Tempest Therapeutics Inc. entered into a definitive agreement and plan of merger to acquire Millendo Therapeutics, Inc. (NasdaqCM:MLND) in a reverse merger transaction on March 29, 2021. The purchase price for the transaction is paid in an all-stock transaction. Subject to the terms and conditions of the merger agreement, at the closing of the Merger, (a) each then outstanding share of Tempest common stock will be converted into the right to receive a number of shares of Millendo common stock calculated in accordance with the merger agreement; and (b) each then outstanding Tempest stock option and warrant to purchase Tempest common stock will be assumed by Millendo, subject to adjustment as set forth in the Merger Agreement. Under the terms of the Merger Agreement, the Millendo board of directors may accelerate the vesting of any Millendo stock options that are outstanding as of immediately prior to the closing of the merger. In connection with the Merger, Millendo will seek the approval of its stockholders to (a) issue the shares of Millendo common stock issuable in connection with the Merger under the rules of The Nasdaq Stock Market LLC and (b) amend its certificate of incorporation to effect a reverse split of Millendo common stock at a ratio of between 1:10 and 1:15, as determined by a committee of the Millendo board of directors prior to the closing of the merger. Assuming the financing transaction described below results in gross proceeds of approximately $30 million. If the merger is completed, the business of Tempest will continue as the business of the combined organization. Under the exchange ratio formula in the merger agreement, upon the closing of the Merger, on a pro forma basis and based upon the number of shares of Millendo common stock expected to be issued in the merger, pre-merger Millendo shareholders will own approximately 18.5% of the combined company and pre-merger Tempest stockholders will own approximately 81.5% of the combined company. The combined company is expected to operate under the name Tempest Therapeutics, Inc. and trade on the Nasdaq Capital Market under the ticker symbol TPST and will be headquartered in South San Francisco, California. The merger agreement contains certain termination rights of each of Millendo and Tempest, including, subject to compliance with the applicable terms of the Merger Agreement, the right of each party to terminate the Merger Agreement to enter into a definitive agreement for a superior proposal. As of June 11, 2021, Millendo board of directors received and reviewed an analysis prepared by Millendo management estimating that, upon a liquidation of Millendo, Millendo stockholders would receive approximately $0.81 per share. Upon termination of the Merger Agreement under specified circumstances, Millendo may be required to pay Tempest a termination fee of $1.4 million and Tempest may be required to pay Millendo a termination fee of $2.8 million.

At the effective time of the merger, the Board of Directors of Millendo is expected to consist of seven members, six of whom will be designated by Tempest and one of whom will be designated by Millendo. Stephen Brady and Tom Dubensky, Ph.D. will serve as Chief Executive Officer and President, respectively, of the combined company. Six Directors designated by merger partner and reasonably acceptable to Millendo Therapeutics, at least three out of six of whom qualify as an “independent director” under Nasdaq listing standards and the applicable rules of the SEC as of the effective time and one Director, designated by Millendo Therapeutics and reasonably acceptable to merger partner, who qualifies, and is designated, as an Independent Designee. In connection with the plan, Millendo's Board determined to reduce Millendo workforce by up to 85%, with the majority of the reduction in personnel expected to be completed by April 15, 2021. The rest of the Tempest team will continue in their current positions.

Consummation of the Merger is subject to certain closing conditions, including, among other things, approval by Millendo stockholders of the Millendo voting proposals, approval by the Tempest stockholders of the adoption of the merger agreement, Nasdaq's approval of the listing of the shares of Millendo common stock to be issued in connection with the merger, the effectiveness of the registration statement with the U.S. Securities and Exchange Commission to register the shares of Millendo common stock to be issued in connection with the merger, and the determination of Millendo's net cash in accordance with the merger agreement, governmental approvals, Millendo Therapeutics net cash shall have been finally determined, third party consents, Millendo Therapeutics shall have received copies of the resignations, effective as of the effective time, of each director of merger partner and its subsidiaries, the number of dissenting shares shall not exceed 5% of the number of outstanding shares of merger partner common stock as of the effective time, each of the funding agreements shall be in full force and effect and the financing shall have been completed in accordance with the terms thereof and merger partner shall have received the proceeds therefrom, termination of investor agreements, officers' certificate. Each party's obligation to consummate the merger is also subject to other specified customary conditions, including the representations and warranties of the other party being true and correct as of the date of the merger agreement and as of the closing date of the merger, generally subject to an overall material adverse effect qualification, and the performance in all material respects by the other party of its obligations under the merger agreement required to be performed on or prior to the date of the closing of the Merger. Millendo's obligation to consummate the merger also is subject to the completion of at least $25 million of the financing transaction described below. As of May 11, 2021, the registration statement was declared effective. Millendo shareholder will hold a special meeting on June 22, 2021 to approve the transaction. The acquisition has been unanimously approved by the Boards of Directors of both Millendo and Tempest. As of June 22, 2021. the stockholders of Millendo Therapeutics approved the transaction. The merger is expected to close in the first half of 2021. As of June 22, 2021, the closing of the merger is anticipated to take place on or around June 25, 2021. The net proceeds of the merger and financing are expected to fund the further development of Tempest's three oncology programs and operate the company into early 2023.

SVB Leerink LLC is serving as the exclusive financial advisor and Stuart M. Falber and Joseph B. Conahan of Wilmer Cutler Pickering Hale and Dorr LLP is serving as legal counsel to Millendo. Piper Sandler & Co. is serving as financial advisor and Asher Rubin, Frank Rahmani, Istvan Hajdu, Matthew Johnson, Rachel Kleinberg, Jim Ducayet, Torrey Cope and Rob Carlson of Sidley Austin LLP is serving as legal counsel to Tempest. SVB Leerink LLC also provided fairness opinion to Millendo Therapeutics. Millendo will retain Broadridge Financial Solutions, Inc. (NYSE:BR) to assist it in soliciting proxies for a fee of $35,000. Morrow & Co., LLC acted as the information agent to Millendo and will receive a fee of approximately $0.02 million for its services. Computershare Trust Company, N.A. is acting as transfer agent for Millendo common stock. Millendo will pay SVB Leerink LLC an aggregate fee of $2 million, $0.5 million of which became payable upon the rendering by SVB Leerink of its opinion. Steven Bryan and Jon Kellner of Wilson Sonsini Goodrich & Rosati, P.C. acted as legal advisor to Millendo Therapeutics, Inc. WSGR acted as legal advisor to Tempest Therapeutics Inc.