Aerpio Pharmaceuticals, Inc.
Annual Report 2017

Plain-text annual report

Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K/A(Amendment No. 1) (Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2017OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934FOR THE TRANSITION PERIOD FROM TO Commission File Number 000-53057 Aerpio Pharmaceuticals, Inc.(Exact name of Registrant as specified in its Charter) Delaware EIN 61-1547850(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.)9987 Carver Road, Cincinnati, OH 45242(Address of principal executive offices) (Zip Code)Registrant’s telephone number, including area code: (513) 985-1920 Securities registered pursuant to Section 12(b) of the Act: Common Stock, Par Value $0.0001 Per Share; Common stock traded on the over-the-countermarket middle tier group, or OTCQB stock market.Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒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 1934during 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 filingrequirements for the past 90 days. YES ☒ NO ☐Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto 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 thatthe Registrant was required to submit and post such files). YES ☒ NO ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not becontained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or anemerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐Non-accelerated filer ☐ (Do not check if a smaller reporting company) 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 orrevised 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 ☐ NO ☒The registrant’s common stock began trading on the OTCQB on August 8, 2017. As of March 8, 2018, the aggregate market value of the registrant’s votingand non-voting common stock held by non-affiliates (without admitting that any person whose shares are not included in such calculation is an affiliate)computed by reference to the price at which the common stock was last sold on March 8, 2018 was approximately $77,257,985. The registrant has providedthis information as of March 8, 2018 because the registrant’s stock was not trading on a national securities exchange as of the last business day of its mostrecently completed second fiscal quarter and therefore cannot calculate the aggregate market value of its voting and non-voting equity held by non-affiliatesas of such date.As of March 8, 2018, there were 27,140,969 shares of common stock, $0.0001 par value per share, outstanding. Table of ContentsDocuments Incorporated by ReferenceNoneTable of ContentsExplanatory NoteAerpio Pharmaceuticals, Inc. (the “Company”, “we”, “our” or “us”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment No. 1”) to amend ourAnnual Report on Form 10-K for the year ended December 31, 2017, originally filed with the Securities and Exchange Commission (the “SEC”) on March 15,2018 (the “Original Filing”), to include the information required by Items 10 through 14 of Part III of Form 10-K. This information was previously omittedfrom the Original Filing in reliance on General Instruction G(3) to Form 10-K. This Amendment No. 1 consists solely of the preceding cover page, thisexplanatory note, the information required by Part III, Items 10, 11, 12, 13, and 14 of Form 10-K, a signature page and certifications required to be filed asexhibits.The reference on the cover of the Original Filing to the incorporation by reference of portions of our definitive proxy statement into Part III of the OriginalFiling is hereby deleted. In addition, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Part III,including Items 10 through 14 of the Original Filing, is hereby amended and restated in its entirety. This Amendment No. 1 should be read in conjunctionwith the Original Filing and with our filings with the SEC subsequent to the Original Filing.This Amendment No. 1 does not reflect events occurring after the filing of the Original Filing, and, except as described above, does not modify or update anyother disclosures.Table of ContentsTable of Contents Page PART III Item 10. Directors, Executive Officers and Corporate Governance 1 Item 11. Executive Compensation 7 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 14 Item 13. Certain Relationships and Related Transactions, and Director Independence 18 Item 14. Principal Accounting Fees and Services 21 PART IV Item 15. Exhibits, Consolidated Financial Statement Schedules 22 Table of ContentsPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceThe following table sets forth certain information concerning our executive officers and directors as of March 15, 2018: Name Age Position(s)Executive Officers Stephen Hoffman 63 Chief Executive Officer and DirectorJoseph Gardner 62 President, Founder and DirectorMichael Rogers 58 Chief Financial OfficerSteve Pakola 49 Chief Medical OfficerKevin G. Peters 61 Chief Scientific OfficerNon-Employee Directors Muneer Satter(3) 57 Director, ChairmanPaul M. Weiss(2) 59 DirectorCaley Castelein(1) 47 DirectorAnupam Dalal(2) 46 DirectorSteven Prelack(1) 60 DirectorChau Khuong(3) 41 DirectorPravin Dugel(1) 54 Director (1)Member of audit committee.(2)Member of compensation committee.(3)Member of the nominating and corporate governance committee.Executive OfficersStephen Hoffman, M.D., Ph.D. has served as Aerpio’s Chief Executive Officer since December 2017. From February 2014 until joining Aerpio, Dr. Hoffmanwas a Senior Advisor at PDL BioPharma, an investment firm that manages a portfolio of investments in companies, products, royalty agreements and debtfacilities in the biotech, pharmaceutical and medical device industries. Prior to that he served as a Managing Director at Skyline Ventures, a venture capitalfirm, from 2007 to 2014 and was general partner at TVM Capital from 2003 to 2007. Prior to TVM, he served as President, Chief Executive Officer and aDirector of Allos Therapeutics from 1994 to 2002, where he remained as Chairman until its acquisition by Spectrum Pharmaceuticals, Inc. in 2012.Dr. Hoffman currently serves on the board of directors of Dicerna Pharmaceuticals, Inc., AcelRx Pharmaceuticals, Inc., Bicycle Therapeutics Ltd., and PalleonPharmaceuticals, Inc. Dr. Hoffman completed a fellowship in clinical oncology and a residency and fellowship in dermatology from 1990 to 1994, both at theUniversity of Colorado, and holds a Ph.D. in chemistry from Northwestern University and an M.D. from the University of Colorado School of Medicine. He isalso board-certified in Dermatology. We believe that Dr. Hoffman is qualified to serve as our Chief Executive Officer and on our board of directors based onhis industry experience and service on multiple boards.Joseph Gardner, Ph.D. has served as Aerpio’s President and Founder since December 2011 and served as its Chief Executive Officer from December 2011until December 2017. Dr. Gardner co-founded Akebia Therapeutics in 2007 and has been an Advisor for Akebia since 2013. He served as the Chief ExecutiveOfficer, President and as a member of the board of directors of Akebia until September 2013. Prior to that, Dr. Gardner worked in pharmaceutical discoveryand development at Procter & Gamble Pharmaceuticals for 23 years, including two years in P&G’s health care mergers and acquisition group and 10 yearsmanaging discovery licensing. He served as a Director of Chemistry and Intellectual Property Management of the Pharmaceutical Division of Procter &Gamble, and as a Director of Juvenile Diabetes Research Foundation International Inc. Dr. Gardner received his B.S. with 1Table of Contentshonors in Biological Chemistry from Tulane University in 1977, earned his M.S. in Chemistry in 1980 from Utah State University and Ph.D. in 1983 inMedicinal Chemistry from University of Wisconsin. We believe that based on Dr. Gardner’s knowledge of our company, industry and business and his serviceas our former Chief Executive Officer and President, Dr. Gardner is qualified to serve on our board of directors.Michael Rogers has served as Aerpio’s Chief Financial Officer since November 2017. From 2016 to 2017, Mr. Rogers served as a consultant to healthcarecompanies. Prior to that, Mr. Rogers was the chief financial officer at Acorda Therapeutics, a biopharmaceutical company, from 2013 to 2016. Prior to AcordaTherapeutics, he was the Executive Vice President and chief financial officer of BG Medicine from 2009 to 2012. From 1999 to 2009, Mr. Rogers was thechief financial officer of Indevus Pharmaceuticals until the company’s sale to Endo Pharmaceuticals. He also served as chief financial officer at AdvancedHealth Corporation and Autoimmune. Prior to his roles as chief financial officer, Mr. Rogers was an investment banker at Lehman Brothers and PaineWebber,where he focused on life sciences companies. Mr. Rogers received his B.A. from Union College, and an M.B.A. from the Darden School of Business at theUniversity of Virginia. He currently serves as Chairman of the Board of Directors of Keryx Biopharmaceuticals and as a member of the Board of Directors forpSivida Corp.Steve Pakola, M.D. has served as Aerpio’s Chief Medical Officer since October 2015. Since May 2012, Dr. Pakola has served as the Chief Medical Officer ofAmakem NV and the Chief Medical Officer, Senior Vice President of Clinical Development