[PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, detailing balance sheets, operations, equity, cash flows, and notes on accounting policies and liquidity [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows significant reductions in cash, total assets, and equity, with liabilities decreasing due to loan repayment Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $14,280 | $30,268 | | Total current assets | $15,103 | $31,474 | | Total assets | $24,484 | $41,488 | | **Liabilities & Equity** | | | | Total current liabilities | $7,141 | $14,220 | | Total liabilities | $14,701 | $22,362 | | Total stockholders' equity | $9,783 | $19,126 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 net loss decreased to $7.9 million, while H1 2025 net loss increased to $18.7 million, driven by higher R&D expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $3,871 | $5,837 | $11,498 | $10,177 | | General and administrative | $4,095 | $3,745 | $7,404 | $7,379 | | Loss from operations | $(7,966) | $(9,582) | $(18,902) | $(17,556) | | Net loss | $(7,870) | $(9,570) | $(18,730) | $(17,474) | | Net loss per share | $(2.07) | $(5.52) | $(5.17) | $(10.15) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity declined from $19.1 million to $9.8 million, driven by a $18.7 million net loss, partially offset by stock issuances - During the first six months of 2025, the company issued common stock and pre-funded warrants, raising cash to partially offset the net loss and fund operations[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations increased to $16.5 million, with financing providing $0.5 million, leading to a $16.0 million net cash decrease for H1 2025 Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash used in operating activities | $(16,467) | $(12,696) | | Cash used in investing activities | $0 | $(417) | | Cash provided by financing activities | $479 | $5,007 | | **Net decrease in cash** | **$(15,988)** | **$(8,106)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail clinical-stage status, 1-for-13 reverse stock split, going concern doubt, strategic review, cost reductions, and financing activities - The company's financial statements were prepared on a going concern basis, but management has substantial doubt about its ability to continue operating for the next 12 months due to recurring losses and limited cash of **$14.3 million** as of June 30, 2025[32](index=32&type=chunk)[33](index=33&type=chunk) - In April 2025, the company reduced its workforce by **21 of 26** full-time employees and transitioned its CEO, CMO, and CFO to consulting arrangements to reduce costs while exploring strategic alternatives[32](index=32&type=chunk) - On April 8, 2025, the company effected a **1-for-13** reverse stock split, with all share and per-share data in the financial statements retrospectively adjusted[29](index=29&type=chunk)[30](index=30&type=chunk) - In June 2025, the company raised approximately **$4.1 million** in net proceeds from a registered direct offering of common stock and pre-funded warrants[37](index=37&type=chunk) - The company fully repaid its loan with Oxford Finance LLC in April 2025 with a payment of **$3.5 million**, which included a **$0.6 million** exit fee, terminating the agreement and releasing all liens[55](index=55&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses clinical programs, strategic review, going concern issues, operational results, and recent financing activities, highlighting financial condition [Overview and Clinical Programs](index=19&type=section&id=Overview%20and%20Clinical%20Programs) Tempest, a clinical-stage biotech, advances amezalpat for Phase 3 HCC and TPST-1495 for Phase 2 FAP, both with key regulatory designations - The lead program, amezalpat, is poised to begin a pivotal Phase 3 study for first-line hepatocellular carcinoma (HCC) after receiving positive feedback from the FDA and NMPA (China)[87](index=87&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - The second clinical program, TPST-1495, is set to begin a Phase 2 trial in patients with Familial Adenomatous Polyposis (FAP) in 2025, with the trial being funded by the National Cancer Institute (NCI)[95](index=95&type=chunk) [Going Concern and Strategic Review](index=20&type=section&id=Going%20Concern%20and%20Strategic%20Review) Substantial doubt exists about the company's going concern ability, with $14.3 million cash for less than 12 months, prompting a strategic review and workforce reduction - The company's existing cash of **$14.3 million** is projected to fund operations for less than 12 months, raising substantial doubt about its ability to continue as a going concern[97](index=97&type=chunk)[101](index=101&type=chunk) - In April 2025, the company began exploring a full range of strategic alternatives and retained MTS Health Partners as a financial advisor[98](index=98&type=chunk) - To extend capital, the company implemented a Reduction in Force (RIF), cutting its workforce from **26 to 5** full-time employees, with key executives transitioning to consulting roles[100](index=100&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q2 2025 R&D decreased by 34% to $3.9 million, while H1 2025 R&D increased by 13% to $11.5 million, with Q2 G&A rising due to separation costs Comparison of Operating Expenses (in thousands) | Expense | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Research & Development | $3,871 | $5,837 | -34% | $11,498 | $10,177 | +13% | | General & Administrative | $4,095 | $3,745 | +9% | $7,404 | $7,379 | 0% | - The decrease in Q2 2025 R&D spending was primarily due to pausing clinical activities while exploring strategic alternatives, while the increase in H1 2025 R&D