Full Press Release Details
Tvardi Therapeutics, Inc.
INDEX TO FINANCIAL STATEMENTS
| Page | |
| Report of independent registered public accounting firm | F-2 |
| Balance sheets as of December 31, 2024 and 2023 | F-3 |
| Statements of operations for the years ended December 31, 2024 and 2023 | F-4 |
| Statements of redeemable convertible preferred stock and stockholders' deficit for the years ended December 31, 2024 and 2023 | F-5 |
| Statements of cash flows for the years ended December 31, 2024 and 2023 | F-6 |
| Notes to financial statements | F-7 |
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors
of Tvardi Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of
Tvardi Therapeutics, Inc. (the "Company") as of December 31, 2024 and 2023, the related statements of operations and comprehensive
loss, redeemable convertible preferred stock and stockholders' deficit and cash flows for each of the two years in the period ended
December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results
of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company
has suffered recurring losses from operations and does not have sufficient cash on hand or available liquidity to fund operations, which
raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are
required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on
the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We
believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or
required to be communicated to the board of directors and that (1) relates to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Prepaid and Accrued Research and Development Expenses -
Refer to Notes 2, 4 and 6 to the financial statements
Critical Audit Matter Description
The Company recognizes research and development expenses and records
accruals for estimated costs of research and development activities conducted by third-party contract research organizations (CROs) service
providers. The majority of the Company's service providers invoice in arrears for services performed, on a pre-determined schedule,
or when contractual milestones are met; however, some require advanced payments. The Company records advance payments to service providers
as prepaid expenses and other current assets, which are expensed as the contracted services are performed. The Company accrues for these
costs based on factors such as the time period over which services will be performed, the enrollment of patients, and the level of effort
to be expended in each period in accordance with its agreements with its third-party service providers for such services.
Given the significant judgments made by the Company in estimating the
progress or stage of completion of the services, auditing the Company's accrued and prepaid research and development expenses related
to CROs was especially challenging. Specifically, because the amount of accrued and prepaid research and development expenses is dependent
on the Company's receipt of timely and accurate reporting from third-party service providers, the Company's estimates of work
completed as of the balance sheet date, and the Company's estimates of the period over which this work will be performed, auditing
prepaid and accrued research and development expenses related to CROs required a high degree of auditor judgment and an increased extent
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to testing the prepaid and accrued research
and development expenses included the following, among others:
| We tested the design and implementation of relevant controls over the Company's review of associated journal entries. | ||
| We evaluated the Company's accounting policy for prepaid and accrued research and development liabilities, including the estimation approach for the expenses, for reasonableness. | ||
| We evaluated the Company's judgments, including but not limited to, patient enrollment, using the evidence obtained to determine the prepaid and accrued research and development liabilities. | ||
| We confirmed the monthly patient enrollment directly with the CROs. | ||
| For a sample of agreements and contracts, we agreed inputs utilized in the estimate of prepaid and accrued research and development liabilities to the underlying contract, corresponding invoices incurred during the period and evidence of payment to test the Company's disbursements made to third-party service providers. | ||
| We compared invoices received by the Company subsequent to December 31, 2024, to the accrued research and development expenses related to CROs recognized by the Company. |
/s/ Deloitte & Touche LLP
We have served as the Company's auditor
Tvardi Therapeutics, Inc.
(Amounts in thousands, except
share and per share amounts)
| As of December 31, | ||||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 31,614 | $ | 22,919 | ||||
| Prepaid expenses and other current assets | 72 | 3,239 | ||||||
| Total current assets | 31,686 | 26,158 | ||||||
| Property and equipment, net | 84 | 116 | ||||||
| Intangible assets, net | 385 | 448 | ||||||
| Operating lease right-of-use assets | 216 | 262 | ||||||
| Deferred offering costs | 2,811 | - | ||||||
| Other non-current assets | 17 | 17 | ||||||
| Total assets | $ | 35,199 | $ | 27,001 | ||||
| Liabilities, Redeemable Convertible Preferred Stock, and Stockholders' Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,186 | 1,611 | |||||
| Accrued expenses | 8,078 | 1,577 | ||||||
| Operating lease liabilities, current portion | 103 | 93 | ||||||
| Total current liabilities | 10,367 | 3,281 | ||||||
| Operating lease liabilities, net of current portion | 201 | 275 | ||||||
| Convertible Notes | 30,259 | - | ||||||
| Total liabilities | 40,827 | 3,556 | ||||||
| Commitments and contingencies (Note 14) | ||||||||
| Redeemable convertible preferred stock (Series A, B), $0.001 par value; 29,723,540 shares authorized as of December 31, 2024 and 2023; 29,555,538 shares issued and outstanding as of December 31, 2024 and 2023; aggregate liquidation preference of $85,902 as of December 31, 2024 and 2023 | 85,503 | 85,503 | ||||||
| Stockholders' Deficit: | ||||||||
| Common stock, $0.001 par value; 58,251,629 shares authorized as of December 31, 2024 and 2023; 19,197,914 and 19,134,164 shares issued and outstanding as of December 31, 2024 and 2023, respectively | 19 | 19 | ||||||
| Additional paid-in capital | 1,086 | 762 | ||||||
| Accumulated deficit | (92,236 | ) | (62,839 | ) | ||||
| Total stockholders' deficit | (91,131 | ) | (62,058 | ) | ||||
| Total liabilities, redeemable convertible preferred stock, and stockholders' deficit | $ | 35,199 | $ | 27,001 |
The accompanying notes are an integral
part of these financial statements.