and as Director at ThromboGenics NV from 2000 to 2012.Previously, Dr. Pakola served as an Associate Director of Cardiovascular Clinical Research at Boehringer-Ingelheim Pharmaceuticals, where he served asGlobal Medical Lead on the Lipid-Lowering Development Programme, as well as USA Medical Lead for the Direct Thrombin Inhibitor DevelopmentProgramme. From 1996 to 1998, Dr. Pakola served in senior-level clinical development positions at Quintiles Cardiovascular Therapeutics and Organon.Dr. Pakola received his B.A and his MD from the University of Pennsylvania.Kevin G. Peters, M.D. has served as Aerpio’s Chief Scientific Officer since November 2011. Dr. Peters guided the development of AKB-9778 while at AkebiaTherapeutics, and continues to be in charge of scientific discovery and development for Aerpio. From 2006 to 2010 he served as Medical Director ofCardiovascular and Metabolic Disease in Global and Discovery Medicine at Bristol Myers Squibb and from 1998 to 2006 he served as head of TherapeuticAngiogenesis research at P&G Pharmaceuticals. He served as a Member of the Scientific Advisory Board of Akebia. Dr. Peters served as an Associate Professorof Medicine and Pharmacology in the Division of Cardiology at Duke University Medical Center. Dr. Peters received his M.D. from the University of Iowaand B.A. from Augustana College.Board CompositionNon-Employee DirectorsMuneer A. Satter has served as a member of Aerpio’s board of directors since October 2013. Mr. Satter has been Founder and Managing Partner of SatterMedical Technology Partners, L.P. since 2016, Chairman of Satter Investment Management LLC since 2012, and he also manages the Satter Foundation.Prior to Satter Investment Management, Mr. Satter was a partner at Goldman Sachs where he spent 24 years in various roles, most recently as the Global Headof the Mezzanine Group in the Merchant Banking Division, where he raised and managed over $30 billion of assets. Mr. Satter is chairman of the board ofdirectors of Akebia Therapeutics and Restorsea Holdings, LLC and a director of Vital Therapies, Inc., Linq3 Technologies LLC and Annexon Biosciences. Healso serves as vice chairman of Goldman Sachs Foundation and GS Gives, is a director of World Business Chicago, is on the Board of Advisors of theAmerican Enterprise Institute, is on the Board of Directors of the Navy SEAL Foundation, and is on the Board of Trustees of Northwestern University wherehe is Chairman of the Finance Committee. Mr. Satter received a B.A. in Economics from Northwestern University, a J.D. from Harvard Law School and anM.B.A. from Harvard Business School. We believe that Mr. Satter is qualified to serve on our board of directors due to his extensive investment experience.Paul M. Weiss Ph.D. has served on Aerpio’s board of directors since November 2011. Since 2006, Dr. Weiss has been Managing Director of VentureInvestors. From 2001 to 2006 Dr. Weiss served as the President at Gala Design, which was sold to Cardinal Health (now part of Catalent). From 1997 to 2000,Dr. Weiss served as the VP of Business Development/VP of Technology and Product Licensing at 3-Dimensional Pharmaceuticals (IPO and 2Table of Contentssubsequent sale to Johnson & Johnson). Prior to that, Dr. Weiss worked as Director of Licensing for the pharmaceutical company Wyeth-Ayerst (now part ofPfizer). Currently, he also serves as a director at FluGen and Madison Vaccines. He served as a director of Akebia Therapeutics (Nasdaq: AKBA), TissueRegeneration Systems, and Neurovance (sold to Otsuka). Dr. Weiss holds a Ph.D. in Biochemistry and an M.B.A. from the University of Wisconsin-Madisonand a B.Sc. in Biochemistry from Carleton University Institute of Biochemistry. We believe Dr. Weiss is qualified to serve on our board based on his industryexperience and service on multiple boards.Caley Castelein, M.D. has served on Aerpio’s board of directors since March 2017. Dr. Castelein is the Founder and has been a Managing Director for KearnyVenture Partners since 2006. Dr. Castelein is also the Founder and has been the Managing Director for KVP Capital since 2013. He is a director for ViewRay,Alivecor, Boreal and Newbridge Pharmaceuticals. Dr. Castelein received his M.D. from University of California, San Francisco and his A.B. in Biology fromHarvard University. We believe that Dr. Castelein is qualified to serve as a director based on his industry experience and service on multiple company boards.Anupam Dalal, M.D. has served on Aerpio’s board of directors since November 2011. Since August 1, 2016, Dr. Dalal has been working at Acuta Capital.From 2006 to 2016, Dr. Dalal was the Managing Director of Kearny Venture Partners. He was a Founder and Managing Member of KVP Capital. He served asa director of Akebia Therapeutics from 2008 to 2016. Dr. Dalal received an M.D. degree from the University of California in San Francisco with honors; anM.B.A., with distinction, from Harvard Business School; and a B.A. degree in Economics, Phi Beta Kappa and highest honors, from the University ofCalifornia at Berkeley. We believe that Dr. Dalal is qualified to serve as a director based on his industry experience.Steven Prelack has served on Aerpio’s board of directors since March 2017. Mr. Prelack has been the Chief Operating Officer and Senior Vice President ofVetCor since 2010. He is a director at Galectin Therapeutics and Pieris, Mr. Prelack holds a CPA and has a B.B.A. in Finance and Accounting from theUniversity of Massachusetts, Amherst. We believe Mr. Prelack is qualified to serve as a director based on his industry experience and service on multiplecompany boards.Chau Khuong has served on Aerpio’s board of directors since April 2014. Since 2003, Mr. Khuong has been a Private Equity Partner at OrbiMed Advisors. Heis currently on the boards of Synlogic, Cerapedics and Inspire Medical Systems. Mr. Khuong holds a B.S. degree in Molecular, Cellular and DevelopmentalBiology and a Master’s in Public Health from Yale University. We believe that Mr. Khoung is qualified to serve as a director based on his industry experienceand service on multiple company boards.Pravin U. Dugel, M.D. has served as a member of Aerpio’s board of directors since March 2017. Since 1994, Dr. Dugel has served as the Managing Partner ofRetinal Consultants of Arizona and is a Founding Member of the Spectra Eye Institute. He is a Clinical Professor at the USC Roski Eye Institute, Keck Schoolof Medicine at the University of Southern California. Dr. Dugel serves on the Advisory Board of Acucela, Inc. and as a member of the Scientific AdvisoryBoard at MacuSight, Inc., Alcon Surgical, Genentech and Novartis. He also serves as a Member of the Medical Advisory Board at TrueVision Systems, Inc.and a Member of the Clinical Advisory Board at Opthea Limited. Dr. Dugel received his M.D. from UCLA School of Medicine and his BA from ColumbiaUniversity. We believe that Dr. Dugel is qualified to serve as a director based on his industry experience and service on multiple boards.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our common stock to file with the SEC initialreports of ownership of our common stock and other equity securities on a Form 3 and reports of changes in such ownership on a Form 4 or Form 5. Directors,executive officers and holders of more than 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) formsthey file. To our knowledge, based solely on a review of our records and representations made by our directors and officers regarding their filing obligations,all Section 16(a) filing requirements were satisfied with respect to 2017, except that Anupam Dalal and Caley Castelein each did not timely file a Form 4 withrespect to one transaction on December 22, 2017 which was submitted on February 14, 2018. 3Table of ContentsCode of EthicsWe have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible forfinancial reporting. Our code of business conduct and ethics is available on our website, which is located at www.aerpio.com. We intend to disclose anyamendments to the code, or any waivers of its requirements, on our website, or in a current report on Form 8-K as may be required by law.Board CommitteesAs our common stock is not presently listed for trading or quotation on a national securities exchange, we are not presently required to have boardcommittees. However, our board of directors has established an audit committee, a compensation committee and a nominating and corporate governancecommittee, each of which operates pursuant to a charter adopted by our board of directors. The composition and functioning of all of our committees complywith all applicable requirements of the Sarbanes-Oxley Act of 2002 and SEC rules and regulations, and we intend to comply with those of the Nasdaq StockMarket. Each of the incumbent directors of the Board attended at least 75% of the aggregate of all meetings of the Board and all meetings of committees ofour Board upon which they served (during the periods that they served) during 2017. The Board of Directors regularly holds executive sessions of theindependent directors. Executive sessions do not include employee directors or directors who do not qualify as independent under SEC rules. Members of ourBoard are encouraged to attend annual meetings of our stockholders.Audit CommitteeSteven