vTv Therapeutics Inc. - Quarter Report: 2015 June (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended June 30, 2015

Or

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)

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  ¨    No  x

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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 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  ¨    No  x

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vTv THERAPEUTICS INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2015

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PART I – FINANCIAL INFORMATION

The financial statements and other disclosures contained in this report include those of vTv Therapeutics Inc. (“we” or the “Registrant”), which is the registrant, and those of vTv Therapeutics LLC (“vTv LLC”), which became the principal operating subsidiary of the Registrant in a series of reorganizational transactions that were completed subsequent to June 30, 2015 (the “Reorganization Transactions”) in connection with our initial public offering (the “IPO”), which was completed on August 4, 2015. Because we had no substantial assets or activities (except for activities relating to our IPO) as of June 30, 2015 and because the Reorganization Transactions had not been completed as of such date, we believe that it is informative to provide the financial statements and various other disclosures as of June 30, 2015 and for the three months and six months ended June 30, 2015 and 2014 of TransTech Pharma, LLC (“TTP”), which was renamed vTvx Holdings I LLC (“vTvx Holdings I”), and High Point Pharmaceuticals, LLC (“HPP”), which was renamed vTvx Holdings II LLC (“vTvx Holdings II”), which are referred to together in this filing as the “Predecessors.” For more information regarding the transactions described above, see Note 12, “Subsequent Events,” to our financial statements contained in this quarterly report on Form 10-Q. In the Reorganization Transactions described in Note 12, “Subsequent Events,” among other transactions, the Predecessors directly or indirectly contributed substantially all of their assets including all of their personnel and operations, to vTv Therapeutics LLC, a subsidiary of vTv Therapeutics Inc. In this report, unless otherwise indicated or the context otherwise requires, references to the “Company,” “we,” “us” and “our” refer to (1) subsequent to the completion of the IPO and the Reorganization Transactions, vTv Therapeutics Inc. and its consolidated subsidiaries, and (2) prior to the completion of the IPO and the Reorganization Transactions, the Predecessors and their consolidated subsidiaries.

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vTv Therapeutics Inc.

Unaudited Balance Sheet at June 30, 2015

See accompanying notes to balance sheet.

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vTv Therapeutics Inc.

Notes to Balance Sheet (unaudited) as of June 30, 2015

vTv Therapeutics Inc. (the “Company,” the “Registrant,” “we” or “us”) is a holding company and was incorporated in the state of Delaware on April 2, 2015 for the sole purpose of becoming the managing member of vTv Therapeutics LLC (“vTv LLC”). As described in more detail in Note 12 of the Condensed Combined Consolidated Financial Statements of TransTech Pharma, LLC (“TTP”) and High Point Pharmaceuticals, LLC (“HPP”), the Company completed an initial public offering (the “IPO”) on August 4, 2015 of 7,812,500 shares of its Class A common stock at a price of $15.00 per share. The IPO raised net proceeds of approximately $109.0 million after underwriting discounts and commissions but before expenses. The Company used the net proceeds of the IPO to acquire nonvoting common units (“vTv Units”) of vTv LLC, an entity created to hold substantially all of the assets and operations of TTP and HPP, which assets and operations were transferred to such entity in a series of pre-IPO reorganization transactions (the “Reorganization Transactions”). vTv LLC is an entity under common control with vTv Therapeutics Inc.

Subsequent to the IPO and the Reorganization Transactions, vTv Therapeutics Inc. is a holding company and its principal asset is a controlling equity interest in vTv LLC, the successor company to TTP and HPP. The Company is the sole managing member of vTv LLC, and although it holds a minority economic interest in vTv LLC, the Company has the sole voting power to operate and control all of the business and affairs of vTv LLC. As a result, beginning in the third quarter of 2015, vTv Therapeutics Inc. will consolidate vTv LLC’s financial results using the variable-interest entity model (because the Company has determined that vTv LLC is a variable-interest entity and that the Registrant is the primary beneficiary of vTv LLC) and report a noncontrolling interest related to the portion of vTv Units not owned by us.

The Company’s balance sheet has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Separate statements of operations, cash flows, and changes in stockholder’s equity and comprehensive income have not been presented because the Company has had no operations from its inception (April 2, 2015) through June 30, 2015.

The Company has authorized for issuance 1,000 shares of common stock with a par value of $0.01 per share (the “Common Stock”). Under a Subscription Agreement dated April 15, 2015, MacAndrews & Forbes Incorporated (“MacAndrews”) agreed to fund $1.00 to the Company in exchange for 100 shares of Common Stock, which are reflected on the Company’s balance sheet as issued and outstanding. The Common Stock receivable from MacAndrews is reflected as a reduction to stockholder’s equity on the Company’s balance sheet.

Holders of Common Stock are entitled to (i) one vote for each share held of record on all matters submitted to a vote of stockholders and (ii) receive dividends, when and if declared by the board of directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends.

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TransTech Pharma, LLC and High Point Pharmaceuticals, LLC

Condensed Combined Consolidated Balance Sheets

(dollars in thousands except per-member unit data)

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TransTech Pharma, LLC and High Point Pharmaceuticals, LLC

Condensed Combined Consolidated Balance Sheets (continued)

(in thousands except per-member unit data)

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

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TransTech Pharma, LLC and High Point Pharmaceuticals, LLC

Condensed Combined Consolidated Statements of Operations - Unaudited

(in thousands except per-member unit data)

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

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TransTech Pharma, LLC and High Point Pharmaceuticals, LLC

Condensed Combined Consolidated Statements of Changes in Redeemable Convertible Units and Members’ Deficit - Unaudited

(in thousands except per-member unit data)

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

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TransTech Pharma, LLC and High Point Pharmaceuticals, LLC

Condensed Combined Consolidated Statements of Cash Flows - Unaudited

(in thousands)

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

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TransTech Pharma, LLC and High Point Pharmaceuticals, LLC

Notes to Condensed Combined Consolidated Financial Statements – Unaudited

($ amounts are in thousands unless otherwise noted)

TransTech Pharma, Inc. (“TTP Inc.”) was incorporated in the State of Delaware on December 3, 1998. TTP Inc., was formed to develop and apply proprietary high-throughput medicinal chemistry approaches as its platform technology to yield clinical drug candidates in a timely and cost effective manner.

