Tempest Therapeutics lands up to $50M equity facility from Lincoln Park
What's the deal? Tempest Therapeutics (NASDAQ: TPST) has signed a purchase agreement with Lincoln Park Capital FundDealroom has a profile for this one. Try Dealroom →, securing a committed equity facility of up to $50 million to fund operations and clinical development. The initial amount available is $25 million, which automatically increases by another $25 million once fully used.
How it works? The facility runs for up to 24 months, subject to conditions including an effective resale registration statement. Tempest has the right, but not the obligation, to sell shares to Lincoln Park at its discretion — controlling both the timing and size of any sales.
The fine print: Regular purchases are priced at 97% of the lower of the lowest sale price on the purchase date or the average of the three lowest closing prices over the prior 10 business days. Lincoln Park's stake is capped at 4.99% of outstanding shares.
As consideration, Tempest issued 560,356 shares on signing and will issue 350,223 more once the initial $25 million is fully drawn. The company must file a resale registration statement with the Securities and Exchange Commission within 10 days of the agreement.
Why it matters: The structure gives Tempest a flexible, opportunistic source of capital tied to its cash needs, without forcing a full drawdown. It reduces near-term liquidity pressure while extending the company's funding runway.
What could go wrong? Selling shares over time introduces significant dilution for existing shareholders. Issuance is capped at 19.99% of outstanding shares (3,195,881) unless stockholders approve more or the average sale price tops $1.3854.
The signal: At $50 million, the facility sits in the smaller tier of financings — a modest raise reflecting how cash-strapped clinical-stage biotechs increasingly lean on flexible equity lines to stretch runway rather than commit to a single dilutive offering.
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