Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 04, 2022 | Jun. 30, 2021 | |
Document and Entity Information | |||
Entity Central Index Key | 0001819576 | ||
Entity Registrant Name | LIQUIDIA CORPORATION | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-39724 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 61,668,021 | ||
Entity Common Stock, Shares Outstanding | 52,435,802 | ||
Auditor Firm ID | 238 | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | Raleigh, North Carolina |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 57,493,933 | $ 65,316,481 |
Accounts receivable, net | 2,989,717 | |
Prepaid expenses and other current assets | 792,381 | 752,447 |
Total current assets | 61,276,031 | 66,068,928 |
Property, plant and equipment, net | 5,017,394 | 6,805,570 |
Operating lease right-of-use assets, net | 2,412,025 | 2,649,328 |
Indemnification asset, related party | 6,281,874 | 1,387,275 |
Contract acquisition costs, net | 10,138,434 | 12,792,491 |
Intangible asset, net | 4,389,676 | 5,534,843 |
Goodwill | 3,903,282 | 3,903,282 |
Other assets | 310,503 | 390,043 |
Total assets | 93,729,219 | 99,531,760 |
Current liabilities: | ||
Accounts payable | 1,069,982 | 3,734,227 |
Accrued compensation | 3,156,787 | 3,259,515 |
Other accrued expenses | 2,014,487 | 1,386,880 |
Refund liability, net | 1,768,864 | |
Current portion of operating lease liabilities | 774,590 | 664,670 |
Current portion of finance lease liabilities | 310,949 | 923,218 |
Total current liabilities | 7,326,795 | 11,737,374 |
Litigation finance payable | 6,143,508 | 1,154,360 |
Long-term operating lease liabilities | 4,231,711 | 5,006,301 |
Long-term finance lease liabilities | 351,714 | 255,402 |
Long-term debt | 10,409,950 | 10,292,485 |
Total liabilities | 28,463,678 | 28,445,922 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock - 10,000,000 shares authorized as of December 31, 2021 and December 31, 2020, 0 shares issued and outstanding as of December 31, 2021 and December 31, 2020 | 0 | 0 |
Common stock - $0.001 par value, 80,000,000 shares authorized as of December 31, 2021 and December 31, 2020, 52,287,737 and 43,336,277 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 52,288 | 43,336 |
Additional paid-in capital | 374,794,120 | 346,044,721 |
Accumulated deficit | (309,580,867) | (275,002,219) |
Total stockholders' equity | 65,265,541 | 71,085,838 |
Total liabilities and stockholders' equity | $ 93,729,219 | $ 99,531,760 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
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) | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 52,287,737 | 43,336,277 |
Common stock, shares outstanding (in shares) | 52,287,737 | 43,336,277 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Operations and Comprehensive Loss | ||
Revenue | $ 12,853,345 | $ 739,628 |
Costs and expenses: | ||
Cost of revenue | 3,022,911 | 237,712 |
Research and development | 20,516,948 | 32,222,393 |
General and administrative | 23,110,529 | 27,368,653 |
Total costs and expenses | 46,650,388 | 59,828,758 |
Loss from operations | (33,797,043) | (59,089,130) |
Other income (expense): | ||
Interest income | 33,435 | 184,359 |
Interest expense | (815,040) | (857,998) |
Total other income (expense), net | (781,605) | (673,639) |
Net loss and comprehensive loss | $ (34,578,648) | $ (59,762,769) |
Net loss per common share, basic (in dollars per share) | $ (0.70) | $ (1.76) |
Net loss per common share, diluted (in dollars per share) | $ (0.70) | $ (1.76) |
Weighted average common shares outstanding, basic (in shares) | 49,677,737 | 33,888,434 |
Weighted average common shares outstanding, diluted (in shares) | 49,678,647 | 33,888,434 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 28,231 | $ 250,158,766 | $ (215,239,450) | $ 34,947,547 |
Balance (in shares) at Dec. 31, 2019 | 28,231,267 | |||
Issuance of common stock upon exercise of stock options | $ 40 | 67,876 | 0 | $ 67,916 |
Issuance of common stock upon exercise of stock options (in shares) | 40,685 | 91,413 | ||
Issuance of common stock under employee stock purchase plan | $ 5 | 19,410 | 0 | $ 19,415 |
Issuance of common stock under employee stock purchase plan (in shares) | 5,090 | |||
Issuance of common stock upon vesting of restricted stock units | $ 4 | (4) | 0 | |
Issuance of common stock upon vesting of restricted stock units (in shares) | 2,810 | |||
Sale of common stock, net | $ 9,506 | 71,006,892 | 0 | 71,016,398 |
Sale of common stock, net (in shares) | 9,506,425 | |||
Equity consideration for acquisition | $ 5,550 | 20,837,781 | 0 | 20,843,331 |
Equity consideration for acquisition (in shares) | 5,550,000 | |||
Stock-based compensation | 3,954,000 | 0 | 3,954,000 | |
Net loss | (59,762,769) | (59,762,769) | ||
Balance at Dec. 31, 2020 | $ 43,336 | 346,044,721 | (275,002,219) | 71,085,838 |
Balance (in shares) at Dec. 31, 2020 | 43,336,277 | |||
Issuance of common stock upon exercise of stock options | $ 14 | 41,061 | 0 | $ 41,075 |
Issuance of common stock upon exercise of stock options (in shares) | 14,699 | 14,758 | ||
Issuance of common stock upon exercise of common stock warrants (in shares) | 40,539 | |||
Issuance of common stock upon exercise of common stock warrants | $ 41 | (41) | 0 | |
Sale of common stock, net | $ 8,626 | 21,701,323 | 0 | $ 21,709,949 |
Sale of common stock, net (in shares) | 8,626,037 | |||
Issuance of warrants | 261,000 | 0 | 261,000 | |
Issuance of common stock under stock incentive plan (in shares) | 270,185 | |||
Issuance of common stock under stock incentive plan | $ 271 | (271) | 0 | |
Stock-based compensation | 6,746,327 | 0 | 6,746,327 | |
Net loss | (34,578,648) | (34,578,648) | ||
Balance at Dec. 31, 2021 | $ 52,288 | $ 374,794,120 | $ (309,580,867) | $ 65,265,541 |
Balance (in shares) at Dec. 31, 2021 | 52,287,737 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | ||
Net loss | $ (34,578,648) | $ (59,762,769) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 6,746,327 | 3,954,000 |
Depreciation and amortization | 5,611,879 | 3,129,579 |
Non-cash lease expense | 237,303 | 174,102 |
Loss on disposal of property and equipment | 43,954 | 10,802 |
Non-cash interest expense | 284,969 | 61,424 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,989,717) | 0 |
Prepaid expenses and other current assets | (39,934) | (132,007) |
Other non-current assets | 79,540 | (12,000) |
Accounts payable | (7,558,844) | (297,160) |
Accrued compensation | (102,728) | 42,312 |
Other accrued expenses | 663,774 | 180,736 |
Refund liability | (1,768,864) | (927,136) |
Operating lease liabilities | (664,670) | (566,390) |
Net cash used in operating activities | (34,035,659) | (54,144,507) |
Investing activities | ||
Cash acquired from acquisition of business | 0 | 1,000,000 |
Purchases of property, plant and equipment | (107,220) | (752,086) |
Net cash used in investing activities | (107,220) | 247,914 |
Financing activities | ||
Principal payments on finance leases | (477,170) | (1,122,356) |
Principal payments on long-term debt | (10,352,940) | (5,647,060) |
Proceeds from issuance of long-term debt with warrants, net | 10,410,269 | 0 |
Receipts from litigation financing | 4,989,148 | 507,849 |
Proceeds from sale of common stock, net of underwriting fees and commissions | 21,709,949 | 71,225,398 |
Payments for offering costs | 0 | (1,634,467) |
Proceeds from issuance of common stock under stock incentive plans | 41,075 | 87,332 |
Net cash provided by financing activities | 26,320,331 | 63,416,696 |
Net (decrease) increase in cash and cash equivalents | (7,822,548) | 9,520,103 |
Cash and cash equivalents, beginning of period | 65,316,481 | 55,796,378 |
Cash and cash equivalents, end of period | 57,493,933 | 65,316,481 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 423,230 | 820,889 |
Cash paid for operating lease liabilities | 1,207,708 | 1,172,759 |
Reduction of lease liability and right-of-use asset from lease modification | 38,787 | 0 |
Non-cash increase in indemnification asset through accounts payable | 4,894,599 | 321,737 |
Changes in purchases of property, plant and equipment in accounts payable and accrued expenses | $ 0 | $ 412,096 |
Business
Business | 12 Months Ended |
Dec. 31, 2021 | |
Business | |
Business | 1. Business Liquidia Corporation (“Liquidia” or the “Company”) is a biopharmaceutical company focused on the development, manufacturing, and commercialization of products that address unmet patient needs, with current focus directed towards the treatment of pulmonary hypertension (“PH”). Liquidia Corporation operates through its wholly owned operating subsidiaries, Liquidia Technologies, Inc. (“Liquidia Technologies”) and Liquidia PAH, LLC (“Liquidia PAH”), formerly known as RareGen, LLC (“RareGen”). The Company generates revenue primarily 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 the first-to-file fully 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. The Company employs a targeted sales force calling on physicians and hospital pharmacies involved in the treatment of pulmonary arterial hypertension (“PAH”) in the United States, as well as key stakeholders involved in the distribution and reimbursement of Treprostinil Injection. Strategically, the Company believes that its commercial presence in the field will enable an efficient base to expand from for the launch of YUTREPIA upon final approval, leveraging existing relationships and further validating its reputation as a company committed to supporting PAH patients. The Company conducts research, development and manufacturing of novel products by applying its 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. The Company’s lead product candidate, for which it holds worldwide commercial rights, is YUTREPIA for the treatment of PAH. YUTREPIA is an inhaled dry powder formulation of treprostinil designed to improve the therapeutic profile of treprostinil by enhancing deep lung delivery and achieving higher dose levels than current inhaled therapies. The Company’s New Drug Application (“NDA”) for YUTREPIA was tentatively approved by the Food and Drug Administration (“FDA”) in November 2021. The Company is 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 key personnel, protection of proprietary technology, compliance with government regulations, the impact of the COVID-19 coronavirus, and the ability to secure additional capital to fund operations. The Company expects to incur significant expenses and operating losses for the foreseeable future as it seeks regulatory approval and pursues commercialization of any approved product candidates. In addition, if the Company obtains marketing approval for any of its current or future product candidates, it would incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. Even if the Company's development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. If the Company is not able to generate significant revenues from the sale of YUTREPIA it will likely be required to raise additional funds through debt, equity or other forms of financing, such as potential collaboration arrangements. If the Company determines it requires but is unable to obtain funding, the Company could be required to delay, reduce, or eliminate research and development programs, product portfolio expansion, or future commercialization efforts, which could adversely affect its business prospects. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation, Summary of Significant Accounting Policies and Going Concern Basis of Presentation The Company has prepared the accompanying financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Such financial statements reflect all adjustments that are, in management’s opinion, necessary to present fairly, in all material respects, the Company’s financial position, results of operations and cash flows and are presented in U.S. Dollars. Going Concern The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business, and do not include any adjustments that may result from the outcome of this uncertainty. The Company has incurred recurring losses and negative cash flows from operations since inception and expects to continue to incur net losses and negative cash flows for the foreseeable future until such time, if ever, that it can generate significant revenues from the sale of YUTREPIA. Although the Company had approximately $57.5 million in cash and cash equivalents at December 31, 2021, the Company anticipates that it will continue to incur losses from operations due to pre-commercialization and commercialization activities, including expanding our sales force, manufacturing commercial batches of YUTREPIA, and building general and administrative infrastructure. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued. The Company’s net losses and cash expenditures may fluctuate significantly from quarter to quarter and year to year. The Company believes, based on its current operating plan and available borrowings under the A&R SVB LSA, excluding any potential contingent borrowings from the A&R SVB LSA and future YUTREPIA product revenue, that cash and cash equivalents will be sufficient to fund operations and remain in compliance with its minimum cash covenant of $27.5 million pursuant to the A&R SVB LSA into the fourth quarter of 2022. The Company has based these estimates on assumptions that may differ from actual results, and it could use its available capital resources sooner than it expects. If the Company is not able to generate significant revenues from the sale of YUTREPIA, the Company will likely be required to raise additional funds through debt, equity or other forms of financing, such as potential collaboration arrangements, to fund future operations and continue as a going concern. There can be no assurance that additional financing will be available when needed or on acceptable terms. If the Company is not able to generate significant revenues from the sale of YUTREPIA or to secure adequate additional funding, the Company will be forced to make reductions in spending, extend payment terms with suppliers, and/or suspend or curtail planned pre-commercialization activities. Any of these actions could materially harm the Company’s business, results of operations, financial condition, and future prospects. There can be no assurance that the Company will be able to generate revenue from sales of YUTREPIA, generate net income or generate positive cash flows from operations. Consolidation The accompanying consolidated financial statements include the Company’s wholly owned subsidiaries, Liquidia Technologies and Liquidia PAH. All intercompany accounts and transactions have been eliminated. 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 reasonable under the circumstances. The Company evaluates its estimates on an ongoing basis and makes changes to the estimates and related disclosures as experience develops or new information becomes known. Actual results will most likely differ from those estimates. Summary of Significant Accounting Policies Cash The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents as of December 31, 2021 were $ 57.5 million and included cash investments in money market funds of $ 56.5 million. Cash as of December 31, 2020 was $ 65.3 million and included no cash equivalents. Accounts Receivable Accounts receivable are stated at net realizable value including an allowance for credit losses as of each balance sheet date, if applicable. The Company did not record an allowance for credit losses during the years ended December 31, 2021 and 2020. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the condensed consolidated balance sheet. 100% of the Company’s cash and cash equivalents are held with Silicon Valley Bank (“SVB”). For the year ended December 31, 2021, one customer accounted for 99% of revenue. As of December 31, 2021, one customer accounted for 98% of the Company's accounts receivable. Leases ASC 842 Leases Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets beginning when the assets are placed in service. Estimated useful lives for the major asset categories are: Lab and build-to-suit equipment (years) 5 - 7 Office equipment (years) 5 Furniture and fixtures (years) 10 Computer equipment (years) 3 Leasehold improvements Lesser of life of the asset or remaining lease term Major renewals and improvements are capitalized to the extent that they increase the useful economic life or increase the expected economic benefit of the underlying asset. Maintenance and repairs are charged to operations as incurred. When items of property, plant and equipment are sold or retired, the related cost and accumulated depreciation or amortization is removed from the accounts, and any gain or loss is included in operating expenses in the accompanying Statements of Operations and Comprehensive Loss. Business Combination In a business combination, the acquisition method of accounting requires that the assets acquired and liabilities assumed be recorded as of the date of the acquisition at their respective fair values with limited exceptions. Assets acquired and liabilities assumed in a business combination that arise from contingencies are generally recognized at fair value. If fair value cannot be determined, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in the Company’s consolidated financial statements after the date of the acquisition. Long-Lived Assets The Company reviews 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. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, the Company performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, the Company groups 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 The Company recognized goodwill on its balance sheet during the fourth quarter of 2020 from the Merger Transaction (See Note 3). The Company assesses 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. The Company has one reporting unit. The Company has 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 As of December 31, 2021, the Company concluded there were no events or changes in circumstances that indicated that the carrying amount of goodwill was not recoverable. Revenue Recognition from Promotion Agreements The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) 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, the Company assesses the promised goods or services in the contract and identifies 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. The Company evaluates 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. The Company recognizes 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. On August 1, 2018, the Company partnered with Sandoz in the Promotion Agreement to launch the first-to-file generic of Treprostinil Injection for the treatment of patients with PAH. Under the Promotion Agreement, the Company provides certain promotional and nonpromotional activities on an exclusive basis for the product in the United States of America for the treatment of PAH, in exchange for a share of Sandoz’s net profits, as defined within the Promotion Agreement. In addition, the Company paid Sandoz $20 million at the inception of the Promotion Agreement, in consideration for the right to conduct the promotional activities for the product. In exchange for its services, the Company is entitled to receive a portion of net profits based on specified profit levels associated with the product. The Company determined that certain activities within the contract are within the scope of ASC 808, Collaborative Arrangements In addition, the Company determined that the services provided under the Promotion Agreement fall within the scope of Topic 606. The promotional activities the Company performs are one of the services the Company expects to provide as part of its ordinary activities, and it is receiving consideration for this service from Sandoz in the form of a share of “Net Profits” (as defined in the Promotion Agreement). The Company has one combined performance obligation under the Promotion Agreement, which is to perform promotional and non-promotional activities to encourage the appropriate use of the product in accordance with the product labeling and applicable law. As such, and in accordance with ASU 2018-18: Clarifying the Interaction between Topic 808 and Topic 606 Segment Information U.S. 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. The Company’s CODM is its Chief Executive Officer. The Company has determined that it has one operating and reporting segment. Research and Development Expense Research and development costs are expensed as incurred and include direct costs incurred to third parties related to the salaries of, and stock-based compensation for, personnel involved in research and development activities, contractor fees, administrative expenses and allocations of research-related overhead costs. Administrative expenses and research-related overhead costs included in research and development expense consist of allocations of facility and equipment lease charges, depreciation and amortization of assets and insurance directly related to research and development activities. Patent Maintenance The Company is responsible for all patent costs, past and future, associated with the preparation, filing, prosecution, issuance, maintenance, enforcement and defense of United States patent applications. Such costs are recorded as general and administrative expenses as incurred. To the extent that the Company’s licensees share these costs, such benefit is recorded as a reduction of the related expenses. Stock-Based Compensation The Company estimates the grant date fair value of its stock-based awards and amortizes this fair value to compensation expense over the requisite service period or vesting term (see Note 7). 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 for the years ended December 31, 2021 and 2020 does not include the following common stock equivalent shares: Year Ended December 31, 2021 2020 Stock Options 5,234,582 2,652,525 Restricted Stock Units 259,705 98,705 SVB Warrant 168,767 — Total 5,663,054 2,751,230 Fair Value of Financial Instruments The carrying values of cash, accounts receivable, and accounts payable at December 31, 2021 and 2020 approximated their fair value due to the short maturity of these instruments. The Company’s valuation of financial instruments is based on a three-tiered approach, which requires that fair value measurements be classified and disclosed in one of three tiers. 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 — Other than quoted prices included in Level 1 inputs 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 tables present the placement in the fair value hierarchy of financial liabilities measured at fair value as of December 31, 2021 and 2020: Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2021 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds $ 56,493,933 $ — $ — $ 56,493,933 Liabilities Silicon Valley Bank term loan $ — $ 10,020,931 $ — $ 10,409,950 Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2020 (Level 1) (Level 2) (Level 3) Value Liabilities Pacific Western Bank term loan $ — $ 9,842,069 $ — $ 10,292,485 The fair value of debt is measured in accordance with ASU 2016-01, Financial Instruments Overall: Recognition and Measurement of Financial Assets and Financial Liabilities Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such equity financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity as a reduction of proceeds generated as a result of the offering. Income Taxes The asset and liability method is used in the Company’s accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets when realization of the tax benefit is uncertain. A valuation allowance is recorded, if necessary, to reduce net deferred taxes to their realizable values if management believes it is more likely than not that the net deferred tax assets will not be realized. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued guidance that provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The Company adopted this guidance during the first quarter of 2021 and it did not have a material impact on its consolidated financial position, results of operations or cash flows. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options |
Acquisition of RareGen, LLC (no
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) | 12 Months Ended |
Dec. 31, 2021 | |
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) | |
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) | 3. Acquisition of RareGen LLC (now Liquidia PAH, LLC) On November 18, 2020 (the “Closing Date”), the Company completed the acquisition of RareGen as contemplated by the Agreement and Plan of Merger, dated as of June 29, 2020, as amended by a Limited Waiver and Modification to the Merger Agreement, dated as of August 3, 2020 (the “Merger Agreement”), by and among Liquidia Technologies, the Company, RareGen, Gemini Merger Sub I, Inc., a Delaware corporation (“Liquidia Merger Sub”), Gemini Merger Sub II, LLC, a Delaware limited liability company (“RareGen Merger Sub”), and PBM RG Holdings, LLC, a Delaware limited liability company (“PBM”). Pursuant to the Merger Agreement, Liquidia Merger Sub, a former wholly owned subsidiary of the Company, merged with and into Liquidia Technologies (the “Liquidia Technologies Merger”), and RareGen Merger Sub, a former wholly owned subsidiary of the Company, merged with and into RareGen (the “RareGen Merger” and, together with the Liquidia Technologies Merger, the “Merger Transaction”). Upon consummation of the Merger Transaction, the separate corporate existences of Liquidia Merger Sub and RareGen Merger Sub ceased and Liquidia Technologies and RareGen (now Liquidia PAH) continued as wholly owned subsidiaries of Liquidia Corporation. On the Closing Date, an aggregate of 5,550,000 shares of common stock, $0.001 par value per share (“Liquidia Corporation Common Stock”), were issued to RareGen members in exchange for 10,000 RareGen common units, representing all of the issued and outstanding RareGen equity. Additionally, on the Closing Date, an aggregate of 616,666 shares of Liquidia Corporation Common Stock were withheld from RareGen members to secure the indemnification obligations of RareGen members. Additionally, RareGen members received a pro rata portion of the RareGen cash at closing in excess of $1 million. RareGen members were also entitled to receive a pro rata portion of up to an additional 2,708,333 shares of Liquidia Corporation Common Stock in the aggregate in 2022, based on the amount of 2021 net sales of the generic treprostinil product (“Net Sales Earnout Shares”) owned by Sandoz, which RareGen markets pursuant to the Promotion Agreement. The 2021 net sales amount was not achieved, and the Net Sales Earnout Shares will not be issued. The fair value of the purchase consideration or the purchase price was approximately $20.8 million. Reasons for the Acquisition and Merger The Company acquired Liquidia PAH to improve financial strength and operational efficiencies including the generation of cash flow through sales of a generic version of Remodulin, which is a parenteral formulation of treprostinil, for the treatment of PAH. Strategically, the Company believes that its commercial presence in the field will enable an efficient launch of YUTREPIA upon approval, leveraging existing relationships and further validating its reputation as a company committed to supporting PAH patients. Merger Consideration The fair value of the purchase consideration or the purchase price, was approximately $20.8 million. The purchase consideration consisted of the 6,166,666 shares of Liquidia Corporation Common Stock based on a per share price of $3.38, which represented the closing price of Liquidia Technologies Common Stock on the Closing Date. 5,550,000 of the shares were issued as of December 31, 2020 and the remaining 616,666 shares were withheld from RareGen members to secure their indemnification obligations pursuant to the Merger Agreement. The total purchase price and allocated purchase price is summarized as follows: Number of common shares to be issued to RareGen’s members 6,166,666 Multiplied by the fair value per share of Liquidia Technologies common stock $ 3.38 Total estimated purchase price $ 20,843,331 Accounting for the Acquisition The acquisition of Liquidia PAH was accounted for as a business combination and reflects the application of acquisition accounting in accordance with ASC 805, Business Combinations Purchase Price Allocation The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed as of the Closing Date of November 18, 2020 based on their respective fair values summarized below: Cash $ 1,000,000 Property and equipment 79,330 Prepaid and other current assets 30,190 Intangible asset 5,620,000 Contract acquisition costs 12,980,000 Indemnification asset, related party 1,065,538 Goodwill 3,903,282 Less other current liabilities (492,499) Less refund liability (2,696,000) Less litigation finance payable, long-term (646,510) Total estimated purchase price $ 20,843,331 Liquidia PAH Results of Operations Liquidia PAH’s results of operations and cash flows are included in the Company’s consolidated financial statements for the period subsequent to November 18, 2020 through December 31, 2021, and Liquidia PAH’s assets and liabilities were recorded at their estimated fair values in the Company’s Consolidated Balance Sheets as of December 31, 2020. Liquidia PAH’s actual results for the period from the Closing Date November 18, 2020 through December 31, 2020, which are included in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2020 were as follows: Revenue $ 739,628 Costs and expenses: Cost of revenue 237,712 Research and development 35,919 General and administrative 216,787 Total costs and expenses 490,418 Total operating income and net income $ 249,210 Transaction Costs In connection with the Merger Transaction, the Company incurred significant one-time expenses in the year ended December 31, 2020 primarily including transaction costs (e.g., bankers’ fees, legal fees, consultant fees, etc.). Total transaction costs recorded in general and administrative expense totaled $4.8 million for the year ended December 31, 2020. Supplemental Pro Forma Financial Information The following unaudited pro forma financial information assumes the companies were combined as of January 1, 2019. The unaudited pro forma financial information as presented below is for informational purposes only and is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information. This is not necessarily indicative of the results of operations that would have been achieved if the Merger Transaction had taken place on January 1, 2019, nor is it necessarily indicative of future results. Consequently, actual results could differ materially from the unaudited pro forma financial information presented below. The following table presents the pro forma operating results as if Liquidia PAH had been included in the Company’s Consolidated Statements of Operations as of January 1, 2019 (unaudited): Year Ended December 31, 2020 Revenue $ 4,756,625 Net loss $ (57,406,967) Net loss per common share, basic and diluted $ (1.48) |
Contract Acquisition Costs, Int
Contract Acquisition Costs, Intangible Asset, and Goodwill | 12 Months Ended |
Dec. 31, 2021 | |
Contract Acquisition Costs, Intangible Asset, and Goodwill | |
Contract Acquisition Costs, Intangible Asset, and Goodwill | 4. Contract Acquisition Costs, Intangible Asset, and Goodwill Contract acquisition costs and the Intangible asset consist of the total value assigned to the Promotion Agreement (see Note 3 for Purchase Price Allocation). The Company is 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 the date of the Merger Transaction through May 2027, the termination date of the Promotion Agreement (see Note 2 for Revenue Recognition accounting policy). Amortization of contract acquisition costs is recorded as a reduction of revenue and amortization of the intangible asset is recorded as cost of revenue. During the years ended December 31, 2021 and 2020, the Company recorded total amortization of $2,654,057 and $187,509, respectively, from the contract acquisition costs as a reduction in revenue. Net contract acquisition costs totaled $10,138,434 and $12,792,491 as of December 31, 2021 and December 31, 2020, respectively. During the years ended December 31, 2021 and 2020, the Company recorded total amortization of $1,145,167 and $85,157, respectively, from the intangible asset as cost of revenue. Net intangible asset totaled $4,389,676 and $5,534,843 as of December 31, 2021 and December 31, 2020, respectively. The Company recognized goodwill in the Merger Transaction of $3,903,282 which primarily represents the Liquidia PAH assembled workforce and the residual value of the purchase consideration and assumed liabilities that exceeded the assets acquired (see Note 2 for Goodwill accounting policy). None of the goodwill recognized is expected to be deductible for income tax purposes. |
Indemnification Asset with Rela
Indemnification Asset with Related Party and Litigation Finance Payable | 12 Months Ended |
Dec. 31, 2021 | |
Indemnification Asset with Related Party and Litigation Finance Payable | |
