What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-19 compared with 2023-03-22 · 167 added, 220 removed, 370 unchanged (51% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Stockholders’

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of Tempest Therapeutics, Inc.

(the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders' equity and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with U.S.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders' equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

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These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued research and development expenses

Description of the Matter

As described in Note 2 to the financial statements under the caption “Research and development expenses and accrued research and development”, the Company records the cost of research and development activities as they are incurred.

The Company estimates preclinical studies and clinical trial expenses based on the services performed pursuant to contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on the Company’s behalf.

Service fees are accrued based on the Company’s estimates of the time period over which services will be performed and the level of effort to be expended in each period.

These estimates are based on communications with the third-party service providers, the Company’s estimates of accrued expenses and on information available at each balance sheet date.

As of December 31, 2022, the Company’s accrued clinical trial liability was $2.2 million.

Auditing the Company’s accrual for research and development expenses was challenging because of the estimation involved in determining the accrual balance, which included information that was accumulated from multiple sources.

Service fees are accrued based on the Company’s estimates of the time period over which services will be performed and the level of effort to be expended in each period.

These estimates are based on communications with the third-party service providers, the Company’s estimates of accrued expenses and on information available at each balance sheet date.

As of December 31, 2023, the Company’s accrued clinical trial liability was $1.0 million.

Auditing the Company’s accrual for research and development expenses was challenging because of the significant volume of transactions and the use of third-party data involved in determining the accrual balance, which was accumulated from multiple sources.

In certain circumstances, the determination of the nature and level of services that have been received during the reporting period requires judgment because the timing and pattern of vendor invoicing did not correspond to the level of services provided and invoicing from clinical study sites and other vendors may not yet be available to management.

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We recalculated the accrual based on executed contracts with the clinical research organizations, contract manufacturing organizations, clinical study sites and collaboration partners.

We also tested subsequent invoicing received from third parties to assess the impact to the accrual at the balance sheet date and compared that to the Company’s estimates.

/s/ Ernst & Young LLP

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Total current assets

Property and equipment —

Property and equipment — net

Operating lease right-of-use assets

Other noncurrent assets

Liabilities and stockholders’

Liabilities and stockholders’ equity

Current liabilities:

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Accrued expenses

Current loan payable (net of discount and issuance costs of $ 112 and nil , respectively)

Current operating lease liabilities

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Commitments and contingencies (Note 5)

Stockholders’

Stockholders’ equity:

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

10,518,539 and 6,910,324 shares issued and outstanding at December 31, 2022 and 2021, respectively

22,045,255 and 10,518,539 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’

Total liabilities and stockholders’

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying Notes to Consolidated Financial Statements

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(in thousands, except share and per share amounts)

Years Ended December 31,

Year Ended December 31,

Operating expenses:

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General and administrative

Loss from operations

Other income (expenses), net:

Operating loss

Other income (expense), net:

Interest expense

Interest income and other income (expenses), net

Total other income (expenses), net

Interest income and other income (expense), net

Other income (expense), net

Provision for income taxes

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Tempest Therapeutics, Inc.

Consolidated Statements of Stockholders’

Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts)

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Equity (Deficit)

BALANCE —

January 1, 2021

Exercise of stock options

Vesting of early exercised stock options

Conversion of preferred stock to common stock

BALANCE — January 1, 2022

Issuance of common stock for cash, net of issuance cost of $ 489

Share-based compensation

Reverse recapitalization transaction costs

Issuance of common stock to Millendo shareholders

Issuance of common stock warrants

BALANCE —

December 31, 2021

Issuance of pre-funded warrants, net of issuance cost $ 283

BALANCE — December 31, 2022

Exercise of stock options

Issuance of common stock for cash, net of issuance cost of $ 1,105

Exercise of pre-funded warrants

Share-based compensation

Issuance of pre-funded warrants, net of issuance cost $ 283

BALANCE —

December 31, 2022

BALANCE — December 31, 2023

See accompanying Notes to Consolidated Financial Statements

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Repayment of loan

Borrowings on loan payable

Payment of loan issuance costs

Cash acquired in connection with reverse recapitalization

Payment of reverse recapitalization transaction costs

Proceeds from option exercises

Cash provided by financing activities

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Cash paid for interest

Cash paid for income taxes

Cash paid for business taxes

Operating lease right-of-use assets recognized in exchange for lease liabilities

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Property and equipment in accounts payable

Non-cash financing activities:

Vesting of early exercise stock options

Issuance of common stock for license agreement

See accompanying Notes to Consolidated Financial Statements

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Tempest Therapeutics, Inc.

(“Tempest,”

or the “Company”) is a clinical-stage oncology company advancing small molecules that combine both tumor-targeted and immune-mediated mechanisms with the potential to treat a wide range of tumors.

The Company’s two novel clinical programs are TPST-1120 and TPST-1495, antagonists of PPARα

and EP2/EP4, respectively.

(“Tempest” or the “Company”) is a clinical-stage oncology company advancing small molecules that combine both tumor-targeted and immune-mediated mechanisms with the potential to treat a wide range of tumors.

The Company’s two novel clinical programs are TPST-1120 and TPST-1495, antagonists of PPARα and EP2/EP4, respectively.

Both programs are advancing through clinical trials designed to study the agents as monotherapies and in combination with other approved agents.

