Tvardi Therapeutics, Inc. (TVRD)

CIK: 0001346830. SIC: 2834 Pharmaceutical Preparations. Latest 10-K as of: 2026-03-31.

SIC breadcrumb: Manufacturing > Chemicals And Allied Products > SIC 2834 Pharmaceutical Preparations

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1346830. Latest filing source: 0001104659-26-037729.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-31. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001346830.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001346830.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001104659-26-057528.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report. In addition to historical financial information, the following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Quarterly Report.

On December 17, 2024, the Delaware corporation formerly known as Tvardi Therapeutics, Inc. (Legacy Tvardi) entered into an agreement and plan of merger and reorganization (the Merger Agreement) with Cara Therapeutics, Inc. (Cara), and CT Convergence Merger Sub, Inc., a wholly-owned subsidiary of Cara (Merger Sub), pursuant to which Merger Sub merged with and into Legacy Tvardi, with Legacy Tvardi surviving the Merger as a wholly-owned subsidiary of Cara (such transaction, the Merger). Upon the closing of the Merger on April 15, 2025, Cara changed its corporate name to Tvardi Therapeutics, Inc. and Legacy Tvardi’s business continued as the business of the Company.

Unless otherwise indicated or the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section to “Tvardi,” the “Company,” “we,” “us,” “our” and other similar terms refer to the business and operations of Legacy Tvardi prior to the Merger and to Tvardi Therapeutics, Inc. and its consolidated subsidiaries following the Merger.

Overview

We are a clinical-stage biopharmaceutical company focused on the development of novel, oral, small molecule therapies targeting Signal Transducer and Activator of Transcription 3 (STAT3) to treat inflammatory and proliferative diseases with significant unmet need. Based upon our founders' seminal work and deep understanding of STAT3, we have designed an innovative approach to directly inhibit STAT3, a highly validated yet historically undruggable target. Leveraging this expertise, we are developing a pipeline of STAT3 inhibitors with a differentiated mechanism of action and convenient oral dosing.

​

Our pipeline includes two oral, small molecule STAT3 inhibitors: TTI-101 and TTI-109. TTI-101 is our first-generation direct STAT3 inhibitor, currently in Phase 1b/2 clinical development in hepatocellular carcinoma (HCC). TTI-109 is a phosphate prodrug of TTI-101 that is mechanistically identical to its parent molecule but is designed to enhance systemic drug delivery and improve tolerability. We submitted an IND application for TTI-109 in June 2025. After FDA acceptance of the IND, we have initiated a Phase 1 trial of TTI-109 in healthy volunteers to evaluate safety, tolerability, and pharmacokinetics, as well as bioequivalence to TTI-101. We expect to report topline data from this trial in June of 2026, following which we intend to announce the clinical indication in which we plan to advance TTI-109. Subsequently, in the second half of 2026, we expect to report topline data of TTI-101 across the three cohorts of the REVERT LIVER CANCER Phase 1b/2 clinical trial.

​

In October 2025, we reported preliminary data from our Phase 2 clinical trial of TTI-101 in IPF and concluded that the study did not meet its goals. Subsequently, we conducted additional analyses of a subset of patients who received study drug for 12 weeks. Based on these analyses, which excluded certain patients due to dosing, pharmacokinetic, or clinical factors, treatment with TTI-101 demonstrated greater reductions in certain exploratory measures, including fibrosis and inflammatory markers, compared to placebo – directly recapitulating findings from multiple preclinical models of fibrotic disease and providing human clinical proof of concept for the STAT3 inhibition mechanism. We continue to evaluate these results to inform potential future development decisions.

​

Since commencing operations in 2017, we have devoted substantially all of our efforts and financial resources to developing our product candidates, organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing research and development of our product candidates, signaling and biology, medicinal chemistry and clinical insights to discover and develop novel therapies for the treatment of inflammatory and proliferative diseases driven by dysregulated STAT3 signaling. Through the date of this filing, we have historically financed our operations principally through the issuance and sale of our preferred stock and convertible debt. We received $28.3 million from the sale and issuance of our convertible promissory notes (Convertible Notes) in

20

Table of Contents

December 2024, which were converted into common stock in April 2025, and $83.4 million from the issuance and sale of our preferred stock and historical convertible debt, which was converted into preferred stock, in 2018 and 2021. We acquired approximately $23.9 million of net assets in connection with our Merger with Cara in April 2025.

As of March 31, 2026, we had $19.9 million in cash and cash equivalents and $5.1 million in short-term investments. We have incurred net losses since inception. As of March 31, 2026 and December 31, 2025, our accumulated deficit was $117.3 million and $110.5 million, respectively. For the three months ended March 31, 2026 and 2025, we reported net losses of $6.8 million and $9.6 million, respectively. Our net loss may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical development activities and other research and development activities. We expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. Losses are expected to continue as we continue to invest in research and development activities. We considered both quantitative and qualitative factors that are known or reasonably knowable as of the date that these condensed consolidated financial statements are issued and concluded that there are conditions present in the aggregate that raise substantial doubt about our ability to continue as a going concern. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect. See the subsection titled “— Liquidity and Capital Resources” below for further discussion.

We will require additional funding in order to finance operations and complete our ongoing and planned clinical trials. Access to such funding on acceptable terms cannot be assured.

We expect that our expense and capital requirements will increase substantially in connection with our ongoing activities and for the foreseeable future, particularly if we, among other things:

●

advance TTI-101, TTI-109 and our other product candidates through clinical development and, if successful, later-stage clinical trials;

●

discover and develop additional product candidates;

●

advance our preclinical development programs into clinical development;

●

experience delays or interruptions to preclinical studies, clinical trials, receipt of services from our third-party service providers on whom we rely, or our supply chain;

●

seek and maintain regulatory approvals for any product candidates that successfully complete clinical trials;

●

commercialize TTI-101, TTI-109, our other product candidates and any future product candidates, if approved;

●

hire additional clinical development, quality control, scientific and management personnel;

●

expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development and manufacturing efforts and operations as a public company;

●

establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with third parties;

●

maintain, expand and protect our intellectual property portfolio;

●

invest in or in-license other technologies or product candidates;

●

continue to build out our organization to engage in such activities; and

●

incur additional legal, accounting, investor relations and other general and administrative expenses associated with operating as a public company.

21

Table of Contents

Given our stage of development, to date we have not had any products approved for sale and have not generated any revenue. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which may not be for several years, if ever. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including collaborations, licenses or similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants or other restrictions limiting our ability to engage in specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies, including our research and development activities. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities, including our ongoing and planned clinical trials, to reduce costs.