was driven by costs for contract research and manufacturing in preparation for the amezalpat pivotal trial[112](index=112&type=chunk)[119](index=119&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $14.3 million cash with a $225.8 million deficit, raised $6.9 million in H1 2025, repaid a loan, and faces substantial doubt about its going concern ability - The company's operations have been financed by sales of common stock, convertible preferred stock, and debt, with cash and cash equivalents at **$14.3 million** as of June 30, 2025[123](index=123&type=chunk) - In H1 2025, the company raised **$2.8 million** from its ATM Program and approximately **$4.1 million** net from a Registered Direct Offering (RDO)[127](index=127&type=chunk)[129](index=129&type=chunk) - The company repaid its **$3.5 million** loan with Oxford Finance in full in April 2025, terminating the agreement[125](index=125&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required as the company qualifies as a smaller reporting company - Disclosure is not required for smaller reporting companies[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[147](index=147&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[148](index=148&type=chunk) [PART II — OTHER INFORMATION](index=29&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not currently involved in any material legal proceedings that would have a material adverse effect on its business or financial condition[150](index=150&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks including going concern doubt, strategic review uncertainty, operating losses, clinical setbacks, regulatory hurdles, and stock price volatility [Risks Related to Our Financial Position and Capital Needs](index=30&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) Critical financial risks include substantial doubt about going concern, need for additional funding, uncertain strategic review outcomes, and a history of operating losses - There is substantial doubt about the company's ability to continue as a going concern, as its cash of **$14.3 million** as of June 30, 2025, is expected to fund operations for less than 12 months[155](index=155&type=chunk) - The process of evaluating strategic alternatives may not result in any transaction, and failure to complete one could cause a decline in the stock price[159](index=159&type=chunk)[160](index=160&type=chunk) - The company has a history of operating losses, with an accumulated deficit of **$225.8 million** as of June 30, 2025, and expects to continue incurring losses[169](index=169&type=chunk) [Risks Related to Our Business and Strategy](index=34&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Strategy) Strategic risks include retaining skilled employees, potential disruptions from acquisitions, and limitations on utilizing net operating loss carryforwards due to ownership changes - The company's success is highly dependent on retaining senior management, and it faces intense competition for qualified personnel in the biotechnology field[172](index=172&type=chunk)[173](index=173&type=chunk) - The company's ability to use its net operating loss (NOL) carryforwards to offset future taxable income may be limited under Section 382 of the Code due to past and potential future ownership changes[177](index=177&type=chunk) [Risks Related to Product Development and Regulatory Approval](index=35&type=section&id=Risks%20Related%20to%20Product%20Development%20and%20Regulatory%20Approval) Business success depends on development and regulatory approval of TPST-1495 and amezalpat, facing risks like trial replication, patient enrollment, side effects, and uncertain FDA approval - The company's ability to generate revenue depends heavily on the successful development and commercialization of its lead product candidates, TPST-1495 and amezalpat, which is uncertain[178](index=178&type=chunk) - Positive results in early-stage clinical trials may not be replicated in later, larger trials, which is a common risk in the biotechnology industry[184](index=184&type=chunk)[186](index=186&type=chunk) - Potential difficulties in enrolling patients for clinical trials could cause delays and increase costs, potentially jeopardizing development programs[187](index=187&type=chunk)[189](index=189&type=chunk) [Risks Related to Commercialization and Manufacturing](index=43&type=section&id=Risks%20Related%20to%20Commercialization%20and%20Manufacturing) Commercial success is not guaranteed, facing risks from market acceptance, pricing uncertainty, reliance on third-party manufacturers, intense competition, and lack of sales infrastructure - Commercial success depends on market acceptance by providers, patients, and third-party payors, which is uncertain[217](index=217&type=chunk) - The company relies on third-party contract manufacturing organizations (CMOs) for its clinical supplies, which exposes it to risks of production delays, quality issues, and supply disruptions[226](index=226&type=chunk)[233](index=233&type=chunk) - The biopharmaceutical industry is intensely competitive, and competitors may have greater financial and technical resources, potentially developing more effective therapies or achieving regulatory approval sooner[228](index=228&type=chunk)[231](index=231&type=chunk) [Risks Related to Government Regulation](index=49&type=section&id=Risks%20Related%20to%20Government%20Regulation) Operating in a highly regulated environment, the company faces risks from lengthy FDA approval, healthcare legislation impacts, evolving data privacy laws, and anti-kickback regulations - The FDA regulatory approval process is lengthy, time-consuming, and unpredictable, with a high potential for delays