Tempest is also developing an orally available inhibitor of TREX-1, a target that controls activation of the cGAS/STING pathway.

Tempest is also developing other product candidates currently in our Discovery Research portfolio.

Tempest is headquartered in Brisbane, California.

Merger with Millendo —On March 29, 2021, TempestTx, Inc.

(“Private Tempest”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Millendo Therapeutics, Inc.

(“Millendo”).

Concurrent with the execution and delivery of the Merger Agreement, Private Tempest entered into funding agreements with certain investors named therein, pursuant to which the investors agreed to purchase, in the aggregate, $ 30.0 million of common stock of Private Tempest, convertible into securities of Millendo.

On June 25, 2021, Private Tempest completed the merger with Millendo in accordance with the Merger Agreement.

Prior to the effective time of the merger, Millendo effected a 1-for-15 reverse stock split, and right after the merger, Millendo changed its name to Tempest Therapeutics, Inc.

Under the terms of the Merger Agreement, immediately prior to the effective time of the merger, each share of Private Tempest’s preferred stock was converted into a share of Private Tempest’s common stock.

At closing of the merger, the Company issued an aggregate of approximately 5,365,899 shares of its common stock to Private Tempest stockholders, based on an exchange ratio of 0.0322 shares of the Company’s common stock for each share of Private Tempest common stock outstanding immediately prior to the merger, including those shares of common stock issued upon conversion of the Private Tempest preferred stock, resulting in approximately 6,635,345 shares of the Company’s common stock being issued and outstanding immediately following the effective time of the merger.

The Company also assumed all of the outstanding and unexercised stock options and warrants to purchase shares of Private Tempest capital stock.

The assumed options continue to be governed by the terms of the 2011 and 2017 Equity Incentive Plans (as discussed more in Note

9) under which the options were originally granted, with such options hence forth representing the right to purchase a number of shares of the Company’s common stock equal to 0.0322 multiplied by the number of shares of Private Tempest common stock previously represented by such options.

The merger was accounted for as a reverse recapitalization in accordance with U.S.

generally accepted accounting principles (“GAAP”).

Under this method of accounting, Private Tempest was be deemed to be the accounting acquirer for financial reporting purposes.

This determination was primarily based on the expectation that, immediately following the merger:

(i) Private Tempest stockholders would own a substantial majority of the voting rights;

(ii) Private Tempest would designate a substantial majority of the initial members of the board of directors of the combined company;

(iii) Private Tempest’s executive management team would become the management of the combined company;

and (iv) the combined company would be named Tempest Therapeutics, Inc.

Accordingly, for accounting purposes, the merger was treated as the equivalent of Tempest issuing stock to acquire the net assets of Millendo.

As a result of the merger, the net assets of Millendo were recorded at their acquisition-date fair value in the financial statements of Private Tempest and the reported operating results prior to the merger will be those of

Private Tempest.

Historical per share figures of Private Tempest have been retroactively restated based on the exchange ratio of 0.0322 .

Liquidity and Management Plans

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The Company has incurred operating losses since inception.

As of December 31, 2022, we had cash and cash equivalents of $ 31.2 million.

Our ability to fund continued development will require additional capital, and we intend to raise such capital through the issuance of additional debt or equity including in connection with potential merger opportunities, or through business development activities.

Our ability to continue as a going concern is dependent upon our ability to successfully accomplish these plans and secure sources of financing and ultimately attain profitable operations.

If we are unable to obtain adequate capital, we could be forced to cease operations.

On April 29, 2022, the Company completed a private investment in public equity (“PIPE”) financing from the sale of 3,149,912 shares of its common stock at a price per share of $ 2.36 and, and in lieu of shares of common stock, pre-funded warrants to purchase up to 3,206,020 shares of its common stock at a price per pre-funded warrant of $ 2.359 to EcoR1 Capital, LLC and Versant Venture Capital (the “PIPE Investors”).

As of December 31, 2023 , the Company had cash and cash equivalents of $ 39.2 million, which is sufficient to fund operations beyond 12 months from the issuance of the financial statements.

The Company’s ability to fund continued development will require additional capital, and Tempest intends to raise such capital through the issuance of additional debt or equity including in connection with potential merger opportunities, or through business development activities.

The Company’s ability to continue as a going concern is dependent upon its ability to successfully accomplish these plans and secure sources of financing and ultimately attain profitable operations.

If the Company are unable to obtain adequate capital, it could be forced to cease operations.

On July 23, 2021, the Company entered into a sales agreement with Jefferies LLC, pursuant to which the Company may sell, from time to time at its sole discretion through Jefferies, as its sales agent, shares of its common stock having, up to an aggregate sales price of $ 100.0 million of its common stock through Jefferies (the “ATM Program”).

Any shares of its common stock sold will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No.

The Company will pay Jefferies a commission up to 3.0 % of the gross sales proceeds of any shares of its common stock sold through Jefferies under the ATM Program and also has provided Jefferies with indemnification and contribution rights.

As of December 31, 2023 , the Company has sold an aggregate of 8,960,822 shares of its common stock for net proceeds of approximately $ 41.2 million, after deducting commissions and expenses pursuant to the ATM Program.

During the year ended December 31, 2023 , the Company has sold an aggregate of 8,260,479 shares of its common stock for net proceeds of approximately $ 35.6 million, after deducting commissions and expenses.