Indemnification Asset with Related Party and Litigation Finance Payable | 5. 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”) and, prior to entering into a binding settlement term sheet with Smiths Medical ASC in November 2020, were pursuing litigation against Smiths Medical. 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, 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. PBM is considered to be a related party as it is controlled by a major stockholder (which beneficially owns approximately 9.9% of Liquidia Corporation Common Stock as of March 4, 2022) who is also a member of the Company’s Board of Directors. Under the terms of the Indemnification Agreement, PBM now controls the litigation, with Liquidia PAH’s primarily 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 United Therapeutics and Smiths Medical ASC 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 the Company records third party legal and litigation expenses related to the United Therapeutics and Smiths Medical ASC litigation. As of December 31, 2021 and December 31, 2020, the Indemnification Asset and Litigation Finance Payable were classified as long-term assets and liabilities, respectively as it is considered unlikely that the litigation would conclude prior to December 31, 2022. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 6. Stockholders’ Equity Authorized Capital As of December 31, 2021, the authorized capital of the Company consists of 90,000,000 shares of capital stock, $0.001 par value per share, of which 80,000,000 shares are designated as common stock and 10,000,000 shares are designated as preferred stock. Common Stock Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of the common stock shall be entitled to receive that portion of the remaining funds to be distributed to the stockholders, subject to the liquidation preferences of any outstanding preferred stock, if any. Such funds shall be paid to the holders of common stock on the basis of the number of shares so held by each of them. Issuance of Common Stock on April 13, 2021 from a Private Placement On April 12, 2021, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with a fund and account managed by Caligan Partners LP and certain other accredited investors for the sale by the Company in a private placement (the “Private Placement”) of an aggregate of 8,626,037 shares of the Company’s Common Stock at a purchase price of $2.52 per share. The Private Placement closed on April 13, 2021 and the Company received gross proceeds of approximately $21.7 million. The Company intends to use the proceeds from the Private Placement to strengthen its commercial capability for the introduction of YUTREPIA and the subcutaneous administration of Treprostinil Injection, for growth initiatives, and for general corporate purposes. Issuance of Common Stock on July 2, 2020 from an Underwritten Public Offering On June 29, 2020, Liquidia Technologies entered into an underwriting agreement (the “Underwriting Agreement”) with Jefferies LLC, as representative of the several underwriters named therein (collectively, the “Underwriters”), pursuant to which 9,375,000 shares of Liquidia Technologies common stock were sold in an underwritten registered public offering at an offering price of $8.00 per Share (the “Offering”). The Offering closed on July 2, 2020. The gross proceeds from the offering were $75.0 million and net proceeds were $70.3 million, after deducting underwriting discounts and commissions and other offering expenses. The Company used and intends to use the net proceeds from this Offering for ongoing commercial development of YUTREPIA, for development of LIQ865 and for general corporate purposes. The Company’s management will retain broad discretion over the allocation of the net proceeds. Issuance of Common Stock from the ATM Agreement Commencing in August 2019 Liquidia Technologies entered into a sales agreement (the “ATM Agreement”) with Jefferies LLC (“Jefferies”) to issue and sell shares of Liquidia Technologies common stock, having an aggregate offering price of up to $40.0 million, from time to time during the term of the ATM Agreement, through an “at-the-market” equity offering program at Liquidia Technologies’ sole discretion, under which Jefferies acted as Liquidia Technologies’ agent and/or principal. Liquidia Technologies paid Jefferies a commission equal to 3.0% of the gross proceeds of any common stock sold through Jefferies under the ATM Agreement. During the year ended December 31, 2020, Liquidia Technologies sold 131,425 shares of common stock for net proceeds of $0.7 million after deducting underwriting discounts and other offering expenses under the ATM Agreement. Warrants During the year ended December 31, 2021, 40,702 warrants to purchase shares of common stock were exercised. During the year ended December 31, 2020, no warrants to purchase shares of common stock were exercised. As of December 31, 2021, outstanding warrants consisted of the following: Number of warrants Exercise Price Expiration Date SVB Warrant - Initial Tranche (see Note 13) 100,000 $ 3.05 February 26, 2031 SVB Warrant - Term B and Term C Tranches (see Note 13) 100,000 $ n/a February 26, 2031 Other warrants 65,572 $ 0.02 December 31, 2026 As of December 31, 2020 outstanding warrants consisted of the following: Number of warrants Exercise Price Expiration Date Other warrants 106,274 $ 0.02 December 31, 2026 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation. | |
Stock-Based Compensation | 7. Stock-Based Compensation The Company’s 2020 Long-Term Incentive Plan (the “2020 Plan”) was approved by stockholders in November 2020. The 2020 Plan replaced the 2018 Plan as the Company’s primary long-term incentive program. In addition to stock options, the 2020 Plan provides for the granting of stock appreciation rights, stock awards, stock units, and other stock-based awards. The 2020 Plan provides for accelerated vesting under certain change of control transactions. A total of 1,700,000 shares of the Company’s common stock was initially authorized and reserved for issuance under the 2020 Plan. This reserve will automatically increase each subsequent anniversary of January 1 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, 2022, the number of shares of common stock available for issuance under the 2020 Plan automatically increased by 2,091,509 shares to 3,023,579 shares from 932,070 pursuant to the Evergreen Provision. The Company’s 2018 Long-Term Incentive Plan (the “2018 Plan”) was approved by stockholders in July 2018. In addition to stock options, the 2018 Plan provided for the granting of stock appreciation rights, stock awards, stock units, and other stock-based awards. The 2018 Plan provides for accelerated vesting under certain change of control transactions. The 2018 Plan was discontinued following stockholder approval of the 2020 Plan, but the outstanding awards under the 2018 Plan will continue to remain in effect in accordance with its terms. Shares that are returned under the 2018 Plan upon cancellation, termination or otherwise of awards outstanding under the 2018 Plan will not be available for grant under the 2020 Plan. As of December 31, 2021, the Company had reserved for issuance 877,855 shares of common stock under the 2018 Plan, representing the remaining outstanding options and restricted stock units granted under the 2018 Plan. The 2018 Plan replaced the 2016 and 2004 Plans as the Company’s primary long-term incentive program. The 2016 and 2004 Plans were discontinued following stockholder approval of the 2018 Plan, but the outstanding awards under the 2016 and 2004 Plans will continue to remain in effect in accordance with their terms. Shares that are returned under the 2016 and 2004 Plans upon cancellation, termination or otherwise of awards outstanding under the 2016 and 2004 Plans will not be available for grant under the 2020 or 2018 Plans. As of December 31, 2021, the Company had reserved for issuance 301,979 shares of common stock under the 2016 Plan and 195,979 shares of common stock under the 2004 Plan, representing the remaining outstanding options granted under the 2016 and 2004 Plans. During December 2020, the Company issued a stock option grant to its new chief executive officer (the “New CEO”) to purchase up to 2,000,000 shares of the Company’s common stock (the “New CEO Option”) at the exercise price on the grant date of $3.00 per share. The New CEO Option was issued outside of the 2020 Plan, and vests as follows: 500,000, or 25%, vested on November 5, 2021 upon achievement of the acceleration event related to the Company’s receipt of tentative approval by the U.S. Food and Drug Administration (the “FDA”) of the Company’s New Drug Application for YUTREPIA; 375,000, or 25% of the then-unvested portion of the New CEO Option, vested on November 11, 2021 upon achievement of the acceleration event related to the commercial availability of the subcutaneous Treprostinil product with cartridge supplies sufficient to support the market for one year; 500,000, or 25%, vested on December 14, 2021, the first anniversary of the grant date; the balance of the New CEO Option will become vested and exercisable over the following third-six months, subject to the New CEO’s continuous employment with the Company, which ended on January 31, 2022. During the year ended December 31, 2021, $1,973,563 was recorded as stock-compensation expense associated with the achievement of the aforementioned acceleration events. Stock-Based Compensation Valuation and Expense The Company accounts for its employee stock-based compensation plans using the fair value method. The fair value method requires the Company to estimate the grant-date fair value of its 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 the Company’s 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. The Company recorded the following stock-based compensation expense: Year Ended December 31, By Expense Category: 2021 2020 Research and development $ 1,922,653 $ 1,099,000 General and administrative 4,823,674 2,855,000 Total stock-based compensation expense $ 6,746,327 $ 3,954,000 Year Ended December 31, By Type of Award: 2021 2020 Stock options $ 5,995,237 $ 3,817,000 Restricted stock units 751,090 137,000 Total stock-based compensation expense $ 6,746,327 $ 3,954,000 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 December 31, 2021 Weighted Average Remaining Recognition Unamortized Period Expense (Years) Stock options $ 6,133,835 2.9 Restricted stock units $ 49,517 2.2 Stock Options The following table summarizes the assumptions used for estimating the fair value of stock options granted under the Black-Scholes option-pricing model during: Year Ended December 31, 2021 2020 Expected dividend yield — — Risk-free interest rate 0.62% - 1.67% 0.40% - 1.60% Expected volatility 91% - 96% 87% - 94% Expected life (years) 5.2 - 6.1 5.8 - 6.2 As a result of using these assumptions in the Black-Scholes option-pricing model, the weighted average fair value for options granted during the years ended December 31, 2021 and 2020 was $2.23 and $2.78 per share, respectively. The following describes each of these assumptions and the Company’s methodology for determining each assumption: Expected Dividend Yield: The dividend yield percentage is zero because the Company neither currently pays dividends nor intends to do so during the expected option term. Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield curve approximating the term of the expected life of the award in effect on the date of grant. Expected Volatility: Expected stock price volatility is based on a weighted average of several peer public companies and the historical volatility of the Company’s common stock during the period for which it has traded since the initial public offering. For purposes of identifying peer companies, the Company considered characteristics such as industry, length of trading history and similar vesting terms. Expected Life: The expected life represents the period the awards are expected to be outstanding. The Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term because of a lack of sufficient data. Therefore, the Company estimates the expected term by using the simplified method. The following table summarizes the Company’s stock option activity, including the CEO Option, during the year ended December 31, 2021: Weighted Weighted Average Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value Outstanding as of December 31, 2020 4,692,071 $ 5.51 Granted 2,023,950 2.72 Exercised (14,758) 2.85 Cancelled (1,103,254) 7.10 Outstanding as of December 31, 2021 5,598,009 $ 4.19 8.1 $ 8,761,969 Exercisable as of December 31, 2021 3,131,403 $ 4.76 7.3 $ 4,348,315 Vested and expected to vest as of December 31, 2021 5,579,988 $ 4.18 8.1 $ 8,747,263 The aggregate intrinsic value of stock options in the table above represents the difference between the $4.87 closing price of the Company’s common stock as of December 31, 2021 and the exercise price of outstanding, exercisable, and vested and expected to vest in-the-money stock options. The following table summarizes information about the Company’s stock options as of December 31, 2021: Weighted Average Exercise Price or Range of Exercise Contractual Life Price Options Outstanding (Years) Options Exercisable $2.42 to $2.54 973,893 9.4 454,893 $2.56 to $2.97 1,008,787 9.2 218,198 $3.00 2,000,000 9.0 1,375,000 $3.14 to $4.71 622,574 6.5 325,443 $4.72 to $9.31 596,502 5.3 433,937 $10.04 to $21.36 396,253 4.4 323,932 5,598,009 8.1 3,131,403 Additional information related to our stock options is summarized below: December 31, 2021 2020 Intrinsic value of options exercised $ 21,361 $ 176,433 Fair value of options vested $ 6,169,000 $ 4,178,659 During the years ended December 31, 2021 and 2020, 14,758 and 91,413 stock options were exercised for the purchase of shares of common stock for total cash proceeds of $41,075 and $43,141, respectively. Restricted Stock Unit Awards Restricted Stock Units (“RSUs”) represent the right to receive shares of common stock of the Company at the end of a specified time period or upon the achievement of a specific milestone. RSUs can only be settled in shares of the Company’s common stock. During the year ended December 31, 2021, the Board of Directors approved grants of an aggregate of 334,015 performance-based RSUs to employees that vested upon the tentative approval by the FDA of the Company’s New Drug Application for YUTREPIA. This performance milestone was achieved during November 2021, resulting in a charge of $754,941 to stock based compensation during the year ended December 31, 2021. During March 2020, the Board of Directors approved grants of an aggregate of 138,464 non-performance-based RSUs to employees. RSUs represent the right to receive shares of common stock of the Company at the end of a specified time period. The RSUs vest over a four-year period similar to stock options granted to employees. A summary of nonvested RSU awards outstanding as of December 31, 2021 and changes during the year then ended is as follows: Weighted Average Grant-Date Number of Fair Value RSUs (per RSU) Nonvested as of December 31, 2020 88,131 $ 4.68 Granted 334,015 2.97 Vested (270,185) 2.99 Forfeited (136,757) 3.99 Nonvested as of December 31, 2021 15,204 $ 3.31 Employee Stock Purchase Plan In November 2020, stockholders approved the Liquidia Corporation 2020 Employee Stock Purchase Plan (the “2020 ESPP”). A total of 300,000 shares of the Company’s common stock were initially reserved for issuance under the 2020 ESPP. This reserve will automatically increase each subsequent anniversary of January 1 through 2030, by an amount equal to the smaller of (a) 1% 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 (the “Evergreen Provision”). On January 1, 2022, the number of shares of common stock available for issuance under the 2020 ESPP increased by 150,000 to 600,000 pursuant to the Evergreen Provision. The initial six-month offering period commenced on September 1, 2021 and will be followed by successive six-month offering periods. The 2020 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions, subject to plan limitations. During the initial six-month offering period, the Company’s common stock will be purchased for the accounts of employees participating in the 2020 ESPP at a price per share that is 85% of the Fair Market Value of a share of Stock on the Offering Date of the Offering Period. During future offering periods, the price per share will be equal to 85% of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock on the Purchase Date. fair market value of the Company’s common stock on the last trading day of the offering period. |
License Agreements
License Agreements | 12 Months Ended |
Dec. 31, 2021 | |
License Agreements | |
License Agreements | 8. License Agreements The Company performs 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, the Company holds an exclusive license to certain research and development technologies and processes in various stages of patent pursuit, for use in its 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, the Company is 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. The Company 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. |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contracts With Customers | |