Additionally, we are subject to risks and uncertainties as of result of global business, political and macroeconomic events and conditions, including increasing financial market volatility and uncertainty, inflation, interest rate fluctuations, uncertainty with respect to the federal budget and debt ceiling, as well as the potential for future potential government shutdowns related thereto, potential instability in the global banking system, cybersecurity events, the impact of war or military conflict, including regional conflicts around the world, and public health pandemics. Our business, financial condition and results of operations could be materially and adversely affected by further negative impact on the global economy and capital markets resulting from these global economic conditions, particularly if such conditions are prolonged or worsen.

Although, to date, our business has not been materially impacted by these global economic and geopolitical conditions, it is impossible to predict the extent to which our operations will be impacted in the short and long term, or the ways in which such instability could impact our business and results of operations. The extent and duration of these market disruptions, other geopolitical tensions, record inflation, tariffs or otherwise, are impossible to predict, but could be substantial. Any s

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-03-31. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Annual Report on Form 10-K. You should read “Cautionary Note Regarding Forward-Looking Statements” and Item 1A. Risk Factors of this Annual Report on Form 10-K for a discussion of material factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Unless otherwise indicated or the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section to “Tvardi,” “the Company,” “we,” “us,” “our” and other similar terms refer to the business and operations of Legacy Tvardi prior to the Merger and to Tvardi Therapeutics, Inc. and its consolidated subsidiaries following the Merger.

Overview

We are a clinical-stage biopharmaceutical company focused on the development of novel, oral, small molecule therapies targeting Signal Transducer and Activator of Transcription 3 (STAT3) to treat inflammatory and proliferative diseases with significant unmet need. Based upon our founders' seminal work and deep understanding of STAT3, we have designed an innovative approach to directly inhibit STAT3, a highly validated yet historically undruggable target. Leveraging this expertise, we are developing a pipeline of STAT3 inhibitors with a differentiated mechanism of action and convenient oral dosing.

​

Our pipeline includes two oral, small molecule STAT3 inhibitors: TTI-101 and TTI-109. TTI-101 is our first-generation direct STAT3 inhibitor, currently in Phase 1b/2 clinical development in hepatocellular carcinoma (HCC). TTI-109 is a phosphate prodrug of TTI-101 that is mechanistically identical to its parent molecule but is designed to enhance systemic drug delivery and improve tolerability. We submitted an IND application for TTI-109 in June 2025. After FDA acceptance of the IND, we have initiated a Phase 1 trial of TTI-109 in healthy volunteers to evaluate safety, tolerability, and pharmacokinetics, as well as bioequivalence to TTI-101. We expect to report topline data from this trial in the second quarter of 2026, following which we intend to announce the clinical indication in which we plan to advance TTI-109. Subsequently, in the second half of 2026, we expect to report topline data of TTI-101 across the three cohorts of the REVERT LIVER CANCER Phase 1b/2 clinical trial.

​

In October 2025, we reported preliminary data from our Phase 2 clinical trial of TTI-101 in IPF and concluded that the study did not meet its goals. Subsequently, we conducted additional analyses of a subset of patients who received study drug for 12 weeks. Based on these analyses, which excluded certain patients due to dosing, pharmacokinetic, or clinical factors, treatment with TTI-101 demonstrated greater reductions in certain exploratory measures, including fibrosis and inflammatory markers, compared to placebo – directly recapitulating findings from multiple preclinical models of fibrotic disease and providing human clinical proof of concept for the STAT3 inhibition mechanism. We continue to evaluate these results to inform potential future development decisions.

​

Since commencing operations in 2017, we have devoted substantially all of our efforts and financial resources to developing our product candidates, organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing research and development of our product candidates, signaling and biology, medicinal chemistry and clinical insights to discover and develop novel therapies for the treatment of inflammatory and proliferative diseases driven by dysregulated STAT3 signaling. Through the date of this filing, we have historically financed our operations principally through the issuance and sale of our preferred stock and convertible debt. We received $28.3 million from the sale and issuance of our Convertible Notes (as defined below) in December 2024 and $83.4 million from the issuance and sale of its preferred stock and historical convertible debt, which was converted into preferred stock, in 2018 and 2021.

As of December 31, 2025, we had $20.7 million in cash and cash equivalents and $10.1 million in short-term investments. As further discussed below, in April 2025, we completed our Merger with Cara, through which we acquired approximately $23.9 million in net assets. We have incurred net losses since inception. As of and for the year ended December 31, 2025, we had an accumulated deficit of $110.5 million and a net loss of $18.2 million. As of and for the year ended December 31, 2024, we had an accumulated

111

Table of Contents

deficit of $92.2 million and a net loss of $29.4 million. Our net loss may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical development activities and other research and development activities. We expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. Losses are expected to continue as we continue to invest in research and development activities. We considered both quantitative and qualitative factors that are known or reasonably knowable as of the date that these consolidated financial statements are issued and concluded that there are conditions present in the aggregate that raise substantial doubt about our ability to continue as a going concern. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect. See the subsection titled “—Liquidity and Capital Resources” below for further discussion.

​

We will require additional funding in order to finance operations and complete our ongoing and planned clinical trials. Access to such funding on acceptable terms cannot be assured.

We expect that our expense and capital requirements will increase substantially in connection with our ongoing activities and for the foreseeable future, particularly if we, among other things:

●

advance TTI-101, TTI-109 and our other product candidates through clinical development and, if successful, later-stage clinical trials;

​

●

discover and develop additional product candidates;

​

●

advance our preclinical development programs into clinical development;

​

●

experience delays or interruptions to preclinical studies, clinical trials, receipt of services from our third-party service providers on whom we rely, or our supply chain;

​

●

seek and maintain regulatory approvals for any product candidates that successfully complete clinical trials;

​

●

commercialize TTI-101, TTI-109, our other product candidates and any future product candidates, if approved;

​

●

hire additional clinical development, quality control, scientific and management personnel;

​

●

expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development and manufacturing efforts and operations as a public company;

​

●

establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with third parties;

​

●

maintain, expand and protect our intellectual property portfolio;

​

●

invest in or in-license other technologies or product candidates;

​

●

continue to build out our organization to engage in such activities; and

​

●

incur additional legal, accounting, investor relations and other general and administrative expenses associated with operating as a public company.

​

Given our stage of development, to date we have not had any products approved for sale and have not generated any revenue. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which may not be for several years, if ever. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including collaborations, licenses or similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants or other

112

Table of Contents

restrictions limiting our ability to engage in specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies, including our research and development activities. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities, including our ongoing and planned clinical trials, to reduce costs.

Additionally, we are subject to risks and uncertainties as of result of global business, political and macroeconomic events and conditions, including increasing financial market volatility and uncertainty, inflation, interest rate fluctuations, uncertainty with respect to the federal budget and debt ceiling, as well as the potential for future potential government shutdowns related thereto, potential instability in the global banking system, cybersecurity events, the impact of war or military conflict, including regional conflicts around the world, and public health pandemics. Our business, financial condition and results of operations could be materially and adversely affected by further negative impact on the global economy and capital markets resulting from these global economic conditions, particularly if such conditions are prolonged or worsen.

