Item 1.01 Entry Into a Material Definitive Agreement.

On January 9, 2023, Liquidia Technologies, Inc., a Delaware corporation (the "Company") and a wholly owned subsidiary of Liquidia Corporation (the "Parent") entered into a Revenue Interest Financing Agreement (the "Agreement") with HealthCare Royalty Partners IV, L.P. (the "Investor") and HealthCare Royalty Management, LLC. Pursuant to the Agreement and subject to customary closing conditions, the Investor has agreed to pay the Company an aggregate investment amount of up to $100.0 million (the "Investment Amount"). Under the terms of the Agreement, $32.5 million of the Investment Amount will be funded at the initial closing, which is expected to occur fifteen business days after the date hereof (the "Initial Closing Date"), an additional $7.5 million of the Investment Amount will be funded fifteen business days after a request made by the Company to the Investor to fund any member of the Company Group's (as defined below) acquisition of rights, whether in the form of an acquisition, license, joint venture or similar transaction, to a clinical stage or commercial stage biopharmaceutical product to diagnose, prevent, or treat pulmonary hypertension, an additional $35.0 million of the Investment Amount will be funded fifteen business days after the earlier of regulatory approval of YUTREPIA or a favorable determination relating to the asserted patents in the ongoing patent litigation with United Therapeutics Corporation, and the remaining $25.0 million of the Investment Amount will be funded fifteen business days after the mutual agreement of the Investor and the Company to fund such amount (the "Fourth Investment Amount"). At the Initial Closing Date, approximately $22.3 million of the Investment Amount will be used to satisfy in full and retire each member of the Company Group's indebtedness under the Amended and Restated Loan and Security Agreement (the "SVB Loan") dated as of January 7, 2022, by and among Silicon Valley Bank, as lender, administrative agent, and collateral agent, SVB Innovation Credit Fund VIII, L.P., the Company, the Parent, and Liquidia PAH, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company ("Liquidia PAH" and together with the Parent and the Company, the "Company Group").

As consideration for the Investment Amount and pursuant to the Agreement, the Company has agreed to pay the Investor a tiered royalty on annual net revenue of the Company Group after the first commercial sale of YUTREPIA (the "Revenue Interests"). Except as may otherwise be mutually agreed to in connection with the funding of the Fourth Investment Amount, the applicable tiered percentage will range from 3.60% to 10.00% on the first $250 million on annual net revenue, 1.44% to 4.00% on the next $250 million in annual net revenue, and 0.36% to 1.00% on all annual net revenue in excess of $500 million. The specific royalty rate within such ranges will depend upon the total amount advanced by the Investor and the Company Group's achievement of a certain annual net revenue threshold for the calendar year 2025. The Company will also make certain fixed quarterly payments to the Investor, plus an additional amount on a ratable basis to reflect the funding of additional amounts by the Investor under the Agreement after the Initial Closing Date. The Company will be required to make additional payments to the Investor in the event that the first commercial sale of YUTREPIA does not occur by June 30, 2025 and certain minimum quarterly royalty payments beginning in 2026.

If the Investor has not received cumulative minimum payments from the Company equal to 60% of the amount funded by the Investor to date by December 31, 2026 or 100% of the amount funded by the Investor to date by December 31, 2028, the Company must make a cash payment immediately following each applicable date to the Investor sufficient to gross the Investor up to such minimum amounts after giving full consideration of the cumulative amounts paid to the Investor by the Company through each date. The net sale thresholds described above are not to be interpreted as financial guidance or projections for future net sales of the Company Group.

The Investor's rights to receive the Revenue Interests will terminate on the date on which the Investor has received payments equal to 175% of funded portion of the Investment Amount less the aggregate amount of all payments made to the Investor as of such date (the "Hard Cap"), plus an amount, if any, that the Investor would need to receive to yield an internal rate of return on the funded Investment Amount equal to 18% (the "IRR True-Up Payment"), unless the Agreement is earlier terminated. If a change of control of the Company occurs, the Investor may accelerate payments due under the Agreement up to the Hard Cap, plus the IRR True-Up Payment, plus any other obligations payable under the Agreement. Upon the occurrence of an event of default, the Investor may accelerate payments due under the Agreement up to the Hard Cap, plus the IRR True-Up Payment, plus any other obligations payable under the Agreement. Upon the occurrence of certain material adverse events or the material breach of certain representations and warranties and specified covenants, which will not be considered events of default, the Investor may elect to terminate the Agreement and require the Company to make payments to the Investor equal to the lesser of the Hard Cap, plus any other obligations payable under the Agreement, or the funded portion of the Investment Amount, minus payments received by the Investor in respect of the Revenue Interests, plus the IRR True-Up Payment. If the U.S. Food and Drug Administration grants final approval to an inhaled treprostinil product therapeutically equivalent to YUTREPIA and the Investor has . . .

Item 1.02 Termination of a Material Definitive Agreement.

The information provided in Item 1.01 of this Current Report on Form 8-K regarding the termination of the SVB Loan is incorporated by reference into this Item 1.02.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure set forth in Item 1.01 is incorporated by reference herein.




Item 8.01 Other Events.

On January 9, 2023, the Parent issued a press release announcing the execution of the Agreement. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated by reference into this Item 8.01.

Item 9.01 Financial Statements and Exhibits.





(d) Exhibits.



Exhibit
No.                                       Exhibit
  99.1       Press Release of Liquidia Corporation, dated January 9, 2023.
104        Cover Page Interactive Data File (the cover page tags are embedded
           within the Inline XBRL document).

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