Prelack, Caley Castelein and Pravin Dugel serve on the audit committee, which is chaired by Steven Prelack. Our board of directors has determinedthat Steven Prelack, Caley Castelein and Pravin Dugel are “independent” for audit committee purposes as that term is defined in the rules of the SEC and theapplicable Nasdaq rules, and each has sufficient knowledge in financial and auditing matters to serve on the audit committee. Our board of directors hasdesignated each of Steven Prelack and Pravin Dugel as an “audit committee financial expert,” as defined under the applicable rules of the SEC. The auditcommittee’s responsibilities include: • appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm; • pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered publicaccounting firm; • reviewing the overall audit plan with our independent registered public accounting firm and members of management responsible for preparingour financial statements; • reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statementsand related disclosures as well as critical accounting policies and practices used by us; • coordinating the oversight and reviewing the adequacy of our internal control over financial reporting; • establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns; • recommending based upon the audit committee’s review and discussions with management and our independent registered public accountingfirm whether our audited financial statements shall be included in our Annual Report on Form 10-K; • monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financialstatements and accounting matters; • preparing the audit committee report required by SEC rules to be included in our annual proxy statement; • reviewing all related person transactions for potential conflict of interest situations and making recommendations to our board of directorsregarding all such transactions; and • reviewing quarterly earnings releases. 4Table of ContentsThe Audit Committee held three meetings during 2017. A copy of the Audit Committee Charter is available on the Company’s websiteat www.aerpio.com under the Investors section.Compensation CommitteeAnupam Dalal and Paul Weiss serve on the compensation committee, which is chaired by Anupam Dalal. Our board of directors has determined that eachmember of the compensation committee is “independent” as defined in the applicable Nasdaq rules. The compensation committee’s responsibilities include: • annually reviewing and recommending to the independent directors on the board of directors the corporate goals and objectives relevant to thecompensation of our Chief Executive Officer; • evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and based on such evaluation:(i) recommending to the independent directors on the board of directors the cash compensation of our Chief Executive Officer and (ii) reviewingand recommending to the independent directors on the board of directors regarding grants and awards to our Chief Executive Officer underequity-based plans; • reviewing and approving or recommending to the independent directors on the board of directors the cash compensation of our other executiveofficers; • reviewing and establishing our overall management compensation, philosophy and policy; • overseeing and administering our compensation and similar plans; • evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in theapplicable Nasdaq rules; • reviewing and approving our policies and procedures for the grant of equity-based awards; • reviewing and recommending to the independent directors on the board of directors the compensation of our directors; • preparing the compensation committee report required by SEC rules, if and when required, to be included in our annual proxy statement; and • reviewing and approving the retention, termination or compensation of any consulting firm or outside advisor to assist in the evaluation ofcompensation matters.The Compensation Committee held two meetings during 2017. A copy of the Compensation Committee Charter is available on the Company’s websiteat www.aerpio.com under the Investors section.Compensation Consultant. As a part of determining compensation for our named executive officers, the compensation committee has engaged Radford, abusiness unit of Aon plc, as an independent compensation consultant. Radford provides analysis and recommendations to the compensation committeeregarding: • trends and emerging topics with respect to executive compensation; • peer group selection for executive compensation benchmarking; • compensation practices of our peer group; • compensation programs for executives and all of our employees; and • stock utilization and related metrics.When requested, Radford consultants attend meetings of the compensation committee, including executive sessions in which executive compensation issuesare discussed. Radford reports to the compensation committee and not to management, although Radford meets with management for purposes of gatheringinformation for its analyses and recommendations.In determining to engage Radford, the compensation committee considered the independence of Radford taking into consideration relevant factors,including the absence of other services provided to us by Radford, the amount of fees we paid to Radford as a percentage of Radford’s total revenue, thepolicies and procedures of Radford that are designed to prevent conflicts of interest, any business or personal relationship of the individual compensationadvisors employed by Radford with any of our executive officers, any business or personal relationship the individual compensation advisors employed byRadford have with any member of the compensation committee, and any shares of our stock owned by Radford or the individual compensation advisorsemployed by Radford. The compensation committee has determined, based on its analysis in light of all relevant factors, including the factors listed above,that the work of Radford and the individual compensation advisors employed by Radford as compensation consultants to the compensation committee hasnot created any conflicts of interest, and that Radford is independent pursuant to the independence standards set forth in the Nasdaq Stock Market listingstandards promulgated pursuant to Section 10C of the Exchange Act.Nominating and Corporate Governance CommitteeChau Khuong and Muneer Satter serve on the nominating and corporate governance committee, which is chaired by Chau Khuong. Our board of directors hasdetermined that each member of the nominating and corporate governance committee is “independent” as defined in the applicable Nasdaq rules. Thenominating and corporate governance committee’s responsibilities include: • developing and recommending to the board of directors criteria for board and committee membership; • establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;  • reviewing the composition of the board of directors to ensure that it is composed of members containing the appropriate skills and expertise toadvise us; • identifying individuals qualified to become members of the board of directors; • recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees; 5Table of Contents • developing and recommending to the board of directors a code of business conduct and ethics and a set of corporate governance guidelines; and • overseeing the evaluation of our board of directors and management.Our board of directors may from time to time establish other committees.The Nominating and Corporate Governance Committee held one meeting during 2017. A copy of the Nominating and Corporate Governance CommitteeCharter is available on the Company’s website at www.aerpio.com under the Investors section.Director NominationsOur nominating and corporate governance committee is responsible for reviewing with the board of directors, on an annual basis, the appropriatecharacteristics, skills and experience required for the board of directors as a whole and its individual members. In evaluating the suitability of individualcandidates (both new candidates and current members), the nominating and corporate governance committee, in recommending candidates for election, andthe board of directors, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following: • personal and professional integrity; • ethics and values; • experience in corporate management, such as serving as an officer or former officer of a publicly held company; • experience in the industries in which we compete; • experience as a director or executive officer of another publicly held company; • diversity of expertise and experience in substantive matters pertaining to our business relative to other board members; • conflicts of interest; and • practical and mature business judgment.Our board of directors evaluates each individual in the context of the board of directors as a whole, with the objective of assembling a group that can bestmaximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in thesevarious areas. 