Although, to date, our business has not been materially impacted by these global economic and geopolitical conditions, it is impossible to predict the extent to which our operations will be impacted in the short and long term, or the ways in which such instability could impact our business and results of operations. The extent and duration of these market disruptions, other geopolitical tensions, record inflation, tariffs or otherwise, are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K.

Reverse Merger

On December 17, 2024, Legacy Tvardi entered into the Merger Agreement with Cara and Merger Sub, pursuant to which, on April 15, 2025, Merger Sub merged with and into Legacy Tvardi, with Legacy Tvardi surviving as a wholly-owned subsidiary of Cara. Upon completion of the Merger, Cara changed its name to Tvardi Therapeutics, Inc., and Legacy Tvardi’s business continued as our business.

Pursuant to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the Effective Time):

●

the outstanding shares of Legacy Tvardi’s common stock (including the shares of common stock issuable upon conversion of all shares of preferred stock prior to the Merger), $0.001 par value per share (Legacy Tvardi common stock), were converted into 6,539,404 shares of our common stock, $0.001 par value per share in the aggregate, based on an exchange ratio calculated in accordance with the Merger Agreement (the Exchange Ratio);

●

we acquired approximately $23.9 million in net assets in accordance with the Merger Agreement;

●

Legacy Tvardi’s outstanding Convertible Notes converted into 1,265,757 shares of our common stock in the aggregate, pursuant to the terms of the Convertible Notes; and

●

all outstanding and unexercised options to purchase shares of Legacy Tvardi common stock were assumed by us and converted into options to purchase shares of our common stock based on the Exchange Ratio.

Immediately following the Merger, equity holders of Legacy Tvardi prior to the Merger, including the holders of Convertible Notes, owned approximately 84.5% of our outstanding common stock on a fully diluted basis.

The Merger was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States (U.S. GAAP). Legacy Tvardi was deemed to be the accounting acquirer for financial reporting purposes. Refer to Note 3, Merger Agreement, in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

In addition, on April 15, 2025, immediately prior to the closing of the Merger, Cara (i) effected a 1-for-3 reverse stock split of its common stock and (ii) increased its authorized shares of common stock to 150,000,000.

Upon the closing of the Merger, our 2025 Equity Incentive Plan (the 2025 Plan) and 2025 Employee Stock Purchase Plan (the 2025 ESPP), both approved during a special meeting of Cara’s stockholders on April 1, 2025, also became effective, following the reverse stock split.

113

Table of Contents

As of the Effective Time, there were 935,554 and 93,555 shares of our common stock available for grant under the 2025 Plan and 2025 ESPP, respectively. As of December 31, 2025, there were 445,721 shares of our common stock remaining available for grant under the 2025 Plan. As of December 31, 2025, no offering periods under the 2025 ESPP had been initiated. On January 1, 2026, the aggregate number of shares of common stock that may be issued pursuant to the 2025 Plan increased to 1,465,233, as approved by the Board of Directors.

Convertible Notes

In December 2024, we entered into a note purchase agreement, pursuant to which it issued and sold convertible promissory notes (the Convertible Notes) in an aggregate principal amount of approximately $28.3 million. The Convertible Notes accrued interest at 8% per annum and had a maturity date of December 31, 2026 (the Maturity Date).

Upon the closing of the Merger, pursuant to the terms of the Convertible Notes, the outstanding principal balance of the Convertible Notes and all unpaid accrued interest automatically converted into 1,265,757 shares of our common stock in the aggregate. Utilizing the fair value option to account for the Convertible Notes, we recorded a gain of $12.8 million during the second quarter of 2025 and a net gain of $7.8 million for the year ended December 31, 2025 in our consolidated statements of operations and comprehensive loss as a result of the net changes in fair value over the 2025 period. There was no change in fair value recorded during the second half of 2025 as the Convertible Notes were fully converted during the second quarter of 2025.

License Agreements

In July 2012 and June 2015, StemMed entered into the BCM First Agreement and BCM Second Agreement, respectively. StemMed assigned the BCM First Agreement and BCM Second Agreement to us in connection with the transfer of all or substantially all of the assets and businesses to which BCM First Agreement and BCM Second Agreement relate in January 2018 and February 2018, respectively. Under both the BCM First Agreement and BCM Second Agreement, we obtained exclusive, worldwide, sublicense licenses under certain of BCM’s patents and patent applications and additionally in the case of the BCM First Agreement, certain BCM technology. Under these licenses, we are permitted to make, have made, use, market, sell, offer to sell, lease and import the BCM1 Licensed Products and BCM2 Licensed Products in all fields of use. The licenses, patents and patent applications and technologies applicable to the BCM First Agreement and BCM Second Agreement are further discussed below.

First License Agreement with Baylor College of Medicine (BCM)

Under the BCM First Agreement, we obtained an exclusive, worldwide, sublicensable license under BCM’s rights to certain patents and patent applications related to STAT3 inhibitors in oncology and certain non-oncology indications, which we refer to as the BCM Patent Rights, together with certain cell lines, biological materials, compounds, know-how and technologies, which we collectively refer to as the BCM Technology, to make, have made, use, market, sell, offer to sell, lease and import BCM1 Licensed Products, in all fields of use.

Pursuant to the terms of the BCM First Agreement, StemMed owed an initial license fee of $75,000 as consideration for the license rights. Upon the assignment of the agreement to us, we became responsible for the payment of annual maintenance fees on the anniversary of the agreement, which range from $30,000 to $50,000. We are also required to pay BCM royalties in the amount of a low-single-digit percent of net sales of BCM1 Licensed Products during the term, which expires, on a country-by-country basis, on the later of (i) the date of expiration of the last-to-expire of the BCM Patent Rights, or, (ii) if no BCM Patent Rights issued in such country, the tenth anniversary of the first commercial sale of the BCM1 Licensed Product in such country. We currently expect the BCM Patent Rights to expire April 18, 2039. Upon the initiation of the Phase 2 clinical trials for two BCM1 Licensed Products, we paid BCM development milestone payments of $250,000 in the aggregate. Upon the achievement of additional specified development and regulatory milestones, we are required to pay BCM one-time milestone payments of up to $2,200,000 in the aggregate for the first BCM1 Licensed Product in an oncology indication and for the first BCM1 Licensed Product in a non-oncology indication to achieve such milestones. Further, in connection with the initiation of the Phase 3 clinical trial, we would expect to incur approximately $400,000 of oncology-related costs and approximately $300,000 of non-oncology-related costs. We are additionally required to pay BCM a tiered low-double-digit percentage of sublicensing revenue obtained in connection with any sublicense granted by us under the BCM Patent Rights or BCM Technology.