Revenue From Contracts With Customers | 9. Revenue From Contracts With Customers On August 1, 2018, the Company partnered with Sandoz in the Promotion Agreement to launch the first-to-file generic of Treprostinil Injection for the treatment of patients with PAH. Under the Promotion Agreement, the Company provides certain promotional and nonpromotional activities on an exclusive basis for the product in the United States of America for the treatment of PAH. In addition, the Company paid Sandoz $20 million at the inception of the Promotion Agreement, in consideration for the right to conduct the promotional and nonpromotional activities for the product. In exchange for its services, the Company is entitled to receive a portion of net profits, as defined within the Promotion Agreement, based on specified profit levels associated with the product. See Note 2 for Revenue Recognition accounting policy. The Company derived approximately 99% of its revenue from the Promotion Agreement during the year ended December 31, 2021. Refund Liability In accordance with the Promotion Agreement, Liquidia PAH receives consideration from Sandoz in the form of a share of Net Profits for the promotional activities it performs. The share of Net Profits received is subject to adjustments from Sandoz for items such as distributor chargebacks, rebates, inventory returns, inventory write-offs and other adjustments (the “Net Profits Adjustment”). The Company expects to refund certain amounts to Sandoz through a reduction of the cash received from future Net Profits generated under the Promotion Agreement. As of December 31, 2021, a $526,491 refund liability is offset against accounts receivable from Sandoz related to net service revenues recognized during the year ended December 31, 2021. As of December 31, 2020, $927,136 of accounts receivable from Sandoz related to net service revenues was offset against the refund liability. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 10. Property, Plant and Equipment Property, plant and equipment consisted of the following: December 31, December 31, 2021 2020 Lab and build-to-suit equipment $ 6,599,508 $ 7,499,645 Office equipment 18,762 31,205 Furniture and fixtures 177,577 257,774 Computer equipment 347,632 404,558 Leasehold improvements 11,456,986 11,524,738 Construction-in-progress — 65,820 Total property, plant and equipment 18,600,465 19,783,740 Accumulated depreciation and amortization (13,583,071) (12,978,170) Property, plant and equipment, net $ 5,017,394 $ 6,805,570 The Company recorded depreciation and amortization expense of $1,812,655 and $2,856,914 for the years ended December 31, 2021 and 2020, respectively. Maintenance and repairs are expensed as incurred and were $110,608 and $194,192, respectively, for the years ended December 31, 2021 and 2020. The following table details the activity of Construction in Progress (“CIP”) in 2021 and 2020 and the associated transfer to Leasehold Improvements, Laboratory Equipment and Computer Software when the assets were placed in service: Leasehold Build-to-suit Lab Improvements Equipment Equipment Total Balance as of December 31, 2019 $ — $ — $ 91,797 $ 91,797 Add: Acquired in Merger Transaction — 65,820 — 65,820 Less: Transfer due to being placed in service — — (91,797) (91,797) Balance as of December 31, 2020 — 65,820 — 65,820 Less: Transfer due to being placed in service — (65,820) — (65,820) Balance as of December 31, 2021 $ — $ — $ — $ — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 11. Income Taxes No provision for federal and state income tax expense has been recorded for the years ended December 31, 2021 and 2020 due to the valuation allowance recorded against the net deferred tax asset and recurring losses. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows as of December 31, 2021 and 2020: 2021 2020 Deferred income tax assets: Tax loss carryforwards $ 57,301,955 $ 54,844,147 Research and development credits 4,203,773 3,995,782 Share-based compensation 3,213,345 1,501,172 Lease liability 1,626,744 1,576,326 Compensation 799,448 193,490 Fixed assets 249,998 17,421 Refund liability — 620,442 Patent amortization 324,786 76,017 Accrued litigation costs 1,641,583 265,659 Settlement reserve 140,682 — Other 1,763 1,763 Valuation allowance (66,986,990) (61,595,499) Total deferred income tax assets 2,517,087 1,496,720 Deferred income tax liabilities: Section 481(a) adjustment 48,317 62,420 Intangible assets 1,678,555 675,866 Right of use asset 790,215 758,434 Total deferred income tax liabilities 2,517,087 1,496,720 Total net deferred tax $ — $ — As of December 31, 2021 and 2020, the Company established a full valuation allowance against its net deferred tax assets since, at the time, the Company could not assert that it was more likely than not that its deferred tax assets would be realized. As a result, there was an increase in the valuation allowance in 2021 of approximately $5,391,500. As of December 31, 2021, the Company had federal and state income tax loss carryforwards of $264,871,600 and $293,749,200, respectively, which begin to expire in 2024 for federal purposes and in 2021 for state purposes. In addition, the Company has tax credit carryforwards for federal tax purposes of approximately $4,659,200 as of December 31, 2021, which begin to expire in 2026. The utilization of net operating loss and tax credit carryforwards to reduce future income taxes will depend on the Company’s ability to generate sufficient taxable income prior to the expiration of the loss carryforwards. The Internal Revenue Code of 1986, as amended, contains provisions which limit the ability to utilize the net operating loss carryforwards in the case of certain events, including significant changes in ownership interests. If the Company’s net operating loss carryforwards are limited, and the Company has taxable income which exceeds the permissible yearly net operating loss carryforwards, the Company would incur a federal income tax liability even though net operating loss carryforwards would be available in future years. The reasons for the difference between actual income tax expense for the years ended December 31, 2021 and 2020 and the amount computed by applying the statutory federal income tax rate to income before income tax are as follows: 2021 2020 % of % of Pretax Pretax Amount Earnings Amount Earnings Income tax benefit at statutory rate $ (7,261,318) 21 % $ (12,550,174) 21 % State income taxes, net of federal tax benefit (2,625,563) 7.6 (1,203,286) 2 Non-deductible expenses — — 2,929 — Stock-based compensation 286,226 (0.8) 247,011 (0.4) Transaction costs — — 573,494 (1.0) Credits (261,735) 0.8 (978,793) 1.6 Change in state rate 4,454,297 (12.9) (667) — Other 16,602 (0.1) (70,721) 0.1 Change in valuation allowance 5,391,491 (15.6) 13,980,207 (23.3) Provision for income taxes $ — — % $ — — % The Company has determined that there may be a future limitation on the Company’s ability to utilize its entire federal R&D credit carryover. Therefore, the Company recognized an uncertain tax benefit associated with the federal R&D credit carryover during the years ended December 31, 2021 and 2020, as follows: Balance at December 31, 2019 $ 158,710 Increases related to 2020 244,698 Balance at December 31, 2020 403,408 Increases related to 2021 51,999 Balance at December 31, 2021 $ 455,407 The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Company has determined that it had no other material uncertain tax benefits for the year ended December 31, 2020. The Company’s policy for recording interest and penalties related to uncertain tax provisions is to record them as a component of the provision for income taxes. The Company did not have any accrued interest or penalties associated with any unrecognized tax positions as of December 31, 2021 and 2020, and there were no such interest or penalties recognized during the years ended December 31, 2021 and 2020. On November 18, 2021, North Carolina enacted the 2021 Appropriations Act, which included a gradual corporate income tax rate decrease from the current 2.5% to 0% by 2030. The Company is in a cumulative loss position and does not have significant deferred tax liabilities that can be utilized as a source of taxable income in the future. The Company has reduced its deferred tax asset related to North Carolina NOLs to zero, as no benefit is expected to be realized from these deferred tax assets prior to 2030 when there would be no income tax in North Carolina. The reduction in the value of the deferred tax assets resulted in $5.1 million of tax expense, which was fully offset by the reduction in the corresponding valuation allowance. If the Company becomes profitable prior to 2030, the Company will recognize an income tax benefit related to the portion of its deferred tax asset related to North Carolina NOLs utilized. The Company has all tax years open to examination by federal tax and state tax jurisdictions. No income tax returns are currently under examination by taxing authorities. |
Leases, Commitments and Conting
Leases, Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Leases, Commitments and Contingencies | |
Leases, Commitments and Contingencies | 12. Leases, Commitments and Contingencies Leases The Company leases certain laboratory space, office space, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company combines lease and non-lease components, if any. Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to purchase the leased property. Consistent with past practice and current intent, the Company has recognized all such purchase options as part of its right-of-use assets and lease liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company conducts its operations from leased facilities of approximately 45,000 square feet in Morrisville, North Carolina with a lease expiration date of October 31, 2026. In addition, the Company leases specialized laboratory equipment under finance leases. 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. The Company does not have access to certain inputs used by its lessors to calculate the rate implicit in its finance leases. As such, the Company utilized its estimated incremental borrowing rate for the discount rate applied to its finance leases. The original incremental borrowing rate used on finance leases was 7.5%. During February 2021, the Company exercised the lease purchase option for certain finance leases that had expired and entered into a lease modification agreement with its existing lessor for certain other finance leases. The modification resulted in an increase in the remaining lease term of between 24 and 48 months as well as a decrease in the monthly payments associated with the respective modified leases. The incremental borrowing rate used on the modified leases was 6.5%. The lease modification had an immaterial impact on the Company’s condensed consolidated financial statements. The Company’s lease cost is reflected in the accompanying Statements of Operations and Comprehensive Loss as follows: Year Ended December 31, Classification 2021 2020 Operating lease cost General and administrative $ 780,470 $ 780,470 Finance lease cost: Amortization of lease assets General and administrative 266,720 1,356,307 Interest on lease liabilities Interest expense 42,841 125,659 Total Lease Cost $ 1,090,031 $ 2,262,436 The weighted average remaining lease term and discount rates as of December 31, 2021 were as follows: Weighted average remaining lease term (years): Operating leases 4.8 Finance leases 2.4 Weighted average discount rate: Operating leases 10.3 % Finance leases 6.5 % The discount rate for operating leases was estimated based upon market rates of collateralized loan obligations of comparable companies on comparable terms. The future minimum lease payments as of December 31, 2021 were as follows: Operating Finance Year ending December 31: Leases Leases Total 2022 $ 1,243,934 $ 342,762 $ 1,586,696 2023 1,283,253 195,350 1,478,603 2024 1,316,540 114,727 1,431,267 2025 1,355,923 64,161 1,420,084 2026 1,157,807 — 1,157,807 Total minimum lease payments 6,357,457 717,000 7,074,457 Less: Interest (1,351,156) (54,337) (1,405,493) Present value of lease liabilities $ 5,006,301 $ 662,663 $ 5,668,964 Other Commitments and Contingencies In March 2012, the Company entered into an agreement, as amended, with Chasm Technologies, Inc. for manufacturing consulting services related to the Company’s manufacturing capabilities during the term of the agreement. The Company agreed to pay future contingent milestones and royalties on net sales totaling no more than $1,500,000, none of which has been earned as of December 31, 2021. The Company enters 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, the Company can elect to discontinue the work under these agreements at any time. In addition, the Company has entered into a multi-year agreement with LGM Pharma, LLC (LGM) to produce active pharmaceutical ingredients for YUTREPIA. Under the manufacturing agreement with LGM, the Company is required to provide rolling forecasts, a portion of which will be considered a binding, firm order, subject to an annual minimum purchase commitment of $3,050,000 for the term of the agreement. The agreement expires five years from the first marketing authorization approval of YUTREPIA. This minimum commitment was waived for the year ending December 31, 2022. Contingencies The Company from time-to-time is subject to claims and litigation in the normal course of business, none of which the Company believes represent a risk of material loss or exposure. See Note 15 for further discussion of pending legal proceedings. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2021 | |
Long-term Debt | |
Long-term Debt | 13. Long-Term Debt Long-term debt consisted of the following as of December 31, 2021 and 2020: December 31, December 31, Maturity Date 2021 2020 Pacific Western Bank term loan October 25, 2022 $ — $ 10,292,485 Silicon Valley Bank term loan September 1, 2024 10,409,950 — Long-term debt $ 10,409,950 $ 10,292,485 During 2020, the Company, Liquidia Merger Sub and RareGen Merger Sub entered into a Joinder and Second Amendment to Amended and Restated Loan and Security Agreement, dated as of October 26, 2018 (the “A&R LSA”), with Pacific Western Bank (“PWB”). The A&R LSA included interest only payments through December 2019 with principal and interest payments beginning in January 2020 and was scheduled to mature in October 2022. The Company and its two wholly owned subsidiaries, Liquidia Technologies and Liquidia PAH, entered into a Loan and Security Agreement with SVB on February 26, 2021 (the “Effective Date”) and a First Loan Modification Agreement with SVB on August 26, 2021 (the “SVB LSA”). The Loan and Security Agreement, as amended by the First Loan Modification Agreement, is referred to as the “SVB LSA.” The SVB LSA established a term loan facility in the aggregate principal amount of up to $20.5 million (the “Term Loan Facility”). An initial $10.5 million (the “Term A Loan”) was funded on March 1, 2021 and was used to satisfy the Company’s existing obligations under the A&R LSA, consisting of approximately $9.4 million in outstanding principal and interest, and such obligations are considered fully repaid and terminated as of that date, with the excess proceeds funded to the Company. The Company accounted for the repayment of the A&R LSA in accordance with ASC 405, Extinguishments of Liabilities In connection with the SVB LSA, the Company issued to SVB a warrant, dated as of the Effective Date (the “SVB Warrant”) to purchase up to 200,000 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), of which (x) 100,000 shares vested on the Effective Date, with an exercise price per share equal to $3.05 (the “Initial Tranche”), and (y) 50,000 shares shall become exercisable on each of the Term B Loan Funding Date and Term C Loan Funding Date (if these events occur), with an exercise price per share equal to the lower of (i) the trailing 10-day average price of the Common Stock on the applicable funding date and (ii) the closing price per share of Common Stock on the trading day prior to applicable funding date (the “Term B and C Tranches”). The Company evaluated the features of the SVB LSA and SVB Warrant in accordance with ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The Company determined that the SVB LSA and SVB Warrant did not contain any features that would qualify as a derivative or embedded derivative. In addition, the Company determined that the SVB Warrant should be classified as equity. The value of the SVB Warrant is included in Additional Paid-in-Capital in the Company’s condensed consolidated balance sheet as of December 31, 2021. The estimated fair value of the SVB Warrant of was calculated using the Black-Scholes Option Pricing Model based on the following inputs: Expected dividend yield — Risk-free interest rate 1.43% Expected volatility 90.8% Expected life (years) 10.0 On January 7, 2022, the Company and its two wholly owned subsidiaries, Liquidia Technologies and Liquidia PAH, entered into an Amended and Restated Loan and Security Agreement with SVB and SVB Innovation Credit Fund VIII, L.P (the “A&R SVB LSA”). The A&R SVB LSA provides the Company with up to $40.0 million in term loans of which the first $20.0 million was funded January 7, 2022. See Note 16 for additional details regarding the A&R SVB LSA. |
Defined Contribution Retirement
Defined Contribution Retirement Plan | 12 Months Ended |
Dec. 31, 2021 | |
Defined Contribution Retirement Plan | |
Defined Contribution Retirement Plan | 14. Defined Contribution Retirement Plan The Company maintains a defined contribution 401(k) retirement plan for its employees, pursuant to which employees who have completed sixty days of service may elect to contribute a portion of their compensation on a tax-deferred basis up to the maximum amount permitted by the Internal Revenue Code. The Company provides a 4% matching contribution to eligible employee contributions. Matching contributions are paid subsequent to the year to which they relate. The Company’s matching contributions for the years ended December 31, 2021 and 2020 were $321,804 and $416,345, respectively, and such amounts were included in Accrued Compensation on the Consolidated Balance Sheets as of December 31, 2021 and 2020, respectively. |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2021 | |
