Business Context and Reporting Period
Company: Tempest Therapeutics, Inc. (TPST)
Filing Type: Form 10-Q (Unaudited)
Period Ended: March 31, 2026
Business Overview: Tempest is a clinical-stage biotechnology company developing CAR-T cell therapies and small molecule candidates. The quarter was defined by a strategic pivot, including a significant asset acquisition and substantial cost reduction measures.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(27.7) million | $(10.9) million |
| Operating Loss | $(27.7) million | $(10.9) million |
| Cash and Cash Equivalents (End of Period) | $1.8 million | $21.9 million |
| Cash Used in Operating Activities | $(7.6) million | $(8.0) million |
| Total Assets | $10.7 million | $16.9 million |
| Total Liabilities | $9.9 million | $10.3 million |
| Stockholders' Equity | $0.8 million | $6.7 million |
Note: All figures in millions unless otherwise noted. No product revenue has been generated to date.
Material Changes vs. Prior Period
- Asset Acquisition: On February 3, 2026, the Company completed the acquisition of assets from Erigen LLC (including TPST-2003, TPST-2206, TPST-3003, and TPST-3206). This resulted in a one-time non-cash charge of $22.2 million for acquired in-process research and development (IPR&D).
- Operating Expenses:
- R&D Expenses: Decreased 99% to $0.1 million from $7.6 million, driven by workforce reductions and strategic reprioritization.
- G&A Expenses: Increased 64% to $5.4 million from $3.3 million, primarily due to one-time transaction costs related to the asset acquisition.
- Liquidity: Cash reserves declined significantly from $7.7 million at year-end 2025 to $1.8 million at March 31, 2026, due to operating burn and transaction costs.
- Debt: The Company fully repaid its $3.5 million outstanding loan to Oxford Finance LLC in April 2025; no interest expense was recorded in Q1 2026.
Guidance, Outlook, and Risks
- Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern for 12 months from the issuance date. Current cash is projected to fund operations for less than 12 months.
- Funding Commitment: Factor Bioscience Inc. has committed up to $20.0 million in funding over 18 months. As of March 31, 2026, $13.8 million remained available, though access is subject to terms and conditions with significant uncertainty.
- Recent Financing: In March 2026, the Company completed a private placement raising approximately $2.0 million in gross proceeds (excluding potential future warrant exercises).
- Strategic Actions: The Company reduced its workforce by 21 of 26 full-time employees in April 2025. Key executives transitioned to consulting arrangements. A warrant dividend was declared in January 2026, issuing 6.8 million warrants.
- Risk Factors: Risks include the inability to secure additional financing, failure to meet conditions of the Factor funding commitment, and the high uncertainty of clinical development timelines.
Investor Verification Checklist
- Cash Runway: Verify the exact timeline for cash exhaustion given the $1.8 million balance and ongoing operating burn.
- Funding Commitment Terms: Review the specific conditions required to access the remaining $13.8 million from Factor Bioscience.
- Asset Acquisition Value: Assess the clinical data and regulatory pathway for the newly acquired CAR-T assets (TPST-2003, etc.) to justify the $22.2 million expense.
- Dilution Impact: Analyze the impact of the recent private placement, warrant dividend, and outstanding options on future share count and per-share value.
- Lease Obligations: Confirm the Company's ability to meet its $1.2 million current operating lease liability for its Brisbane facility.