Tempest Therapeutics Inc

This management proposal requests shareholder approval under Nasdaq Listing Rules 5635(c) and 5635(d) to permit the issuance of up to 1,851,854 shares of common stock upon exercise of Series A and Series B PIPE Warrants issued in connection with the Company’s March 20, 2026 Private Placement. Management is seeking approval because Nasdaq rules require stockholder consent when equity (or securities exercisable for equity) is issued to insiders at prices that may be below Market Value or when an issuance could equal 20% or more of outstanding shares; Factor, an investor affiliated with the CEO, received warrants in the Private Placement, which is a specific reason Nasdaq review is implicated. The proposal would make Series A warrants (exercisable for five years) and Series B warrants (exercisable for 24 months) exercisable and allow the holders to convert warrants into common shares at $2.16 per share (subject to customary adjustments and cashless exercise provisions), subject to beneficial ownership limits (4.99% default or 9.99% if elected). The board frames approval as necessary to meet contractual obligations under the securities purchase agreement and to preserve expected financing proceeds and liquidity that support operations; management emphasizes that without approval the investors would be restricted from exercising warrants and the Company would be required to reconvene special meetings every 90 days until approval or warrant termination, increasing administrative costs. Approving the proposal will also remove exercise restrictions on investors and allow resale of underlying shares only once a resale registration is effective (or an exemption applies), though issuance could increase dilution and downward pressure on market price. The board’s recommendation balances regulatory compliance and financing stability against dilution risks, arguing that investor ability to exercise is material to the Company’s access to capital and continuity of operations. Related-party considerations are present because the CEO is the majority equityholder and Chairman of Factor, which acquired warrants; the filing discloses that Factor will not vote shares it holds in favor of this matter if those shares are held as of the record date. If stockholders deny approval, management warns of potential harm to financing prospects and increased costs from repeated solicitations, while approval may facilitate near-term liquidity but at the cost of share dilution and potential market impact.

This management proposal asks shareholders to approve, under Nasdaq Listing Rule 5635(d), the issuance of up to 2,344,828 shares of common stock upon exercise of Inducement Warrants granted as part of an arrangement dated May 28, 2026 that permitted an investor to exercise certain outstanding November 2025 warrants at a reduced price. Management seeks shareholder approval because the transaction could represent 20% or more of outstanding shares or voting power and the effective price was below the Nasdaq “Minimum Price,” triggering the stockholder approval requirement. The Inducement Warrants carry a $1.73 exercise price, expire two years after issuance, include customary beneficial ownership limits (4.99% default or 9.99% election), and may be cashlessly exercised; placement agent warrants with similar terms but a $2.1625 exercise price were also issued. Management frames approval as necessary to honor the Inducement Letter, preserve anticipated cash proceeds from the exercise, and maintain access to financing and liquidity that support operations; it warns that without approval the investor would be unable to exercise and the Company would need to call additional special meetings every 90 days, increasing costs. Approving the proposal will permit exercise and potential resale (once a resale registration is effective or an exemption applies), but also increases dilution and could depress the trading price. The board’s recommendation emphasizes contractual and liquidity considerations over dilution concerns, asserting that approval is in the Company’s best interest to support working capital and future financing prospects. From a governance perspective, the inducement reflects a negotiated discount to incent immediate funding, and investors’ holdings and placement agent warrants should be considered for their potential market impact and alignment with management.