or failure[250](index=250&type=chunk) - Recent and future healthcare legislation, such as the Inflation Reduction Act (IRA), may increase pricing pressure and the difficulty of commercializing products[269](index=269&type=chunk)[273](index=273&type=chunk) - The company is subject to numerous evolving data privacy and security laws in the U.S. and abroad (e.g., HIPAA, CCPA, GDPR), and non-compliance could lead to significant fines and reputational harm[281](index=281&type=chunk)[282](index=282&type=chunk)[286](index=286&type=chunk) [Risks Related to Our Intellectual Property](index=62&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Success depends on obtaining and protecting intellectual property, facing risks from costly patenting, potential challenges, reliance on third-party licenses, infringement claims, and global IP enforcement - The company's commercial success depends on obtaining and maintaining strong patent protection, but the patenting process is expensive, time-consuming, and uncertain[316](index=316&type=chunk) - The company depends on intellectual property licensed from third parties, such as the Regents of the University of California, and could lose significant rights if these licenses are terminated or if disputes arise[318](index=318&type=chunk)[319](index=319&type=chunk) - The company may face third-party claims of intellectual property infringement, which could be expensive to defend and could block the commercialization of its product candidates[339](index=339&type=chunk)[341](index=341&type=chunk) [Risks Related to Ownership of Our Common Stock and Other General Matters](index=74&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock%20and%20Other%20General%20Matters) Stockholders face risks from high stock price volatility, reduced liquidity post-reverse split, thin trading, reduced disclosure as a smaller reporting company, and anti-takeover provisions - The market price of the company's common stock has been and is likely to continue to be highly volatile[371](index=371&type=chunk) - The **1-for-13** reverse stock split effective April 8, 2025, may reduce trading liquidity and there is no assurance it will maintain a higher stock price[376](index=376&type=chunk) - The company has a stockholder rights plan (a 'poison pill') and other anti-takeover provisions that could discourage or prevent an acquisition[392](index=392&type=chunk)[395](index=395&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[402](index=402&type=chunk) [Item 3. Defaults Upon Senior Securities](index=81&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable - Not applicable[403](index=403&type=chunk) [Item 4. Mine Safety Disclosures](index=81&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - Not applicable[404](index=404&type=chunk) [Item 5. Other Information](index=81&type=section&id=Item%205.%20Other%20Information) The company entered into success bonus agreements with key executives, contingent on a change in control before January 31, 2026, and amended the Corporate Controller's offer letter - The company entered into success bonus agreements with key executives, totaling **$725,000** in aggregate, contingent upon a change in control occurring before January 31, 2026[84](index=84&type=chunk)[405](index=405&type=chunk) [Item 6. Exhibits](index=82&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with or incorporated by reference into the Form 10-Q, including corporate governance documents, material agreements, and certifications

Core Viewpoint - Tempest Therapeutics, Inc. reported progress in its clinical oncology portfolio, including the clearance to initiate a pivotal trial of amezalpat combination therapy for first-line hepatocellular carcinoma (HCC) in China, and is actively exploring strategic alternatives to maximize value for stockholders and patients [2][5]. Recent Highlights - Clearance received to proceed with pivotal trial of amezalpat combination therapy for first-line HCC in China [5]. - Orphan drug designation granted by the European Medicines Agency (EMA) for amezalpat for HCC treatment [5]. - New mechanism-of-action data for amezalpat presented at the 2025 AACR Annual Meeting [5]. - Orphan Drug designation granted by the FDA for TPST-1495 for familial adenomatous polyposis (FAP) [5]. Financial Results Second Quarter 2025 - Cash and cash equivalents decreased to $14.3 million from $30.3 million as of December 31, 2024, primarily due to cash used in operating activities [6]. - Net loss for the quarter was $7.9 million, with a net loss per share of $2.07, compared to a net loss of $9.6 million and $5.52 per share for the same period in 2024 [6][15]. - Research and development expenses were $3.9 million, down from $5.8 million in the same quarter of 2024 [6]. - General and administrative expenses increased to $4.1 million from $3.7 million in the same period of 2024, mainly due to one-time separation costs [7]. Year-to-Date - For the six months ended June 30, 2025, net loss was $18.7 million, with a net loss per share of $5.17, compared to $17.5 million and $10.15 per share for the same period in 2024 [11]. - Research and development expenses for the six months were $11.5 million, up from $10.2 million in 2024 [11]. - General and administrative expenses remained stable at $7.4 million compared to the same period in 2024 [11]. Balance Sheet Overview - Total assets decreased to $24.5 million as of June 30, 2025, from $41.5 million at the end of 2024 [13]. - Current liabilities decreased to $7.1 million from $14.2 million as of December 31, 2024 [13]. - Stockholders' equity decreased to $9.8 million from $19.1 million at the end of 2024, with an accumulated deficit of $225.8 million [13].