Legal Proceedings | |
Legal Proceedings | 15. 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 “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. In July 2020, the Company filed an answer to United Therapeutics’ complaint and also included counterclaims of invalidity, non-infringement, and Orange Book de-listing of the ‘901 Patent and ‘066 Patent. United Therapeutics seeks a judgment that the asserted patents are infringed and an injunction of FDA final approval and subsequent commercial launch of YUTREPIA product until after the latest to expire asserted patent. United Therapeutics’ complaint is in response to the Company’s NDA for YUTREPIA, filed with the FDA, requesting approval to market YUTREPIA, a dry powder inhalation 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. Under the Hatch-Waxman Act, the FDA is automatically precluded from approving the YUTREPIA NDA for up to 30 months until October 2022, absent an earlier judgment unfavorable to United Therapeutics by the court. Although the Company believes its YUTREPIA dry powder inhaler for the treatment of PAH is highly differentiated from Tyvaso®, since the Company is seeking approval of the YUTREPIA NDA under the 505(b)(2) regulatory pathway, the YUTREPIA NDA is subject to the provisions of the Hatch-Waxman Act. 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 also filed an amended complaint in the Hatch-Waxman Litigation asserting infringement of the ‘793 Patent by the practice of YUTREPIA. The infringement allegation of the ‘793 Patent is separate from the 30-month regulatory stay on final approval of the NDA for YUTREPIA, which is only associated with the infringement allegations of the ‘901 Patent and the ‘066 Patent. United Therapeutics’ motion to dismiss the Company’s invalidity defenses and counterclaims concerning the ‘793 Patent was denied by the U.S. District Court for the District of Delaware in November 2020. In June 2021, Judge Andrews, presiding over the Hatch-Waxman Litigation, held a claim construction hearing. Following the claim construction hearing, the Court issued orders that three of the terms under consideration would be given their plain and ordinary meaning and ruling in our favor regarding the other two terms. Based on the Court’s construction of the 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 our non-infringement of the ’901 Patent. United Therapeutics preserved its appellate rights with respect to the ‘901 Patent in the event the Court’s construction of those terms is reversed. With this stipulation of partial judgment, only the ‘066 Patent now serves as a basis for the on-going regulatory stay for final approval of YUTREPIA by the FDA. Trial is scheduled for March 28-30, 2022, with closing arguments to follow on March 31, 2022. In March 2020, the Company filed two petitions for inter partes inter partes inter partes inter partes inter partes inter partes In January 2021, the Company filed a petition for inter partes inter partes 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. The claims are substantially similar to the claims that United Therapeutics previously sought to add to the Hatch-Waxman Litigation. In January 2022, the Company’s co-defendant in the lawsuit removed the lawsuit to the United States District Court for the Middle District of North Carolina. Subsequently, in January 2022, United Therapeutics filed an amended complaint eliminating their claim under the federal Defend Trade Secrets Act and seeking to have the case remanded to North Carolina state court. The motion to remand remains under consideration by the Court. The Company continues to disagree with United Therapeutics’ allegations, deny any liability for misappropriation of any trade secrets or for engaging in any unfair or deceptive trade practices and intend to vigorously defend against these allegations. Liquidia PAH-Related 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 “UTC/Smiths Medical 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 January 2020, the Court denied Liquidia PAH’s and Sandoz’s motion for a preliminary injunction and United Therapeutics’ and Smiths Medicals’ motion to dismiss. 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 UTC/Smiths Medical 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 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. As of the date of this Annual Report on Form 10-K, the UTC/Smiths Medical Litigation is ongoing. 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. The motion for summary judgment remains under consideration by the Court. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events Roger Jeff’s Appointment as Chief Executive Officer Effective January 3, 2022 (the “Jeffs Effective Date”), Roger A. Jeffs, Ph.D. was appointed as the Company’s Chief Executive Officer, succeeding Damian deGoa, the Company’s former Chief Executive Officer. Dr. Jeffs will also continue to serve as a director on the Board. In connection with Dr. Jeffs’ appointment, on the Jeffs Effective Date, the Company and Dr. Jeffs entered into an executive employment agreement (the “Jeffs Employment Agreement”) pursuant to which Dr. Jeffs is entitled to an annual base salary of $650,000 and is eligible to receive a discretionary annual cash bonus of up to 50% of his annualized base salary. Dr. Jeffs is also entitled to a quarterly bonus, beginning in 2023 through the end of the last calendar quarter in 2025, equal in the aggregate to the difference (only if positive) between the per share closing price of a share of common stock, $0.001 par value per share, of the Company (“Common Stock”) on the date which the Second Tranche Option (as defined below) is granted minus the per share closing price of Common Stock on the Jeffs Effective Date multiplied by 931,745. On the Jeffs Effective Date, pursuant to the Jeffs Employment Agreement, Dr. Jeffs was granted a nonstatutory stock option entitling the purchase up to 1,682,827 shares (the “Sign-On Option”) of Common Stock, with an exercise price per share equal to the closing price of a share of Common Stock on the date of grant. Subject to the terms and conditions of the Jeffs Employment Agreement, Dr. Jeffs is also entitled to a grant of a nonstatutory stock option to purchase up to 931,745 shares (the “Second Tranche Option” and together with the Sign-On Option, the “Options”) of Common Stock, with an exercise price per share equal to the closing price of share of Common Stock on the date of grant. The Options shall (i) be granted under and subject to the terms of the Company’s 2020 Long-Term Incentive Plan (the “Plan”) and a form of nonstatutory stock option grant agreement, and (ii) be subject to the following vesting schedule: 25% of the grant will become vested and exercisable on the first anniversary of the Jeffs Effective Date, and the remaining portion of the grant will become vested and exercisable, as applicable, in equal monthly installments over the following thirty-six (36) months, subject to Dr. Jeffs’ continuous employment with the Company on each such vesting date. Notwithstanding the foregoing, in the event of a Change in Control (as defined in the Plan) then 100% of the unvested portion of the Options shall become vested and exercisable as of the closing date of such Change in Control, provided that Dr. Jeffs is actively employed with the Company on such date. Amended and Restated Loan and Security Agreement On January 7, 2022 (the “A&R SVB Effective Date”), the Company, Liquidia Technologies, and Liquidia PAH entered into an Amended and Restated Loan and Security Agreement with SVB and SVB Innovation Credit Fund VIII, L.P. (“Innovation”) (the “A&R SVB LSA”), which provides the Company with up to $40.0 million in term loans of which $20.0 million was funded on the A&R SVB Effective Date. The prior SVB LSA had provided up to $20.5 million in term loans of which $10.5 million had been funded as of December 31, 2021 and the A&R SVB Effective Date. Under the terms of the A&R SVB LSA, SVB will make loans available in three tranches. Proceeds from the first tranche of $20.0 million were used to retire the loans outstanding under the prior SVB LSA and added $9.5 million of cash to the Company’s balance sheet. The first tranche also provides the option of drawing an additional $5.0 million at the Company’s discretion through December 31, 2022. A second tranche of $7.5 million is available to fund immediately upon receipt of final and unconditional approval for YUTREPIA by December 31, 2022. The third tranche of $7.5 million will be available through August 31, 2023, upon generating trailing six-month net product sales of YUTREPIA of $27.5 million by June 30, 2023. The debt facility will mature on December 1, 2025 and will consist of interest-only payments through December 31, 2023, unless the third tranche milestone is achieved, in which case interest-only payments will continue through December 31, 2024. The outstanding principal amount of the term loans shall accrue interest at a floating rate per annum equal to the greater of (1) seven and one-quarter of one percent (7.25%) and (2) the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal plus four percent (4.0%). The A&R SVB LSA contains customary affirmative and negative covenants and customary events of default, including, among other things, the occurrence of a material adverse change, which is defined as a material impairment in the perfection or priority of the lien in the Company’s assets that serve as collateral or the value of such collateral, a material adverse change in the Company’s business, operations, or condition (financial or otherwise), or a material impairment of the prospect of repayment of any portion of the loan. In the event of default by the Company or a declaration of material adverse change by its lender, under the Term Loan, the lender would be entitled to exercise its remedies thereunder, including the right to accelerate the debt, upon which the Company may be required to repay all amounts then outstanding under the A&R SVB LSA, which could materially harm the Company’s financial condition. The A&R SVB LSA also contains certain financial covenants, including maintaining a minimum cash balance of $27.5 million prior to funding of the second tranche. After funding of the second tranche, the Company must either have a minimum cash balance of 150% of the then-outstanding cash balance or meet other minimum market capitalization or minimum revenue requirements. As of the filing date of this Annual Report on Form 10-K, the Company was not aware of any breach of covenants, occurrence of material adverse change, nor had it received any notice of event of default from SVB. As an inducement to enter into the A&R SVB LSA, the Company issued to each of SVB, Innovation, and Innovation Credit Fund VIII-A L.P. (“Innovation Credit”) certain warrants to purchase shares of the Company’s common stock pursuant to the Warrant to Purchase Stock agreements by and between the Company and each recipient (collectively, the “SVB Warrants”). The grant of warrants under the respective SVB Warrants provided (i) SVB with the initial right to obtain 125,000 shares of the Company’s stock at an exercise price of $5.14 a share, and there is an opportunity for SVB to obtain up to 50,000 more warrants based on certain loans that may be made under the A&R SVB LSA, (ii) Innovation with the initial right to obtain 62,500 shares of the Company’s stock at an exercise price of $5.14 a share, and there is an opportunity for Innovation to obtain up to 25,000 more warrants based on certain loans that may be made under the Loan Agreement, and (iii) Innovation Credit with the initial right to obtain 62,500 shares of the Company’s stock at an exercise price of $5.14 a share, and there is an opportunity for Innovation Credit to obtain up to 25,000 more warrants based on certain loans that may be made under the Loan Agreement. The SVB Warrants provide an option for a cashless exercise. 2022 Inducement Plan On January 25, 2022, the Board approved the adoption of the Company’s 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 without stockholder approval pursuant to Rule 5635(c)(4) of the rules and regulations of The Nasdaq Stock Market, LLC (the “Nasdaq Listing Rules”). The Board has reserved 310,000 shares of the Company's common stock for issuance pursuant to equity awards 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 (or any subsidiary of the Company), or following a bona fide period of non-employment by the Company (or a subsidiary of the Company), if he or she is granted such equity awards in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Company has prepared the accompanying financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Such financial statements reflect all adjustments that are, in management’s opinion, necessary to present fairly, in all material respects, the Company’s financial position, results of operations and cash flows and are presented in U.S. Dollars. |
Going Concern | Going Concern The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business, and do not include any adjustments that may result from the outcome of this uncertainty. The Company has incurred recurring losses and negative cash flows from operations since inception and expects to continue to incur net losses and negative cash flows for the foreseeable future until such time, if ever, that it can generate significant revenues from the sale of YUTREPIA. Although the Company had approximately $57.5 million in cash and cash equivalents at December 31, 2021, the Company anticipates that it will continue to incur losses from operations due to pre-commercialization and commercialization activities, including expanding our sales force, manufacturing commercial batches of YUTREPIA, and building general and administrative infrastructure. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued. The Company’s net losses and cash expenditures may fluctuate significantly from quarter to quarter and year to year. The Company believes, based on its current operating plan and available borrowings under the A&R SVB LSA, excluding any potential contingent borrowings from the A&R SVB LSA and future YUTREPIA product revenue, that cash and cash equivalents will be sufficient to fund operations and remain in compliance with its minimum cash covenant of $27.5 million pursuant to the A&R SVB LSA into the fourth quarter of 2022. The Company has based these estimates on assumptions that may differ from actual results, and it could use its available capital resources sooner than it expects. If the Company is not able to generate significant revenues from the sale of YUTREPIA, the Company will likely be required to raise additional funds through debt, equity or other forms of financing, such as potential collaboration arrangements, to fund future operations and continue as a going concern. There can be no assurance that additional financing will be available when needed or on acceptable terms. If the Company is not able to generate significant revenues from the sale of YUTREPIA or to secure adequate additional funding, the Company will be forced to make reductions in spending, extend payment terms with suppliers, and/or suspend or curtail planned pre-commercialization activities. Any of these actions could materially harm the Company’s business, results of operations, financial condition, and future prospects. There can be no assurance that the Company will be able to generate revenue from sales of YUTREPIA, generate net income or generate positive cash flows from operations. |
Consolidation | Consolidation The accompanying consolidated financial statements include the Company’s wholly owned subsidiaries, Liquidia Technologies and Liquidia PAH. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | 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 reasonable under the circumstances. The Company evaluates its estimates on an ongoing basis and makes changes to the estimates and related disclosures as experience develops or new information becomes known. Actual results will most likely differ from those estimates. |
Cash | Cash The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents as of December 31, 2021 were $ 57.5 million and included cash investments in money market funds of $ 56.5 million. Cash as of December 31, 2020 was $ 65.3 million and included no cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at net realizable value including an allowance for credit losses as of each balance sheet date, if applicable. The Company did not record an allowance for credit losses during the years ended December 31, 2021 and 2020. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the condensed consolidated balance sheet. 100% of the Company’s cash and cash equivalents are held with Silicon Valley Bank (“SVB”). For the year ended December 31, 2021, one customer accounted for 99% of revenue. As of December 31, 2021, one customer accounted for 98% of the Company's accounts receivable. |
