What changed in this filing

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Item 9A. Controls and Procedures

2023-03-22 compared with 2022-03-29 · 98 added, 71 removed, 86 unchanged (66% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

We maintain “disclosure controls and procedures,”

as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer (principal executive officer) and Vice-President, Strategy and Finance (principal financial officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15, as of December 31, 2022.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2021, our Chief Executive Officer and Vice-President, Strategy and Finance concluded that, as of such date, our disclosure controls and procedures were not effective at a reasonable assurance level because of the material weaknesses in internal control over financial reporting set forth below;

provided, however, that we have made improvements with respect to addressing such material weaknesses and will continue to execute on an existing plan to remedy them.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2022, our Chief Executive Officer and Vice-President, Strategy and Finance concluded that, as of such date, our disclosure controls and procedures were effective.

Internal Control Over Financial Reporting

3 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive and principal financial officers, or persons performing similar functions, and effected by a company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring organizations of the Treadway Commission (COSO) in Internal Control –

Integrated Framework (2013).

Based on that assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was effective.

Previously Reported Material Weakness and Remediation

In preparing the financial statements as of and for the year ended December 31, 2020, our management identified material weaknesses in its internal control over financial reporting.

2 unchanged sentences

(ii) There was a material weakness in our internal control activities due to a failure in design and implementation of controls to review clinical trial expenses, including the evaluation of the terms of clinical trial contracts.

Specifically, Tempest failed to properly review and evaluate progress of expense incurred in clinical trial contracts which resulted in the inaccurate actual of its clinical trial expenses.

Remediation of Material Weaknesses in Internal Control over Financial Reporting

Our management, under the supervision of its Chief Executive Officer, has undertaken a plan to remediate the material weaknesses identified above, including adjustment to the methodology used to reflect clinical trial expenses in our financial statements and leveraging additional accounting resources.

The additional efforts summarized below, which are in the process of being implemented, are intended to finalize the remediation, which our management expects to complete in the first half of 2022.

(i) We will seek to recruit and hire additional accounting personnel with appropriate experience, certification, education and training to help design, implement, document and operate effective internal controls over financial reporting;

(ii) We will finalize our internal control design, and implement management review controls to review clinical trial expenses and the completeness of our reserves based on the status of clinical development and the progress of expense incurred.

Our management cannot assure you that the material weaknesses identified will be remediated on the timelines currently anticipated by us, or at all, or that there will not be additional material weaknesses or significant deficiencies in the future.

Notwithstanding the existence of the material weaknesses as described above, we believe that the Consolidated Financial Statements in this Annual Report fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods, presented, in conformity with GAAP.

Specifically, we failed to properly review and evaluate progress of expense incurred in clinical trial contracts which resulted in the inaccurate actual of its clinical trial expenses.

Management completed the remediation of the previously identified material weaknesses described above during the year ended December 31, 2022.

Remedial actions include adjustments to the methodology used to reflect clinical trial expenses in our financial statements.

In addition, management also (i) hired additional accounting personnel with appropriate experience, certification, education and training to help design, implement, document and operate effective internal controls over financial reporting;

and (ii) with the assistance of such personnel, finalized our internal control design and implemented management review controls to review clinical trial expenses and the completeness of our reserves based on the status of clinical development and the progress of expense incurred.

Attestation Report of the Registered Public Accounting Firm.

1 unchanged sentence

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than remediation measures discussed above, there were no changes in internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

3 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to our Proxy Statement for our 2022 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021.

Information About Our Directors

Information regarding our Directors required by this item will be contained in our 2023 Proxy Statement under the caption “Information Regarding Director Nominees and Continuing Directors,”

and is hereby incorporated by reference.

Information About Our Executive Officers

Information regarding our Executive Officers required by this item will be contained in our 2023 Proxy Statement under the caption “Executive Officers,”

and is hereby incorporated by reference.

Identification of Audit Committee and Financial Experts

Information regarding our Audit Committee and Financial Experts required by this item will be contained in our 2023 Proxy Statement under the caption “Information Regarding the Board of Directors and Corporate Governance—Audit Committee,”

and is hereby incorporated by reference.

Material Changes to Procedures for Recommending Directors

Information regarding our Procedures for Recommending Directors required by this item will be contained in our 2023 Proxy Statement under the caption “Information Regarding the Board of Directors and Corporate Governance—Nominating and Corporate Governance Committee,”

and is hereby incorporated by reference.

