UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXC For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXC For the transition period from to . Commission File No. 001-35890 Tempest Therapeutics, Inc. (Exact Name of Registrant as Specified in its Charter) | Delaware | 45-1472564 | | --- | --- | | (State or Other Jurisdiction of | (I.R.S. Emp ...

TEMPEST THERAPEUTICS Company Overview July 2022 Information Regarding Disclosures Forward-Looking Statements This presentation contains forward-looking statements (including within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended (the "Securities Act")) concerning Tempest Therapeutics, Inc. ("Tempest Therapeutics"). These statements may discuss goals, intentions and expectations as to future plans, trends, events, result ...

[PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the unaudited financial statements, management's analysis, and internal controls for the reporting period [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited financial statements for Q1 2022 show a net loss of $8.5 million, a decrease in total assets, and an accumulated deficit of $108.6 million [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2022, shows total assets decreased to $67.0 million, primarily due to reduced cash, while stockholders' equity declined to $29.4 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $45,754 | $51,829 | | Total current assets | $62,710 | $68,963 | | Total assets | $66,953 | $73,238 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $20,815 | $20,026 | | Total liabilities | $37,596 | $37,121 | | Total stockholders' equity | $29,357 | $36,117 | | Total liabilities and stockholders' equity | $66,953 | $73,238 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations for Q1 2022 show a net loss of $8.5 million, an increase from the prior year, driven by higher operating expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $5,109 | $3,592 | | General and administrative | $3,052 | $1,535 | | Loss from operations | ($8,161) | ($5,127) | | Net loss | ($8,491) | ($5,355) | | Net loss per share, basic and diluted | ($1.18) | ($10.55) | [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Stockholders' equity decreased to $29.4 million as of March 31, 2022, primarily due to the $8.5 million net loss for the quarter - The company's total stockholders' equity declined by **$6.7 million** during the first quarter of 2022, moving from **$36.1 million** to **$29.4 million**[19](index=19&type=chunk) - The primary driver of the decrease in equity was the net loss of **$8.5 million** incurred during the three-month period[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $7.1 million for Q1 2022, resulting in a $5.7 million net decrease in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Cash used in operating activities | ($7,107) | ($6,310) | | Cash used in investing activities | ($3) | ($14) | | Cash provided by financing activities | $1,403 | $14,944 | | Net (decrease) increase in cash | ($5,707) | $8,620 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's oncology business, the Millendo merger accounting, cash sufficiency, and a $15 million legal settlement fully covered by insurance - Tempest is a clinical-stage oncology company with two main clinical programs: **TPST-1120** (PPARα antagonist) and **TPST-1495** (EP2/EP4 antagonist)[25](index=25&type=chunk) - The June 2021 merger with Millendo was accounted for as a reverse recapitalization, with Private Tempest as the accounting acquirer[28](index=28&type=chunk) - Management believes cash and cash equivalents as of March 31, 2022, are sufficient to fund operations for the next 12 months, further strengthened by a **$15 million** PIPE financing completed in April 2022[30](index=30&type=chunk)[31](index=31&type=chunk) - A shareholder class action lawsuit (Dahhan v. OvaScience) was preliminarily settled for **$15 million**, which will be funded entirely by insurance and recorded as both an accrued legal settlement and an insurance recovery[53](index=53&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's oncology programs, continued operating losses, increased expenses, and sufficient cash position for the next 12 months, bolstered by recent financing - The company is advancing three novel, orally available therapies for solid tumors: **TPST-1495** (dual EP2/EP4 antagonist), **TPST-1120** (PPARα antagonist), and a preclinical **TREX-1 inhibitor**[91](index=91&type=chunk) Comparison of Operating Expenses (in thousands) | Expense Category | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Research and development | $5,109 | $3,592 | +$1,517 | | General and administrative | $3,052 | $1,535 | +$1,517 | - The increase in R&D expense was due to expanded research efforts, while the rise in G&A expense was primarily due to increased professional fees and insurance costs associated with being a public company post-merger[108](index=108&type=chunk)[109](index=109&type=chunk) - As of March 31, 2022, the company had **$45.8 million** in cash and cash equivalents and believes this is sufficient to fund operations for at least the next 12 months, further strengthened by a **$15 million** PIPE financing