Business Context and Reporting Period
This Form 8-K, dated June 25, 2021, reports the completion of a business combination between Millendo Therapeutics, Inc. (the "Company") and TempestTx, Inc. (formerly Tempest Therapeutics, Inc.). Effective June 25, 2021, the Company changed its name to Tempest Therapeutics, Inc. and its ticker symbol to "TPST" on The Nasdaq Capital Market. The Company is now a clinical-stage oncology company focused on developing novel orally available therapies for solid tumors.
Key Financial Metrics and Capital Structure
The filing details specific debt obligations and equity restructuring but does not provide consolidated revenue, profit, or cash flow metrics for the combined entity in this specific report.
- Debt Obligation: Assumed a term loan agreement with Oxford Finance LLC totaling $35.0 million, maturing August 1, 2025, with a floating interest rate of 7.15% (index rate + 7%).
- Loan Tranches:
- Tranche A: $15.0 million funded on January 15, 2021.
- Tranche B: $10.0 million available through March 31, 2022, contingent on raising $50.0 million in Series C equity and initiating specific clinical trials.
- Tranche C: $10.0 million available at the lender's option.
- Equity Restructuring:
- Executed a 1-for-15 reverse stock split effective June 25, 2021.
- Issued approximately 5,365,768 shares of common stock to Tempest stockholders at an exchange ratio of 0.0322.
- Post-merger outstanding shares: Approximately 6,635,303 (post-split adjusted).
- Liquidity: The filing does not provide a clear value for total cash or cash equivalents as of the reporting date.
Material Changes Versus Prior Period
The primary material change is the fundamental transformation of the Company's business and corporate structure:
- Business Focus: Shifted from the Company's prior operations to Tempest's clinical-stage oncology pipeline.
- Corporate Identity: Name changed from Millendo Therapeutics, Inc. to Tempest Therapeutics, Inc.; ticker changed from "MLND" to "TPST".
- Capitalization: Significant dilution and restructuring via the reverse stock split and issuance of new shares to Tempest shareholders.
- Leadership: Complete turnover of the Board of Directors and Executive Officers. Former CEO Louis J. Arcudi, III and CFO Jennifer Minai-Azary resigned. Stephen Brady appointed CEO, Thomas Dubensky appointed President, and Samuel Whiting appointed CMO.
Guidance, Outlook, and Risks
Outlook and Milestones: The Company's ability to access the remaining $20.0 million of its term loan (Tranche B) is contingent upon specific milestones: raising at least $50.0 million in Series C equity capital and initiating Phase 1/Phase 2 clinical trials for candidates TPST-1495 and TPST-1120.
Risks and Contingencies:
- Financing Risk: Failure to raise the required $50.0 million in equity or meet clinical milestones will prevent access to Tranche B funding.
- Debt Service: The Company assumes a significant debt load with a 7.15% interest rate, requiring cash flow management despite being a clinical-stage company with no product revenue.
- Integration: Risks associated with integrating Tempest's operations, pipeline, and personnel into the Company's structure.
Investor Verification Checklist
- Verify the status of the $50.0 million Series C equity raise required to unlock Tranche B of the Oxford loan.
- Confirm the initiation dates for the Phase 1 combination study of TPST-1495 and the Phase 2 trial of TPST-1120.
- Review the full audited financial statements of Tempest (filed separately) to assess the combined entity's cash runway.
- Monitor the trading volume and price of the new ticker "TPST" following the 1-for-15 reverse stock split.
- Examine the employment agreements and severance terms for the departing Millendo executives (Arcudi and Minai-Azary) for potential cash outflows.