6Table of ContentsItem 11. Executive Compensation.The following summarizes the compensation earned by our executive officers named in the “Summary Compensation Table” below (referred to herein as our“named executive officers”) for our fiscal year ending December 31, 2017.This section also discusses the material elements of our executive compensation policies and decisions and important factors relevant to an analysis of thesepolicies and decisions. It provides qualitative information regarding the manner and context in which compensation is awarded to and earned by our namedexecutive officers and is intended to place in perspective the information presented in the following tables and the corresponding narrative.OverviewHistorically, our executive compensation program has reflected its growth and corporate goals. To date, the compensation of the named executive officers hasconsisted of a combination of base salary, annual cash bonus, and long-term equity incentive compensation in the form of restricted stock and stock options,and other employee benefits generally available to our employees. The named executive officers are also entitled to certain compensation and benefits uponcertain terminations of employment pursuant to their executive employment agreements as described below.The named executive officers for the year ended December 31, 2017 were as follows: • Stephen Hoffman, our Chief Executive Officer; • Michael Rogers, our Chief Financial Officer; • Joseph H. Gardner, our President and Founder and former Chief Executive Officer; and • Steve Pakola, our Chief Medical Officer.Elements of Executive CompensationBase Salaries. Base salaries for the named executive officers are determined annually by the compensation committee, subject to review and approval by theboard of directors, based on the scope of each officer’s responsibilities along with his respective experience and contributions during the prior year. Whenreviewing base salaries, the compensation committee takes factors into account such as each officer’s experience and individual performance, ourperformance as a whole, data from surveys of compensation paid by comparable companies, and general industry conditions, but does not assign any specificweighting to any factor.Annual Cash Bonuses. Prior to the Merger (as further described in the Original Filing), all of the named executive officers participated in an annual cashprogram sponsored by Aerpio and, following the Merger, all of the named executive officers participate in the Aerpio Pharmaceuticals, Inc. annual cashbonus program, which promotes and rewards the executives for the achievement of key strategic and business goals. In anticipation of possible fund raisingactivities to be completed in 2017, no bonuses were declared for 2016. For the 2017 bonus plan period, the target annual bonus as a percentage of basesalary, as determined based on the salary earned throughout the bonus plan period, for each of the named executive officers is further described in the sectiontitled “Executive Compensation—Employment Agreements.” At the beginning of the 2017 bonus plan period, the compensation committee establishedcorporate performance goals, each having a designated weighting, which related to key development, strategic and financial goals of or company. At the endof the 2017 bonus plan period, the compensation committee met and evaluated the performance of the Company against the specified performance goals.Based on its evaluation, the compensation committee recommended, and the board of directors approved, that we achieved 110% of our corporate goals.Consequently, the board of directors approved payment of cash bonuses to the named executive officers for the 2017 bonus plan period in the amountsreported in the “Summary Compensation Table—2017” below.Equity Awards. The named executive officers have historically participated in Aerpio’s 2011 Plan and 2017 Plan. During fiscal year 2017 and in connectionwith their commencement of employment with us, we granted Dr. Hoffman an option to purchase 586,012 shares of our common stock and Mr. Rogers anoption to purchase 293,006 shares of our common stock, each having an exercise price of $5.50 per share. These options vest 25% on the first anniversary ofthe commencement of employment and then in 36 monthly 7Table of Contentsinstallments thereafter, in each case subject to the executive continuing to provide services through each such vesting date. Additionally, in 2017, wegranted Dr. Gardner an option to purchase 135,000 shares of our common stock, having an exercise price of $5.50 per share, which option shall vest in full onJuly 1, 2018, subject to Dr. Gardner continuing to provide services through such vesting date. We did not grant any equity awards to Dr. Pakola in 2016 or2017.Other Benefits. Our named executive officers are eligible for additional benefits, such as participation in our 401(k) plan, our employee stock purchase planand basic health benefits that are generally available to all of our employees.Summary Compensation Table – 2017The following table sets forth information regarding compensation awarded to, earned by or paid to each of the named executive officers for the periodsending December 31, 2017 and 2016. Name and Principal Position Year Salary ($) Bonus($)(1) OptionAwards($)(2) Non-Equity IncentiveCompensation ($)(3) All OtherCompensation($)(4) Total ($) Stephen Hoffman (5) 2017 39,167 — 2,007,300 21,542 89 2,068,094 Chief Executive Officer Michael Rogers (6) 2017 48,296 — 1,000,446 21,250 47 1,070,034 Chief Financial Officer Joseph Gardner 2017 383,675 21,000 427,880 127,551 1,069 961,175 President and Founder 2016 350,000 — — — 1,069 351,069 Stephen Pakola 2017 348,131 20,400 — 96,989 41 445,161 Chief Medical Officer 2016 340,000 — — — 243 340,243 (1)Amount represents discretionary bonuses paid to Drs. Gardner and Pakola in 2017, which amounts were approved and paid after completion of theMerger.(2)The amounts reported in the Option Awards column represent the fair value of the stock options granted to the named executive officers as of the grantdate as computed in accordance with FASB ASC Topic 718, not including any estimates of forfeitures. The assumptions used in calculating the grantdate fair value of the stock options reported in the Option Awards column are set forth in Note 9 to our financial statements for the year endedDecember 31, 2017 and 2016. Note that the amounts reported in this column reflect the accounting cost for these stock options, and do not correspondto the actual economic value that may be received by the named executive officers from the options.(3)Amounts for 2017 represent cash bonuses earned for 2017 based upon achievement of corporate performance goals.(4)Amounts represent the dollar value of life insurance premiums paid by us on behalf of the named executive officers.(5)Dr. Hoffman commenced employment with us on December 1, 2017, with an annual base salary of $470,000. Salary and bonus amounts have beenprorated to reflect his partial year of employment.(6)Mr. Rogers commenced employment with us on November 15, 2017, with an annual base salary of $375,000. Salary and bonus amounts have beenprorated to reflect his partial year of employment. 8Table of ContentsOutstanding Equity Awards at Fiscal Year-End 2017The following table sets forth information concerning outstanding equity awards for each of the named executive officers as of December 31, 2017: Option Awards Stock Awards Name and Principal Position VestingCommencementDate(1) Number ofSecuritiesUnderlyingUnexercisedOptions (#)Exercisable Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable OptionExercisePrice ($) OptionExpirationDate Number ofSecuritiesThatHave NotVested (#) MarketValue ofSecuritiesThatHave NotVested ($) Stephen Hoffman 12/14/2017 — 586,012(2) $5.50 12/14/2027 — — Chief Executive Officer Michael Rogers 12/14/2017 — 293,006(2) $5.50 12/14/2027 — — Chief Financial Officer Joseph Gardner 3/22/2012 27,727 — $1.66 3/22/2022 — — President and Founder 2/18/2014 198,950 8,678 $2.11 2/18/2024 — — 10/23/2014 — — — — 36,583 $173,769 12/14/2017 — 135,000(3) $5.50 12/14/2027 — — Stephen Pakola 12/29/2015 90,689 76,740(2) $1.80 12/29/2025 — $— Chief Medical Officer (1)Except as otherwise noted, options vest and become exercisable in 48 equal installments on each monthly anniversary of the vesting commencementdate, such that all awards will be vested on the fourth anniversary of the vesting commencement date, subject to the holder continuing to provideservices to the company through such vesting date.(2)Vests 25% on the first anniversary of the vesting commencement date, then vests in 36 equal monthly installments thereafter, such that the option isvested on the fourth anniversary of the vesting commencement date, subject to the holder continuing to provide services to the company through suchvesting date.