As of December 31, 2023 , approximately $ 57.6 million remained available under the ATM Program.

PIPE Financing

Net proceeds from the PIPE financings totaled approximately $ 14.5 million, after deducting offering expenses.

The Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the PIPE Investors pursuant to which the Company filed a registration statement with the SEC registering the resale of the 3,149,912 shares common stock and the 3,206,020 shares of common stock underlying the pre-funded warrants issued in the PIPE financing.

The Company entered into a registration rights agreement

with the PIPE Investors pursuant to which the Company filed a registration statement with the SEC registering the resale of the 3,149,912 shares common stock and the 3,206,020 shares of common stock underlying the pre-funded warrants issued in the PIPE financing.

As of December 31, 2023 , all pre-funded warrants had been exercised.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation —The accompanying Consolidated Financial Statements have been prepared in accordance with US generally accepted accounting principles ("GAAP") and necessarily include amounts based on estimates and assumptions by management.

Use of Estimates —The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to research and development accruals, recoverability of long-lived assets, right-of-use assets, lease obligations, stock-based compensation and income taxes uncertainties and valuation allowances.

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Actual results may differ from those estimates.

Segment Information —The Company operates and manages its business as one reportable and operating segment, which is the business of discovery and development of small molecule drugs to treat cancers.

All assets and operations are in the U.S.

The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

Risks and Uncertainties —The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on single-source vendors, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of the Company’s products under development, compliance with government regulations and the need to obtain additional financing to fund operations.

Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials and regulatory approval, prior to commercialization.

These efforts will require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting.

The Company’s product

candidates are still in development and, to date, none of the Company’s product candidates have been approved for sale and, therefore, the Company has not generated any revenue from product sales.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales.

The Company’s product candidates are still in development and, to date, none of the Company’s product candidates have been approved for sale and, therefore, the Company has not generated any revenue from product sales.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales.

The Company operates in an environment of rapid technological change and substantial competition from other pharmaceutical and biotechnology companies.

In addition, the Company is dependent upon the services of its employees, consultants and other third parties.

Concentration of Credit Risk —Financial instruments, which potentially subject the Company to concentration of risk, consist principally of cash and money market fund.

All of the Company’s cash and money market fund are deposited in accounts with a major financial institution in excess of federally insured limits.

Concentration of Credit Risk —Financial instruments, which potentially subject the Company to concentration of risk, consist principally of cash and money market fund.

All of the Company’s cash and money market fund are deposited in accounts with a major financial institution in excess of federally insured limits.

The Company is exposed to credit risk in the event of default by the financial institutions holding its cash and cash equivalents to the extent recorded in the balance sheets.

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The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

Cash and Cash Equivalents —The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisitions to be cash equivalents.

As of December 31, 2022 and 2021 , the Company’s cash and cash equivalents consisted of bank deposits and money market funds.

Leases —The Company determines if an arrangement is a lease at contract inception.

Cash and Cash Equivalents —The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisitions to be cash equivalents.

As of December 31, 2023 and 2022 , the Company’s cash and cash equivalents consisted of bank deposits and money market funds.

Leases —The Company determines if an arrangement is a lease at contract inception.

A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration.

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Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Property and Equipment —Property and equipment is recorded at cost and depreciated over the estimated useful lives of the related assets using the straight-line method.

Upon disposal of an asset, the related cost and accumulated depreciation are removed from the asset accounts and any resulting gain or loss is included in the consolidated statements of operations.

Repair and maintenance costs are expensed as incurred, whereas major improvements are capitalized as additions to property and equipment.

The estimated useful lives of the Company’s respective assets are as follows:

Computer equipment and software

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Shorter of the useful life of the asset or the life of the lease

Impairment of Long-Lived Assets —Long-lived assets are reviewed for impairment if events or circumstances indicate the carrying amount of these assets may not be recoverable.

If this review indicates that these assets will not be recoverable, based on the forecasted undiscounted future operating cash flows expected to result from the use of long-lived assets and their eventual disposition, the Company’s carrying value of the long-lived assets is reduced to fair value based on a discounted future cash flow approach or quoted market values.

Research and Development Expenses and Accrued Research and Development —Research and development expenses are charged to expense as incurred.

Impairment of Long-Lived Assets —Long-lived assets are reviewed for impairment if events or circumstances indicate the carrying amount of these assets may not be recoverable.

Research and Development Expenses and Accrued Research and Development —Research and development expenses are charged to expense as incurred.

Research and development expenses include certain payroll and personnel expenses including stock-based compensation, laboratory supplies, consulting costs, external contract research and development expenses and facility or lease expenses.

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Advance payments for goods or services for future research and development activities are deferred and expensed as the goods are delivered or the related services are performed.

In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period.

These estimates are based on communications with the third-party service providers, the Company’s estimates of accrued expenses and on information available at each balance sheet date.

These estimates are based on communications with the third-party service

providers, the Company’s estimates of accrued expenses and on information available at each balance sheet date.

If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly.

The estimates are trued up to reflect the best information available at the time of the financial statement issuance.

Although the Company does not expect its estimates to be materially different from amounts actually incurred, the Company’s estimate of the status and timing of services performed relative to the actual status and timing of services performed may vary.

Patent Costs —Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain.

These patent-related legal costs are reported as a component of general and administrative expenses.

