UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

_____________________________

(Mark One)

☒
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~

2022

☐
o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-37524

_____________________________

vTv Therapeutics Inc.

(Exact name of registrant as specified in its charter)

_____________________________

(336) 841-0300

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

_____________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.01 per share	VTVT	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐o No ☒


Class of Stock	Shares Outstanding as of ~~November 1, 2017~~		August 15, 2022
Class A common stock, par value $0.01 per share	81,483,600	~~9,693,254~~
Class B common stock, par value $0.01 per share	23,093,860	~~23,119,246~~

Table of Contents

vTv THERAPEUTICS INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED ~~September~~JUNE 30, ~~2017~~

2022

	PAGE NUMBER
			PAGE NUMBER

PART I – FINANCIAL INFORMATION

Item 1.		Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2022, (Unaudited) and December 31, ~~2016~~2021		4

		Unaudited Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~2021		5

		Unaudited Condensed Consolidated Statement of Changes in Redeemable Noncontrolling Interest and Stockholders’ Deficit for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2022, and 2021		6

		Unaudited Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~2021		7 8

		Notes to Unaudited Consolidated Financial Statements		8 9

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		18 25

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		27 34

Item 4.		Controls and Procedures		28 35

PART II – OTHER INFORMATION

Item 1.		Legal Proceedings		28 35

Item 1A.		Risk Factors		28 35

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		30 35

Item 3.		Defaults Upon Senior Securities		30 36

Item 4.		Mine Safety Disclosures		30 36

Item 5.		Other Information		30 36

Item 6.		Exhibits		31 36

		Signatures		32 37

Table of Contents

PART I – ~~FINANCI~~ALFINANCIAL INFORMATION

The financial statements and other disclosures contained in this report include those of vTv Therapeutics Inc. (“we”, the “Company” or the “Registrant”), which is the registrant, and those of vTv Therapeutics LLC (“vTv LLC”), which is the principal operating subsidiary of the Registrant. Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q to the “Company”, “we”, “us” and “our” refer to vTv Therapeutics Inc. and its consolidated subsidiaries.

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vTv Therapeutics Inc.

Condensed Consolidated Balance Sheets

(in thousands, except number of shares and per share data)

	September 30,			December 31,
	2017			2016				June 30, 2022		December 31, 2021
	(Unaudited)							(Unaudited)
Assets							Assets
Current assets:							Current assets:
Cash and cash equivalents	$	20,488		$	51,505		Cash and cash equivalents	$	17,863	$	13,415
Restricted cash		281			—
Accounts receivable							Accounts receivable	77		57
Promissory note receivable							Promissory note receivable	11,941		—
Prepaid expenses and other current assets		725			612		Prepaid expenses and other current assets	643		2,049
Current deposits							Current deposits	85		100
Total current assets		21,494			52,117		Total current assets	30,609		15,621
Property and equipment, net		310			444		Property and equipment, net	254		278
Other long-term assets		2,251			1,934
Operating lease right-of-use assets							Operating lease right-of-use assets	354		402
Long-term investments							Long-term investments	5,772		9,173
Total assets	$	24,055		$	54,495		Total assets	$	36,989	$	25,474
Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Deficit							Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Deficit
Current liabilities:							Current liabilities:
Accounts payable and accrued expenses	$	10,120		$	11,413		Accounts payable and accrued expenses	$	9,600	$	8,023
Deferred revenue		—			21
Current portion of operating lease liabilities							Current portion of operating lease liabilities	199		184
Current portion of contract liabilities							Current portion of contract liabilities	26		35
Current portion of notes payable		2,083			—		Current portion of notes payable	—		256
Total current liabilities		12,203			11,434		Total current liabilities	9,825		8,498
Notes payable		17,228			11,058
Other liabilities		285			433
Contract liabilities, net of current portion							Contract liabilities, net of current portion	18,669		—
Operating lease liabilities, net of current portion							Operating lease liabilities, net of current portion	388		492
Warrant liability, related party							Warrant liability, related party	717		1,262
Total liabilities		29,716			22,925		Total liabilities	29,599		10,252
Commitments and contingencies							Commitments and contingencies	0		0
Redeemable noncontrolling interest		130,642			122,515		Redeemable noncontrolling interest	15,916		24,962
Stockholders’ deficit:							Stockholders’ deficit:
Class A Common Stock, $0.01 par value; 100,000,000 shares authorized, 9,693,254 shares outstanding as of September 30, 2017 and December 31, 2016		97			97
Class B Common Stock, $0.01 par value; 100,000,000 shares authorized, 23,119,246 shares outstanding as of September 30, 2017 and December 31, 2016		232			232
Class A common stock, $0.01 par value; 200,000,000 shares authorized, 77,329,051 and 66,942,777 shares outstanding as of June 30, 2022, and December 31, 2021							Class A common stock, $0.01 par value; 200,000,000 shares authorized, 77,329,051 and 66,942,777 shares outstanding as of June 30, 2022, and December 31, 2021	773		669
Class B common stock, $0.01 par value; 100,000,000 shares authorized, and 23,093,860 outstanding as of June 30, 2022, and December 31, 2021							Class B common stock, $0.01 par value; 100,000,000 shares authorized, and 23,093,860 outstanding as of June 30, 2022, and December 31, 2021	232		232
Additional paid-in capital		127,036			124,212		Additional paid-in capital	243,772		238,193
Accumulated deficit		(263,668	)		(215,486	)	Accumulated deficit	(253,303)		(248,834)
Total stockholders’ deficit attributable to vTv Therapeutics Inc.		(136,303	)		(90,945	)	Total stockholders’ deficit attributable to vTv Therapeutics Inc.	(8,526)		(9,740)
Total liabilities, redeemable noncontrolling interest and stockholders’ deficit	$	24,055		$	54,495		Total liabilities, redeemable noncontrolling interest and stockholders’ deficit	$	36,989	$	25,474

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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vTv Therapeutics Inc.

Condensed Consolidated Statements of Operations - Unaudited

(in thousands, except number of shares and per share data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,							Three Months Ended June 30,				Six Months Ended June 30,
	2017			2016			2017			2016				2022		2021		2022		2021
Revenue	$	15		$	38		$	58		$	596		Revenue	$	9	$	9	$	2,009	$	996
Operating expenses:													Operating expenses:
Research and development		8,989			10,636			29,572			33,854		Research and development	2,205		2,437		5,338		5,540
Research and development - related party		—			529			—			795
General and administrative		2,567			2,401			8,396			7,654		General and administrative	1,831		2,242		7,179		4,406
Total operating expenses		11,556			13,566			37,968			42,303		Total operating expenses	4,036		4,679		12,517		9,946
Operating loss		(11,541	)		(13,528	)		(37,910	)		(41,707	)	Operating loss	(4,027)		(4,670)		(10,508)		(8,950)
Other income (loss), net		—			2			—			2
Other income (expense)													Other income (expense)	(167)		2,898		(3,401)		2,898
Other income (expense) – related party													Other income (expense) – related party	53		931		545		(717)
Interest income		35			21			95			66		Interest income	50		—		50		1
Interest expense		(849	)		—			(2,240	)		(3	)	Interest expense	—		—		(1)		—
Loss before income taxes and noncontrolling interest		(12,355	)		(13,505	)		(40,055	)		(41,642	)	Loss before income taxes and noncontrolling interest	(4,091)		(841)		(13,315)		(6,768)
Income tax provision		—			—			—			—		Income tax provision	—		—		200		15
Net loss before noncontrolling interest		(12,355	)		(13,505	)		(40,055	)		(41,642	)	Net loss before noncontrolling interest	(4,091)		(841)		(13,515)		(6,783)
Less: net loss attributable to noncontrolling interest		(8,705	)		(9,512	)		(28,222	)		(29,340	)	Less: net loss attributable to noncontrolling interest	(940)		(233)		(3,357)		(1,934)
Net loss attributable to vTv Therapeutics Inc.	$	(3,650	)	$	(3,993	)	$	(11,833	)	$	(12,302	)	Net loss attributable to vTv Therapeutics Inc.	$	(3,151)	$	(608)	$	(10,158)	$	(4,849)
Net loss per share of vTv Therapeutics Inc. Class A Common Stock, basic and diluted	$	(0.38	)	$	(0.41	)	$	(1.22	)	$	(1.30	)
Weighted-average number of vTv Therapeutics Inc. Class A Common Stock, basic and diluted		9,693,254			9,691,362			9,693,254			9,495,926
Net loss attributable to vTv Therapeutics Inc. common shareholders													Net loss attributable to vTv Therapeutics Inc. common shareholders	$	(3,151)	$	(608)	$	(10,158)	$	(4,849)
Net loss per share of vTv Therapeutics Inc. Class A common stock, basic and diluted													Net loss per share of vTv Therapeutics Inc. Class A common stock, basic and diluted	$	(0.04)	$	(0.01)	$	(0.15)	$	(0.08)
Weighted average number of vTv Therapeutics Inc. Class A common stock, basic and diluted													Weighted average number of vTv Therapeutics Inc. Class A common stock, basic and diluted	70,366,823		58,615,137		68,664,259		57,549,755

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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vTv Therapeutics Inc.

Condensed Consolidated Statement of Changes in Redeemable Noncontrolling Interest and Stockholders’ Deficit - Unaudited

(in thousands, except number of shares)

Class A Common Stock

Class B Common Stock

Redeemable
Noncontrolling
Interest

Shares

Amount

Shares

Amount

Additional
Paid-in
Capital

Accumulated Deficit

Total Stockholders' Deficit

Balances at December 31, 2016

122,515

9,693,254

97

23,119,246

232

124,212

(215,486
)

(90,945
)
Net loss

(28,222
)

—

—

—

—

—

(11,833
)

(11,833
)
Share-based compensation

—

—

—

—

—

2,657

—

2,657

Issuance of warrants to purchase
Class A Common Stock

—

—

—

—

—

167

—

167

Change in redemption value of
noncontrolling interest

36,349

—

—

—

—

—

(36,349
)

(36,349
)
Balances at September 30, 2017
$
130,642

9,693,254

$
97

23,119,246

$
232

$
127,036

$
(263,668
)

$
(136,303
)


For the three months ended June 30, 2022
			Class A Common Stock			Class B Common Stock
	Redeemable Noncontrolling Interest		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Deficit
Balances at March 31, 2022	$	14,367	66,942,777	$	669	23,093,860	$	232	$	238,669	$	(247,663)	$	(8,093)
Net loss	(940)		—	—		—	—		—		(3,151)		(3,151)
Share-based compensation	—		—	—		—	—		167		—		167
Issuance of Class A common stock to collaboration partner	—		10,386,274	104		—	—		4,936		—		5,040
Change in redemption value of noncontrolling interest	2,489		—	—		—	—		—		(2,489)		(2,489)
Balances at June 30, 2022	$	15,916	77,329,051	$	773	23,093,860	$	232	$	243,772	$	(253,303)	$	(8,526)


For the three months ended June 30, 2021
			Class A Common Stock			Class B Common Stock
	Redeemable Noncontrolling Interest		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Deficit
Balances at March 31, 2021	$	62,647	57,571,904	$	576	23,093,860	$	232	$	217,647	$	(274,730)	$	(56,275)
Net loss	(233)		—	—		—	—		—		(608)		(608)
Share-based compensation	—		—	—		—	—		452		—		452
Issuance of Class A common stock under ATM offering	—		2,180,337	22		—	—		5,313		—		5,335
Issuance of Class A common stock under LPC Agreement	—		441,726	4		—	—		1,045		—		1,049
Change in redemption value of noncontrolling interest	(2,224)		—	—		—	—		—		2,224		2,224
Balances at June 30, 2021	$	60,190	60,193,967	$	602	23,093,860	$	232	$	224,457	$	(273,114)	$	(47,823)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

��

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vTv Therapeutics Inc.

Condensed Consolidated ~~Statements~~Statement of ~~Cash Flows~~Changes in Redeemable Noncontrolling Interest and Stockholders’ Deficit - Unaudited

(in ~~thousands)~~

thousands, except number of shares)

Nine Months Ended September 30,

2017

2016

Cash flows from operating activities:

Net loss before noncontrolling interest

$
(40,055
)

$
(41,642
)
Adjustments to reconcile net loss before noncontrolling interest to net cash used in operating
activities:

Gain on disposal of property and equipment, net

(11
)

(2
)
Depreciation expense

152

216

Share-based compensation expense

2,657

1,988

Amortization of debt discount

753

—

Changes in assets and liabilities:

Accounts receivable

—

69

Change in restricted cash

(281
)

—

Prepaid expenses and other assets

(113
)

56

Employee loans receivable – related party

—

46

Other long-term assets

(317
)

(268
)
Accounts payable and accrued expenses

(1,293
)

3,417

Accounts payable and accrued expenses – related party

—

(474
)
Deferred revenue

(21
)

(198
)
Other liabilities

19

9

Net cash used in operating activities

(38,510
)

(36,783
)
Cash flows from investing activities:

Proceeds from sale of assets

32

4

Purchases of property and equipment

(39
)

(87
)
Net cash used in investing activities

(7
)

(83
)
Cash flows from financing activities:

Proceeds from debt issuance

7,500

—

Debt issuance costs

—

(50
)
Repayment of long-term obligations

—

(29
)
Net cash provided by (used in) financing activities

7,500

(79
)
Net decrease in cash and cash equivalents

(31,017
)

(36,945
)
Cash and equivalents, beginning of period

51,505

88,003

Cash and equivalents, end of period

$
20,488

$
51,058

Non-cash activities:

Change in redemption value of noncontrolling interest

$
36,349

$
26,120

Exchange of vTv Therapeutics Inc. Class B Common Stock and vTv Therapeutics, LLC
member units for vTv Therapeutics Inc. Class A Common Stock

$
—

$
3,164


For the six months ended June 30, 2022
			Class A Common Stock			Class B Common Stock
	Redeemable Noncontrolling Interest		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Deficit
Balances at December 31, 2021	$	24,962	66,942,777	$	669	23,093,860	$	232	$	238,193	$	(248,834)	$	(9,740)
Net loss	(3,357)		—	—		—	—		—		(10,158)		(10,158)
Share-based compensation	—		—	—		—	—		643		—		643
Issuance of Class A common stock to collaboration partner	—		10,386,274	104		—	—		4,936		—		5,040
Change in redemption value of noncontrolling interest	(5,689)		—	—		—	—		—		5,689		5,689
Balances at June 30, 2022	$	15,916	77,329,051	$	773	23,093,860	$	232	$	243,772	$	(253,303)	$	(8,526)


For the six months ended June 30, 2021
			Class A Common Stock			Class B Common Stock
	Redeemable Noncontrolling Interest		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Deficit
Balances at December 31, 2020	$	83,895	54,050,710	$	541	23,094,221	$	232	$	209,161	$	(290,036)	$	(80,102)
Net loss	(1,934)		—	—		—	—		—		(4,849)		(4,849)
Share-based compensation	—		—	—		—	—		888		—		888
Issuance of Class A common stock under ATM offering	—		2,180,337	22		—	—		5,313		—		5,335
Exchange of Class B common stock for Class A common stock	—		361	—		(361)	—		—		—		—
Exercise of stock options	—		20,833	—		—	—		47		—		47
Issuance of Class A common stock under LPC Agreement	—		3,941,726	39		—	—		9,048		—		9,087
Change in redemption value of noncontrolling interest	(21,771)		—	—		—	—		—		21,771		21,771
Balances at June 30, 2021	$	60,190	60,193,967	$	602	23,093,860	$	232	$	224,457	$	(273,114)	$	(47,823)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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vTv Therapeutics Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net loss before noncontrolling interest	$	(13,515)	$	(6,783)
Adjustments to reconcile net loss before noncontrolling interest to net cash used in operating activities:
Depreciation expense	45		45
Non-cash interest income	(50)		—
Share-based compensation expense	643		888
Change in fair value of investments	3,401		(2,897)
Change in fair value of warrants, related party	(545)		717
Changes in assets and liabilities:
Accounts receivable	(20)		158
Prepaid expenses and other assets	1,421		873

Accounts payable and accrued expenses	1,536		(1,302)
Contract liabilities	6,769		(996)
Net cash used in operating activities	(315)		(9,297)
Cash flows from investing activities:
Purchases of property and equipment	(21)		—
Net cash used in investing activities	(21)		—
Cash flows from financing activities:
Proceeds from sale of Class A common stock to collaboration partner, net of offering costs	5,040		—
Proceeds from issuance of Class A common stock, net of offering costs	—		14,422
Proceeds from exercise of stock options	—		47
Repayment of notes payable	(256)		(84)
Net cash provided by financing activities	4,784		14,385
Net increase in cash, cash equivalents and restricted cash and cash equivalents	4,448		5,088
Total cash, cash equivalents and restricted cash and cash equivalents, beginning of period	13,415		5,747
Total cash, cash equivalents and restricted cash and cash equivalents, end of period	$	17,863	$	10,835

Non-cash activities:
Change in redemption value of noncontrolling interest	$	(5,689)	$	(21,771)
Notes receivable recorded at fair value from collaboration partner	$	11,891	$	—

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

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vTv Therapeutics Inc.

Notes to Condensed Consolidated Financial Statements – Unaudited

(dollar amounts are in thousands, unless otherwise noted)

~~Note 1:~~

~~Description of Business, Basis of Presentation and Going Concern~~

Note 1: Description of Business,

Basis of Presentation and Going Concern

Description of Business

vTv Therapeutics Inc. (the “Company,” the “Registrant,” “we” or “us”) was incorporated in the state of Delaware in April 2015. The Company ~~was formed~~is a clinical stage pharmaceutical company focused on treating metabolic diseases to ~~discover and develop orally administered small molecule drug candidates to fill significant unmet medical needs.~~

minimize their long-term complications through end-organ protection.

Principles of Consolidation

vTv Therapeutics Inc. is a holding company, and its principal asset is a controlling equity interest in vTv Therapeutics LLC (“vTv LLC”), the Company’s principal operating subsidiary, which is a ~~clinical-stage~~clinical stage biopharmaceutical company engaged in the discovery and development of orally administered small molecule drug candidates to fill significant unmet medical needs.

The Company has determined that vTv LLC is a variable-interest entity (“VIE”) for accounting purposes and that vTv Therapeutics Inc. is the primary beneficiary of vTv LLC because (through its managing member interest in vTv LLC and the fact that the senior management of vTv Therapeutics Inc. is also the senior management of vTv LLC) it has the power and benefits to direct all of the activities of vTv LLC, which include those that most significantly impact vTv LLC’s economic performance. vTv Therapeutics Inc. has therefore consolidated vTv LLC’s results pursuant to Accounting Standards Codification Topic 810, “Consolidation” in its Condensed Consolidated Financial Statements. As of ~~September~~June 30, ~~2017,~~2022, various holders own non-voting interests in vTv LLC, representing a ~~70.5%~~23.0% economic interest in vTv LLC, effectively restricting vTv Therapeutics Inc.’s interest to ~~29.5%~~77.0% of vTv LLC’s economic results, subject to increase in the future, should vTv Therapeutics Inc. purchase additional non-voting common units (“vTv Units”) of vTv LLC, or should the holders of vTv Units decide to exchange such units (together with shares of Class B ~~Common Stock)~~common stock) for shares of Class A ~~Common Stock~~common stock (or cash) pursuant to the Exchange Agreement (as defined in Note 7)9). vTv Therapeutics Inc. has provided financial and other support to vTv LLC in the form of its purchase of vTv Units with the net proceeds of the Company’s initial public offering (“IPO”) in 2015, its registered direct offering in March 2019, and its agreeing to be a co-borrower under the Venture Loan and Security Agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation and Silicon Valley Bank (together, the “Lenders”) which was entered into in 2016. vTv Therapeutics Inc. entered into the letter agreements with MacAndrews and Forbes Group LLC (“M&F Group”), a related party and an affiliate of MacAndrews & Forbes Incorporated (together with its affiliates “MacAndrews”). in December 2017, July 2018, December 2018, March 2019, September 2019, and December 2019 (the “Letter Agreements”). In addition, vTv Therapeutics Inc. also entered into the Controlled Equity OfferingSM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor Fitzgerald”) (the “ATM Offering”), the purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) (the “LPC Purchase Agreement”), and the common stock purchase agreement with G42 Investments AI Holding RSC Ltd (“G42 Investments”) (the “G42 Purchase Agreement”). vTv Therapeutics Inc. will not be required to provide financial or other support for vTv ~~LLC outside of its obligations pertaining to the Loan Agreement as a co-borrower.~~ LLC. However, vTv Therapeutics Inc. will control its business and other activities through its managing member interest in vTv LLC, and its management is the management of vTv LLC. ~~The creditors of vTv LLC do not have any recourse to the general credit of vTv Therapeutics Inc. except as allowed under the provisions of the Loan Agreement.~~ Nevertheless, because vTv Therapeutics Inc. will have no material assets other than its interests in vTv LLC, any financial difficulties at vTv LLC could result in vTv Therapeutics Inc. recognizing a loss.

Going Concern and Liquidity

To date, the Company has not generated any product revenue and has not achieved profitable operations. The continuing development of our drug candidates will require additional financing. From its inception through ~~September~~June 30, ~~2017,~~2022, the Company has funded its operations primarily through a combination of private placements of common and preferred equity, research collaboration agreements, upfront and milestone payments for license agreements, debt ~~financing~~and equity financings and the completion of its IPO in August 2015. As of ~~September~~June 30, ~~2017,~~2022, the Company ~~has~~had an accumulated deficit of ~~$263.7~~$253.3 million and has generated net losses in each year of its existence. ~~Management estimates that~~

As of June 30, 2022, the Company’s liquidity sources included cash and cash equivalents ~~balance~~of $17.9 million. To meet our future funding requirements into the third quarter of 2023, including funding the on-going and future clinical trials of TTP399, we are evaluating several financing strategies, including direct equity investments and the potential licensing and monetization of other Company programs such as HPP737. The Company also has a promissory note of ~~September 30, 2017~~$12.5 million under

Table of ~~$20.5 million will allow~~Contents

the G42 Purchase Agreement payable to the Company on or before May 31, 2023 (see Note 9) and on July 25, 2022, announced a $10.0 million investment by CinPax, LLC (see Note 14).

The Company may also use its remaining availability of $37.3 million under our Sales Agreement with Cantor Fitzgerald pursuant to ~~continue its operations~~which the Company may offer and ~~activities for a period~~sell, from time to time shares of ~~less than twelve months from~~ the ~~issuance~~Company’s Class A common stock (the “ATM Offering”) and the ability to sell an additional 9,437,376 shares of ~~these Condensed Consolidated Financial Statements.~~

~~Based~~Class A common stock under the LPC Purchase Agreement based on the ~~Company’s current operating plan, management believes that~~remaining number of registered shares. However, the ~~current cash and cash equivalents will allow~~ability to use these sources of capital is dependent on a number of factors, including the ~~Company to meet its liquidity requirements through the receipt~~prevailing market price of top-line results for Subpart A of its STEADFAST Study in early 2018. In addition to available cash and cash equivalents, the Company is seeking possible partnering opportunities for our GKA, GLP-1r and other drug candidates which it believes may provide additional cash for use in its operations and the ~~continuation~~volume of trading in the ~~clinical trials~~Company’s Class A common stock. See Note 9 for its drug candidates. The Company is also pursuing other sources of interim financing to provide flexibility to its operating plan. The timing and occurrence of such interim financing is not yet known. further details.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

If we are unable to raise additional capital as and when needed, or upon acceptable terms, such failure would have a significant negative impact on our financial condition.

The Company’s financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Condensed Consolidated Financial Statements do not include adjustments to reflect the possible future effects on the recoverability and classification of recorded assets or the amounts of liabilities that might be necessary should the Company be unable to continue as a going concern.

~~Note 2:~~

Note 2: Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying Condensed Consolidated Balance Sheet as of ~~September~~June 30, ~~2017,~~2022, Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016,~~2021, Condensed Consolidated Statement of Changes in Redeemable Noncontrolling Interest and Stockholders’ Deficit for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2022, and 2021 and Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~2021 are unaudited. These unaudited financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the audited financial statements and the accompanying notes for the year ended December 31, ~~2016~~2021, contained in the Company’s Annual Report on Form 10-K. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of ~~September~~June 30, ~~2017,~~2022, the results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~2021 and cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016.~~2021. The December 31, ~~2016~~2021 Condensed Consolidated Balance Sheet included herein was derived from the audited financial statements but does not include all disclosures or notes required by GAAP for complete financial statements.

The financial data and other information disclosed in these notes to the financial statements related to the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~2021 are unaudited. Interim results are not necessarily indicative of results for an entire year.

The Company does not have any components of other comprehensive income recorded within its Condensed Consolidated Financial Statements, and, therefore, does not separately present a statement of comprehensive income in its Condensed Consolidated Financial Statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

On an ongoing basis, the Company evaluates its estimates, including those related to the grant date fair value of equity awards, the fair value of warrants to purchase shares of its Class A common stock, the fair value of the Class B ~~Common Stock,~~common stock, the useful lives of property and equipment, the fair value of derivative liabilities, the fair value of the promissory note receivable, and the fair value of the Company’s debt, among others. The Company bases its estimates on historical

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experience and on various other assumptions that it believes to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash on deposit with ~~multiple~~one financial ~~institutions.~~institution. The balances of these cash accounts frequently exceed insured limits.

~~There were no accounts receivable balances outstanding as of September 30, 2017 and December 31, 2016.~~

One ~~and two customers~~customer represented 100% of the revenue earned during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016,~~2021, respectively.

Cash and Cash Equivalents

The Company considers any highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

~~Restricted Cash and Cash Equivalents~~

Restricted cash and cash equivalents as of September 30, 2017 reflect cash and cash equivalents that have been received through a research, development and commercialization agreement with JDRF International (“JDRF”) (the “JDRF Agreement”) but which have not yet been utilized to fund the development activities required under the JDRF Agreement.

~~Collaboration Agreements~~

~~Calithera~~

~~The majority of the Company’s collaboration revenue recognized~~

Investments

Investments in ~~the three and nine months ended September 30, 2016 is related to an exclusive global license agreement (the “License Agreement”),~~entities in which the Company ~~entered into~~has no control or significant influence, is not the primary beneficiary, and have a readily determinable fair value are classified as equity investments with readily determinable fair value. The investments are measured at fair value based on ~~March 6, 2015 with Calithera Biosciences, Inc. (“Calithera”)~~a quoted market price per unit in active markets multiplied by the number of units held without consideration of transaction costs (Level 1). Gains and losses are recorded in other income (expense), ~~granting Calithera exclusive world-wide~~net on the Consolidated Statements of Operations.

Equity investments without readily determinable fair value include ownership rights ~~to research, develop and commercialize the Company’s portfolio of hexokinase II inhibitors. Under the terms of the License Agreement, Calithera paid~~that do not provide the Company ~~an initial license fee of $0.6 million~~with control or significant influence and ~~potential development and regulatory milestone payments totaling up~~these investments do not have readily determinable fair values. The Company has elected to ~~$30.5 million~~measure its equity investments without readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the first licensed product, an additional $77.0 million in potential sales-based milestones, as well as royalty payments, based on tiered sales of the first commercialized licensed product. In addition, the Company recognized a total of $0.3 million for the three and nine months ended September 30, 2016 for the costs associated with up to four full-time employees for the Company to develop additional hexokinase inhibitors. If Calithera develops additional licensed products, after achieving regulatory approval of the first licensed product, Calithera would owe additional regulatory milestone payments and additional royalty payments based on sales of such additional licensed products.

~~JDRF~~

~~In August 2017, the Company entered into the JDRF Agreement to support the funding of a Phase 2 Proof of Concept study to explore the effects of~~ ~~TTP399~~, an orally administered, liver-selective glucokinase activator (“GKA”), in type 1 diabetics. According to the terms of the JDRF Agreement, JDRF will provide research funding of up to $3.0 million based on the achievement of research and development milestones, with the total funding not to exceed approximately one-half of the total cost of the project. Additionally, the Company has the obligation to make certain milestone payments to JDRF upon the commercialization, licensing, saleidentical or ~~transfer of~~ ~~TTP399~~ ~~as a treatment for Type 1 Diabetes.~~

Payments that the Company receives from JDRF under this agreement will be recorded as restricted cash and current liabilities, and recognized as an offset to research and development expense, based on the progress of the project, and only to the extent that the restricted cash is utilized to fund such development activities. As of September 30, 2017, the Company had received funding under this agreement of $0.3 million, and research and development costs were offset by an insignificant amount. As of September 30, 2017, the Company has recognized restricted cash of $0.3 million related to this agreement.

similar investment.

Revenue Recognition

The Company uses the revenue recognition guidance established by ASC Topic ~~605, “Revenue Recognition.”~~606, Revenue From Contracts With Customers (“ASC 606”). When an agreement falls under the scope of other standards, such as ASC Topic 808, Collaborative Arrangements (“ASC 808”), the Company will apply the recognition, measurement, presentation, and disclosure guidance in ASC 606 to the performance obligations in the agreements if those performance obligations are with a customer. Revenue recognized by analogizing to ASC 606, is recorded as collaboration revenue on the statements of operations.

The majority of the Company’s revenue results from its license and collaboration agreements associated with the development of investigational drug products. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. For each contract meeting these criteria, the Company identifies the performance obligations included within the contract. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company then recognizes revenue ~~when: 1) persuasive evidence of an arrangement exists; 2)~~under each contract as the ~~service has been provided to~~related performance obligations are satisfied.

The transaction price under the ~~customer; 3) collection of the fee~~contract is reasonably assured; and 4) the amount of the fee to be paid by the customer is fixed or determinable. In determining the accounting for collaboration and alliance agreements, the Company follows the provisions of ASC Topic 605, Subtopic 25, “Multiple-Element Arrangements” (“ASC 605-25”) and ASC 808 (“Collaborative Arrangements”). ASC 605-25 provides guidance on whether an arrangement that involves multiple revenue-generating activities or deliverables should be divided into separate units of accounting for revenue recognition purposes and, if division is required, how the arrangement consideration should be allocated among the separate units of accounting. If a deliverable has value on a stand-alone basis, the Company treats the deliverable as a separate unit of accounting. If the arrangement constitutes separate units of accounting according to the separation criteria of ASC 605-25, the consideration received is allocated among the separate units of accounting and the applicable revenue recognition criteria is applied to each unit. The Company determines how to allocate amounts received under agreements among the separate unitsdetermined based on the ~~respective~~value of the consideration expected to be received in exchange for the transferred assets or services. Development, regulatory and sales milestones included in the Company’s collaboration agreements are considered to be variable consideration. The amount of variable consideration expected to be received is included in the transaction price when it becomes probable that the milestone will be met. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the Company’s best estimate of the standalone selling price of each ~~unit. If~~distinct good or service in the ~~arrangement constitutes a single unit of accounting,~~contract. The primary method used to estimate standalone selling price is the revenue recognition policy must be determined for the entire arrangement and the consideration received is recognized over the period of inception through the date the last deliverable within the single unit of accounting is expected ~~to be delivered.~~

cost-plus margin approach.

Collaboration research and development revenue is earned and recognized as research is performed and related expenses are incurred. Non-refundable upfront fees are recorded as deferred revenue and recognized into revenue as license fees and milestones from collaborations on a straight-line basis over the estimated period of the Company’s substantive performance obligations. If the Company does not have substantive performance obligations, it recognizes non-refundable upfront fees into revenue ratably over the period during which the product deliverable is provided to the customer.

Revenue for non-refundable payments based on the achievement of milestone events under collaborative arrangements is recognized in accordance with ASC Topic 605, Subtopic 28, “Milestone Method” (“ASC 605-28”). Milestone events under the Company’s collaboration agreements may include research, development, regulatory, commercialization, and sales events. Under ASC 605-28, a milestone payment is recognized as revenue when the applicable event is achieved if the event meets the definition of a milestone and the milestone is determined to be substantive. ASC 605-28 defines a milestone event as an event having all of the following characteristics: (1) substantive uncertainty regarding achievement of the milestone event exists at the inception of the arrangement; (2) the event can only be achieved based, in whole or in part, on either the Company’s performance or a specific outcome resulting from the Company’s performance; and (3) if achieved, the event will result in additional payment due to the Company. The Company also treats events that can only be achieved based, in whole or in part, on either a third party’s performance or a specific outcome resulting from a third party’s performance as milestone events if the criteria of ASC 605-28 are otherwise satisfied.

Research and development costs that are reimbursable under collaboration agreements are recorded in accordance with ASC Topic 605, Subtopic 45, “Principal-Agent Considerations.” Amounts reimbursed under a cost-sharing arrangement are reflected as reductions of research and development expense.

Research and Development

Major components of research and development costs include cash and share-based compensation, ~~depreciation expense on research and development property and equipment,~~ costs of preclinical studies, clinical trials and related clinical manufacturing, costs of drug development, costs of materials and supplies, ~~facilities costs, overhead costs,~~ regulatory and compliance costs, ~~and~~ fees paid to consultants and other entities that conduct certain research and development activities on the Company’s ~~behalf.~~behalf, facilities costs, and overhead costs. Research and development costs are expensed as incurred.

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The Company records accruals based on estimates of the services received, efforts expended, and amounts owed pursuant to contracts with numerous contract research organizations. In the normal course of business, the Company contracts with third parties to perform various clinical study activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variation from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events and the completion of portions of the clinical study or similar conditions. The objective of the Company’s accrual policy is to match the recording of expenses in its financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical studies are recognized based on the Company’s estimate of the degree of completion of the event or events specified in the specific clinical study.

The Company records nonrefundable advance payments it makes for future research and development activities as prepaid expenses. Prepaid expenses are recognized as expense in the Condensed Consolidated Statements of Operations as the Company receives the related goods or services.

~~Share-Based Compensation~~

~~Compensation expense for share-based compensation awards is based on the fair value of the award at the date of grant,~~

Research and compensation expense is recognized for those awards earned over the service period. The grant date fair value of stock option awards is estimated using the Black-Scholes option pricing formula. Due to the lack of sufficient historical trading information with respect to its own shares, the Company estimates expected volatility based on a portfolio of selected stocks of companies believed to have market and economic characteristics similar to its own. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of restricted stock unit (“RSU”) grants are based on the market value of our Class A Common Stock on the date of grant. The Company also estimates the number of share-based awardsdevelopment costs that are ~~expected to be forfeited based on historical employee turnover rates.~~

reimbursed under a cost-sharing arrangement are reflected as a reduction of research and development expense.

Recently Issued Accounting Pronouncements

Fair Value Measurements:In ~~May 2014,~~June 2022, the Financial Accounting Standards Board ~~(“FASB”)~~(FASB) issued Accounting Standards Update ~~(“ASU”)~~(ASU) No. ~~2014-09, “Revenue From Contracts With Customers”,~~2022-03 “Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” These amendments clarify that ~~outlines~~ a ~~single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific~~

~~guidance. The ASU is based~~contractual restriction on the ~~core principle that~~sale of an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoptionequity security is not considered part of the ~~new standard.~~ ~~In addition,~~unit of account of the equity security and, therefore, is not considered in ~~March, April, and May 2016, the FASB issued final amendments to clarify the implementation~~measuring fair value. This guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property, and narrow-scope improvements and practical expedients, respectively. ~~This ASU~~ is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. The Company plans to adopt this guidance using the modified retrospective transition method. To date, the Company has not generated any revenue from drug sales and its ability to recognize revenue from its collaboration and licensing agreements is contingent upon its ability to enter into such agreements in the future or the clinical success and subsequent approval by the United States Food and Drug Administration of investigational drug products subject to its current agreements. As such, the Company will continue to evaluate the effect this standard will have on the Company’s Condensed Consolidated Financial Statements based on its potential future revenue sources.

In February 2016, the FASB issued ASU No. 2016-02, “Lease (Topic 842)” (“ASU 2016-02”), which increases transparency and comparability among companies accounting for lease transactions. The most significant change of this update will require the recognition by a lessee of lease assets and liabilities on its balance sheet for operating lease arrangements with lease terms greater than 12 months. This update will require a modified retrospective application which includes a number of optional practical expedients related to the identification and classification of leases commenced before the effective date. This ASU is effectivepublic business entities for fiscal years, ~~and~~including interim periods within those fiscal years, beginning after December ~~18, 2018.~~15, 2023. Early adoption is permitted. The Company has assessed ASU 2022-03 and early adopted the guidance during the second quarter of 2022. The adoption ~~of this guidance will result in the recognition of additional assets and liabilities related to the Company’s operating leases within its Condensed Consolidated Balance Sheets.~~

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this guidance in the first quarter of fiscal 2017 on a prospective basis and will continue to estimate forfeitures of outstanding awards throughout the requisite service period. The adoption of this guidance did not ~~have a material impact on the Company’s Condensed Consolidated Financial Statements.~~

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU2016-18”), which clarifies the classification and presentation of changes in restricted cash on the statement of cash flows. The update requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents. This ASU is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. The Company’s adoption of this guidance will change the presentation of restricted cash and restricted cash equivalents within its Condensed Consolidated Statements of Cash Flows, but is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 107-09”), which clarifies the changes to terms or conditions of a share-based payment award that require an entity to apply modification accounting. ASU 2017-09 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. Early application is permitted and prospective application is required. The Company does not expect that the adoption of this guidance will have a material impact on the Company's Condensed Consolidated Financial ~~Statements.~~

Statements.

Note 3: Collaboration Agreements

G42 Purchase Agreement and Cogna Collaborative and License Agreement

The Company and G42 Investments AI Holding RSC Ltd, a private limited company (“G42 Investments”), entered into a Common Stock Purchase Agreement (the “G42 Purchase Agreement”), pursuant to which the Company sold to G42 Investments 10,386,274 shares of the Company’s Class A common stock, par value $0.01 per share (the “G42 Common Stock) at a price per share of approximately $2.41, for an aggregate purchase price of $25.0 million, which was paid (i) $12.5 million in cash at the closing and (ii) $12.5 million in the form of a promissory note of G42 Investments to be paid at the one-year anniversary of the execution of the G42 Purchase Agreement. As part of the G42 Purchase Agreement, G42 Investments put forward a director as appointee and the Company’s board of directors approved appointing the new director to the Company’s board.

G42 Investments has agreed to certain transfer restrictions (including restrictions on short sales or similar transactions) and restrictions on further acquisitions of shares, in each case subject to specified exceptions. Following the expiration of a lock up period, from the period May 31, 2022 until December 31, 2024 (or if earlier, the date of receipt of U.S. Food and Drug Administration (“FDA”) approval in the U.S. for TTP399 (the “FDA Approval”) of TTP399), the Company has granted to G42 Investments certain shelf and piggyback registration rights with respect to those shares of Class A common stock issued to G42 Investments pursuant to the G42 Purchase Agreement, including the ability to conduct an underwritten offering to resell such shares under certain circumstances. The registration rights include customary cooperation, cut-back, expense reimbursement, and indemnification provisions.

Contemporaneously with the G42 Purchase Agreement, effective on May 31, 2022, the Company entered into a collaboration and license agreement (the “Cogna Agreement”) with Cogna Technology Solutions LLC, an affiliate of G42 Investments (“Cogna”) (“Collaboration Partner”), which requires Cogna to work with the Company in performing Phase 3 clinical trials for the Company’s TTP399 compound (the “Licensed Product”) as well as jointly creating a global development plan to develop, market, and commercialize TTP399 in certain countries in the Middle East, Africa, and Central Asia (the “Partner Territory”). Under the terms of the Cogna Agreement, Cogna will obtain rights to the Company’s license of TTP399, for purposes of performing Phase 3 clinical trials in the Partner Territory, but will not have access to the various intellectual property (“IP”) related to the license and TTP399. Specifically, the Company will share various protocols with Cogna related to conducting the clinical trials and will provide the patient dosages and placebo of TTP399 needed to conduct the trials. Separately, the Company will conduct its Phase 3 clinical trials for TTP399 in the U.S. at its own cost that similarly

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will not be reimbursed. The results of each party’s Phase 3 clinical trials will be combined by the Company to seek FDA approval in the U.S. for TTP399.

Under the Cogna Agreement, Cogna has the right to develop and commercialize the Licensed Product in the Partner Territory at its own cost once restrictions on the use of the IP have been lifted by the Company. The Cogna Agreement determined which specific countries in the Partner Territory that Cogna may pursue development and commercialization and provides the Company with the ability to determine when Cogna can benefit from this IP through the powers granted to the Company to approve the global development plan. Further, the Company may supply at cost, or Cogna may manufacture, TTP399 for commercial sale under terms to be agreed upon by the parties at a later date.

The G42 Purchase Agreement also provides for, following the receipt of FDA approval of the Licensed Product, at the option of G42 Investments, either (a) the issuance of the Company’s Class A common stock (the “Milestone Shares”) having an aggregate value equal to $30.0 million or (b) the payment by the Company of $30.0 million in cash (the “Milestone Cash Payment”). The issuance of the Milestone Shares or the payment of the Milestone Cash Payment, as applicable, are conditioned upon receipt of the FDA Approval and subject to certain limitations and conditions set forth in the G42 Purchase Agreement. There can be no assurance that the FDA Approval will be granted or as to the timing thereof.

Once commercialization takes place in the Partner Territories, the Company will receive royalties of 8% from Cogna on the sale of the Licensed Product for ten years after the first commercial sale of the Licensed Product.

Common stock is generally recorded at fair value at the date of issuance. In determining the fair value of the Class A common stock issued to G42 Investments, the Company considered the closing price of the common stock on the effective date. The Company did not make an adjustment to the fair value for sale restrictions on the stock in accordance with guidance recently adopted in ASU 2022-03. See the “Recently Issued Accounting Guidance” in this 10-Q for details of the ASU. Accordingly, the Company determined that cash consideration of $5.7 million should be recorded as fair value of the Class A common stock at the effective date, utilizing the Class A common stock closing price of $0.55 at the effective date.

A premium was paid on the Class A common stock by G42 Investments of $18.7 million, net of a note receivable discount of $0.6 million. This premium is determined to be the transaction price for all remaining obligations under the agreements, which will be accounted for under ASC 808 or ASC 606 based on determination of the unit of account.

The Company determined that certain commitments under the agreements are in the scope of ASC 808 as both the Company and Cogna are active participants in the clinical trials of the Licensed Product, and both are exposed to significant risks and rewards based on the success of the clinical trials and subsequent FDA approval. Cogna is determined to be a vendor of the Company during the clinical trial phase, working on the Company’s behalf to complete R&D activities, and not in a customer capacity. The Company accounted for the commitments related to the clinical trials, which includes transfer of trial protocols, supply of clinical trial dosages, and collaboration on the joint development committee (“JDC”) as an ASC 808 unit of account, applying the recognition and measurement principles of ASC 606 by analogy. The Company will recognize collaboration revenue for its development activities under ASC 808 over time based on the estimated period of performance.

By applying the principals in ASC 606 by analogy, the Company identified the performance obligation and considered the timing of satisfaction of the obligation to account for the pattern of revenue recognition. In order to recognize collaboration revenue, generally, the Company would have to complete its performance obligation and Cogna would need to be able to use and benefit from delivery of the assets or services. The performance obligation under the agreements that fall within the 808 unit of account are concentrated in the Phase 3 clinical trials. As of June 30, 2022, the Phase 3 clinical trials had not commenced. Accordingly, no collaboration revenue was recognized for the ASC 808 unit of account during the three and six months ended June 30, 2022.

The Company identified certain commitments that are in the scope of ASC 606 as Cogna’s relationship is that of a customer for these commitments. The significant performance obligations that are in the scope of ASC 606 are (1) the development, commercialization and manufacturing license of the IP once restrictions on the use of the IP have been lifted by the Company and (2) a potential material right to a commercial supply agreement. The material right is predicated upon FDA approval. The Company will recognize revenue from the development, commercial and manufacturing license at a point in time when the Company releases the restrictions on the use of the IP, which is expected to be after the Licensed Product is approved by the FDA. As a result, the Company has not recognized any revenue under the ASC 606 unit of account during the three and six months ended June 30, 2022.

As of June 30, 2022, the Company has recognized the cash and a non-interest bearing promissory note receivable of with a principal balance of $12.5 million. The promissory note receivable was classified and accounted for under ASC 310 and was measured at its fair value of and will be subsequently remeasured at its amortized cost thru its maturity date. The

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Company also recorded the $18.7 million as deferred revenue in the Consolidated Balance Sheets, as none of the underlying performance obligations had been satisfied as of and for the three and six months ended June 30, 2022.

Reneo License Agreement

The Company is party to a license agreement with Reneo Pharmaceuticals, Inc. (“Reneo”) (the “Reneo License Agreement”), under which Reneo obtained an exclusive, worldwide, sublicensable license to develop and commercialize the Company’s peroxisome proliferation activated receptor delta (PPAR-δ) agonist program, including the compound HPP593, for therapeutic, prophylactic or diagnostic application in humans.

The Company has fully allocated the transaction price to the license and the technology transfer services, which represents a single combined performance obligation because they were not capable of being distinct on their own. The revenue related to this performance obligation was recognized on a straight-line basis over the technology transfer service period.

The revenue related to this performance obligation has been fully recognized and no revenue related to this performance obligation was recognized for the three and six months ended June 30, 2022, and 2021. There have been no adjustments to the transaction price for the performance obligations under the Reneo License Agreement during the three and six months ended June 30, 2022, and 2021.

Huadong License Agreement

The Company is party to a License Agreement with Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (“Huadong”) (the “Huadong License Agreement”), under which Huadong obtained an exclusive and sublicensable license to develop and commercialize the Company’s glucagon-like peptide-1 receptor agonist (“GLP-1r”) program, including the compound TTP273, for therapeutic uses in humans or animals, in China and certain other pacific rim countries, including Australia and South Korea (collectively, the “Huadong License Territory”). Additionally, under the Huadong License Agreement, the Company obtained a non-exclusive, sublicensable, royalty-free license to develop and commercialize certain Huadong patent rights and know-how related to the Company’s GLP-1r program for therapeutic uses in humans or animals outside of the Huadong License Territory.

On January 14, 2021, the Company entered into the First Huadong Amendment which eliminated the Company’s obligation to sponsor a multi-region clinical trial (the “Phase 2 MRCT”), and corresponding obligation to contribute up to $3.0 million in support of such trial. The amendment also reduced the total potential development and regulatory milestone payments by $3.0 million.

Prior to the First Amendment, the Company had allocated a portion of the transaction price to the obligation to sponsor and conduct a portion of the Phase 2 MRCT. Upon the removal of this performance obligation, the Company evaluated the impact of the modification under the provisions of ASC Topic 606 and performed a reallocation of the transaction price among the remaining performance obligations. This resulted in the recognition of approximately $1.0 million of revenue on a cumulative catch-up basis during the six months ended June 30, 2021. The majority of the transaction price originally allocated to the Phase 2 MRCT performance obligation was reallocated to the license and technology transfer services combined performance obligation discussed below, which had already been completed. The reallocation of the purchase price in connection with the First Huadong Amendment was made based on the relative estimated selling prices of the remaining performance obligations.

The significant performance obligations under this license agreement, as amended, were determined to be (i) the exclusive license to develop and commercialize the Company’s GLP-1r program, (ii) technology transfer services related to the chemistry and manufacturing know-how for a defined period after the effective date, (iii) the Company’s obligation to participate on a joint development committee (the “JDC”), and (iv) other obligations considered to be de minimis in nature.

The Company has determined that the license and technology transfer services related to the chemistry and manufacturing know-how represent a combined performance obligation because they were not capable of being distinct on their own. The Company also determined that there was no discernible pattern in which the technology transfer services would be provided during the transfer service period. As such, the Company recognized the revenue related to this combined performance obligation using the straight-line method over the transfer service period. This combined performance obligation was considered complete as of June 30, 2021. The Company recognized $1.0 million of revenue related to this combined performance obligation during the six months ended June 30, 2021. During the six months ended June 30, 2022, the transaction price for this performance obligation was increased by $2.0 million due to the satisfaction of a development milestone under the license agreement. This amount was fully recognized as revenue during the six months ended June 30, 2022, as the related performance obligation was fully satisfied.

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A portion of the transaction price allocated to the obligation to participate in the JDC to oversee the development of products and the Phase 2 MRCT in accordance with the development plan remained deferred as of June 30, 2022, and revenue will be recognized using the proportional performance model over the period of the Company’s participation on the JDC. The unrecognized amount of the transaction price allocated to this performance obligation as of June 30, 2022, was de minimis. An immaterial amount of revenue for this performance obligation has been recognized during six months ended June 30, 2022, and 2021.

Newsoara License Agreement-

The Company is party to a license agreement with Newsoara Biopharma Co., Ltd., (“Newsoara”) (the “Newsoara License Agreement”) under which Newsoara obtained an exclusive and sublicensable license to develop and commercialize the Company’s phosphodiesterase type 4 inhibitors (“PDE4”) program, including the compound HPP737, in China, Hong Kong, Macau, Taiwan and other pacific rim countries (collectively, the “Newsoara License Territory”). Additionally, under the Newsoara License Agreement, the Company obtained a non-exclusive, sublicensable, royalty-free license to develop and commercialize certain Newsoara patent rights and know-how related to the Company’s PDE4 program for therapeutic uses in humans outside of the Newsoara License Territory.

The Company has fully allocated the transaction price to the license and the technology transfer services which represents a single performance obligation because they were not capable of being distinct on their own. The Company recognized revenue for this performance obligation using the straight-line method over the transfer service period. The revenue for this performance obligation has been fully recognized as of June 30, 2022. No revenue related to this performance obligation was recognized and there have been no changes to the transaction price during the three and six months ended June 30, 2022, and 2021.

Anteris License Agreement

On December 11, 2020, the Company entered into a license agreement with Anteris Bio, Inc. (“Anteris”) (the “Anteris License Agreement”), under which Anteris obtained a worldwide, exclusive and sublicensable license to develop and commercialize the Company’s Nrf2 activator, HPP971.

Under the terms of the Anteris License Agreement, Anteris paid the Company an initial license fee of $2.0 million. The Company is eligible to receive additional potential development, regulatory, and sales-based milestone payments totaling up to $151.0 million. Anteris is also obligated to pay the Company royalty payments at a double-digit rate based on annual net sales of licensed products. Such royalties will be payable on a licensed product-by-licensed product basis until the latest of expiration of the licensed patents covering a licensed product in a country, expiration of data exclusivity rights for a licensed product in a country, or a specified number of years after the first commercial sale of a licensed product in a country. As additional consideration, the Company received preferred stock representing a minority ownership interest in Anteris.

Pursuant to the terms of the Anteris License Agreement, the Company was required to provide technology transfer services for a 30-day period after the effective date. In accordance with ASC Topic 606, the Company identified all the performance obligations at the inception of the Anteris License Agreement. The significant obligations were determined to be the license and the technology transfer services. The Company has determined that the license and technology transfer services represent a single performance obligation because they were not capable of being distinct on their own. The transaction price has been fully allocated to this combined performance obligation and consisted of the $2.0 million initial license payment, as well as the fair value of the equity interest received in Anteris of $4.2 million. The revenue related to this performance obligation was fully recognized during the year ended December 31, 2020, as the technology transfer services were considered complete as of that date. No revenue related to this performance obligation was recognized and there have been no changes to the transaction price during the three and six months ended June 30, 2022, and 2021.

JDRF Agreement

In August 2017, the Company entered into a research and collaboration agreement with JDRF International (the “JDRF Agreement”) to support the funding of the Simplici-T1 Study, a Phase 2 study to explore the effects of TTP399 in patients with type 1 diabetes. The JDRF Agreement was amended in June 2021 to provide additional funding for the Company’s mechanistic study exploring the effects of TTP399 on ketone body formation during a period of insulin withdrawal in people with type 1 diabetes. According to the terms of the JDRF Agreement, JDRF will provide research funding of up to $3.4 million based on the achievement of research and development milestones, with the total funding provided by JDRF not to exceed approximately one-half of the total cost of the project. Additionally, the Company has the obligation to make certain milestone payments to JDRF upon the commercialization, licensing, sale or transfer of TTP399 as a treatment for type 1 diabetes.

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Payments that the Company receives from JDRF under this agreement will be recorded as restricted cash and current liabilities and recognized as an offset to research and development expense, based on the progress of the project, and only to the extent that the restricted cash is utilized to fund such development activities. As of June 30, 2022, the Company had received funding under this agreement of $3.4 million. Research and development costs have been offset by a total of $3.4 million over the course of this agreement.

Contract Liabilities

Contract liabilities related to the Company’s collaboration agreements consisted of the following (in thousands):


	June 30, 2022		December 31, 2021
Current portion of contract liabilities	$	26	$	35
Contract liabilities, net of current portion	18,669		—
Total contract liabilities	$	18,695	$	35

Changes in short-term and long-term contract liabilities for the six months ended June 30, 2022, were as follows:


	Contract Liabilities
Balance on January 1, 2022	$	35
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied	(9)
Consideration received in advance and not recognized as revenue	18,669
Balance on June 30, 2022	$	18,695

~~Note 3:~~

Note 4: Share-Based Compensation

~~During the three and nine months ended September 30, 2017, the~~

The Company has issued non-qualified stock option awards to management, other key employees, consultants, and ~~restricted stock units to certain employees~~non-employee directors. These option awards generally vest ratably over a three-year period and ~~directors~~the option awards expire after a term of ten years from the ~~Company.~~date of grant. As of ~~September~~June 30, ~~2017,~~2022, the Company had total unrecognized stock-based compensation expense for its outstanding stock option awards of approximately ~~$5.0~~$1.7 million, which is expected to be recognized over a weighted average period of ~~1.7~~2.3 years. The weighted average grant date fair value of ~~option grants~~options granted during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~2021 was ~~$4.17~~$0.65 and ~~$3.94~~$2.21 per option, respectively. The aggregate intrinsic value of the ~~stock option~~in-the-money awards outstanding at ~~September~~June 30, ~~2017~~2022, was ~~$0.2 million.~~

de minimis.

On February 27, 2022, Ms. Deepa Prasad notified the Board of Directors (the “Board”) of the Company of her decision to resign from her positions as Chief Executive Officer, President, and Board member, effective as of March 29, 2022, and served in these roles through March 29, 2022 (the “Effective Date”). Ms. Prasad agreed to serve as a Strategic Advisor to the Company for six months after the Effective Date. Ms. Prasad will retain 624,659 of the outstanding options previously granted to her, which will vest at the end of the 15-month period following the Effective Date. As a result of the separation agreement, these options were modified to accelerate vesting at the Effective Date. These options will remain exercisable for the original ten-year period and the remaining 1,873,976 of her options were cancelled. The ~~Company uses~~additional stock compensation expense for the ~~Black-Scholes option pricing model to calculate~~modification during the ~~fair value of stock options granted. The fair value of stock options granted~~six months ended June 30, 2022, was ~~estimated using the following assumptions:~~

de minimis.

For the Nine Months Ended September 30,

2017

2016

Expected volatility
76.88% - 85.93%

81.57% - 87.23%

Expected life of option, in years
5.8 - 6.0

5.0 - 6.0

Risk-free interest rate
1.87% - 2.24%

1.22% - 1.42%

Expected dividend yield

0.00%

0.00%

The following table summarizes the activity related to the stock option awards for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~

2022:

	Number of Shares			Weighted- Average Exercise Price
Awards outstanding at December 31, 2016		1,096,101		$	10.68
							Number of Shares	Weighted Average Exercise Price
Awards outstanding at December 31, 2021						Awards outstanding at December 31, 2021	7,056,035	$	3.19
Granted		872,500			5.78	Granted	1,200,000	0.76
Forfeited		(16,202	)		6.78	Forfeited	(2,871,508)	2.29
Awards outstanding at September 30, 2017		1,952,399		$	8.52
Options exercisable at September 30, 2017		653,756		$	11.23
Awards outstanding at June 30, 2022						Awards outstanding at June 30, 2022	5,384,527	$	3.12
Options exercisable at June 30, 2022						Options exercisable at June 30, 2022	2,496,888	$	5.19
Weighted average remaining contractual term	8.0 Years					Weighted average remaining contractual term	6.1 Years
Options vested and expected to vest at September 30, 2017		1,862,429		$	8.63
Options vested and expected to vest at June 30, 2022						Options vested and expected to vest at June 30, 2022	4,858,805	$	3.33
Weighted average remaining contractual term	8.6 Years					Weighted average remaining contractual term	7.6 Years

~~The following table summarizes the activity related to the awards~~

Table of ~~RSUs for the nine months ended September 30, 2017:~~

Contents

Number of Shares

Weighted-
Average Grant Date Fair Value

Awards outstanding at December 31, 2016

—

$
—

Granted

35,000

5.81

Awards outstanding at September 30, 2017

35,000

$
5.81

RSUs vested and expected to vest at September 30, 2017

34,002

$
5.81

As of September 30, 2017, the Company had total unrecognized stock-based compensation expense for its outstanding RSU awards of approximately $0.2 million, which is expected to be recognized over a weighted-average period of 2.4 years. The aggregate intrinsic value of the RSUs outstanding at September 30, 2017 was $0.2 million.

Compensation expense related to the grants of stock options ~~and RSUs~~ is included in research and development and general and administrative expense as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016			2022		2021		2022		2021
Research and development	$	405	$	252	$	1,077	$	735	Research and development	$	88	$	180	$	180	$	356
General and administrative		554		429		1,580		1,253	General and administrative	79		272		463		532
Total share-based compensation expense	$	959	$	681	$	2,657	$	1,988	Total share-based compensation expense	$	167	$	452	$	643	$	888

Note 4:~~Notes Payable~~

~~Notes payable consist of the following (in thousands):~~

5: Investments

September 30, 2017

December 31, 2016

Notes payable under the Loan Agreement
$
20,000

$
12,500

Less: Debt discount

(689
)

(1,442
)
Total notes payable

19,311

11,058

Less: Current portion

(2,083
)

—

Total notes payable, net of current portion
$
17,228

$
11,058

On October 28, 2016, the Company and vTv LLC entered into the Loan Agreement under which the Company and vTv LLC could borrow up to $25.0 million in three tranches of $12.5 million, $7.5 million and $5.0 million, respectively.

The Company borrowed the first tranche of $12.5 million upon closing of the transaction on October 28, 2016 and the second tranche of $7.5 million on March 24, 2017. The availability of the third tranche of $5.0 million expired unused on June 30, 2017.

~~Each loan tranche bears interest at a floating rate equal to 10.5% plus the amount by which the one-month London Interbank Offer Rate (“LIBOR”) exceeds 0.5%.~~

The Company has agreed to repay the first tranche of $12.5 million on an interest only basis monthly until May 1, 2018 followed by equal monthly payments of principal plus accrued interest through the scheduled maturity date for the first tranche loan on May 1, 2020. In addition, a final payment for the first tranche loan equal to $0.8 million will be due on May 1, 2020, or such earlier date specified in the Loan Agreement. The Company has agreed to repay the second tranche of $7.5 million on an interest only basis monthly until October 1, 2018 followed by equal monthly payments of principal plus accrued interest through the scheduled maturity date for the second tranche loan on October 1, 2020. In addition, a final payment for the second tranche loan equal to $0.5 million will be due on October 1, 2020, or such earlier date specified in the Loan Agreement.

If the Company repays all or a portion of the loan prior to the applicable maturity date, it will pay the Lenders a prepayment penalty fee, based on a percentage of the then outstanding principal balance equal to 4.0% during the first 18 months following the funding of the second tranche and 2.0% thereafter.

The Company’s obligations under the Loan Agreement are secured by a first priority security interest in substantially all of its assets other than its intellectual property. Subject to certain conditions related to the Company’s Phase 3 clinical trial of ~~azeliragon~~, the Company may be required to grant a security interest in its intellectual property. The Company has agreed not to pledge or otherwise encumber its intellectual property assets, subject to certain exceptions.

~~The Loan Agreement includes customary affirmative and restrictive covenants,~~ including, but not limited to, restrictions on the payment of dividends or other equity distributions and the incurrence of debt or liens upon the assets of the Company or its subsidiaries. The Loan Agreement does not contain any financial maintenance covenants. The Loan Agreement includes customary events of default, including payment defaults, covenant defaults, and material adverse change default. Upon the occurrence of an event of default and following any applicable cure periods, a default interest rate of an additional 5% will be applied to the outstanding loan balances, and the Lenders may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement.

In connection with the ~~Loan Agreement,~~Reneo and Anteris License Agreements, the Company ~~issued to the Lenders warrants to purchase shares~~has received equity ownership interests of less than 20% of the ~~Company’s Class A Common Stock (the “Warrants”). On October 28, 2016,~~voting equity of the investee. Further, the Company ~~issued Warrants~~does not have the ability to ~~purchase 152,580 shares of its Class A Common Stock at a per share~~ exercise ~~price of $6.39 per share, which aggregate exercise price represents 6.0% of~~significant influence over the principal amount borrowed under the first tranche of the Loan Agreement and 3.0% of the amount available under the second tranche of the Loan Agreement. Additionally, upon funding of the second tranche on March 24, 2017, the Company issued Warrants to purchase 38,006 shares of its Class A Common Stock at a per share exercise price of $5.92 per share, which aggregate exercise price represents 3.0% of the amount available under the second tranche of the Loan Agreement. In each instance, the Warrants have an exercise price equal to the lower of (a) the volume weighted average price per share of the Company’s Class A Common Stock,investees. The investments are classified as reported on the principal stock exchange on which the Company’s Class A Common Stock is listed, for 10 trading days prior to the issuance of the applicable Warrants or (b) the closing price of a share of the Company’s Class A Common Stock on the trading day prior to the issuance of the applicable Warrants. The Warrants will expire seven years from their date of issuance.

The Company incurred $0.7 million of costs in connection with the Loan Agreement. These costs, along with the allocated fair value of the Warrants issued for the first and second tranches which were treated as a debt discount, and are offset against the carrying value of the notes payablelong-term investments in the Company’s Consolidated Balance ~~Sheet~~Sheets.

Reneo completed its initial public offering in April 2021. Prior to Reneo becoming a publicly traded company, the Company’s investment in Reneo did not have a readily determinable fair value and was measured at cost less impairment, adjusted for any changes in observable prices, under the measurement alternative. Subsequent to Reneo’s initial public offering, the Company’s investment in Reneo is considered to have a readily determinable fair value and, as ~~of September 30, 2017 and December 31, 2016 and will be~~such, is adjusted to its fair value each period with changes in fair value recognized as ~~interest expense over the term~~a component of ~~each applicable tranche using the effective interest method.~~ net loss.

The ~~final payments~~Company’s investment in Anteris does not have a readily determinable fair value and is measured at cost less impairment, adjusted for ~~the first and second loan tranches will be accrued as additional interest expense, using the effective interest method, over the term~~any changes in observable prices.

The Company’s investments consist of the ~~relevant loan tranche.~~

~~The fair~~following:


	June 30, 2022		December 31, 2021
Equity investment with readily determinable fair value:
Reneo common stock	$	1,527	$	4,928

Equity investment without readily determinable fair values assessed under the measurement alternative:
Anteris preferred stock	4,245		4,245
Total	$	5,772	$	9,173

No adjustments have been made to the value of the Company’s ~~notes payable is considered~~investment in Anteris since its initial measurement either due to ~~approximate~~impairment or based on observable price changes. The Company recognized an unrealized loss on its ~~carrying value because it bears interest at~~investment in Reneo of $0.2 million and $3.4 million for the three and six months ended June 30, 2022, respectively. During the three and six months ended June 30, 2021, the Company recognized an unrealized gain on its investment in Reneo of $2.9 million. These adjustments were recognized as a ~~variable interest rate.~~

component of other income/(expense) in the Company’s Condensed Consolidated Statements of Operations.

~~Note 5:~~

Note 6: Commitments and Contingencies

Legal Matters

From time to time, the Company is involved in various legal proceedings arising in the normal course of business. If a specific contingent liability is determined to be probable and can be reasonably estimated, the Company accrues and discloses the amount. The Company is not currently a party to any material legal proceedings.

~~Columbia University Agreement~~

In May 2015, the Company entered into a worldwide exclusive agreement with Columbia University (“Columbia”) to license certain intellectual property from Columbia. Under the agreement, the Company is obligated to pay to Columbia (1) an annual fee of $0.1 million from 2015 through 2021, (2) a potential regulatory milestone payment of $0.8 million and (3) potential royalty payments at a single digit royalty rate based on net sales of licensed products as defined in the agreement.

Novo Nordisk

In February 2007, the Company entered into an Agreement Concerning Glucokinase Activator Project with Novo Nordisk A/S (the “Novo License Agreement”) whereby wethe Company obtained an exclusive, worldwide, sublicensable license under certain Novo Nordisk intellectual property rights to discover, develop, manufacture, have manufactured, use and commercialize products for the prevention, treatment, control, mitigation or palliation of human or animal diseases or conditions. As part of this license grant, the Company obtained certain worldwide rights to Novo Nordisk’s GKA program, including rights to preclinical and clinical compounds such as TTP399. This agreement was amended in May 2019 to create

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milestone payments applicable to certain specific and non-specific areas of therapeutic use. Under the terms of the amended Novo License Agreement, the Company has ~~additional~~ potential developmental and regulatory milestone payments totaling up to $9.0 million for approval of a product for the treatment of type 1 diabetes, $50.5 million for approval of a product for the treatment of type 2 diabetes, or $115.0 million for approval of a ~~product.~~product in any other indication. The Company may also be obligated to pay an additional $75.0 million in potential sales-based milestones, as well as royalty payments, at mid-single digit royalty rates, based on tiered sales of commercialized licensed products.

During the fourth quarter of 2021, the Company made a payment of $2.0 million related to the satisfaction of the milestone to complete the phase 2 trials for TTP399 under this agreement.

Note 7: Leases

The Company leases office space for its headquarters location under an operating lease. This lease commenced in November 2019 after the completion of certain tenant improvements made by the lessor. The lease includes an option to renew for a five-year term as well as an option to terminate after three years, neither of which have been recognized as part of its related right of use assets or lease liabilities as their election was not considered reasonably certain. The Company has notified the lessor that it intends to exercise the early termination option and is negotiating an amendment to the lease. Further, this lease does not include any material residual value guarantee or restrictive covenants.

At each of June 30, 2022, and December 31, 2021, the weighted average incremental borrowing rate for the operating leases held by the Company was 13.1%. At June 30, 2022, and December 31, 2021, the weighted average remaining lease terms for the operating leases held by the Company were 2.6 years and 3.1 years, respectively.

Maturities of lease liabilities for the Company’s operating leases as of June 30, 2022, were as follows (in thousands):


2022 (remaining six months)	$	131
2023	268
2024	275
2025	23
2026	—
Thereafter	—
Total lease payments	697
Less: imputed interest	(110)
Present value of lease liabilities	$	587

Operating lease cost and the related operating cash flows for the six months ended June 30, 2022, and 2021 were immaterial amounts.

~~Note 6:~~

Note 8: Redeemable Noncontrolling Interest

The Company is subject to the Exchange Agreement with respect to the vTv Units representing the ~~70.5%~~23.0% noncontrolling interest in vTv LLC outstanding as of ~~September~~June 30, ~~2017~~2022 (see Note 7)9). The Exchange Agreement requires the surrender of an equal number of vTv Units and Class B ~~Common Stock~~common stock for (i) shares of Class A ~~Common Stock~~common stock on a ~~one-for-one~~1-for-one basis or (ii) cash (based on the fair market value of the Class A ~~Common Stock~~common stock as determined pursuant to the Exchange Agreement), at the Company’s option (as the managing member of vTv LLC), subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The exchange value is determined based on a ~~20 day~~20-day volume weighted average price of the Class A ~~Common Stock~~

common stock as defined in the Exchange Agreement, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications.

The redeemable noncontrolling interest is recognized at the higher of (1) ~~the~~its initial fair value plus accumulated earnings/losses associated with the noncontrolling interest or (2) the redemption value as of the balance sheet date. At ~~September~~June 30, ~~2017~~2022, and December 31, ~~2016,~~2021, the redeemable noncontrolling interest was recorded based on the redemption value as of ~~$130.6~~the balance sheet date of $15.9 million and ~~$122.5~~$25.0 million, respectively.

Changes in the Company’s ownership interest in vTv LLC while the Company retains its controlling interest in vTv LLC are accounted for as equity transactions, and the Company is required to adjust noncontrolling interest and equity for

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such changes. The following is a summary of net income attributable to vTv Therapeutics Inc. and transfers to noncontrolling interest:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Net loss attributable to vTv Therapeutics Inc. common shareholders	$	(3,151)	$	(608)	$	(10,158)	$	(4,849)
(Increase)/Decrease in vTv Therapeutics Inc. accumulated deficit for purchase of LLC Units as a result of common stock issuances	(1,361)		(115)		1,071		(2,525)
Change from net loss attributable to vTv Therapeutics Inc. common shareholders and transfers to noncontrolling interest	$	(4,512)	$	(723)	$	(9,087)	$	(7,374)

Note 9: Stockholders’ Deficit

Amendment to Certificate of Incorporation

On May 4, 2021, the Company filed an amendment to its Amended and Restated Certificate of Incorporation (the “Charter Amendment”) to increase the number of shares of Class A common stock that the Company is authorized to issue from 100,000,000 shares of Class A common stock to 200,000,000 shares of Class A common stock, representing an increase of 100,000,000 shares of authorized Class A common stock, with a corresponding increase in the total authorized common stock, which includes Class A common stock and Class B common stock, from 200,000,000 to 300,000,000, and a corresponding increase in the total authorized capital stock, which includes common stock and preferred stock, from 250,000,000 shares to 350,000,000 shares.

G42 Investments Transaction

On May 31, 2022, the Company and G42 Investments entered in to the G42 Purchase Agreement (see Note 3), pursuant to which the Company agreed to sell to G42 Investments 10,386,274 shares of the Company's Class A common stock, par value $0.01 per share at a price per share of approximately $2.41, for an aggregate purchase price of $25.0 million, consisting of (i) $12.5 million in cash at the closing of the transaction and (ii) $12.5 million in the form of a promissory note of G42 Investments to be paid at the one-year anniversary of the execution of the G42 Purchase Agreement.

ATM Offering

In April 2020, the Company entered into the Sales Agreement with Cantor Fitzgerald as the sales agent, pursuant to which the Company may offer and sell, from time to time, through Cantor, shares of its Class A common stock, par value $0.01 per share, having an aggregate offering price of up to $13.0 million by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act (the “ATM Offering”). The shares are offered and sold pursuant to the Company’s shelf registration statement on Form S-3. In no event will we sell Class A common stock under this registration statement with a value exceeding more than one-third of the “public float” (the market value of our Class A common stock and any other equity securities that we may issue in the future that are held by non-affiliates) in any 12-calendar month period so long as our public float remains below $75 million.

On January 14, 2021, and June 25, 2021, the Company filed a prospectus supplement in connection with the ATM Offering to increase the size of the at-the-market offering pursuant to which the Company may offer and sell, from time to time, through or to Cantor, as sales agent or principal, shares of the Company’s Class A common stock, by an aggregate offering price of $5.5 million and $50.0 million, respectively.

During the three and six months ended June 30, 2021, the Company sold 2,180,337 shares of its Class A common stock under the ATM Offering for net proceeds of $5.3 million.

During the three and six months ended June 30, 2022, the Company did not sell any shares under the ATM Offering.

Lincoln Park Capital Transaction

On November 24, 2020, the Company entered into the LPC Purchase Agreement and a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company has the right to sell to Lincoln Park shares of the Company’s Class A common stock having an aggregate value of up to $47.0 million, subject to certain limitations and conditions set forth in the LPC Purchase Agreement. The Company will control the timing and amount of any sales of shares

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to Lincoln Park. pursuant to the LPC Purchase Agreement. During the three and six months ended June 30, 2021, the Company sold 441,726 and 3,941,726 shares under the LPC Purchase Agreement for total proceeds of $1.0 million and $9.1 million, respectively.

During the three and six months June 30, 2022, the Company did not sell any shares under the LPC Purchase Agreement.

~~Note 7:~~

Note 10: Related-Party Transactions

~~PharmaCore, Inc.~~

Prior to its acquisition by Cambrex Corporation in October 2016, certain controlling shareholders of the Company also controlled PharmaCore, Inc. (“PharmaCore”) and PharmaCore was therefore considered to be a related party. The Company purchased chemistry and Good Manufacturing Practices manufacturing services from PharmaCore. Total purchases from PharmaCore for the three and nine months ended September 30, 2016 were $0.5 million and $0.8 million, respectively.

MacAndrews & Forbes Incorporated

As of ~~September~~June 30, ~~2017,~~2022, subsidiaries and affiliates of MacAndrews & Forbes Incorporated (collectively “MacAndrews”) ~~held~~indirectly controlled 23,084,267 shares of the Company’s Class B ~~Common Stock~~common stock and ~~2,565,666~~36,519,212 shares of the Company’s Class A ~~Common Stock.~~common stock. As a result, MacAndrews’ holdings represent approximately ~~78.2%~~59.4% of the combined voting power of the Company’s outstanding common stock.

The Company has entered into several agreements with MacAndrews or its affiliates as ~~part~~further detailed below:

Letter Agreements

The Company has previously entered into the Letter Agreements with MacAndrews. Under the terms of the ~~Reorganization Transactions~~Letter Agreements, the Company had the right to sell to MacAndrews shares of its Class A common stock at a specified price per share, and MacAndrews has the right (exercisable up to three times) to require the Company to sell to it shares of Class A common stock at the same price. In addition, in connection with and as ~~further detailed below:~~

a commitment fee for the entrance into certain of these Letter Agreements, the Company also issued MacAndrews warrants (the “Letter Agreement Warrants”) to purchase additional shares of the Company’s Class A common stock.

The Letter Agreement Warrants have been recorded as warrant liability, related party within the Company’s Condensed Consolidated Balance Sheets based on their fair value. The issuance of the Letter Agreement Warrants was considered to be a cost of equity recorded as a reduction to additional paid-in capital.

Exchange Agreement

The Company and MacAndrews are party to an exchange agreement (the “Exchange Agreement”) pursuant to which the vTv Units (along with a corresponding number of shares of the Class B ~~Common Stock)~~common stock) are exchangeable for (i) shares of the Company’s Class A ~~Common Stock~~common stock on a one-for-one basis or (ii) cash (based on the fair market value of the Class A ~~Common Stock~~common stock as determined pursuant to the Exchange Agreement), at the Company’s option ~~of vTv Therapeutics Inc.~~ (as the managing member of vTv LLC), subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. Any decision to require an exchange for cash rather than shares of Class A ~~Common Stock~~common stock will ultimately be determined by the entire board of directors of vTv Therapeutics Inc. (the “Board of Directors”). As of ~~September~~June 30, ~~2017,~~2022, MacAndrews had not exchanged any shares under the provisions of ~~this agreement.~~

the Exchange Agreement.

Tax Receivable Agreement

The Company and MacAndrews are party to a tax receivable agreement (the “Tax Receivable Agreement”), which provides for the payment by the Company to M&F TTP Holdings Two LLC (“M&F”), as successor in interest to vTv Therapeutics Holdings, LLC (“vTv Therapeutics Holdings”), and M&F TTP Holdings LLC (or certain of its transferees or other assignees) of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes (or, in some circumstances, the Company is deemed to realize) as a result of (a) the exchange of Class B ~~Common Stock,~~commons stock, together with the corresponding number of vTv Units, for shares of the Company’s Class A ~~Common Stock~~common stock (or for cash), (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of the Tax Receivable Agreement and (c) certain tax benefits attributable to payments under the Tax Receivable Agreement.

As no shares have been exchanged by MacAndrews pursuant to the Exchange Agreement (discussed above), the Company has not recognized any liability, nor has it made any payments pursuant to the Tax Receivable Agreement as of ~~September~~June 30, ~~2017.~~

2022.

Investor Rights Agreement

The Company is party to an investor rights agreement with M&F, as successor in interest to vTv Therapeutics Holdings (the “Investor Rights Agreement”). The Investor Rights Agreement provides M&F with certain demand, shelf, and piggyback registration rights with respect to its shares of Class A ~~Common Stock~~common stock and also provides M&F with certain

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governance rights, depending on the size of its holdings of Class A ~~Common Stock.~~common stock. Under the Investor Rights Agreement, M&F was initially entitled to nominate a majority of the members of the Board of Directors and designate the members of the committees of the Board of Directors.

~~Note 8:~~

Note 11: Income Taxes

The Company is subject to U.S. federal income taxes as well as state taxes. ~~As a result of the Company’s operating losses, the~~The Company did not record an income tax ~~expense~~provision for the three ~~and nine~~ months ended ~~September~~June 30, ~~2017 and 2016.~~ 2022. The Company’s income tax provision for the six months ended June 30, 2022, was $0.2 million related to foreign withholding taxes. The Company did not record an income tax provision for the three months ended June 30, 2021. The Company’s income tax provision for the six months ended June 30, 2021, was a de minimis amount related to foreign withholding taxes.

Management has evaluated the positive and negative evidence surrounding the realization of its deferred tax assets, including the Company’s history of losses, and under the applicable accounting standards determined that it is more-likely-than-not that the deferred tax assets will not be realized. The difference between the effective tax rate of the Company and the U.S. statutory tax rate of ~~34%~~21% on June 30, 2022, is due to the valuation allowance against the Company’s expected net operating losses.

As discussed in Note 7,10, the Company is party to a tax receivable agreement with a related party which provides for the payment by the Company to ~~vTv Therapeutics Holdings~~M&F (or certain of its transferees or other assignees) of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes (or, in some circumstances, the Company is deemed to realize) as a result of certain transactions. As ~~there have been~~ no transactions ~~which are probable to occur~~have occurred which would trigger a liability under this agreement, the Company has not recognized any liability related to this agreement as of ~~September~~June 30, ~~2017.~~

2022.

~~Note 9:~~

~~Net Loss per Share~~

Note 12: Net Loss per Share

Basic loss per share is computed by dividing net loss attributable to vTv Therapeutics Inc. by the weighted-average number of shares of Class A ~~Common Stock~~common stock outstanding during the period. Diluted loss per share is computed giving effect to all potentially dilutive shares. Diluted loss per share for all periods presented is the same as basic loss per share as the inclusion of potentially issuable shares would be antidilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of Class A ~~Common Stock~~common stock is as follows (in thousands, except share and per share amounts):


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,							For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2017			2016			2017			2016				2022		2021		2022		2021
Numerator:													Numerator:
Net loss	$	(12,355	)	$	(13,505	)	$	(40,055	)	$	(41,642	)	Net loss	$	(4,091)	$	(841)	$	(13,515)	$	(6,783)
Less: Net loss attributable to noncontrolling interests		(8,705	)		(9,512	)		(28,222	)		(29,340	)	Less: Net loss attributable to noncontrolling interests	(940)		(233)		(3,357)		(1,934)
Net loss attributable to vTv Therapeutics Inc., basic and diluted	$	(3,650	)	$	(3,993	)	$	(11,833	)	$	(12,302	)
Net loss attributable to common shareholders of vTv Therapeutics Inc., basic and diluted													Net loss attributable to common shareholders of vTv Therapeutics Inc., basic and diluted	(3,151)		(608)		(10,158)		(4,849)
Denominator:													Denominator:
Weighted-average vTv Therapeutics Inc. Class A Common Stock, basic and diluted		9,693,254			9,691,362			9,693,254			9,495,926
Net loss per share of vTv Therapeutics Inc. Class A Common Stock, basic and diluted	$	(0.38	)	$	(0.41	)	$	(1.22	)	$	(1.30	)
Weighted average vTv Therapeutics Inc. Class A common stock, basic and diluted													Weighted average vTv Therapeutics Inc. Class A common stock, basic and diluted	70,366,823		58,615,137		68,664,259		57,549,755
Net loss per share of vTv Therapeutics Inc. Class A common stock, basic and diluted													Net loss per share of vTv Therapeutics Inc. Class A common stock, basic and diluted	$	(0.04)	$	(0.01)	$	(0.15)	$	(0.08)

Potentially dilutive securities not included in the calculation of diluted net loss per share are as follows:

September 30, 2017

September 30, 2016

Class B Common Stock ⁽¹⁾

23,119,246

23,119,246

Common stock options

1,952,399

1,099,434

Restricted stock units

35,000

—

Common stock warrants

190,586

—

Total

25,297,231

24,218,680


	June 30, 2022	June 30, 2021
Class B common stock (1)	23,093,860	23,093,860
Common stock options granted under the Plan	5,384,527	4,474,403
Common stock warrants	2,014,503	2,014,503
Total	30,492,890	29,582,766

_____________________________

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	~~(1)~~
			(1)			Shares of Class B ~~Common Stock~~common stock do not share in the Company’s earnings and are not participating securities. Accordingly, separate presentation of loss per share of Class B ~~Common Stock~~common stock under the two-class method has not been provided. Each share of Class B ~~Common Stock~~common stock (together with a corresponding vTv Unit) is exchangeable for one share of Class A ~~Common Stock.~~ common stock.

Note 13: Fair Value of Financial Instruments

The carrying amount of certain of the Company’s financial instruments, including cash and cash equivalents, net accounts receivable, note receivable, accounts payable, and other accrued liabilities, approximate fair value due to their short-term nature.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments. The Company determined that the promissory note receivable was level 2 and the fair value measurement was based on the market yield curves. The following table summarizes the conclusions reached regarding fair value measurements as of June 30, 2022, and December 31, 2021 (in thousands):


	Balance at June 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Equity securities with readily determinable fair value	$	1,527	$	1,527	$	—	$	—
Total	$	1,527	$	1,527	$	—	$	—

Liabilities:
Warrant liability, related party (1)	$	717	$	—	$	—	$	717
Total	$	717	$	—	$	—	$	717


	Balance at December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Equity securities with readily determinable fair value	$	4,928	$	4,928	$	—	$	—
Total	$	4,928	$	4,928	$	—	$	—

Liabilities:
Warrant liability, related party (1)	$	1,262	$	—	$	—	$	1,262
Total	$	1,262	$	—	$	—	$	1,262

_____________________________

~~ITEM 2.~~	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~ ~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~
(1)			Fair value determined using the Black-Scholes option pricing model. Expected volatility is based on the historical volatility of the Company’s common stock over the most recent period. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of valuation.

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	Changes in Level 3 instruments for the six months ended June 30,
	Balance at January 1		Net Change in fair value included in earnings		Purchases / Issuance		Sales / Repurchases		Balance at June 30,
2022
Warrant liability, related party	$	1,262	$	(545)	$	—	$	—	$	717
Total	$	1,262	$	(545)	$	—	$	—	$	717

2021
Warrant liability, related party	$	2,871	$	717	$	—	$	—	$	3,588
Total	$	2,871	$	717	$	—	$	—	$	3,588

During the three and six months ended June 30, 2021, Reneo completed its initial public offering. As a result, the fair value of the Company’s investment in Reneo’s common stock now has a readily determinable market value and is no longer eligible for the practical expedient for investments without readily determinable fair market values. As such, the Company’s investment in Reneo is adjusted each reporting period to its fair value based on its most recent closing price, which is considered a Level 1 fair value measurement under the fair value hierarchy.

There were no transfers into or out of level 3 instruments and/or between level 1 and level 2 instruments during the three and six months ended June 30, 2022. Gains and losses recognized due to the change in fair value of the warrant liability, related party are recognized as a component of other (expense) income, related party in the Condensed Consolidated Statements of Operations.

The fair value of the Letter Agreement Warrants was determined using the Black-Scholes option pricing model or option pricing models based on the Company’s current capitalization. Expected volatility is based on the historical volatility of the Company’s common stock over the most recent period. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of valuation. Significant inputs utilized in the valuation of the Letter Agreement Warrants as of June 30, 2022, and December 31, 2021, were:


	June 30, 2022		December 31, 2021
	Range	Weighted Average	Range	Weighted Average
Expected volatility	83.47% - 138.02%	117.64%	82.68% - 142.86%	128.13%
Risk-free interest rate	2.95% - 3.00%	3.00%	0.95% - 1.26%	1.15%

The weighted average expected volatility and risk-free interest rate was based on the relative fair values of the warrants.

Changes in the unobservable inputs noted above would impact the amount of the liability for the Letter Agreement Warrants. Increases (decreases) in the estimates of the Company’s annual volatility would increase (decrease) the liability and an increase (decrease) in the annual risk-free rate would increase (decrease) the liability.

Note 14: Subsequent Events

CinPax Partnership

On July 25, 2022, the Company and CinPax, LLC (“CinPax”), a subsidiary of CinRx Pharma, LLC (“CinRx”) entered into a Common Stock and Warrant Purchase Agreement (the “CinRx Purchase Agreement”). Under the terms of the CinRx Purchase Agreement, CinPax acquired 4,154,549 shares of Class A common stock at an issue price of approximately $2.41 per share, for an aggregate purchase price of $10.0 million, consisting of (i) $6.0 million in cash at the closing of the transaction and (ii) $4.0 million in the form of a promissory note of CinPax payable on November 22, 2022. The CinRx Purchase Agreement also provides CinRx a warrant to purchase up to 1,200,000 shares of Class A common stock at an initial exercise price of approximately $0.72 per share, that become exercisable upon agreed vesting triggers (including FDA Approval of TTP399). In addition to the investment, the CinRx Purchase Agreement sets forth the terms under which the Company will leverage the CinRx team’s industry experience to collaborate on the oversight of the clinical trials for pharmaceutical products that contain TTP399.

Leadership

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On July 25, 2022, the Company entered into an employment agreement with Paul Sekhri, who was appointed President and Chief Executive Officer and a member of the Board (the “Sekhri Employment Agreement”). In addition to outlining the terms of Mr. Sekhri’s compensation, it also provides for the grant of stock options (the “Options”) to purchase 2,200,000 shares of Class A common stock at an exercise price of $0.79 per share pursuant to an inducement award agreement (the “Inducement Award Agreement”). Subject to potential acceleration upon the achievement of certain performance metrics as set forth in the Inducement Award Agreement, 25% of the Options will vest on the first anniversary of the grant date and the remaining 75% of the Options will vest quarterly over three years thereafter. Upon certain terminations of employment, a portion of the Options will vest on a pro rata basis based on the number of days employed during the four-year term.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this Quarterly Report on Form 10-Q, the “Company”, the “Registrant”, “we” or “us” refer to vTv Therapeutics Inc. and “vTv LLC” refers to vTv Therapeutics LLC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes that appear elsewhere in this report. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, assumptions and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report under “Part II, Other Information—Item 1A, Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies and operations, financing plans, potential growth opportunities, potential market opportunities, potential results of our drug development efforts or trials, and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s plans, estimates, assumptions and beliefs only as of the date of this report. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Company Overview

We are a ~~clinical-stage biopharmaceutical~~clinical stage pharmaceutical company ~~engaged in~~focused on treating metabolic and inflammatory diseases to minimize their long-term complications and improve the ~~discovery and development~~lives of ~~orally administered~~patients. We have an innovative pipeline of first-in-class small molecule clinical and preclinical drug ~~candidates to fill significant unmet medical needs. We have a pipeline of clinical drug candidates, led by our programs for the treatment of Alzheimer’s disease (“AD”) and diabetes.~~candidates. Our ~~drug candidate for the treatment of AD,~~ ~~azeliragon~~ (~~TTP488~~)lead program is TTP399, is an orally administered, small molecule, antagonist targeting the receptor for advanced glycation endproducts (“RAGE”), for which we have successfully completed the enrollment of patients in both sub-studies in our Phase 3 clinical trial (the “STEADFAST Study”) under a Food and Drug Administration (“FDA”) agreed Special Protocol Assessment (“SPA”). Our type 2 diabetes drug candidates include ~~TTP399, an orally administered,~~ liver-selective glucokinase activator (“GKA”), for the treatment of type 1 diabetes.

