Commitments and Contingencies

3 Months Ended

Mar. 31, 2025

Commitments and Contingencies

Commitments and Contingencies

16. Commitments and Contingencies

Merger Proceedings

Two lawsuits were filed in the Supreme Court of the State of New York, County of New York, on March 5 and March 6, 2025 by two purported stockholders of Cara in connection with the Merger. The lawsuits are captioned Joseph Clark v. Cara Therapeutics, Inc., et al., No. 651260/2025 (the “Clark Complaint”), and Michael Kent v. Cara Therapeutics, Inc., et al., No. 651272/2025 (the “Kent Complaint” and, together with the Clark Complaint, the “Complaints”). Both Complaints named as defendants Cara and the members of the Cara board of directors as defendants. The plaintiffs contended that the Proxy Statement/Prospectus omitted or misrepresented material information regarding the Merger, rendering the Proxy Statement/Prospectus false and misleading, and assert claims under New York state law.

Between December 20, 2024 and March 19, 2025, Cara received thirteen demands and three draft complaints from purported stockholders of Cara (collectively, the “Demands”) making substantially similar allegations as in the Complaints regarding the disclosures in the Proxy Statement/Prospectus related to the Merger and assert claims for violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934.

The Combined Company cannot predict the outcome of any litigation or the Demands. The Combined Company and the individual defendants intend to vigorously defend against the allegations made in the Complaints, the Demands, and any subsequently filed similar actions. It is possible additional lawsuits may be filed or additional demand letters may be received arising out of the Merger. Absent new or significantly different allegations, the Combined Company will not necessarily disclose such additional filings.

Given the early stage of this litigation, at this time, the Combined Company is not in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from this action.

Other Proceedings

From time to time, the Combined Company may be subject to legal proceedings and claims arising in the ordinary course of its business. The Combined Company is not currently a party or aware of any proceedings that it believes will have, individually or in the aggregate, a material adverse effect on the Combined Company’s business, financial condition or results of operations.

License Agreement with Enteris Biopharma, Inc.

In August 2019, Cara entered into a non-exclusive license agreement (the “Enteris License Agreement”) with Enteris Biopharma, Inc. (“Enteris”), pursuant to which Enteris granted to Cara a non-exclusive, royalty-bearing license, including the right to grant sublicenses, under certain proprietary technology and patent rights related to or covering formulations for oral delivery of peptide active pharmaceutical ingredients with functional excipients to enhance permeability and/or solubility, known as Enteris’s Peptelligence^® technology, to develop, manufacture and commercialize products using such technology worldwide, excluding Japan and South Korea.

Cara was also obligated, pursuant to the Enteris License Agreement, to pay Enteris (1) milestone payments upon the achievement of certain development, regulatory and commercial milestones and (2) low-single digit royalty percentages on net sales of licensed products, subject to reductions in specified circumstances. During the three months ended March 31, 2025 and 2024, no milestone payments or royalties were paid to Enteris by Cara in relation to the Enteris License Agreement.

In June 2024, Cara announced its decision to discontinue the clinical program in NP following the outcome from the dose-finding Part A of the KOURAGE-1 study evaluating the efficacy and safety of oral difelikefalin for moderate-to-severe pruritus in adult patients with NP.

Manufacturing Agreements

In July 2021, Cara entered into an API Commercial Supply Agreement with Polypeptide Laboratories S.A. (“PPL”) that defines each party’s responsibilities with respect to PPL’s manufacture and supply of the active pharmaceutical ingredient difelikefalin (“API”) for the difelikefalin injection product candidate. Under the API Commercial Supply Agreement, PPL manufactured API at its facility for sale and supply to Cara, in the amounts as set forth in purchase orders to be provided by Cara. Cara was required to purchase its requirements of API for each year of the term of the agreement, based on internal forecasts.

The API Commercial Supply Agreement was to continue until the fifth anniversary of the approval by the FDA of the new drug application for KORSUVA injection, unless the API Commercial Supply Agreement was earlier terminated, and would be automatically be extended for successive five-year periods unless either party gave notice to the other party of its intention to terminate. In connection with the consummation of the Asset Disposition, Cara assigned the API Commercial Supply Agreement to CSL Vifor (see Note 18, Subsequent Events).

In July 2019, Cara entered into a Master Manufacturing Services Agreement (“MSA”) with Patheon UK Limited (“Patheon”). The MSA governed the general terms under which Patheon, or one of its affiliates, would provide non-

exclusive manufacturing services to Cara for the drug products specified by Cara from time to time. Pursuant to the MSA, Cara agreed to order from Patheon at least a certain percentage of its commercial requirements for a product under a related Product Agreement. Each Product Agreement that Cara entered into from time to time would be governed by the terms of the MSA, unless expressly modified in such Product Agreement.

The MSA had an initial term ending December 31, 2024, which automatically renewed after the initial term for successive terms of two years until December 31, 2026. In connection with the consummation of the Asset Disposition, Cara assigned the MSA to CSL Vifor (see Note 18, Subsequent Events).

In July 2019, Cara entered into two related Product Agreements under the MSA, one with each of Patheon and Patheon Manufacturing Services LLC (“Patheon Greenville”), to govern the terms and conditions of the manufacture of commercial supplies of difelikefalin injection, Cara’s lead product candidate. Pursuant to the Product Agreements, Patheon and Patheon Greenville manufactured commercial supplies of difelikefalin injection at the Monza, Italy and Greenville, North Carolina manufacturing sites, respectively, from active pharmaceutical ingredient supplied by Cara. Patheon and Patheon Greenville were responsible for supplying the other required raw materials and packaging components, and provided supportive manufacturing services such as quality control testing for raw materials, packaging components and finished product.

Restructuring Activity

Cara announced restructuring activities related to workforce reductions in January and June 2024. There was no additional restructuring expense recorded for the three months ended March 31, 2025, and restructuring expenses of $2,401 were recorded for the three months ended March 31, 2024. As of December 31, 2024, $50 remained to be paid under Cara’s restructuring provision. As of March 31, 2025, there were no amounts remaining to be paid under Cara’s restructuring provision.

Operating Lease

Cara’s corporate office lease agreement that was entered into in May 2023 for new principal office space in Stamford, Connecticut was terminated on November 1, 2024. As a result, there were no operating lease right-of-use (“ROU”) assets or operating lease liabilities as of March 31, 2025 and December 31, 2024 due to the termination of the lease.

During the three months ended March 31, 2024, interest expense was calculated using the effective interest method, and any right-of-use asset was amortized on a straight-line basis, and both were recorded as lease expense. As a result, lease expense of $269 for this former lease was recorded for the three months ended March 31, 2024, consisting of $173 relating to R&D lease expense and $96 relating to G&A lease expense.

Other information related to the former lease was as follows:

	Three Months Ended March 31,
	2025			2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows relating to operating leases	$	—		$	—
ROU assets obtained in exchange for new operating lease liabilities	$	—		$	—
Remaining lease term - operating leases (years)		—			10.6
Discount rate - operating leases		—	%		12.8	%

There are no other future minimum cash lease payments as the lease agreement was terminated in 2024.