General and Administrative Expenses —General and administrative costs are expensed as incurred and include employee-related expenses including salaries, benefits, travel and stock-based compensation for the Company’s personnel in executive, finance and accounting, and other administrative functions, as well as fees paid for legal, accounting and tax services, consulting fees and facilities costs not otherwise included in research and development expenses.

Legal costs include general corporate legal fees and patent costs.

Fair Value Measurements —Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

The carrying amounts of the Company’s financial instruments approximate fair value due to their short-term maturities.

Stock-Based Compensation Expense —The Company accounts for stock-based compensation by measuring and recognizing compensation expense for all share-based payments made to employees, directors and non-employees based on estimated grant-date fair values.

The Company uses the straight-line method to allocate compensation cost to reporting periods over each optionee’s requisite service period, which is generally the vesting period.

The carrying amounts of the Company’s financial instruments approximate fair value due to their short-term maturities.

The Company uses the straight-line method to allocate compensation cost to reporting periods over each optionee’s requisite service period, which is generally the vesting period.

The Company estimates the fair value of stock options to employees, directors and non-employees using the Black-Scholes option-valuation model.

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The group of representative companies have characteristics similar to the Company, including stage of product development and focus on the life science industry.

Company uses the simplified method to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

The Company uses the simplified method to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting tranche for awards with graded vesting.

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The Company accounts for forfeitures as they occur.

Net Loss per Share Attributable to Common Stockholders —The Company follows the two-class method when computing net loss per share as the Company has issued shares that meet the definition of participating securities.

The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings.

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For purpose of this calculation, outstanding stock options, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares.

Income Taxes —The Company accounts for income taxes using the asset and liability method.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.

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Interest and penalties related to unrecognized tax benefits are included within the provision for income tax.

MILLENDO MERGER

As described in Note 1, Private Tempest merged with the Company on June 25, 2021.

The merger was accounted for as a reverse recapitalization with Private Tempest as the accounting acquirer.

The primary pre-combination assets of Millendo were cash, cash equivalents and restricted cash.

Under reverse recapitalization accounting, the assets and liabilities of Millendo were recorded at their fair value which approximated book value due to the short-term nature of the instruments.

No goodwill or intangible assets were recognized.

Consequently, the Condensed Consolidated Financial Statements of Tempest reflect the operations of Millendo for accounting purposes together with a deemed issuance of shares, equivalent to the shares held by the former stockholders of the legal acquirer and a recapitalization of the equity of the accounting acquirer.

As part of the reverse recapitalization, the Company obtained approximately $ 17.0 million of cash, cash equivalents and restricted cash.

The Company also obtained prepaids and other assets of approximately $ 1.4 million and assumed payables and accruals of approximately $ 0.5 million.

The Company also acquired the operating lease right-of-use asset of $ 2.1 million and the related operating lease liability of $ 2.1 million.

All of the development programs and associated collaboration arrangements were terminated prior to the merger and were deemed to have no value at the transaction date and the Company has since wound down the legacy Millendo operations.

FAIR VALUE MEASUREMENTS

The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis (in thousands):

As of December 31, 2023

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Less accumulated depreciation

Property and equipment—net

Depreciation expense for the years ended December 31, 2023 and 2022 were $ 381 and $ 638 , respectively.

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COMMITMENTS AND CONTINGENCIES

Facilities Lease Agreements —In February 2019, the Company entered into a 5-year office lease agreement for a 9,780 square feet facility in South San Francisco, California.

The original lease term expires on February 29, 2024 .

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The amendment was not accounted for as a separate contract and the lease liability and the right-of-use asset were remeasured on the lease modification date.

As a result of the merger with Millendo, the Company assumed Millendo’s noncancelable operating leases for office space which have remaining lease terms of approximately 1.2 years.

In February 2019 and October 2018, Millendo entered into two noncancellable operating leases for office space in Ann Arbor, Michigan (“Ann Arbor Leases”), one that Millendo took possession of in April 2019 and the other that Millendo took possession of in July 2019, respectively.

One of its leases in Ann Arbor, Michigan expires in June 2024 and the other expires in March 2024.

In January 2022, the Company entered into a new 8-year office lease agreement for a 20,116 square feet facility in Brisbane, California ("Brisbane Lease").

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Rent expense was $ 2,738 and $ 1,445 for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2022, future minimum annual lease payments under the Company’s operating lease liabilities were as follows:

As of December 31, 2023, future minimum annual lease payments under the Company’s operating lease liabilities were as follows:

Total Commitment

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This amount is included in other noncurrent assets in the accompanying Consolidated Balance Sheets as of December 31, 2023.

Guarantees and Indemnifications —In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification.

The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future.

Guarantees and Indemnifications —In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification.

The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future.

To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations.

As of December 31, 2023 and 2022, the Company does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Legal Proceedings —Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

As a result of the merger with Millendo, the Company is party to various litigation matters given Millendo’s role as successor to OvaScience, Inc.

(“OvaScience”).

As a result of the merger with Millendo, the Company is party to various litigation matters given Millendo’s role as successor to OvaScience, Inc.

(“OvaScience”).

OvaScience merged with Millendo in 2018.

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On November 9, 2016, a purported shareholder derivative action was filed in Massachusetts State court (Cima v.

Dipp) against OvaScience and certain former officers and directors of OvaScience and OvaScience alleging breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets for purported actions related to OvaScience’s January 2015 follow-on public offering.