[Business Highlights](index=1&type=section&id=Business%20Highlights) Tempest Therapeutics achieved significant clinical and regulatory milestones for its oncology pipeline, including pivotal trial clearances and orphan drug designations, while pursuing strategic alternatives and strengthening its cash position - Received clearance to proceed with a pivotal trial of amezalpat combination therapy for first-line hepatocellular carcinoma (HCC) in China, expanding on previous clearances from the FDA (U.S.) and EMA (Europe)[3](index=3&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) - Amezalpat was granted orphan drug designation by the European Medicines Agency (EMA) for treating HCC[5](index=5&type=chunk)[7](index=7&type=chunk) - TPST-1495 received Orphan Drug designation from the FDA for the treatment of familial adenomatous polyposis (FAP)[5](index=5&type=chunk)[7](index=7&type=chunk) - The company is actively engaged in a strategic alternatives process and has implemented cost-cutting measures to maximize stockholder value[3](index=3&type=chunk)[7](index=7&type=chunk) - Strengthened its cash position with a **$4.6 million** registered direct offering of common stock in June 2025[7](index=7&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Tempest Therapeutics reported an improved net loss in Q2 2025, ending with **$14.3 million** cash, driven by reduced R&D expenses and strategic reprioritization [Second Quarter 2025](index=2&type=section&id=Second%20Quarter%202025) Q2 2025 financial performance is detailed, focusing on cash position, net loss, and shifts in R&D and G&A expenses - Ended Q2 2025 with **$14.3 million** in cash and cash equivalents, a decrease from **$30.3 million** at the end of 2024. The decrease was primarily due to cash used in operations, partially offset by proceeds from stock offerings[7](index=7&type=chunk) Q2 2025 vs Q2 2024 Financial Performance | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Change | | :--- | :--- | :--- | :--- | | Net Loss | $7.9 million | $9.6 million | Decreased | | Net Loss Per Share | $2.07 | $5.52 | Decreased | | R&D Expenses | $3.9 million | $5.8 million | Decreased | | G&A Expenses | $4.1 million | $3.7 million | Increased | - The **$1.9 million** decrease in R&D expenses was primarily due to a reduction in costs as the company re-prioritized efforts towards exploring strategic alternatives[7](index=7&type=chunk) - The **$0.4 million** increase in G&A expenses was mainly related to one-time separation costs for terminated employees[7](index=7&type=chunk) [Year-to-Date (Six Months Ended June 30, 2025)](index=3&type=section&id=Year-to-Date%20(Six%20Months%20Ended%20June%2030%2C%202025)) Year-to-date financial performance is presented, detailing cash usage, net loss, and changes in R&D and G&A expenses - Cash used in operating activities for the first six months of 2025 was **$16.5 million**[11](index=11&type=chunk) YTD 2025 vs YTD 2024 Financial Performance | Metric | YTD 2025 (USD) | YTD 2024 (USD) | Change | | :--- | :--- | :--- | :--- | | Net Loss | $18.7 million | $17.5 million | Increased | | Net Loss Per Share | $5.17 | $10.15 | Decreased | | R&D Expenses | $11.5 million | $10.2 million | Increased | | G&A Expenses | $7.4 million | $7.4 million | Unchanged | - The **$1.3 million** increase in YTD R&D expenses was primarily due to costs from contract research and manufacturing organizations in preparation for the pivotal Phase 3 trial of amezalpat[11](index=11&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) Consolidated financial statements detail the balance sheet, showing **$24.5 million** in total assets, and the statement of operations [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets summarize key asset, liability, and equity figures for June 30, 2025, and December 31, 2024 Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | **$14,280** | **$30,268** | | Total current assets | $15,103 | $31,474 | | **Total assets** | **$24,484** | **$41,488** | | Total current liabilities | $7,141 | $14,220 | | **Total liabilities** | **$14,701** | **$22,362** | | **Total stockholders' equity** | **$9,783** | **$19,126** | - Total assets decreased by **41%** from December 31, 2024, to June 30, 2025, primarily driven by a **53%** reduction in cash and cash equivalents[14](index=14&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated statements of operations detail R&D, G&A expenses, operating loss, and net loss for Q2 and YTD 2025 and 2024 Statement of Operations Summary (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $3,871 | $5,837 | $11,498 | $10,177 | | General and administrative | $4,095 | $3,745 | $7,404 | $7,379 | | **Operating loss** | **($7,966)** | **($9,582)** | **($18,902)** | **($17,556)** | | **Net loss** | **($7,870)** | **($9,570)** | **($18,730)** | **($17,474)** | | **Net loss per share** | **($2.07)** | **($5.52)** | **($5.17)** | **($10.15)** | [About Tempest Therapeutics](index=3&type=section&id=About%20Tempest%20Therapeutics) Tempest Therapeutics is a clinical-stage biotechnology company developing small molecule cancer treatments via tumor-targeted and immune-mediated mechanisms - Tempest is a