Business Context and Reporting Period
Company: Tempest Therapeutics, Inc. (TPST)
Filing Type: Form 10-Q (Unaudited)
Period Ended: June 30, 2026
Business Overview: Tempest is a clinical-stage biotechnology company developing CAR-T product candidates for cancer and autoimmune indications. The company operates as a single segment focused on discovery and development. As of June 30, 2026, the company had 15,979,411 shares of common stock outstanding.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(32.9) million | $(18.7) million |
| Net Loss Per Share (Basic & Diluted) | $(2.52) | $(5.17) |
| Cash and Cash Equivalents (Ending) | $0.8 million | $14.7 million |
| Cash Used in Operating Activities | $(10.4) million | $(16.5) million |
| Total Assets | $9.6 million | $16.9 million |
| Total Liabilities | $10.7 million | $10.3 million |
| Stockholders' Equity (Deficit) | $(1.1) million | $6.7 million |
Debt and Liquidity: The company has no outstanding borrowings as of June 30, 2026, having repaid its Oxford Finance loan in April 2025. The company reported a negative working capital position with current liabilities of $4.5 million against current assets of $1.7 million.
Material Changes vs. Prior Period
- Asset Acquisition: In February 2026, the company completed the acquisition of Erigen Assets (including TPST-2003, TPST-2206, TPST-3003, and TPST-3206) for approximately $22.2 million in consideration (8.3 million shares of common stock). This resulted in a one-time non-cash charge of $22.2 million to "Acquired in-process research and development" expense in Q1 2026.
- Operating Expenses:
- R&D Expenses: Decreased to $1.9 million for the six months ended June 30, 2026, from $11.5 million in the prior year period. This 83% reduction is primarily due to the cessation of the Amezalpat program and workforce reductions, offset by costs related to newly acquired CAR-T programs.
- G&A Expenses: Increased to $8.9 million from $7.4 million, driven by one-time transaction costs related to the Asset Acquisition and legal settlements.
- Capital Structure: The company raised approximately $3.5 million in net proceeds during the six months ended June 30, 2026, through a private placement and a warrant exercise inducement. This contrasts with the prior year period which included significant loan repayments.
- Stock Split: A 1-for-13 reverse stock split was effected in April 2025; all share data presented is adjusted to reflect this.
Guidance, Outlook, Risks, and Unusual Items
Going Concern: The company has raised substantial doubt about its ability to continue as a going concern. With only $0.8 million in cash as of June 30, 2026, management expects existing resources to fund operations for less than 12 months. The company is actively exploring financing options.
Strategic Outlook & Pipeline:
- TPST-2003: Reported 100% complete response rates in recent interim data for relapsed/refractory multiple myeloma and POEMS syndrome. Plans to initiate a U.S. registrational study later in 2026.
- TPST-4003: Plans to advance this in vivo CAR-T candidate into an investigator-initiated trial (IIT) in China for autoimmune diseases (myasthenia gravis, multiple sclerosis) in Q4 2026, in collaboration with Senlang Biotechnology.
Risks and Contingencies:
- Funding Commitment: Factor Bioscience has committed up to $20.0 million in funding, with $11.8 million remaining available as of June 30, 2026. However, access to these funds is subject to conditions and significant uncertainty.
- Nasdaq Compliance: The company received notices from Nasdaq regarding non-compliance with minimum stockholders' equity requirements (reported equity was below $2.5 million) and board independence requirements. The company has submitted compliance plans but faces potential delisting risks.
- Management Turnover: Significant changes in executive leadership and board composition occurred during the period, including the resignation of the former CEO and CFO.
Unusual Items:
- Warrant Dividend: In February 2026, the company issued a warrant dividend to shareholders, resulting in the issuance of approximately 6.8 million warrants.
- Related Party Waiver: Factor Bioscience waived $2.1 million in service fees under a Master Services Agreement, recorded as a capital contribution rather than income.
Investor Verification Checklist
- Cash Runway: Verify the timeline for the next capital raise given the $0.8 million cash balance and "substantial doubt" going concern warning.
- Funding Commitment Terms: Review the specific conditions attached to the $11.8 million remaining under the Factor Bioscience funding commitment to assess accessibility.
- Nasdaq Status: Monitor the status of the company's compliance plans regarding stockholders' equity and board composition to assess delisting risk.
- Acquisition Integration: Confirm the progress of the Erigen Assets integration and the specific milestones required to unlock future milestone payments (up to $1.98 billion potential).
- Related Party Transactions: Scrutinize the ongoing Master Services Agreement with Factor Bioscience and the waiver of fees to ensure fair value and lack of conflict of interest.