We may terminate the BCM First Agreement at its convenience following a specified notice period upon advance written notice to BCM. The BCM First Agreement may also be terminated by BCM for our default or failure to perform any of terms of the BCM First Agreement, following a specified notice and cure period. Additionally, BCM may terminate the BCM First Agreement if we

114

Table of Contents

undergo specified bankruptcy or insolvency events, following the expiration of a specified period. Upon expiration of the term of the BCM First Agreement in a given country, the license grant from BCM to us will be fully-paid and perpetual in such country.

The BCM First Agreement was amended in April 2015 to update the schedule of BCM Patent Rights and description of description of BCM Technology covered by the license for immaterial consideration. The BCM First Agreement was further amended in August 2019 to amend our diligence and insurance obligations as well as to further update the schedule of BCM Patent Rights.

Under the BCM First Agreement, the full amount of $50,000 in annual maintenance fees had already been paid as of December 31, 2025 and 2024, and thus no accrual was needed at each respective date. We also incurred $125,000 in milestones payments in relation to the initiation of a Phase 2 clinical trial during the year ended December 31, 2024. No royalty fees have been incurred to date. All related license costs are expensed as incurred within research and development on the consolidated statements of operations and comprehensive loss.

Second License Agreement with Baylor College of Medicine

Under the BCM Second Agreement, we obtained an exclusive, worldwide, sublicensable license under certain patents and patent applications co-owned by BCM and the National Institutes of Health (NIH), related to methods and compositions for the use of STAT3 inhibitors in certain conditions like anaphylaxis, which rights we refer to as the Licensed Patent Rights, to make, have made, use, market, sell, offer to sell, lease and import the BCM2 Licensed Products, in all fields of use.

Pursuant to the terms of the BCM Second Agreement, StemMed owed an initial license fee of $5,000 in consideration for the license rights. Upon the assignment of the agreement to us, we became responsible for the payment of maintenance fees on the anniversary of the agreement, which range from $30,000 to $50,000. We are also required to pay BCM royalties in the amount of a low-single-digit percent of net sales of BCM2 Licensed Products during the term, which expires, on a country-by-country basis, on the later (i) of the date of expiration of the last to expire of the Licensed Patent Rights, or, (ii) if no Licensed Patent Rights issued in such country, the tenth anniversary of the first commercial sale of the BCM2 Licensed Product in such country. We currently expect the Licensed Patent Rights to expire July 18, 2034. Upon the achievement of additional specified development and regulatory milestones, we are required to pay BCM one-time milestone payments of up to $1,225,000 in the aggregate for the first BCM2 Licensed Product to achieve such milestones. Further, in connection with the initiation of the Phase 3 clinical trial, we would expect to incur approximately $300,000 in costs. We are additionally required to pay BCM a tiered low-double-digit percentage of sublicensing revenue obtained in connection with any sublicense granted by us under the Licensed Patent Rights.

We may terminate the BCM Second Agreement at its convenience following a specified notice period upon advance written notice to BCM. The BCM Second Agreement may also be terminated by BCM for our default or failure to perform any of terms of the BCM Second Agreement, following a specified notice and cure period. Additionally, BCM may terminate the BCM Second Agreement if we undergo specified bankruptcy or insolvency events, following the expiration of a specified period. The NIH may terminate its license to BCM if we fail to fulfill certain obligations. Upon expiration of the term of the BCM Second Agreement in a given country, the license grant from BCM to us will be fully paid and perpetual in such country.

The BCM Second Agreement was amended in June 2019 to amend our diligence and insurance obligations. We entered into a second amendment in April 2023 to further amend our diligence obligations and to terminate the obligation to pay annual maintenance fees until the first anniversary of the achievement of certain patent milestones and annually thereafter.

Under the BCM Second Agreement, no payments were made or incurred during the years ended December 31, 2025 and 2024. No royalty fees have been incurred to date.

Components of Operating Results

The following discussion sets forth certain components of our Consolidated Statements of Operations and Comprehensive Loss as well as factors that impact those items or could impact those items in the future.

Revenue

We have not generated any revenue since our inception and we do not expect to generate any revenue from the sale of products in the near future, if at all. If our development efforts for TTI-101, TTI-109 or additional product candidates that we may develop in the

115

Table of Contents

future are successful and result in marketing approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from such collaboration or license agreements.

Operating Expenses

Our operating expenses since inception, as well as our operating expenses, have consisted primarily of research and development expenses and general and administrative costs.

Research and Development Expenses

Our research and development expenses since inception, as well as our operating expenses, consist primarily of direct and indirect costs incurred in performing clinical and preclinical development activities.

Direct costs include:

●

expenses incurred under agreements with consultants and third-party CROs that conduct research and development activities on our behalf;

●

costs related to production of preclinical and clinical materials, including fees paid to contract manufacturers; and

●

costs associated with license agreements.

Indirect costs include:

●

personnel costs, which includes salaries, benefits, stock-based compensation expense and travel expenses, for personnel engaged in research and development functions;

●

facilities, amortization and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies; and

●

costs related to compliance with quality and regulatory requirements.

Pursuant to U.S. GAAP and our internal policies, including our clinical trial accrual policy, we expense all research and development costs in the periods in which they are incurred, including the costs of treatment center start-up activities, patient enrollment, and study reporting. Costs for certain other research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial statements as prepaid or accrued research and development expenses.

The majority of our clinical spending during the years ended December 31, 2025 and 2024 was on TTI-101, for which certain direct research and development costs are tracked by clinical trial. We also incurred costs for TTI-109 related to CMC and clinical operations for the year ended December 31, 2025. Costs incurred for TTI-109 for the year ended December 31, 2024 were related to CMC and preclinical costs.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in the development of TTI-101 and TTI-109, support our ongoing preclinical programs and discover any new product candidates, as well as increase our headcount. In particular, clinical development, as opposed to preclinical development, generally has higher development costs, primarily due to the increased size and duration of later-stage clinical trials. Moreover, the costs associated with our clinical activities, which are managed by our CROs, and CDMOs, to manufacture materials for our product candidates and future commercial products, are much more costly as compared to early-stage preclinical development. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our current and future candidates due to the inherently unpredictable nature of preclinical and clinical development. Preclinical and clinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which therapeutic candidates to pursue and how much funding to direct to each therapeutic candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each therapeutic candidate’s commercial potential. We will need substantial

116

Table of Contents

additional capital in the future to support these efforts. In addition, we cannot forecast which therapeutic candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of any of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from sales or licensing of our product candidates. This is due to the numerous risks and uncertainties associated with drug development, including:

●

negative or inconclusive results from our preclinical studies or clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program;

●

undesirable product-related side effects experienced by subjects in our clinical trials or by individuals using drugs or therapeutics similar to our product candidates;