(3)Vests in full upon July 1, 2018, subject to Dr. Gardner continuing to provide services to the company through such vesting date.Employment AgreementsWe have entered into employment agreements with each of our named executive officers and our other executive officers. Each employment agreementprovides for “at will” employment, meaning that either we or the officer may terminate the employment relationship at any time without cause.Executive Employment Agreement with Stephen Hoffman. Dr. Hoffman’s initial base salary under his employment agreement is $470,000, which is subject toannual review and adjustment, and he is eligible to earn an annual cash incentive bonus with a target amount equal to 50% of his base salary. Dr. Hoffman isalso eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.Dr. Hoffman’s employment agreement provides that, in the event that his employment is terminated by us without “cause” (as defined in his employmentagreement) or Dr. Hoffman resigns for “good reason” (as defined in his employment agreement) subject to the execution and effectiveness of a separationagreement, including a general release of claims in our favor, he will be entitled to receive (i) an amount equal to twelve months of his base salary, (ii) ifDr. Hoffman is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of twelve monthsfollowing termination or the end of Dr. Hoffman’s COBRA health continuation period in an amount equal to the amount that we would have made to providehealth insurance to Dr. Hoffman had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Dr. Hoffman in whichDr. Hoffman would have vested if he had remained employed for an additional twelve months. All amounts payable to Dr. Hoffman shall be made insubstantially equal installments over twelve months following his termination.In lieu of the payments and benefits described in the preceding paragraph, in the event that Dr. Hoffman’s employment is terminated by us without cause orDr. Hoffman resigns for good reason, in either case within fifteen months following a “change in control” (as defined in his employment agreement), subjectto the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to 9Table of Contentsreceive (i) a lump sum cash payment equal to 1.5 times the sum of (x) Dr. Hoffman’s then-current base salary (or his base salary in effect immediately prior tothe change in control, if higher) and (y) his target annual incentive compensation, (ii) if Dr. Hoffman is participating in our group health plan immediatelyprior to his termination, a monthly cash payment until the earlier of twelve months following termination or the end of Dr. Hoffman’s COBRA healthcontinuation period in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us and(iii) acceleration of all time-based equity awards held by Dr. Hoffman in which Dr. Hoffman would have vested if he had remained employed for an additionaltwelve months.In addition, Dr. Hoffman remains bound by certain restrictive covenants, including non-competition and non-solicitation provisions. These restrictivecovenants apply during the term of Dr. Hoffman’s employment and for one year thereafter.Executive Employment Agreement with Michael Rogers. Mr. Rogers’ initial base salary under his employment agreement is $375,000, which is subject toannual review and adjustment, and he is eligible to earn an annual cash incentive bonus with a target amount equal to 40% of his base salary. Mr. Rogers isalso eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.Mr. Rogers’ employment agreement provides that, in the event that his employment is terminated by us without “cause” (as defined in his employmentagreement) or Mr. Rogers resigns for “good reason” (as defined in his employment agreement) subject to the execution and effectiveness of a separationagreement, including a general release of claims in our favor, he will be entitled to receive (i) an amount equal to twelve months of his base salary, (ii) ifMr. Rogers is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of twelve monthsfollowing termination or the end of Mr. Rogers’ COBRA health continuation period in an amount equal to the amount that we would have made to providehealth insurance to Mr. Rogers had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Mr. Rogers in whichMr. Rogers would have vested if he had remained employed for an additional twelve months. All amounts payable to Mr. Rogers shall be made insubstantially equal installments over twelve months following his termination.In lieu of the payments and benefits described in the preceding paragraph, in the event that Mr. Rogers’ employment is terminated by us without cause orMr. Rogers resigns for good reason, in either case within 12 months following a “change in control” (as defined in his employment agreement), subject to theexecution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) a lump sum cashpayment equal to 1 times the sum of (x) Mr. Rogers’ then-current base salary (or his base salary in effect immediately prior to the change in control, if higher)and (y) his target annual incentive compensation, (ii) if Mr. Rogers is participating in our group health plan immediately prior to his termination, a monthlycash payment until the earlier of six months following termination or the end of Mr. Rogers’ COBRA health continuation period in an amount equal to theamount that we would have made to provide health insurance to him had he remained employed with us and (iii) full acceleration of all time-based equityawards held by Mr. Rogers.In addition, Mr. Rogers remains bound by certain restrictive covenants, including non-competition and non-solicitation provisions, which have beenincorporated by reference into the new employment agreement from his prior employment agreement. These restrictive covenants apply during the term ofMr. Rogers’ employment and for one year thereafter.Executive Employment Agreement with Joseph H. Gardner. Dr. Gardner’s base salary under his employment agreement, as amended after the Merger, is$410,000, which is subject to annual review and adjustment, and he is eligible to earn an annual cash incentive bonus with a target amount equal to 50% ofhis base salary. Dr. Gardner is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.Dr. Gardner’s employment agreement, as amended after the Merger, provides that, in the event that (a) prior to July 1, 2018 his employment is terminated byus for reasons other than “cause” (as defined in his employment agreement, as amended) or he remains an employee through July 1, 2018 and his employmentis terminated by us without cause or he resigns for “good reason” (as defined in his employment agreement, as amended) thereafter, and subject to theexecution and effectiveness of a separation agreement, including a general release of claims in our 10Table of Contentsfavor, he will be entitled to receive (i) an amount equal to twelve months of his base salary, (ii) if Dr. Gardner is participating in our group health planimmediately prior to his termination, a monthly cash payment until the earlier of twelve months following termination or the end of Dr. Gardner’s COBRAhealth continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Gardner had he remained employedwith us, and (iii) acceleration of all time-based equity awards held by Dr. Gardner in which Dr. Gardner would have vested if he had remained employed for anadditional twelve months or (b) Dr. Gardner resigns for “good reason” prior to July 1, 2018 and subject to the execution and effectiveness of a separationagreement, including a general release of claims in our favor, he will be entitled to receive (i) an amount equal to nine months of his base salary, (ii) ifDr. Gardner is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of nine months followingtermination or the end of Dr. Gardner’s COBRA health continuation period in an amount equal to the amount that we would have made to provide healthinsurance to Dr. Gardner had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Dr. Gardner in which Dr. Gardnerwould have vested if he had remained employed for an additional six months. All amounts payable to Dr. Gardner shall be made in substantially equalinstallments over nine months following his termination, except that, in the case of a termination that occurs after July 1, 2018, such amount shall be paid ina lump sum.In lieu of the payments and benefits described in the preceding paragraph, in the event that Dr. Gardner’s employment is terminated by us without cause orDr. Gardner resigns for good reason, in either case within 12 months following a “change in control” (as defined in his employment agreement, as amended),subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) alump sum cash payment equal to 0.75 times the sum of (x) Dr. Gardner’s then-current base salary (or his base salary in effect immediately prior to the changein control, if higher) and (y) his target annual incentive compensation, (ii) if Dr. Gardner is participating in our group health plan immediately prior to histermination, a monthly cash payment until the earlier of nine months following termination or the end of Dr. Gardner’s COBRA health continuation period inan amount equal to the amount that we would have made to provide health insurance to him had he remained employed with us and (iii) full acceleration ofall time-based equity awards held by Dr. Gardner.In addition, Dr. Gardner remains bound by certain restrictive covenants, including non-competition and non-solicitation provisions, which have beenincorporated by reference into the employment agreement from his prior employment agreement. These restrictive covenants apply during the term ofDr. Gardner’s employment and for one year thereafter.Executive Employment Agreement with Stephen Pakola, M.D. Dr. Pakola’s base salary under his employment agreement is $350,200, which is subject toannual review and adjustment, and he is eligible to earn an annual cash incentive bonus with a