Company: ZVRA
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001628280-25-039967
Chunk: 74

Company: ZEVRA THERAPEUTICS, INC.
Filing Date: 2025-08-12
Form: 10-Q
Item: Part I, Item 1
Chunk 74
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 30, 2025, the changes in fair value of the warrant liabilities primarily resulted from changes in the discount rate.Contingent ConsiderationContingent consideration liabilities relate to the Company's liabilities arising in connection with the CVRs issued as a result of the Merger. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation or a scenario-based method, depending on the earn-out achievement objectives, utilizing projections about future performance. Significant inputs include volatility and projected financial information, including projections representative of a market participant's view of the expected cash payments associated with the agreed upon regulatory milestones based on probabilities of technical success, timing of the potential milestone events for the compounds, and estimated discount rates.The following table provides a reconciliation of the beginning and ending balances related to the contingent consideration liabilities for the CVRs (dollars in thousands):Balance as of December 31, 2024$3,500 Change in fair value measurement of contingent consideration liabilities(2,130)Balance as of June 30, 2025$1,370 For the six months ended June 30, 2025, the changes in fair value of contingent consideration primarily resulted from changes in market data and revenue projections.

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J.    Net Income (Loss) Per Share

The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Under the two-class method, for periods with net income attributable to common stockholders, basic net income attributable to common stockholders per share of common stock is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Undistributed net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss as the holders of the participating securities have no obligation to fund losses. Diluted net income attributable to common stockholders per share of common stock is computed under the two-class method by using the weighted average number of shares of common stock outstanding plus the potential dilutive effects of stock options and warrants. In addition to analyzing under the two-class method, the Company analyzes the potential dilutive effect of stock options and warrants under the treasury-stock method when calculating diluted income (loss