vTv Therapeutics Inc.VTVT
vTv Therapeutics Inc. Fair Value Disclosure
Fair Value of Financial Instruments
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 December 31, 2024, 2023 and 2022 (in thousands):
| Balance at December 31, 2024 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Warrant liability, related party (1)(2) | $ | 57 | $ | — | $ | — | $ | 57 | |||||||||||||||
Warrant liability(1) | $ | 43 | $ | — | $ | — | $ | 43 | |||||||||||||||
| Total | $ | 100 | $ | — | $ | — | $ | 100 | |||||||||||||||
| (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. | ||||
| (2) | CinRx is no longer deemed to be a related party. As a result the CinRx Warrants are no longer included. | ||||
| Balance at December 31, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Warrant liability, related party (1) | $ | 110 | $ | — | $ | — | $ | 110 | |||||||||||||||
| Total | $ | 110 | $ | — | $ | — | $ | 110 | |||||||||||||||
_____________________________
(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.
| Changes in Level 3 Instruments for the years ended December 31, 2024, 2023 and 2022 | |||||||||||||||||||||||||||||||||||
| Balance at January 1 | Net Change in fair value included in earnings | Purchases / Issuance | Sales / Repurchases | Reclass | Balance at December 31, 2024 | ||||||||||||||||||||||||||||||
| 2024 | |||||||||||||||||||||||||||||||||||
Warrant liability, related party (1)(2) | $ | 110 | $ | 150 | $ | — | $ | — | $ | (203) | $ | 57 | |||||||||||||||||||||||
Warrant liability(1) | — | (160) | — | — | 203 | 43 | |||||||||||||||||||||||||||||
| Total | $ | 110 | $ | (10) | $ | — | $ | — | $ | — | $ | 100 | |||||||||||||||||||||||
| 2023 | |||||||||||||||||||||||||||||||||||
Warrant liability, related party (1) | 684 | (574) | — | — | 110 | ||||||||||||||||||||||||||||||
| Total | $ | 684 | $ | (574) | $ | — | $ | — | $ | — | $ | 110 | |||||||||||||||||||||||
| 2022 | |||||||||||||||||||||||||||||||||||
| 1,262 | (946) | 368 | — | 684 | |||||||||||||||||||||||||||||||
| Total | $ | 1,262 | $ | (946) | $ | 368 | $ | — | $ | — | $ | 684 | |||||||||||||||||||||||
| (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. | ||||
| (2) | CinRx is no longer deemed to be a related party. As a result the CinRx Warrants are no longer included. | ||||
There were no transfers into or out of level 3 instruments and/or between level 1 and level 2 instruments during the years ended December 31, 2024, 2023 and 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 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 were:
| December 31, 2024 | December 31, 2023 | ||||||||||||||||
| Range | Weighted Average | Range | Weighted Average | ||||||||||||||
| Expected volatility | 88.01% - 116.31% | 105.97% | 79.96% - 89.61% | 81.55% | |||||||||||||
| Risk-free interest rate | 4.17% - 4.25% | 4.23% | 4.01% - 4.87% | 4.15% | |||||||||||||
The fair value of the CinRx Warrants was 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. Significant inputs utilized in the valuation of the CinRx Warrants as of December 31, 2024, were:
| December 31, 2024 | December 31, 2023 | |||||||
| Expected volatility | 96.5 | % | 82.1 | % | ||||
| Expected life of options in years | 2.5 | 3.5 | ||||||
| Risk-free interest rate | 4.3 | % | 4.0 | % | ||||
| Expected dividend yield | — | % | — | % | ||||
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 and CinRx 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. Gains and losses recognized due to the change in fair value of the warrant liability are recognized as a component of other (expense) income in the Consolidated Statements of Operations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 20, 2025 | Showing above |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 6, 2023 | |
| 2021 | Mar 29, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Mar 4, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.