As of September 12, 2022, the parties have reached an agreement in principle and have executed a term sheet in connection with a settlement.

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On December 14, 2022, the court extended that order for 60 days to February 20, 2023.

The parties have now reached an agreement on all of the material settlement terms and informed the court of this in a joint status update and request for extension of the order until March 22, 2023.

On February 17, 2023, the court extended the order until March 22, 2023 and set a court appearance for March 23, 2023.

The parties are currently working on the settlement documentation.

Any final settlement is subject to Court approval.

On March 24, 2017, a purported shareholder class action lawsuit was filed in Massachusetts Federal court (Dahhan v.

OvaScience, Inc.) against OvaScience and certain former officers of OvaScience alleging violations of Sections 10(b) and 20(a) of the Exchange Act (the “Dahhan Action”).

On March 4, 2022, the parties filed a motion to preliminarily approve a settlement of the action.

The settlement amount of $ 15 million was funded entirely by insurance.

All defendants expressly deny liability.

On April 1, 2022, the Court preliminarily approved the settlement.

On December 20, 2022, the Court entered final approval of the settlement and dismissed the Dahhan Action with prejudice.

The settlement included a release of all claims against the defendants.

The settlement included a release of all claims against the defendants thus no liability and $ 15 million related to this

matter was recorded in our Condensed Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021, respectively.

On March 23, 2023, the court granted preliminary approval of the settlement and set a final fairness hearing for June 12, 2023.

By order dated June 12, 2023, the court granted final approval of the settlement.

On July 27, 2017, a purported shareholder derivative complaint was filed in Massachusetts Federal court (Chiu v.

Dipp) against OvaScience and certain former officers and directors of OvaScience alleging breach of fiduciary duties, unjust enrichment and violations of Section 14(a) of the Exchange Act.

related to OvaScience’s January 2015 follow-on public offering and other public statements concerning OvaScience’s AUGMENT treatment.

Following the Court’s dismissal of an amended complaint, the parties agreed that plaintiffs could file a second amended complaint and that the case would be stayed pending the resolution of the Dahhan Action.

related to OvaScience’s January 2015 follow-on public offering and other public statements concerning OvaScience’s AUGMENT treatment.

Following the court’s dismissal of an amended complaint, the parties agreed that plaintiffs could file a second amended complaint and that the case would be stayed pending the resolution of the Dahhan Action.

In May 2018, the court entered an order staying this case pending the resolution of the Dahhan Action.

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On February 14, 2023, the parties informed the court that, subject to court approval, they had reached an agreement to settle Chiu v.

Dipp as well Cima v.

The parties requested a 90-day stay in order for the parties to present the settlement to the state court in Cima v.

Dipp as well as Cima v.

The parties requested a 90-day stay in order to present the settlement to the state court in Cima v.

On February 16, 2023, the court granted the 90-day stay.

The parties are currently working on the settlement documentation.

Any final settlement is subject to Court approval.

On May 2, 2023, the court extended the stay through July 12, 2023.

After final approval of the Cima settlement, the parties filed a stipulation and proposed order to dismiss the Chiu Action with prejudice on June 27, 2023.

By order dated July 5, 2023, the court dismissed the Chiu Action with prejudice.

On January 15, 2021, the Company entered into a loan agreement with Oxford Finance LLC (the "Lender") to borrow a term loan amount of $ 35,000 to be funded in three tranches.

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Tranche B of $ 10,000 expired on March 31, 2022 .

Tranche C of $ 10,000 is available at the Lender’s option.

On December 23, 2022, the Company entered into a First Amendment to the loan agreement.

The amendment modified the agreement as follows:

(i) each of the Company and Millendo Therapeutics US, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Millendo”), were joined as co-borrowers under the Loan Agreement;

(i) each of the Company and Millendo, were joined as co-borrowers under the Loan Agreement;

(ii) the interest-only repayment period was extended through December 31, 2023 (which interest-only period may be further extended through June 30, 2024 under certain circumstances);

and (iii) a security interest in all of the assets of the Company, TempestTx and Millendo, including any intellectual property, was granted to the Lender.

and (iii) a security interest in all of the assets of the Company, TempestTx

and Millendo, including any intellectual property, was granted to the Lender.

In addition, the Lender permitted a one-time prepayment in the amount of $ 5.0 million, which the Company paid on December 23, 2022.

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Index Rate is the greater of (i) 1-Month CME Term SOFR or (ii) 0.05 %.

Monthly principal payments of $ 513 will begin on January 1, 2024.

In the fourth quarter of 2023, the Company achieved the circumstances necessary to extend the interest-only repayment period through June 30, 2024.

Monthly principal payments of $ 733 are required to begin on July 1, 2024.

Related to this borrowing, the Company recorded loan discounts totaling $ 898 and paid $ 95 of debt issuance costs.

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The carrying value of the loan approximates fair value (Level 2).

For the year ended December 31, 2022 and 2021, total interest expense was $ 1,618 and $ 1,282 , respectively.

For the years ended December 31, 2023 and 2022 , total interest expense was $ 1,449 and $ 1,618 , respectively.

STOCKHOLDERS' EQUITY

Convertible Preferred Stock

Prior to the merger with Millendo on June 25, 2021, Private Tempest had issued and outstanding convertible preferred stock.