In November 2013, TTP Inc. underwent a reorganization by contributing all of its assets to TransTech Pharma, LLC (“TTP,” or “TransTech”), a Delaware limited liability company, in exchange for (a) assumption of all liabilities of TTP Inc. and (b) all membership units of the Company. The membership units of the Company were then distributed to the shareholders of TTP Inc. to match in kind and number the shares held by them in TTP Inc.

On March 12, 2008, TTP Inc. formed High Point Pharmaceuticals, LLC (“HPP”) and transferred various intellectual property (principally consisting of certain programs) to HPP in exchange for common and preferred units as well as warrants to purchase an additional 6.7 million common units. TTP Inc. subsequently distributed these equity investments to its unit holders on a pro-rata basis, based on the unit holders’ ownership in TTP Inc. HPP is primarily responsible for all preclinical and clinical development efforts, as well as maintenance of the intellectual property portfolio for all of its drug candidate programs. TTP provides research employees and facilities, for which TTP charges HPP a maintenance fee. TTP has no further obligation beyond the items described above, and TTP has no obligation to the creditors of HPP as a result of its involvement with HPP. For the six months ended June 30, 2015 and 2014, HPP had revenues of $160 and $0, respectively. For the six months ended June 30, 2015 and 2014, HPP had a net loss of $4.3 million and $6.4 million, respectively.

TTP and HPP are collectively referred to as “the Company.”

The condensed combined consolidated financial statements include the consolidated accounts of TTP, its wholly owned subsidiary (prior to December 31, 2014), High Point Clinical Trials Center, LLC (“HPCTC”), and the combined accounts of HPP. All significant intercompany balances and transactions have been eliminated. Condensed combined financial statements are presented as these entities are under common ownership and management.

Reorganization and Initial Public Offering (IPO)

During July 2015, TTP and HPP were renamed vTvx Holdings I and vTvx Holdings II, respectively. The Company then entered into a series of Reorganization Transactions (as described in Note 12) through which the operations of vTvx Holdings I and vTvx Holdings II were combined into vTv LLC. As a result of the Reorganization Transactions, substantially all of the assets of TTP and HPP were transferred to vTv LLC, an entity controlled by vTv Therapeutics Inc.

On August 4, 2015, vTv Therapeutics Inc. consummated its IPO of 7,812,500 shares of its Class A common stock at a price of $15.00 per share. The IPO raised net proceeds of approximately $109.0 million after underwriting discounts and commissions but before expenses. vTv Therapeutics Inc. used the net proceeds of the IPO to acquire vTv Units from vTv LLC, an entity under common control with vTv Therapeutics Inc. and the holder of substantially all of the assets of the Company. Following the reorganization transactions, vTv Therapeutics Inc. intends to use the net proceeds of the offering to fund clinical development, studies, and trials for its various products and other drug candidates, for working capital and other general corporate purposes.

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TransTech Pharma, LLC and High Point Pharmaceuticals, LLC

Notes to Condensed Combined Consolidated Financial Statements - Unaudited (continued)

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 balance sheet as of June 30, 2015, statements of operations for the three and six months ended June 30, 2015 and 2014 and cash flows for the six months ended June 30, 2015 and 2014 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, 2014 contained in the final prospectus filed by the Company with the SEC on July 31, 2015 relating to the IPO. 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 June 30, 2015 and the results of operations for the three and six months ended June 30, 2015 and 2014 and cash flows for the six months ended June 30, 2015 and 2014. The December 31, 2014 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 six months ended June 30, 2015 and 2014 are unaudited. Interim results are not necessarily indicative of results for an entire year.

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 useful lives of property and equipment, the fair value of the Company’s membership units, the fair value of redeemable preferred units, the fair value of derivative liabilities, and the fair value of the Company’s debt, among others. The Company bases its estimates on historical 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 financial institutions. The balances of these cash accounts frequently exceed insured limits.

The accounts receivable balance at June 30, 2015 was $0.

One customer represented 100% of the revenue earned during the six months ended June 30, 2015. Two customers represented 100% of the revenue during the six months ended June 30, 2014.

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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 reflect cash and cash equivalents that are pledged as collateral required by the terms of operating leases on facilities used by HPCTC.

Accounts Receivable

On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance based on its history of collections and write-offs and the current status of all receivables.

Property and Equipment and other Long-lived Assets

The Company periodically assesses it property and equipment and other long-lived assets for impairment in accordance with the relevant accounting guidance. During 2014, the Company determined that certain of its land assets met the criteria for held-for-sale accounting treatment and, accordingly, adjusted the carrying value of such assets to the amount of the expected proceeds less costs of disposal, which was lower than the original carrying value. As of June 30, 2015 and December 31, 2014, the carrying value of assets held for sale was $2.7 million and $2.8 million, respectively.

Revenue Recognition

The Company uses the revenue recognition guidance established by ASC Topic 605, “Revenue Recognition.” The Company recognizes revenue when 1) persuasive evidence of an arrangement exists; 2) the service has been provided to the customer; 3) collection of the fee 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 units based on the respective selling price of each unit. If the arrangement constitutes a single unit of accounting, 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.

