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Contract Acquisition Costs and Intangible Asset - Contract acquisition costs and intangible asset (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Contract Acquisition Costs and Intangible Asset
Contract acquisition costs, Gross Carrying Amount	$ 12,980	$ 12,980
Contract acquisition costs, Accumulated Amortization	(5,182)	(5,058)
Contract acquisition costs, Net Carrying Amount	7,798	7,922
Intangible asset, Gross Carrying Amount	5,620	5,620
Intangible asset, Accumulated Amortization	(2,244)	(2,190)
Intangible asset, Net Carrying Amount	$ 3,376	$ 3,430

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Operating Leases
2024 (nine months remaining)	$ 989
2025	1,356
2026	1,158
Total minimum lease payments	3,503
Less: interest	(418)
Present value of lease liabilities	3,085
Finance Leases
2024 (nine months remaining)	86
2025	64
2026	0
Total minimum lease payments	150
Less: interest	(5)
Present value of lease liabilities	145
Total
2024	1,075
2025	1,420
2026	1,158
Total minimum lease payments	3,653
Less: interest	(423)
Present value of lease liabilities	$ 3,230

Business - Liquidity (Details) - USD ($) $ in Thousands	3 Months Ended
Business - Liquidity (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Business
Net loss	$ 40,928	$ 11,745
Accumulated deficit	470,026		$ 429,098
For Calendar Year Beginning on January 1 , 2024
Business
Revenue interest financing agreement	15,000
Revenue Interest Financing Agreement. \| HealthCare Royalty Partners IV, L.P and HealthCare Royalty Management, LLC \| For Calendar Year Beginning on January 1 , 2024
Business
Revenue interest financing agreement	$ 7,500

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Leases - Cost (Details) - USD ($) $ in Thousands	3 Months Ended
Leases - Cost (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Leases
Total Lease Cost	$ 218	$ 230
Research and Development Expense
Leases
Fixed lease cost	175	176
Amortization of lease assets	22	30
General and Administrative Expense
Leases
Fixed lease cost	19	19
Interest Expense
Leases
Interest on lease liabilities	$ 2	$ 5

Leases (Tables)

3 Months Ended

Mar. 31, 2024

Leases

Schedule of lease cost


		Three Months Ended March 31,
	Classification	2024		2023
Operating lease cost:
Fixed lease cost	Research and development	$	175	$	176
Fixed lease cost	General and administrative		19		19
Finance lease cost:
Amortization of lease assets	Research and development		22		30
Interest on lease liabilities	Interest expense		2		5
Total Lease Cost		$	218	$	230


Weighted average remaining lease term (years):
Operating leases	2.6
Finance leases	1.0
Weighted average discount rate:
Operating leases	10.3	%
Finance leases	6.5	%

Schedule of lease liability maturity


	Operating		Finance
Year ending December 31:	Leases		Leases		Total
2024 (nine months remaining)	$	989	$	86	$	1,075
2025		1,356		64		1,420
2026		1,158		—		1,158
Total minimum lease payments		3,503		150		3,653
Less: interest		(418)		(5)		(423)
Present value of lease liabilities	$	3,085	$	145	$	3,230

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements

2. Basis of Presentation, Significant Accounting Policies and Fair Value Measurements

Basis of Presentation

The unaudited interim condensed consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments and accruals) necessary for a fair statement of the results for the periods presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The year-end condensed consolidated balance sheet data was derived from our audited consolidated financial statements but does not include all disclosures required by GAAP. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. Certain amounts have been reclassified from the prior year presentation to conform to current presentation, specifically in relation to the balance sheet presentation of finance and operating leases. Our financial position, results of operations and cash flows are presented in U.S. Dollars.

The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2023, which are included in our 2023 Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”).

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. These estimates are based on historical experience and various other assumptions believed to be reasonable under the circumstances. We evaluate our estimates on an ongoing basis, including those related to the valuation of stock-based awards, certain accruals, the revenue interest financing payable, and intangible and contract acquisition cost amortization, and make changes to the estimates and related disclosures as our experience develops or new information becomes known. Actual results will most likely differ from those estimates.

Segment Information

GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. We have determined that we have one operating and reporting segment.

Summary of Significant Accounting Policies

Our significant accounting policies are disclosed in Note 2 of the consolidated financial statements for the years ended December 31, 2023 and 2022, which are included in our 2023 Annual Report on Form 10-K. There have been no material changes to our significant accounting policies during the three months ended March 31, 2024.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board under its accounting standards codifications (ASC) or other standard setting bodies and are adopted by us as of the specified effective date. For the three months ended March 31, 2024, there were no newly adopted accounting pronouncements

that had a material impact on our condensed consolidated financial statements. As of March 31, 2024, there are no recently issued but not yet adopted accounting pronouncements that are expected to materially impact our condensed consolidated financial statements.

Cash, Cash Equivalents, and Concentration of Credit Risk

We consider all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents.

Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents. We are exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding our cash and cash equivalents to the extent of amounts recorded on the condensed consolidated balance sheet. Our cash and cash equivalents are held at multiple accredited financial institutions. We have not experienced any losses on such accounts and do not believe that we are subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Such deposits have exceeded and will continue to exceed federally insured limits.

Accounts Receivable

Accounts receivable are stated at net realizable value and net of an allowance for credit losses as of each balance sheet date, if applicable. One customer accounted for 98% and 99% of our accounts receivable, net at March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, we have not recorded an allowance for credit losses.

Prelaunch Inventory

We capitalize prelaunch inventory prior to receiving regulatory approval if regulatory approval and subsequent commercialization of a product is probable and we also expect future economic benefit from the sales of the product to be realized. Prior to this conclusion, we expense prelaunch inventory as research and development expense in the period incurred. For prelaunch inventory that is capitalized, we consider a number of specific facts and circumstances, including the product’s historical shelf life, the product's current status in the development and regulatory approval process, results from related clinical trials, results from meetings with relevant regulatory agencies prior to the filing of regulatory applications, potential obstacles to the approval process, viability of commercialization and market trends. In late 2023, based on our assessment of the legal and regulatory process related to YUTREPIA, we concluded that we met the criteria to capitalize expenditures for prelaunch inventory. We capitalized $3.5 million of prelaunch inventory as of March 31, 2024 and none as of December 31, 2023. We do not have an allowance for inventory obsolescence as of March 31, 2024. If either regulatory approval or market acceptance post-approval of YUTREPIA do not occur at all or on a timely basis prior to the inventory shelf-life expiration, we may be required to write-off some or all prelaunch inventory, which could affect our financial condition and financial results.

Long-Lived Assets

We review long-lived assets, including definite-life intangible assets, for realizability on an ongoing basis. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. We also review for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, we perform undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, we group assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Any impairment losses would be recorded in the consolidated statements of operations. To date, no such impairments have occurred.

Goodwill

We assess goodwill for impairment at least annually as of July 1 or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. For example, significant and unanticipated changes or our inability to obtain or maintain regulatory approvals for our product candidates, including the NDA for YUTREPIA, could trigger testing of our goodwill for impairment at an interim date. We have one reporting unit. We have the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, in which case a quantitative impairment test is not required.

Per ASC 350, Intangibles Goodwill and Other, the quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the fair value up to the amount of goodwill allocated to the reporting unit. Income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit are considered when measuring the goodwill impairment loss, if applicable.

As of March 31, 2024, we concluded there were no events or changes in circumstances which indicated that the carrying amount of goodwill was not recoverable. We completed our annual impairment test as of July 1, 2023 and concluded that no impairments had occurred.

Revenue Interest Financing Payable

We recognized a liability related to amounts received in January 2023, July 2023, and January 2024 pursuant to the RIFA under ASC 470-10, Debt and ASC 835-30, Interest - Imputation of Interest. The liability will be accreted under the effective interest method based upon the estimated amount of future payments to be made pursuant to the RIFA. If the timing or amounts of any estimated future payments change, we will prospectively adjust the effective interest and the related amortization of the liability and related issuance costs. A significant increase or decrease in these estimates could materially impact the liability balance and related interest expense. Amendments are assessed under ASC 470 to determine appropriate treatment as extinguishments or modifications.

Revenue Recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

●

Step 1: Identify the contract with the customer

●

Step 2: Identify the performance obligations in the contract

●

Step 3: Determine the transaction price

●

Step 4: Allocate the transaction price to the performance obligations in the contract

●

Step 5: Recognize revenue when the company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, we assess the promised goods or services in the contract and identify each promised good or service that is distinct.

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We evaluate any non-cash consideration, consideration payable to the customer, potential returns and refunds, and whether consideration contains a significant financing element in determining the transaction price.

Revenue is measured based on consideration specified in a contract with a customer. We recognize revenue when it satisfies a performance obligation by transferring control over a service to a customer. The amount of revenue recognized reflects estimates for refunds and returns, which are presented as a reduction of accounts receivable where the right of setoff exists.

Research and Development Expense

Research and development costs are expensed as incurred in accordance with ASC 730, Research and Development and include facility-related costs related to research and development activities, direct costs from third parties, such as contract research organizations (“CROs”), contract manufacturing organizations (CMOs”), and consultants, as well as employee-related expenses, including salaries, benefits, and stock-based compensation. Research and development expenses also include costs of acquired product licenses and related technology rights where there is no alternative future use.

Accrued Research and Development Expenses

As part of the process of preparing the condensed consolidated financial statements, we are required to estimate accrued expenses. This process involves reviewing quotations and contracts, identifying services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in our condensed consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of these estimates with the service providers and make adjustments if necessary.

The significant estimates in our accrued research and development expenses are related to expenses incurred with respect to CROs, CMOs and other vendors in connection with research and development and manufacturing activities. The financial terms of our agreements with CROs and CMOs 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 applicable research and development or manufacturing expense. In accruing service fees, we estimate the time period over which services will be performed 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 such estimate, we adjust the accrual or 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 could result in us reporting amounts that are too high or too low in any particular period. There have been no material changes in estimates for the periods presented.

Stock-Based Compensation

We estimate the grant date fair value of stock-based awards and amortize this fair value to compensation expense over the requisite service period or the vesting period of the respective award. In arriving at stock-based compensation expense, we estimate the number of stock-based awards that will be forfeited due to employee turnover. The forfeiture assumption is based primarily on turn-over historical experience. If the actual forfeiture rate is higher than the estimated forfeiture rate, then an adjustment will be made to increase the estimated forfeiture rate, which will result in a decrease

to the expense recognized in our financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, then an adjustment will be made to lower the estimated forfeiture rate, which will result in an increase to expense recognized in our financial statements. The expense we recognize in future periods will be affected by changes in the estimated forfeiture rate and may differ from amounts recognized in the current period. See Note 9.

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period, without consideration of common stock equivalents.

Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. Due to their anti-dilutive effect, the calculation of diluted net loss per share excludes the following common stock equivalent shares:


	Three Months Ended
	March 31,
	2024	2023
Stock Options	9,571,521	9,402,106
Restricted Stock Units	2,982,485	1,590,469
Warrants	450,000	450,000
Total	13,004,006	11,442,575

Certain common stock warrants are included in the calculation of basic and diluted net loss per share since their exercise price is de minimis.

Fair Value Measurements

ASC 825, Financial Instruments defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price). As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 825 establishes a three-tiered approach for valuation of financial instruments, which requires that fair value measurements be classified and disclosed in one of three tiers, whether or not recognized on our condensed consolidated balance sheets at fair value. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs other than quoted prices included in active markets that are observable for the asset or liability, either directly or indirectly; and

Level 3 — Unobservable inputs for the asset and liability used to measure fair value, to the extent that observable inputs are not available.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table presents the placement in the fair value hierarchy of financial assets and liabilities measured at fair value as of March 31, 2024 and December 31, 2023:

Quoted

Significant

Prices in

Other

Significant

Active

Observable

Unobservable

Markets

Inputs

Carrying

March 31, 2024

(Level 1)

(Level 2)

(Level 3)

Value

Money market funds (cash equivalents)

154,066

—

154,066

Quoted

Significant

Prices in

Other

Significant

Active

Observable

Unobservable

Markets

Inputs

Carrying

December 31, 2023

(Level 1)

(Level 2)

(Level 3)

Value

Money market funds (cash equivalents)

79,912

—

79,912

Money market funds are included in cash and cash equivalents on our condensed consolidated balance sheet and are classified within Level 1 of the fair value hierarchy since they are valued using quoted market prices.

