Company: TVRD
Filing Date: 2025-10-20
Form Type: S-1/A
Source: 0001104659-25-100896
Chunk: 157

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-10-20
Form: S-1/A
Chunk 157
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 for the three and six months ended June 30, 2025 and 2024, both as included elsewhere in this prospectus, management believes that the following accounting policies are critical to understanding our historical and our future performance, as the policies relate to the more significant areas involving management’s judgments

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and estimates used in the preparation of the audited financial statements and unaudited condensed consolidated financial statements.

Prepaid and Accrued Research and Development Costs

Accounting for preclinical studies and clinical trials relating to activities performed by CROs and other external vendors requires management to exercise significant estimates in regard to the timing and accounting for these expenses. We estimate costs of research and development activities conducted by service providers, which include costs to properly initiate and manage ongoing preclinical studies and clinical trials. The diverse nature of services being provided under contracts with our CROs, CDMOs and other arrangements, the different compensation arrangements that exist for each type of service and the lack of timely information related to certain pre-clinical and clinical activities complicates the estimation of accruals for services rendered by the CROs, CDMOs and other vendors in connection with preclinical studies and clinical trials.

Examples of estimated accrued research and development expenses include:

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expenses incurred under agreements with third parties, including our CROs that conducts research, preclinical studies and clinical trials on our behalf;

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expenses incurred under agreements with third parties, including our CDMOs, that develop and manufacture our product candidate for use in our preclinical studies and clinical trials; and

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other providers and vendors in connection with research and development activities.

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with our CROs, CDMOs and other third-party vendors that conduct research, preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense.

Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing fees, we estimate the time period over which services will be performed, the enrollment of patients and the level of effort to be expended in each period. If the actual timing of the performance