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

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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.

Income Taxes

The Company is treated as a partnership for income tax purposes. Accordingly, the allocated share of taxable income or loss is includable in the income tax returns of the Company’s members. The Company recognizes the effect of income tax positions only if these positions are more likely than not of being sustained. Changes in recognition or measurement are reflected in the period in which each change occurs. The Company has not recognized any uncertain tax positions and no examinations are currently being conducted by U.S., state, or local taxing authorities.

Deferred Offering Costs

Legal and accounting costs of $3.5 million, which were incurred in connection with the IPO, are reflected on the balance sheet as of June 30, 2015 as capitalized deferred offering costs. Following the consummation of the IPO (see Note 12 for more information), deferred offering costs will be offset against the proceeds of the offering and included in members’ deficit.

Segment and Geographic Information

Operating segments are defined as an enterprise’s components (business activities from which it earns revenue and incurs expenses) for which discrete financial information is (1) available; and (2) is regularly reviewed by the chief operating decision maker (CODM) in deciding how to allocate resources and in assessing performance. The Company’s CODM is its President and Chief Executive Officer. The Company’s business operates in one reportable segment comprised of one operating segment.

Recently Issued Accounting Pronouncements Not Yet Adopted

In April 2015, the FASB issued ASU No. 2015-04, “Compensation—Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets,” (“ASU 2015-04”). For an entity with a fiscal year-end that does not coincide with a month-end, the amendments in this update provide a practical expedient that permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. The practical expedient should be applied consistently to all plans if an entity has more than one plan. This ASU is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. The Company does not expect ASU 2015-04 to have a material impact on its combined consolidated financial statements upon adoption.

In April 2015, the FASB issued ASU No. 2015-05, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” (“ASU 2015-05”). The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should

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account for the arrangement as a service contract. This ASU is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. The Company does not expect ASU 2015-05 to have a material impact on its combined consolidated financial statements upon adoption.

In April 2015, the FASB issued ASU No. 2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions (a consensus of the Emerging Issues Task Force),” (“ASU 2015-06”). The amendments in this update specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. This ASU is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. The amendments in this update should be applied retrospectively for all financial statements presented. The Company does not expect ASU 2015-06 to have a material impact on its combined consolidated financial statements upon adoption.

In June 2015, the FASB issued ASU No. 2015-10, “Technical Corrections and Improvements,” (“ASU 2015-10”). The amendments in this update represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The effective dates of transition guidance varies based on the amendments in this update. The amendments in this update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this update. The Company does not expect ASU 2015-10 to have a material impact on its combined consolidated financial statements upon adoption.

On March 28, 2014, the Company entered into a reaffirmation and pledge agreement (“Pledge Agreement”) with a former officer and director (“the Former Officer”) and certain entities related to the officer (collectively with the Former Officer, the “Former Officer and Related Entities”) of the Company. Pursuant to the Pledge Agreement, the Former Officer granted a security interest to the Company in 18,730,276 Series F convertible preferred units of TTP and 9,363,128 Series B convertible preferred units of HPP owned by the Former Officer (the “Pledged Units”) to secure the Former Officer’s obligations to the Company under a promissory note (the “2007 Note”) issued by the Former Officer to the Company. See further discussion of the 2007 Note in Note 4.

On December 30, 2014, the Company’s board of directors authorized a repurchase of units from the Former Officer and Related Entities. The terms of the unit repurchase are stipulated in a Letter Agreement (the “Former Officer Agreement”) with the Former Officer and Related Entities. The Former Officer Agreement superseded all prior understandings with respect to any sales or other similar transactions relating to the Company, stipulating that the Company would repurchase all of the Company’s issued and outstanding units owned by the Former Officer and Related Entities, including any warrants and options to purchase common units. These included 9,100,001 common units of TTP, 14,462,213 common units of HPP, 108,781,071 Series B convertible preferred units of HPP, 218,818,574 Series F convertible preferred units of TTP, 2,776,522 warrants for common units of TTP, 750,000 warrants for common units of HPP and 58,750 options for common units of HPP (collectively, the “Repurchased Units”). All units repurchased by the Company were legally retired and resumed the status of authorized and unissued common and preferred units.

In exchange for the Repurchased Units, under the Former Officer Agreement, the Company agreed to make periodic cash payments to the Former Officer and Related Entities totaling $7.5 million between December 30, 2014 and September 30, 2017. Payments consist of $2.5 million paid at closing of the agreement on December 30, 2014 and $5.0 million to be paid in eight equal quarterly installments beginning December 31, 2015. This obligation is recorded in other liabilities in the combined consolidated balance sheet. The Company also transferred 100% of its ownership interests in HPCTC to the Former Officer and agreed to make future distributions to the Former Officer (the “Contingent Distributions”). The distributions payable amounts are to be made in the form of cash or certain

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securities upon the occurrence of certain operational or transactional events and milestones. The Contingent Distributions are reported at fair value on the combined consolidated balance sheet and classified as Fair value of contingent distribution as of June 30, 2015 and December 31, 2014. The maximum Contingent Distributions in aggregate equal $150 million. However, the Company’s obligation to pay the Contingent Distributions expires upon the occurrence of any one of a number of specified termination events. In addition, the Company exchanged the Pledged Units for TTP Perpetual Securities in the principal amount of approximately $6.0 million and HPP Perpetual Securities in the principal amount of approximately $0.5 million (the “Perpetual Securities”). All Pledged Units exchanged by the Company were legally retired and resumed the status of authorized and unissued preferred units. The Perpetual Securities remain subject to the Pledge Agreement, have no fixed maturity date and accrue interest at a rate per annum equal to the 2007 Note. The Perpetual Securities may be prepaid without penalty in whole or in part at any time. Prepayments shall first be applied to accrued interest and then to principal. The Perpetual Securities obligation is presented as a note payable on the Condensed Combined Balance Sheet as of June 30, 2015 and December 31, 2014.