●

poor efficacy of our product candidates during clinical trials;

●

delays in submitting IND applications or comparable foreign applications or delays or failure in obtaining the necessary approvals from the FDA or other comparable foreign regulatory authorities to commence a clinical trial, or a suspension or termination of a clinical trial once commenced;

●

conditions imposed by the FDA or comparable foreign regulatory authorities regarding the scope or design of our clinical trials;

●

delays in enrolling subjects in clinical trials, including due to operational challenges or competition with other clinical trials;

●

high drop-out rates or screening failures of subjects from clinical trials;

●

inadequate supply or quality of product candidates or other materials necessary for the conduct of our clinical trials;

●

greater than anticipated clinical trial costs;

●

inability to compete with other therapies;

●

failure to secure or maintain orphan designation in some jurisdictions;

●

unfavorable FDA or other regulatory agency inspection and review of a clinical trial site;

●

failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all;

●

delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our technology in particular; or

●

varying interpretations of data by the FDA and other comparable foreign regulatory authorities.

A change in the outcome of any of these variables with respect to the development of any of our product candidates or potential future product candidates could mean a significant change in the costs and timing associated with the development of that product candidate or potential future product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate would be required for the completion of clinical development of a product candidate or potential future product candidate, or if we experience significant delays in our clinical trials due to slower than expected patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of

117

Table of Contents

clinical development. We may never obtain regulatory approval for any of our product candidates, and, even if we do, drug commercialization takes several years and millions of dollars in development costs.

General and Administrative Expenses

General and administrative (G&A) expenses consist primarily of personnel costs, including salaries, benefits and stock-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions. G&A expenses also include outside professional services, such as legal, audit and accounting services, insurance costs and facility-related expenses, which includes direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect our G&A expenses to increase over the next several years as we continue our research and development activities, prepare for potential commercialization of our current and future product candidates, as well as expand our operations and continue operating as a public company following the Merger. These increases will likely include increases related to the hiring of additional personnel and legal, regulatory and other fees and services associated with maintaining compliance with listing rules and SEC requirements, director and officer insurance premiums and investor relations costs associated with being a public company.

Interest Income

Interest income for the year ended December 31, 2025 consisted of interest earned on our cash and cash equivalents as well as interest earned on short-term investments and the accretion of the net discount of our short-term investments. Interest income for the year ended December 31, 2024 consisted of interest earned on our cash and cash equivalents.

Other Income (Expense), Net

Other income (expense), net consists of the net changes in fair value of our Convertible Notes, for which we elected the fair value option as well as interest accrued on the Convertible Notes and any associated debt issuance costs incurred. See “Convertible Notes” above for further discussion of our Convertible Notes.

Income Taxes

We provide for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

For the years ended December 31, 2025 and 2024, there was no current or deferred income tax expense or benefit due to our current year loss and prior year loss and full valuation allowance in each respective year. As of December 31, 2025, we evaluated all available evidence and concluded that a valuation allowance was still required against our net deferred tax assets because it is more likely than not they will not be realized in the foreseeable future. As a result, our effective tax rate for each of the periods presented differs from the U.S. federal statutory rate primarily due to recurring operating losses and the full valuation allowance against deferred tax assets.

On July 4, 2025, the OBBBA was signed into law. The OBBBA introduced multiple U.S. federal income tax changes such as favorable changes to the deductibility of domestic research and development expenses, bonus depreciation of certain property additions, and limitations on interest expense deductions. We have considered the impact of these provisions on our consolidated financial statements for the year ended December 31, 2025, however, the changes in tax law did not result in a change in our tax provision. Because we maintain a full valuation allowance and have no current income tax expense or cash tax payments, the enactment of OBBBA in 2025 did not have a material impact on our financial position, results of operations, liquidity or cash flows for the year ended December 31, 2025.

During the year ended December 31, 2025, we adopted Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The adoption did not impact our financial position, results of operations, or cash flows, but resulted in expanded income tax disclosures, primarily related to the disaggregation of effective tax rate reconciliation items and

118

Table of Contents

income taxes paid, as presented in the notes to the consolidated financial statements. Refer to Note 11, Income Taxes, in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

Results of Operations

Comparison of the Years ended December 31, 2025 and 2024

The following table sets forth our results of operations for the years ended December 31, 2025 and 2024 (in thousands, except percentages):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended

​

​

​

​

​

​

​

December 31, 

​

Change

​

​

2025

  ​ ​ ​

2024

  ​ ​ ​

Amount

  ​ ​ ​

Percent

Operating expenses:

​

​

  ​

​

  ​

​

  ​

  ​

​

Research and development

​

$

18,011

​

$

23,650

​

$

(5,639)

(23.8)

%

General and administrative

​

8,737

​

4,457

​

4,280

96.0

%

Total operating expenses

​

26,748

​

28,107

​

(1,359)

(4.8)

%

Loss from operations

​

(26,748)

​

(28,107)

​

1,359

(4.8)

%

Interest income

​

1,375

​

747

​

628

84.1

%

Other income (expense), net

​

7,159

​

(2,037)

​

9,196

n/a

​

Net loss

​

$

(18,214)

​

$

(29,397)

​

$

11,183

(38.0)

%

​

Research and Development Expenses

Research and development expenses for the years ended December 31, 2025 and 2024 were comprised of the following (in thousands, except percentages):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended

​

​

​

​

​

​

​

December 31, 

​

Change

​

​

2025

  ​ ​ ​

2024

  ​ ​ ​

Amount

  ​ ​ ​

Percent

Direct research and development expenses by program:

​

​

  ​

​

  ​

​

  ​

  ​

​

TTI-101:

​

​

  ​

​

  ​

​

  ​

  ​

​

HCC

​

$

3,183

​

$

8,583

​

$

(5,400)

(62.9)

%

IPF

​

4,683

​

6,703

​

(2,020)

(30.1)

%

mBC

​

(262)

​

2,182

​

(2,444)

(112.0)

%

Preclinical, CMC, and other (unallocated)

​

688

​

969

​

(281)

(29.0)

%

TTI-109

​

5,371

​

1,193

​

4,178

350.2

%

Unallocated research and development expense:

​

  ​

​

  ​

​

​

  ​

​

Personnel costs (including stock-based compensation)

​

3,329

​

2,988

​

341

11.4

%

Consultant fees and other costs

​

1,019

​

1,032

​

(13)

(1.3)

%

Total research and development expenses

​

$

18,011

​

$

23,650

​

$

(5,639)

(23.8)

%

​

Research and development expenses were $18.0 million for the year ended December 31, 2025, compared to $23.7 million for the year ended December 31, 2024. The decrease of $5.6 million was primarily driven by costs associated with our product candidate TTI-101, including decreases of $5.4 million, $2.4 million and $2.0 million related to our HCC, metastatic breast cancer (mBC) and IPF trials, respectively. The decrease in costs related to our HCC trial was attributable to the changes in patient enrollments and estimated study costs. The decrease in costs related to our mBC trial was due to the discontinuation of the trial in January 2024 and a related true-up recorded during the second quarter of 2025 due to the negotiation of wind-down costs. The decrease in costs related to our IPF trial was due to reduced patient enrollment as the study progressed and changes in estimated clinical trial costs resulting from clinical trial change orders.

