Equity Lines Explained Through Tempest Therapeutics’ August 2026 Purchase Agreement

The timeline in filings

The 8-K said the S-1 would be filed within 10 days of signing. It was filed eight days later.

Number 1: What is actually registered

The resale prospectus covers 8,910,579 shares:

• 560,356 initial commitment shares, issued at signing for no cash
• 350,223 additional commitment shares, to be issued only after Tempest has received the full first $25 million
• 8,000,000 shares that Tempest may sell to Lincoln Park for cash

So the registered pool for cash sales is 8,000,000 shares, not $50 million. The prospectus does the conversion at the August 20, 2026 closing price of $1.02:

8,000,000 × $1.02 = $8,160,000

That is 16.3% of the $50 million headline. Raising the full $50 million at that price would take about 50,000,000 ÷ $1.02 = 49.0 million shares, which is about 2.96 times the 16,539,767 shares outstanding on August 19, 2026. Selling beyond 8,000,000 shares would require registering more shares, and possibly stockholder approval (see Number 2).

The $50 million is also staged: a $25 million “initial available amount,” which increases by another $25 million automatically only after the first $25 million has been received.

Number 2: The 19.99% exchange cap

Under Nasdaq rules, as the 8-K and prospectus describe them, Tempest cannot issue more than 3,195,881 shares to Lincoln Park under the agreement, which is 19.99% of the shares outstanding immediately before signing, unless either:

• stockholders approve issuing more, or
• the average price of all shares sold to Lincoln Park under the agreement is at least $1.3854. That figure is the lower of the prior-day official close and the five-day average official close before signing, adjusted for the commitment shares.

At the $1.02 reference price, 3,195,881 shares × $1.02 = $3.26 million. If the commitment shares count toward the cap, the room for cash sales is smaller. The prospectus also says Tempest cannot direct a purchase that would push Lincoln Park above 4.99% beneficial ownership.

So, at the reference price, there are three layers: $50 million headline, $8.16 million registered, and about $3.26 million under the exchange cap without approval or a higher average price. The FennEdge lesson Capacity limits explains why the narrowest gate is the one that matters.

Number 3: The commitment fee, paid in shares

Lincoln Park was paid for its commitment in stock, not cash:

• 560,356 shares at signing, plus 350,223 later, for 910,579 total
• 910,579 ÷ 16,539,767 = 5.5% of the August 19 share count (which already includes the first 560,356)
• At the $1.02 reference price, the initial commitment shares would be worth 560,356 × $1.02 = $571,563. This is an illustration using a price the prospectus cites, not the value the company booked.

Commitment shares are registered for resale like the purchase shares. Tempest receives no cash for them.

How the price is set

From the prospectus:

Regular purchases. On any business day when the closing price is at or above a $0.15 floor, Tempest can require Lincoln Park to buy up to 60,000 shares. The limit rises to 70,000 if the close is at least $1.00, and to 80,000 if the close is at least $2.00. Lincoln Park’s commitment in any single regular purchase is capped at $500,000. The price is:

Accelerated and additional accelerated purchases. If Tempest makes a maximum-size regular purchase, it can also require extra purchases of up to the lesser of 30% of the day’s volume (over a measurement period) or 300% of the regular purchase. The price is:

A worked example with filing numbers. If both reference prices in the regular-purchase formula equal $1.02, the purchase price would be 0.97 × $1.02 = $0.9894. With a close of at least $1.00, the 70,000-share tier applies, so one regular purchase would be 70,000 × $0.9894 = $69,258. Using only regular purchases of 70,000 shares, the 8,000,000 registered purchase shares would take about 115 purchase days (8,000,000 ÷ 70,000 = 114.3). Accelerated purchases can move faster when volume allows. Actual prices will differ; this only shows how the formula behaves.

Two features matter to anyone watching the tape. The “lowest sale price” and “three lowest closes” inputs mean the formula reaches back to recent lows. And the prospectus says there is no upper limit on the price Lincoln Park pays, while Lincoln Park agreed not to short sell or hedge into a net short position during the agreement.