In conjunction with the issuance of the Perpetual Securities, the Company gave the Former Officer an irrevocable right to sell back to the Company all of the Perpetual Securities. This right is exercisable at the discretion of the Former Officer. The exercise price of the put feature for all of the Perpetual Securities is the amount then outstanding on the 2007 Note. The Former Officer also gave the Company an irrevocable right to repurchase all of the Perpetual Securities. This right is exercisable at the earlier to occur of: (1) the maturity of the 2007 Note or (2) the date the Former Officer receives distribution payable payments under the Former Officer Agreement in excess of $30 million. The exercise price of the call feature for all of the Perpetual Securities is the amount then outstanding on the 2007 Note. The Company, at its sole discretion, may elect to pay the exercise price in cash or via the extinguishment of the 2007 Note.

On March 30, 2007, the Company entered into the 2007 Note with the Former Officer, pursuant to which the Company loaned $4.8 million to the Former Officer. Interest accrues on the 2007 Note at a rate per annum equal to the lowest rate necessary to meet the Internal Revenue Code requirements for the applicable federal rate and is payable at maturity. Under the original terms of the 2007 Note, the entire principal balance and any accrued but unpaid interest would have become due on the earlier of (1) March 30, 2017 or (2) the date on which the Former Officer received in excess of $10 million in proceeds from the sale of any shares of capital stock of TTP, Inc., PharmaCore, Inc. or any of their subsidiaries. See Note 9 for additional discussion of PharmaCore, Inc. As of December 31, 2014, the 2007 Note had an aggregate outstanding principal amount of $4.8 million, and $1.8 million of accrued and unpaid interest. As of June 30, 2015, the 2007 Note had an aggregate outstanding principal amount of $4.8 million, and $1.9 million of accrued and unpaid interest.

On March 28, 2014, the Company entered into the Pledge Agreement with the Former Officer. Pursuant to the Pledge Agreement, the Former Officer granted a security interest to the Company in the Pledged Units to secure the Former Officer’s obligations to the Company under the 2007 Note and under the Pledge Agreement. The Pledge Agreement also amended the maturity date of the 2007 Note to be the earlier of March 30, 2018 or the date on which the Former Officer receives in excess of $10 million in proceeds from the sale of any units of the Company, HPP, PharmaCore, Inc. or any of their subsidiaries or from the sale of any assets of any of the foregoing.

As discussed in Note 3, on December 30, 2014, the Company exchanged the Pledged Units into the Perpetual Securities. The Perpetual Securities remain subject to the Pledge Agreement, have no fixed maturity date and accrue interest at a rate per annum equal to the 2007 Note. The Perpetual Securities may be prepaid without penalty in whole or in part at any time. Prepayments shall first be applied to accrued interest and then to principal. The Perpetual Securities were initially recorded at their initial fair value of $6.6 million. The increase in the fair value of the perpetual securities during the six months ended June 30, 2015 was $115 and is reflected in other income, net in the combined consolidated statements of operations.

In June 2008, the Company entered into a promissory note with a financial institution secured by a deed of trust on land the Company purchased in 2008. The Company borrowed $2.8 million at an interest rate of 6.5% per

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annum. The note principal was to be repaid in one installment on June 20, 2011, with interest payments made monthly during the term of the note. On May 9, 2011, the Company entered into a Debt Modification Agreement to amend the terms of the promissory note, whereby it extended the maturity date to May 20, 2016 and changed the annual interest rate to the Prime Rate plus 1.250%, with a maximum interest rate of 6.750% and minimum rate of 4.750%. The note is to be repaid in 60 monthly payments of principal and interest, including 59 payments of approximately $22 plus a final payment for the remaining balance of principal and interest.

On March 28, 2014, the Company and M&F TTP Holdings LLC (“M&F”) agreed to exchange all $116.2 million of outstanding principal and interest due to M&F under the Note and Equity Issuance Agreement (including amounts advanced under the initial agreement plus the 2013 Promissory Notes and amounts advanced following the December 24, 2013 amendment) for 292,722,844 Series F redeemable convertible preferred units of the Company and 155,219,376 Series B redeemable convertible preferred units of HPP. Concurrently on March 28, 2014, the Company entered into an Uncommitted Advance Agreement with M&F and the Former Officer. As of December 30, 2014, the Former Officer was no longer party to this agreement. Advances made under the Uncommitted Advance Agreement are secured by substantially all of our assets and bear interest at an annual rate of LIBOR plus 10%. Principal and interest were originally payable on demand. On May 4, 2015, M&F agreed to extend the maturity date of the Uncommitted Advance Agreement to January 15, 2016. Prepayments can be made under the Uncommitted Advance Agreement without penalty. As of June 30, 2015 and December 31, 2014, $46.6 million and $27.3 million, respectively, of principal was outstanding under the Uncommitted Advance Agreement.

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.

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 $100 from 2015 through 2021, (2) a potential regulatory milestone payment of $750 and (3) potential royalty payments at single digit royalty rates based on net sales of licensed products as defined in the agreement.

Authorized, Issued, and Outstanding Redeemable Convertible Preferred Units

As of June 30, 2015, TTP was authorized to issue 1,415,851,831 preferred units in the aggregate. The following table summarizes authorized, issued and outstanding redeemable convertible preferred units as of June 30, 2015. The preferred units are carried at the greater of the original cost, liquidation preference, or fair value as indicated in the table below (in thousands except per-member unit data):

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No TTP redeemable convertible units were issued or repurchased during the six months ended June 30, 2015.

