Company: TVRD
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001558370-25-007575
Chunk: 11

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Item 3
Chunk 11
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Item 3.Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

Historically, Cara invested substantially all of its cash reserves in a variety of available-for-sale marketable securities, including investment-grade debt instruments, principally corporate bonds, commercial paper, municipal bonds and direct obligations of the U.S. government and U.S. government-sponsored entities, and in cash equivalents. As of March 31, 2025 and December 31, 2024, Cara did not invest in any available-for-sale marketable securities.

Cara maintained an investment portfolio in accordance with its investment policy, which included guidelines on acceptable investment securities, minimum credit quality, maturity parameters, and concentration and diversification. The primary objectives of Cara’s investment policy were to preserve principal, maintain proper liquidity and to meet operating needs. Cara’s investments were subject to interest rate risk and would decrease in value if market interest rates increased. However, due to the conservative nature of Cara’s investments in money market funds, Cara did not believe it was materially exposed to changes in interest rates related to its investments. As a result, Cara did not use interest rate derivative instruments to manage exposure to interest rate changes.

Duration is a sensitivity measure that can be used to approximate the change in the fair value of a security that will result from a change in interest rates. Applying the duration model, a hypothetical 100 basis point, or 1%, increase in interest rates as of March 31, 2025 and December 31, 2024, would have resulted in immaterial decreases in the fair values of Cara’s portfolio of investments at those dates.