Company: TVRD
Filing Date: 2025-02-14
Form Type: 424B3
Source: 0001104659-25-014310
Chunk: 19

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-02-14
Form: 424B3
Chunk 19
---
 237of this proxy statement/prospectus for a more complete description of the material U.S. Federal Income Tax consequences of the Reverse Stock Split to Cara U.S. holders.

**Q:**

#### What are the Convertible Notes?
**A:

On December 3, 2024, Tvardi entered into a Note Purchase Agreement to issue and sell convertible promissory notes (Convertible Notes) in an aggregate amount of approximately $28.3 million. The Convertible Notes accrue simple interest at 8% per annum and mature on December 31, 2026. Upon the Closing, the outstanding principal balance of such notes and all unpaid accrued interest will be automatically converted into shares of Cara common stock, at a conversion price equal to 80% of the implied valuation of the combined company in the Merger. The Conversion Shares shall be calculated by multiplying the Post-Closing Cara Shares (as defined below) by (a) the quotient obtained by dividing (i) the Implied Note Valuation (as defined below) by (ii) the Aggregate Post-Bridge Valuation (as defined below). The Post-Closing Shares means the quotient obtained by dividing the Cara Outstanding Shares (as defined below) by the Cara Allocation Percentage (as defined below). The Implied Note Valuation means the quotient obtained by dividing (a) the principal amount of the Convertible Notes plus all accrued and unpaid interest by (b) 80%. The Aggregate Post-Bridge Valuation means the sum of (i) the Tvardi Valuation (as defined below), plus (ii) the Cara Valuation (as defined below) plus (iii) the Implied Note Valuation. The Conversion Shares issued with respect to the 20% discount under the terms of the Convertible Notes (Note Conversion Discount Shares) shall dilute the pre-Merger equityholders of Tvardi as part of calculating the Exchange Ratio. The remaining Conversion Shares shall dilute the pre-Merger Cara equityholders and the pre-Merger Tvardi equityholders on a pro rata basis. Immediately following the conversion of the Convertible Notes, the pre-Merger equityholders of Cara are expected to hold approximately 15.25% of the shares of Cara common stock, the pre-Merger equityholders of Tvardi are expected to hold approximately 72.21% of the shares of Cara common stock, and the holders of the Convertible Notes are expected to hold approximately 12.54% of the shares of Cara common