clinical-stage biotechnology company developing small molecule product candidates for cancer treatment[9](index=9&type=chunk) - The company's portfolio utilizes tumor-targeted and/or immune-mediated mechanisms[9](index=9&type=chunk) - Programs range from early research to a later-stage randomized global study in first-line cancer patients[9](index=9&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section provides a legal disclaimer for forward-looking statements, outlining risks for future plans and product development - The press release includes forward-looking statements concerning the company's evaluation of strategic alternatives and the anticipated therapeutic benefit and regulatory development of its product candidates[10](index=10&type=chunk)[12](index=12&type=chunk) - Identified risks include capital market volatility, the company's ability to operate as a going concern, the availability and success of strategic transactions, and unexpected safety or efficacy data from clinical trials[12](index=12&type=chunk)

Amezalpat (TPST-1120) in HCC - Amezalpat randomized Phase 2 data in first-line HCC showed superiority to the Standard of Care (SoC) arm[6] - Overall Survival (OS) data revealed a six-month improvement with a stable hazard ratio of 0.65 compared to the control arm[6, 32, 35, 58] - Confirmed Objective Response Rate (ORR) in the ITT population was 30% in the Amezalpat + atezolizumab + bevacizumab arm compared to 13.3% in the atezolizumab + bevacizumab arm[32] - In PD-L1 negative patients, the confirmed ORR was 27% in the Amezalpat arm versus 7% in the SoC arm[32] - In patients with β-catenin mutations, the confirmed ORR in the Amezalpat arm was 43% with 100% Disease Control Rate (DCR)[32] Clinical Development and Regulatory - The FDA and EMA have agreed on a Phase 3 plan for Amezalpat[4, 48] - A pivotal Phase 3 study is designed with over 700 subjects and a 1:1 randomization[49] - The Phase 3 study has a critical hazard ratio of <0.805 for primary efficacy and <0.729 for early efficacy[49] - FDA granted Orphan Drug Designation in December 2024 and Fast Track Designation in January 2025[52] Market Opportunity - First-Line HCC is a large market, with 234,785 treated cases across the US, EU5, and China[54]

Core Insights - Tempest Therapeutics has received approval from the National Medical Products Administration (NMPA) in China to initiate a pivotal trial for amezalpat (TPST-1120) in combination with atezolizumab and bevacizumab for the treatment of unresectable or metastatic hepatocellular carcinoma (HCC) [1][2][3] Company Overview - Tempest Therapeutics is a clinical-stage biotechnology company focused on developing targeted and immune-mediated therapeutics for cancer treatment [8] - The company is headquartered in Brisbane, California, and has a diverse portfolio of small molecule product candidates [8] Drug Development - Amezalpat is an oral, small molecule, selective PPAR⍺ antagonist that shows promise in treating cancer by targeting tumor cells and modulating the tumor microenvironment [7] - The planned Phase 3 study will be a global, blinded, 1:1 randomized trial comparing amezalpat plus atezolizumab and bevacizumab against a placebo combination for first-line treatment of HCC [3] - The company has received agreement from both the FDA and EMA on the study design and statistical plan for the Phase 3 trial [3] Hepatocellular Carcinoma (HCC) Insights - HCC is an aggressive cancer with over 900,000 new diagnoses globally each year, and it is projected to become the third leading cause of cancer death by 2030 [4] - The highest incidence and mortality rates of HCC are found in East Asia, with increasing rates in Europe and the US [4] - Chronic liver diseases, including hepatitis B and C, NAFLD, NASH, and cirrhosis, account for 90% of HCC cases [5] Clinical Trial Context - The ongoing global randomized Phase 1b/2 study of amezalpat in combination with atezolizumab and bevacizumab has shown clinical superiority in overall survival compared to the standard of care [7] - Early-stage HCC patients face a 70-80% recurrence rate post-surgery, which is associated with poorer prognosis [6]

Core Viewpoint - Tempest Therapeutics, Inc. has entered into a definitive agreement for a registered direct offering of 739,000 shares at an offering price of $6.25 per share, expected to close around June 12, 2025, subject to customary conditions [1][2] Group 1: Offering Details - The offering is expected to generate approximately $4.6 million in gross proceeds before deducting fees and expenses [2] - H.C. Wainwright & Co. is acting as the exclusive placement agent for this offering [2] - The shares are being offered under a "shelf" registration statement filed with the SEC, which was declared effective on January 27, 2025 [3] Group 2: Use of Proceeds - The net proceeds from the offering will primarily support a previously announced strategic alternative process, along with working capital and general corporate purposes [2] Group 3: Company Overview - Tempest Therapeutics is a clinical-stage biotechnology company focused on developing targeted and immune-mediated therapeutics for cancer treatment [5] - The company has a diverse portfolio of small molecule product candidates, ranging from early research to later-stage investigations in global studies [5]