Code of Business Conduct and Ethics

Information regarding our Code of Business Conduct and Ethics (the “Code of Conduct”) required by this item will be contained in our 2023 Proxy Statement under the caption “Information Regarding the Board of Directors and Corporate Governance—Code of Ethics,”

and is hereby incorporated by reference.

If we make any substantive amendments to the Code of Conduct or grant any waiver from a provision of the Code of Conduct to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on its website.

The full text of our Code of Conduct is available at the investors section of our website at www.tempesttx.com.

The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this Annual Report.

Delinquent Section 16(a) Reports

Information regarding compliance with Section 16(a) of the Exchange Act required by this item will be contained in our 2023 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management—Delinquent Section 16(A) Reports,”

if any, and is hereby incorporated by reference.

EXECUTIVE COMPENSATION

Information regarding our Executive Compensation required by this item will be contained in our 2023 Proxy Statement under the caption “Executive and Director Compensation,”

and is hereby incorporated by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Ownership of Securities

Information regarding our Ownership of Securities required by this item will be contained in our 2023 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management,”

and is hereby incorporated by reference.

Equity Compensation Plan Information

Information regarding our Equity Compensation Plan required by this item will be contained in our 2023 Proxy Statement under the caption “Equity Compensation Plan Information,”

and is hereby incorporated by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information regarding Related Transactions and Director Independence required by this item will be contained in our 2023 Proxy Statement under the caption “Transactions with Related Persons and Indemnification,”

and “Information Regarding the Board of Directors and Corporate Governance –

Independence of the Board of Directors,”

and is hereby incorporated by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Information regarding Accounting Fees and Services required by this item will be contained in our 2023 Proxy Statement in Proposal 3 under the captions “—Principal Accountant Fees and Services”

and “—Pre-Approval Policies and Procedures,”

and is hereby incorporated by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

2 unchanged sentences

The financial statements are included in Item 8.

“Financial Statements and Supplementary Data.”

(a)(2) Financial Statement Schedules

2 unchanged sentences

Incorporation by Reference

Exhibit Number Description of Exhibit Form File Number Exhibit Filing Date Filed or Furnished Herewith

Exhibit Number

Description of Exhibit

Filed or Furnished Herewith

Agreement and Plan of Merger, dated as of March 29, 2021, by and among Tempest Therapeutics, Inc., Mars Merger Corp.

and Tempest Therapeutics, Inc.

8-K 001-35890 2.1 3/29/2021

Restated Certificate of Incorporation of the Registrant, as amended

10-Q 001-35890 3.1 5/15/2019

Certificate of Amendment to the Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on June 24, 2021

8-K 001-35890 3.1 6/28/2021

Certificate of Amendment to the Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on June 25, 2021

8-K 001-35890 3.2 6/28/2021

Amended and Restated Bylaws of the Registrant

8-K 001-35890 3.1 9/24/2021

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

1 unchanged sentence

Warrant to Purchase Stock

S-4/A 333-255198 4.2 5/4/2021

Form of Pre-Funded Warrant

2011 Equity Incentive Plan

S-8 333-257727 10.2 7/7/2021

2017 Equity Incentive Plan

S-8 333-257727 10.1 7/7/2021

Form of Stock Option Agreement under the 2017 Equity Incentive Plan

2019 Equity Incentive Plan

8-K 001-35890 10.1 6/13/2019

Amended and Restated 2019 Equity Incentive Plan

Form of Option Grant Package under 2019 Equity Incentive Plan

10-Q 001-35890 10.7 8/12/2019

Form of RSU Grant Package under 2019 Equity Incentive Plan

10-Q 001-35890 10.8 8/12/2019

Form of Stock Option Agreement under the Sub Plan for French Residents under 2019 Equity Incentive Plan

10-K 001-35890 10.16 3/11/2020

Form of Inducement Nonqualified Stock Option Agreement subject to the terms of the 2019 Equity Incentive Plan

10-K 001-35890 10.17 3/11/2020

2019 Employee Stock Purchase Plan

8-K 001-35890 10.2 6/13/2019

Amended and Restated 2019 Employee Stock Purchase Plan

Loan and Security Agreement, dated January 15, 2021, by and among Oxford Finance LLC, the Lenders party thereto, and Tempest

S-4/A 333-255198 10.3 5/4/2021

Form of Indemnification Agreement

8-K 001-35890 10.1 7/07/2021

Employment Agreement, dated July 7, 2021, by and between the Company and Stephen Brady

8-K 001-35890 10.2 7/07/2021

Employment Agreement, dated July 7, 2021, by and between the Company and Thomas Dubensky, Ph.D.