The carrying amounts reflected in our condensed consolidated balance sheets for cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to their short-term nature. The carrying value of long-term debt and the revenue interest financing payable approximate fair value as the respective interest rates are reflective of current market rates on debt with similar terms and conditions. In addition, the revenue interest financing payable is updated with the expected amount to be paid back each reporting period based on the contractual terms and current projections.

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued Expenses and Other Current Liabilities
Accrued compensation	$ 4,715	$ 8,544
Accrued research and development expenses	3,020	2,902
Accrued inventory costs	1,690
Accrued other expenses	4,643	1,954
Total accrued expenses and other current liabilities	$ 14,068	$ 13,400

Inventory

3 Months Ended

Mar. 31, 2024

Inventory

Inventory

3. Inventory

Inventories are stated at the lower of average cost or net realizable value and consist of the following:


	March 31,		December 31,
	2024		2023
Raw materials	$	1,303	$	—
Work in process		2,214		—
Inventory	$	3,517	$	—

Prelaunch Inventory

During the quarter ended March 31, 2024, we capitalized costs of $3.5 million associated with the manufacture of YUTREPIA as a result of our determination that regulatory approval and subsequent commercialization is probable and we also expect future economic benefit from the sales of the product to be realized.

Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2024

Accrued Expenses and Other Current Liabilities

Schedule of Accrued expenses and other current liabilities


	March 31,		December 31,
	2024		2023
Accrued compensation	$	4,715	$	8,544
Accrued research and development expenses		3,020		2,902
Accrued inventory costs		1,690		—
Accrued other expenses		4,643		1,954
Total accrued expenses and other current liabilities	$	14,068	$	13,400

Leases - Other (Details)	3 Months Ended
Leases - Other (Details)	Mar. 31, 2024
Leases
Lessee, Finance Lease, Discount Rate	6.50%
Renewal term	5 years
Lessee, Operating Lease, Existence of Option to Extend [true false]	true

Revenue From Contracts With Customers (Details) - Sandoz - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Aug. 31, 2018	Mar. 31, 2024
Promotion Agreement, Payment	$ 20.0
Contract with Customer, Refund Liability		$ 0.5
Percentage of Revenue from Promotion Agreement		99.00%

Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2024

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	March 31,		December 31,
	2024		2023
Accrued compensation	$	4,715	$	8,544
Accrued research and development expenses		3,020		2,902
Accrued inventory costs		1,690		—
Accrued other expenses		4,643		1,954
Total accrued expenses and other current liabilities	$	14,068	$	13,400

Stock-Based Compensation - Other (Details) - $ / shares			1 Months Ended	3 Months Ended
Stock-Based Compensation - Other (Details) - $ / shares	Jan. 01, 2024	Jan. 01, 2023	Nov. 30, 2020	Mar. 31, 2024	Mar. 31, 2023	Jan. 25, 2022
Percentage of the number of shares of common stock issued and outstanding			1.00%
Number of common stock shares outstanding			150,000
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price (in dollars per share)				$ 12.86
Restricted Stock Units
Share-based compensation arrangement by share-based payment award, award vesting period				4 years
Granted, number (in shares)				1,857,325
Performance Based Restricted Stock Units
Granted, number (in shares)				520,526
Common Stock
Issuance of common stock under employee stock purchase plan (in shares)				67,982	81,281
Share Price (in dollars per share)				$ 14.75
Share-based Payment Arrangement, Tranche One \| Performance Based Restricted Stock Units
Share-based compensation arrangement by share-based payment award, award vesting period				1 year
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage				25.00%
Share-based Payment Arrangement, Tranche Two \| Performance Based Restricted Stock Units
Share-based compensation arrangement by share-based payment award, award vesting period				3 years
Employee Stock Option
Share-based compensation arrangement by share-based payment award, award vesting period				4 years
The 2020 Plan
Share-based compensation arrangement by share-based payment award, percent annual increase in capital shares reserved for future issuance				4.00%
Share-based compensation arrangement by share-based payment award, number of additional shares authorized (in shares)	2,745,183
Share-based compensation arrangement by share-based payment award, number of shares available for grant (in shares)				984,622
Common stock, capital shares reserved for future issuance (in shares)				635,280
2022 Inducement Plan
Common stock, capital shares reserved for future issuance (in shares)				26,650		310,000
Employee Stock Purchase Plan
Common stock, capital shares reserved for future issuance (in shares)				639,155
Available of issuance under the ESPP		150,000
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent				85.00%
Issuance of common stock under employee stock purchase plan (in shares)				67,982	81,281

Legal Proceedings (Details) $ in Thousands	Apr. 21, 2021 USD ($)
Liquidia PAH and Sandoz \| UTC and Smiths Medical Litigation \| Pending Litigation
Legal Proceedings
Proceeds from Legal Settlements	$ 4,250

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Stock-Based Compensation - Unamortized Compensation Expense (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Employee Stock Option
Unamortized Expense	$ 13,698
Weighted Average Remaining Recognition Period (Years)	2 years
Restricted Stock Units
Unamortized Expense	$ 29,115
Weighted Average Remaining Recognition Period (Years)	3 years

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements - Other (Details)		3 Months Ended	12 Months Ended
	Jul. 01, 2023 USD ($)	Mar. 31, 2024 USD ($) customer segment	Dec. 31, 2023 USD ($) customer
Number of operating segments \| segment		1
Inventory		$ 3,517,000	$ 0
Allowance for inventory		0
Impairment of long-lived assets		$ 0
Number of reporting units		1
Impairment of goodwill	$ 0
Credit Concentration Risk \| Accounts Receivable \| Customer One
Number of customers \| customer		1	1
Concentration risk, percentage		98.00%	99.00%

Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Stockholders' Equity

Stockholders' Equity

8. Stockholders’ Equity

Common Stock

Issuance of Common Stock on January 4, 2024 from a Private Placement

On January 4, 2024, we entered into a common stock purchase agreement with Legend Aggregator, LP for the sale by us in a private placement (the “2024 Private Placement”) of an aggregate of 7,182,532 shares of our common stock at a purchase price of $10.442 per share. The 2024 Private Placement closed on January 8, 2024, and we received gross proceeds of approximately $75.0 million, before deducting offering costs of less than $0.1 million.

Issuance of Common Stock on December 12, 2023 from an Underwritten Public Offering and Private Placement

In December 2023, we sold 3,491,620 shares of our common stock in an underwritten registered public offering at an offering price of $7.16 per share (the “2023 Offering”) for net proceeds of approximately $25.0 million, before deducting offering costs of approximately $1.9 million.

Caligan Partners LP (“Caligan”), our largest stockholder, and Paul B. Manning, a member of our Board of Directors, participated in the 2023 Offering and purchased shares of common stock in an aggregate amount of approximately $10.0

million at the public offering price per share and on the same terms as the other purchasers in the 2023 Offering. Caligan purchased 1,117,318 shares of common stock in the 2023 Offering for an aggregate purchase price of $8.0 million and Paul B. Manning purchased 279,330 shares of common stock in the 2023 Offering for an aggregate purchase price of $2.0 million.

Concurrently with the 2023 Offering referenced above, we entered into a common stock purchase agreement with Roger Jeffs, our Chief Executive Officer, for the sale by us in a private placement of an aggregate of 139,665 shares of our common stock at a purchase price of $7.16 per share for gross proceeds of approximately $1.0 million.

Warrants

During the three months ended March 31, 2024 and 2023, 948 and no warrants to purchase shares of common stock were exercised, respectively.


Number of
warrants	Exercise Price		Expiration Date
250,000	$	5.14	January 6, 2032
100,000	$	3.05	February 26, 2031
100,000	$	n/a¹	February 26, 2031
64,624	$	0.02	December 31, 2026

Outstanding warrants consisted of the following as of March 31, 2024:

These warrants were issued on February 26, 2021, in connection with our previously outstanding debt with Silicon Valley Bank. These warrants only became exercisable if there was additional funding under the loan agreement, and the exercise price of these warrants was to be set upon such potential additional funding. The additional funding never occurred, and the loan agreement has since been repaid and terminated. While these warrants technically remain outstanding, they are not, and will never be, exercisable.

- Definition

The entire disclosure for equity.

+ References

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-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Mar. 31, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Operating activities
Net loss		$ (40,928)	$ (11,745)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		4,524	2,552
Depreciation and amortization		489	569
Non-cash lease expense		113	91
Loss (gain) on disposal of property and equipment		3	(2)
Loss on extinguishment of debt		11,483	2,311	$ 2,300
Accretion and non-cash interest expense		2,521	953
Changes in operating assets and liabilities:
Accounts receivable, net		1,491	886
Inventory		(3,517)
Prepaid expenses and other current assets		(1,832)	214
Other noncurrent assets		63
Accounts payable		303	(1,495)
Accrued expenses and other current liabilities		668	(2,577)
Operating lease liabilities		(247)	(214)
Net cash used in operating activities		(24,866)	(8,457)
Investing activities
Purchases of property, plant and equipment		(624)	(366)
Proceeds from the sale of property, plant and equipment		0	2
Net cash used in investing activities		(624)	(364)
Financing activities
Proceeds from revenue interest financing, net		24,975	31,814
Principal payments on long-term debt			(20,000)
Payments for debt prepayment and extinguishment costs			(2,190)
Payments on revenue interest financing liability	$ (654)	(654)
Principal payments on finance leases		(26)	(105)
Receipts from litigation financing		3	17
Proceeds from sale of common stock, net of issuance costs		74,868
Proceeds from issuance of common stock under stock incentive plans		503	414
Net cash provided by financing activities		99,669	9,950
Net increase in cash and cash equivalents		74,179	1,129
Cash and cash equivalents, beginning of period		83,679	93,283	93,283
Cash and cash equivalents, end of period	$ 157,858	157,858	94,412	$ 83,679
Supplemental disclosure of cash flow information
Cash paid for interest		0	360
Cash paid for operating lease liabilities		328	319
Non-cash increase in property, plant and equipment through accounts payable		786	122
Non-cash increase in indemnification asset through accounts payable		$ 5	$ 17

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (40,928)	$ (11,745)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Stock-Based Compensation

9. Stock-Based Compensation

2020 Long-Term Incentive Plan

Our 2020 Long-Term Incentive Plan (the “2020 Plan”) provides for the granting of stock appreciation rights, stock awards, stock units, and other stock-based awards and for accelerated vesting under certain change of control transactions. The number of shares of our common stock available for issuance under the 2020 plan will automatically increase on January 1 of each year through 2030, by an amount equal to the smaller of (a) 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the Board of Directors (the “Evergreen Provision”). On January 1, 2024, the number of shares of common stock available for issuance under the 2020 Plan automatically increased by 2,745,183 shares pursuant to the Evergreen Provision. As of March 31, 2024, there were 984,622 shares available for future grants under the 2020 Plan.

The 2020 Plan replaced all prior equity award plans and such plans have been discontinued. However, the awards outstanding under the prior equity award plans will continue to remain in effect in accordance with their terms. Awards that are forfeited under these prior plans upon cancellation, termination or expiration will not be available for grant under the 2020 Plan. As of March 31, 2024, a total of 635,280 shares of common stock were reserved for issuance related to the remaining outstanding equity awards granted under the prior plans.

2022 Inducement Plan

On January 25, 2022, the Board of Directors approved the adoption of our 2022 Inducement Plan (the “2022 Inducement Plan”). The 2022 Inducement Plan was recommended for approval by the Compensation Committee of the Board (the “Compensation Committee”), and subsequently approved and adopted by the Board of Directors without stockholder approval pursuant to Rule 5635(c)(4) of the rules and regulations of The Nasdaq Stock Market, LLC (the “Nasdaq Listing Rules”).