Company Overview - Tempest Therapeutics, Inc. is a clinical-stage biotechnology company focused on developing first-in-class targeted and immune-mediated therapeutics for cancer treatment [1][8] - The company is headquartered in Brisbane, California, and has a diverse portfolio of small molecule product candidates [8] Drug Development and Designations - The European Medicines Agency (EMA) has granted Orphan Drug Designation (ODD) to amezalpat (TPST-1120), an oral, small molecule, selective PPAR⍺ antagonist for hepatocellular carcinoma (HCC) [1][6] - Earlier in the year, the FDA also granted ODD and Fast Track Designation (FTD) to amezalpat for the same indication, highlighting the urgent need for new treatment options [2][6] - Amezalpat has shown positive outcomes in a global randomized Phase 1b/2 clinical study, demonstrating a six-month improvement in median overall survival (OS) with a hazard ratio (HR) of 0.65 when combined with standard-of-care therapies [2][4] Disease Context - Hepatocellular carcinoma (HCC) is an aggressive cancer with over 900,000 new diagnoses globally each year, projected to become the third leading cause of cancer death by 2030 [3] - The majority of HCC cases are linked to chronic liver diseases, with a high recurrence rate of 70-80% even after early-stage diagnosis [3][4] Mechanism of Action - Amezalpat is designed to target tumor cells directly while also modulating immune suppressive cells and angiogenesis within the tumor microenvironment [4] - The drug has shown clinical superiority across multiple study endpoints, including overall survival in both the entire population and key subpopulations compared to standard care [4][6] Regulatory Benefits - The EMA's ODD provides benefits such as potential 10 years of market exclusivity following regulatory approval in the EU, reduced regulatory fees, and a centralized EU approval process [7]

PART I — FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Tempest Therapeutics reported a net loss of **$10.9 million** for Q1 2025, with cash decreasing to **$21.5 million**, raising going concern doubts [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$32.2 million** by March 31, 2025, driven by reduced cash, leading to a decline in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $21,511 | $30,268 | | Total current assets | $22,433 | $31,474 | | Total assets | $32,164 | $41,488 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $13,177 | $14,220 | | Total liabilities | $21,031 | $22,362 | | Total stockholders' equity | $11,133 | $19,126 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss increased to **$10.9 million** in Q1 2025, primarily due to a significant rise in research and development expenses to **$7.6 million** Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $7,627 | $4,340 | | General and administrative | $3,309 | $3,634 | | Loss from operations | $(10,936) | $(7,974) | | Net loss | $(10,860) | $(7,904) | | Net loss per share, basic and diluted | $(3.16) | $(4.62) | | Weighted-average shares outstanding | 3,437,671 | 1,710,323 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$8.0 million** in Q1 2025, resulting in an **$8.8 million** net decrease in cash Summary of Cash Flows (in thousands) | Activity | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Cash used in operating activities | $(8,036) | $(7,186) | | Cash used in investing activities | $0 | $(168) | | Cash provided by (used in) financing activities | $(721) | $450 | | **Net decrease in cash** | **$(8,757)** | **$(6,904)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail a 1-for-13 reverse stock split, going concern doubt, and post-quarter workforce reduction and loan repayment - The company's financial statements were prepared on a going concern basis, but management has concluded there is substantial doubt about its ability to continue operating for the next 12 months due to recurring losses and insufficient cash reserves[32](index=32&type=chunk) - On April 8, 2025, the company effected a **1-for-13 reverse stock split** of its common stock, with all share and per-share amounts retrospectively adjusted[29](index=29&type=chunk)[82](index=82&type=chunk) - Subsequent to the quarter end, in April 2025, the company reduced its workforce by **21 of 26** full-time employees, expecting to incur **$1.5 million** in severance and related costs[80](index=80&type=chunk) - On April 8, 2025, the company fully repaid its outstanding loan, including principal and fees, for a total of **$3.5 million**, terminating the loan agreement[51](index=51&type=chunk)[81](index=81&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic alternatives, workforce reduction, and a **76%** increase in R&D expenses, reiterating going concern doubts - The company is exploring a full range of strategic alternatives, including mergers, acquisitions, partnerships, or other transactions, and has retained MTS Health Partners as a financial advisor[97](index=97&type=chunk)[99](index=99&type=chunk) - In April 2025, the