8-K 001-35890 10.3 7/07/2021

Employment Agreement, dated July 7, 2021, by and between the Company and Samuel Whiting, M.D., Ph.D.

8-K 001-35890 10.4 7/07/2021

10.24† Lease Agreement, dated February 22, 2019, by and between ARE-San Francisco No.

17, LLC and Tempest Therapeutics, Inc.

S-4/A 333-255198 10.1 5/4/2021

10.25† First Amendment to Lease, dated June 28, 2019, by and between ARE-San Francisco No.

17, LLC and Tempest Therapeutics, Inc.

S-4/A 333-255198 10.2 5/4/2021

21.1 Subsidiaries of the Registrant X

Lease Agreement, dated January 24, 2022, by and between HCP Life Science REIT, Inc.

and Tempest Therapeutics, Inc.

Securities Purchase Agreement, dated April 26, 22, by and among Tempest Therapeutics, Inc.

and the persons party thereto

Registration Rights Agreement, dated April 26, 22, by and among Tempest Therapeutics, Inc.

and the persons party thereto

First Amendment to Loan and Security Agreement, dated December 23, 2022, by and among Oxford Finance LLC, Tempest Therapeutics, Inc., Tempest TX, Inc.

and Millendo Therapeutics US, Inc.

Subsidiaries of the Registrant

Consent of Ernst & Young LLP, independent registered public accounting firm

23.2 Consent of Deloitte & Touche LLP, independent registered public accounting firm

24.1 Power of Attorney (included on signature page) X

Power of Attorney (included on signature page)

Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2 unchanged sentences

Section 1350, as adopted pursuant to section 906 of The Sarbanes-Oxley Act of 2002

101.INS Inline XBRL Instance Document X

101.SCH Inline XBRL Taxonomy Extension Schema Document X

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension contained in Exhibit 101).

_______________________________________

* Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The registrant hereby undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the SEC.

+ Indicates management contract or compensatory plan.

† Filed previously.

^ These certifications are being furnished solely to accompany this Annual Report pursuant to 18 U.S.C.

9 unchanged sentences

Nicholas Maestas

Vice-President, Strategy and Finance (Principal

Financial Officer)

Vice-President, Strategy and Finance (Principal Financial Officer)

March 22, 2023

1 unchanged sentence

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Stephen Brady President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ Stephen Brady

Chief Executive Officer and Director (Principal Executive Officer)

March 22, 2023

Stephen Brady

/s/ Nicholas Maestas Vice President, Strategy and Finance

/s/ Nicholas Maestas

Vice President, Strategy and Finance and Secretary

(Principal Financial Officer)

1 unchanged sentence

Nicholas Maestas

/s/ Pierre Lorenzo Corporate Controller, Treasurer and Secretary

/s/ Justin Trojanowski

Corporate Controller, Treasurer

(Principal Accounting Officer)

March 22, 2023

Pierre Lorenzo

/s/ Michael Rabb Chairman of the Board of Directors March 29, 2022

/s/ Thomas Dubensky President and Director March 29, 2022

Justin Trojanowski

/s/ Michael Raab

Chairman of the Board of Directors

March 22, 2023

/s/ Thomas Dubensky

President and Director

March 22, 2023

Thomas Dubensky, Ph.D.

/s/ Geoff Nichol Director March 29, 2022

/s/ Geoff Nichol

March 22, 2023

Geoff Nichol, M.B., Ch.B., M.B.A.

/s/ Christine Pellizzari Director March 29, 2022

/s/ Christine Pellizzari

March 22, 2023

Christine Pellizzari

/s/ Ronit Simantov Director March 29, 2022

/s/ Ronit Simantov

March 22, 2023

Ronit Simantov, M.D.

/s/ Thomas Woiwode Director March 29, 2022

/s/ Thomas Woiwode

March 22, 2023

Thomas Woiwode, Ph.D.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures