Item 1.01 Entry into a Material Definitive Agreement
On July 22, 2022, vTv Therapeutics Inc. (the “Company”), CinPax, LLC, an Ohio limited liability company (“CinPax”), and CinRx Pharma, LLC, an Ohio limited liability company (“CinRx”), entered into a Common Stock and Warrant Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell (a) to CinPax, 4,154,549 shares of the Company’s Class A common stock, par value $0.01 per share (the “Common Stock” and such shares, the “Closing Shares”) at a price per share of approximately $2.41, and (b) to CinRx, warrants to purchase up to 1,200,000 shares of Common Stock at an initial exercise price of approximately $0.72 per share (the “Warrants”). The Closing Shares and the Warrants were purchased for an aggregate purchase price of $10,000,000 the (“Purchase Price”), which was paid (i) $6,000,000 in cash at the closing of the transaction and (ii) $4,000,000 in the form of a promissory note of CinPax which matures at the four-month anniversary of the execution of the Purchase Agreement (the “Closing Note”).
The Warrants will become exercisable by CinRx only if (i) the Company receives approval from the U.S. Food and Drug Administration (“FDA Approval”) to market and distribute the pharmaceutical product containing the Company’s proprietary candidate, TTP399 (the “Product”), or (ii) the Company is acquired by a third party, sells all or substantially all of its assets related to the Product to a third party or grants a third party an exclusive license to develop, commercialize and manufacture the Product in the United States, in each case within five years of the date of the issuance of the Warrants. The exercise price of the Warrants and the number of shares issuable upon exercise of the Warrants are subject to adjustments in accordance with the terms of the Warrants.
The Purchase Agreement provides for the right of CinPax to nominate a director to the Company’s board of directors for so long as CinPax holds a number of shares of Common Stock not less than the Closing Shares. The Purchase Agreement contains customary representations, warranties and agreements of the Company and CinPax for an agreement of this type.
CinRx and its affiliates have agreed to certain transfer restrictions (including restrictions on short sales or similar transactions) and restrictions on further acquisitions of Company shares, in each case subject to specified exceptions. Following the expiration of a lock up period, the Company has granted to CinPax and CinRx certain shelf and piggyback registration rights with respect to the shares of Common Stock issued to CinPax (with respect to the Closing Shares) and CinRx (with respect to shares issuable upon exercise of the Warrants) pursuant to the 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.
The Company expects to use the proceeds from the Purchase Agreement toward the funding of a Phase 3 clinical trial for a pharmaceutical product containing the Company’s proprietary candidate, TTP399, and for general corporate purposes and working capital.
The foregoing description of the Purchase Agreement and the Warrants does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement and the Warrants, copies of which are filed as Exhibit 10.1 and Exhibit 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
The Purchase Agreement contains representations, warranties, and covenants that the parties made to each other as of the date of the Purchase Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Purchase Agreement. The Purchase Agreement has been attached to provide investors with information regarding its terms and is not intended to provide any other factual information about the Company, CinPax, CinRx or any other person or entity. In particular, the representations, warranties, covenants and agreements contained in the Purchase Agreement, which were made only for purposes of the Purchase Agreement, and as of specific dates, were solely for the benefit of the parties to the Purchase Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement, instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and reports and documents filed with the SEC. Investors should not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Purchase Agreement. In
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