Recent Developments

On July 27, 2022, the Company appointed Paul Sekhri as President, Chief Executive Officer (CEO) effective August 1, 2022, and was confirmed as a member of the board of directors on August 9, 2022. Mr. Sekhri brings nearly 30 years of healthcare experience, including serving as President and CEO of several healthcare companies, experience in several senior business development and strategy roles and he has been a director on more than 30 private, public company and non-profit boards.

Based upon the positive results of our Simplici-T1 Study, we requested Breakthrough Therapy Designation (“BTD”) with the FDA which was granted in April 2021. In October 2021, we ~~completed~~began to implement a ~~Phase 2b~~strategy to focus our efforts on the continued development of TTP399 as a potential treatment for patients with type 1 diabetes (“T1D”).

After several meetings with the FDA BTD-team, the Company is planning two pivotal, placebo-controlled clinical ~~trial (the “AGATA Study”)~~trials of TTP399 in ~~August 2016,~~subjects with T1D. The studies will recruit a total of approximately 1,000 patients and ~~TTP273, an orally administered, non-peptide agonist~~at least one of the studies will be one year of treatment. The FDA confirmed that ~~targets~~ the ~~glucagon-like peptide-1 receptor (“GLP-1r”), for which we completed a~~effect size of TTP399 on events of hypoglycemia as demonstrated in the Phase 2 ~~clinical trial (the “LOGRA Study”)~~SimpliciT-1 Study is clinically meaningful and has agreed on the primary endpoint for the studies as the difference between placebo and TTP399-treated group in ~~December 2016.~~

~~In August 2017,~~number of hypoglycemia events.

The results of the ~~Company entered into the JDRF Agreement~~mechanistic study provided additional evidence to support the ~~funding~~idea that treatment with TTP399 will not increase the risk of diabetic ketoacidosis (“DKA”) in patients with T1D. The data demonstrate that in contrast to agents such as SGLT2 inhibitors and GLP‐1RAs, TTP399 does not increase the risk of ketoacidosis when used as an ~~adaptive Phase 1b/2~~adjunctive therapy to insulin in individuals with T1D. Moreover, these findings support prior studies that demonstrate that TTP399 improves glucose control and reduces hypoglycemia and suggests a protective effect of TTP399 against acidosis in people with T1D. Thus, accumulating data suggest that TTP399 has robust potential as an adjunctive therapy for T1D. Full study ~~to explore the effects of~~ ~~TTP399, an orally administered, liver-selective glucokinase activator (“GKA”), in type 1 diabetics. We plan to initiate this trial~~results were published in the ~~fourth quarter of 2017. According to the terms of the JDRF Agreement, JDRF will provide research funding of up to $3.0 million based on the achievement of research~~Diabetes Obesity and ~~development milestones,~~Metabolism journal in conjunction with the ~~total funding not to exceed approximately one-half~~82nd American Diabetes Association Scientific Sessions on June 6, 2022.

Table of ~~the total cost of the project. Additionally, the Company has the obligation to make certain milestone payments to JDRF upon the commercialization, licensing, sale or transfer of~~ ~~TTP399~~ ~~as a treatment for Type 1 Diabetes.~~

~~In addition to the above, we also have three programs in various stages of preclinical and clinical development for the prevention of muscle weakness and the treatment of inflammatory disorders.~~

Contents

The following table summarizes our ~~current~~ drug candidates, their partnership status, and their respective stages of development:

_____________________________

*Chronic obstructive pulmonary disease

Our Type 1 Diabetes Program – TTP399

The Company is planning two pivotal, placebo-controlled clinical trials of TTP399 in subjects with T1D and has engaged with FDA on the optimal clinical trial designs for these studies. The studies will recruit a total of approximately 1000 patients and at least one of the studies will be one year of treatment. The FDA and the company have agreed on the primary endpoint for the studies as the difference between placebo and TTP399-treated group in number of hypoglycemia events. These pivotal studies are expected to start in 4Q 2022.

In October 2021, we announced positive results of a mechanistic study of TTP399 in patients with T1D. The study demonstrated that patients with T1D taking TTP399 experienced no increase in ketone levels relative to placebo during a period of acute insulin withdrawal, indicating no increased risk of ketoacidosis. Consistent with previous clinical studies, improved fasting plasma glucose levels and fewer hypoglycemic events were observed in the TTP399 treated group during the week of treatment prior to the insulin withdrawal test. The FDA has declined to approve SGLT2 inhibitors as an adjunctive therapy in T1D, with concerns over the potential risks of diabetic ketoacidosis (“DKA”) in focus. DKA can lead to hospitalization and, if untreated, death. To address these concerns, vTv, following the FDA’s recommendation, conducted this mechanistic study to demonstrate that treatment with TTP399, a liver-selective glucokinase activator, will not result in increased production of ketones, a precursor to ketoacidosis.

In April 2021, we announced that the FDA granted BTD for TTP399 as an adjunctive therapy to insulin for the treatment of T1D. This designation provides a sponsor with added support and the potential to expedite development and review timelines for a promising new investigational medicine.

G42 Investments

On May 31, 2022, the Company announced entry into agreements that include a $25.0 million investment by G42 Investments. Under the terms of the agreements, the Company agreed to sell G42 Investments 10,386,274 shares of the Company’s Class A common stock at an issue price of $2.407 per share, with $12.5 million paid in cash at closing, and the remaining amount of $12.5 million payable on May 31, 2023. The agreements also provide for the potential issuance of $30.0 million in additional shares of Class A common stock to G42 Investments (or cash in lieu of such issuance at the option of

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G42 Investments) if the FDA approves the marketing and sale of a pharmaceutical product containing TTP399, a liver selective glucokinase activator, as the active ingredient for treatment of T1D in the United States. The agreements set forth the terms under which the Company and Cogna, an affiliate of G42 Investments, plan to collaborate on clinical trials for pharmaceutical products that contain TTP399, including Cogna funding a portion of the Phase 3 clinical trials for TTP399, and the Company granting Cogna an exclusive license to develop and commercialize pharmaceutical products containing TTP399 in a specified territory, principally consisting of the Middle East, Africa and Central Asia.

Holding Company Structure

vTv Therapeutics Inc. is a holding company, and its principal asset is a controlling equity interest in vTv Therapeutics LLC, ~~(“vTv LLC”),~~ the principal operating subsidiary. ~~The Company has~~We have determined that vTv LLC is a variable-interest entity (“VIE”) for accounting purposes and that vTv Therapeutics Inc. is the primary beneficiary of vTv LLC because (through its managing member interest in vTv LLC and the fact that the senior management of vTv Therapeutics Inc. is also the senior management of vTv LLC) it has the power to direct all of the activities of vTv LLC, which include those that most significantly impact vTv LLC’s economic performance. vTv Therapeutics Inc. has therefore consolidated vTv LLC’s results under the VIE accounting model in its consolidated financial statements.

To date, we have devoted substantially all of our resources to our research and development efforts relating to our drug candidates, including conducting clinical trials with our drug candidates, providing general and administrative support for these operations and protecting our intellectual property. We do not have any products approved for sale and have not generated any revenue from drug sales. From our inception through September 30, 2017, we have funded our operations primarily through a combination of private placements of preferred equity, research collaboration agreements, upfront and milestone payments for license agreements, debt financing and the completion of our initial public offering (“IPO”) in August 2015.

~~We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We anticipate that our expenses will increase substantially as we:~~

~~continue the development of our lead drug candidate,~~ ~~azeliragon,~~ ~~for the treatment of AD;~~

~~seek to obtain regulatory approvals for~~ ~~azeliragon~~;

~~prepare for the potential commercialization of~~ ~~azeliragon~~;

~~begin outsourcing the commercial manufacturing of~~ ~~azeliragon~~;

~~expand our research and development activities and advance our clinical programs, including our type 2 diabetes programs,~~ ~~TTP399~~ ~~and~~ ~~TTP273; and~~

~~maintain, expand and protect our intellectual property portfolio.~~

We do not expect to generate revenue from drug sales unless and until we successfully complete development and obtain marketing approval for one or more of our drug candidates, which we expect will take a number of years and will be subject to significant uncertainty. Accordingly, we anticipate that we will need to raise additional capital in addition to the net proceeds of the IPO and the Loan Agreement prior to the commercialization of ~~azeliragon~~ or any of our other drug candidates. Until such time that we can generate substantial revenue from product sales, we expect to finance our operating activities through a combination of equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing

arrangements. Nevertheless, we may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms or at all, which would have a negative impact on our liquidity and financial condition and could force us to delay, reduce the scope or eliminate one or more of our research and development programs or commercialization efforts. Failure to receive additional funding could cause us to cease operations, in part or in full.

Financial Overview

Revenue

To date, we have not generated any revenue from drug sales. ~~All of our~~Our revenue ~~to date~~ has been primarily derived from up-front proceeds, milestones and research fees under collaboration and license ~~agreements and government grants.~~

agreements.

In the future, we may generate revenue from a combination of product sales, license fees, milestone payments and royalties from the sales of products developed under licenses of our intellectual property. We expect that any revenue we generate will fluctuate from quarter to quarter as a result of the timing and amount of license fees, milestone and other payments, and the amount and timing of payments that we receive upon the sale of our products, to the extent any are successfully commercialized. If we fail to complete the development of our drug candidates in a timely manner or obtain regulatory approval for them, our ability to generate future revenue and our results of operations and financial position will be materially adversely affected.

Research and Development Expenses

Since our inception, we have focused our resources on our research and development activities, including conducting preclinical studies and clinical trials, manufacturing development efforts, and activities related to regulatory filings for our drug candidates. We recognize research and development expenses as they are incurred. Our direct research and development expenses consist primarily of external costs such as fees paid to investigators, consultants, central laboratories, and clinical research organizations (“~~CRO”s)~~CRO(s)”) in connection with our clinical trials, and costs related to acquiring and manufacturing clinical trial materials. Our indirect research and development costs consist primarily of ~~salaries,~~cash and share-based compensation costs, the cost of employee benefits, and related overhead expenses for personnel in research and development ~~functions and depreciation of leasehold improvements, laboratory equipment and computers.~~functions. Since we typically use our employee and infrastructure resources across multiple research and development programs such costs are not allocated to the individual projects.

From our inception, including our predecessor companies, through ~~September~~June 30, ~~2017,~~2022, we have incurred approximately ~~$531.8~~$605.4 million in research and development expenses.

Table of Contents

Our research and development expenses by project for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~2021 were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016			2022		2021		2022		2021
Direct research and development expense:									Direct research and development expense:
Azeliragon	$	6,163	$	6,287	$	20,948	$	21,372	Azeliragon	$	(92)	$	175	$	(52)	$	887
TTP399		60		749		199		2,396	TTP399	1,633		368		4,129		636
TTP273		42		1,228		323		3,151
HPP737									HPP737	(8)		712		45		1,767
Other projects		290		685		942		1,139	Other projects	238		157		251		232
Indirect research and development expense		2,434		2,216		7,160		6,591	Indirect research and development expense	434		1,025		965		2,018
Total research and development expense	$	8,989	$	11,165	$	29,572	$	34,649	Total research and development expense	$	2,205	$	2,437	$	5,338	$	5,540

We plan to continue to incur significant research and development expenses for the foreseeable future as we continue the development of ~~azeliragon~~TTP399 and further advance the development of our other drug candidates, subject to the availability of additional funding.

The successful development of our clinical and preclinical drug candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing, or costs of the efforts that will be necessary to complete the remainder of the development of any of our clinical or preclinical drug candidates or the period, if any, in which material net cash inflows from these drug candidates may commence. This is due to the numerous risks and uncertainties associated with the development of our drug candidates, including:

•the uncertainty of the scope, rate of progress, and expense of our ongoing, as well as any additional, clinical trials and other research and development activities;

•the potential benefits of our candidates over other therapies;

•our ability to market, commercialize, and achieve market acceptance for any of our drug candidates that we are developing or may develop in the future;

•

~~our ability to market, commercialize and achieve market acceptance for any of our drug candidates that we are developing or may develop in the future;~~

•future clinical trial results;

•our ability to enroll patients in our clinical trials;

•the timing and receipt of any regulatory ~~approvals, if any;~~approvals; and

•the filing, prosecuting, defending, and enforcing of patent claims and other intellectual property rights, and the expense of doing so.

A change in the outcome of any of these variables with respect to the development of a drug candidate could mean a significant change in the costs and timing associated with the development of that drug candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a drug candidate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time with respect to the development of that drug candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, benefits, and related costs for employees in executive, finance, corporate development, ~~and~~ human resources, and administrative support functions. Other significant general and administrative expenses include accounting and legal services, expenses associated with obtaining and maintaining patents, cost of various consultants, occupancy costs, and information systems.

~~We expect that~~

Interest Income

Interest income represents non-cash interest income related to the imputed interest from our ~~general and administrative expenses will continue to increase as we operate as a public company and commercialize~~promissory note receivable, all of which are recognized in our ~~drug candidates. We also expect to incur additional costs in future periods as we continue to establish our investor relations function, implement a system~~Condensed Statement of ~~internal control over financial reporting and a system~~Operations using the effective interest method.

Interest Expense

The Company’s interest expense is immaterial.

Table of disclosure controls and procedures that are compliant with applicable requirements and with corporate governance requirements and other rules of the stock exchange on which we are listed and other similar requirements applicable to public companies.

~~Interest Expense~~

~~Beginning in October 2016, interest~~ Contents

Other Income (Expense), Net

Other income/expense primarily consists of ~~cash and non-cash interest expense related~~unrealized gains or losses attributable to ~~our Loan Agreement. Cash interest on~~ the Loan Agreement is recognized at a floating interest rate equal to 10.5% plus the amount by which the one-month London Interbank Offer Rate (“LIBOR”) exceeds 0.5%. Non-cash interest expense represents the amortizationchanges in fair value of the ~~costs incurred~~equity investments held by our licensees, as well as the recognition of changes in ~~connection with the Loan Agreement, the allocated~~ fair value of the warrants to purchase shares of our Class A Common Stock issued in connection with the Loan Agreement (the “Warrants”) and the accretion of the final interest payments (which will be paid in cash upon loan maturity), all of which are recognized in our Condensed Consolidated Statement of Operations using the effective interest method.

common stock held by a related party.

Results of Operations

Comparison of the three months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~

2021

The following table sets forth certain information concerning our results of operations for the periods shown:


(dollars in thousands)	Three Months Ended September 30,									(dollars in thousands)	Three Months Ended June 30,
Statement of operations data:	2017			2016			Change			Statement of operations data:	2022		2021		Change
Revenue	$	15		$	38		$	(23	)	Revenue	$	9	$	9	$	—
Operating expenses:										Operating expenses:
Research and development		8,989			11,165			(2,176	)	Research and development	2,205		2,437		(232)
General and administrative		2,567			2,401			166		General and administrative	1,831		2,242		(411)
Total operating expenses		11,556			13,566			(2,010	)	Total operating expenses	4,036		4,679		(643)
Operating loss		(11,541	)		(13,528	)		1,987		Operating loss	(4,027)		(4,670)		643
Interest income		35			21			14		Interest income	50		—		50
Interest expense		(849	)		—			(849	)	Interest expense	—		—		—
Other income (expense), net		—			2			(2	)
Other (expense) income, net										Other (expense) income, net	(114)		3,829		(3,943)
Loss before income taxes		(12,355	)		(13,505	)		1,150		Loss before income taxes	(4,091)		(841)		(3,250)
Income tax provision		—			—			—		Income tax provision	—		—		—
Net loss before noncontrolling interest		(12,355	)		(13,505	)		1,150		Net loss before noncontrolling interest	(4,091)		(841)		(3,250)
Less: net loss attributable to noncontrolling interest		(8,705	)		(9,512	)		807
Less: Net loss attributable to noncontrolling interest										Less: Net loss attributable to noncontrolling interest	(940)		(233)		(707)
Net loss attributable to vTv Therapeutics Inc.	$	(3,650	)	$	(3,993	)	$	343		Net loss attributable to vTv Therapeutics Inc.	$	(3,151)	$	(608)	$	(2,543)

Revenue

Revenue ~~was insignificant~~ for the three months ended ~~September~~June 30, ~~2017~~2022, and ~~2016.~~

2021 were insignificant.

Research and Development Expenses

Research and development expenses were ~~$9.0~~$2.2 million and ~~$11.2~~$2.4 million for the three months ended ~~September~~June 30, ~~2017~~2022, and ~~2016,~~2021, respectively. The decrease in research and development expenses during ~~the~~this period of ~~$2.2~~$0.2 million or ~~19.5%~~9.5%, was primarily ~~due to:~~

Adriven by i) a decrease in clinical trial costs of ~~$0.1~~$0.3 million for azeliragon, ~~which was mainly~~ driven by the discontinuance of its development as a ~~decrease~~potential treatment of ~~$0.6~~Alzheimer’s disease in patients with type 2 diabetes, ii) decreased spending of $0.7 million related to the ~~timing~~multiple ascending dose study for HPP737, due to its completion in 2021, iii) decreases in indirect costs of ~~expenses for our ongoing STEADFAST study,~~$0.6 million offset by ~~an increase~~ iv) higher spending on TTP399 of ~~$0.5~~$1.3 million, ~~related to the costs for our open-label extension (“OLE”) trial as patients completing the STEADFAST Study elect to roll into the OLE trial;~~

~~Costs related to~~ ~~TTP399~~ ~~in the third quarter of 2017 decreased $0.7 million from the three months ended September 30, 2016,~~ due to ~~the completion of the AGATA study in August 2016;~~

~~A decrease in clinical~~ trial preparation costs, and v) higher spending on other projects costs of ~~$1.2 million for~~ ~~TTP273~~ ~~in the third quarter of 2017 as compared with the third quarter of 2016, due to the completion of the LOGRA study in December 2016.~~

$0.1 million.

