reorganization or
similar business combination with one or more businesses. On January 7, 2021,
ACE entered into an Agreement and Plan of Merger (the "Merger Agreement") with
ACE Convergence Subsidiary Corp., a Delaware corporation and a direct wholly
owned subsidiary of ACE ("Merger Sub"), and Achronix Semiconductor Corporation,
a Delaware corporation ("Achronix").
Pursuant to the Merger Agreement, and subject to the approval of ACE's
shareholders, among other things: (i) prior to the closing of the business
combination contemplated by the Merger Agreement (the "Closing"), ACE shall
domesticate as a Delaware corporation in accordance with Section 388 of the
Delaware General Corporation Law, as amended, and the Cayman Islands Companies
Law (2020 Revision) (the "Domestication"), (ii) at the Closing, upon the terms
and subject to the conditions of the Merger Agreement, in accordance with the
DGCL, Merger Sub will merge with and into Achronix, the separate corporate
existence of Merger Sub will cease and Achronix will be the surviving
corporation and a wholly owned subsidiary of ACE (the "Merger"), (iii) upon
consummation of the Merger, all of the equity interests of Achronix will be
converted into the right to receive shares of common stock, par value $0.001 per
share, of ACE (after its Domestication as a corporation incorporated in the
State of Delaware) ("ACE Common Stock") and cash and (iv) upon the effective
time of the Merger, ACE shall immediately be renamed "Achronix Semiconductor
Corporation". The Closing is subject to the satisfaction or waiver of certain
closing conditions contained in the Merger Agreement.
On January 7, 2021, concurrently with the execution of the Merger Agreement, ACE
also announced that it entered into subscription agreements (the "Subscription
Agreements") with certain investors (collectively, the "PIPE Investors")
pursuant to, and on the terms and subject to the conditions of which, the PIPE
Investors have collectively subscribed for 15,000,000 shares of ACE Common Stock
for an aggregate purchase price equal to $150,000,000 (the "PIPE Investment"), a
portion of which is expected to be funded by one or more affiliates of ACE
Convergence Acquisition LLC, ACE's sponsor (the "Sponsor"). The PIPE Investment
will be consummated substantially concurrently with the Closing, subject to the
terms and conditions contemplated by the Subscription Agreements.
On January 7, 2021, concurrently with the execution of the Merger Agreement,
certain affiliates of the Sponsor (the "Backstop Investor") entered into a
backstop subscription agreement (the "Backstop Subscription Agreement") with
ACE, pursuant to, and on the terms and subject to the conditions on which, the
Backstop Investor has committed to purchase, following the Domestication and
prior to the Closing, shares of ACE's common stock, par value $0.001 per share,
as such shares will exist as common stock following the Domestication, in a
private placement for a purchase price of $10.00 per share to backstop certain
redemptions by ACE shareholders.
On January 7, 2021, ACE also announced entry into a Support Agreement (the
"Sponsor Support Agreement"), by and among ACE, the Sponsor, Achronix and
certain other parties thereto, pursuant to which the Sponsor and each director
and officer of ACE agreed to, among other things, vote in favor of the Merger
Agreement and the transactions contemplated thereby, in each case, subject to
the terms and conditions contemplated by the Sponsor Support Agreement. In
addition, ACE has entered into a Support Agreement (the "Company Support
Agreement") by and among ACE, Achronix and certain stockholders of Achronix (the
"Key Stockholders"), pursuant to which the Key Stockholders 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 Company Support Agreement.
A copy of the Merger Agreement, the form of the Subscription Agreements, the
form of the Backstop Subscription Agreement, the Sponsor Support Agreement and
the Company Support Agreement will be filed by amendment on Form 8-K/A to this
Current Report within four business days of the date hereof as Exhibit 2.1,
Exhibit 10.1, Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4, respectively, and the
foregoing description of each of the Merger Agreement, Subscription Agreements,
Backstop Subscription Agreement, Sponsor Support Agreement and Company Support
Agreement is qualified in its entirety by reference thereto.