As of June 30, 2015, HPP was authorized to issue 753,885,484 preferred units in the aggregate. The following table summarizes authorized, issued and outstanding redeemable convertible preferred units as of June 30, 2015. The preferred units are carried at the greater of the original cost, liquidation preference, or fair value as indicated in the table below (in thousands except per member unit data):

There were no HPP redeemable convertible preferred units issued or repurchased during the six months ended June 30, 2015.

Conversion Rights

Each TTP Series A, Series B, Series C, Series D, Series E and Series F preferred unit (collectively, the “TTP Series Preferred”) is convertible, at the option of the holder, into common units of TTP based on the total consideration received by TTP for each series of the preferred units (plus declared and unpaid distributions) divided by the conversion price. Initially the conversion prices were $0.296973, $1.37385, $2.457293, $3.91268996, $2.64413153 and $0.10 per common unit for the Series A, Series B, Series C, Series D, Series E and Series F preferred units, respectively. The conversion prices are subject to adjustments for stock splits, stock dividends, combinations or any other similar event.

Subsequently, the Series C conversion price was adjusted to $0.203979 per common unit and the Series D conversion price was adjusted to $2.644131 per common unit. The foregoing conversion prices were in effect at June 30, 2015.

Each HPP Series A and B preferred unit is convertible, at the option of the holder, into HPP common units based on the total consideration received by HPP for each series of the preferred units (plus declared and unpaid distributions) divided by the conversion price. Initially the conversion prices were $0.024 and $0.024 per common unit for the Series A and Series B preferred units, respectively.

Each series of preferred units also contains a provision whereby the units shall automatically convert into common units based on the then-effective conversion price upon the occurrence of the closing of a qualified public offering pursuant to an effective registration statement under the Securities Act of 1933. See Note 12, “Subsequent Events.”

Rights to Distributions Prior to Termination of the Company

Holders of preferred units are entitled to receive distributions of cash or other property prior to termination of the Company when and if declared by the Board of Directors. Such distributions are made to members of the Company on a pro rata basis (and with respect to preferred units, on an as-converted basis). Holders of preferred units are entitled to share in any distribution made to the common units.

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Voting Rights

Each holder of TTP and HPP Series Preferred Units is entitled to vote on all matters on which the holders of common units are entitled to vote, based on the number of common units into which their TTP and HPP Series Preferred units are convertible. In addition, holders of preferred units are entitled to a separate class vote on certain extraordinary matters.

Liquidation

Liquidation is deemed to occur in the event of any liquidation, dissolution or winding up of TTP, whether voluntary or involuntary, as well as (if determined by the Board) any change of control of the Company that includes (i) an acquisition of the Company in which the unit holders of the Company immediately prior to such transaction do not own a majority of the outstanding voting securities of the acquiring entity immediately following such transaction and (ii) a sale of all or substantially all of the assets of the Company.

In the event of any liquidation, dissolution or winding up of TTP, the holders of the TTP Series F units are entitled to receive, prior to the distribution to the other holders, a liquidation amount equal to the TTP Series F consideration paid per unit ($0.10) plus all declared but unpaid distributions thereon. Thereafter, the holders of all other series of TTP Series Preferred are entitled to receive, prior to distribution to the holders of common units, a liquidation amount equal to the consideration paid per unit ($0.296973, $1.37385, $2.457293, $3.91268996, $2.64413153, $.024 and $.024 for the TTP Series A, TTP Series B, TTP Series C, TTP Series D, TTP Series E, HPP Series A and HPP Series B units, respectively), plus all declared but unpaid distributions thereon.

Redemption

On May 18, 2015, the Board of Directors amended the TTP operating agreements and revised the redemption dates of the Company’s redeemable convertible units as follows:

Beginning January 1, 2020, the holders of a majority of the outstanding TTP Series F preferred units may demand that TTP redeem up to all of the outstanding TTP Series F preferred units. Beginning January 8, 2020, the holders of a majority of the outstanding TTP Series A preferred units and/or a majority of the outstanding TTP Series B preferred units and/or a majority of the outstanding TTP Series C preferred units may demand that TTP redeem up to all of the outstanding units of each respective series of preferred units. Beginning on November 26, 2020, the holders of a majority of the outstanding shares of TTP Series E preferred units may demand that TTP redeem up to all of the outstanding units of such series of preferred units. Beginning on May 20, 2020, the holders of a majority of the outstanding shares of TTP Series D preferred units may demand that TTP redeem up to all of the outstanding units of such series. The redemption price per unit for each such series continues to be the greater of (a) such series’ liquidation value (i.e., the original cost for each unit of such series (as adjusted for any unit split, unit dividend or other similar events) plus all declared and unpaid distributions on such series and (b) such series’ fair market value (plus all declared but unpaid distributions on such series).

The redemptions of TTP Series Preferred can only be made out of funds legally available for that purpose (which determination would require the TTP board of directors to consider whether, following such redemption, TTP would be able to continue as a going concern). If TTP has insufficient funds legally available to redeem all TTP Series Preferred required to be redeemed on the mandatory redemption date, those funds legally available for such purpose shall be first used to ratably redeem the maximum number of any Series F preferred units that have properly demanded that TTP redeem such units in accordance with the TTP operating agreement before the units of any other series of TTP Series Preferred are redeemed. As of June 30, 2015 there were no funds legally available for redemption.

On May 18, 2015, the Board of Directors amended the HPP operating agreements and revised the redemption dates of the Company’s redeemable convertible units as follows:

Beginning January 1, 2020, the holders of a majority of the outstanding HPP Series B preferred units may demand that HPP redeem up to all of the outstanding units of such series. Beginning April 11, 2020, the holders of a

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majority of the outstanding HPP Series A preferred units may demand that HPP redeem up to all of the outstanding units of such series. The redemption price per unit for each such series continues to be the greater of (a) such series’ liquidation value (i.e., the invested amount for each unit of such series (as adjusted for any unit split, unit dividend or similar events)) and (b) such series’ fair market value.