General and Administrative Expenses

General and administrative expenses were ~~$2.6~~$1.8 million and ~~$2.4~~$2.2 million for the three months ended ~~September~~June 30, ~~2017~~2022, and ~~2016,~~2021, respectively. The ~~increase~~decrease in general and administrative expenses during this period of $0.4 million, or 18.3%, was primarily driven by i) decreases in payroll costs of $0.9 million due to the ~~period~~reduction in workforce in connection with the Company’s restructuring plan that occurred in December 2021, ii) decreases in share-based expense of $0.2 million, ~~or 6.9%, was primarily attributable to~~offset by iii) increases of $0.4 million in ~~the~~legal expense, ~~related to share-based awards due to the granting~~and iv) increases of ~~additional awards in fiscal 2017.~~

$0.3 million other general and administrative costs.

Interest ~~Expense~~

income

Interest ~~expense was $0.8 million and an insignificant amount~~income for the three months ended ~~September~~June 30, ~~2017~~2022, and ~~2016, respectively.~~ 2021, was insignificant.

Interest Expense

Interest expense ~~recognized~~for the three months ended June 30, 2022, and 2021, was insignificant.

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Other (Expense) / Income

Other expense was $0.1 million for the three months ended June 30, 2022, and was driven by an unrealized loss related to our investment in ~~2017 relates~~Reneo as well as the gains related to the ~~cash~~change in the fair value of the outstanding warrants to purchase shares of our own stock issued to a related party (“Related Party Warrants”). Other income was $3.8 million for the three months ended June 30, 2021, and ~~non-cash interest for~~was related to the unrealized gain recognized related to our ~~Loan Agreement which was finalized~~investment in ~~late October 2016 and which bears interest at~~ ~~10.5% plus~~Reneo as well as gains related to the ~~amount~~change in the fair value of the outstanding warrants in our own stock held by ~~which the one-month LIBOR exceeds 0.5%~~.

a related party.

Comparison of the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016~~

2021

The following table sets forth certain information concerning our results of operations for the periods shown:


(dollars in thousands)	Nine Months Ended September 30,									(dollars in thousands)	Six Months Ended June 30,
Statement of operations data:	2017			2016			Change			Statement of operations data:	2022		2021		Change
Revenue	$	58		$	596		$	(538	)	Revenue	$	2,009	$	996	$	1,013
Operating expenses:										Operating expenses:
Research and development		29,572			34,649			(5,077	)	Research and development	5,338		5,540		(202)
General and administrative		8,396			7,654			742		General and administrative	7,179		4,406		2,773
Total operating expenses		37,968			42,303			(4,335	)	Total operating expenses	12,517		9,946		2,571
Operating loss		(37,910	)		(41,707	)		3,797		Operating loss	(10,508)		(8,950)		(1,558)
Interest income		95			66			29		Interest income	50		1		49
Interest expense		(2,240	)		(3	)		(2,237	)	Interest expense	(1)		—		(1)
Other income (expense), net		—			2			(2	)
Other (expense) income, net										Other (expense) income, net	(2,856)		2,181		(5,037)
Loss before income taxes		(40,055	)		(41,642	)		1,587		Loss before income taxes	(13,315)		(6,768)		(6,547)
Income tax provision		—			—			—		Income tax provision	200		15		185
Net loss before noncontrolling interest		(40,055	)		(41,642	)		1,587		Net loss before noncontrolling interest	(13,515)		(6,783)		(6,732)
Less: net loss attributable to noncontrolling interest		(28,222	)		(29,340	)		1,118
Less: Net loss attributable to noncontrolling interest										Less: Net loss attributable to noncontrolling interest	(3,357)		(1,934)		(1,423)
Net loss attributable to vTv Therapeutics Inc.	$	(11,833	)	$	(12,302	)	$	469		Net loss attributable to vTv Therapeutics Inc.	$	(10,158)	$	(4,849)	$	(5,309)

Revenue

Revenue ~~was insignificant~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2017 and was $0.6~~2022, includes a $2.0 million increase to the transaction price for the ~~nine~~license performance obligations under the amended license agreement with Huadong due to the satisfaction of a development milestone. Revenue for the six months ended ~~September~~June 30, ~~2016. The revenue earned during the nine months ended September 30, 2016 was primarily attributable~~2021, relates to the ~~global~~reallocation of revenue to the license ~~agreement that we entered into~~and technology transfer performance obligation made in connection with ~~Calithera Biosciences, Inc. (“Calithera”) in March 2015.~~

the First Huadong Amendment.

Research and Development Expenses

Research and development expenses were ~~$29.6~~$5.3 million and ~~$34.6~~$5.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016,~~2021, respectively. The decrease in research and development expenses during the period of ~~$5.1~~$0.2 million, or ~~14.7%~~3.6%, was primarily ~~due to:~~

Adriven by i) a decrease in clinical trial costs of ~~$0.4~~$0.9 million for azeliragon ~~for the nine months ended September 30, 2017~~ which was mainly driven by discontinuance of its development as a ~~$1.8~~potential treatment of Alzheimer’s disease in patients with type 2 diabetes, ii) decreased spending of $1.7 million ~~decrease in costs~~ related to the ~~drug-drug interaction~~multiple ascending dose study ~~which is now complete and a decrease of $1.2 million~~ for ~~compound manufacturing costs~~ HPP737, due to ~~timing~~its completion in 2021, iii)decreases in indirect costs of ~~activities. These decreases were~~$1.1 million offset by ~~increases in the cost of the STEADFAST and OLE studies of $1.0 million each,~~iv) higher spending on TTP399, due to ~~higher enrollment in these trials during the nine months ended September 30, 2017;~~

trial preparation costsof $3.5 million.

~~Costs related to~~ ~~TTP399~~ ~~in the nine months ended September 30, 2017 decreased $2.2 million from the nine months ended September 30, 2016, due to the completion of the AGATA study in August 2016;~~

~~A decrease in clinical trial costs of $2.8 million for~~ ~~TTP273~~ ~~for the nine months ended September 30, 2017, due to the completion of the LOGRA study in December 2016.~~

General and Administrative ~~Expenses~~

Expenses

General and administrative expenses were ~~$8.4~~$7.2 million and ~~$7.7~~$4.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, and ~~2016,~~2021, respectively. The increase of $2.8 million has been primarily driven by i) increases of $2.6 million in legal expense, ii) increases of $0.8 million in severance costs, iii) increases of $0.7 million in other general and administrative ~~expenses during~~costs, offset by iv) decreases of $0.1 million in shared based expense, and v) decreases of $1.2 million in payroll costs due to the ~~period~~reduction in workforce in connection with the Company’s restructuring plan that occurred in December 2021.

Interest income

Interest income for the six months ended June 30, 2022, and 2021, was insignificant.

Table of ~~$0.7 million, or 9.7%, was primarily attributable to increases in compensation expense, including the~~Contents

Interest Expense

Interest expense for ~~share-based awards.~~

~~Interest Expense~~

~~Interest~~the six months ended June 30, 2022, and 2021, was insignificant.

Other Income / (Expense)

Other expense was $2.9 million for the six months ended June 30, 2022 and is driven by an unrealized loss recognized related to the Company’s investment in Reneo as well as the gains related to the change in the fair value of the outstanding warrants to purchase shares of our own stock issued to a related party. Other income was $2.2 million ~~and an insignificant amount~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021, and ~~2016, respectively. Interest expense~~was driven by an unrealized gain recognized ~~in 2017 relates~~related to the ~~cash and non-cash interest for~~Company’s investment in Reneo as well as losses related to the change in fair value of the outstanding warrants in our ~~Loan Agreement which was finalized in late October 2016 and which bears interest at~~ ~~10.5% plus the amount~~own stock held by ~~which the one-month LIBOR exceeds 0.5%~~.

a related party.

Liquidity and Capital Resources

Liquidity and Going Concern

As of ~~September~~June 30, ~~2017,~~2022, we have an accumulated deficit of ~~$263.7~~$253.3 million as well as a history of negative cash flows from operating activities. We anticipate that we will continue to incur losses for the foreseeable future as we continue our clinical trials. Further, we expect that we will need additional capital to continue to fund our operations. ~~Our currently available~~As of June 30, 2022, our liquidity sources ~~of liquidity include our~~included cash and cash equivalents of $20.5 million at September 30, 2017. Based on our current operating plan, we believe that our current cash and cash equivalents will allow us to meet our liquidity requirements through the receipt of top-line results for Subpart A of our STEADFAST Study in early 2018.$17.9 million. In addition to available cash and cash equivalents discussed above, we are ~~seeking possible partnering opportunities for~~evaluating several financing strategies to fund the on-going and future clinical trials of TTP399, including direct equity investments and the potential licensing and monetization of other Company programs such as HPP737. The Company also has a promissory note of $12.5 million under the G42 Purchase Agreement payable to the Company on or before May 31, 2023 (see Note 9) and on July 25, 2022 announced a $10.0 million Class A common stock investment by CinPax, LLC, consisting of $6.0 million in cash and $4.0 million payable on November 22, 2022 (see Note 14).

Based on our ~~GKA, GLP-1r and other drug candidates~~current operating plan, we may use the remaining availability of $37.3 million under our Sales Agreement with Cantor Fitzgerald pursuant to which we ~~believe may provide additional cash for~~could offer and sell, from time to time, shares of our Class A common stock under the ATM Offering and our ability to sell approximately 9.4 million shares of Class A common stock to Lincoln Park pursuant and subject to the limitations of the LPC Purchase Agreement. However, the ability to use these sources of capital is dependent on a number of factors, including the prevailing market price of and the volume of trading in our operations and the continuation of the clinical trials for our drug candidates. We will also pursue other sources of interim financing to provide flexibility to our operating plan. The timing and occurrence of such interim financing is not yet known.Class A common stock. These factors raise substantial doubt ~~regarding~~about our ability to continue as a going concern.

~~Debt Transaction~~

~~In October 2016, we and vTv LLC~~

ATM Offering

We have entered into the ~~Loan~~Sales Agreement ~~under~~with Cantor Fitzgerald pursuant to which we ~~have borrowed $20.0 million. Each loan tranche bears interest at a floating rate equal~~may offer and sell, from time to ~~10.5% plus the amount by which the one-month LIBOR exceeds 0.5%.~~

~~We borrowed the first tranche of $12.5 million upon the close of the Loan Agreement in October 2016. Payments with respect~~time, through or to ~~the first tranche are payable on an interest only basis monthly until May 1, 2018, followed by equal monthly payments of~~Cantor Fitzgerald, as sales agent or principal, plus accrued interest through the scheduled maturity date on May 1, 2020. In addition, a final payment for the first tranche loan equal to $0.8 million will be due on May 1, 2020, or such earlier date specified in the Loan Agreement. We borrowed the second tranche of $7.5 million in March 2017. Payments with respect to the second tranche are payable on an interest only basis monthly until October 1, 2018, followed by equal monthly payments of principal plus accrued interest through the scheduled maturity date on October 1, 2020. In addition, a final payment for the second tranche loan equal to $0.5 million will be due on October 1, 2020, or such earlier date specified in the Loan Agreement. ~~The availability of the third tranche of $5.0 million expired unused on June 30, 2017.~~

If we repay all or a portion of the loan prior to the applicable maturity date, we will pay the Lenders a prepayment penalty fee, based on a percentage of the then outstanding principal balance equal to 4.0% during the first 18 months following the funding of the second tranche and 2.0% thereafter.

~~In connection with the Loan Agreement, we have issued to the Lenders warrants to purchase shares of our Class A common stock. On October 28, 2016, we issued Warrants to purchase 152,580~~ shares of our Class A common stock athaving an aggregate offering price of up to $68.5 million. We are not obligated to sell any shares under the Sales Agreement. Under the terms of the Sales Agreement, we will pay Cantor Fitzgerald a commission of up to 3% of the aggregate proceeds from the sale of shares and reimburse certain legal fees or other disbursements. As of June 30, 2022, we have sold $31.2 million worth of Class A common stock under the ATM Offering for net proceeds of $30.3 million, leaving $37.3 million available to be sold. The shares are offered and sold pursuant to the Company’s shelf registration statement on Form S-3. In no event will we sell Class A common stock under this registration statement with a value exceeding more than one-third of the “public float” (the market value of our Class A common stock and any other equity securities that we may issue in the future that are held by non-affiliates) in any 12-calendar month period so long as our public float remains below $75 million.

Lincoln Park Purchase Agreement

We have entered into the LPC Purchase Agreement, pursuant to which we have the right to sell to Lincoln Park shares of the Company’s Class A common stock having an aggregate value of up to $47.0 million. As of June 30, 2022, we have issued 5,331,306 of these shares for gross proceeds of approximately $11.1 million, leaving $35.9 million available to be sold.

Over the 36-month term of the LPC Purchase Agreement, we have the right, but not the obligation, from time to time, in our sole discretion, to direct Lincoln Park to purchase up to 250,000 shares per day (the “Regular Purchase Share Limit”) of the Class A common stock (each such purchase, a “Regular Purchase”). The Regular Purchase Share Limit will increase to 275,000 shares per day if the closing price of the Class A common stock on the applicable purchase date is not below $4.00 per share ~~exercise~~and will further increase to 300,000 shares per day if the closing price of ~~$6.39~~the Class A common stock on the applicable purchase date is not below $5.00 per ~~share, which aggregate exercise~~share. In any case, Lincoln Park’s maximum obligation under any single Regular Purchase will not exceed $2,000,000. The purchase price ~~represents 6.0%~~for shares of Class A common stock to be purchased by

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Lincoln Park under a Regular Purchase will be equal to the lower of (in each case, subject to the adjustments described in the LPC Purchase Agreement): (i) the lowest sale price for the Class A common stock on the applicable purchase date and (ii) the arithmetic average of the ~~principal amount borrowed under~~three lowest closing sales prices for the ~~first tranche~~Class A common stock during the 10 consecutive trading days prior to the purchase date.

If we direct Lincoln Park to purchase the maximum number of shares of Class A common stock that we may sell in a Regular Purchase, then in addition to such Regular Purchase, and subject to certain conditions and limitations in the LPC Purchase Agreement, we may direct Lincoln Park to make an “accelerated purchase” and an “additional accelerated purchase”, each of an additional number of shares of Class A common stock which may not exceed the lesser of: (i) 300% of the ~~Loan~~number of shares purchased pursuant to the corresponding Regular Purchase and (ii) 30% of the total number of shares of the common stock traded during a specified period on the applicable purchase date as set forth in the LPC Purchase Agreement. The purchase price for such shares will be the lesser of (i) 97% of the volume weighted average price of the Class A common stock over a certain portion of the date of sale as set forth in the LPC Purchase Agreement and ~~3.0%~~(ii) the closing sale price of the ~~amount available under~~Class A common stock on the ~~second tranche~~date of sale (an “Accelerated Purchase”). Under certain circumstances and in accordance with the LPC Purchase Agreement, we may direct Lincoln Park to purchase shares in multiple Accelerated Purchases on the same trading day.

The LPC Purchase Agreement also prohibits us from directing Lincoln Park to purchase any shares of its Class A common stock if those shares, when aggregated with all other shares of Class A common stock then beneficially owned by Lincoln Park and its affiliates, would result in Lincoln Park and its affiliates having beneficial ownership, at any single point in time, of more than 9.99% of the ~~Loan Agreement. On March 24, 2017, in connection with the funding~~then total outstanding shares of Class A common stock as calculated pursuant to Section 13(d) of the ~~second tranche, we~~Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder.

Cash Flows


	Six Months Ended June 30,
	2022		2021
(dollars in thousands)
Net cash used in operating activities	$	(315)	$	(9,297)
Net cash used in investing activities	(21)		—
Net cash provided by financing activities	4,784		14,385
Net increase in cash and cash equivalents	$	4,448	$	5,088

Operating Activities

For the six months ended June 30, 2022, our net cash used in operating activities decreased by $9.0 million from the six months ended June 30, 2021 The significant contributor to the change in cash used during the year was driven by working capital changes offset by cash received of $6.8 million in excess of the fair value of the Class A common stock issued ~~Warrants~~ to ~~purchase 38,006~~G42 investments.

Investing Activities

For the six months ended June 30, 2022, net cash used in investing activities was insignificant. There were no cash flows from investing activities for the six months ended June 30, 2021.

Financing Activities

For the six months ended June 30, 2022, net cash provided by financing activities was driven by sales of our Class A common stock to a collaboration partner. For the six months ended June 30, 2021, net cash provided by financing activities was driven by sales of shares of our Class A common stock ~~at a per share exercise price of $5.92 per share, which aggregate exercise price represents 3.0% of~~during the principal amount of the second tranche. In each instance, the Warrants have an exercise price equal to the lower of (a) the volume weighted average price per share of our Class A common stock, as reported on the principal stock exchange on which our Class A common stock is listed, for 10 trading days prior to the issuance of the applicable Warrants or (b) the closing price of a share of our Class A common stock on the trading day prior to the issuance of the applicable Warrants. The Warrants will expire seven years from their date of issuance.