The authorized, issued and outstanding shares of the convertible preferred stock and liquidation preferences of Private Tempest as of December 31, 2020 and June 24, 2021 were as follows (in thousands, except share and per share amounts):

Shares Authorized

Shares Issued and Outstanding

Per Share Liquidation Preference

Aggregate Liquidation Amount

Proceeds Net of Issuance Cost

Net Carrying Value

Upon completion of the merger on June 25, 2021, the Company issued an aggregate of approximately 5,365,899 shares of its common stock to Private Tempest stockholders, based on an exchange ratio of 0.0322 shares of the Company’s common stock for each share of Private Tempest common stock outstanding immediately prior to the merger, including those shares of common stock issued upon conversion of the Private Tempest preferred stock ( 3,692,912 common shares) and those shares of common stock issued with its pre-merger financing of $ 30.0 million ( 1,136,849 common shares).

On March 29, 2021, TempestTx, Inc.

(“Private Tempest”) entered into an Agreement and Plan of Merger (with Millendo Therapeutics, Inc.

upon completion of the merger on June 25, 2021, the Company issued an aggregate of approximately 5,365,899 shares of its common stock to Private Tempest stockholders, based on an exchange ratio of 0.0322 shares of the Company’s common stock for each share of Private Tempest common stock outstanding immediately prior to the merger, including those shares of common stock issued upon conversion of the Private Tempest preferred stock ( 3,692,912 common shares) and those shares of common stock issued with its pre-merger financing of $ 30.0 million ( 1,136,849 common shares).

As of December 31, 2023 and December 31, 2022, the Company was authorized to issue 100,000,000 shares of common stock and 5,000,000 shares of preferred stock, each with a par value of $ 0.001 per share.

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There were no shares subject to repurchase due to remaining vesting requirements.

Common stockholders are entitled to dividends as declared by the Board of Directors, subject to rights of holders of all classes of stock outstanding having priority rights as to dividends.

There was no preferred stock issued nor outstanding as of December 31, 2023 and December 31, 2022.

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The holders of each share of common stock are entitled to one vote.

Except for effecting or validating certain specific actions intended to protect the preferred stockholders, the holders of common stock vote together with preferred stockholders and have the right to elect one member of the Company’s Board of Directors.

On July 23, 2021, the Company entered into a sales agreement with Jefferies LLC, pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $ 100,000,000 of its common stock through Jefferies LLC (the "ATM Program").

Our ability to sell securities under the ATM program will be limited until we are no longer subject to the SEC’s “baby shelf”

On October 10, 2023, the Company’s Board of Directors adopted a limited duration stockholder rights plan (the “Rights Plan”), effective immediately, and declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of the common stock, par value $ 0.001 per share (the “Common Shares”), of the Company.

The dividend was effective as of October 23, 2023 (the “Record Date”) with respect to stockholders of record on that date.

The Rights will also attach to new Common Shares issued after the Record Date.

Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $ 0.001 per share, (the “Preferred Shares”), of the Company at a price of $ 25.00 per one one-thousandth of a Preferred Share, subject to adjustment.

The descriptions and terms of the Rights are set forth in a Rights Agreement, dated as of October 10, 2023 (the “Rights Agreement"), between the Company and Computershare Trust Company, NA.

The Rights will expire on October 10, 2024 , or, if the Company’s stockholders approve the Rights plan, on October 10, 2026 , unless the Rights are earlier redeemed or exchanged by the Company.

Our ability to sell securities under the ATM program will be limited until we are no longer subject to the SEC’s “baby shelf” limitations.

Pre-Funded Warrants

In April 2022, the Company completed a PIPE financing, which included the issuance of pre-funded warrants to purchase up to 3,206,020 shares of its common stock at a price per pre-funded warrant of $ 2.359 to the PIPE Investors.

The pre-funded warrants provide that the holder will not have the right to exercise any portion of its warrants if such holder, together with its affiliates, would beneficially own in excess of 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”);

provided, however, that the holder may increase or decrease the Beneficial Ownership Limitation by giving 61 days ’

notice to the Company, but not to any percentage in excess of 19.99 %.

As of December 31, 2023, all pre-funded warrants had been exercised.

STOCK-BASED COMPENSATION

In 2011, Private Tempest adopted the 2011 Equity Incentive Plan (the “2011 Plan), and in 2017, Private Tempest adopted the 2017 Equity Incentive Plan (the “2017 Plan”), and together with the 2011 Plan, “the Tempest Equity Plans”.

Upon adoption of the 2017 Plan, the 2011 Plan was terminated.

The Board of Millendo adopted the 2019 Equity Incentive Plan (the “2019 Plan”) on April 29, 2019, subject to approval by the Company’s stockholders, and became effective with such stockholder approval on June 11, 2019.

As a result of the merger, the Tempest Equity Plans were assumed by the Company.

The number of shares of the Company's common stock reserved for issuance under the 2019 Plan will automatically increase on January 1st of each year, for a period of 10 years, from January 1, 2020 continuing through January 1, 2029, by 4 % of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board of Directors.

On June 17, 2022, the Company’s stockholders approved the Amended and Restated 2019 Equity Incentive Plan (the “A&R 2019 Plan”), which amends and restates the 2019 Plan and will be a successor to, and replacement of, the 2019 Plan.

The A&R 2019 Plan had been adopted by the Company’s Board of Directors and one of the material changes was to increase the number of shares available for issuance by 1,132,252 .

