Company: TVRD
Filing Date: 2025-01-27
Form Type: S-4/A
Source: 0001104659-25-006050
Chunk: 138

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-01-27
Form: S-4/A
Chunk 138
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 expiring in 2026 for federal purposes (to the extent such federal NOLs are generated in taxable years beginning on or before December 31, 2017) and 2027 for state purposes if Cara has not used them prior to that time, and Cara’s federal R&D tax credits will begin expiring in 2025 unless previously used. The federal NOLs arising in 2018 and forward have an unlimited carryforward period and losses from 2018-2020 may be carried back five years due to the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act). It is uncertain if and to what extent various states will conform to the Tax Cuts and Jobs Act of 2017 (TCJA), as modified by the CARES Act. To the extent that Cara has not exchanged its Connecticut R&D tax credits for a tax refund, those tax credits carry forward indefinitely. Additionally, Cara’s ability to use any NOL and R&D tax credit carryforwards to offset taxable income or tax, respectively, in the future will be limited under Internal Revenue Code Sections 382 and 383, respectively, if Cara has a cumulative change in ownership of Cara’s stock of more than 50% within a three-year period. The

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completion of Cara’s initial public offering in 2014 and Cara’s follow-on public offerings in 2015, 2017, 2018 and 2019, together with private placements and other transactions that have occurred, may have triggered such ownership changes. Cara conducted a 382 analysis in the first quarter of 2021. This analysis showed a limited change of ownership had occurred, and the amount of NOL carryforwards and R&D tax credits that could be utilized annually in the future to offset taxable income or tax, respectively. In addition, since Cara will need to raise substantial additional funding to finance its operations, Cara may undergo ownership changes in the future. The Merger, if consummated, may also constitute an ownership change (within the meaning of Section 382 of the Code). Any such annual limitation may significantly reduce the utilization of the NOL carryforwards and R&D tax credits before they expire. In addition, certain states have in the past suspended use of NOL carryforwards for certain taxable years (including Connecticut which currently limits the use of NOL carryforwards by 50% and California, which recently enacted legislation that temporarily suspends the use of California NOLs for three years