Company: TVRD
Filing Date: 2025-05-30
Form Type: S-1
Source: 0001104659-25-054853
Chunk: 105

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-05-30
Form: S-1
Chunk 105
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 19, 2025, Cara received thirteen demands and three draft complaints from purported stockholders of Cara (collectively, the “Demands”) making substantially similar allegations as in the Complaints regarding the disclosures in the Proxy Statement/Prospectus related to the Merger and assert claims for violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The Company cannot predict the outcome of any litigation or the Demands. The Company and the individual defendants intend to vigorously defend against the allegations made in the Complaints, the Demands, and any subsequently filed similar actions. It is possible additional lawsuits may be filed or additional demand letters may be received arising out of the Merger. Responding to these demands and litigation often is expensive and diverts management’s attention and resources, which could adversely affect the Company’s business.

#### General Risk Factors
Legacy Tvardi identified material weaknesses in its internal control over financial reporting, and, following the Merger, such material weaknesses must be remediated by the Company. If the Company fails to remediate these material weaknesses, or if it experiences additional material weaknesses in the future or otherwise fails to maintain effective internal control over financial reporting in the future, the Company may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect investor confidence in the Company and, as a result, the value of its common stock.

As of December 31, 2024, Legacy Tvardi had limited accounting personnel and other resources to address its internal control over financial reporting. In connection with the preparation of Legacy Tvardi’s financial statements for the year ended December 31, 2024, material weaknesses were identified in the design and operating effectiveness of Legacy Tvardi’s internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

These material weaknesses are related to the fact that Legacy Tvardi lacked a sufficient number of professionals to consistently establish appropriate authorities and responsibilities in pursuit of Legacy Tvardi’s financial reporting objectives. The lack of sufficient number of finance and accounting professionals contributed to the inadequate design and Legacy Tvardi’s inability to maintain effective controls over the segregation of duties related to journal entries. In addition, Legacy Tvardi identified a material weakness in its