What else is in the share-count picture

The equity line is one layer. As of August 19, 2026, the prospectus lists:

• 16,539,767 shares outstanding, of which 8,502,834 were held by affiliates (51.4%), leaving 8,036,933 held by non-affiliates
• 11,064,204 shares underlying warrants at a weighted-average exercise price of $12.09
• 799,902 shares underlying options at a weighted-average exercise price of $36.81

The prospectus states that if all registered shares were issued, they would be about 33% of shares outstanding and about 50% of non-affiliate shares. Checking the first figure: (8,000,000 + 350,223) ÷ (16,539,767 + 8,350,223) = 8,350,223 ÷ 24,889,990 = 33.5%.

After the equity line, Tempest raised money another way. A September 15, 2026 8-K disclosed a private placement of pre-funded warrants for 3,105,591 shares, with 3,105,591 Series C and 3,105,591 Series D warrants, at a combined price of $0.804, for about $2.5 million gross. A resale prospectus for up to 9,534,164 shares from that deal (424B3 filed October 2, 2026) cited a September 24 closing price of $0.85. That price is below the $1.00 threshold for the 70,000-share regular-purchase tier and below the $1.3854 exchange-cap price.

What the selling stockholder table adds

The resale prospectus also includes a selling stockholder table, which is easy to skip and worth reading. As of August 19, 2026, it shows Lincoln Park owning 560,356 shares (3.4%), which are exactly the initial commitment shares. It shows 8,910,579 shares that may be offered, and zero shares owned after the offering, on the assumption that everything registered is resold.

The footnotes explain two points that headlines skip. First, the 8,000,000 purchase shares and the 350,223 additional commitment shares are excluded from Lincoln Park’s beneficial ownership because the company, not Lincoln Park, decides whether they are ever issued. Second, the company says it would have to register more shares before selling above 8,000,000 if it wanted the full $50 million. In other words, the table describes a pipeline the company controls, not shares already in the market.

Where draws will show up

Equity line sales usually do not get their own 8-K. In the filings we reviewed, the places to look are:

• Form 10-Q / 10-K: subsequent-events notes and equity footnotes often state shares sold under the purchase agreement and proceeds. The quarter ended September 30, 2026 is the first one in which draws could appear.
• 10-Q / 10-K cover pages: the latest share count with its date
• Prospectus supplements to the resale 424B3, if the company files them
• Proxy statements asking stockholders to approve issuance above the 19.99% cap
• New resale registrations if the company wants to sell more than the 8,000,000 registered shares

Checklist for the next equity line you see

1. Headline commitment, and whether it is staged
2. Shares registered for cash purchases, separate from commitment shares
3. Reference price in the prospectus, and registered shares × that price
4. Exchange cap share count and the price that lifts it
5. Beneficial ownership limit (here 4.99%)
6. Pricing formula: discount, lookback window, VWAP or closing price, and floor
7. Daily limits per purchase type
8. Commitment shares: count, timing, and percent of outstanding
9. Restrictions on other financings (here, no other equity line or ATM except an agented ATM)
10. Other layers: warrants, options, and any later financings

This article is for information and education. It is not investment, legal, or tax advice, and it does not recommend any security or trade.

Related reading

To keep checking related concepts, read ATM offerings, Warrant inducements: the Decoy Therapeutics case, Offerings, dilution and reverse splits; the FennEdge dilution course; and the trading glossary.

Sources

• Tempest Therapeutics, Form 8-K, purchase agreement (filed Aug 13, 2026)
• Tempest Therapeutics, Form S-1 (filed Aug 21, 2026)
• Tempest Therapeutics, Form 424B3 resale prospectus, No. 333-298498 (dated Aug 31, 2026)
• Tempest Therapeutics, Form 8-K, private placement (filed Sept 15, 2026)
• Tempest Therapeutics, Form 424B3 resale prospectus, No. 333-299142 (filed Oct 2, 2026)
• SEC EDGAR, Tempest Therapeutics filing index (checked Oct 5, 2026)