The A&R 2019 Plan still includes the annual evergreen provision of automatically increasing on January 1st of each year the number of option shares available for issuance by 4 % of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board of Directors.

On January 1, 2023, the common stock reserved for issuance was increased by 420,742 shares.

Both the 2017 Plan and the A&R 2019 Plan allow the Company to grant stock awards to employees, directors and consultants of the Company, including incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards and other stock awards.

All stock awards granted under the Tempest Prior Plans will remain subject to the terms of the applicable prior plan.

As a result of the merger with Millendo, the Tempest Prior Plans were assumed by the Company.

On April 29, 2019, the Board of Millendo adopted the 2019 Equity Incentive Plan (the “2019 Plan”), subject to approval by the Company’s stockholders, and became effective with such stockholder approval on June 11, 2019.

On June 17, 2022, the Company’s stockholders approved the Amended and Restated 2019 Equity Incentive Plan (the “A&R 2019 Plan”), which amended and restated the 2019 Plan and will be a successor to, and replacement of, the 2019 Plan.

The Board of Tempest adopted the Amended and Restated 2023 Equity Incentive Plan (the “2023 Plan”) on April 30, 2023, subject to approval by the Company’s stockholders.

On June 15, 2023, the Company’s stockholders approved the 2023 Plan, which amended and restated the A&R 2019 Plan and will be a successor to, and replacement of, the A&R 2019 Plan.

The number of shares of the Company's common stock reserved for issuance under the 2023 Plan will automatically increase on January 1st of each year, for a period of 10 years, from January 1, 2024 continuing through January 1, 2033, by 4 % of the total number of shares of the Company's common stock outstanding on December 31 st of the preceding calendar year, or a lesser number of shares as may be determined by the Board of Directors.

Accordingly, on January 1, 2024, the common stock reserved for issuance was increased by 881,810 shares.

As of December 31, 2023 , there were 233,708 shares available for future grant under the 2023 Plan.

The 2023 Plan allows the Company to grant stock awards to employees, directors and consultants of the Company, including incentive stock options (“ISOs”), non-qualified stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards and other stock awards.

The Board of Tempest adopted the 2023 Inducement Plan (“2023 Inducement Plan”) on June 21, 2023, pursuant to which the Company reserved 1,150,000 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

The 2023 Inducement Plan was approved by the Company’s Board of Directors without stockholder approval in accordance with such rule.

As of December 31, 2023 , there were 1,142,350 shares available for future grant under the 2023 Inducement Plan.

The Company measures employee and non-employee stock-based awards at grant date fair value and records compensation expense on a straight-line basis over the vesting period of the award.

As of December 31, 2022 , a total of 1,039,010 shares are available for future grant under the 2017 Plan and A&R 2019 Plan.

Employee Stock Ownership Plan

The Board of Millendo adopted the 2019 Employee Stock Purchase Plan on April 29, 2019, which became effective upon such stockholder approval on June 11, 2019.

On June 17, 2022, the Company’s stockholders approved the Amended and Restated 2019 Employee Stock Purchase Plan (the “2019 ESPP”).

The Board of Millendo adopted the 2019 Employee Stock Purchase Plan on April 29, 2019, which became effective upon stockholder approval on June 11, 2019.

On June 17, 2022, the Company’s stockholders approved the Amended and Restated

2019 Employee Stock Purchase Plan (the “2019 ESPP”).

The 2019 ESPP enables employees to purchase shares of the Company's common stock through offerings of rights to purchase the Company's common stock to all eligible employees.

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As of December 31, 2023 , 232,136 shares of common stock remained available for future issuance under the 2019 ESPP.

As of December 31, 2022 , 6,120 shares of common stock had been issued under the 2019 ESPP during the 12 months ended December 31, 2022.

During the year ended December 31, 2023 , 62,739 shares of common stock had been issued under the 2019 ESPP.

Stock Options

Options to purchase the Company’s common stock may be granted at a price not less than the fair market value in the case of both NSOs and ISOs, except for an options holder who owns more than 10% of the voting power of all classes of stock of the Company, in which case the exercise price shall be no less than 110 % of the fair market value per share on the grant date.

Stock options granted under the Plans generally vest over four years and expire no later than ten ( 10 ) years from the date of grant.

Vested options can be exercised at any time.

Prior to the merger, the grant date fair market value of the shares of common stock underlying stock options has historically been determined by the Company’s Board of Directors.

Up until the merger, there had been no public market for the Company’s common stock, and therefore the Board of Directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair market value, which included valuations performed by an independent third-party, important developments in the Company’s operations, sales of convertible preferred stock, actual operating results, financial performance, the conditions in the life sciences industry, the economy in general, the stock price performance and volatility of comparable public companies, and the lack of liquidity of the Company’s common stock.

Prior to the merger with Millendo, the grant date fair market value of the shares of common stock underlying stock options was determined by the Company’s Board of Directors.

The following shows the stock option activities for the years ended December 31, 2023 and 2022:

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Weighted-Average Exercise Price

Balance—December 31, 2020

Assumed in reverse recapitalization

Balance—December 31, 2021

Cancelled and forfeited

Balance—December 31, 2021

Balance—December 31, 2022

Cancelled and forfeited

Balance—December 31, 2022

Balance—December 31, 2023

The following table summarizes information about stock options outstanding at December 31, 2023:

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106 % - 111 %

109 % - 112 %

Risk-free interest rate

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1.5 % - 3.9 %

Expected Term —The expected term of options granted represents the period of time that the options are expected to be outstanding.