company reduced its workforce by **21 of 26** employees to extend capital resources, anticipating **$1.5 million** in cash expenditures for severance and related costs[100](index=100&type=chunk) - The FDA has granted Orphan Drug Designation and Fast Track Designation for amezalpat for the treatment of hepatocellular carcinoma (HCC), and the company has received a "Study May Proceed" letter for its pivotal Phase 3 trial[90](index=90&type=chunk)[91](index=91&type=chunk) R&D Expenses by Program (in thousands) | Program | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | TPST-1120 (amezalpat) | $4,218 | $882 | 378% | | TPST-1495 | $0 | $596 | (100)% | | Personnel and other costs | $2,181 | $1,766 | 23% | | **Total R&D Expenses** | **$7,627** | **$4,340** | **76%** | [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Tempest Therapeutics is not required to provide market risk disclosures - Disclosure under this item is not required as the company qualifies as a smaller reporting company[135](index=135&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal controls - The company's management, including the CEO and CFO, concluded that as of March 31, 2025, the disclosure controls and procedures were effective at a reasonable assurance level[138](index=138&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[139](index=139&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 5 to the financial statements - The report refers to Note 5 of the financial statements for information on legal proceedings[142](index=142&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) Key risks include going concern doubt, potential failure of strategic review, dependence on product candidates, and intellectual property challenges - There is substantial doubt about the company's ability to continue as a going concern, as existing cash is expected to fund operations for less than 12 months, and failure to secure additional funding or a strategic alternative may force the company to wind down operations[147](index=147&type=chunk)[150](index=150&type=chunk) - The process of evaluating strategic alternatives may not result in a transaction, could be costly and time-consuming, and may not enhance stockholder value[151](index=151&type=chunk) - The company's business is highly dependent on the successful development, regulatory approval, and commercialization of its lead product candidates, amezalpat and TPST-1495, which is a lengthy, expensive, and uncertain process[170](index=170&type=chunk) - The company faces risks related to its intellectual property, including the ability to obtain and maintain patent protection, potential infringement claims from third parties, and the difficulty of protecting trade secrets[308](index=308&type=chunk)[331](index=331&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were reported during the period - None[393](index=393&type=chunk) [Other Information](index=81&type=section&id=Item%205.%20Other%20Information) The company entered a retention agreement with its principal accounting officer and reported no Rule 10b5-1 trading plan changes - The company entered into a retention agreement with its principal accounting officer, providing a **$100,000** cash bonus for service through July 31, 2025[396](index=396&type=chunk) - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter[397](index=397&type=chunk) [Exhibits](index=82&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed as part of the Quarterly Report on Form 10-Q, including required certifications

Core Viewpoint - Tempest Therapeutics, Inc. reported promising developments in its clinical-stage oncology programs, particularly highlighting the amezalpat program's potential as a cancer therapy and ongoing efforts to maximize stockholder value through strategic alternatives [2][5]. Recent Highlights - The amezalpat program demonstrated its ability to reduce immunosuppression and activate the immune system against tumors, supported by positive randomized Phase 2 data [2]. - Tempest received Orphan Drug designation from the FDA for TPST-1495 for familial adenomatous polyposis (FAP) and for amezalpat for hepatocellular carcinoma (HCC) [5][6]. - The company is preparing for a Phase 2 trial of TPST-1495, expected to begin in 2025, emphasizing innovative cancer prevention strategies [6]. Financial Results - For the first quarter of 2025, Tempest reported a net loss of $10.9 million, or $3.16 per share, compared to a net loss of $7.9 million, or $4.62 per share, in the same period of 2024 [6][15]. - Research and development expenses increased to $7.6 million from $4.3 million year-over-year, primarily due to costs associated with preparing for a pivotal Phase 3 trial of amezalpat [6][7]. - The company ended the quarter with $21.5 million in cash and cash equivalents, down from $30.3 million at the end of 2024, mainly due to cash used in operating activities [6][12]. Corporate Developments - The company announced plans to explore a full range of strategic alternatives to advance its clinical-stage programs and maximize stockholder value [6]. - A reduction in force was completed on April 30, 2025, as part of its strategic initiatives [6].