Leases | Leases ASC 842 Leases |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets beginning when the assets are placed in service. Estimated useful lives for the major asset categories are: Lab and build-to-suit equipment (years) 5 - 7 Office equipment (years) 5 Furniture and fixtures (years) 10 Computer equipment (years) 3 Leasehold improvements Lesser of life of the asset or remaining lease term Major renewals and improvements are capitalized to the extent that they increase the useful economic life or increase the expected economic benefit of the underlying asset. Maintenance and repairs are charged to operations as incurred. When items of property, plant and equipment are sold or retired, the related cost and accumulated depreciation or amortization is removed from the accounts, and any gain or loss is included in operating expenses in the accompanying Statements of Operations and Comprehensive Loss. |
Business Combination | Business Combination In a business combination, the acquisition method of accounting requires that the assets acquired and liabilities assumed be recorded as of the date of the acquisition at their respective fair values with limited exceptions. Assets acquired and liabilities assumed in a business combination that arise from contingencies are generally recognized at fair value. If fair value cannot be determined, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in the Company’s consolidated financial statements after the date of the acquisition. |
Long-Lived Assets | Long-Lived Assets The Company reviews 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. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, the Company performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, the Company groups 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 | Goodwill The Company recognized goodwill on its balance sheet during the fourth quarter of 2020 from the Merger Transaction (See Note 3). The Company assesses 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. The Company has one reporting unit. The Company has 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 As of December 31, 2021, the Company concluded there were no events or changes in circumstances that indicated that the carrying amount of goodwill was not recoverable. |
Revenue Recognition from Promotion Agreements | Revenue Recognition from Promotion Agreements The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) 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, the Company assesses the promised goods or services in the contract and identifies 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. The Company evaluates 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. The Company recognizes 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. On August 1, 2018, the Company partnered with Sandoz in the Promotion Agreement to launch the first-to-file generic of Treprostinil Injection for the treatment of patients with PAH. Under the Promotion Agreement, the Company provides certain promotional and nonpromotional activities on an exclusive basis for the product in the United States of America for the treatment of PAH, in exchange for a share of Sandoz’s net profits, as defined within the Promotion Agreement. In addition, the Company paid Sandoz $20 million at the inception of the Promotion Agreement, in consideration for the right to conduct the promotional activities for the product. In exchange for its services, the Company is entitled to receive a portion of net profits based on specified profit levels associated with the product. The Company determined that certain activities within the contract are within the scope of ASC 808, Collaborative Arrangements In addition, the Company determined that the services provided under the Promotion Agreement fall within the scope of Topic 606. The promotional activities the Company performs are one of the services the Company expects to provide as part of its ordinary activities, and it is receiving consideration for this service from Sandoz in the form of a share of “Net Profits” (as defined in the Promotion Agreement). The Company has one combined performance obligation under the Promotion Agreement, which is to perform promotional and non-promotional activities to encourage the appropriate use of the product in accordance with the product labeling and applicable law. As such, and in accordance with ASU 2018-18: Clarifying the Interaction between Topic 808 and Topic 606 |
Segment Information | Segment Information U.S. 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. The Company’s CODM is its Chief Executive Officer. The Company has determined that it has one operating and reporting segment. |
Research and Development Expense | Research and Development Expense Research and development costs are expensed as incurred and include direct costs incurred to third parties related to the salaries of, and stock-based compensation for, personnel involved in research and development activities, contractor fees, administrative expenses and allocations of research-related overhead costs. Administrative expenses and research-related overhead costs included in research and development expense consist of allocations of facility and equipment lease charges, depreciation and amortization of assets and insurance directly related to research and development activities. |
Patent Maintenance | Patent Maintenance The Company is responsible for all patent costs, past and future, associated with the preparation, filing, prosecution, issuance, maintenance, enforcement and defense of United States patent applications. Such costs are recorded as general and administrative expenses as incurred. To the extent that the Company’s licensees share these costs, such benefit is recorded as a reduction of the related expenses. |
Stock-Based Compensation | Stock-Based Compensation The Company estimates the grant date fair value of its stock-based awards and amortizes this fair value to compensation expense over the requisite service period or vesting term (see Note 7). |
Net Loss Per Share | 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 for the years ended December 31, 2021 and 2020 does not include the following common stock equivalent shares: Year Ended December 31, 2021 2020 Stock Options 5,234,582 2,652,525 Restricted Stock Units 259,705 98,705 SVB Warrant 168,767 — Total 5,663,054 2,751,230 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of cash, accounts receivable, and accounts payable at December 31, 2021 and 2020 approximated their fair value due to the short maturity of these instruments. The Company’s valuation of financial instruments is based on a three-tiered approach, which requires that fair value measurements be classified and disclosed in one of three tiers. 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 — Other than quoted prices included in Level 1 inputs 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 tables present the placement in the fair value hierarchy of financial liabilities measured at fair value as of December 31, 2021 and 2020: Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2021 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds $ 56,493,933 $ — $ — $ 56,493,933 Liabilities Silicon Valley Bank term loan $ — $ 10,020,931 $ — $ 10,409,950 Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2020 (Level 1) (Level 2) (Level 3) Value Liabilities Pacific Western Bank term loan $ — $ 9,842,069 $ — $ 10,292,485 The fair value of debt is measured in accordance with ASU 2016-01, Financial Instruments Overall: Recognition and Measurement of Financial Assets and Financial Liabilities |
Deferred Offering Costs | Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such equity financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity as a reduction of proceeds generated as a result of the offering. |
Income Taxes | Income Taxes The asset and liability method is used in the Company’s accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets when realization of the tax benefit is uncertain. A valuation allowance is recorded, if necessary, to reduce net deferred taxes to their realizable values if management believes it is more likely than not that the net deferred tax assets will not be realized. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued guidance that provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The Company adopted this guidance during the first quarter of 2021 and it did not have a material impact on its consolidated financial position, results of operations or cash flows. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Schedule of Property, Plant and Equipment, Useful Life [Table Text Block] | Lab and build-to-suit equipment (years) 5 - 7 Office equipment (years) 5 Furniture and fixtures (years) 10 Computer equipment (years) 3 Leasehold improvements Lesser of life of the asset or remaining lease term |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Year Ended December 31, 2021 2020 Stock Options 5,234,582 2,652,525 Restricted Stock Units 259,705 98,705 SVB Warrant 168,767 — Total 5,663,054 2,751,230 |
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis [Table Text Block] | Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2021 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds $ 56,493,933 $ — $ — $ 56,493,933 Liabilities Silicon Valley Bank term loan $ — $ 10,020,931 $ — $ 10,409,950 Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2020 (Level 1) (Level 2) (Level 3) Value Liabilities Pacific Western Bank term loan $ — $ 9,842,069 $ — $ 10,292,485 |
Acquisition of RareGen, LLC (_2
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | Number of common shares to be issued to RareGen’s members 6,166,666 Multiplied by the fair value per share of Liquidia Technologies common stock $ 3.38 Total estimated purchase price $ 20,843,331 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Cash $ 1,000,000 Property and equipment 79,330 Prepaid and other current assets 30,190 Intangible asset 5,620,000 Contract acquisition costs 12,980,000 Indemnification asset, related party 1,065,538 Goodwill 3,903,282 Less other current liabilities (492,499) Less refund liability (2,696,000) Less litigation finance payable, long-term (646,510) Total estimated purchase price $ 20,843,331 |
Business Acquisition, Pro Forma Information [Table Text Block] | Revenue $ 739,628 Costs and expenses: Cost of revenue 237,712 Research and development 35,919 General and administrative 216,787 Total costs and expenses 490,418 Total operating income and net income $ 249,210 Year Ended December 31, 2020 Revenue $ 4,756,625 Net loss $ (57,406,967) Net loss per common share, basic and diluted $ (1.48) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | As of December 31, 2021, outstanding warrants consisted of the following: Number of warrants Exercise Price Expiration Date SVB Warrant - Initial Tranche (see Note 13) 100,000 $ 3.05 February 26, 2031 SVB Warrant - Term B and Term C Tranches (see Note 13) 100,000 $ n/a February 26, 2031 Other warrants 65,572 $ 0.02 December 31, 2026 As of December 31, 2020 outstanding warrants consisted of the following: Number of warrants Exercise Price Expiration Date Other warrants 106,274 $ 0.02 December 31, 2026 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation. | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block] | Year Ended December 31, By Expense Category: 2021 2020 Research and development $ 1,922,653 $ 1,099,000 General and administrative 4,823,674 2,855,000 Total stock-based compensation expense $ 6,746,327 $ 3,954,000 Year Ended December 31, By Type of Award: 2021 2020 Stock options $ 5,995,237 $ 3,817,000 Restricted stock units 751,090 137,000 Total stock-based compensation expense $ 6,746,327 $ 3,954,000 |
Share-based Payment Arrangement, Nonvested Award, Cost [Table Text Block] | As of December 31, 2021 Weighted Average Remaining Recognition Unamortized Period Expense (Years) Stock options $ 6,133,835 2.9 Restricted stock units $ 49,517 2.2 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Year Ended December 31, 2021 2020 Expected dividend yield — — Risk-free interest rate 0.62% - 1.67% 0.40% - 1.60% Expected volatility 91% - 96% 87% - 94% Expected life (years) 5.2 - 6.1 5.8 - 6.2 |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | Weighted Weighted Average Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value Outstanding as of December 31, 2020 4,692,071 $ 5.51 Granted 2,023,950 2.72 Exercised (14,758) 2.85 Cancelled (1,103,254) 7.10 Outstanding as of December 31, 2021 5,598,009 $ 4.19 8.1 $ 8,761,969 Exercisable as of December 31, 2021 3,131,403 $ 4.76 7.3 $ 4,348,315 Vested and expected to vest as of December 31, 2021 5,579,988 $ 4.18 8.1 $ 8,747,263 |
Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block] | Weighted Average Exercise Price or Range of Exercise Contractual Life Price Options Outstanding (Years) Options Exercisable $2.42 to $2.54 973,893 9.4 454,893 $2.56 to $2.97 1,008,787 9.2 218,198 $3.00 2,000,000 9.0 1,375,000 $3.14 to $4.71 622,574 6.5 325,443 $4.72 to $9.31 596,502 5.3 433,937 $10.04 to $21.36 396,253 4.4 323,932 5,598,009 8.1 3,131,403 |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value [Table Text Block] | December 31, 2021 2020 Intrinsic value of options exercised $ 21,361 $ 176,433 Fair value of options vested $ 6,169,000 $ 4,178,659 |
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | Weighted Average Grant-Date Number of Fair Value RSUs (per RSU) Nonvested as of December 31, 2020 88,131 $ 4.68 Granted 334,015 2.97 Vested (270,185) 2.99 Forfeited (136,757) 3.99 Nonvested as of December 31, 2021 15,204 $ 3.31 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment | |
Property, Plant and Equipment [Table Text Block] | December 31, December 31, 2021 2020 Lab and build-to-suit equipment $ 6,599,508 $ 7,499,645 Office equipment 18,762 31,205 Furniture and fixtures 177,577 257,774 Computer equipment 347,632 404,558 Leasehold improvements 11,456,986 11,524,738 Construction-in-progress — 65,820 Total property, plant and equipment 18,600,465 19,783,740 Accumulated depreciation and amortization (13,583,071) (12,978,170) Property, plant and equipment, net $ 5,017,394 $ 6,805,570 |
Schedule of Construction In Progress Roll forward [Table Text Block] | Leasehold Build-to-suit Lab Improvements Equipment Equipment Total Balance as of December 31, 2019 $ — $ — $ 91,797 $ 91,797 Add: Acquired in Merger Transaction — 65,820 — 65,820 Less: Transfer due to being placed in service — — (91,797) (91,797) Balance as of December 31, 2020 — 65,820 — 65,820 Less: Transfer due to being placed in service — (65,820) — (65,820) Balance as of December 31, 2021 $ — $ — $ — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 2021 2020 Deferred income tax assets: Tax loss carryforwards $ 57,301,955 $ 54,844,147 Research and development credits 4,203,773 3,995,782 Share-based compensation 3,213,345 1,501,172 Lease liability 1,626,744 1,576,326 Compensation 799,448 193,490 Fixed assets 249,998 17,421 Refund liability — 620,442 Patent amortization 324,786 76,017 Accrued litigation costs 1,641,583 265,659 Settlement reserve 140,682 — Other 1,763 1,763 Valuation allowance (66,986,990) (61,595,499) Total deferred income tax assets 2,517,087 1,496,720 Deferred income tax liabilities: Section 481(a) adjustment 48,317 62,420 Intangible assets 1,678,555 675,866 Right of use asset 790,215 758,434 Total deferred income tax liabilities 2,517,087 1,496,720 Total net deferred tax $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 2021 2020 % of % of Pretax Pretax Amount Earnings Amount Earnings Income tax benefit at statutory rate $ (7,261,318) 21 % $ (12,550,174) 21 % State income taxes, net of federal tax benefit (2,625,563) 7.6 (1,203,286) 2 Non-deductible expenses — — 2,929 — Stock-based compensation 286,226 (0.8) 247,011 (0.4) Transaction costs — — 573,494 (1.0) Credits (261,735) 0.8 (978,793) 1.6 Change in state rate 4,454,297 (12.9) (667) — Other 16,602 (0.1) (70,721) 0.1 Change in valuation allowance 5,391,491 (15.6) 13,980,207 (23.3) Provision for income taxes $ — — % $ — — % |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | Balance at December 31, 2019 $ 158,710 Increases related to 2020 244,698 Balance at December 31, 2020 403,408 Increases related to 2021 51,999 Balance at December 31, 2021 $ 455,407 |
Leases, Commitments and Conti_2
Leases, Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases, Commitments and Contingencies | |
Lease, Cost [Table Text Block] | Year Ended December 31, Classification 2021 2020 Operating lease cost General and administrative $ 780,470 $ 780,470 Finance lease cost: Amortization of lease assets General and administrative 266,720 1,356,307 Interest on lease liabilities Interest expense 42,841 125,659 Total Lease Cost $ 1,090,031 $ 2,262,436 Weighted average remaining lease term (years): Operating leases 4.8 Finance leases 2.4 Weighted average discount rate: Operating leases 10.3 % Finance leases 6.5 % |
Lease Liability Maturity [Table Text Block] | Operating Finance Year ending December 31: Leases Leases Total 2022 $ 1,243,934 $ 342,762 $ 1,586,696 2023 1,283,253 195,350 1,478,603 2024 1,316,540 114,727 1,431,267 2025 1,355,923 64,161 1,420,084 2026 1,157,807 — 1,157,807 Total minimum lease payments 6,357,457 717,000 7,074,457 Less: Interest (1,351,156) (54,337) (1,405,493) Present value of lease liabilities $ 5,006,301 $ 662,663 $ 5,668,964 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Long-term Debt | |