The increase of $4.2 million related to our product candidate TTI-109 was primarily driven by the healthy volunteer study, which began in the third quarter of 2025, as well as related CMC costs related to clinical supply and preclinical studies.

The increase in personnel costs of $0.3 million was primarily related to increases in compensation across the research and development functions as well as an increase in stock-based compensation expense related to new option grants in 2025.

119

Table of Contents

General and Administrative Expenses

General and administrative expenses for the years ended December 31, 2025 and 2024 were comprised of the following (in thousands, except percentages):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

  ​ ​ ​

Year Ended December 31,

​

Change

​

​

2025

​

2024

​

Amount

​

Percent

Personnel costs

​

$

3,505

$

2,085

$

1,420

​

​

68.1

%  

Professional fees

​

3,875

1,863

​

2,012

​

108.0

%  

Insurance costs

​

494

59

​

435

​

737.3

%  

Rent and other costs

​

863

450

​

413

​

91.8

%  

Total general and administrative expenses

​

$

8,737

$

4,457

$

4,280

​

​

96.0

%  

​

General and administrative expenses were $8.7 million for the year ended December 31, 2025, compared to $4.5 million for the year ended December 31, 2024. The increase of approximately $4.3 million was primarily driven by increases in professional fees of $2.0 million, attributable to increased legal, accounting and audit fees incurred as a result of the Merger and subsequent filings as a public company. The remaining increase was attributable to increases in personnel costs, insurance costs, and rent and other costs.

Interest Income

Interest income was $1.4 million for the year ended December 31, 2025, compared to $0.7 million for the year ended December 31, 2024. The $1.4 million of interest income for the year ended December 31, 2025 includes $0.7 million of interest earned on our cash and cash equivalents and $0.7 million of interest from our short-term investments, as well as the accretion of the net discount on our short-term investments. The $0.7 million of interest income for the year ended December 31, 2024 was driven by interest income earned on our cash and cash equivalents.

Other Income (Expense), Net

Other income of $7.2 million for the year ended December 31, 2025 was primarily attributable to the $12.8 million remeasurement gain on our Convertible Notes recorded during the second quarter of 2025, partially offset by a $4.9 million remeasurement loss recorded during the first quarter of 2025, as well as a total of $0.7 million in interest accrued on the Convertible Notes during those respective periods. Other expense of $2.0 million for the year ended December 31, 2024 was primarily attributable to a $1.8 million remeasurement loss on our Convertible Notes and $0.1 million of debt issuance costs incurred.

Liquidity and Capital Resources

Sources of Liquidity

Since inception, we have not generated any revenue from product sales or any other sources and have incurred significant operating losses. We have not yet commercialized any products and do not expect to generate revenue from sales of any product candidates for several years, if ever. To date, we have financed our operations primarily through the (i) issuance and sale of our Convertible Notes in December 2024 for gross proceeds of $28.3 million (ii) the issuance and sale of preferred stock and historical convertible debt (which converted into preferred stock in 2018 and 2021) for total gross proceeds of $83.4 million, and (iii) as discussed above in “—Recent Developments,” our Merger with Cara in April 2025. To date, we have devoted substantially all of our efforts and financial resources to developing our product candidates, organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing research and development of our product candidates, signaling and biology, medicinal chemistry and clinical insights to discover and develop novel therapies for the treatment of inflammatory and proliferative diseases driven by dysregulated STAT3 signaling. As of December 31, 2025, we had $20.7 million in cash and cash equivalents and $10.1 million in short-term investments. In April 2025, we acquired approximately $23.9 million of net assets in connection with the closing of the Merger.

Funding Requirements

Our primary uses of cash are to fund our operations, which consist primarily of research and development costs related to the development of our product candidates, and, to a lesser extent, general and administrative costs. We have incurred significant operating losses since our inception, and as of December 31, 2025, had an accumulated deficit of $110.5 million. Management has

120

Table of Contents

determined that its present capital resources as of December 31, 2025 will not be sufficient to fund its planned operations for at least one year from the issuance date of the consolidated financial statements, included elsewhere in this Annual Report on Form 10-K, which raises substantial doubt as to our ability to continue as a going concern. In April 2025, as further discussed above, Legacy Tvardi completed its Merger with Cara, through which we acquired approximately $23.9 million in net assets. Subsequent to the completion of the Merger, we plan to seek additional funding through equity offerings or debt financings, credit or loan facilities, and strategic alliances and licensing arrangements. However, there can be no assurance that such funding will be available to us, will be obtained on terms favorable to us, or will provide us with sufficient funds to meet our objectives.

We anticipate that we will continue to incur significant and potentially increasing expenses for the foreseeable future as we continue to advance our product candidates, expand our corporate infrastructure, including the costs associated with being a public company following the Merger, further our research and development initiatives for our product candidates and incur costs associated with the potential commercialization of our product candidates, if approved. We are subject to all of the risks typically related to the development of new drug candidates, and may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We anticipate that we will need substantial additional funding in connection with our continuing operations. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants or other restrictions limiting our ability to engage in specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.

Our future funding requirements will depend on many factors, including, but not limited to:

●

the initiation, progress, timing, costs and results of preclinical studies and clinical trials for our potential future product candidates;

●

the clinical development plans we establish for our product candidates;

●

the timelines of our clinical trials and the overall costs to conduct and complete the clinical trials, including any increased costs due to disruptions caused by marketplace conditions, including the effects of health epidemics, or other geopolitical and macroeconomic conditions;

●

the cost and capital commitments required for manufacturing our product candidates at clinical and if, approved, commercial scales;

●

the number and characteristics of product candidates that we develop;

●

the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;

●

whether we are able to enter into future collaboration agreements and the terms of any such agreements;

●

the ability to achieve and timing of achieving a favorable pricing and reimbursement decision by the pricing authorities in the markets of interest;

●

the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights, including patent infringement actions brought by third parties against us or our product candidates;

●

the effect of competing technological and market developments;

121

Table of Contents

●

the cost and timing of completion of commercial-scale outsourced manufacturing activities; and

●

the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own.