target amount equal to 20% of his base salary. Dr. Pakola isalso eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.Dr. Pakola’s employment agreement provides that, in the event that his employment is terminated by us without “cause” (as defined in his new employmentagreement) or Dr. Pakola resigns for “good reason” (as defined in his employment agreement) subject to the execution and effectiveness of a separationagreement, including a general release of claims in our favor, he will be entitled to receive (i) an amount equal to six months of his base salary, (ii) if Dr.Pakola is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of six months followingtermination or the end of Dr. Pakola’s COBRA health continuation period in an amount equal to the amount that we would have made to provide healthinsurance to Dr. Pakola had he remained employed with us, and (iii) acceleration of all time-based equity awards held by Dr. Pakola in which Dr. Pakolawould have vested if he had remained employed for an additional six months. All amounts payable to Dr. Pakola shall be made in substantially equalinstallments over six months following his termination.In lieu of the payments and benefits described in the preceding paragraph, in the event that Dr. Pakola’s employment is terminated by us without cause or Dr.Pakola resigns for good reason, in either case within 12 months following a “change in control” (as defined in his employment agreement), subject to theexecution and effectiveness of a separation agreement, including a general release of claims in our favor, he will be entitled to receive (i) a lump sum cashpayment equal to 0.5 times the sum of (x) Dr. Pakola’s then-current base salary (or his base salary in effect immediately prior to the change in control, ifhigher) and (y) his target annual incentive compensation, (ii) if Dr. Pakola is participating in our group health plan immediately prior to his termination, amonthly cash payment until the earlier of six months following termination or the end of Dr. Pakola’s COBRA health continuation period in an amount equalto the amount that we would have made to provide health insurance to him had he remained employed with us and (iii) full acceleration of all time-basedequity awards held by Dr. Pakola.In addition, Dr. Pakola has also entered into an employee confidentiality and assignment agreement with us that also contains certain restrictive covenants,including non-competition and non-solicitation provisions that apply during the term of Dr. Pakola’s employment and for one year thereafter.Retirement PlanWe offer a 401(k) plan to eligible employees, including our named executive officers. In accordance with this plan, all eligible employees may contribute apercentage of compensation up to a maximum of the statutory limits per year. Company contributions are discretionary. We made no contributions during theyear ended December 31, 2017. We intend for the 401(k) plan to qualify, depending on the employee’s election, under Section 401(a) of the Code, so thatcontributions by employees, and income earned on those contributions, are not taxable to employees until withdrawn from the 401(k) plan.Other Compensation PoliciesHedging and Pledging ProhibitionsOur insider trading policy expressly prohibits short sales and derivative transactions of our stock by our named executive officers, directors and specifiedother employees, including short sales of our securities, including short sales “against the box.” Our insider trading policy expressly prohibits, without theadvance approval of our audit committee, purchases or sales of puts, calls or other derivative securities of the company or any derivative securities thatprovide the economic equivalent of or monetization transactions accomplished through the use of prepaid variable forwards, equity swaps, collars andexchange funds.In addition, our insider trading policy expressly prohibits our named executive officers, directors and specified other employees from purchasing oursecurities on margin or borrowing against company securities held in a margin account, or, without the advance approval of our audit committee, pledgingour securities as collateral for a loan or modifying an existing pledge.Risks Related to Compensation Policies and PracticesIn establishing and reviewing our compensation philosophy and programs, our Board considers whether such programs encourage unnecessary or excessiverisk taking. We believe that our executive and other compensation programs do not encourage excessive or unnecessary risk taking. This is primarily due tothe fact that our 11Table of Contentscompensation programs are designed to encourage our executive officers and other employees to remain focused on both short-term and long-term strategicgoals. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.Director CompensationOn March 15, 2017, we adopted a compensation policy for our non-employee directors, or the Director Compensation Program. Pursuant to the DirectorCompensation Program, our non-employee directors will receive cash compensation, paid quarterly, as follows: • Each non-employee director will receive an annual cash retainer in the amount of $35,000 per year. • Any non-employee Chairman will receive an additional annual cash retainer in the amount of $25,000 per year. • The chairperson of the audit committee will receive additional annual cash compensation in the amount of $15,000 per year for suchchairperson’s service on the audit committee. Each non-chairperson member of the audit committee will receive additional annual cashcompensation in the amount of $7,500 per year for such member’s service on the audit committee. • The chairperson of the compensation committee will receive additional annual cash compensation in the amount of $10,000 per year for suchchairperson’s service on the compensation committee. Each non-chairperson member of the compensation committee will receive additionalannual cash compensation in the amount of $5,000 per year for such member’s service on the compensation committee. • The chairperson of the nominating and corporate governance committee will receive additional annual cash compensation in the amount of$7,000 per year for such chairperson’s service on the nominating and corporate governance committee. Each non-chairperson member of thenominating and corporate governance committee will receive additional annual cash compensation in the amount of $3,500 per year for suchmember’s service on the nominating and corporate governance committee.Under the Director Compensation Program, upon the director’s initial appointment or election to our board of directors, each non-employee director willreceive an option (the Initial Grant) to purchase that number of shares of our common stock such that the award has an aggregate grant date fair value (asdefined below) equal to $181,400, rounded down to the nearest whole share (subject to adjustment as provided in the applicable equity plan). In addition,each non-employee director who has been serving as a director for the prior three months and will continue to serve as a director immediately following eachannual stockholder meeting, will receive, on the date of such annual stockholder meeting, an option (the Annual Grant) to purchase that number of shares ofour common stock such that the award has an aggregate grant date fair value equal to $90,700, rounded down to the nearest whole share (subject toadjustment as provided in the applicable equity plan). For purposes of the Initial Grant and the Annual Grant, “grant date fair value” will mean the fair valueof an award as of the date of grant as determined in accordance with ASC Topic 718, “Share-Based Payment”, using the Black-Scholes pricing model and thevaluation assumptions used by the company in accounting for options as of such date of grant. The Initial Grant will vest as to one-third of the shares subjectto Initial Grant on each yearly anniversary of the applicable grant date, subject to continued service through each applicable vesting date, and the AnnualGrant will fully vest on the earlier of the first anniversary of the applicable grant date or the date of the next annual stockholder meeting, subject to continuedservice through such vesting date. 12Table of Contents2017 Director Compensation TableThe following table sets forth information for the year ended December 31, 2017, regarding the compensation awarded to, earned by or paid to ournon-employee directors as of December 31, 2017. Directors who are also our employees receive no additional compensation for their service as a director. Thecompensation received by Drs. Gardner and Hoffman as employees of the Company is presented in “Executive Compensation—Summary CompensationTable—2017. Name(1) Fees Earned orPaid in Cash ($) Total ($) Muneer Satter $50,271 $50,271 Paul M. Weiss $31,667 $31,667 Caley Castelein, M.D. $33,646 $33,646 Anupam Dalal, M.D. $35,625 $35,625 Steven Prelack $39,583 $39,583 Chau Khuong $33,250 $33,250 Pravin U. Dugel, M.D.(2) $33,646 $33,646 (1)Unless otherwise indicated, our non-employee directors do not currently hold any options or stock awards.(2)Dr. Dugel holds options to purchase 16,742 shares of our common stock. 