Schedule of Long-Term Debt | December 31, December 31, Maturity Date 2021 2020 Pacific Western Bank term loan October 25, 2022 $ — $ 10,292,485 Silicon Valley Bank term loan September 1, 2024 10,409,950 — Long-term debt $ 10,409,950 $ 10,292,485 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Going Concern (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Cash and cash equivalents | $ 57,493,933 | $ 65,316,481 |
Minimum cash covenant | $ 27,500,000 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Other (Details) | Aug. 01, 2018USD ($) | Dec. 31, 2021USD ($)customer | Dec. 31, 2020USD ($) |
Cash and cash equivalents | $ 57,493,933 | $ 65,316,481 | |
Money market funds included in cash and cash equivalents | 56,500,000 | ||
Cash equivalents | 0 | ||
Allowance for doubtful accounts | $ 0 | $ 0 | |
Number of reporting units | 1 | ||
Impairment of long-lived assets | $ 0 | ||
Number of operating segments | 1 | ||
Sandoz | |||
Fees paid related to the Promotion Agreement | $ 20,000,000 | ||
Credit Concentration Risk | Cash Held on Deposit | Pacific Western Bank | |||
Concentration risk, percentage | 100.00% | ||
Credit Concentration Risk | Accounts Receivable | Customer One | |||
Concentration risk, percentage | 98.00% | ||
Number of customers | customer | 1 | ||
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Customer One | |||
Concentration risk, percentage | 99.00% | ||
Number of customers | customer | 1 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Estimated Useful Lives for Major Asset Categories (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Lab and build-to-suit equipment | Minimum | |
Property, Plant and Equipment, Useful life (Year) | 5 years |
Lab and build-to-suit equipment | Maximum | |
Property, Plant and Equipment, Useful life (Year) | 7 years |
Office equipment | |
Property, Plant and Equipment, Useful life (Year) | 5 years |
Furniture and fixtures | |
Property, Plant and Equipment, Useful life (Year) | 10 years |
Computer equipment | |
Property, Plant and Equipment, Useful life (Year) | 3 years |
Leasehold improvements | |
Property, Plant and Equipment, Estimated Useful life | Lesser of life of the asset or remaining lease term |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Common Stock Equivalent Shares Excluded From Calculation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares) | 5,663,054 | 2,751,230 |
Stock Options | ||
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares) | 5,234,582 | 2,652,525 |
Restricted Stock Units (RSUs) | ||
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares) | 259,705 | 98,705 |
SVB Warrant | ||
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares) | 168,767 |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Fair Value of Financial Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Money Market Funds | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Money market funds | $ 56,493,933 | |
Money Market Funds | Fair Value, Inputs, Level 1 | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Money market funds | 56,493,933 | |
Silicon Valley Bank Term Loan | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Debt | 10,409,950 | |
Silicon Valley Bank Term Loan | Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Debt | $ 10,020,931 | |
Pacific Western Bank Term Loan | Reported Value Measurement | ||
Fair Value of Financial Instruments | ||
Debt | $ 10,292,485 | |
Pacific Western Bank Term Loan | Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Debt | $ 9,842,069 |
Acquisition of RareGen, LLC (_3
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) (Details) - USD ($) | Dec. 31, 2020 | Nov. 18, 2020 | Nov. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2021 |
Acquisition | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Merger With RareGen LLC | |||||
Acquisition | |||||
Shares issued on closing date | 5,550,000 | 5,550,000 | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | 6,166,666 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Number of common units exchanged, representing all of the issued and outstanding RareGen equity | 10,000 | ||||
Cash threshold amount used to determine the pro-rata portion of RareGen cash at closing that RareGen members received | $ 1,000,000 | ||||
Purchase consideration | $ 20,843,331 | $ 20,800,000 | |||
Merger With RareGen LLC | General and Administrative Expense | |||||
Acquisition | |||||
Business Combination, Acquisition Related Costs | $ 4,800,000 | ||||
Merger With RareGen LLC | Holdback Shares | |||||
Acquisition | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | 616,666 | ||||
Merger With RareGen LLC | Maximum | |||||
Acquisition | |||||
Business Acquisition, Number of Additional Shares Issuable Upon Achievement of Sales Target (in shares) | 2,708,333 |
Acquisition of RareGen, LLC (_4
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) - Purchase Price (Details) - Merger With RareGen LLC - USD ($) | Nov. 18, 2020 | Nov. 30, 2020 |
Acquisition | ||
Number of common shares to be issued to RareGen's members | 6,166,666 | |
Multiplied by the fair value per share of Liquidia Technologies common stock | $ 3.38 | |
Total estimated purchase price | $ 20,843,331 | $ 20,800,000 |
Holdback Shares | ||
Acquisition | ||
Number of common shares to be issued to RareGen's members | 616,666 |
Acquisition of RareGen, LLC (_5
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) - Purchase Price Allocation (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 18, 2020 |
Acquisition | |||
Contract acquisition costs | $ 10,138,434 | $ 12,792,491 | |
Goodwill | 3,903,282 | 3,903,282 | |
Merger With RareGen LLC | |||
Acquisition | |||
Cash | $ 1,000,000 | ||
Property and equipment | 79,330 | ||
Prepaid and other current assets | 30,190 | ||
Intangible asset | 5,620,000 | ||
Contract acquisition costs | $ 10,138,434 | $ 12,792,491 | 12,980,000 |
Indemnification asset, related party | 1,065,538 | ||
Goodwill | 3,903,282 | ||
Less other current liabilities | (492,499) | ||
Less refund liability | (2,696,000) | ||
Less litigation finance payable, long-term | (646,510) | ||
Total estimated purchase price | $ 20,843,331 |
Acquisition of RareGen, LLC (_6
Acquisition of RareGen, LLC (now Liquidia PAH, LLC) - Results of Operations and Pro Forma Information (Details) - Merger With RareGen LLC - USD ($) | 1 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
Results of Operations | ||
Revenue | $ 739,628 | |
Cost of revenue | 237,712 | |
Research and development | 35,919 | |
General and administrative | 216,787 | |
Total costs and expenses | 490,418 | |
Total operating income and net income | $ 249,210 | |
Pro Forma Financial Information | ||
Revenue | $ 4,756,625 | |
Net loss | $ (57,406,967) | |
Net loss per common share, basic and diluted (in dollars per share) | $ (1.48) |
Contract Acquisition Costs, I_2
Contract Acquisition Costs, Intangible Asset, and Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Nov. 18, 2020 | |
Business Acquisition [Line Items] | |||
Contract acquisition costs | $ 10,138,434 | $ 12,792,491 | |
Intangible asset, net | 4,389,676 | 5,534,843 | |
Goodwill | 3,903,282 | 3,903,282 | |
Merger With RareGen LLC | |||
Business Acquisition [Line Items] | |||
Business Combination, Amortization Expense | 2,654,057 | 187,509 | |
Contract acquisition costs | 10,138,434 | 12,792,491 | $ 12,980,000 |
Amortization of Intangible Assets, Total | 1,145,167 | 85,157 | |
Intangible asset, net | $ 4,389,676 | $ 5,534,843 | |
Goodwill | 3,903,282 | ||
Goodwill expected to be tax deductible | $ 0 |
Indemnification Asset with Re_2
Indemnification Asset with Related Party and Litigation Finance Payable (Details) | Mar. 04, 2022 |
PBM | |
Indemnification Asset with Related Party and Litigation Finance Payable | |
Major stockholder ownership percentage of Liquidia Corporation Common Stock | 9.90% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 13, 2021 | Jul. 02, 2020 | Jun. 29, 2020 | Aug. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 26, 2021 |
Common Stock and Preferred Stock, Shares Authorized (in shares) | 90,000,000 | ||||||
Common Stock and Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | ||||||
Common Stock, Shares Authorized (in shares) | 80,000,000 | 80,000,000 | |||||
Preferred Stock, Shares Authorized (in shares) | 10,000,000 | 10,000,000 | |||||
SVB Warrant Initial Tranche | |||||||
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 | $ 3.05 | |||||
SVB Warrant - Term B and Term C Tranches | |||||||
Class of Warrant or Right, Outstanding (in shares) | 100,000 | ||||||
Other Warrants | |||||||
Class of Warrant or Right, Outstanding (in shares) | 65,572 | 106,274 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 0.02 | $ 0.02 | |||||
Warrants to Purchase Common Stock | |||||||
Class of Warrant or Right, Exercised During Period (in shares) | 40,702 | 0 | |||||
Underwritten Public Offering | |||||||
Stock Issued During Period, Shares, New Issues (in shares) | 9,375,000 | ||||||
Shares Issued, Price Per Share (in dollars per share) | $ 8 | ||||||
Proceeds from Issuance of Common Stock | $ 75 | ||||||
Proceeds from Issuance of Common Stock, Net | $ 70.3 | ||||||
Private Placement | |||||||
Stock Issued During Period, Shares, New Issues (in shares) | 8,626,037 | ||||||
Shares Issued, Price Per Share (in dollars per share) | $ 2.52 | ||||||
Proceeds from Issuance of Common Stock | $ 21.7 | ||||||
ATM Agreement | |||||||
Stock Issued During Period, Shares, New Issues (in shares) | 131,425 | ||||||
Proceeds from Issuance of Common Stock, Net | $ 0.7 | ||||||
ATM Agreement | Jefferies, LLC | |||||||
Sale of Stock, Maximum Aggregate Offering Price | $ 40 | ||||||
Sale of Stock, Commission Percentage | 3.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | Jan. 01, 2022 | Jan. 03, 2021 | Dec. 31, 2020 | Nov. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 2,023,950 | ||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share) | $ 2.72 | ||||||
Stock-based compensation expense | $ 6,746,327 | $ 3,954,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 2.23 | $ 2.78 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 14,758 | 91,413 | |||||
Proceeds from Stock Options Exercised | $ 41,075 | $ 43,141 | |||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | ||||||
Stock-based compensation expense upon achievement of performance milestone | $ 754,941 | ||||||
Stock-based compensation expense | $ 751,090 | $ 137,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 138,464 | 334,015 | |||||
Common Stock | |||||||
Share Price (in dollars per share) | $ 4.87 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 14,699 | 40,685 | |||||
Chief Executive Officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 2,000,000 | ||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share) | $ 3 | ||||||
Stock-based compensation expense | $ 1,973,563 | ||||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 500,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | 25.00% | |||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 375,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 36 months | ||||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 500,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 6 months | ||||||
The 2020 Plan | |||||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 1,700,000 | ||||||
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) | 2,091,509 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | 3,023,579 | 932,070 | |||||
The 2018 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 877,855 | ||||||
The 2016 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 301,979 | ||||||
The 2004 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 195,979 | ||||||
The ESPP | |||||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 600,000 | 300,000 | |||||
Increase in Common Stock Reserved for Future Issuance as Percent of Common Stock Issued and Outstanding | 1.00% | ||||||
Increase in Common Stock Reserved for Future Issuance | 150,000 | 150,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation expense | $ 6,746,327 | $ 3,954,000 |
Stock Options | ||
Stock-based compensation expense | 5,995,237 | 3,817,000 |
Restricted Stock Units (RSUs) | ||
Stock-based compensation expense | 751,090 | 137,000 |
Research and Development Expense | ||
Stock-based compensation expense | 1,922,653 | 1,099,000 |
General and Administrative Expense | ||
Stock-based compensation expense | $ 4,823,674 | $ 2,855,000 |
Stock-Based Compensation - Unam
Stock-Based Compensation - Unamortized Compensation Expense (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Stock Options | |
Stock-based awards, unamortized expense | $ 6,133,835 |
Stock-based awards, weighted average remaining recognition period (Year) | 2 years 10 months 24 days |
Restricted Stock Units (RSUs) | |
Stock-based awards, unamortized expense | $ 49,517 |
Stock-based awards, weighted average remaining recognition period (Year) | 2 years 2 months 12 days |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate, minimum | 0.62% | 0.40% |
Risk-free interest rate, maximum | 1.67% | 1.60% |
Expected Volatility, minimum | 91.00% | 87.00% |
Expected Volatility, maximum | 96.00% | 94.00% |
Minimum | ||
Expected life (years) (Year) | 5 years 2 months 12 days | 5 years 9 months 18 days |
Maximum | ||
Expected life (years) (Year) | 6 years 1 month 6 days | 6 years 2 months 12 days |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation. | ||
Outstanding, number of shares (in shares) | 4,692,071 | |
Outstanding, weighted average exercise price (in dollars per share) | $ 5.51 | |
Granted, number of shares (in shares) | 2,023,950 | |
Granted, weighted average exercise price (in dollars per share) | $ 2.72 | |
Exercised, number of shares (in shares) | (14,758) | (91,413) |
Exercised, weighted average exercise price (in dollars per share) | $ 2.85 | |
Cancelled, number of shares (in shares) | (1,103,254) | |
Cancelled, weighted average exercise price (in dollars per share) | $ 7.10 | |
Outstanding, number of shares (in shares) | 5,598,009 | 4,692,071 |
Outstanding, weighted average exercise price (in dollars per share) | $ 4.19 | $ 5.51 |
Outstanding, weighted average contractual term (Year) | 8 years 1 month 6 days | |
Outstanding, aggregate intrinsic value | $ 8,761,969 | |
Exercisable, number of shares (in shares) | 3,131,403 | |
Exercisable, weighted average exercise price (in dollars per share) | $ 4.76 | |
Exercisable, weighted average contractual term (Year) | 7 years 3 months 18 days | |
Exercisable, aggregate intrinsic value | $ 4,348,315 | |
Vested and expected to vest, number of shares (in shares) | 5,579,988 | |
Vested and expected to vest, weighted average exercise price (in dollars per share) | $ 4.18 | |
Vested and expected to vest, weighted average contractual term (Year) | 8 years 1 month 6 days | |
Vested and expected to vest, aggregate intrinsic value | $ 8,747,263 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summarizes Information about Stock Options (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Options Outstanding (in shares) | 5,598,009 |
Weighted Average Contractual Life (Year) | 8 years 1 month 6 days |
Options Exercisable (in shares) | 3,131,403 |
$2.42 to $2.54 | |
Exercise Price or Range of Exercise Price, Lower Limit (in dollars per share) | $ / shares | $ 2.42 |
Exercise Price or Range of Exercise Price, Upper Limit (in dollars per share) | $ / shares | $ 2.54 |
Options Outstanding (in shares) | 973,893 |
Weighted Average Contractual Life (Year) | 9 years 4 months 24 days |
Options Exercisable (in shares) | 454,893 |
$2.56 to $2.97 | |
Exercise Price or Range of Exercise Price, Lower Limit (in dollars per share) | $ / shares | $ 2.56 |
Exercise Price or Range of Exercise Price, Upper Limit (in dollars per share) | $ / shares | $ 2.97 |
Options Outstanding (in shares) | 1,008,787 |
Weighted Average Contractual Life (Year) | 9 years 2 months 12 days |
Options Exercisable (in shares) | 218,198 |
$3.00 | |
Options Outstanding (in shares) | 2,000,000 |
Weighted Average Contractual Life (Year) | 9 years |
Options Exercisable (in shares) | 1,375,000 |
Options outstanding, exercise price (in dollars per share) | $ / shares | $ 3 |
$3.14 to $4.71 | |
Exercise Price or Range of Exercise Price, Lower Limit (in dollars per share) | $ / shares | 3.14 |
Exercise Price or Range of Exercise Price, Upper Limit (in dollars per share) | $ / shares | $ 4.71 |
Options Outstanding (in shares) | 622,574 |
Weighted Average Contractual Life (Year) | 6 years 6 months |
Options Exercisable (in shares) | 325,443 |
$4.72 to $9.31 | |
Exercise Price or Range of Exercise Price, Lower Limit (in dollars per share) | $ / shares | $ 4.72 |
Exercise Price or Range of Exercise Price, Upper Limit (in dollars per share) | $ / shares | $ 9.31 |
Options Outstanding (in shares) | 596,502 |
Weighted Average Contractual Life (Year) | 5 years 3 months 18 days |
Options Exercisable (in shares) | 433,937 |
$10.04 to $21.36 | |
Exercise Price or Range of Exercise Price, Lower Limit (in dollars per share) | $ / shares | $ 10.04 |
