Company: TVRD
Filing Date: 2025-01-27
Form Type: S-4/A
Source: 0001104659-25-006050
Chunk: 392

Company: Tvardi Therapeutics, Inc.
Filing Date: 2025-01-27
Form: S-4/A
Chunk 392
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 with Nasdaq, as described below, to seek a listing upon the closing of the Merger. According to Nasdaq rules, an issuer must, in a case such as this, apply for initial inclusion following a transaction whereby the issuer combines with a non-Nasdaq entity, resulting in a change of control of the issuer and potentially allowing the non-Nasdaq entity to obtain a Nasdaq listing. Accordingly, the listing standards of Nasdaq will require Cara to have, among other things, a $4.00 per share minimum bid price upon the closing of the Merger. Therefore, the Reverse Stock Split may be necessary in order to consummate the Merger.

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One of the effects of the Reverse Stock Split will be to effectively increase the proportion of authorized shares which are unissued relative to those which are issued. This could result in Cara’s management being able to issue more shares without further stockholder approval. For example, before the Reverse Stock Split, as of January 15, 2025, Cara’s authorized shares of common stock immediately prior to the closing of the Merger and without giving effect to the Authorized Share Proposal is 16,666,667 compared to shares issued and outstanding of 4,571,229. If Cara effects the Reverse Stock Split using a -for-1 ratio, its authorized shares of common stock immediately prior to the closing of the Merger would still be compared to shares issued and outstanding of approximately . Cara currently has no plans to issue shares, other than in connection with the Merger and to satisfy obligations under the Cara employee stock options from time to time as the options are exercised. The Reverse Stock Split will not affect the number of authorized shares of Cara common stock which will continue to be authorized pursuant to the certificate of incorporation of Cara. Potential Increased Investor Interest On December 17, 2024, Cara common stock closed at $2.996 per share (after giving effect to the December Reverse Stock Split). An investment in Cara common stock may not appeal to brokerage firms that are reluctant to recommend lower priced securities to their clients. Investors may also be dissuaded from purchasing lower priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced stocks. Also, the Cara Board believes that most investment funds are reluctant to invest in lower priced stocks. There are risks associated with the Reverse Stock Split, including that the Reverse Stock Split may