[First Quarter 2025 Financial Results and Business Update](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results%20and%20Business%20Update) This section provides an overview of Tempest Therapeutics' Q1 2025 financial performance and key business developments [Business and Corporate Highlights](index=1&type=section&id=Recent%20Highlights) Tempest Therapeutics advanced key drug candidates with FDA designations and pursued strategic alternatives including a workforce reduction - Amezalpat (TPST-1120) received both **Orphan Drug** and **Fast Track designations** from the FDA for the treatment of hepatocellular carcinoma (HCC)[4](index=4&type=chunk)[7](index=7&type=chunk) - **New mechanism-of-action data** for amezalpat was presented at the 2025 AACR Annual Meeting, supporting its potential as a novel cancer treatment by showing it reduces immunosuppression and activates the immune system[3](index=3&type=chunk)[4](index=4&type=chunk)[7](index=7&type=chunk) - TPST-1495 was granted **Orphan Drug designation** by the FDA for treating familial adenomatous polyposis (FAP) and received a "Study May Proceed" letter for its **Phase 2 trial**, which is expected to begin in 2025[4](index=4&type=chunk)[7](index=7&type=chunk) - The company announced it is exploring a full range of **strategic alternatives** to advance its clinical programs and maximize stockholder value, completing a related **reduction in force** on April 30, 2025[3](index=3&type=chunk)[7](index=7&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Tempest Therapeutics reported an increased net loss in Q1 2025, driven by higher R&D expenses, with a decrease in cash and cash equivalents [Key Financial Metrics](index=2&type=section&id=Key%20Financial%20Metrics) Key financial metrics for Q1 2025 show decreased cash, an increased net loss, and the full repayment of a $3.5 million loan | Financial Metric | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | Change (Millions USD) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | $21.5 | N/A | -$8.8 (vs. Q4 2024) | | Net Loss | $10.9 | $7.9 | +$3.0 | | Net Loss Per Share (USD) | $3.16 | $4.62 | -$1.46 | - The decrease in cash was primarily due to operating activities, partially offset by **$1.5 million** in proceeds from the at-the-market offering program[7](index=7&type=chunk) - In April 2025, the company repaid **$3.5 million**, fully satisfying its Loan and Security Agreement with Oxford Finance LLC[7](index=7&type=chunk) [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Operating expenses rose in Q1 2025, primarily due to increased R&D costs for Phase 3 trial preparations, while G&A expenses slightly decreased | Expense Category | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | Change (Millions USD) | | :--- | :--- | :--- | :--- | | Research and Development | $7.6 | $4.3 | +$3.3 | | General and Administrative | $3.3 | $3.6 | -$0.3 | - The increase in R&D expenses was primarily due to costs from contract research and manufacturing organizations in preparation for the **pivotal Phase 3 trial** of amezalpat for first-line HCC[10](index=10&type=chunk) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, shows decreases in total assets, liabilities, and stockholders' equity compared to year-end 2024 | Item | March 31, 2025 (Thousands USD) | December 31, 2024 (Thousands USD) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $21,511 | $30,268 | | Total current assets | $22,433 | $31,474 | | **Total assets** | **$32,164** | **$41,488** | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $13,177 | $14,220 | | **Total liabilities** | **$21,031** | **$22,362** | | **Total stockholders' equity** | **$11,133** | **$19,126** | | **Total liabilities and stockholders' equity** | **$32,164** | **$41,488** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show increased operating and net losses for the three months ended March 31, 2025, compared to the prior year | Item | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Research and development (Thousands USD) | $7,627 | $4,340 | | General and administrative (Thousands USD) | $3,309 | $3,634 | | **Operating loss (Thousands USD)** | **($10,936)** | **($7,974)** | | **Net loss (Thousands USD)** | **($10,860)** | **($7,904)** | | **Net loss per share (USD)** | **($3.16)** | **($4.62)** | [Company Overview and Forward-Looking Statements](index=3&type=section&id=About%20Tempest%20Therapeutics) Tempest Therapeutics is a clinical-stage biotechnology company focused on cancer treatment, with forward-looking statements subject to inherent risks and uncertainties - Tempest Therapeutics is a **clinical-stage biotechnology company** focused on advancing a diverse portfolio of small molecule product candidates with tumor-targeted and/or immune-mediated mechanisms[8](index=8&type=chunk) - The report contains **forward-looking statements** regarding strategic alternatives and the therapeutic potential of its product candidates, which are based on current management beliefs and are subject to **significant risks and uncertainties**[9](index=9&type=chunk)[11](index=11&type=chunk)