The redemptions of HPP preferred units can only be redeemed out of funds legally available for that purpose (which determination would require the HPP board of directors to consider whether, following such redemption, TTP would be able to continue as a going concern). If HPP has insufficient funds legally available to redeem all of the HPP Series A and Series B units required to be redeemed on the mandatory redemption date, those funds legally available for such purpose shall be first used to ratably redeem the maximum number of any HPP Series B preferred units that have properly requested that HPP redeem such units in accordance with the HPP operating agreement before the HPP Series A preferred units are redeemed. As of June 30, 2015, no funds were legally available for redemption.

Registration Rights Agreement

Preferred unit holders have certain preferential rights in connection with public offerings and sales of common units.

Common Member Units

Authorized, Issued, and Outstanding Common Membership Units

TTP’s common units consist of one class, with no par value, 1,512,722,844 units authorized, and 4,188,607 units issued and outstanding at June 30, 2015 and December 31, 2014, respectively. At June 30, 2015, the Company had reserved common membership units for future issuance as follows:

HPP’s common units consist of one class, with no par value, 805,219,377 units authorized, and 5,148,485 units issued and outstanding at June 30, 2015 and December 31, 2014, respectively. At June 30, 2015, the Company had reserved common membership units for future issuance as follows:

As of June 30, 2015, HPP had 505,837 options outstanding with a strike price of $0.024 expiring at various dates in 2018. As of June 30, 2015 the fair value of the options was $0.

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Liquidation Rights

In the event of any liquidation or dissolution of the Company, the holders of the TTP Series G Units are entitled to receive the Series G liquidation preference prior to the distribution to the other holders. See Note 12, “Subsequent Events—TTP Series G” for additional details regarding the TTP Series G Units. The holders of the common units are entitled to share ratably with holders of the TTP and HPP Series Preferred, on an as-if-converted-to-common-units basis, in the remaining assets of the Company legally available for distribution after the payment of the full liquidation preference for all other Preferred Series shares.

Distributions Prior to Termination of the Company and Voting Rights

The holders of the common units are entitled to receive distributions of cash or other property prior to termination of the Company when and if declared by the Board of Directors. Such distributions would be made to members of the Company on a pro-rata basis.

The holders of the common units have the right to one vote per unit.

Warrants on Common Units

TTP’s outstanding warrants and related exercise prices for the six months ended June 30, 2015 are as follows:

The following table summarizes information related to the outstanding TTP warrants as of June 30, 2015:

HPP’s outstanding warrants and related exercise prices for the six months ending June 30, 2015 are as follows:

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The following table summarizes information about the outstanding HPP warrants as of June 30, 2015:

The carrying amount of certain of the Company’s financial instruments, including cash and cash equivalents, net accounts 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 following table summarizes the conclusions reached regarding fair value measurements as of June 30, 2015:

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There were no transfers into or out of level 3 instruments and/or between level 1 and level 2 instruments during the six months ended June 30, 2015.

Significant inputs utilized in the valuation of the Company’s redeemable convertible preferred units and contingent distribution as of June 30, 2015 were as follows:

In addition to the significant inputs above, the fair values of the redeemable convertible preferred units and the contingent distribution as of June 30, 2015 were derived utilizing forecasts through 2030 as an input to a discounted cash flow model. These forecasts represent the future expected revenues and costs associated with the drug programs currently under development, adjusted for certain probabilities of successful passage through various developmental hurdles, including successful completion of pre-clinical trials and all three phases of clinical trials, as well as FDA approval of a new drug application.

Changes in the unobservable inputs noted above would impact members’ equity and net income. For the Company’s redeemable convertible preferred units, increases (decreases) in the estimates of the Company’s annual volatility would increase (decrease) the members’ equity and an increase (decrease) in the annual risk free rate would increase (decrease) the members’ equity. For the Company’s contingent distribution, increases (decreases) in the estimates of the Company’s annual volatility would increase (decrease) net income and an increase (decrease) in the annual risk free rate would increase (decrease) net income.

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PharmaCore, Inc.

Certain unit holders of the Company also control PharmaCore, Inc. (“PharmaCore”). The Company purchases chemistry and Good Manufacturing Practices manufacturing services from PharmaCore. Total purchases from PharmaCore for the six months ended June 30, 2015 and June 30, 2014 were $0.9 million and $0.8 million, respectively.

On April 17, 2007, the Company’s Board of Directors approved $2.0 million of subordinated financing to be provided to PharmaCore. Advances were made and interest accrued before the Company entered into the Subordinated Promissory Note agreement (the “Note Agreement”) with PharmaCore on June 9, 2008. The Note Agreement was amended on April 23, 2010 to provide an additional $2.9 million of subordinated financing, with the same terms as the original note. The Note Agreement has a nine-year term, a fixed interest rate of 8.25% per annum, with maturity of June 1, 2017. No payments were required through December 31, 2014 with accrued interest capitalized into the principal balance. Thereafter, interest is to be paid quarterly. As part of the agreement, the Company received a warrant, exercisable for up to ten years, to purchase 370,370 common units of PharmaCore at an exercise price of $0.54 per unit. During the six months ended June 30, 2015 and 2014, the Company recorded interest income of $0.4 million related to this financing. The total receivable balance due from PharmaCore financing, accrued interest and cash advance activities was $10.0 million and $9.6 million at June 30, 2015 and December 31, 2014, respectively.