A change in the outcome of any of these or other variables with respect to the development of any of our current and future product candidates could significantly change the costs and timing associated with the development of that product candidate. See the section titled “Risk Factors” set forth in this Annual Report on Form 10-K for additional risks associated with our substantial capital requirements.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):

​

​

​

​

​

​

​

​

​

Year Ended December 31,

​

2025

  ​ ​ ​

2024

Net cash used in operating activities

​

$

(23,499)

​

$

(18,305)

Net cash used in investing activities

​

(10,084)

​

—

Net cash provided by financing activities

​

22,703

​

27,000

Net (decrease) increase in cash and cash equivalents

​

$

(10,880)

​

$

8,695

​

Operating Activities

Net cash used in operating activities was $23.5 million for the year ended December 31, 2025, reflecting a net loss of $18.2 million and non-cash changes of $5.8 million, partially offset by changes in operating assets and liabilities of $0.5 million. The changes of $5.8 million in non-cash expenses were primarily driven by $7.8 million related to the net change in fair value of our Convertible Notes, partially offset by $1.4 million related to stock-based compensation expense and $0.7 million in interest accrued on our Convertible Notes until conversion during the second quarter of 2025. The net changes in operating assets and liabilities of $0.5 million were primarily driven by a $0.9 million increase in accounts payable and accrued expenses, driven by the timing of invoices and payments, partially offset by a $0.3 million increase in prepaid expenses and other current assets, attributable to payments for pre-clinical activities and prepaid insurance.

Net cash used in operating activities was $18.3 million for the year ended December 31, 2024, reflecting a net loss of $29.4 million, net of changes in operating assets and liabilities of $8.6 million, and non-cash changes of $2.5 million. The net changes in operating assets and liabilities of $8.6 million was primarily driven by a $3.2 million decrease in prepaid expenses and other current assets, attributable to the timing of patient enrollments, and a $5.6 million increase in accounts payable and accrued expenses, driven by the timing of invoices and payments. The changes of $2.5 million in non-cash expenses were primarily driven by $1.8 million related to the change in fair value of our Convertible Notes, $0.2 million in interest accrued on its Convertible Notes, $0.3 million in stock-based compensation, and $0.1 million in depreciation and amortization.

Investing Activities

Net cash used in investing activities was $10.1 million for the year ended December 31, 2025, attributable to purchases of short-term investments of $31.5 million, partially offset by maturities of short-term investments of $21.4 million.

There was no net cash provided by or used in investing activities for the year ended December 31, 2024.

Financing Activities

The net cash provided by financing activities for the year ended December 31, 2025 was primarily due to approximately $25.0 million of cash acquired in connection with the Merger and proceeds of $0.5 million from the exercise of stock options, partially offset by payments of $2.8 million related to Merger transaction costs.

The net cash provided by financing activities for the year ended December 31, 2024 was primarily due to the proceeds from our Convertible Notes, partially offset by payments of deferred offering costs.

122

Table of Contents

Contractual Obligations and Commitments

Lease Obligations

We lease space under one operating lease agreement for corporate office space in Sugar Land, Texas, which expires in August 2027. As of December 31, 2025, we had future operating lease liabilities of $0.2 million, of which $0.1 million is included within operating lease liabilities, current portion on our consolidated balance sheet.

License Agreements

As discussed above, we have license agreements with BCM for exclusive use of patent rights of TTI-101. The license agreements contain terms for annual maintenance fees, milestone payments and net revenue royalties. Annual maintenance fees range from $30,000 to $50,000 per year, per license. Potential milestone payments are up to $1,225,000 in the aggregate per license. Milestones include new drug filings, clinical trial stages, and NDA approval by the FDA. We are obligated to pay BCM royalties in the amount of a low-single-digit percent of net sales of BCM1 Licensed Products or BCM2 Licensed Products during the term, which expire, on a country-by-country basis, on the later of (i) the date of expiration of BCM Patent Rights or Licensed Patent Rights, whichever is the last to expire, or, (ii) if no BCM Patent Rights or Licensed Patent Rights are issued in such country, the tenth anniversary the first commercial sale of the BCM1 Licensed Products or BCM2 Licensed Products in such country. License fees are expensed as incurred within research and development within our consolidated statements of operations and comprehensive loss. Under the BCM First Agreement, the full amount of $50,000 in annual maintenance fees had already been paid as of December 31, 2025 and 2024, and thus no accrual was needed in either respective year. We also incurred $125,000 in milestones payments in relation to the initiation of a Phase 2 clinical trial during the year ended December 31, 2024. No royalty fees have been incurred to date.

Other Capital Requirements and Additional Royalty Obligations

We enter into agreements in the normal course of business with various third-party providers for the provision of research and development services, which include preclinical studies and clinical trial services with CROs and the manufacturing of product candidates for use in our preclinical studies and clinical trials with CDMOs. These agreements may include certain provisions for purchase obligations and termination obligations that could require payments for the cancellation of committed purchase obligations or for early termination of the agreements. The amount of the cancellation or termination payments vary and are based on the timing of the cancellation or termination and the specific terms of the agreement. These obligations and commitments are not presented separately.

In addition to our obligation to make potential royalty payments under the BCM First Agreement and BCM Second Agreement discussed above, pursuant to our founder restricted stock purchase agreements with each of our founders, David J. Tweardy, M.D. and Ron DePinho, M.D., we are also obligated to pay royalties to each such founder in an amount equal to 1% each on the worldwide net sales of TTI-101 and any derivative formulations (a Royalty Bearing Product). These royalty obligations last, on a country-by-country basis, for the later of (i) the date on which the sale of Royalty Bearing Product is no longer covered by a Covered Patent (as defined below) in such country, or (ii) 15 years after the first commercial sale of Royalty Bearing Product in such country. The timing of when our royalty payments will actually be made is uncertain as the payments are contingent upon future activities, including the successful development, regulatory approval and commercialization of Royalty Bearing Product. A Covered Patent means, subject to certain customary exceptions, an issued patent that is owned by us or an affiliate, or for which all rights to develop and commercialize pharmaceutical products for the treatment of any human disorder, are exclusively licensed to us or an affiliate by the owner of such patent, with our right or our affiliate’s right to grant sublicenses.

Critical Accounting Estimates

Our audited consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of the audited consolidated financial statements and related disclosures requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses in our audited consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management evaluates estimates and assumptions on a periodic basis. Our actual results may differ from these estimates.

123

Table of Contents

While our significant accounting policies are described in more detail in Note 2 to the audited consolidated financial statements for the years ended December 31, 2025 and 2024, both as included elsewhere within this Annual Report on Form 10-K, management believes that the following accounting policies are critical to understanding our historical and future performance, as the policies relate to the more significant areas involving management’s judgments and estimates used in the preparation of the audited consolidated financial statements.

Prepaid and Accrued Research and Development Expenses

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:

●

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

●

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

●

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 of services or the level of effort varies from our estimate, or if we receive any change orders from our third-party providers, we adjust the accrual or amount of prepaid expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low in any particular period. To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses.