completed in April 2022[95](index=95&type=chunk)[96](index=96&type=chunk)[112](index=112&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2022, due to identified material weaknesses, for which a remediation plan is underway - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2022[125](index=125&type=chunk) - The ineffectiveness is due to previously identified material weaknesses, including insufficient resources with appropriate expertise in financial reporting and failure to design and implement controls to review clinical trial expenses[128](index=128&type=chunk)[129](index=129&type=chunk) - A remediation plan is underway, involving recruiting additional accounting personnel and finalizing the design and implementation of management review controls for clinical trial expenses[130](index=130&type=chunk)[132](index=132&type=chunk) [PART II — OTHER INFORMATION](index=26&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other disclosures pertinent to the company's operations [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in litigation inherited from the Millendo/OvaScience merger, including a **$15 million** shareholder class action settlement fully covered by insurance - The company is involved in litigation inherited from the Millendo/OvaScience merger[50](index=50&type=chunk)[139](index=139&type=chunk) - A shareholder class action (Dahhan v. OvaScience) has been preliminarily settled for **$15 million**, which will be fully covered by insurance and has been recorded on the balance sheet[53](index=53&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, operational, clinical, regulatory, and intellectual property risks, including a history of losses and material weaknesses in internal controls - **Financial Risks:** The company has a history of operating losses, expects them to continue, and will need to raise additional capital, which may not be available on acceptable terms[142](index=142&type=chunk)[151](index=151&type=chunk)[154](index=154&type=chunk) - **Internal Control Risks:** Material weaknesses have been identified in internal control over financial reporting, which could harm the business and stock value if not remediated effectively[144](index=144&type=chunk)[160](index=160&type=chunk) - **Clinical and Regulatory Risks:** There is a high risk of failure in clinical development, with success in early trials not guaranteeing later success, and the regulatory approval process being lengthy, costly, and uncertain[144](index=144&type=chunk)[177](index=177&type=chunk)[187](index=187&type=chunk) - **Operational and Commercialization Risks:** The company faces significant competition, relies on third parties for manufacturing, and the commercial success of its products depends on market acceptance and adequate reimbursement from payors[218](index=218&type=chunk)[221](index=221&type=chunk)[206](index=206&type=chunk) - **Intellectual Property Risks:** The company's success depends on its ability to obtain, maintain, and protect its intellectual property, which is a difficult and costly process with an uncertain outcome[290](index=290&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period covered by this report - None[373](index=373&type=chunk) [Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable - Not applicable[374](index=374&type=chunk) [Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[375](index=375&type=chunk) [Other Information](index=63&type=section&id=Item%205.%20Other%20Information) Not applicable - Not applicable[376](index=376&type=chunk) [Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer, and XBRL data files - The report includes a list of exhibits filed, such as the Agreement and Plan of Merger, Restated Certificate of Incorporation, and various officer certifications[378](index=378&type=chunk)[379](index=379&type=chunk)

TEMPEST THERAPEUTICS Company Overview April 2022 Information Regarding Disclosures Forward-Looking Statements This presentation contains forward-looking statements (including within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended (the "Securities Act")) concerning Tempest Therapeutics, Inc. ("Tempest Therapeutics"). These statements may discuss goals, intentions and expectations as to future plans, trends, events, resul ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _______________________________________________________________________________________________________________________________ FORM 10-K _______________________________________________________________________________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXC For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXC For the transition period from to . Commission File No. 001-35890 Tempest Therapeutics, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 45-1472564 (State or Other Jurisdiction of (I.R.S. Employer Incorporation ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-35890 Tempest Therapeutics, Inc. (Exact Name of Registrant as Specified in its Charter) (Former Name, Former Address and Form ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________________________________ FORM 10-Q _____________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ ...

Corporate Restructuring and Workforce Reduction - The company discontinued the development of livoletide, nevanimibe, and MLE-301 due to insufficient trial results and strategic reevaluation, with a significant workforce reduction of approximately 85% planned by April 15, 2021[21]. - The company expects to incur costs of approximately $5.5 million for termination benefits and retention arrangements related to the corporate restructuring plan[21]. - The company plans to reduce its workforce by up to 85%, with the majority of reductions expected to be completed by April 15, 2021[113]. - The company has discontinued further investment in MLE-301, resulting in a reduced workforce of 12 employees as of the date of the filing[128]. - The company may face significant risks related to employment litigation due to workforce reductions and the need to retain key employees for the merger[128]. - The company may need to reassess its workforce requirements and raise funds to support continued operations if the merger does not close[124]. - The company implemented a reduction in force, reducing employee count by up to 85%, which may disrupt operations and lead to loss of institutional knowledge[184]. Merger and Strategic Transactions - A merger agreement was entered into with Tempest Therapeutics, Inc. on March 29, 2021, which, if completed, will allow Tempest's business to continue as part of the combined organization[22]. - If the merger is not completed, the company may consider dissolving and liquidating its assets or pursuing another strategic transaction[24]. - The merger with Tempest Therapeutics, Inc. is expected to result in pre-Merger Millendo shareholders owning approximately 18.5% and pre-Merger Tempest stockholders owning approximately 81.5% of the combined company, assuming gross proceeds of approximately $30 million[119]. - If the merger is not consummated, the company may incur a termination fee of $1.4 million or reimburse Tempest's expenses up to a maximum of $1.0 million[120]. - The announcement and pendency of the merger may adversely affect the trading price of the company's common stock and its business prospects[121]. - The company is devoting substantially all resources to consummating the merger transaction, but there is no assurance that it will deliver the anticipated benefits[119]. Financial Performance and Projections - The company incurred a net loss of $36.4 million and $44.6 million for the years ended December 31, 2020 and 2019, respectively, with an accumulated deficit of $245.1 million as of December 31, 2020[129]. - The company expects to continue incurring significant operating losses and increasing expenses for the foreseeable future, particularly if drug development activities resume[130]. - As of December 31, 2020, the company had cash, cash equivalents, and restricted cash of $38.7 million, which is expected to fund operations for at least the next 12 months[135]. - The company has never generated revenue from product sales and has a limited operating history, making it difficult to assess future viability[131]. - If the merger is not completed, the company may need to raise substantial additional funding, which may not be available on acceptable terms[132]. - The company has never obtained marketing approval for any product candidate, which could delay or prevent commercialization and revenue generation[139]. - The company anticipates that any delay in obtaining marketing approvals could significantly harm its business and financial condition[140]. Regulatory Compliance and Risks - The company is subject to various federal and state laws that impose significant penalties for violations, which could adversely affect its operations and financial condition[110]. - The FDA requires a 30-day waiting period after the submission of an IND application before clinical testing can begin in the U.S.[49]. - The FDA has a goal of responding to standard review NDAs within ten months after the 60-day filing review period, with priority review drugs typically reviewed within six to eight months[59]. - The FDA may require a risk evaluation and mitigation strategy (REMS) as a condition of NDA approval, which can affect the market and profitability of the drug[62]. - Post-approval, the FDA regulates drugs with specific requirements for recordkeeping, periodic reporting, and changes to approved drugs[65]. - The FDA requires drug manufacturers to comply with cGMP regulations, necessitating significant investment in production and quality control to maintain compliance[66]. - Non-compliance with FDA regulations can lead to severe consequences, including withdrawal of drug approval, fines, and potential criminal penalties[67][70]. - The FDA grants a five-year marketing exclusivity period for new chemical entities (NCEs), preventing the approval of generic versions during this time[69]. - The Patient Protection and Affordable Care Act (PPACA) has increased Medicaid rebates to 23.1% for branded drugs and 13% for generics, impacting manufacturers' financial obligations[76]. - Legislative changes have led to a 70% point-of-sale discount requirement for Medicare Part D beneficiaries during coverage gaps, affecting drug pricing strategies[76]. - The FDA's regulations on drug marketing prohibit off-label promotion, with significant liability risks for violations[68]. - The European Union requires extensive regulatory compliance for drug marketing, including a centralized procedure for certain drug categories[85]. - The new EU clinical trials regulation aims to streamline the authorization process and improve transparency, although full implementation is pending[82]. - Ongoing legislative interest in drug pricing practices may lead to increased transparency and potential reforms in reimbursement methodologies[79]. - The European Union grants eight years of data exclusivity for new active substances, followed by two years of market exclusivity, which can be extended to three years if a new therapeutic indication is approved during the initial exclusivity