Item 3.02 Unregistered Sales of Equity Securities
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
with respect to the PIPE Investment is incorporated by reference in this Item
3.02. The shares of ACE Common Stock to be issued in connection with the PIPE
Investment will not be registered under the Securities Act of 1933, as amended
(the "Securities Act"), and will be issued in reliance on the exemption from
registration requirements thereof provided by Section 4(a)(2) of the Securities
Act.
Item 7.01 Regulation FD Disclosure.
On January 7, 2021, ACE and Achronix issued a joint press release (the "Press
Release") announcing the execution of the Merger Agreement. The Press Release is
attached hereto as Exhibit 99.1 and incorporated by reference herein.
Attached as Exhibit 99.2 and incorporated herein by reference is the investor
presentation dated January 7, 2021, for use by ACE in meetings with certain of
its stockholders as well as other persons with respect to ACE's proposed
transaction with Achronix, as described in this Current Report on Form 8-K.
Attached as Exhibit 99.3 and incorporated herein by reference is the transcript
from a call on January 7, 2021, between ACE and certain of its stockholders to
discuss the business combination.
The information in this Item 7.01, including Exhibit 99.1, Exhibit 99.2 and
Exhibit 99.3 is furnished and shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to liabilities under that section, and shall not be
deemed to be incorporated by reference into the filings of ACE under the
Securities Act or the Exchange Act, regardless of any general incorporation
language in such filings. This Current Report on Form 8-K will not be deemed an
admission as to the materiality of any information of the information contained
in this Item 7.01, including Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3.
Forward-Looking Statements Legend
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws with respect to the proposed
transaction between Achronix and ACE. These forward-looking statements generally
are identified by the words "believe," "project," "expect," "anticipate,"
"estimate," "intend," "strategy," "future," "opportunity," "plan," "may,"
"should," "will," "would," "will be," "will continue," "will likely result," and
similar expressions. Forward-looking statements are predictions, projections and
other statements about future events that are based on current expectations and
assumptions and, as a result, are subject to risks and uncertainties. All
statements, other than statements of present or historical fact included in this
press release, regarding ACE's proposed acquisition of Achronix and ACE's
ability to consummate the proposed transaction, among others, are
forward-looking statements. Many factors could cause actual future events to
differ materially from the forward-looking statements in this document,
including but not limited to: the risk that the transaction may not be completed
in a timely manner or at all, which may adversely affect the price of ACE's
securities, the risk that the transaction may not be completed by ACE's business
combination deadline and the potential failure to obtain an extension of the
business combination deadline if sought by ACE, the failure to satisfy the
conditions to the consummation of the transaction, including the adoption of the
Merger Agreement by the shareholders of ACE, the satisfaction of the minimum
Trust Account amount following redemptions by ACE's public shareholders and the
receipt of certain governmental and regulatory approvals, the lack of a third
party valuation in determining whether or not to pursue the proposed
transaction, the inability to complete the PIPE Investment, the occurrence of
any event, change or other circumstance that could give rise to the termination
of the Merger Agreement, the effect of the announcement or pendency of the
transaction on Achronix's business relationships, operating results, and
business generally, risks that the proposed transaction disrupts current plans
and operations of Achronix, the outcome of any legal proceedings that may be
instituted against Achronix or against ACE related to the Merger Agreement or
the proposed transaction, the ability to maintain the listing of ACE's
securities on a national securities exchange, changes in the competitive and
regulated industries in which Achronix operates, variations in operating
performance across competitors, changes in laws and regulations affecting
Achronix's business and changes in the combined capital structure, the ability
to implement business plans, forecasts, and other expectations after the
completion of the proposed transaction, and identify and realize additional
opportunities, failure to realize the anticipated benefits of the proposed
transaction, risks relating to the uncertainty of the projected financial
information with respect to Achronix, risks related to the rollout of Achronix's
business and the timing of expected business milestones, the effects of
competition on Achronix's business, the effects of the cyclical nature of the
semiconductor industry on Achronix's business, risks related to Achronix's
customer concentration, the risks to Achronix's business if internal processes
and information technology systems are not properly maintained, risks associated
with Achronix's operational dependence on independent contractors and third
parties, risks associated with Achronix's reliance on certain suppliers for,
among other things, silicon wafers, risks and uncertainties related to
Achronix's international operations, including possible restrictions on
cross-border investments which could harm Achronix's financial position, and
risks associated with Achronix's ability to develop new products and adapt to
new markets. The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and uncertainties
described in the "Risk Factors" section of ACE's registration on Form S-1, as
amended (File No. 333-239716), the registration statement on Form S-4 discussed
above and other documents filed by ACE from time to time with the SEC. These
filings identify and address other important risks and uncertainties that could
cause actual events and results to differ materially from those contained in the
forward-looking statements. There may be additional risks that neither ACE nor
Achronix presently know, or that ACE or Achronix currently believe are
immaterial, that could also cause actual results to differ from those contained
in the forward-looking statements. ACE and Achronix anticipate that subsequent
events and developments will cause ACE's and Achronix's assessments to change.
Forward-looking statements speak only as of the date they are made. Readers are
cautioned not to put undue reliance on forward-looking statements as predictions
of future events, and Achronix and ACE assume no obligation and do not intend to
update or revise these forward-looking statements, whether as a result of new
information, future events, or otherwise, except as required by applicable law.
Neither Achronix nor ACE gives any assurance that either Achronix or ACE, or the
combined company, will achieve its expectations.
Additional Information and Where to Find It
This Current Report on Form 8-K relates to a proposed transaction between
Achronix and ACE. This Current Report on Form 8-K does not constitute an offer
to sell or exchange, or the solicitation of an offer to buy or exchange, any
securities, nor shall there be any sale of securities in any jurisdiction in
which such offer, sale or exchange would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. ACE intends to
file a registration statement on Form S-4 with the U.S. Securities and Exchange
Commission (the "SEC"), which will include a document that serves as a
prospectus and proxy statement of ACE, referred to as a proxy
statement/prospectus. A proxy statement/prospectus will be sent to all ACE
shareholders. ACE also will file other documents regarding the proposed
transaction with the SEC. Before making any voting decision, investors and
security holders of ACE are urged to read the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that will be
filed with the SEC in connection with the proposed transaction as they become
available because they will contain important information about the proposed
transaction.
Investors and security holders will be able to obtain free copies of the
registration statement, the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC by ACE through the website
maintained by the SEC at www.sec.gov.
The documents filed by ACE with the SEC also may be obtained free of charge at
ACE's website at http://acev.io or upon written request to 1013 Centre Road,
Suite 403S, Wilmington, DE 19805.
Participants in Solicitation
ACE and its directors and executive officers may be deemed to be participants in
the solicitation of proxies from ACE's shareholders in connection with the
proposed transaction. A list of the names of such directors and executive
officers and information regarding their interests in the business combination
will be contained in the proxy statement/prospectus when available. You may
obtain free copies of these documents as described in the preceding paragraph.
Non-Solicitation
This Current Report on Form 8-K is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or in respect of
the potential transaction and shall not constitute an offer to sell or a
solicitation of an offer to buy the securities of ACE, the combined company or
Achronix, nor shall there be any sale of any such securities in any state or
jurisdiction in which such offer, solicitation, or sale would be unlawful prior
to registration or qualification under the securities laws of such state or
jurisdiction. No offer of securities shall be made except by means of a
prospectus meeting the requirements of the Securities Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Joint Press Release, dated as of January 7, 2021.
99.2 Investor Presentation, dated as of January 7, 2021.
99.3 Transcript of Recorded Investor Presentation, dated as of January
7, 2021.
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