Company: TVRD
Filing Date: 2025-10-07
Form Type: S-1/A
Source: 0001104659-25-097519
Chunk: 347

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-10-07
Form: S-1/A
Chunk 347
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 and sell convertible notes (the Convertible Notes) in an aggregate principal amount of$ 28.3million. The Convertible Notes accrued interest at8%per annum and had a maturity date of December 31, 2026 (the Maturity Date). As further discussed in Note 3,Merger Agreement, the Company completed its Merger with Cara in April 2025. Upon the closing of the Merger, the Convertible Notes converted into1,265,757shares of the Company’s common stock,$ 0.001par value per share, in the aggregate.

The fair value of the Convertible Notes as of December 31, 2024 was estimated based on significant inputs not observable in the market, which represented Level 3 measurements within the fair value hierarchy. The Convertible Notes were valued using a scenario-based valuation analysis requiring a probability of inputs including the probability of occurrence of events that would trigger conversion of the Convertible Notes and the expected timing of such events.

F-40

In addition to the estimated probabilities of the occurrence of events that would trigger conversion, the following table presents the other assumptions, estimates, and contractual features incorporated into the valuation of the Convertible Notes as of December 31, 2024:

| ​                                                    | ​ |                  ​ | ​ |
| ​                                                    | ​ | As of December 31, | ​ |
| ​                                                    | ​ |               2024 | ​ |
| Time to Qualified/non-Qualified financing (in years) |   |               0.25 | ​ |
| Time to IPO (in years)                               |   |               0.25 | ​ |
| Time to reverse merger (in years)                    |   |               0.33 | ​ |
| Time to dissolution (in years)                       |   |                n/a | ​ |
| Interest rate (risk-free)                            |   |               4.37 | % |
| Conversion discount rate                             |   |              20.00 | % |

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

Under the fair value option, any change in