We also record advance payments to service providers as prepaid expenses and other current assets, which are expensed when the contracted services are performed. If the actual timing of the performance of services varies from the estimate, then we adjust the amount of the accrued expense or the prepaid expense accordingly.

Convertible Notes

Historically, we elected to account for our Convertible Notes pursuant to the fair value option under Accounting Standards Codification (ASC) 825, Financial Instruments (ASC 825). In accordance with ASC 825 and the fair value option, we recorded our Convertible Notes at fair value with changes in fair value recorded as component of other income (expense), net in our consolidated statements of operations and comprehensive loss. As a result of the fair value option, any issuance costs related to the Convertible Notes were expensed as incurred and were not deferred.

The fair value of the Convertible Notes were determined using a scenario-based valuation analysis that required 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.

124

Table of Contents

As of December 31, 2024, prior to the Merger with Cara in April 2025, Legacy Tvardi assessed the probability of (i) an automatic conversion of the Convertible Notes into equity securities upon a Qualified or non-Qualified Financing, (ii) an automatic conversion of the Convertible Notes into shares of Legacy Tvardi common stock upon an IPO, (iii) an automatic conversion of the Convertible Notes into the combined company’s common stock upon a reverse merger, and (iv) an event of default, dissolution, or liquidation, weighted with 20%, 10%, 60%, and 10%, respectively. Immediately prior to the Merger closing in April 2025, the probability of these events were weighted as 2.5%, 0%, 95%, and 2.5%, respectively.

Additional assumptions and estimates used to estimate the fair value of the Convertible Notes included the: (i) fixed price conversion option, which was valued using a Black-Scholes option model, (ii) aggregate call value of each scenario, which was synthesized using a bond plus call option model, (iii) expected volatility, (iv) risk-free interest rate, and (v) the fair value of the Convertible Notes under the reverse merger scenario, which was estimated using a forward contract structure.

Since we 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 our 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 our common stock after the reverse merger with Cara.

Under the fair value option, any change in fair value was recorded to our 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 our consolidated statements of operations and comprehensive loss within other income (expense), net for the second quarter of 2025. Net fair value changes of $7.8 million were recorded to our consolidated statement of operations and comprehensive loss as a remeasurement gain within other income (expense), net for the year ended December 31, 2025. Net fair value changes of $1.8 million were recorded to our consolidated statement of operations and comprehensive loss as a remeasurement loss within other income (expense), net for the year ended December 31, 2024.

As discussed above, upon the closing of the Merger, the Convertible Notes converted into 1,265,757 shares of our common stock in the aggregate. As a result, there were no Convertible Notes as of December 31, 2025.

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

Stock-Based Compensation Expense

We measure and record 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, we issue stock option awards with service-based vesting conditions and record 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. We estimate the grant date fair value of each common stock option using the Black-Scholes option-pricing model, which requires the input of highly subjective assumptions and management’s best estimates. These estimates involve inherent uncertainties and management’s judgement. If factors change and different assumptions are used, our stock-based compensation could be materially different in the future.

These assumptions are estimated as follows:

●

Fair Value — Because our common stock was not yet publicly traded prior to the Merger, we had to estimate the fair value of our common stock. Our board of directors considered numerous objective and subjective factors to determine the fair value of our common stock at each meeting in which awards were approved. Subsequent to the Merger, our common stock is publicly traded.

●

Expected Volatility — Because we did not have any trading history for our common stock prior to the Merger, the expected volatility was estimated using averages of the historical volatility of our peer group of companies for a period equal to the expected term of the stock options granted. Our peer group of publicly traded companies was chosen based on their similar size, stage in the life cycle or area of specialty. Subsequent to the Merger, we intend to continue to consistently apply this process using the same or a similar peer group of public companies, until a sufficient amount of historical information regarding the volatility of our own common stock price becomes available.

●

Expected Term — Derived from the life of the options granted under the option plan and is based on the simplified method which is essentially the weighted average of the vesting period and contractual term.

125

Table of Contents

●

Risk-Free Interest Rate — The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date.

●

Dividend Yield — We had not declared or paid dividends, and we do not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.

Changes in the foregoing assumptions can materially affect the estimate of grant date fair value and ultimately how much share-based compensation expense is recognized; and the resulting change in fair value, if any, is recognized in our consolidated statements of operations and comprehensive loss during the period the related services are rendered. These inputs are subjective and generally require significant analysis and judgment to develop.

Fair Value of Stock-Based Awards

As a privately held company prior to the Merger, there had been no public market for our common stock. The estimated fair value of our common stock had been determined by its board of directors as of the date of each option grant, with input from management, considering the most recently available third-party valuations of its common stock and our board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

Our third-party valuations of common stock were prepared using the option-pricing method (OPM), which used a market approach to estimate our enterprise value. The OPM treats common stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger.

These third-party valuations resulted in a valuation of our common stock of $0.92 (pre-application of the Exchange Ratio) as of June 30, 2023. We used this information to calculate the grant date fair value per share of stock options granted in January 2024 ($4.62 post-Exchange Ratio). In addition to considering the results of these third-party valuations, our board of directors considered various objective and subjective factors to determine the fair value of our common stock as of each grant date, including:

●

the prices at which we sold shares of our preferred stock and the superior rights and preferences of the preferred stock relative to our common stock at the time of each grant;

●

the lack of an active public market for our common stock and preferred stock;

●

the progress of our research and development programs, including the status and results of preclinical studies and clinical trials for our product candidates;

●

our stage of development and commercialization and our business strategy, and material risks to our business;

●

external market conditions affecting the pharmaceutical and biopharmaceutical industry and trends within each industry;

●

our financial position, including cash on hand, and its historical and forecasted performance and operating results;

●

the likelihood of achieving a liquidity event, such as an initial public offering or sale of us in light of prevailing market conditions; and

●

the analysis of initial public offerings and the market performance of similar companies in the biopharmaceutical industry.

The assumptions underlying these valuations represented management’s best estimate, which involved inherent uncertainties and the application of management’s judgment. As a result, if we had used significantly different assumptions or estimates prior, the fair value of our common stock and our stock-based compensation expense could have been materially different.

Following the Merger and the establishment of a public trading market for our common stock, it is no longer necessary for our board of directors to estimate the fair value of our common stock in connection with our accounting for stock options and other such awards we may grant, as the fair value of our common stock will be determined based on the quoted market price of our common stock.

126

Table of Contents

Recently Issued and Adopted Accounting Pronouncements

We do not expect that any recently issued accounting pronouncements will have a material effect on our financial position, results of operations or cash flows. Refer to Note 2 of Notes to Consolidated Financial Statements, Summary of Significant Accounting Policies, in this Annual Report on Form 10-K, for a full description of accounting pronouncements recently adopted, and issued but not yet adopted, if applicable.