As of June 30, 2015 and December 31, 2014, the Company recorded an allowance for uncollectible amounts related to the PharmaCore receivable of $9.2 million and $8.8 million, respectively. The changes in the allowance during the six months ended June 30, 2015 and June 30, 2014 are reflected in other income (expense) - related party on the combined consolidated statements of operations.

In November 2013, TTP Inc. underwent a reorganization by contributing all of its assets to TTP, in exchange for (a) assumption of all its liabilities and (b) all membership units of TTP. The membership units of TransTech Pharma, LLC, were then distributed to the shareholders of TTP Inc. to match in kind and number the shares previously held by them in TTP Inc. Following the reorganization, the Company, a limited liability company, was treated as a partnership for U.S. federal and state income tax purposes in most jurisdictions. Partnerships generally do not pay income tax, nor recognize income tax expense, but pass their taxable attributes to the partners who pay income tax at the individual partner level. Prior to the reorganization to an LLC, TTP Inc. had significant deferred tax assets largely comprised of net operating loss carryforwards and research and development credits. As a result of recurring and anticipated future operating losses, the Company recorded a full valuation allowance against the net deferred tax assets prior to the reorganization.

Under the two-class method, for periods with net income, basic net income per common unit is computed by dividing the net income attributable to common unit holders by the weighted-average number of common units outstanding during the period. Net income attributable to common unit holders is computed by subtracting from net income the portion of current year earnings that participating securities would have been entitled to receive pursuant to their dividend rights had all of the year’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss as the holders of the participating securities have no obligation to fund losses. Diluted net loss per common unit is computed under the two-class method by using the weighted-average number of common units outstanding plus, for periods with net income attributable to common unit holders, the potentially dilutive effects of unit options and warrants. In addition, the Company analyzes the potentially dilutive effect of the outstanding participating securities under the if-converted method when calculating diluted earnings per unit in which it is assumed that the outstanding participating securities convert into common units at the beginning of the period. The Company reports the more dilutive of the approaches (two-class or if-converted) as its diluted net income per unit during the period. Due to the existence of net losses for TTP and HPP for the six months ended June 30, 2015 and June 30, 2014, basic and diluted loss per unit were the same, as the effect of potentially dilutive securities would have been anti-dilutive.

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Undistributed net earnings (loss) for a given period is apportioned to participating securities based on the weighted-average common membership units outstanding during the applicable period as a percentage of the total weighted-average units outstanding during the same period.

The following table summarizes the computation of basic and diluted net loss (in thousands) and net loss per unit of TTP:

The following table summarizes the computation of basic and diluted net earnings (loss) (in thousands) and net earnings (loss) per unit of HPP:

As of June 30, 2015, June 30, 2014 and December 31, 2014, the following TTP securities, presented on a common-unit-equivalent basis, have been excluded from the calculation of weighted-average TTP common units outstanding because their effect is anti-dilutive:

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As of June 30, 2015 and 2014, the following HPP securities, presented on a common-unit-equivalent basis, have been excluded from the calculation of weighted-average HPP common units outstanding because their effect is anti-dilutive:

Initial Public Offering (IPO)

On August 4, 2015, vTv Therapeutics Inc. consummated its IPO of 7,812,500 shares of its Class A Common Stock at a price of $15.00 per share. The IPO raised net proceeds of approximately $109.0 million after underwriting discounts and commissions but before expenses. vTv Therapeutics Inc. used the net proceeds of the IPO to acquire vTv Units of vTv Therapeutics LLC, an entity under common control with vTv Therapeutics Inc. which holds substantially all of the assets of the Company as a result of the Reorganization Transactions described below. vTv Therapeutics Inc. intends to use the net proceeds of the IPO to fund clinical development, studies, and trials for its various products and other drug candidates, for working capital and other general corporate purposes.

Reorganization Transactions

Prior to the IPO and the Reorganization Transactions described below, TransTech Pharma, LLC and High Point Pharmaceuticals, LLC were renamed vTvx Holdings I and vTvx Holdings II, respectively. In the Reorganization Transactions:

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Below is a summary of the principal documents entered into in connection with the Reorganization Transactions:

Exchange Agreement

Pursuant to the terms of the Exchange Agreement, but subject to the Amended and Restated LLC Agreement of vTv Therapeutics LLC, the vTv Units (along with a corresponding number of shares of the Class B Common Stock) are exchangeable for (i) shares of the Class A Common Stock on a one-for-one basis or (ii) cash (based on the fair market value of the Company’s Class A Common Stock as determined pursuant to the Exchange Agreement), at our option (as the managing member of vTv Therapeutics 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 will ultimately be determined by the entire board of directors of vTv Therapeutics Inc. (the ‘‘Board of Directors’’).

Tax Receivable Agreement

The Tax Receivable Agreement among the Successor, vTv Therapeutics Holdings and M&F provides for the payment by the Successor to vTv Therapeutics Holdings (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 Successor actually realizes (or, in some circumstances, the Successor is deemed to realize) as a result of (a) the exchange of Class B Common Stock, together with the corresponding number of vTv Units, for shares of the Successor’s Class A Common Stock (or for cash), (b) tax benefits related to imputed interest deemed to be paid by the Successor as a result of the Tax Receivable Agreement and (c) certain tax benefits attributable to payments under the Tax Receivable Agreement.

Investor Rights Agreement

The Successor entered into an investor rights agreement with vTv Therapeutics Holdings. Under the investor rights agreement, vTv Therapeutics Holdings is initially entitled to nominate a majority of the members of the Company’s Board of Directors and designate the members of the committees of the Board of Directors.

Sale of Land

On August 18, 2015, the Company sold a portion of its assets held for sale, with a carrying value of $1.3 million, and repaid debt related to the financing of these assets of $1.3 million, resulting in no gain or loss on the sale.

