Company: ZVRA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001434647-25-000011
Chunk: 75

Company: ZEVRA THERAPEUTICS, INC.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 75
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 exercisable. These warrants qualify as participating securities under ASC Topic 260, Earnings per Share, and are treated as such in the net income (loss) per share calculation. The Company may be required to redeem these warrants for a cash amount equal to the BSM value of the portion of the warrants to be redeemed.While the warrants are outstanding (but unexercised), the warrant holders will participate in any dividend or other distribution of the Company’s assets to its common stockholders by way of return of capital or otherwise. As of September 30, 2025, 1,046,900 of the warrants had been exercised. No warrants had been exercised as of December 31, 2024. The warrants have been evaluated to determine the appropriate accounting and classification pursuant to ASC 480 and ASC 815. Generally, freestanding warrants should be classified as (i) liabilities if the warrant terms allow settlement of the warrant exercise in cash and (ii) equity if the warrant terms only allow settlement in shares of common stock.The Company determined that its outstanding warrants should be recorded as a liability and stated at fair value at each reporting period. Changes to the fair value of the warrant liability are recorded through the unaudited condensed consolidated statements of operations as a fair value adjustment related to warrant and CVR liability. As of September 30, 2025, and December 31, 2024, the fair value of the liability associated with these warrants was approximately $13.8 million and $17.8 million, respectively. The fair value adjustment related to these warrants for the three and nine months ended September 30, 2025 was $5.1 million and $3.1 million of loss, respectively. The fair value adjustment related to these warrants for the three and nine months ended September 30, 2024 was $6.0 million of loss and $2.2 million of income, respectively.

H.    Stock-Based Compensation

In November 2014, the Board of Directors of the Company (the “Board”), and in April 2015, the Company’s stockholders, approved the Company’s 2014 Equity Incentive Plan (the “2014 Plan”), which became effective in April 2015. The 2014 Plan provides for the grant of stock options, other forms of equity compensation, and performance cash awards. In June 2021, the Company's stockholders approved an Amended and Restated 2014 Equity Incentive Plan (the “A