~~The Loan Agreement includes customary affirmative and restrictive covenants,~~ including, but not limited to, restrictions on the payment of dividends or other equity distributions and the incurrence of debt or liens upon the assets of the Company or its subsidiaries. The Loan Agreement does not contain any financial maintenance covenants. The Loan Agreement includes customary events of default, including payment defaults, covenant defaults and material adverse change default. Upon the occurrence of an event of default and following any applicable cure periods, a default interest rate of an additional 5% will be applied to the outstanding loan balances, and the Lenders may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement.

~~Cash Flows~~

Nine Months Ended

September 30,

2017

2016

(dollars in thousands)

Net cash used in operating activities

$
(38,510
)

$
(36,783
)
Net cash used in investing activities

(7
)

(83
)
Net cash provided by (used in) financing activities

7,500

(79
)
Net decrease in cash and cash equivalents

$
(31,017
)

$
(36,945
)

~~Operating Activities~~

~~For the nine~~six months ended ~~September~~June 30, 2017, our net cash used in operating activities increased $1.7 million from the nine months ended September 30, 2016. The increased use of cash was primarily driven by a higher usage of existing working capital.

~~Investing Activities~~

~~For the nine months ended September 30, 2017 and 2016, net cash used in investing activities was insignificant.~~

~~Financing Activities~~

For the nine months ended September 30, 2017, our cash provided by financing activities was driven primarily by the borrowing of the $7.5 million second tranche available to us under our Loan Agreement.

2021.

Future Funding Requirements

To date, we have not generated any revenue from drug product sales. We do not know when, or if, we will generate any revenue from drug product sales. We do not expect to generate ~~significant~~ revenue from drug sales unless and until we obtain regulatory approval of and commercialize ~~azeliragon~~ or any of our ~~other~~ drug candidates. At the same time, we expect our expenses to continue or to increase in connection with our ongoing development activities, particularly as we continue the research, development, and clinical trials of, and seek regulatory approval for, our drug candidates. In addition, subject to obtaining regulatory approval of any of our drug candidates, we expect to incur significant commercialization expenses for product sales, marketing, manufacturing, and distribution. We anticipate that we will need substantial additional funding in connection with our continuing operations.

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We ~~will also continue~~plan to finance our operations into the third quarter of 2023 through the use ~~cash to fund expenses related to~~of our ~~compliance with requirements applicable to us as a listed public company.~~

~~Based on our current operating plan, we believe that our current~~ cash and cash equivalents ~~will allow us to meet our liquidity requirements through the receipt of top-line results for Subpart A of our STEADFAST Study in early 2018. In addition to available cash~~ and ~~cash equivalents,~~based on current operating plans, we are ~~seeking possible partnering opportunities for our GKA, GLP-1r~~evaluating several financing strategies to fund the on-going and future clinical trials of TTP399, including direct equity investments and the potential licensing and monetization of other ~~drug candidates which~~Company programs such as HPP737. The Company also has a promissory note of $12.5 million under the G42 Purchase Agreement payable to the Company on or before May 31, 2023. The timing of any such transactions is not certain, and we ~~believe~~ may ~~provide additional cash for use in~~not be able to complete such transactions on acceptable terms, or at all. Even if we are able to complete such transactions, it may contain restrictions on our operations ~~and the continuation of the clinical trials for our drug candidates. We will also pursue other sources of interim financing to provide flexibility~~or cause substantial dilution to our ~~operating plan. The timing~~stockholders. We have based our estimates on assumptions that may prove to be wrong, and ~~occurrence of such interim financing is not yet known.~~we may use our available capital resources sooner than we currently expect. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of our drug candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures necessary to complete the development of our drug candidates.

Additionally, we may rely on our ability to sell shares of our Class A common stock pursuant to the ATM Offering and LPC Purchase Agreement. However, the ability to use these sources of capital is dependent on a number of factors, including the prevailing market price of and the volume of trading in the Company’s Class A common stock, and we may use our available capital resources sooner than we currently expect.

Our future capital requirements will depend on many factors, including:

~~the~~•The progress, costs, results, and timing of ~~the STEADFAST Study, and the clinical development~~our planned trials to evaluate TTP399 as a potential treatment of ~~azeliragon;~~

T1D;

•the willingness of the FDA to ~~accept the STEADFAST Study, as well as~~rely upon our ~~other~~ completed and planned clinical and preclinical studies and other work, as the basis for review and approval of ~~azeliragon~~;

our drug candidates;

•the outcome, costs, and timing of seeking and obtaining FDA and any other regulatory approvals;

•the number and characteristics of drug candidates that we pursue, including our drug candidates in preclinical development;

•the ability of our drug candidates to progress through clinical development successfully;

•our need to expand our research and development activities;

•the costs associated with securing, establishing, and maintaining commercialization capabilities;

•

~~the costs associated with securing, establishing and maintaining commercialization capabilities;~~

•the costs of acquiring, licensing, or investing in businesses, products, drug candidates and technologies;

•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

•our need and ability to hire additional management and scientific and medical personnel;

•the effect of competing technological and market developments;

•our need to implement additional internal systems and infrastructure, including financial and reporting systems;

•the economic and other terms, timing and success of our existing licensing arrangements and any collaboration, licensing, or other arrangements into which we may enter in the future; ~~and~~

•the amount of any payments we are required to make to M&F TTP Holdings Two LLC in the future under the Tax Receivable ~~Agreement.~~

Agreement; and

•the impact and duration of the COVID-19 outbreak / pandemic.

Until such time, if ever, as we can generate substantial revenue from drug sales, we expect to finance our cash needs through a combination of equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances, and licensing arrangements. We ~~do not~~ currently have ~~any~~ committed external source of ~~funds.~~ funds available through the ATM Offering, LPC Purchase Agreement and a Promissory Note under the G42 Purchase Agreement for $12.5 million payable to the Company on or before May 31, 2023.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants that will further limit or restrict our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or licensing arrangements with third parties, we may be required

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to relinquish valuable rights to our technologies, future revenue streams or drug candidates or grant licenses on terms that may not be favorable to us. If we are unable to obtain additional funding, we could be forced to delay, reduce, or eliminate our research and development programs or commercialization efforts, or pursue one or more alternative strategies, such as restructuring, any of which could adversely affect our business prospects.

~~Disclosures About Contractual Obligations and Commitments~~

~~The following table summarizes our contractual obligations at September 30, 2017 (in thousands):~~

Three months ended December 31,

Years ended December 31,

Total

2017

2018 - 2020

2021 - 2022

2023 and thereafter

Principal payments under Loan Agreement
$
20,000

$
—

$
20,000

$
—

$
—

Interest on Loan Agreement (1)

5,256

568

4,688

—

—

Operating lease commitments

810

88

722

—

—

Total contractual obligations
$
26,066

$
656

$
25,410

$
—

$
—

~~(1)~~

Interest payments associated with the Loan Agreement are projected based on interest rates in effect as of September 30, 2017 assuming no variable rate fluctuations going forward. An increase in the interest rates applicable to our Loan Agreement by 1% would result in an additional $0.2 million of annual cash interest expense. In addition to the estimated monthly cash interest payments, the projected interest payments stated above also include the 6% final interest payment to be paid upon the maturity of the debt obligation.

Off-Balance Sheet Arrangements

~~During the periods presented,~~

As of June 30, 2022, we did not have ~~nor do we currently have,~~outstanding any off-balance sheet arrangements as defined under SEC rules.

Discussion of Critical Accounting Policies

For a discussion of our critical accounting policies and estimates, please refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021. There have been no material changes to our critical accounting policies and estimates in ~~2017.~~

2022.

Forward-Looking Statements

This quarterly report includes certain forward-looking statements within the meaning of the federal securities laws regarding, among other things, our management’s intentions, plans, beliefs, expectations, or predictions of future events, which are considered forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “outlook”, “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based upon assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. As you read this quarterly report, you should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties, and assumptions, including those described under the heading “Risk Factors” under Item 1A of Part I in our Annual Report on Form 10-K and under Item 1A of Part II of this Quarterly Report on Form 10-Q. Although we believe that these forward-looking statements are based upon reasonable assumptions, you should be aware that many factors, including those described under the heading “Risk Factors” under Item 1A of Part I in our Annual Report on Form 10-K and under Item 1A of Part II of this Quarterly Report on Form 10-Q, could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements.

Our forward-looking statements made herein are made only as of the date of this quarterly report. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this quarterly report.

Effect of Recent Accounting Pronouncements

See discussion of recent accounting pronouncements in Note 2, “Summary of Significant Accounting Policies”, to the Condensed Consolidated Financial Statements in this Form 10-Q.

~~ITEM 3.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our Loan Agreement bears interest at a floating rate equal to 10.5% plus the amount by which the one-month LIBOR exceeds 0.5%. A one percent increase in the variable rate of interest on the Loan Agreement would increase interest expense by approximately $0.2 million annually based on the amounts currently outstanding.

We do not currently ~~hedge our~~have any material interest rate exposure.

Market Risk

Our exposure to market risk is limited to our cash and cash equivalents, all of which have maturities of one year or less. The goals of our investment strategy are preservation of capital, fulfillment of liquidity needs and fiduciary control of cash and investments. We also seek to maximize income from our investments without assuming significant risk. To achieve our goals, we maintain a portfolio of cash equivalents ~~and investments~~ in a ~~variety of securities~~financial institution that management believes to be of high credit quality. ~~The securities in our investment portfolio are not leveraged and are, due to their short-term nature, subject to minimal interest rate risk.~~ Because of the short-term maturities of our investments, we do not believe that an increase in market rates would have a material negative impact on the value of our investment portfolio.

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Foreign Currency Risk

We do not have any material foreign currency exposure.

~~ITEM 4.~~

~~CONTROLS~~ ~~AND PROCEDURES~~

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer and Chief ~~Financial~~Accounting Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934) as of ~~September~~June 30, ~~2017.~~2022. Based upon that evaluation, our Chief Executive Officer and Chief ~~Financial~~Accounting Officer concluded that, as of ~~September~~June 30, ~~2017,~~2022, our disclosure controls and procedures were effective in causing material information relating to us (including our consolidated subsidiaries) to be recorded, processed, summarized, and reported by management on a timely basis and to ensure the quality and timeliness of our public disclosures pursuant to SEC disclosure obligations.

Our management, including our Chief Executive Officer and Chief ~~Financial~~Accounting Officer, does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, with the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error and mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of controls.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Changes to Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting ~~other than those described above~~during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Website Availability of Reports and other Corporate Governance Information

The Company maintains a comprehensive corporate governance program, including Corporate Governance Guidelines for its Board of Directors, Board Guidelines for Assessing Director Independence, and charters for its Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee. The Company maintains a corporate investor relations website, www.vtvtherapeutics.com, where stockholders and other interested persons may review, without charge, among other things, corporate governance materials and certain SEC filings, which are generally available on the same business day as the filing date with the SEC on the SEC’s website http://~~www.sec.gov~~.

www.sec.gov. The contents of our website are not made a part of this Quarterly Report on Form 10-Q.

PART II – OTHER INFORMATION

~~ITEM 1.~~

ITEM 1. LEGAL PROCEEDINGS

We are not currently a party to any material legal proceedings.

~~ITEM 1A.~~

ITEM 1A. RISK FACTORS

~~In addition to the~~

Our risk ~~factor listed below and other information in this report, investors should carefully consider the risk~~ factors are set forth under the heading “Risk Factors” under Item 1A of Part I in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

~~We will need additional capital~~2021. There have been no material changes to ~~complete the STEADFAST Study and to complete the development and commercialization of azeliragon and~~ our other drug candidates and there is a substantial doubt about our ability to continue as a going concern. If we are unable to raise sufficient capital for these purposes, we would be forced to delay, reduce or eliminate our product development programs.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We expect our research and development expenses to increase in connection with our ongoing activities, particularly as we continue the STEADFAST Study, undertake additional clinical trials of our other drug candidates and continue to work on our other research programs. Our current capital will not be sufficient for us to complete the STEADFAST Study and the development of our other drug candidates. As such, we will need to raise substantial additional capital to complete the development and commercialization of ~~azeliragon. We are seeking possible partnering opportunities for our GKA, GLP-1r and other drug candidates which we believe may provide additional cash for use~~risk factors from those previously disclosed in our ~~operations and~~Annual Report on Form 10-K for the continuation of the clinical trials for our drug candidates. We will also pursue other sources of interim financing to provide flexibility to our operating plan. The timing and occurrence of such interim financing is not yet known.

If the FDA or other regulators require that we perform additional studies beyond those we currently expect, or if there are any delays in completing our clinical trials or the development of any of our drug candidates, our expenses could increase beyond what we currently anticipate and the timing of any potential product approval may be delayed. We have no commitments or arrangements for any additional financing to fund our research and development programs. We also will need to raise substantial additional capital in the future to complete the development and commercialization of ~~azeliragon~~ for additional indications and for developing our other drug candidates. Because successful development of our drug candidates is uncertain, we are unable to estimate the actual funds required to complete research and development and commercialize and license our products under development.

Until we can generate a sufficient amount of revenue from our drug candidates, if ever, we expect to finance future cash needs through equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. If worldwide economic conditions and the international equity and credit markets deteriorate and return to depressed states, it will be more difficult for us to obtain additional equity or credit financing, when needed.

Our recurring losses, accumulated deficit and our current levels of cash and cash equivalents raise substantial doubt about our ability to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and it is likely that investors will lose all or a part of their investment. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all. Further, if adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our research or development programs.

~~Our future capital requirements will depend on many factors, including:~~

~~the progress, costs, results and timing of the STEADFAST Study, and the clinical development of~~ ~~azeliragon~~;

year ended December 31, 2021.

~~the willingness of the FDA to accept the STEADFAST Study, as well as our other completed and planned clinical and preclinical studies and other work, as the basis for review and approval of~~ ~~azeliragon~~;

~~the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;~~

~~the number and characteristics of drug candidates that we pursue, including our drug candidates in preclinical development;~~

~~the ability of our drug candidates to progress through clinical development successfully;~~

~~our need to expand our research and development activities;~~

~~the costs associated with securing, establishing and maintaining commercialization capabilities;~~

~~the costs of acquiring, licensing or investing in businesses, products, drug candidates and technologies;~~

our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

~~our need and ability to hire additional management and scientific and medical personnel;~~

~~the effect of competing technological and market developments;~~

•

~~our need to implement additional internal systems and infrastructure, including financial and reporting systems; and~~

~~the economic and other terms, timing and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future;~~

~~the amount of any payments we are required to make to M&F TTP Holdings Two LLC in the future under the Tax Receivable Agreement.~~

~~ITEM 2.~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~

During the three months ended June 30, 2022, the Company issued the following unregistered securities:

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In May 2022, the Company sold 10,386,274 shares of the Company’s Class A common stock at a price per share of approximately $2.41, for an aggregate purchase price of $25.0 million.

~~ITEM 3.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

~~ITEM 4.~~

ITEM 4. MINE SAFETY DISCLOSURES

None.

~~ITEM 5.~~

ITEM 5. OTHER INFORMATION

~~None.~~

None.

~~ITEM 6.~~

ITEM 6. EXHIBITS

Exhibit Number	~~Description~~
Exhibit Number		Description
~~31.1~~
10.1*		Cogna Technology Solutions LLC, Collaboration and License Agreement

31.1*		Certification of President and Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~31.2~~ 31.2*		Certification of Chief ~~Financial~~Accounting Officer required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~32.1~~ 32.1*		Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~32.2~~ 32.2*		Certification of Chief ~~Financial~~Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF		Inline XBRL Taxonomy Extension Definition Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

_____________________________

†† Confidential treatment received with respect to portions of this exhibit.

* Filed herewith

Table of Contents ~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: ~~November 1, 2017~~

August 15, 2022


		VTV THERAPEUTICS INC.
		(Registrant)

~~By:~~	By:	/s/ ~~Stephen L. Holcombe~~ Paul J. Sekhri
		~~Stephen L. Holcombe~~ Paul J. Sekhri
		President and Chief Executive Officer

~~By:~~	By:	/s/ ~~Rudy C. Howard~~ Barry Brown
		~~Rudy C. Howard~~ Barry Brown
		Chief ~~Financial~~Accounting Officer

	Number of Shares		Weighted- Average Grant Date Fair Value
Awards outstanding at December 31, 2016		—	$	—
Granted		35,000		5.81
Awards outstanding at September 30, 2017		35,000	$	5.81
RSUs vested and expected to vest at September 30, 2017		34,002	$	5.81

	September 30, 2017			December 31, 2016
Notes payable under the Loan Agreement	$	20,000		$	12,500
Less: Debt discount		(689	)		(1,442	)
Total notes payable		19,311			11,058
Less: Current portion		(2,083	)		—
Total notes payable, net of current portion	$	17,228		$	11,058

	September 30, 2017		September 30, 2016
Class B Common Stock ⁽¹⁾		23,119,246		23,119,246
Common stock options		1,952,399		1,099,434
Restricted stock units		35,000		—
Common stock warrants		190,586		—
Total		25,297,231		24,218,680

			Three months ended December 31,		Years ended December 31,
	Total		2017		2018 - 2020		2021 - 2022		2023 and thereafter
Principal payments under Loan Agreement	$	20,000	$	—	$	20,000	$	—	$	—
Interest on Loan Agreement (1)		5,256		568		4,688		—		—
Operating lease commitments		810		88		722		—		—
Total contractual obligations	$	26,066	$	656	$	25,410	$	—	$	—

~~Delaware~~

~~47-3916571~~

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

~~4170 Mendenhall Oaks Pkwy~~
3980 Premier Dr, Suite 310
High Point, NC

(Address of principal executive offices)

(Zip Code)