Company: TVRD
Filing Date: 2025-10-07
Form Type: S-1/A
Source: 0001104659-25-097519
Chunk: 105

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-10-07
Form: S-1/A
Chunk 105
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 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 material weaknesses in its financial reporting related to inadequate review of financial statements and disclosures, as well as a lack of formal documentation and timely communication regarding prepaid and accrued research and development expenses related to the CRO.

However, these material weaknesses could result in a misstatement of substantially all of the Company’s accounts or disclosures that would result in a material misstatement of its future annual or interim financial statements that would not be prevented or detected. Following the Merger, these material weaknesses must be remediated by the Company.

To remediate the material weaknesses, the Company has begun a formal risk assessment process to identify control gaps and design new procedures and controls to remediate the identified weaknesses. The Company has added additional experienced accounting and financial reporting personnel and is formalizing the design and implementation of internal controls over the financial reporting process, including general controls over information systems. The material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above and the controls operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. The measures the Company has taken to date, and is continuing to design and implement, may not be sufficient to remediate the material weaknesses the Company has identified or avoid potential future material weaknesses. If the steps the Company takes do not