13Table of ContentsItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The following table sets forth information relating to the beneficial ownership of our common stock at March 8, 2018, by: • each person, or group of affiliated persons, known by us to beneficially own more than 5% of the outstanding shares of our common stock; • each of our directors; • each of our named executive officers; and • all current directors and executive officers as a group.The number of shares beneficially owned by each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and theinformation is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares overwhich the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days ofMarch 8, 2018 through the exercise of any stock option, warrants or other rights. Except as otherwise indicated, and subject to applicable communityproperty laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by such person.The percentage of shares beneficially owned is computed on the basis of 27,140,969 shares of common stock outstanding as of March 8, 2018. Shares ofcommon stock that a person has the right to acquire within 60 days of March 8, 2018 are deemed outstanding for purposes of computing the percentageownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, exceptwith respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated below, the address for each beneficialowner listed in the table is c/o Aerpio Pharmaceuticals, Inc., 9987 Carver Road, Suite 420, Cincinnati, Ohio 45242. Shares Beneficially Owned Number Percentage 5% Stockholders: Novartis Bioventures Ltd.(1) 5,805,550 21.4% Entities Affiliated with OrbiMed Private Investments III, LP(2) 4,416,446 16.3% Trusts and Other Entities Affiliated with Muneer A. Satter(3) 3,241,835 11.9% Venture Investors Early Stage Fund IV(4) 1,576,167 5.8% Named Executive Officers and Directors: Muneer A. Satter(3) 3,241,835 11.9% Chau Khuong(2) 4,416,446 16.3% Steven Prelack — * Paul Weiss(4) 1,576,167 5.8% Caley Castelein 10,920 * Anupam Dalal 2,269 * Pravin Dugel(5) 14,964 * Joseph Gardner(6) 828,374 3.0% Steve Pakola(7) 108,129 * Stephen Hoffman — * Michael Rogers — * All directors and executive officers as a group (12 persons) 10,521,552 38.3% *Indicates beneficial ownership of less than 1% of the total outstanding common stock. 14Table of Contents(1)Consists of 5,805,550 shares of common stock owned directly by Novartis Bioventures, Ltd. The board of directors of Novartis Bioventures Ltd. hassole voting and investment control and power over such shares. None of the members of its board of directors has individual voting or investmentpower with respect to such shares and each disclaims beneficial ownership of such shares. Novartis Bioventures Ltd. is an indirectly-owned subsidiaryof Novartis AG. The address of Novartis Bioventures Ltd. is 131 Front Street, Hamilton, HM12, Bermuda.(2)Consists of 4,416,446 shares of common stock owned directly by OrbiMed Private Investments III, LP, or OPI III. OrbiMed Advisors LLC, or OrbiMed,is the managing member of GP III, which is the general partner of OPI III. Samuel D. Isaly is the managing member of and owner of a controlling interestin OrbiMed. By virtue of such relationships, GP III, OrbiMed and Mr. Isaly may be deemed to have voting and investment power over the shares heldby OPI III and as a result may be deemed to have beneficial ownership of such shares. Chau Khuong, an employee of OrbiMed, is a member of ourboard of directors. Each of GP III, OrbiMed, Mr. Isaly and Mr. Khuong disclaims beneficial ownership of the shares held by OPI III, except to the extentof its or his pecuniary interest therein, if any. The address of OrbiMed Investments and OrbiMed Associates is c/o OrbiMed Advisors LLC, 601Lexington Avenue, 54th Floor, New York, New York 10022.(3)Consists of (a) 976,568 shares of common stock that are held by the Muneer A. Satter Revocable Trust for which Muneer A. Satter serves as trustee and,in such capacity, has sole voting and dispositive power over all such shares, (b) 1,145,267 shares of common stock that are held by various other trustsand other entities for which Muneer A. Satter serves as trustee, investment advisor or manager and, in such capacity, has sole voting and dispositivepower over all such shares (collectively, the “Satter Investors”), and (c) 1,120,000 shares of common stock that are held by Satter Medical TechnologyPartners, L.P., or SMTP, and Muneer A. Satter has sole voting and dispositive power over all such shares. The address of the Satter Investors and SMTPis c/o Satter Management Co., L.P., 676 North Michigan Avenue, Suite 4000, Chicago, Illinois 60610.(4)Consists of 1,576,475 shares of common stock owned directly by Venture Investors Early Stage Fund IV Limited Partnership, or VIESF. The generalpartner of VIESF, VIESF IV GP LLC, has sole voting and investment control over the shares owned by VIESF. The members of VIESF IV GP LLC, JohnNeis, Paul M. Weiss, Scott Button, George Arida, James R. Adox, Loren G. Peterson, and Venture Investors Southeast LLC (of which Roger H. Ganser isthe sole member), have sole voting and investment power for VIESF IV GP LLC with respect to its voting power in its capacity as General Partner forthe shares held by VIESF. None of the members of VIESF IV GP LLC has individual voting or investment power with respect to such shares and eachdisclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein. The address of Venture Investors Early Stage FundIV Limited Partnership is 505 South Rosa Road, Suite 201, Madison, Wisconsin, 53719.(5)Consists of 14,964 shares of common stock issuable directly to Pravin Dugel upon the conversion of options within 60 days of March 8, 2018.(6)Consists of (i) 593,019 shares of common stock held directly by Joseph Gardner and (ii) 235,355 shares of common stock issuable upon the conversionof options within 60 days of March 8, 2018.(7)Consists of 108,129 shares of common stock issuable directly to Steve Pakola upon the conversion of options within 60 days of March 8, 2018. 15Table of ContentsSecurities Authorized for Issuance Under Equity Compensation PlansThe following table contains information about our equity compensation plans as of December 31, 2017. As of December 31, 2017, we had three equitycompensation plans, each of which was approved by our stockholders: our 2011 Plan, our 2017 Plan and our ESPP.Equity Compensation Plan Information Plan Category Number of securities to beissued upon exercise ofoutstanding options,warrants and rights Weighted averageexercise price ofoutstanding options,warrants and rights Number of securitiesremaining available forfuture issuance underequity compensationplans (excludingsecurities reflected incolumn (a)) (a) (b) (c) Equity compensation plansapproved by security holders 1,179,410 $2.61 3,691,960 Equity compensation plans notapproved by security holders (1) 733,570 $5.50 — Total 1,912,980 $3.72 3,691,960 (1)Includes 733,750 shares issued as inducement grants outside of our equity compensation plans. 16Table of ContentsIndemnification of Officers and DirectorsWe have agreed to indemnify our directors and executive officers in certain circumstances. See “Certain Relationships and Related Transactions, andDirector Independence —Indemnification Agreements and Directors’ and Officers’ Liability Insurance.” 17Table of ContentsItem 13. Certain Relationships and Related Transactions, and Director Independence.SEC rules require us to disclose any transaction or currently proposed transaction in which we were a participant and in which any related person has or willhave a direct or indirect material interest involving the lesser of $120,000 or 1% of the average of our total assets as of the end of last fiscal year. A relatedperson is any executive officer, director, nominee for director, or holder of 5% or more of our common stock, or an immediate family member of any of thosepersons.The following is a description of transactions since January 1, 2017 to which we have been a party, in which the amount involved exceeded or will exceed$120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family memberthereof, had or will have a direct or indirect material interest, other than compensation and other arrangements that are described in the section titled“Executive Compensation.”Sales and Purchases of SecuritiesConvertible Promissory Note Purchase AgreementIn October 2016 and January 2017, Aerpio issued convertible promissory notes for an aggregate principal amount of approximately $3.8 million to 53accredited investors. The Convertible Notes accrued interest at 8% per annum, compounded annually. All outstanding principal and interest under theseNotes converted into shares of Aerpio common stock immediately prior to the Merger, which were then converted into shares of our common stock on a2.3336572:1 basis at the effective time of the Merger. The table below sets forth the principal amount of the convertible promissory notes sold to ourdirectors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof. Purchasers AggregatePrincipal Price Joseph Gardner $37,553.38 Entities affiliated with Kearny Venture(1) $284,929.84 Entities affiliated with Novartis Bioventures Ltd.(2) $1,167,910.04 Trusts and Other Entities affiliated with Muneer A. Satter(3) $472,424.59 Venture Investors Early Stage Fund IV(4) $290,302.73 OrbiMed Private Investments V, L.P.