Company: TVRD
Filing Date: 2025-05-30
Form Type: S-1
Source: 0001104659-25-054853
Chunk: 363

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-05-30
Form: S-1
Chunk 363
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 control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. Valuation of Liability related to the Sales of Future Royalties and Milestones, Net

| Description of the Matter | As discussed in Note 10 to the financial statements, on November 1, 2023, the Company entered into a Royalty Purchase and Sale Agreement with a third party, pursuant to which the Company sold certain of its rights to receive royalty and milestone payments in exchange for up to $40.0 million. This represents the Company’s royalty financing obligation. The Company will repay the lender at a multiple of the initial proceeds received, which may vary based on timing and amount of cash flows received from its licensing partners. The Company determined that the royalty financing should be treated as a financing arrangement under ASC 470 and be classified as a liability.​ |

F-50

/s/ Ernst & Young LLP We have served as the Company’s auditor since 2006. Stamford, CT March 11, 2025 except for Notes 2 and 23, as to which the date is May 30, 2025

F-51

CARA THERAPEUTICS, INC. CONSOLIDATED BALANCE SHEETS (amounts in thousands,