Tvardi Therapeutics, Inc.
Statements of Operations
(Amounts in thousands, except
share and per share amounts)
| For the Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating expenses: | ||||||||
| Research and development | $ | 23,650 | $ | 15,866 | ||||
| General and administrative | 4,457 | 2,799 | ||||||
| Total operating expenses | 28,107 | 18,665 | ||||||
| Loss from operations | (28,107 | ) | (18,665 | ) | ||||
| Interest income | 747 | 1,318 | ||||||
| Other income (expense), net | (2,037 | ) | - | |||||
| Net loss | $ | (29,397 | ) | $ | (17,347 | ) | ||
| Net loss per share attributable to common stockholders, basic and diluted | $ | (1.53 | ) | $ | (0.91 | ) | ||
| Weighted-average common shares outstanding, basic and diluted | 19,193,932 | 19,134,096 |
The accompanying notes are an integral
part of these financial statements.
Tvardi Therapeutics, Inc.
Statements of Redeemable Convertible
Preferred Stock and Stockholders' Deficit
(Amounts in thousands, except
| Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-In | Accumulated | Accumulated Other | Total Stockholders' | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Comprehensive Loss | Deficit | |||||||||||||||||||||||||
| Balances as of December 31, 2022 | 29,555,538 | $ | 85,503 | 19,127,914 | $ | 19 | $ | 446 | $ | (45,492 | ) | $ | (24 | ) | $ | (45,051 | ) | |||||||||||||||
| Exercise of stock options | - | - | 6,250 | - | 2 | - | - | 2 | ||||||||||||||||||||||||
| Stock-based compensation | - | - | 314 | - | - | 314 | ||||||||||||||||||||||||||
| Maturities of short-term investments | - | - | - | - | - | - | 24 | 24 | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | (17,347 | ) | - | (17,347 | ) | ||||||||||||||||||||||
| Balances as of December 31, 2023 | 29,555,538 | $ | 85,503 | 19,134,164 | $ | 19 | $ | 762 | $ | (62,839 | ) | $ | - | $ | (62,058 | ) | ||||||||||||||||
| Exercise of stock options | - | - | 63,750 | - | 5 | - | - | 5 | ||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | 319 | - | - | 319 | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | (29,397 | ) | - | (29,397 | ) | ||||||||||||||||||||||
| Balances as of December 31, 2024 | 29,555,538 | $ | 85,503 | 19,197,914 | $ | 19 | $ | 1,086 | $ | (92,236 | ) | $ | - | $ | (91,131 | ) |
The accompanying notes are an integral
part of these financial statements.
Tvardi Therapeutics, Inc.
Statements of Cash Flows
(Amounts in thousands)
| For the Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (29,397 | ) | $ | (17,347 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | 95 | 95 | ||||||
| Stock-based compensation expense | 319 | 314 | ||||||
| Change in fair value of Convertible Notes | 1,807 | - | ||||||
| Non-cash lease expense | 76 | 51 | ||||||
| Accretion of discounts on short-term investments | - | (194 | ) | |||||
| Interest accrued on Convertible Notes | 154 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | 3,167 | (2,869 | ) | |||||
| Accounts payable and accrued expenses | 5,567 | (1,008 | ) | |||||
| Operating lease liabilities | (93 | ) | (82 | ) | ||||
| Net cash used in operating activities | (18,305 | ) | (21,040 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Maturities of short-term investments | - | 22,468 | ||||||
| Net cash provided by investing activities | - | 22,468 | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | 5 | 2 | ||||||
| Proceeds from Convertible Notes | 28,298 | - | ||||||
| Payments of deferred offering costs | (1,303 | ) | - | |||||
| Net cash provided by financing activities | 27,000 | 2 | ||||||
| Net increase in cash and cash equivalents | 8,695 | 1,430 | ||||||
| Cash and cash equivalents - beginning of year | 22,919 | 21,489 | ||||||
| Cash and cash equivalents - end of year | $ | 31,614 | $ | 22,919 | ||||
| Non-cash investing and financing activities | ||||||||
| Deferred offering costs included in accounts payable and accrued expenses | $ | 1,508 | $ | - |
The accompanying notes are an integral
part of these financial statements.
Tvardi Therapeutics, Inc.
Notes to Financial Statements
Tvardi Therapeutics, Inc.,
Tvardi or the Company, incorporated on December 20, 2017, is a Delaware Corporation headquartered in Houston, Texas. The Company
is a clinical-stage, biopharmaceutical company focused on the development of novel, oral, small molecule therapies targeting STAT3 to
treat fibrosis-driven diseases with significant unmet need. Based upon its founder's seminal work and deep understanding of the
transcription factor, STAT3, the Company has designed an innovative approach to directly inhibit STAT3, a highly validated, yet historically
undruggable target. Leveraging this expertise, the Company is developing a pipeline of STAT3 inhibitors with a differentiated mechanism
of action and convenient oral dosing. The Company's lead product candidate, TTI-101, is currently in Phase 2 clinical development
for the treatment of fibrosis-driven diseases, with an initial focus on idiopathic pulmonary fibrosis, IPF and hepatocellular carcinoma,