310,000 shares of our common stock were reserved for issuance pursuant to equity awards that may be granted under the 2022 Inducement Plan, and the 2022 Inducement Plan will be administered by the Compensation Committee. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, equity awards under the 2022 Inducement Plan may only be made to an employee who has not previously been an employee or member of the Board of Directors, or following a bona fide period of non-employment by us, if he or she is granted such equity awards in connection with his or her commencement of employment with us and such grant is an inducement material to his or her entering into employment with us. As of March 31, 2024, a total of 26,650 shares were available for issuance under the 2022 Inducement Plan.

Employee Stock Purchase Plan

In November 2020, stockholders approved the Liquidia Corporation 2020 Employee Stock Purchase Plan (the “ESPP”). The number of shares of our common stock available for issuance under the ESPP will automatically increase on January 1 of each year through 2030, by the lesser of (a) 1.0% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, (b) 150,000 shares, or (c) an amount determined by the Board of Directors. On January 1, 2024, the number of shares of common stock available for issuance under the ESPP increased by 150,000 shares. As of March 31, 2024, a total of 639,155 shares of common stock are reserved for issuance under the ESPP. The ESPP allows eligible employees to purchase shares of our common stock at a discount through payroll deductions, subject to plan limitations. Unless otherwise determined by the administrator, the common stock will be purchased for the accounts of employees participating in the ESPP at a price per share that is 85% of the lesser of the fair market value of our common stock on the first and last trading day of the offering period. During the three months ended March 31, 2024 and 2023, 67,982 and 81,281 shares were issued under the ESPP, respectively.

Stock-Based Compensation Valuation and Expense

We account for employee stock-based compensation plans using the fair value method. The fair value method requires us to estimate the grant-date fair value of stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. The fair value of each option grant is estimated using a Black-Scholes option-pricing model.

For restricted stock units (“RSUs”), the grant-date fair value is based upon the market price of our common stock on the date of the grant. This fair value is then amortized to compensation expense over the requisite service period or vesting term.

Total stock-based compensation expense recognized for employees and non-employees was as follows:


	Three Months Ended
	March 31,
By Expense Category:	2024		2023
Cost of revenue	$	64	$	—
Research and development		1,011		581
General and administrative		3,449		1,971
Total stock-based compensation expense	$	4,524	$	2,552

The following table summarizes the unamortized compensation expense and the remaining years over which such expense would be expected to be recognized, on a weighted average basis, by type of award:


	As of March 31, 2024
			Weighted
			Average
			Remaining
			Recognition
	Unamortized		Period
	Expense		(Years)
Stock options	$	13,698	2.0
Restricted and performance stock units	$	29,115	3.0

Fair Value of Stock Options Granted and Purchase Rights Issued under the ESPP

We use the Black-Scholes option-pricing model to determine the fair value of stock options granted and purchase rights issued under the ESPP.

The following table summarizes the assumptions used for estimating the fair value of stock options granted under the Black-Scholes option-pricing model:


	Three Months Ended
	March 31,
	2024	2023
Expected dividend yield	—	—
Risk-free interest rate	3.98%	3.46% - 3.64%
Expected volatility	90%	94% - 95%
Expected life (years)	6.1	5.9 - 6.1

The weighted average fair value for options granted during the three months ended March 31, 2024 and 2023 was $9.84 and $4.80 per share, respectively.

The following table summarizes the assumptions used for estimating the fair value of purchase rights granted to employees under the ESPP under the Black-Scholes option-pricing model:


	Three Months Ended
	March 31,
	2024	2023
Expected dividend yield	—	—
Risk-free interest rate	5.27%	5.20%
Expected volatility	90%	64%
Expected life (years)	0.50	0.50

Stock Option Activity

Options generally vest over a four-year period in multiple tranches.

The following table summarizes stock option activity during the three months ended March 31, 2024:


				Weighted
		Weighted		Average
		Average		Contractual	Aggregate
	Number of	Exercise		Term	Intrinsic
	Shares	Price		(in years)	Value
Outstanding as of December 31, 2023	9,573,937	$	4.80
Granted	7,500		12.86
Exercised	(23,247)		4.27
Cancelled	(3,000)		6.37
Outstanding as of March 31, 2024	9,555,190	$	4.81	7.5	$	95,040
Exercisable as of March 31, 2024	6,123,944	$	4.47	7.2	$	62,992
Vested and expected to vest as of March 31, 2024	9,069,464	$	4.76	7.5	$	90,617

The aggregate intrinsic value of stock options in the table above represents the difference between the $14.75 closing price of our common stock as of March 31, 2024 and the exercise price of outstanding, exercisable, and vested and expected to vest in-the-money stock options.

Restricted Stock Units

Restricted Stock Units (“RSUs”) represent the right to receive shares of our common stock at the end of a specified time period and/or upon the achievement of a specific milestone. RSUs can only be settled in shares of our common stock. RSUs generally vest over a four-year period similar to stock options granted to employees.

The tax withholding method used for most RSUs is the sell-to-cover method, in which shares with a market value equivalent to the tax withholding obligation are sold on behalf of the holder of the RSUs upon vesting and settlement to cover the tax withholding liability and the cash proceeds from such sales are remitted to taxing authorities by us. In circumstances where the sell-to-cover method is not used, the holder of the RSUs is required to remit cash to us to cover the tax withholding liability and the cash is then remitted to taxing authorities by us.

A summary of unvested RSU awards outstanding as of March 31, 2024 and changes during the three months ended March 31, 2024 are as follows:


		Weighted
		Average
		Grant-Date
	Number of	Fair Value
	RSUs	(per RSU)
Unvested as of December 31, 2023	1,657,978	$	6.41
Granted	1,857,325		12.54
Vested	(383,133)		6.42
Forfeited	(2,277)		12.50
Unvested as of March 31, 2024	3,129,893	$	10.04

RSUs granted during the three months ended March 31, 2024, included 520,526 performance-based RSUs granted to our executives. These performance-based RSUs vest upon the later of (a) time-based vesting conditions and (b) the first commercial sale of YUTREPIA in the United States. The time-based vesting condition means 25% of the performance-based RSUs vest one year after grant date and quarterly thereafter for three years, subject to the executive’s continued service.

Inventory (Details) - USD ($) $ in Thousands	3 Months Ended
Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Inventory
Raw materials	$ 1,303
Work in process	2,214
Inventory	3,517	$ 0
Capitalized costs	$ 3,517

Property, Plant, and Equipment

3 Months Ended

Mar. 31, 2024

Property, Plant, and Equipment

Property, Plant, and Equipment

4. Property, Plant, and Equipment

Property, plant and equipment consisted of the following:


	March 31,		December 31,
	2024		2023
Lab and build-to-suit equipment	$	6,756	$	6,834
Office equipment		19		19
Furniture and fixtures		241		241
Computer equipment		487		487
Leasehold improvements		11,374		11,409
Construction-in-progress		1,966		804
Total property, plant and equipment		20,843		19,794
Accumulated depreciation and amortization		(15,267)		(15,314)
Property, plant and equipment, net	$	5,576	$	4,480

We recorded depreciation and amortization expense related to property, plant and equipment of $0.2 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively.

Indemnification Asset with Related Party and Litigation Finance Payable (Details)	Apr. 26, 2024
PBM \| Subsequent Events.
Indemnification Asset with Related Party and Litigation Finance Payable
Major stockholder ownership percentage of Liquidia Corporation Common Stock	8.30%

Stock-Based Compensation - Fair Value of Stock Options Granted and Purchase Rights Issued under the ESPP (Details) - $ / shares	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Weighted average fair value for options granted (in dollars per share)	$ 9.84	$ 4.80
Employee Stock Purchase Plan \| Employee Stock Option
Expected dividend yield
Risk-free interest rate, minimum	3.98%	3.46%
Risk-free interest rate, maximum		3.64%
Risk-free interest rate	3.98%
Expected Volatility, minimum		94.00%
Expected Volatility, maximum		95.00%
Expected volatility	90.00%
Expected life (years)	6 years 1 month 6 days
Employee Stock Purchase Plan \| Employee Stock Option \| Minimum
Expected life (years)	6 years 1 month 6 days	5 years 10 months 24 days
Employee Stock Purchase Plan \| Employee Stock Option \| Maximum
Expected life (years)		6 years 1 month 6 days
Employee Stock Purchase Plan \| Employee Purchase Rights
Expected dividend yield
Risk-free interest rate, minimum	5.27%		5.20%
Risk-free interest rate	5.27%	5.20%
Expected Volatility, minimum	90.00%		64.00%
Expected volatility	90.00%	64.00%
Expected life (years)	6 months	6 months

Contract Acquisition Costs and Intangible Asset (Tables)

3 Months Ended

Mar. 31, 2024

Contract Acquisition Costs and Intangible Asset

Schedule of contract acquisition costs and intangible asset


	March 31, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Contract acquisition costs	$	12,980	$	(5,182)	$	7,798	$	12,980	$	(5,058)	$	7,922
Intangible asset	$	5,620	$	(2,244)	$	3,376	$	5,620	$	(2,190)	$	3,430

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements

Summary of calculation of diluted net loss per share


	Three Months Ended
	March 31,
	2024	2023
Stock Options	9,571,521	9,402,106
Restricted Stock Units	2,982,485	1,590,469
Warrants	450,000	450,000
Total	13,004,006	11,442,575

Summary of financial assets and liabilities measured at fair value

Quoted

Significant

Prices in

Other

Significant

Active

Observable

Unobservable

Markets

Inputs

Carrying

March 31, 2024

(Level 1)

(Level 2)

(Level 3)

Value

Money market funds (cash equivalents)

154,066

—

154,066

Quoted

Significant

Prices in

Other

Significant

Active

Observable

Unobservable

Markets

Inputs

Carrying

December 31, 2023

(Level 1)

(Level 2)

(Level 3)

Value

Money market funds (cash equivalents)

79,912

—

79,912

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements - Fair Value of Financial Assets and Financial Liabilities (Details) - Money market funds (cash equivalents) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Reported Value Measurement
Fair Value of Financial Instruments
Money market funds	$ 154,066	$ 79,912
Fair Value, Inputs, Level 1 \| Estimate of Fair Value Measurement
Fair Value of Financial Instruments
Money market funds	$ 154,066	$ 79,912

Indemnification Asset with Related Party and Litigation Finance Payable

3 Months Ended

Mar. 31, 2024

Indemnification Asset with Related Party and Litigation Finance Payable

Indemnification Asset with Related Party and Litigation Finance Payable

6. Indemnification Asset with Related Party and Litigation Finance Payable

On June 3, 2020, Liquidia PAH entered into a litigation financing arrangement (the “Financing Agreement”) with Henderson SPV, LLC (“Henderson”). Liquidia PAH, along with Sandoz (collectively the “Plaintiffs”), are pursuing litigation against United Therapeutics Corporation (“United Therapeutics”) (the “RareGen Litigation”). Under the Financing Agreement, Henderson will fund Liquidia PAH’s legal and litigation expenses (referred to as “Deployments”) in exchange for a share of certain litigation or settlement proceeds. Deployments received from Henderson are recorded as a Litigation finance payable.

Litigation proceeds will be split equally between Liquidia PAH and Sandoz. Unless there is an event of default by Henderson, litigation proceeds received by Liquidia PAH must be applied first to repayment of total Deployments received. Litigation proceeds in excess of Deployments received are split between Liquidia PAH and Henderson

according to a formula. Unless there is an event of default by PBM (as defined below), all proceeds received by Liquidia PAH are due to PBM as described further below.

On November 17, 2020, Liquidia PAH entered into a Litigation Funding and Indemnification Agreement (“Indemnification Agreement”) with PBM RG Holdings, LLC (“PBM”). PBM is considered to be a related party as it is controlled by a major stockholder (which beneficially owns approximately 8.3% of Liquidia Corporation common stock as of April 26, 2024), who is also a member of our Board of Directors.