Due to the lack of historical exercise history, the expected term of the Company’s employee stock options has been determined utilizing the simplified method for awards that qualify as plain-vanilla options.

Expected Volatility —The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have any trading history for the Company’s common stock.

The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company’s common stock becomes available.

Risk-Free Interest Rate —The risk-free interest rate assumption is based on the U.S.

Treasury instruments whose term was consistent with the expected term of the Company’s stock options.

Dividends —The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future.

Expected Term —The expected term of options granted represents the period of time that the options are expected to be outstanding.

The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company’s common stock becomes available.

Risk-Free Interest Rate —The risk-free interest rate assumption is based on the U.S.

Treasury instruments whose term was consistent with the expected term of the Company’s stock options.

Dividends —The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future.

Consequently, an expected dividend yield of zero was used.

Restricted Stock Units

The Company granted 125,000 restricted stock units ("RSUs") with a fair value of $ 0.60 per share during the year ended December 31, 2023 .

The RSUs vest on February 25, 2024 .

Stock-Based Compensation Expense

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021:

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of operations for the years ended December 31, 2023 and 2022:

Research and development

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At December 31, 2023 and 2022 the Company concluded it was not more likely than not that it would realize its deferred tax assets, and therefore has recorded a full valuation allowance.

For the years ended December 31, 2022 and 2021, income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pre-tax loss as follows:

For the years ended December 31, 2023 and 2022, income tax provision (benefit) related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 21% to pre-tax loss as follows (in thousands):

federal provision (benefit)

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Permanent differences

Significant components of the Company’s deferred tax assets at December 31, 2022 and 2022 are shown below.

Significant components of the Company’s deferred tax assets at December 31, 2023 and 2022 are shown below.

Deferred tax assets:

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Net deferred tax assets

The deferred tax assets and valuation allowance increased by $ 8.6 million from December 31, 2021 to December 31, 2022 due primarily to the generation of net operating losses and research and development credits.

The valuation allowance increased by $ 9.1 million from December 31, 2022 to December 31, 2023 due primarily to the generation of net operating losses and research and development credits.

As of December 31, 2023, the Company has net operating loss carryforwards for federal and state income tax purposes of approximately $ 482.1 million and $ 457.8 million, respectively.

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$ 2.9 million of the state credits can be carried forward indefinitely.

Utilization of some of the federal and state net operating loss and credit carryforwards may be subject to annual limitations due to the “change in ownership”

provisions of the Internal Revenue Code of 1986 and similar state provisions.

Utilization of some of the federal and state net operating loss and credit carryforwards may be subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions.

The annual limitations may result in the expiration of net operating losses and credits before utilization.

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Beginning balance

Gross increase - tax positions in prior periods

Gross decrease - tax positions in prior periods

Gross increase - tax position in current period

Lapses in statutes of limitations

Ending balance

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The Company does not anticipate the uncertain tax positions will materially change in the next 12 months.

The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense.

The Company had no accrual for interest and penalties on the accompanying consolidated balance sheets as of December 31, 2022 and 2021, respectively, and has not recognized penalties and interest in the accompanying statements of operations for the years ended December 31, 2022 and 2021, respectively.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

The Company had no accrual for interest and penalties on the accompanying consolidated balance sheets as of December 31, 2023 and 2022, respectively, and has not recognized penalties and/or interest in the accompanying statements of operations for the years ended December 31, 2023 and 2022, respectively.

The Company is subject to taxation in the United States, California, Massachusetts, and Michigan.

The Company’s tax years from inception are subject to examination by the IRS and state tax authorities due to the carryforward of unutilized net operating losses and research and development credits.

RETIREMENT PLAN

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During the year ended December 31, 2023 , the Company contributed $ 147 to the 401(k) Plan.

There was no contribution from the Company for the year ended December 31, 2021.

During the year ended December 31, 2022 , the Company contributed $ 126 to the 401(k) Plan.

NET LOSS PER SHARE

The following table sets forth the computation of the Company’s basic and diluted net loss per share for the years ended December 31, 2022 and 2021 (in thousands, except share and per share amounts):

The following table sets forth the computation of the Company’s basic and diluted net loss per share for the years ended December 31, 2023 and 2022 (in thousands, except share and per share amounts):

Weighted-average common shares outstanding

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Weighted-average shares used in computing basic and diluted net loss per share

Net loss per share attributable to common stockholders—basic and diluted

As of December 31, 2022 and 2021 , the Company’s potentially dilutive securities included unvested stock warrants and stock options, which have been excluded from the computation of diluted net loss per share attributable to common stockholders as the effect would be anti-dilutive.

Net loss per share attributable to common stockholders—basic and diluted

As of December 31, 2023 and 2022 , the Company’s potentially dilutive securities included unvested stock warrants and stock options, which have been excluded from the computation of diluted net loss per share attributable to common stockholders as the effect would be anti-dilutive.

The issuance of pre-funded warrants have been included in the computation of basic and diluted net loss per share attributable to common stockholders.

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Options to purchase common stock

Restricted stock units

Common stock warrants

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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 8. Financial Statements and Supplementary Data