Zevra Therapeutics Restates Financials Due to Internal Control Weakness

TL;DR

Zevra Therapeutics (ZEVRA) is restating past financials due to accounting errors, impacting Q4 2023 and prior periods.

AI Summary

Zevra Therapeutics, Inc. announced on March 28, 2024, that its previously issued financial statements for the fiscal year ended December 31, 2023, and the interim periods ended June 30, 2023, and September 30, 2023, should no longer be relied upon. This is due to a material weakness in internal control over financial reporting related to the accounting for a revenue-based milestone payment received from a third party.

Why It Matters

This restatement indicates potential issues with the company's financial reporting accuracy, which could impact investor confidence and the reliability of past financial performance.

Risk Assessment

Risk Level: medium — Restatements can signal underlying control deficiencies that may affect future reporting and investor trust.

Key Players & Entities

• Zevra Therapeutics, Inc. (company) — Registrant
• March 28, 2024 (date) — Date of Report
• December 31, 2023 (date) — Fiscal Year End
• June 30, 2023 (date) — Interim Period End
• September 30, 2023 (date) — Interim Period End

FAQ

Key Financial Figures

• $14.8 million — and warrant liability of approximately $14.8 million for fiscal year 2022, an increase in de
• $10.2 million — and warrant liability of approximately $10.2 million for fiscal year 2022, and an increase i
• $34.5 m — nd accumulated deficit of approximately $34.5 million, $25.0 million and $59.5 million,
• $25.0 million — deficit of approximately $34.5 million, $25.0 million and $59.5 million, respectively, for fi
• $59.5 m — mately $34.5 million, $25.0 million and $59.5 million, respectively, for fiscal year 20
• $1.5 million — and derivative and warrant liability of $1.5 million as of March 31, 2023, and a decrease in
• $2.1 million — and derivative and warrant liability of $2.1 million and $3.7 million, respectively, as of J
• $3.7 m — d warrant liability of $2.1 million and $3.7 million, respectively, as of June 30, 202
• $12.3 million — and derivative and warrant liability of $12.3 million and $2.1 million as of March 31, 2022,
• $5.6 million — and derivative and warrant liability of $5.6 million as of September 30, 2022. The errors a

Filing Documents

• zvra20230627c_8k.htm (8-K) — 42KB
• ex_538720.htm (EX-99.1) — 154KB
• resized1.jpg (GRAPHIC) — 7KB
• 0001437749-24-009849.txt ( ) — 359KB
• zvra-20240328.xsd (EX-101.SCH) — 3KB
• zvra-20240328_def.xml (EX-101.DEF) — 11KB
• zvra-20240328_lab.xml (EX-101.LAB) — 15KB
• zvra-20240328_pre.xml (EX-101.PRE) — 11KB
• zvra20230627c_8k_htm.xml (XML) — 3KB

02 Results of Operations and Financial Condition

Item 2.02 Results of Operations and Financial Condition . On March 28, 2024, Zevra Therapeutics, Inc., a Delaware corporation (the "Company" or "Zevra"), issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2023, as well as information regarding a conference call and live audio webcast to discuss its financial results and corporate updates scheduled for Thursday, March 28, 2024, at 4:30 p.m. ET. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information contained in the press release furnished as Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is not incorporated by reference into any of Zevra's filings under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in any such filing.

02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. On March 25, 2024, the Audit Committee (the "Audit Committee") of the Company's Board of Directors, after discussion with senior management and the Company's independent registered public accountants, concluded that the Company's previously issued audited consolidated financial statements as of and for the fiscal years ended December 31, 2022 and December 31, 2021, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, (collectively, the "Prior Financial Statements") should no longer be relied upon. In connection with the preparation of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Form 10-K"), the Audit Committee concluded that, in prior years it had not appropriately accounted for certain common stock warrants as liabilities. These errors led to understatements of derivative and warrant liability and additional paid-in capital and fluctuations in fair value adjustment related to derivative and warrant liability during the impacted periods. We estimate that the impacts to the periods reported in the Prior Financial Statements will result in an increase to previously reported fair value adjustment income related to derivative and warrant liability of approximately $14.8 million for fiscal year 2022, an increase in derivative and warrant liability of approximately $10.2 million for fiscal year 2022, and an increase in beginning additional paid-in capital, derivative and warrant liability and accumulated deficit of approximately $34.5 million, $25.0 million and $59.5 million, respectively, for fiscal year 2022. As a result of these adjustments, we estimate that we will record approximately $14.8 million in additional net income for fiscal year 2022. In addition, the Company has concluded that the previously disclosed errors led to misstatements of fair va

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 99.1 Press Release dated March 28, 2024. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Zevra Therapeutics, Inc . Date: March 28, 2024 By: /s/ Timothy J. Sangiovanni Timothy J. Sangiovanni, CPA Senior Vice President, Corporate Controller

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