Under the terms of the Indemnification Agreement, PBM now controls the litigation, with Liquidia PAH’s primary responsibility being to cooperate to support the litigation proceedings as needed. The Indemnification Agreement provides that Liquidia PAH and its affiliates will not be entitled to any proceeds resulting from, or bear any financial or other liability for, the RareGen Litigation unless there is an event of default by PBM. Any Liquidia PAH litigation expenses not reimbursed by Henderson under the Financing Agreement will be reimbursed by PBM. Any proceeds received which Henderson is not entitled to under the Financing Agreement will be due to PBM.

The Indemnification Asset is increased as we record third party legal and litigation expenses related to the United Therapeutics and Smiths Medical litigation.

As of March 31, 2024 and December 31, 2023, the Indemnification Asset and Litigation Finance Payable were classified as long-term assets and liabilities, respectively, as it is considered unlikely that the RareGen Litigation would conclude prior to March 31, 2025.

Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Total stock-based compensation expense	$ 4,524	$ 2,552
Cost of Revenue
Total stock-based compensation expense	64
Research and development
Total stock-based compensation expense	1,011	581
General and administrative
Total stock-based compensation expense	$ 3,449	$ 1,971

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)
Revenue	$ 2,972	$ 4,493
Costs and expenses:
Cost of revenue	1,467	654
Research and development	10,057	5,278
General and administrative	20,249	7,793
Total costs and expenses	31,773	13,725
Loss from operations	(28,801)	(9,232)
Other income (expense):
Interest income	1,880	922
Interest expense	(2,524)	(1,124)
Loss on extinguishment of debt	(11,483)	(2,311)
Total other expense, net	(12,127)	(2,513)
Net loss and comprehensive loss	$ (40,928)	$ (11,745)
Net loss per common share, basic (in dollars per share)	$ (0.54)	$ (0.18)
Net loss per common share, diluted (in dollars per share)	$ (0.54)	$ (0.18)
Weighted average common shares outstanding, basic (in shares)	75,393,907	64,656,424
Weighted average common shares outstanding, diluted (in shares)	75,393,907	64,656,424

Property, Plant, and Equipment (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant, and Equipment

Schedule of Property, plant and equipment


	March 31,		December 31,
	2024		2023
Lab and build-to-suit equipment	$	6,756	$	6,834
Office equipment		19		19
Furniture and fixtures		241		241
Computer equipment		487		487
Leasehold improvements		11,374		11,409
Construction-in-progress		1,966		804
Total property, plant and equipment		20,843		19,794
Accumulated depreciation and amortization		(15,267)		(15,314)
Property, plant and equipment, net	$	5,576	$	4,480

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements (Policies)

3 Months Ended

Mar. 31, 2024

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements

Basis of Presentation

Use of Estimates

Segment Information

Recent Accounting Pronouncements

Cash, Cash Equivalents, and Concentration of Credit Risk

We consider all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents.

Revenue Interest Financing Payable

Revenue Recognition

●

Step 1: Identify the contract with the customer

●

Step 2: Identify the performance obligations in the contract

●

Step 3: Determine the transaction price

●

Step 4: Allocate the transaction price to the performance obligations in the contract

●

Step 5: Recognize revenue when the company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, we assess the promised goods or services in the contract and identify each promised good or service that is distinct.

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

Research and Development Expense

Accrued Research and Development Expenses

Stock-Based Compensation

Net Loss Per Share


	Three Months Ended
	March 31,
	2024	2023
Stock Options	9,571,521	9,402,106
Restricted Stock Units	2,982,485	1,590,469
Warrants	450,000	450,000
Total	13,004,006	11,442,575

Certain common stock warrants are included in the calculation of basic and diluted net loss per share since their exercise price is de minimis.

Fair Value Measurements

Level 1 — Quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs other than quoted prices included in active markets that are observable for the asset or liability, either directly or indirectly; and

Level 3 — Unobservable inputs for the asset and liability used to measure fair value, to the extent that observable inputs are not available.

Quoted

Significant

Prices in

Other

Significant

Active

Observable

Unobservable

Markets

Inputs

Carrying

March 31, 2024

(Level 1)

(Level 2)

(Level 3)

Value

Money market funds (cash equivalents)

154,066

—

154,066

Quoted

Significant

Prices in

Other

Significant

Active

Observable

Unobservable

Markets

Inputs

Carrying

December 31, 2023

(Level 1)

(Level 2)

(Level 3)

Value

Money market funds (cash equivalents)

79,912

—

79,912

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		12 Months Ended
	Jan. 08, 2024	Jan. 04, 2024	Dec. 12, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Sale of common stock, net				$ 74,868
Warrants, Expiration, January 6, 2032
Class of Warrant or Right, Outstanding (in shares)				250,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 5.14
Warrants, Initial Tranche, Expiration, February 26, 2031
Class of Warrant or Right, Outstanding (in shares)				100,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 3.05
Warrants, Other Tranches, Expiration, February 26, 2031
Class of Warrant or Right, Outstanding (in shares)				100,000
Warrants, Expiration, December 31, 2026
Class of Warrant or Right, Outstanding (in shares)				64,624
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 0.02
Warrants to Purchase Common Stock
Class of Warrant or Right, Exercised During Period (in shares)				948	0
Private Placement
Stock Issued During Period, Shares, New Issues (in shares)		7,182,532
Shares Issued, Price Per Share (in dollars per share)		$ 10.442
Proceeds from Issuance of Private Placement	$ 75,000
Private Placement \| Maximum
Before deducting offering costs	$ 100
Private Placement \| Roger Jeffs
Stock Issued During Period, Shares, New Issues (in shares)			139,665
Shares Issued, Price Per Share (in dollars per share)			$ 7.16
Proceeds from Issuance of Private Placement			$ 1,000
Underwritten Public Offering
Stock Issued During Period, Shares, New Issues (in shares)			3,491,620
Shares Issued, Price Per Share (in dollars per share)			$ 7.16
Proceeds from Issuance of Common Stock, Net			$ 25,000
Payments for offering costs			1,900
Underwritten Public Offering \| Caligan and Paul B. Manning
Sale of common stock, net			$ 10,000
Underwritten Public Offering \| Caligan
Stock Issued During Period, Shares, New Issues (in shares)						1,117,318
Sale of common stock, net						$ 8,000
Underwritten Public Offering \| Mr. Paul B. Manning
Stock Issued During Period, Shares, New Issues (in shares)						279,330
Sale of common stock, net						$ 2,000

Property, Plant, and Equipment - Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property, Plant, and Equipment
Depreciation and amortization expense	$ 0.2	$ 0.3

Contract Acquisition Costs and Intangible Asset

3 Months Ended

Mar. 31, 2024

Contract Acquisition Costs and Intangible Asset

Contract Acquisition Costs and Intangible Asset

5. Contract Acquisition Costs and Intangible Asset

Contract acquisition costs and intangible asset are summarized as follows:


	March 31, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Contract acquisition costs	$	12,980	$	(5,182)	$	7,798	$	12,980	$	(5,058)	$	7,922
Intangible asset	$	5,620	$	(2,244)	$	3,376	$	5,620	$	(2,190)	$	3,430

We are amortizing the value of the contract acquisition costs and intangible asset on a pro-rata basis based on the estimated total revenue or net profits to be recognized over the period from November 18, 2020 through December 2032, the termination date of the Promotion Agreement (see Note 2-Revenue Recognition for our accounting policies). Amortization of contract acquisition costs is recorded as a reduction of revenue, and amortization of the intangible asset is recorded as cost of revenue.

We recorded amortization related to the contract acquisition costs of $0.1 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively. We recorded amortization related to the intangible asset of $0.1 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. Annual amortization over the next five years is expected to immaterially fluctuate from the 2023 amounts, consistent with changes to net profits to be recognized pursuant to the Promotion Agreement over the period.

Revenue Interest Financing Payable (Tables)

3 Months Ended

Mar. 31, 2024

Revenue Interest Financing Payable

Schedule of changes in the liability related to RIFA


Balance as of December 31, 2023	$	46,033
Accretion		107
Amortization of issuance costs		2
Second tranche funding, net of fees		24,975
Balance as of January 5, 2024, prior to extinguishment	$	71,117
Loss on extinguishment		11,483
Balance as of January 5, 2024, after extinguishment	$	82,600
Accretion		2,412
Payments		(654)
Balance as of March 31, 2024	$	84,358
Less: current portion of revenue interest financing payable		(4,153)
Long-term portion of revenue interest financing payable	$	80,205

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies.

Commitments and Contingencies

13. Commitments and Contingencies

Pharmosa License Agreement and Asset Transfer Agreement

In June 2023, we entered into a License Agreement with Pharmosa Biopharm Inc. (“Pharmosa”) pursuant to which we were granted an exclusive license in North America to develop and commercialize L606, an inhaled, sustained-release formulation of treprostinil currently being evaluated in a clinical trial for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD), and a non-exclusive license for the manufacture, development and use (but not commercialization) of such licensed product in most countries outside North America (the “Pharmosa License Agreement”).

Under the terms of the Pharmosa License Agreement, we will be responsible for development, regulatory and commercial activities of L606 in North America. Pharmosa will manufacture clinical and commercial supplies of the liposomal formulation through its global supply chain and support us in establishing a redundant global supply chain. In consideration for these exclusive rights, we paid Pharmosa an upfront license fee of $10 million and will pay Pharmosa potential development milestone payments tied to PAH and PH-ILD indications of up to $30 million, potential sales milestones of up to $185 million and two tiers of low, double-digit royalties on net sales of L606. Pharmosa will also receive a $10 million milestone payment for each additional indication approved after PAH and PH-ILD and each additional product approved under the license. We also retain the first right to negotiate for development and commercialization of L606 in Europe and other territories should Pharmosa seek a partner, subject to satisfaction of certain conditions as set forth in the Pharmosa License Agreement.

Concurrently with the execution of the Pharmosa License Agreement, we also entered into an Asset Transfer Agreement with Pharmosa pursuant to which Pharmosa will transfer its inventory of physical materials.

Mainbridge Health Care Device Development and Supply Agreement

In December 2022, we entered into a Device Development and Supply Agreement (the “Pump Development Agreement”) with Mainbridge Health Partners, LLC (“Mainbridge”) and Sandoz Inc. (“Sandoz”). The Pump Development Agreement provides for the cooperation between us, Sandoz and Mainbridge to develop a new pump that is suitable for the subcutaneous administration of Treprostinil Injection. Mainbridge will perform all development, validation and testing activities required for the pump and related consumables in anticipation of submitting a 510(k) clearance application for the pump to the FDA in 2025. In connection with the Pump Development Agreement, we and Sandoz have agreed to pay Mainbridge certain future contingent milestone payments in accordance with the terms and conditions set forth therein.

UNC License Agreement

We perform research under a license agreement with The University of North Carolina at Chapel Hill (“UNC”) as amended to date (the “UNC License Agreement”). As part of the UNC License Agreement, we hold an exclusive license to certain research and development technologies and processes in various stages of patent pursuit, for use in our research and development and commercial activities, with a term until the expiration date of the last to expire patent subject to the UNC License Agreement, subject to industry standard contractual compliance. Under the UNC License Agreement, we are obligated to pay UNC royalties equal to a low single digit percentage of all net sales of drug products whose manufacture, use or sale includes any use of the technology or patent rights covered by the UNC License Agreement, including YUTREPIA. We may grant sublicenses of UNC licensed intellectual property in return for specified payments based on a percentage of any fee, royalty or other consideration received.

Chasm Technologies

In March 2012, we entered into an agreement, as amended, with Chasm Technologies, Inc. for manufacturing consulting services related to our manufacturing capabilities during the term of the agreement. We agreed to pay future contingent milestones and royalties on net sales totaling no more than $1.5 million, $0.2 million of which has been accrued as of March 31, 2024.

Employment Agreements and Executive Severance and Change in Control Plan

We have agreements with certain employees and an Executive Severance and Change in Control Plan which covers certain other employees which require payments if certain events, such as a change in control or termination without cause, occur.

Purchase Obligations

We enter into contracts in the normal course of business with contract service providers to assist in the performance of research and development and manufacturing activities. Subject to required notice periods and obligations under binding purchase orders, we can elect to discontinue the work under these agreements at any time.

On July 14, 2023, we entered into an Amended and Restated Commercial Manufacturing Services and Supply Agreement with Lonza Tampa LLC (“Lonza”) (the “CSA”). Lonza is our sole supplier for encapsulation and packaging services for YUTREPIA. Pursuant to the terms of the CSA, we deliver bulk treprostinil powder, manufactured using our proprietary PRINT^® technology, and Lonza encapsulates and packages it. The CSA was effective upon signing and will be in effect for an initial term of 5 years from receipt of regulatory approval of YUTREPIA by the FDA (“Regulatory Approval”) absent termination by either party in accordance with the terms of the CSA. We may terminate the CSA upon 60 days’ written notice to Lonza in the event that the application for regulatory approval is rejected by the FDA and such FDA decision is not caused by the fault of the Company (the “Termination for FDA Rejection”). Lonza may terminate the CSA upon 120 days written notice if we do not receive regulatory approval by December 31, 2024 (the “Termination for FDA Delay”). Upon any Termination for FDA Rejection or Termination for FDA Delay, we would reimburse Lonza for 50% of its documented out-of-pocket expenditures for any capital equipment that is purchased by Lonza after the effective date of the Agreement to perform the services for us, not to exceed $2.5 million in the aggregate.

We are required to provide Lonza with quarterly forecasts of our expected production requirements for the following 24-month period, the first twelve months of which is considered a binding, firm order. We are required to purchase certain minimum annual order quantities, which may be adjusted by us after the thirteenth month after receipt of regulatory approval (as defined in the CSA). The CSA provides for tiered pricing depending upon the batch size ordered.

In addition, we are party to a multi-year supply agreement with LGM Pharma, LLC (LGM) to produce active pharmaceutical ingredients for YUTREPIA. Under the supply agreement with LGM, we are required to provide rolling forecasts, a portion of which will be considered a binding, firm order, subject to an annual minimum purchase

commitment of $2.7 million for the term of the agreement. The agreement expires five years from the first marketing authorization approval of YUTREPIA.

As of March 31, 2024, we have non-cancelable commitments for product manufacturing and supply costs of approximately $6.5 million.

Other Contingencies and Commitments

From time-to-time we are subject to claims and litigation in the normal course of business, none of which do we believe represent a risk of material loss or exposure. See Note 14 for further discussion of pending legal proceedings.

In addition to the commitments described above, we are party to other commitments, including non-cancelable leases and long-term debt, which are described elsewhere in these notes to the condensed consolidated financial statements.

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 157,858	$ 83,679
Accounts receivable, net	2,570	4,061
Inventory	3,517	0
Prepaid expenses and other current assets	3,991	2,159
Total current assets	167,936	89,899
Property, plant and equipment, net	5,576	4,480
Operating lease right-of-use assets, net	1,591	1,704
Indemnification asset, related party	6,712	6,707
Contract acquisition costs, net	7,798	7,922
Intangible asset, net	3,376	3,430
Goodwill	3,903	3,903
Other assets	224	287
Total assets	197,116	118,332
Current liabilities:
Accounts payable	2,490	1,396
Accrued expenses and other current liabilities	14,068	13,400
Revenue interest financing payable, current	4,153	2,615
Operating and finance lease liabilities, current	1,214	1,139
Total current liabilities	21,925	18,550
Litigation finance payable	6,710	6,707
Revenue interest financing payable, noncurrent	80,205	43,418
Operating and finance lease liabilities, noncurrent	2,016	2,364
Total liabilities	110,856	71,039
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock - 10,000,000 shares authorized, none outstanding	0	0
Common stock - $0.001 par value, 100,000,000 shares authorized as of March 31, 2024 and December 31, 2023 76,287,415 and 68,629,575 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	76	69
Additional paid-in capital	556,210	476,322
Accumulated deficit	(470,026)	(429,098)
Total stockholders' equity	86,260	47,293
Total liabilities and stockholders' equity	$ 197,116	$ 118,332

Legal Proceedings

3 Months Ended

Mar. 31, 2024

Legal Proceedings

Legal Proceedings

14. Legal Proceedings

YUTREPIA-Related Litigation

In June 2020, United Therapeutics filed a complaint for patent infringement against the Company in the U.S. District Court for the District of Delaware (Case No. 1:20 cv 00755 RGA) (the “Original Hatch-Waxman Litigation”), asserting infringement by the Company of U.S. Patent Nos. 9,604,901, entitled “Process to Prepare Treprostinil, the Active Ingredient in Remodulin®” (the “‘901 Patent”), and 9,593,066, entitled “Process to Prepare Treprostinil, the Active Ingredient in Remodulin®” (the “‘066 Patent”), relating to United Therapeutics’ Tyvaso®, a nebulized treprostinil solution for the treatment of PAH. United Therapeutics’ complaint was in response to the Company’s NDA for YUTREPIA, filed with the FDA, requesting approval to market YUTREPIA, a dry powder formulation of treprostinil for the treatment of PAH. The YUTREPIA NDA was filed under the 505(b)(2) regulatory pathway with Tyvaso® as the reference listed drug.

In July 2020, the U.S. Patent and Trademark Office (the “USPTO”) issued U.S. Patent No. 10,716,793 (the “‘793 Patent”), entitled “Treprostinil Administration by Inhalation”, to United Therapeutics. In July 2020, United Therapeutics filed an amended complaint in the Original Hatch-Waxman Litigation asserting infringement of the ‘793 Patent by the practice of YUTREPIA.

In June 2021, the Court held a claim construction hearing. Based on the Court’s construction of the claim terms, United Therapeutics filed a stipulation of partial judgment with respect to the ‘901 Patent in December 2021 under which United Therapeutics agreed to the entry of judgment of the Company’s non-infringement of the ’901 Patent. United Therapeutics did not file an appeal with respect to the ‘901 Patent.

Trial proceedings in the Original Hatch-Waxman Litigation were held in March 2022. In August 2022, Judge Andrews, who was presiding over the Original Hatch-Waxman Litigation, issued an opinion that claims 1, 2, 3, 6 and 9 of the ‘066 Patent were invalid, that the remaining asserted claims of the ‘066 Patent were not infringed by the Company, and that all of the asserted claims of the ‘793 Patent were both valid and infringed by the Company, based on the arguments presented by the Company in the Original Hatch-Waxman Litigation. In September 2022, Judge Andrews entered a final judgment in the Original Hatch-Waxman Litigation that incorporated the findings from his opinion and ordered that the effective date of any final approval by the FDA of YUTREPIA shall be a date which is not earlier than the expiration date of the ’793 Patent, which will be in 2027. Both the Company and United Therapeutics appealed Judge Andrews’ decision to the United States Court of Appeals for the Federal Circuit. On July 24, 2023, the United States Court of Appeals for the Federal Circuit affirmed Judge Andrews’ decision with respect to both the ‘066 patent and the ‘793 patent.

In March 2020, the Company filed a petition for inter partes review with the Patent Trial and Appeal Board (the “PTAB”) of the USPTO with respect to the ‘901 Patent, seeking a determination that the claims in the ‘901 Patent are invalid. In October 2021, the PTAB issued a final written decision concluding that seven of the claims in the ‘901 patent were unpatentable, leaving only the narrower dependent claims 6 and 7, both of which require actual storage at ambient

temperature of treprostinil sodium. In November 2021, United Therapeutics submitted a rehearing request with respect to the PTAB’s decision in the inter partes review of the ‘901 Patent. The rehearing request was denied in June 2022. In August 2022, United Therapeutics appealed the decision of the PTAB with respect to the ‘901 Patent to the United States Court of Appeals for the Federal Circuit. Oral argument was held in February 2024, and the appeal remains pending.

In January 2021, the Company filed a petition for inter partes review with the PTAB relating to the ‘793 Patent, seeking a determination that the claims in the ‘793 Patent are invalid. In July 2022, the PTAB ruled in the Company’s favor, concluding that based on the preponderance of the evidence, all the claims of the ’793 Patent have been shown to be unpatentable. In August 2022, United Therapeutics submitted a rehearing request with respect to the PTAB’s decision in the inter partes review of the ‘793 Patent. The rehearing request was denied in February 2023. In April 2023, United Therapeutics appealed the decision of the PTAB with respect to the ‘793 Patent to the United States Court of Appeals for the Federal Circuit. In December 2023, the United States Court of Appeals for the Federal Circuit affirmed the earlier decision by the PTAB, which found all claims of the ‘793 Patent to be unpatentable due to the existence of prior art cited by us in inter partes review proceedings. In January 2024, United Therapeutics filed a request for rehearing of the decision by the United States Court of Appeals for the Federal Circuit. The request for rehearing was denied in March 2024. United Therapeutics has publicly stated that it plans to file a petition for a writ of certiorari to seek an appeal with the United States Supreme Court, but no such petition has been filed to date.

As a result of this decision by the United States Court of Appeals for the Federal Circuit with respect to the invalidity of the ‘793 Patent, in December 2023, the Company filed a motion for Judge Andrews to set aside the injunction he issued in the Original Hatch-Waxman Litigation. The motion was granted in March 2024, and the injunction on final approval by the FDA of YUTREPIA was set aside. United Therapeutics has appealed Judge Andrews’ decision to set aside the injunction to the Federal Circuit.

In connection with an amendment to our NDA filed in July 2023 to add PH-ILD as an indication for YUTREPIA, the Company provided a new notice of the paragraph IV certification to United Therapeutics as the owner of the patents that are the subject of the certification to which the NDA for YUTREPIA refers. As a result, in September 2023, United Therapeutics filed a second complaint for patent infringement against us in the U.S. District Court for the District of Delaware (Case No. 1:23-cv-00975-RGA) (the “New Hatch-Waxman Litigation”), again asserting infringement by the Company of the ‘793 Patent. In November 2023, the U.S. Patent and Trademark Office (the USPTO) issued U.S. Patent No. 11,826,327, or the ‘327 Patent, entitled “Treatment for Interstitial Lung Disease”, to United Therapeutics. On November 30, 2023, United Therapeutics filed an amended complaint in the New Hatch-Waxman Litigation asserting infringement of the ‘327 Patent by the practice of YUTREPIA based on the amended NDA. In January 2024, the Company filed an answer, counterclaims and a partial motion to dismiss the claims related to the ‘793 Patent as a result of the decision by the United States Court of Appeals for the Federal Circuit to affirm the PTAB’s finding that the ’793 patent is unpatentable. In February 2024, United Therapeutics stipulated to the dismissal of the claims in the New Hatch-Waxman Litigation related to the ‘793 Patent. In February 2024, United Therapeutics also filed a motion seeking a preliminary injunction to prevent us from manufacturing, marketing, storing, importing, distributing, offering for sale, and/or selling YUTREPIA for the treatment of PH-ILD. Briefing on the motion is complete and a hearing on the motion was held in April 2024. The motion remains pending.

FDA Litigation

In February 2024, United Therapeutics filed a complaint against the FDA in the U.S. District Court for the District of Columbia, challenging the FDA’s acceptance of our amended NDA for review (the “FDA Litigation”). The Company intervened and became a party to the lawsuit in March 2024. In March 2024, United Therapeutics filed a motion for a temporary restraining order in the FDA Litigation, seeking to enjoin the FDA from approving our NDA for YUTREPIA with respect to the indication to treat PH-ILD. United Therapeutics’ motion was denied in March 2024. On May 7, 2024, both the Company and the FDA filed motions to dismiss United Therapeutics’ complaint. Briefing on the motions to dismiss is in progress.

Trade Secret Litigation

In December 2021, United Therapeutics filed a complaint in the Superior Court in Durham County, North Carolina, alleging that the Company and a former United Therapeutics employee, who later joined the Company as an employee many years after terminating his employment with United Therapeutics, conspired to misappropriate certain trade secrets of United Therapeutics and engaged in unfair or deceptive trade practices. In January 2024, our co-defendant in the lawsuit filed a motion to dismiss all claims. The motion has been briefed and remains pending, with a hearing on the motion scheduled for May 16, 2024. Fact discovery in the case has concluded, and expert discovery is in process.

RareGen Litigation

In April 2019, Sandoz and Liquidia PAH (then known as RareGen) filed a complaint against United Therapeutics and Smiths Medical in the District Court of New Jersey (Case No. No. 3:19 cv 10170), (the “RareGen Litigation”), alleging that United Therapeutics and Smiths Medical violated the Sherman Antitrust Act of 1890, state law antitrust statutes and unfair competition statutes by engaging in anticompetitive acts regarding the drug treprostinil for the treatment of PAH. In March 2020, Sandoz and Liquidia PAH filed a first amended complaint adding a claim that United Therapeutics breached a settlement agreement that was entered into in 2015, in which United Therapeutics agreed to not interfere with Sandoz’s efforts to launch its generic treprostinil, by taking calculated steps to restrict and interfere with the launch of Sandoz’s competing generic product. United Therapeutics developed treprostinil under the brand name Remodulin® and Smiths Medical manufactured a pump and cartridges that are used to inject treprostinil into patients continuously throughout the day. Sandoz and Liquidia PAH allege that United Therapeutics and Smiths Medical entered into anticompetitive agreements (i) whereby Smiths Medical placed restrictions on the cartridges such that they can only be used with United Therapeutics’ branded Remodulin® product and (ii) requiring Smiths Medical to enter into agreements with specialty pharmacies to sell the cartridges only for use with Remodulin®.

In November 2020, Sandoz and Liquidia PAH entered into a binding term sheet (the “Term Sheet”) with Smiths Medical in order to resolve the outstanding RareGen Litigation solely with respect to disputes between Smiths Medical, Liquidia PAH and Sandoz. In April 2021, Liquidia PAH and Sandoz entered into a Long Form Settlement Agreement (the “Settlement Agreement”) with Smiths Medical to further detail the terms of the settlement among such parties as reflected in the Term Sheet. Pursuant to the Term Sheet and the Settlement Agreement, the former RareGen members and Sandoz received a payment of $4.25 million that was evenly split between the parties. In addition, pursuant to the Term Sheet and Settlement Agreement, Smiths Medical disclosed and made available to Sandoz and Liquidia PAH certain specifications and other information related to the cartridge that Smiths Medical developed and manufactures for use with the CADD-MS 3 infusion pump (the “CADD-MS 3 Cartridge”). Pursuant to the Settlement Agreement, Smiths Medical also granted Liquidia PAH and Sandoz a non-exclusive, royalty-free license in the United States to Smiths Medical’s patents and copyrights associated with the CADD-MS 3 Cartridge and certain other information for use of the CADD-MS 3 pump and the CADD-MS 3 Cartridges. Smiths also agreed in the Settlement Agreement to provide information and assistance in support of Liquidia PAH’s efforts to receive FDA clearance for the RG 3ml Medication Cartridge (the “RG Cartridge”) and to continue to service certain CADD-MS 3 pumps that are available for use with the Treprostinil Injection through January 1, 2025. Liquidia PAH and Sandoz agreed, among other things, to indemnify Smiths from certain liabilities related to the RG Cartridge.

In September 2021, United Therapeutics filed a motion for summary judgment with respect to all of the claims brought by Sandoz and Liquidia PAH against United Therapeutics. At the same time, Sandoz filed a motion for summary judgment with respect to the breach of contract claim. In March 2022, the Court issued an order granting partial summary judgment to United Therapeutics with respect to the antitrust and unfair competition claims, denying summary judgment to United Therapeutics with respect to the breach of contract claim, and granting partial summary judgment to Sandoz with respect to the breach of contract claim. A trial to determine the amount of damages due from United Therapeutics to Sandoz with respect to the breach of contract claim was held from late April to early May 2024. Closing arguments are scheduled for June 2024.

Under the Promotion Agreement, all proceeds from the litigation will be divided evenly between Sandoz and Liquidia PAH. Under the litigation finance agreements that Liquidia PAH has entered into with Henderson and PBM, any net

proceeds received by Liquidia PAH with respect to the RareGen Litigation will be divided between Henderson and PBM.

Condensed Consolidated Statements of Stockholders' Equity (unaudited) - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2022	$ 64	$ 440,954	$ (350,596)	$ 90,422
Balance (in shares) at Dec. 31, 2022	64,517,912
Issuance of common stock upon exercise of stock options		79	0	79
Issuance of common stock upon exercise of stock options (in shares)	21,447
Issuance of common stock upon vesting of restricted stock units	$ 1	(1)	0
Issuance of common stock upon vesting of restricted stock units (in shares)	89,804
Issuance of common stock under employee stock purchase plan		335	0	335
Issuance of common stock under employee stock purchase plan (in shares)	81,281
Stock-based compensation		2,552	0	2,552
Net loss			(11,745)	(11,745)
Balance at Mar. 31, 2023	$ 65	443,919	(362,341)	81,643
Balance (in shares) at Mar. 31, 2023	64,710,444
Balance at Dec. 31, 2022	$ 64	440,954	(350,596)	90,422
Balance (in shares) at Dec. 31, 2022	64,517,912
Balance at Dec. 31, 2023	$ 69	476,322	(429,098)	47,293
Balance (in shares) at Dec. 31, 2023	68,629,575
Issuance of common stock upon exercise of stock options		99	0	$ 99
Issuance of common stock upon exercise of stock options (in shares)	23,247			23,247
Issuance of common stock upon vesting of restricted stock units			0
Issuance of common stock upon vesting of restricted stock units (in shares)	383,133
Issuance of common stock under employee stock purchase plan		404	0	$ 404
Issuance of common stock under employee stock purchase plan (in shares)	67,982
Issuance of common stock upon exercise of warrants (in shares)	946
Issuance of common stock upon exercise of warrants			0
Sale of common stock, net	$ 7	74,861	0	74,868
Sale of common stock, net (in shares)	7,182,532
Stock-based compensation		4,524	0	4,524
Net loss			(40,928)	(40,928)
Balance at Mar. 31, 2024	$ 76	$ 556,210	$ (470,026)	$ 86,260
Balance (in shares) at Mar. 31, 2024	76,287,415

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 02, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-39724
Entity Registrant Name	LIQUIDIA CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-1710962
Entity Address, Address Line One	419 Davis Drive, Suite 100
Entity Address, City or Town	Morrisville
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27560
City Area Code	919
Local Phone Number	328-4400
Title of 12(b) Security	Common stock, $0.001 par value per share
Trading Symbol	LQDA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		76,382,718
Entity Central Index Key	0001819576
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

Commitments and Contingencies (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended
	Jul. 14, 2023	Jun. 30, 2023	Mar. 31, 2024
Non-cancelable commitments for product manufacturing and supply costs			$ 6.5
Pharmosa License Agreement
Upfront license fee to be paid		$ 10.0
Maximum potential development milestone payments		30.0
Maximum potential sales milestones		185.0
Milestone payments Pharmosa is to receive per terms of the license agreement		$ 10.0
Chasm Technologies
Maximum Net Sales Threshold As Basis For Payment Of Future Contingent Royalties			1.5
Net sales earned relating to payment of future contingent royalties			0.2
Agreement With LGM Pharma, LLC
Purchase Commitment, Remaining Minimum Amount Committed			$ 2.7
Expiration term of agreement			5 years
Amended and Restated Commercial Manufacturing Services and Supply Agreement with Lonza Tampa LLC
Initial term	5 years
Termination term for FDA rejection	60 days
Termination term for FDA delay	120 days
Percentage of reimburse	50.00%
Aggregate exceed	$ 2.5
Term of submission	24 months
Initial term	12 months

Stock-Based Compensation - Restricted Stock Units (Details) - Restricted Stock Units	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Unvested, number (in shares) \| shares	1,657,978
Unvested , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 6.41
Granted, number (in shares) \| shares	1,857,325
Granted , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 12.54
Vested , number (in shares) \| shares	(383,133)
Vested , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 6.42
Forfeited, number (in shares) \| shares	(2,277)
Forfeited , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 12.50
Unvested , number (in shares) \| shares	3,129,893
Unvested , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 10.04

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Schedule of stock-based compensation expense recognized for employees and non-employees


	Three Months Ended
	March 31,
By Expense Category:	2024		2023
Cost of revenue	$	64	$	—
Research and development		1,011		581
General and administrative		3,449		1,971
Total stock-based compensation expense	$	4,524	$	2,552

Schedule of unamortized compensation expense and weighted average remaining recognition period


	As of March 31, 2024
			Weighted
			Average
			Remaining
			Recognition
	Unamortized		Period
	Expense		(Years)
Stock options	$	13,698	2.0
Restricted and performance stock units	$	29,115	3.0

Schedule of assumptions used for estimating the fair value of stock options


	Three Months Ended
	March 31,
	2024	2023
Expected dividend yield	—	—
Risk-free interest rate	3.98%	3.46% - 3.64%
Expected volatility	90%	94% - 95%
Expected life (years)	6.1	5.9 - 6.1

Schedule of stock option activity


				Weighted
		Weighted		Average
		Average		Contractual	Aggregate
	Number of	Exercise		Term	Intrinsic
	Shares	Price		(in years)	Value
Outstanding as of December 31, 2023	9,573,937	$	4.80
Granted	7,500		12.86
Exercised	(23,247)		4.27
Cancelled	(3,000)		6.37
Outstanding as of March 31, 2024	9,555,190	$	4.81	7.5	$	95,040
Exercisable as of March 31, 2024	6,123,944	$	4.47	7.2	$	62,992
Vested and expected to vest as of March 31, 2024	9,069,464	$	4.76	7.5	$	90,617

Schedule of unvested RSU awards outstanding


		Weighted
		Average
		Grant-Date
	Number of	Fair Value
	RSUs	(per RSU)
Unvested as of December 31, 2023	1,657,978	$	6.41
Granted	1,857,325		12.54
Vested	(383,133)		6.42
Forfeited	(2,277)		12.50
Unvested as of March 31, 2024	3,129,893	$	10.04

Employee Stock Purchase Plan

Schedule of assumptions used for estimating the fair value of stock options


	Three Months Ended
	March 31,
	2024	2023
Expected dividend yield	—	—
Risk-free interest rate	5.27%	5.20%
Expected volatility	90%	64%
Expected life (years)	0.50	0.50

Leases - Remaining Lease Term and Discount Rates (Details)	Mar. 31, 2024
Leases
Weighted average remaining lease term, Operating leases	2 years 7 months 6 days
Weighted average remaining lease term, Finance leases	1 year
Weighted average discount rate, Operating leases	10.30%
Weighted average discount rate, Finance leases	6.50%

Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) $ / shares shares
Stock-Based Compensation
Outstanding, number of shares (in shares) \| shares	9,573,937
Outstanding, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.80
Granted, number of shares (in shares) \| shares	7,500
Granted, weighted average exercise price (in dollars per share) \| $ / shares	$ 12.86
Exercised, number of shares (in shares) \| shares	(23,247)
Exercised, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.27
Cancelled, number of shares (in shares) \| shares	(3,000)
Cancelled, weighted average exercise price (in dollars per share) \| $ / shares	$ 6.37
Outstanding, number of shares (in shares) \| shares	9,555,190
Outstanding, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.81
Outstanding, weighted average contractual term (Year)	7 years 6 months
Outstanding, aggregate intrinsic value \| $	$ 95,040
Exercisable, number of shares (in shares) \| shares	6,123,944
Exercisable, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.47
Exercisable, weighted average contractual term (Year)	7 years 2 months 12 days
Exercisable, aggregate intrinsic value \| $	$ 62,992
Vested and expected to vest, number of shares (in shares) \| shares	9,069,464
Vested and expected to vest, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.76
Vested and expected to vest, weighted average contractual term (Year)	7 years 6 months
Vested and expected to vest, aggregate intrinsic value \| $	$ 90,617

Revenue Interest Financing Payable

3 Months Ended

Mar. 31, 2024

Revenue Interest Financing Payable

Revenue Interest Financing Payable

12. Revenue Interest Financing Payable

On January 9, 2023, we entered into the RIFA with HCR and HealthCare Royalty Management, LLC, pursuant to which and subject to the terms and conditions contained therein, HCR agreed to pay us an aggregate investment amount of up to $100.0 million (the “Investment Amount”) in four tranches. On January 27, 2023, $32.5 million of the Investment Amount was funded from the first tranche, $22.2 million of which was used to satisfy existing obligations due to Silicon Valley Bank. This repayment resulted in a loss on extinguishment during the year ended December 31, 2023 of $2.3 million.

On June 28, 2023 and July 27, 2023, we entered into the Second Amendment to the RIFA and Third Amendment to the RIFA, respectively, pursuant to which HCR moved $2.5 million from the fourth tranche to the second tranche such that HCR would fund a total of $10.0 million of the Investment Amount under the second tranche. $10.0 million from the second tranche was funded on July 27, 2023.

On January 3, 2024, we entered into the Fourth Amendment to the RIFA pursuant to which HCR moved $25.0 million from the third tranche to the second tranche, such that the second tranche totals $35.0 million. The additional $25.0 million from the second tranche was funded on January 5, 2024. The remaining third tranche of $10.0 million and fourth tranche of $22.5 million can be funded in the future upon the mutual agreement of both parties.

As consideration for the Investment Amount and pursuant to the RIFA, we have agreed to pay HCR either (a) quarterly fixed payments and a one-time fixed payment or (b) a tiered royalty on our annual net revenue after the first commercial sale of YUTREPIA (the “Revenue Interests”) depending on whether the Third Investment Amount (as defined in the RIFA) has been funded.

We are currently required to make certain fixed quarterly payments to HCR which include an additional amount on a ratable basis to reflect the funding of additional amounts by HCR under the RIFA and a one-time fixed payment. As of March 31, 2024, we were required to pay $4.2 million within one year of the balance sheet date, which is classified as current in our condensed consolidated balance sheet. As a result of the Fourth Amendment, if the Third Investment Amount is not funded, our quarterly fixed payment will increase to $1.0 million beginning in the second quarter of 2024 and then to $5.8 million beginning in the third quarter of 2025 through 2028. Additionally, in the event that the Third

Investment Amount has not been funded by June 30, 2025, we will be obligated to pay an incremental one-time fixed payment of $23.8 million also during the third quarter of 2025.

If the Third Investment Amount is funded, the applicable tiered percentage will range from 3.60% to 10.28% on the first $250 million on annual net revenue, 1.44% to 4.11% on the next $250 million in annual net revenue, and 0.36% to 1.03% on all annual net revenue in excess of $500 million. The specific royalty rate within such ranges will depend upon the total amount advanced by HCR and our achievement of a certain annual net revenue threshold for the calendar year 2025.

If HCR has not received cumulative payments equaling at least 60% of the amount funded to date by December 31, 2026 or at least 100% of the amount funded to date by December 31, 2028, we will be obligated to make a cash payment to HCR immediately following each applicable date in an amount sufficient to achieve such percentage funded amounts to HCR giving full consideration of the cumulative amounts paid to HCR by us through each date.

HCR’s rights to receive the Revenue Interests will terminate on the date on which HCR has received payments equal to 175% of funded portion of the Investment Amount less the aggregate amount of all payments made to HCR as of such date (the “Hard Cap”), plus an amount, if any, that HCR would need to receive to yield an internal rate of return on the funded Investment Amount equal to 18% (the “IRR True-Up Payment”), unless the RIFA is earlier terminated. If a change of control occurs or upon the occurrence of an event of default, HCR may accelerate payments due under the RIFA up to the Hard Cap, plus the IRR True-Up Payment, plus any other obligations payable under the RIFA.

The RIFA contains customary affirmative and negative covenants and customary events of default and other events that would cause acceleration, including, among other things, the occurrence of certain material adverse events or the material breach of certain representations and warranties and specified covenants, in which event HCR may elect to terminate the RIFA and require us to make payments to HCR equal to the lesser of (a) the Hard Cap, plus any other obligations payable under the RIFA, or (b) the funded portion of the Investment Amount, minus payments received by HCR in respect of the Revenue Interests, plus the IRR True-Up Payment. If the FDA grants final approval to an inhaled treprostinil product therapeutically equivalent to YUTREPIA and HCR has not received 100% of the amount funded by HCR to date, then we will be required to make payments to HCR equal to 100% of the amount funded by HCR to date, minus payments received by HCR in respect of the Revenue Interests.

The RIFA contains certain restrictions on our ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, dispose of assets, pay dividends and distributions, subject to certain exceptions. In addition, the RIFA contains a financial covenant that requires us to maintain cash and cash equivalents in an amount at least equal to $7.5 million during the calendar year beginning on January 1, 2024 and at least equal to $15.0 million for the remainder of the payment term after the calendar year ended December 31, 2024.

As of the filing date of these condensed consolidated financial statements, we are not aware of any breach of covenants, or the occurrence of any material adverse event, nor have we received any notice of event of default from HCR.

The Fourth Amendment to the RIFA qualifies as a debt extinguishment and issuance of a new debt instrument in accordance with ASC 405-20, Extinguishments of Liabilities. We recorded a loss on extinguishment during the quarter ended March 31, 2024 of $11.5 million, equal to the fair value of the amended RIFA less the carrying value of the existing RIFA on January 5, 2024.

We recorded the total funds received from HCR of $42.5 million under the terms of the RIFA as a liability. The issuance costs, consisting primarily of legal fees, totaled $0.9 million and were recorded as a deduction of the carrying amount of the liability and are being amortized under the effective interest method over the estimated period the liability will be repaid. We estimated the total amount of payments over the life of the RIFA to determine the interest expense to record to accrete the liability to the amount ultimately due. For the three months ended March 31, 2024, we estimated an effective annual interest rate of approximately 12.3%. Over the course of the RIFA, the effective annual interest rate may be affected by potential changes in forecasted payments. On a quarterly basis, we will reassess the expected amount and timing of payments, recalculate the amortization and effective interest rate and adjust the accounting prospectively as needed.

The following table presents the changes in the RIFA payable during the three months ended March 31, 2024:


Balance as of December 31, 2023	$	46,033
Accretion		107
Amortization of issuance costs		2
Second tranche funding, net of fees		24,975
Balance as of January 5, 2024, prior to extinguishment	$	71,117
Loss on extinguishment		11,483
Balance as of January 5, 2024, after extinguishment	$	82,600
Accretion		2,412
Payments		(654)
Balance as of March 31, 2024	$	84,358
Less: current portion of revenue interest financing payable		(4,153)
Long-term portion of revenue interest financing payable	$	80,205

Inventory (Tables)

3 Months Ended

Mar. 31, 2024

Inventory

Schedule of inventory


	March 31,		December 31,
	2024		2023
Raw materials	$	1,303	$	—
Work in process		2,214		—
Inventory	$	3,517	$	—

Basis of Presentation, Significant Accounting Policies and Fair Value Measurements - Common Stock Equivalent Shares Excluded From Calculation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares)	13,004,006	11,442,575
Employee Stock Option
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares)	9,571,521	9,402,106
Restricted Stock Units
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares)	2,982,485	1,590,469
Warrants
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares)	450,000	450,000

Revenue Interest Financing Payable - Terms (Details) $ in Thousands								1 Months Ended	3 Months Ended		12 Months Ended
	Jan. 05, 2024 USD ($)	Jan. 04, 2024 USD ($)	Jan. 04, 2024 USD ($)	Jan. 03, 2024 USD ($)	Jul. 27, 2023 USD ($)	Jan. 27, 2023 USD ($)	Jan. 09, 2023 USD ($) tranche	Jul. 27, 2023 USD ($)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Revenue Interest Financing Payable
Amount of debt repaid with initial investment from RIFA										$ 2,190
Loss on extinguishment	$ 11,483								$ (11,483)	$ (2,311)	$ (2,300)
Amount funded under the second tranche		$ 24,975
Payments Due Third Quarter of 2025
Revenue Interest Financing Payable
One-time fixed payment amount				$ 23,800
Revenue Interest Financing Agreement
Revenue Interest Financing Payable
RIFA, maximum investment amount							$ 100,000
RIFA, number of tranches \| tranche							4
RIFA, initial investment amount						$ 32,500
RIFA, Hard Cap percentage							175
RIFA, internal rate of return							18.00%
Percentage of investment amount to be repaid on final approval							100
Percentage of investment amount to be paid							100
Minimum cash and cash equivalents required to be maintained during next year							$ 7,500
Minimum cash and cash equivalents required to be maintained after December 31, 2024							15,000
RIFA, total amount funded									42,500
Issuance costs									$ 900
Effective annual interest rate									12.30%
Revenue Interest Financing Agreement \| On First $250 Million of Annual Net Revenue
Revenue Interest Financing Payable
RIFA, annual net revenue, threshold							$ 250,000
Revenue Interest Financing Agreement \| On First $250 Million of Annual Net Revenue \| Minimum
Revenue Interest Financing Payable
RIFA, percentage of royalty payment on annual net revenue							3.60%
Revenue Interest Financing Agreement \| On First $250 Million of Annual Net Revenue \| Maximum
Revenue Interest Financing Payable
RIFA, percentage of royalty payment on annual net revenue							10.28%
Revenue Interest Financing Agreement \| On Second $250 Million of Annual Net Revenue
Revenue Interest Financing Payable
RIFA, annual net revenue, threshold							$ 250,000
Revenue Interest Financing Agreement \| On Second $250 Million of Annual Net Revenue \| Minimum
Revenue Interest Financing Payable
RIFA, minimum payment to be made, percentage							1.44%
Revenue Interest Financing Agreement \| On Second $250 Million of Annual Net Revenue \| Maximum
Revenue Interest Financing Payable
RIFA, minimum payment to be made, percentage							4.11%
Revenue Interest Financing Agreement \| In Excess of $500 Million of Annual Net Revenue
Revenue Interest Financing Payable
RIFA, annual net revenue, threshold							$ 500,000
Revenue Interest Financing Agreement \| In Excess of $500 Million of Annual Net Revenue \| Minimum
Revenue Interest Financing Payable
RIFA, Hard Cap percentage							0.36
Revenue Interest Financing Agreement \| In Excess of $500 Million of Annual Net Revenue \| Maximum
Revenue Interest Financing Payable
RIFA, Hard Cap percentage							1.03
Revenue Interest Financing Agreement \| Funding Amount by December 31, 2026
Revenue Interest Financing Payable
RIFA, minimum payment to be made, percentage							60.00%
Revenue Interest Financing Agreement \| Funding Amount by December 31, 2028
Revenue Interest Financing Payable
RIFA, minimum payment to be made, percentage							100.00%
Revenue Interest Financing Agreement \| A&R Silicon Valley Bank Term Loan
Revenue Interest Financing Payable
Amount of debt repaid with initial investment from RIFA						$ 22,200
Second and Third Amendments to Revenue Interest Financing Agreement
Revenue Interest Financing Payable
Amount moved from fourth tranche to second tranche								$ 2,500
Amount to be funded under the second tranche.								$ 10,000
Amount funded under the second tranche					$ 10,000
Fourth Amendment to Revenue Interest Financing Agreement
Revenue Interest Financing Payable
Amount to be funded under the second tranche.				35,000
Amount funded under the second tranche			$ 25,000
Amount moved from third tranche to second tranche				25,000
Amount to be funded under third tranche				10,000
Amount to be funded under fourth tranche				22,500
Fourth Amendment to Revenue Interest Financing Agreement \| Payments Beginning Second Quarter 2024
Revenue Interest Financing Payable
Quarterly fixed payment amount				1,000
Fourth Amendment to Revenue Interest Financing Agreement \| Payments Beginning Third Quarter of 2025 through 2028
Revenue Interest Financing Payable
Quarterly fixed payment amount				$ 5,800

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2024

Stockholders' Equity

Schedule of outstanding warrants


Number of
warrants	Exercise Price		Expiration Date
250,000	$	5.14	January 6, 2032
100,000	$	3.05	February 26, 2031
100,000	$	n/a¹	February 26, 2031
64,624	$	0.02	December 31, 2026

Revenue Interest Financing Payable - Summary (Details) - USD ($) $ in Thousands			3 Months Ended			12 Months Ended
	Jan. 05, 2024	Jan. 04, 2024	Mar. 31, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Revenue Interest Financing Payable
Beginning balance	$ 71,117	$ 46,033	$ 82,600	$ 46,033
Second tranche funding, net of fees		24,975
Loss on extinguishment	11,483			(11,483)	$ (2,311)	$ (2,300)
Accretion		107	2,412
Amortization of issuance costs		2
Payments			(654)	(654)
Ending balance	$ 82,600	$ 71,117	84,358	84,358		46,033
Less: current portion of revenue interest financing payable			(4,153)	(4,153)		(2,615)
Long-term portion of revenue interest financing payable			$ 80,205	$ 80,205		$ 43,418

Leases

3 Months Ended

Mar. 31, 2024

Leases

Leases

11. Leases

Operating Leases

We are party to a non-cancelable operating lease for our laboratory and office space in Morrisville, North Carolina. The lease expires on October 31, 2026 with an option to extend for an additional period of five years with appropriate notice. We have not included the optional extension period in the measurement of lease liabilities because it is not reasonably certain that we will exercise the option to extend. The payments under this lease are subject to escalation clauses. Operating lease cost is allocated between research and development and general and administrative expenses based on the usage of the leased facilities. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset.

Finance Leases

We lease specialized laboratory equipment under finance leases. We do not have access to certain inputs used by our lessors to calculate the rate implicit in our finance leases and, as such, use our estimated incremental borrowing rate at the time of lease inception for the discount rate applied to our finance leases. The incremental borrowing rate used on finance leases was 6.5%. Certain finance leases also include options to purchase the leased property. We recognize all such purchase options as part of our right-of-use assets and lease liabilities if we are reasonably certain that such purchase options will be exercised.

Lease Balances, Costs, and Future Minimum Payments

Leases with an initial term of 12 months or less are not recorded on the balance sheet. As of March 31, 2024, we have not entered into any short-term leases. For lease agreements entered into or reassessed after the adoption of ASC 842 Leases, we combine lease and non-lease components, if any. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Our lease cost is reflected in the accompanying condensed statements of operations and comprehensive loss as follows:


		Three Months Ended March 31,
	Classification	2024		2023
Operating lease cost:
Fixed lease cost	Research and development	$	175	$	176
Fixed lease cost	General and administrative		19		19
Finance lease cost:
Amortization of lease assets	Research and development		22		30
Interest on lease liabilities	Interest expense		2		5
Total Lease Cost		$	218	$	230

The weighted average remaining lease term and discount rates as of March 31, 2024 were as follows:


Weighted average remaining lease term (years):
Operating leases	2.6
Finance leases	1.0
Weighted average discount rate:
Operating leases	10.3	%
Finance leases	6.5	%

The discount rate for leases was estimated based upon market rates of collateralized loan obligations of comparable companies on comparable terms at the time of lease inception.

The future minimum lease payments as of March 31, 2024 were as follows:


	Operating		Finance
Year ending December 31:	Leases		Leases		Total
2024 (nine months remaining)	$	989	$	86	$	1,075
2025		1,356		64		1,420
2026		1,158		—		1,158
Total minimum lease payments		3,503		150		3,653
Less: interest		(418)		(5)		(423)
Present value of lease liabilities	$	3,085	$	145	$	3,230

Property, Plant, and Equipment - Schedule of Property, plant and equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Total property, plant and equipment	$ 20,843	$ 19,794
Accumulated depreciation and amortization	(15,267)	(15,314)
Property, plant and equipment, net	5,576	4,480
Lab and build-to-suit equipment
Total property, plant and equipment	6,756	6,834
Office equipment
Total property, plant and equipment	19	19
Furniture and fixtures
Total property, plant and equipment	241	241
Computer equipment
Total property, plant and equipment	487	487
Leasehold improvements
Total property, plant and equipment	11,374	11,409
Construction-in-progress
Total property, plant and equipment	$ 1,966	$ 804

Condensed Consolidated Balance Sheets (unaudited) (Parentheticals) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Condensed Consolidated Balance Sheets (unaudited)
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	76,287,415	68,629,575
Common stock, shares outstanding (in shares)	76,287,415	68,629,575

Business

3 Months Ended

Mar. 31, 2024

Business

Business

1. Business

Description of the Business

We are a biopharmaceutical company focused on the development, manufacture, and commercialization of products that address unmet patient needs, with current focus directed towards rare cardiopulmonary diseases such as pulmonary arterial hypertension (“PAH”) and pulmonary hypertension associated with interstitial lung disease (“PH-ILD”). We operate through our wholly owned operating subsidiaries, Liquidia Technologies, Inc. (“Liquidia Technologies”) and Liquidia PAH, LLC (“Liquidia PAH”), formerly known as RareGen, LLC (“RareGen”).

We currently generate revenue pursuant to a promotion agreement between Liquidia PAH and Sandoz Inc. (“Sandoz”), dated as of August 1, 2018, as amended (the “Promotion Agreement”), sharing profit derived from the sale of Sandoz’s substitutable generic treprostinil injection (“Treprostinil Injection”) in the United States. Liquidia PAH has the exclusive rights to conduct commercial activities to encourage the appropriate use of Treprostinil Injection. We employ a targeted sales force calling on physicians and hospital pharmacies involved in the treatment of PAH and PH-ILD in the United States, as well as key stakeholders involved in the distribution and reimbursement of medicines to treat these patients. We established our commercial presence in the field to support Treprostinil Injection and have since expanded our presence to support the potential launch of YUTREPIA upon final approval, further validating our reputation as a company committed to supporting PAH and PH-ILD patients.

We conduct research, development and manufacturing of novel products by applying our subject matter expertise in cardiopulmonary diseases and our proprietary PRINT® technology, a particle engineering platform, to enable precise production of uniform drug particles designed to improve the safety, efficacy and performance of a wide range of therapies. Through development of our own products and research with third parties, we have experience applying PRINT across multiple routes of administration and drug payloads including inhaled therapies, vaccines, biologics, nucleic acids and ophthalmic implants, among others.

Our lead product candidate is YUTREPIA for the treatment of PAH and PH-ILD. YUTREPIA is an inhaled dry powder formulation of treprostinil designed with PRINT to improve the therapeutic profile of treprostinil by enhancing deep lung delivery while using a convenient, low effort dry-powder inhaler (“DPI”) and by achieving higher dose levels than the labeled doses of current inhaled therapies. In November 2021, the United States Food and Drug Administration (“FDA”) tentatively approved our New Drug Application (“NDA”) for YUTREPIA for the treatment of PAH. In July 2023, we filed an amendment to our NDA to add PH-ILD to the label for YUTREPIA. We are currently awaiting final action by the FDA with respect to our NDA.

We are also developing L606, an investigational, liposomal formulation of treprostinil administered twice-daily with a short-duration next-generation nebulizer, which we licensed from Pharmosa. L606 is currently being evaluated in an open-label study in the United States for treatment of PAH and PH-ILD with a planned pivotal study for the treatment of PH-ILD.

Risks and Uncertainties

We are subject to risks and uncertainties common to companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on third parties and key personnel, protection of proprietary technology, compliance with government regulations, and the ability to secure additional capital to fund operations.

The current global macro-economic environment is volatile, which may result in supply chain constraints and elevated rates of inflation. In addition, we operate in a dynamic and highly competitive industry and believe that changes in any of the following areas could have a material adverse effect on our future financial position, results of operations, or cash

flows: the ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of our products; development of sales channels; certain strategic relationships; litigation or claims against us related to intellectual property, product, regulatory, or other matters; and our ability to attract and retain employees necessary to support our growth.

Product candidates we develop require approval from the FDA and/or other international regulatory agencies prior to commercial sales. There can be no assurance that our product candidates will receive the necessary approvals or, if we do, the indications for which our products will be approved. If we are denied approval, approval is delayed, approval is for less than all of the indications we are seeking, or we are unable to maintain approval, it could have a material adverse impact on our business, financial position and results of operations.

We rely on single source manufacturers and suppliers for the supply of our product candidates, adding to the manufacturing risks we face. In the event of any failure by a supplier, we could be left without backup facilities. Any disruption from these manufacturers or suppliers could have a negative impact on our business, financial position and results of operations.

Liquidity

In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. We have financed our growth and operations through a combination of funds generated from revenues, the issuance of convertible preferred stock and common stock, bank borrowings, bank borrowings with warrants, the issuance of convertible notes and warrants, and revenue interest financing. Since inception, we have incurred recurring losses, including a net loss of $40.9 million for the three months ended March 31, 2024. As of March 31, 2024, we had an accumulated deficit of $470.0 million.

We expect to incur significant expenses and operating losses for the foreseeable future as we conduct clinical development of product candidates and seek regulatory approval and prepare for commercialization of any approved product candidates. These efforts require significant amounts of capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. Even if our development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales. Additionally, the Revenue Interest Financing Agreement with HealthCare Royalty Partners IV, L.P. (“HCR”) dated January 9, 2023, as amended (the “RIFA”) contains fixed quarterly payments and minimum cash covenants that require us to maintain cash and cash equivalents in an amount at least equal to $7.5 million during the calendar year beginning on January 1, 2024 and at least equal to $15.0 million for the remainder of the payment term after the calendar year ended December 31, 2024.

Our future funding requirements will be heavily determined by the timing of the potential commercialization of YUTREPIA and the resources needed to support development of our product candidates. We may require additional capital to fund operations as well as to pursue in-licenses or acquisitions of other product candidates. If we determine we require but are unable to obtain additional funding, we could be required to delay, reduce, or eliminate research and development programs, product portfolio expansion, or future commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

Although we expect to continue to generate operating losses for the foreseeable future, we believe that based on our current operating plan, excluding any future YUTREPIA product revenue, our cash and cash equivalents will be sufficient to fund operations, capital expenditures, and RIFA quarterly fixed payment requirements and allow us to remain in compliance with our minimum cash covenants pursuant to the RIFA for at least twelve months from the issuance date of these condensed consolidated financial statements. If we have not received full FDA approval for both PAH and PH-ILD and begun product sales of YUTREPIA or are unable to access additional capital by the date of issuance of our second quarter 2024 financial statements, there could be substantial doubt about our ability to continue as a going concern as of that date. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Revenue From Contracts With Customers

3 Months Ended

Mar. 31, 2024

Revenue From Contracts With Customers

Revenue From Contracts With Customers

10. Revenue From Contracts With Customers

In August 2018, we entered into a Promotion Agreement with Sandoz under which we have the exclusive rights to conduct commercial activities to encourage the appropriate use of Treprostinil Injection for the treatment of patients with PAH in the United States. We paid Sandoz $20 million at the inception of the Promotion Agreement in consideration for these rights. In exchange for conducting these commercial activities, we are entitled to receive a share of Net Profits (as defined within the Promotion Agreement) based on specified profit levels. The share of Net Profits received is subject to adjustments from Sandoz for certain items, such as distributor chargebacks, rebates, inventory returns, inventory write-offs and other adjustments. We expect to refund certain amounts to Sandoz through a reduction of the cash received from future Net Profits generated under the Promotion Agreement. As of March 31, 2024, a $0.5 million refund liability is offset against accounts receivable from Sandoz related to expected refund amounts. Approximately 99% of revenue during the three months ended March 31, 2024 was generated from the Promotion Agreement.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
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+ Details

Contract Acquisition Costs and Intangible Asset (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Contract Acquisition Costs and Intangible Asset
Business Combination, Amortization Expense	$ 0.1	$ 0.2
Amortization of Intangible Assets, Total	$ 0.1	$ 0.1