period[94]. - Orphan drugs receive a 10-year exclusivity period post-marketing authorization, which can be reduced to six years if criteria for orphan designation are no longer met[89]. - Companies must establish a pharmacovigilance system and appoint a qualified person for pharmacovigilance to oversee safety reporting obligations after obtaining marketing authorization[92]. - New marketing authorizations must include a risk management plan detailing the safety profile and risk-minimization measures for the product[93]. - The approval process for generic drugs in the EU allows for abridged applications referencing innovator data once data exclusivity has expired[94]. - Third-party payors increasingly challenge drug pricing and may require pharmacoeconomic studies to demonstrate cost-effectiveness for coverage and reimbursement[97]. - Governments in the EU influence drug pricing through reimbursement rules, which can create barriers to market entry for new drugs[99]. - The FDA regulates all advertising and promotion activities for drugs, and only approved claims regarding safety and efficacy may be used in labeling[102]. - Companies face potential civil, criminal, or administrative sanctions if they fail to comply with manufacturing regulations and standards[91]. - The marketability of drugs may suffer if adequate coverage and reimbursement are not provided by government and third-party payors[100]. Intellectual Property and Legal Risks - The company relies on a combination of patents, trade secrets, and confidentiality agreements to protect its intellectual property, which is critical for competitive positioning[154]. - The patent prosecution process is expensive and time-consuming, and the company may not be able to secure necessary patent protections in a timely manner[155]. - Changes in patent laws or interpretations could diminish the value of the company's patents, affecting its ability to compete effectively[156]. - The company may face challenges from third-party submissions or litigation that could invalidate or limit its patent rights, allowing competitors to enter the market[158]. - Patent terms may not provide adequate protection for the company's product candidates, as patents could expire before commercialization[164]. - The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding intellectual property rights, which could adversely impact the company's business[165]. - The company may face litigation regarding intellectual property rights, which could adversely affect its ability to commercialize future product candidates[166]. - Legal claims to protect or enforce patents could be expensive and time-consuming, potentially leading to unsuccessful outcomes[167]. - Changes in U.S. patent law could diminish the value of patents, impairing the company's ability to protect its product candidates[170]. - The company may not be able to protect its intellectual property rights globally, which could allow competitors to develop similar drugs[171]. Operational Challenges and External Factors - The ongoing COVID-19 pandemic has resulted in operational disruptions, potentially delaying clinical programs and impacting financial condition[176]. - The pandemic may also affect the company's ability to access capital, which could negatively impact liquidity[178]. - The company is highly dependent on key executives, and their loss could impede the achievement of corporate objectives[181]. - Attracting and retaining qualified personnel is critical, as competition for talent in the biotechnology sector is intense[183]. - The company may face challenges in securing successful collaborations with third parties for product development, which could harm its business[175]. - Patent litigation can lead to substantial costs and distract management, impacting overall business operations[168]. - The company is exposed to foreign exchange risk, particularly with expenses and potential revenues in euros, which could negatively impact financial results[189]. - The company may face significant unexpected costs and liabilities related to the historic OvaScience business, which could adversely affect liquidity and operations[190]. - The market price of the company's common stock has been volatile, influenced by various factors including the ongoing COVID-19 pandemic and program discontinuations[191]. Tax and Compliance Issues - The company had federal net operating loss carryforwards (NOLs) of $330.8 million and state NOLs of $280.9 million as of December 31, 2020[207]. - The company does not anticipate paying any cash dividends on its common stock in the foreseeable future, intending to retain future earnings for business development[210]. - The company expects to incur increased costs due to compliance with public company responsibilities and corporate governance practices, which were not present as a private company[203]. - The effective tax rate may fluctuate due to various factors, including changes in tax laws and the mix of profitability across jurisdictions[206]. - The company may face limitations on using NOLs and other tax attributes to offset future taxable income due to ownership changes[208]. - The company is subject to various legal proceedings, which could have a material effect on its financial position and results of operations[215]. - The company has not declared or paid cash dividends to date, and capital appreciation will be the sole source of gain for investors in the foreseeable future[211]. - The company is required to maintain effective internal controls over financial reporting, and failure to do so could impair the accuracy of financial statements[202]. - The company may experience increased legal and financial compliance costs due to the Sarbanes-Oxley Act and other regulations[203]. - Changes in tax laws or regulations could materially adversely affect the company's business and financial condition[205].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________________________________ FORM 10-Q _____________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ ...