Company: TVRD
Filing Date: 2025-11-13
Form Type: 424B3
Source: 0001104659-25-111336
Chunk: 71

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-11-13
Form: 424B3
Chunk 71
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ible Notes under the reverse merger scenario,
which was estimated using a forward contract structure.

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Table of Contents

Since Tvardi elected the fair value option for the
Convertible Notes, at the time of conversion, the fair value was measured as the quoted market price of Tvardi’s common shares into
which the Convertible Notes were exchanged. The fair value was determined to be the closing market trading price on April 16, 2025, the
first day of trading for Tvardi’s common shares.

Under the fair value
option, any change in fair value was recorded to Tvardi’s condensed consolidated statements of operations and comprehensive loss
as a gain or loss from a fair value measurement. At the time of conversion, the fair value of the Convertible Notes was $23.1 million,
calculated as 1,265,757 shares of common stock at the closing market trading price on April 16, 2025. The $12.8 million change in fair
value when comparing the $23.1 million at the time of conversion to the $35.9 million recorded value of the Convertible Notes immediately
prior to the conversion date was recorded to Tvardi’s condensed consolidated statements of operations and comprehensive loss within
other income, net for the second quarter of 2025. Net fair value changes of $7.8 million were recorded to Tvardi’s condensed consolidated
statements of operations and comprehensive loss within other income, net for the nine months ended September 30, 2025.

As discussed above, upon the closing of the Merger,
the Convertible Notes converted into 1,265,757 shares of Tvardi common stock in the aggregate. As a result, there were no Convertible
Notes as of September 30, 2025.

Stock-Based Compensation Expense and Fair Value of Stock-Based Awards

Stock-Based Compensation Expense

Tvardi measures and records the expense related
to stock-based awards granted to employees, directors, consultants and advisors based upon their respective fair value at the date of
grant. Generally, Tvardi issues stock option awards with service-based vesting conditions and records the expense for these awards using
the straight-line method such that the aggregate amount of expense recognized is at least the fair value of what has legally vested. Tvardi
estimates the grant date fair value of each common stock option using the Black-Scholes option-pricing model, which requires the input
of highly subjective