Exercise Price or Range of Exercise Price, Upper Limit (in dollars per share) | $ / shares | $ 21.36 |
Options Outstanding (in shares) | 396,253 |
Weighted Average Contractual Life (Year) | 4 years 4 months 24 days |
Options Exercisable (in shares) | 323,932 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation. | ||
Intrinsic value of options exercised | $ 21,361 | $ 176,433 |
Fair value of options vested | $ 6,169,000 | $ 4,178,659 |
Stock-Based Compensation - Nonv
Stock-Based Compensation - Nonvested RSU Awards Outstanding (Details) - Restricted Stock Units (RSUs) - $ / shares | 1 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2021 | |
Nonvested, number (in shares) | 88,131 | |
Nonvested , weighted average grant date fair value (in dollars per share) | $ 4.68 | |
Granted, number (in shares) | 138,464 | 334,015 |
Granted , weighted average grant date fair value (in dollars per share) | $ 2.97 | |
Vested , number (in shares) | (270,185) | |
Vested , weighted average grant date fair value (in dollars per share) | $ 2.99 | |
Forfeited, number (in shares) | (136,757) | |
Forfeited , weighted average grant date fair value (in dollars per share) | $ 3.99 | |
Nonvested , number (in shares) | 15,204 | |
Nonvested , weighted average grant date fair value (in dollars per share) | $ 3.31 |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Details) - Sandoz - USD ($) | Aug. 01, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Promotion Agreement, Payment | $ 20,000,000 | ||
Percentage of Revenue from Promotion Agreement | 99.00% | ||
Contract with Customer, Refund Liability | $ 526,491 | ||
Contract with Customer, Liability, Revenue Recognized | $ 927,136 |
Property, Plant and Equipment -
Property, Plant and Equipment - Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Total property, plant and equipment | $ 18,600,465 | $ 19,783,740 | |
Accumulated depreciation and amortization | (13,583,071) | (12,978,170) | |
Property, Plant and Equipment, Net, Total | 5,017,394 | 6,805,570 | |
Lab and build-to-suit equipment | |||
Total property, plant and equipment | 6,599,508 | 7,499,645 | |
Office equipment | |||
Total property, plant and equipment | 18,762 | 31,205 | |
Furniture and fixtures | |||
Total property, plant and equipment | 177,577 | 257,774 | |
Computer equipment | |||
Total property, plant and equipment | 347,632 | 404,558 | |
Leasehold improvements | |||
Total property, plant and equipment | 11,456,986 | 11,524,738 | |
Construction-in-progress | |||
Total property, plant and equipment | $ 0 | $ 65,820 | $ 91,797 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment | ||
Depreciation, Depletion and Amortization, Nonproduction, Total | $ 1,812,655 | $ 2,856,914 |
Cost of Property Repairs and Maintenance | $ 110,608 | $ 194,192 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Activity of Construction in Progress (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Beginning balance | $ 19,783,740 | |
Ending balance | 18,600,465 | $ 19,783,740 |
Construction in Progress, Leasehold Improvements | ||
Beginning balance | 0 | 0 |
Add: Acquired in Merger Transaction | 0 | |
Less: Transfer due to being placed in service | 0 | 0 |
Ending balance | 0 | 0 |
Construction in Progress, Build to suit Equipment | ||
Beginning balance | 65,820 | 0 |
Add: Acquired in Merger Transaction | 65,820 | |
Less: Transfer due to being placed in service | (65,820) | 0 |
Ending balance | 0 | 65,820 |
Construction in Progress, Lab Equipment | ||
Beginning balance | 0 | 91,797 |
Add: Acquired in Merger Transaction | 0 | |
Less: Transfer due to being placed in service | 0 | (91,797) |
Ending balance | 0 | 0 |
Construction-in-progress | ||
Beginning balance | 65,820 | 91,797 |
Add: Acquired in Merger Transaction | 65,820 | |
Less: Transfer due to being placed in service | (65,820) | (91,797) |
Ending balance | $ 0 | $ 65,820 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Expense (Benefit), Total | $ 0 | $ 0 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 5,391,500 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total | 0 | 0 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total | 0 | $ 0 |
Domestic Tax Authority | ||
Operating Loss Carryforwards, Subject to Expiration | 264,871,600 | |
Tax Credit Carryforward, Amount | 4,659,200 | |
State and Local Jurisdiction | ||
Operating Loss Carryforwards, Subject to Expiration | $ 293,749,200 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Assets and Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Income Taxes | ||
Tax loss carryforwards | $ 57,301,955 | $ 54,844,147 |
Research and development credits | 4,203,773 | 3,995,782 |
Share-based compensation | 3,213,345 | 1,501,172 |
Lease liability | 1,626,744 | 1,576,326 |
Compensation | 799,448 | 193,490 |
Fixed assets | 249,998 | 17,421 |
Refund liability | 0 | 620,442 |
Patent amortization | 324,786 | 76,017 |
Accrued litigation costs | 1,641,583 | 265,659 |
Settlement reserve | 140,682 | 0 |
Other | 1,763 | 1,763 |
Valuation allowance | (66,986,990) | (61,595,499) |
Total deferred income tax assets | 2,517,087 | 1,496,720 |
Section 481(a) adjustment | 48,317 | 62,420 |
Intangible assets | 1,678,555 | 675,866 |
Right of use asset | 790,215 | 758,434 |
Total deferred income tax liabilities | 2,517,087 | 1,496,720 |
Total net deferred tax | $ 0 | $ 0 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Income tax benefit at statutory rate | $ (7,261,318) | $ (12,550,174) |
Income tax benefit at statutory rate, percentage | 21.00% | 21.00% |
State income taxes, net of federal tax benefit | $ (2,625,563) | $ (1,203,286) |
State income taxes, net of federal tax benefit, percentage | 7.60% | 2.00% |
Non-deductible expenses | $ 0 | $ 2,929 |
Non-deductible expenses, percentage | 0.00% | 0.00% |
Share-based compensation | $ 286,226 | $ 247,011 |
Share-based compensation, percentage | (0.80%) | (0.40%) |
Transaction costs | $ 0 | $ 573,494 |
Transaction costs, percentage | 0.00% | (1.00%) |
Credits | $ (261,735) | $ (978,793) |
Credits, percentage | 0.80% | 1.60% |
Change in state rate | $ 4,454,297 | $ (667) |
Change in state rate, percentage | (12.90%) | 0.00% |
Other | $ 16,602 | $ (70,721) |
Other, percentage | (0.10%) | 0.10% |
Change in valuation allowance | $ 5,391,491 | $ 13,980,207 |
Change in valuation allowance, percentage | (15.60%) | (23.30%) |
Provision for income taxes | $ 0 | $ 0 |
Provision for income taxes, percentage | 0.00% | 0.00% |
Income Taxes - Uncertain Tax Be
Income Taxes - Uncertain Tax Benefit (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Taxes | |||
Beginning balance | $ 403,408 | $ 158,710 | |
Increases related current period | 51,999 | 244,698 | |
Ending balance | $ 455,407 | 455,407 | $ 403,408 |
North Carolina corporate income tax rate | 2.50% | ||
North Carolina corporate income tax rate expected by 2030 | 0.00% | ||
Income tax expense due to the reduction in value of the North Carolina deferred tax assets as a result of the 2021 Appropriations Act | $ 5,100,000 |
Leases, Commitments and Conti_3
Leases, Commitments and Contingencies (Details) | 12 Months Ended | |||
Dec. 31, 2021USD ($)ft² | Feb. 28, 2021 | Jan. 31, 2021 | Nov. 30, 2020shares | |
Lessee, Finance Lease, Discount Rate | 6.50% | 7.50% | ||
Maximum Net Sales Threshold As Basis For Payment Of Future Contingent Royalties | $ 1,500,000 | |||
Agreement With LGM Pharma, LLC | ||||
Purchase Commitment, Remaining Minimum Amount Committed | $ 3,050,000 | |||
Minimum | ||||
Lessee, Finance Lease, Remaining Lease Term | 24 months | |||
Maximum | ||||
Lessee, Finance Lease, Remaining Lease Term | 48 months | |||
Merger With RareGen LLC | Maximum | ||||
Business Acquisition, Number of Additional Shares Issuable Upon Achievement of Sales Target (in shares) | shares | 2,708,333 | |||
Primary Building in Morrisville, North Carolina | ||||
Area of Real Estate Property (Square Foot) | ft² | 45,000 |
Leases, Commitments and Conti_4
Leases, Commitments and Contingencies - Lease Cost and Other (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total Lease Cost | $ 1,090,031 | $ 2,262,436 |
Operating leases (Year) | 4 years 9 months 18 days | |
Finance leases (Year) | 2 years 4 months 24 days | |
Operating leases | 10.30% | |
Finance leases | 6.50% | |
General and Administrative Expense | ||
Operating lease cost | $ 780,470 | 780,470 |
Amortization of lease assets | 266,720 | 1,356,307 |
Interest Expense | ||
Interest on lease liabilities | $ 42,841 | $ 125,659 |
Leases, Commitments and Conti_5
Leases, Commitments and Contingencies - Future Minimum Lease Payments (Details) | Dec. 31, 2021USD ($) |
Operating Leases | |
2022 | $ 1,243,934 |
2023 | 1,283,253 |
2024 | 1,316,540 |
2025 | 1,355,923 |
2026 | 1,157,807 |
Total minimum lease payments | 6,357,457 |
Less: Interest | (1,351,156) |
Present value of lease liabilities | 5,006,301 |
Finance Leases | |
2022 | 342,762 |
2023 | 195,350 |
2024 | 114,727 |
2025 | 64,161 |
2026 | 0 |
Total minimum lease payments | 717,000 |
Less: Interest | (54,337) |
Present value of lease liabilities | 662,663 |
Total | |
2022 | 1,586,696 |
2023 | 1,478,603 |
2024 | 1,431,267 |
2025 | 1,420,084 |
2026 | 1,157,807 |
Total minimum lease payments | 7,074,457 |
Less: Interest | (1,405,493) |
Present value of lease liabilities | $ 5,668,964 |
Long-term Debt - Summary (Detai
Long-term Debt - Summary (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Long-Term Debt | ||
Long-term debt, less current portion | $ 10,409,950 | $ 10,292,485 |
Pacific Western Bank Term Loan | ||
Long-Term Debt | ||
Long-term debt | $ 10,292,485 | |
Silicon Valley Bank Term Loan | ||
Long-Term Debt | ||
Long-term debt | $ 10,409,950 |
Long-term Debt - Terms (Details
Long-term Debt - Terms (Details) | Jan. 07, 2022USD ($)subsidiary$ / sharesshares | Mar. 01, 2021USD ($) | Feb. 26, 2021USD ($)subsidiary$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / shares |
Long-Term Debt | |||||
Number of wholly owned subsidiaries | subsidiary | 2 | ||||
Proceeds from Issuance of Long-term Debt, Total | $ 10,410,269 | $ 0 | |||
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
SVB Warrant | |||||
Long-Term Debt | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares | 200,000 | ||||
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares | $ 0.001 | ||||
SVB Warrant | Subsequent Events. | |||||
Long-Term Debt | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares | 125,000 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares | $ 5.14 | ||||
SVB Warrant Initial Tranche | |||||
Long-Term Debt | |||||
Class of Warrant or Right, Number of Securities Vested (in shares) | shares | 100,000 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares | $ 3.05 | $ 3.05 | |||
Class of Warrant or Right, Outstanding (in shares) | shares | 100,000 | ||||
SVB Warrant Term B Tranche | |||||
Long-Term Debt | |||||
Class of Warrant or Right, Outstanding (in shares) | shares | 50,000 | ||||
SVB Warrant Term C Tranche | |||||
Long-Term Debt | |||||
Class of Warrant or Right, Outstanding (in shares) | shares | 50,000 | ||||
Pacific Western Bank Term Loan | |||||
Long-Term Debt | |||||
Repayments of Debt | $ 9,400,000 | ||||
Loss on extinguishment of debt | $ 53,150 | ||||
Silicon Valley Bank Term Loan | |||||
Long-Term Debt | |||||
Maximum Borrowing Capacity | $ 20,500,000 | 20,500,000 | |||
Term A Loan | |||||
Long-Term Debt | |||||
Debt Instrument, Face Amount | $ 10,500,000 | $ 10,500,000 | |||
Amended and Restated Loan and Security Agreement | Subsequent Events. | |||||
Long-Term Debt | |||||
Number of wholly owned subsidiaries | subsidiary | 2 | ||||
Maximum Borrowing Capacity | $ 40,000,000 | ||||
Proceeds from Lines of Credit | $ 20,000,000 |
Long-term Debt - SVB Warrant Fa
Long-term Debt - SVB Warrant Fair Value (Details) - SVB Warrant | Dec. 31, 2021Y |
Measurement Input, Expected Dividend Rate | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | 0 |
Measurement Input, Risk Free Interest Rate | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | 1.43 |
Measurement Input, Price Volatility | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | 90.8 |
Measurement Input, Expected Life | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | 10 |
Defined Contribution Retireme_2
Defined Contribution Retirement Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Retirement Plan | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4.00% | |
Defined Contribution Plan, Cost | $ 321,804 | $ 416,345 |
Legal Proceedings (Details)
Legal Proceedings (Details) $ in Thousands | Nov. 06, 2020USD ($) |
Liquidia PAH and Sandoz | UTC and Smiths Medical Litigation | Pending Litigation | |
Proceeds from Legal Settlements | $ 4,250 |
Subsequent Events (Details)
Subsequent Events (Details) | Jan. 07, 2022USD ($)tranche$ / sharesshares | Jan. 03, 2021USD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Jan. 25, 2022shares | Mar. 01, 2021USD ($) | Feb. 26, 2021USD ($)$ / sharesshares |
Subsequent Events | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Granted, number of shares (in shares) | shares | 2,023,950 | |||||||
Revenue | $ 12,853,345 | $ 739,628 | ||||||
Minimum cash covenant | 27,500,000 | |||||||
SVB Warrant | ||||||||
Subsequent Events | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares | 200,000 | |||||||
Silicon Valley Bank Term Loan | ||||||||
Subsequent Events | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 20,500,000 | $ 20,500,000 | ||||||
Term A Loan | ||||||||
Subsequent Events | ||||||||
Debt Instrument, Face Amount | $ 10,500,000 | $ 10,500,000 | ||||||
Chief Executive Officer | ||||||||
Subsequent Events | ||||||||
Employment Agreement, Annual Base Salary | $ 650,000 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||
Employment Agreement, Multiplier | 931,745 | |||||||
Granted, number of shares (in shares) | shares | 2,000,000 | |||||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche One | ||||||||
Subsequent Events | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | 25.00% | ||||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche Two | ||||||||
Subsequent Events | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 36 months | |||||||
Chief Executive Officer | Stock Options | ||||||||
Subsequent Events | ||||||||
Percent of Shares Vested and Exercisable on Closing Date of Change in Control | 100.00% | |||||||
Chief Executive Officer | Sign On Option | ||||||||
Subsequent Events | ||||||||
Granted, number of shares (in shares) | shares | 1,682,827 | |||||||
Chief Executive Officer | Second Tranche Option | ||||||||
Subsequent Events | ||||||||
Granted, number of shares (in shares) | shares | 931,745 | |||||||
Chief Executive Officer | Maximum | ||||||||
Subsequent Events | ||||||||
Employment Agreement, Percentage of Discretionary Annual Cash Bonus on Annual Base Salary | 50.00% | |||||||
Subsequent Events. | Inducement Plan 2022 | ||||||||
Subsequent Events | ||||||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | shares | 310,000 | |||||||
Subsequent Events. | SVB Warrant | ||||||||
Subsequent Events | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares | 125,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares | $ 5.14 | |||||||
Class of Warrant or Right, Additional Warrants Issued Under Loan Agreement | shares | 50,000 | |||||||
Subsequent Events. | Innovation Warrants | ||||||||
Subsequent Events | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares | 62,500 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares | $ 5.14 | |||||||
Class of Warrant or Right, Additional Warrants Issued Under Loan Agreement | shares | 25,000 | |||||||
Subsequent Events. | Innovation Credit Warrants | ||||||||
Subsequent Events | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares | 62,500 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares | $ 5.14 | |||||||
Class of Warrant or Right, Additional Warrants Issued Under Loan Agreement | shares | 25,000 | |||||||
Subsequent Events. | Amended and Restated Loan and Security Agreement | ||||||||
Subsequent Events | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000,000 | |||||||
Proceeds from Lines of Credit | $ 20,000,000 | |||||||
Number of Tranches in Debt Facility | tranche | 3 | |||||||
Cash | $ 9,500,000 | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 7.25% | |||||||
Minimum cash covenant | $ 27,500,000 | |||||||
Subsequent Events. | Amended and Restated Loan and Security Agreement | Prime Rate | ||||||||
Subsequent Events | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.00% | |||||||
Subsequent Events. | Amended and Restated Loan and Security Agreement Tranche One | ||||||||
Subsequent Events | ||||||||
Line of Credit Facility, Additional Borrowing Capacity | $ 5,000,000 | |||||||
Subsequent Events. | Amended and Restated Loan and Security Agreement Tranche Two | ||||||||
Subsequent Events | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 7,500,000 | |||||||
After funding of second tranche, minimum cash balance percentage | 150.00% | |||||||
Subsequent Events. | Amended and Restated Loan and Security Agreement Tranche Three | ||||||||
Subsequent Events | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 7,500,000 | |||||||
Line of Credit Facility, Trailing Sales Period | 6 months | |||||||
Revenue | $ 27,500,000 |