Liquidia Corp

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THE CHARTER AMENDMENT PROPOSAL

Overview

Our Charter currently authorizes us to issue a total of 100,000,000 shares of common stock, with a par value of $0.001 per share, and 10,000,000 shares of preferred stock, with a par value of $0.001 per share, for a total of 110,000,000 shares of all classes. In April 2024, our Board approved an amendment to our Charter (the “Charter Amendment”) to increase the number of shares of authorized common stock from 100,000,000 shares to 115,000,000 shares, subject to stockholder approval, and consequently the total number of shares of all classes increased to 125,000,000.

Approval of the Charter Amendment requires the affirmative vote of the holders of a majority of the shares of common stock outstanding. Brokers are authorized to vote without instructions on this proposal. Abstentions are included in the shares present at the Meeting for purposes of determining whether a quorum is present, and are counted as a vote against for purposes of determining whether the foregoing proposal is approved.

Our Board has unanimously determined that the Charter Amendment is advisable and in the best interests of the Company and our stockholders and recommends that our stockholders approve the Charter Amendment. In accordance with the General Corporation Law of the State of Delaware (the “DGCL”), we are hereby seeking approval of the Charter Amendment by our stockholders. No other changes to our Charter are being proposed, including with respect to the number of authorized shares of our preferred stock. The Charter Amendment is not intended to modify the rights of existing stockholders in any material respect. The additional shares of common stock to be authorized pursuant to the proposed Charter Amendment will be identical to the shares of common stock currently authorized and outstanding under our Charter, none of which have preemptive or similar rights to acquire the newly authorized shares. Under the DGCL, our stockholders are not entitled to appraisal rights with respect to the proposed Charter Amendment to increase the number of authorized shares of common stock, and we will not independently provide stockholders with any such rights.

Reasons for the Authorized Shares Amendment

Our Board is proposing the Charter Amendment to increase the number of authorized shares of our common stock from 100,000,000 shares to 115,000,000 shares, and consequently increase the total number of shares of all classes from 110,000,000 to 125,000,000. Of the 100,000,000 shares of common stock that are currently authorized to be issued under the Charter, as of the Record Date, 76,382,718 shares are issued and outstanding and an aggregate of 14,629,139 shares are reserved for issuance under our equity plans and under warrant agreements. Therefore, we currently have only a limited number of authorized shares of common stock available for future issuance.

In determining the magnitude of the number of shares of common stock to authorize pursuant to the Charter Amendment, the Board considered a number of factors, including our historical issuances of shares and potential future needs, our need to issue additional shares in connection with one or more future equity transactions, acquisitions or other strategic transactions and future issuances under equity compensation plans.

The additional authorized shares will be available for issuance from time to time to enable us to respond to future business opportunities requiring the issuance of shares, including the consummation of equity-based financings involving common stock or securities convertible into or exercisable for common stock (“equity-linked securities”), acquisition or strategic joint venture transactions involving the issuance of common stock or equity-linked securities, grants of common stock and equity-linked securities to our current and future employees and directors, or for other general corporate purposes that our Board may deem advisable from time to time.

Our Board believes that the proposed increase in the number of authorized shares of common stock will also benefit us by improving our ability to raise funding through the issuance of shares of common stock. As of the date of this proxy statement, we have no current plans, arrangements or understandings regarding the issuance of any additional shares of common stock that would be authorized pursuant to this proposal (other than in connection with the evergreen provision of our existing equity plans), and there are no negotiations pending with respect to the issuance thereof for any purpose. Our Board does not intend to issue any common stock except on terms which our Board deems to be in the best interests of our Company and its then existing stockholders.

Potential Effects of Not Approving the Charter Amendment

Without an increase in the number of authorized shares of common stock, we may be constrained in our ability to raise capital in a timely fashion or at all and may be unable to complete our clinical programs, commercialize our products, or conduct important business activities, which could adversely affect our financial performance and growth. For example, if the stockholders do not approve this proposal, then we may not have needed additional shares available or may be required to seek stockholder approval in connection with a transaction, which may delay or otherwise have a material adverse effect on us. If our Company’s stockholders do not approve the increase in authorized shares of common stock, then our Company will not be able to increase the total number of authorized shares of common stock from 100,000,000 to 115,000,000, and therefore, the Company could be limited in its ability to use shares of common stock for financing, issue shares as consideration for potential acquisitions, issuing stock options or other general corporate purposes.

Potential Effects of Approving the Authorized Shares Amendment

The proposed increase in the number of authorized shares of common stock will not have any immediate effect on the rights of our existing stockholders. However, the Board will have the authority to issue the additional shares of common stock without requiring future stockholder approval of such issuances, except as may be required by applicable law or rules of any stock exchange on which our securities may be listed, including The Nasdaq Capital Market. The issuance of additional shares of common stock may decrease the relative percentage of equity ownership of our existing stockholders, thereby diluting the voting power of their common stock.

While the issuance of additional shares of common stock may be deemed to have potential anti-takeover effects, including by delaying or preventing a change in control of our Company through subsequent issuances of these shares and the other reasons set forth above, which, among other things, could include issuances in one or more transactions that would make a change in control of our Company more difficult, and therefore, less likely, this proposal to increase the authorized common stock is not prompted by any specific effort of which we are aware to accumulate shares of our common stock or obtain control of our Company. A takeover may be beneficial to independent stockholders because, among other reasons, a potential suitor may offer such stockholders a premium for their shares of common stock as compared to the then-existing market price.

The additional authorized shares of common stock, if and when issued, would be part of the existing class of common stock and would have the same rights and privileges as the shares of common stock currently outstanding. Stockholders do not have preemptive rights with respect to our common stock. Therefore, should the Board determine to issue additional shares of common stock, existing stockholders would not have any preferential rights to purchase such shares in order to maintain their proportionate ownership thereof.

We can provide no assurance that we will be successful in amending our Charter to increase the number of shares of common stock that are available for issuance, or that the Charter Amendment will not have an adverse effect on our stock price.

Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposed amendment, except to the extent of their ownership in shares of our common stock and securities convertible or exercisable for common stock and to the extent of their participation in our existing equity plans.

Effectiveness of the Authorized Shares Amendment

The form of the Charter Amendment is attached as Exhibit A to this proxy statement. If the Charter Amendment is approved by our stockholders, it will become effective upon the acceptance by the Secretary of State of the State of Delaware of the filing of the Charter Amendment. Such filing is expected to occur promptly after stockholder approval of this proposal. If this proposal is not approved, our Charter would remain unchanged and the number of authorized shares of common stock would remain 100,000,000. Other than as described herein, this proposed Charter Amendment effects no other changes to our Charter.

We are asking our stockholders to approve an amendment to our Charter to increase the total number of authorized shares of our common stock from 100,000,000 shares to 115,000,000 shares. A copy of the Charter Amendment is included as Exhibit A to this proxy statement.

The Charter Amendment Proposal requires the affirmative vote of the holders of a majority of the shares of common stock outstanding in order for such proposal to be approved.

After careful consideration, the Board determined that approval of the Charter Amendment Proposal is advisable and in the best interests of Liquidia and its stockholders. On the basis of the foregoing, the Board has approved and declared advisable the approval of the Charter Amendment Proposal and recommends that you vote “FOR” the approval of the Charter Amendment Proposal.