(5) $813,432.86 (1)Consists of an aggregate principal price of (a) $262,606.51 by Kearny Venture Partners, L.P. (b) $5,356.15 by Kearny Venture Partners EntrepreneursFund, L.P., (c) $15,211.94 by Revelation TWHVP, LLC, and (d) $1,755.24 by TWHVP SPV, LLC. Caley Castelein, who is on our board of directors, isaffiliated with each of these entities.(2)Consists of an aggregate principal price of $1,167,910.04 held by Novartis International Pharmaceutical Investment Ltd., an entity affiliated withNovartis Bioventures Ltd.(3)Consists of an aggregate principal price of (a) $200,994.68 by the Muneer A. Satter Revocable Trust for which Muneer A. Satter serves as trustee and,in such capacity, has sole voting and dispositive power over all such amount and (b) $271,429.91 by various other trusts and other entities for whichMuneer A. Satter serves as trustee, investment advisor or manager and, in such capacity, has sole voting and dispositive power over all such amount.(4)Paul Weiss, who is on our board of directors, is affiliated with this entity.(5)Chau Khuong, who is on our board of directors, is affiliated with this entity.Private Placement OfferingIn March 2017, we entered into a Subscription Agreement pursuant to which we issued and sold 8,049,555 shares of our common stock at a price per share of$5.00 for an aggregate principal amount of approximately $40.2 million. The table below sets forth the shares purchase by our directors, executive officers orholders of more than 5% of our capital stock, or an affiliate or immediate family member thereof. 18Table of ContentsPurchasers Shares of CommonStock AggregatePrincipal Price Joseph Gardner 52,834 $264,179 Entities affiliated with Kearny Venture(1) 400,000 $2,000,000 Novartis Bioventures Ltd 560,000 $2,800,000 Trusts and Other Entities affiliated with Muneer A. Satter(2) 1,120,000 $5,600,000 Venture Investors Early Stage Fund IV(3) 272,302 $1,361,510 OrbiMed Private Investments V, L.P.(4) 762,995 $3,814,975 (1)Consists of (i) 392,005 shares held by Kearny Venture Partners, L.P. (“KVP”) and (b) 7,995 shares held by Kearny Venture Partners Entrepreneurs Fund,L.P. (“KVPEF”). KVP and KVPEF are affiliated with Caley Castelein, who is on our board of directors.(2)Consists of 1,120,000 shares held by Satter Medical Technology Partners, L.P. (“SMTP”). SMTP is affiliated with Muneer Satter, who is on our board ofdirectors.(3)Paul Weiss, who is on our board of directors, is affiliated with this entity.(4)Chau Khuong, who is on our board of directors, is affiliated with this entity.Indemnification Agreements and Directors’ and Officers’ Liability InsuranceWe have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us toindemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees,judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by orin right of us, arising out of the person’s services as a director or executive officer.Employment Agreements and Offer LettersEach of our executive officers is employed with us under the terms of their employment agreement or offer letter, as applicable. For more informationregarding these employment agreements for Messrs. Hoffman, Rogers and Gardner, see the section titled “Executive Compensation—Narrative to SummaryCompensation Table and Outstanding Equity Awards at 2017 Year End.”Other TransactionsWe have granted stock options to our executive officers. For a description of these stock options granted to such individuals, see the section titled “ExecutiveCompensation.” We have also granted stock options to certain members of the board of directors, and will do so in the future pursuant to our non-employeedirector compensation policy. For a description of these stock options, see the section titled “Management—Director Compensation Table.”Policies and Procedures for Related-Person TransactionsOur board of directors has adopted a written related-person transaction policy setting forth the policies and procedures for the review and approval orratification of related-person transactions. This policy will cover, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, anytransaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, wherethe amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases ofgoods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness andemployment by us of a related person. In reviewing and approving any such transactions, our audit committee is 19Table of Contentstasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could beobtained in an arm’s-length transaction and the extent of the related person’s interest in the transaction. Furthermore, all related-person transactions with amajority stockholder requires a supermajority (66 2/3%) vote of the directors then in office. All of the transactions described in this section occurred prior tothe adoption of this policy.Director IndependenceOur securities are not listed on a national securities exchange or on any inter-dealer quotation system which has a requirement that a majority of directors beindependent. We evaluate independence by the standards for director independence set forth in the Nasdaq Marketplace Rules. Under such rules, our board ofdirectors has determined that all members of the board of directors, except Stephen Hoffman and Joseph Gardner, are independent directors. Stephen Hoffmanand Joseph Gardner are not independent directors under these rules because they are executive officers of our company. In making such independencedetermination, our board of directors considered the relationships that each non-employee director has with us and all other facts and circumstances that ourboard of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employeedirector. In considering the independence of the directors listed above, our board of directors considered the association of our directors with the holders ofmore than 5% of our common stock. The composition and functioning of our board of directors and each of our committees complies with all applicablerequirements of the Nasdaq Stock Market and the rules and regulations of the SEC. There are no family relationships among any of our directors or executiveofficers. 20Table of ContentsItem 14. Principal Accounting Fees and Services.Audit Fees and ServicesThe following table summarizes the fees of Ernst and Young LP, our independent registered public accounting firm, for each of the last two fiscal years. Fee Category 2017 2016 Audit Fees(1) $659,859 $225,627 Audit-Related Fees(2) — — Tax Fees(3) — — All Other Fees(4) — — Total Fees $659,859 $225,627 (1)Fees represent amounts paid for Aerpio Therapeutics, Inc. 2016 audit.(2)There were no audit-related fees for fiscal years 2017 and 2016.(3)There were no tax fees for fiscal years 2017 and 2016.(4)There were no other fees for fiscal years 2017 and 2016.In 2017, the Audit Committee approved a formal policy concerning approval of audit and non-audit services to be provided by the Company by itsindependent registered public accounting firm, Ernst & Young LLP. The policy requires that all services to be provided by Ernst & Young LLP, includingaudit services and permitted audit-related and non-audit services, must be pre-approved by the Audit Committee, provided that de minimis non-audit servicesmay instead be approved in accordance with applicable SEC rules. The Board of Directors preapproved all audit and non-audit services provided by Ernst &Young LLP during fiscal year 2017 and fiscal year 2016. 21Table of ContentsPART IVItem 15. Exhibits, Financial Statements.(a)(2) Exhibits.Exhibit Index ExhibitNumber Description31.3* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as AdoptedPursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.4* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as AdoptedPursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *Filed herewith.SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to besigned on its behalf by the undersigned, thereunto duly authorized. AERPIO PHARMACEUTICALS, INC.Date: April 6, 2018 By: /s/ Stephen Hoffman, M.D., Ph.D. Stephen Hoffman, M.D., Ph.D.Chief Executive Officer and PrincipalExecutive Officer 22Exhibit 31.3CERTIFICATION PURSUANT TORULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Stephen Hoffman, certify that: 1.I have reviewed this annual report on Form 10-K/A of Aerpio Pharmaceuticals, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)(Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the registrant’s internal control over financial reporting. 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: April 6, 2018 By: /s/ Stephen Hoffman, M.D., Ph.D. Stephen Hoffman, M.D., Ph.D. Chief Executive Officer (Principal Executive Officer)Exhibit 31.4CERTIFICATION PURSUANT TORULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Michael Rogers, certify that: 1.I have reviewed this annual report on Form 10-K/A of Aerpio Pharmaceuticals, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)(Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the registrant’s internal control over financial reporting. 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: April 6, 2018 By: /s/ Michael Rogers Michael Rogers Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer)

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