Company: TVRD
Filing Date: 2025-10-20
Form Type: S-1/A
Source: 0001104659-25-100896
Chunk: 160

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-10-20
Form: S-1/A
Chunk 160
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 assumptions and management’s best estimates. These estimates involve inherent uncertainties and management’s judgement. If factors change and different assumptions are used, our stock-based compensation could be materially different in the future.

These assumptions are estimated as follows:

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Fair Value — Because Legacy Tvardi’s common stock was not yet publicly traded prior to the Merger, it had to estimate the fair value of its common stock. Legacy Tvardi’s board of directors considered numerous objective and subjective factors to determine the fair value of its common stock at each meeting in which awards are approved. Subsequent to the Merger, our common stock is publicly traded.

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Expected Volatility — Because Legacy Tvardi did not have any trading history for its common stock prior to the Merger, the expected volatility was estimated using averages of the historical volatility of its peer group of companies for a period equal to the expected term of the stock options granted. Legacy Tvardi’s peer group of publicly traded companies was chosen based on their similar size,

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stage in the life cycle or area of specialty. We intend to continue to consistently apply this process using the same or a similar peer group of public companies, until a sufficient amount of historical information regarding the volatility of our own common stock price becomes available.

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Expected Term — Derived from the life of the options granted under the option plan and is based on the simplified method which is essentially the weighted average of the vesting period and contractual term.

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Risk-Free Interest Rate — The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date.

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Dividend Yield — We have not declared or paid dividends to date and do not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.

Changes in the foregoing assumptions can materially affect the estimate of grant date fair value and ultimately how much share-based compensation expense is recognized; and the resulting change in fair value, if any, is recognized in our statements of operations during the period the related services are rendered. These inputs are subjective and generally require significant analysis and judgment to develop.

Fair Value of Legacy Tvardi Stock-Based Awards

As a privately held company prior to the Merger, there had been no public market for Legacy Tvardi’s common stock. The estimated fair value of Legacy Tvardi’s common stock had been determined by its board of directors as of the date of