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Item 1.01
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Entry into a Material Definitive Agreement
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Private Placement and Common Stock Purchase Agreement
On April 12, 2021, Liquidia Corporation (the “Company”)
entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with a fund and account managed by Caligan Partners
LP (“Caligan”) and certain other accredited investors, including Roger Jeffs, a director of the Company, and PD Joint Holdings,
LLC Series 2016-A, of which Paul Manning, a director of the Company, is a manager (the “Purchasers”), for the sale by the
Company in a private placement (the “Private Placement”) of an aggregate of 8,626,037 shares (the “Private Placement
Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”), at a purchase price of $2.52
per Private Placement Share. The closing of the Private Placement (the “Closing”) occurred on April 13, 2021. The Company
has granted the Purchasers indemnification rights with respect to its representations, warranties, covenants and agreements under the
Purchase Agreement. In addition, subject to certain exceptions, the Purchasers have agreed not to
offer, sell, transfer or otherwise dispose of any Private Placement Shares during the 6-month period following the Closing.
The aggregate gross proceeds for the sale of the Private Placement
Shares was approximately $21.7 million, before deducting offering expenses.
In connection with the Private Placement, the Company agreed to increase
the size of the board of directors to nine directors and to appoint David Johnson to the Company’s board of directors as a nominee
of Caligan.
The Company intends to use the net proceeds from the Private Placement
to strengthen its commercial capability for the introduction of LIQ861 and the subcutaneous administration of Treprostinil Injection,
for growth initiatives, and for general corporate purposes.
The Private Placement is exempt from the registration requirements
of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption for transactions by an issuer
not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in
reliance on similar exemptions under applicable state laws. Each of the Purchasers represented that it is an accredited investor within
the meaning of Rule 501 of Regulation D, and is acquiring the securities for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof. The Private Placement Shares were offered without any general solicitation
by the Company or its representatives.
The Private Placement Shares sold and issued in the Private Placement
have not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent
registration with the Securities and Exchange Commission (the “SEC”) or an applicable exemption from the registration requirements.
Registration Rights Agreement
In connection with the Private Placement, on April 12, 2021 the Company
entered into a registration rights agreement (the “Registration Rights Agreement”) with the Purchasers. Pursuant to the Registration
Rights Agreement, the Company agreed to file a shelf registration statement (the “Registration Statement”) with the SEC within
180 days following the date of entry into the Registration Rights Agreement (the “Filing Deadline”) to register the Private
Placement Shares for resale and use its best efforts to cause the Registration Statement to be declared effective by the SEC or otherwise
become effective under the Securities Act as soon as practicable after the filing thereof, but in no event later than that date that is
the earlier of (i) 60 days after the Filing Deadline provided, that the Effectiveness Deadline shall be extended to 90 days after the
Filing Deadline if such Registration Statement is reviewed by the SEC and (ii) five (5) business days after the date the Company receives
written notification from the SEC that the Registration Statement will not be reviewed (the “Effectiveness Deadline”). The
Company also agreed, among other things, to indemnify the selling holders under the registration statements from certain liabilities and
to pay all fees and expenses incident to the Company’s performance of or compliance with the Registration Rights Agreement.
Standstill Agreement
In connection with the Private Placement, on April 13, 2021 the Company
entered into a standstill agreement (the “Standstill Agreement”) with Caligan. Pursuant to the Standstill Agreement, the Company
agreed to appoint David Johnson as a Class II director of the Company and member of the Company’s audit committee for a term expiring
at the Company’s 2023 annual meeting of stockholders, and until his successor is duly elected and qualified, or until his earlier
resignation, removal or death. The Company shall also name Mr. Johnson as a Class II director nominee at the Company 2023 annual meeting
of stockholders. The Standstill Agreement also provides that, among other things, during the period commencing on April 12, 2021 and ending
on the earlier of (A) the one-year anniversary of the date on which Mr. Johnson or any replacement director designee no longer serves
on the Board and (B) the two-year anniversary of April 13, 2021 (the “Standstill Period”), and so long as Caligan owns 66% of the Private Placement Shares purchased by Caligan, Caligan shall be entitled to appoint a replacement director designee
if Mr. Johnson becomes unwilling or unable to serve as a director and ceases to be a director, resigns as a director or is removed as
a director, or for any other reason fails to serve or is not serving as a director at any time prior to the end of the Standstill Period.
Pursuant to the Standstill Agreement, during the Standstill Period, Caligan also shall vote in accordance with the Board’s recommendation
on all matters presented at the Company’s annual stockholder meetings (subject to certain limited exceptions), and shall not institute,
solicit, join or assist in any litigation, arbitration or other proceeding against or involving the Company or any of its current or former
directors or officers (including derivative actions) or affiliates, subject to certain limited exceptions.
Additionally, Caligan has agreed, among
other things, during the Standstill Period, not to, without the prior written consent of the Board, and subject to certain limited
exceptions, acquire, directly or indirectly, any securities or assets of the Company such that after giving effect to any such
acquisition, Caligan or any of its affiliates holds on an aggregate basis in excess of 20% of the then outstanding common stock of
the Company, which ownership cap may be increased only by the affirmative vote of a majority of the Board.
Transaction Documents
The representations, warranties and covenants contained in the Purchase
Agreement, Registration Rights Agreement and Standstill Agreement (together, the “Transaction Documents”) were made solely
for the benefit of the parties to the Transaction Documents. In addition, such representations, warranties and covenants (i) are intended
as a way of allocating the risk between the parties to the Transaction Documents and not as statements of fact, and (ii) may apply standards
of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company.
Accordingly, the Transaction Documents are filed with this report only to provide investors with information regarding the terms of transaction,
and not to provide investors with any other factual information regarding the Company. Stockholders should not rely on the representations,
warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company. Moreover,
information concerning the subject matter of the representations and warranties may change after the date of the Transaction Documents,
which subsequent information may or may not be fully reflected in public disclosures.
The foregoing descriptions of the Purchase Agreement, Registration
Rights Agreement and Standstill Agreement do not purport to be complete and are qualified in their entirety by reference to the full text
of the Purchase Agreement, Registration Rights Agreement and Standstill Agreement, which are filed hereto as Exhibits 10.1, 10.2 and 10.3,
respectively, and are incorporated herein by reference.