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TTP Series G

On July 29, 2015, the Company and M&F agreed to exchange all $27.0 million of principal and interest due to M&F under the Uncommitted Advance Agreement for 27,009.5 Series G non-convertible preferred units of vTvx Holdings I (the “TTP Series G Units”) and the operating agreement of vTvx Holdings I was amended and restated to effect the foregoing. TTP Series G Units are non-redeemable and have a liquidation preference that is senior to the TTP Series Preferred. In the event of any liquidation, dissolution or winding up of TTP, the holders of the TTP Series G Units are entitled to receive, prior to the distribution to the other holders, a liquidation amount equal to the TTP Series G Liquidation Value paid per unit ($1,000).

Transactions with Former Officer and Related Entities

On August 28, 2015, the Company and vTv Therapeutics Holdings entered into a release agreement (the “Release Agreement”) with the Former Officer and Related Entities to settle certain obligations, including the obligation to pay the Contingent Distributions, under the Former Officer Agreement. Under the Release Agreement, the Company agreed to cause vTv Therapeutics Holdings to transfer 1,346,186 shares of Class B Common Stock and the same number of corresponding vTv Units to the Former Officer and Related Entities. Under the Release Agreement and the Former Officer Agreement, the 2007 Note owed by the Former Officer to the Company was also deemed discharged and canceled and the perpetual securities of vTvx Holdings I and vTvx Holdings II having principal amounts of $6,049,963 and $543,870, respectively, held by the Former Officer, were repurchased by vTvx Holdings I and vTvx Holdings II in exchange therefor. On the same date, under the Exchange Agreement, the Former Officer and Related Entities exchanged those shares of Class B Common Stock and vTv Units for 1,346,186 shares of Class A Common Stock.

ITEM 1A. UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION

Basis of Presentation

vTv Therapeutics Inc. was formed in April 2015 and does not have historical financial data. Presented below are the historical combined consolidated financial data of our Predecessors, vTvx Holdings I (formerly TransTech Pharma, LLC) and vTvx Holdings II (formerly High Point Pharmaceuticals, LLC). The unaudited pro forma condensed combined consolidated statement of operations data for the six months ended June 30, 2015 gives pro forma effect to the Reorganization Transactions, the IPO and the application of the net proceeds from the IPO to purchase vTv Units as if they had been completed as of January 1, 2015. The unaudited pro forma condensed combined consolidated balance sheet data as of June 30, 2015 gives pro forma effect to the Reorganization Transactions, the IPO and the application of the net proceeds from the IPO to purchase vTv Units as if they had been completed as of the balance sheet date. The unaudited pro forma condensed combined consolidated financial data is presented for information purposes only and should not be considered indicative of actual results of operations that would have been achieved had the Reorganization Transactions and the IPO been consummated on the date indicated, and do not purport to be indicative of statements of financial position or results of operations as of any future date or for any future period. The pro forma condensed combined consolidated financial statements reflect pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions we believe are reasonable, but are subject to change. We have made, in our opinion, all adjustments that are necessary to present fairly the pro forma financial data.

The pro forma adjustments principally give effect to the following items:

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Consolidation

We have determined that vTv Therapeutics LLC is a variable-interest entity (“VIE”) for accounting purposes and that vTv Therapeutics Inc. is the primary beneficiary of vTv Therapeutics LLC because (through its managing member interest in vTv Therapeutics LLC and the fact that the senior management of vTv Therapeutics Inc. is also the senior management of vTv Therapeutics LLC) it has the power to direct all of the activities of vTv Therapeutics LLC, which include those that most significantly impact vTv Therapeutics LLC’s economic performance. vTv Therapeutics Inc. has therefore consolidated vTv Therapeutics LLC’s results under the VIE accounting model in its pro forma financial statements and will continue to consolidate these results using the VIE model subsequent to the Reorganization Transactions and the completion of the IPO. vTv Therapeutics Holdings LLC owns a non-voting interest in vTv Therapeutics LLC, representing a 76.2% economic interest in vTv Therapeutics LLC, effectively restricting vTv Therapeutics Inc.’s interest to 23.8% of vTv Therapeutics LLC’s economic results (assuming no exercise of the underwriters’ over-allotment option), subject to increase in the future, should vTv Therapeutics Inc. purchase additional vTv Units or should the holders of vTv Units decide to exchange such units (together with shares of Class B common stock) for shares of Class A common stock (or cash) pursuant to the Exchange Agreement. Other than its purchase of vTv Units with the net proceeds of the IPO, as of the closing date of the IPO, vTv Therapeutics Inc. will not have provided any financial or other support to vTv Therapeutics LLC. In the future, vTv Therapeutics Inc. will not be required to provide financial or other support for vTv Therapeutics LLC, although it will control its business and other activities through its managing member interest in vTv Therapeutics LLC, and its management will be the management of vTv Therapeutics LLC. Because vTv Therapeutics Inc. is not a guarantor or obligor with respect to any of the liabilities of vTv Therapeutics LLC, absent any such guarantee or other arrangement, the creditors of vTv Therapeutics LLC will not have any recourse to the general credit of vTv Therapeutics Inc. Nevertheless, because vTv Therapeutics Inc. will have no material assets other than its interests in vTv Therapeutics LLC, any financial difficulties at vTv Therapeutics LLC could result in vTv Therapeutics Inc. recognizing a loss.

Additional Information

You should read the Unaudited Pro Forma Condensed Combined Consolidated Financial Information and accompanying notes in conjunction with the condensed combined consolidated historical financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” elsewhere in this quarterly report on Form 10-Q.

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vTv Therapeutics Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of June 30, 2015

(dollars in thousands, except per unit and per share data)

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