Liquidia Corp

Notes to Condensed Consolidated Financial Statements (unaudited)

(tabular dollars in thousands)

1. Business

Description of the Business

We are a biopharmaceutical company driven by science and compassion to revolutionize care for patients with challenging respiratory and vascular diseases. We operate through our wholly owned operating subsidiaries, Liquidia Technologies, Inc. and Liquidia PAH, LLC, formerly known as RareGen.

We currently generate product revenue through the sale of YUTREPIA® (treprostinil) inhalation powder (“YUTREPIA”). YUTREPIA is an inhaled dry powder formulation of treprostinil designed with our proprietary PRINT technology, a particle engineering platform that enables precise production of uniform drug particles, to improve the therapeutic profile of treprostinil by enhancing deep lung delivery while using a convenient, low effort dry-powder inhaler (“DPI”) and by achieving higher dose levels than the labeled doses of other marketed inhaled treprostinil therapies. YUTREPIA was approved by the U.S. Food and Drug Administration (“FDA”) in May 2025 for the treatment of pulmonary arterial hypertension (“PAH”) and pulmonary hypertension associated with interstitial lung disease (“PH-ILD”) and began commercialization in June 2025. In October 2026, we entered into a settlement agreement (“Settlement Agreement”) with United Therapeutics Corporation (“UTC”) settling all outstanding litigation between the parties and pursuant to which we agreed to cease promoting YUTREPIA for the treatment of PH-ILD and agreed to amend the label for YUTREPIA to remove PH-ILD.

Through the third quarter of 2026, we also generated revenue pursuant to a promotion agreement with Sandoz Inc. (“Sandoz”), dated as of August 1, 2018, as amended (the “Promotion Agreement”), under which we shared profit derived from the sale of Sandoz’s generic treprostinil injection (“Treprostinil Injection”) in the United States. Treprostinil Injection is a fully substitutable generic treprostinil for parenteral administration in the United States. The Promotion Agreement was terminated in October 2026 and we will no longer generate service revenue.

We employ a targeted commercial field force calling on healthcare providers involved in the treatment of PAH in the United States, as well as key stakeholders involved in the distribution and reimbursement of medicines to treat these patients.

We also conduct research, development and manufacturing of novel products by applying our subject matter expertise in respiratory and vascular diseases. For example, we are currently developing L606, an investigational, liposomal formulation of treprostinil, which we licensed from Pharmosa Biopharm Inc. (“Pharmosa”), that is administered twice-daily with a short-duration next-generation nebulizer. L606 is currently being evaluated in an open-label study in the United States for treatment of PAH and PH-ILD and in a worldwide, placebo-controlled pivotal study for the treatment of PH-ILD. In September 2026, we initiated a clinical study to evaluate YUTREPIA for the treatment of Raynaud’s phenomenon associated with systemic sclerosis (“SSc-RP”). We are also planning to conduct clinical studies in pulmonary hypertension associated with chronic obstructive pulmonary disease (“PH-COPD”), idiopathic pulmonary fibrosis (“IPF”), and progressive pulmonary fibrosis (“PPF”).

Recent Events

Settlement Agreement

On October 13, 2026, we entered into the Settlement Agreement with UTC resolving, without admission of liability by either party, all ongoing litigation between us and UTC, including the resolution of the ‘327 Patent Litigation, the ‘782 Patent Litigation, the Trade Secret Litigation, the Breach of Contract Litigation, the ‘494 Patent Litigation, and the RareGen Litigation, each as defined and discussed inNote 14 Legal Proceedings. The Settlement Agreement followed the September 30, 2026 decision of the U.S. District Court for the District of Delaware in the ‘327 Patent Litigation, and, as part of the Settlement Agreement, we agreed not to appeal that decision.

Under the terms of the Settlement Agreement, we will continue to market, sell and promote YUTREPIA for the treatment of PAH. In exchange, we (a) filed a supplement with the FDA to amend the current product label of YUTREPIA to remove PH-ILD as an indicated treatment as well as any reference to PH-ILD, (b) immediately and permanently ceased any and all activities relating to the marketing, advertising, promotion, and detailing of YUTREPIA for the treatment of PH-ILD, and (c) agreed to pay UTC (i) $185.0 million within thirty business days of October 13, 2026 and (ii) an aggregate of $145.4 million, to be paid intwo equal installments of $72.7 million on or before January 31, 2027 and April 30, 2027, respectively (such payments, collectively, the “UTC Payments”). UTC agreed to pay us $10.0 million within thirty business days of October 13, 2026 in resolution of the RareGen Litigation. On October 19, 2026, we paid UTC the $185.0 million initial payment, and we received the $10.0 million payment from UTC on October 16, 2026. The Settlement Agreement does not grant us a license to UTC’s patents. To secure the UTC Payments, on October 23, 2026, we caused irrevocable standby letters of credit to be issued in the aggregate amount of $145.4 million in favor of UTC (the “UTC Letters of Credit”). The UTC Letters of Credit are partially cash collateralized and as of October 23, 2026, $105.4 million of cash and cash equivalents has been legally restricted and is not available for operations until the UTC Payments have been made. (seeNote 16 Subsequent Events).

Under the Settlement Agreement, we were required to secure a settlement of the antitrust and breach of contract proceedings brought by Sandoz and Liquidia PAH against UTC and Smiths Medical ASD, Inc. in the RareGen Litigation, as further discussed inNote 14 Legal Proceedings. Accordingly, we entered into agreements with each of Sandoz, Henderson SPV, LLC (“Henderson”) and PBM RG Holdings, LLC (“PBM”), which held interests in the RareGen Litigation. The amounts payable under these agreements were determined as part of the negotiation of the Settlement Agreement and do not reflect arm's-length price discovery for the value of the RareGen Litigation.

Sandoz Agreement

On October 11, 2026, we entered into a Settlement and Termination Agreement with Sandoz (the “Sandoz Agreement”) to settle Sandoz’s entitlement tofifty percent of the proceeds from the RareGen Litigation pursuant to the Promotion Agreement. Under the Sandoz Agreement, Liquidia made a payment of $21.75 million (the “Sandoz Payment”) into escrow on October 14, 2026, which amount will be released to Sandoz upon Sandoz’s delivery into escrow of the documents necessary to dismiss the RareGen Litigation with prejudice and the entry by the Company and/or its affiliates into the Settlement Agreement. Upon release of the Sandoz Payment to Sandoz, Sandoz’s interest in the RareGen Litigation is assigned to us and the Promotion Agreement terminates, other than Sandoz’s obligation to pay net profits for the third quarter of 2026 and provisions that survive termination. The Sandoz Payment was released to Sandoz on October 26, 2026.

Henderson Agreement

On October 8, 2026, we entered into a Settlement and Termination Agreement with Henderson (the “Henderson Agreement”), which fixed the amount payable to Henderson in complete satisfaction of its economic rights under the Litigation Financing Agreement, dated as of June 4, 2020, by and between Henderson and RareGen, pursuant to which Henderson funded a portion of Liquidia PAH’s legal and litigation expenses in the RareGen Litigation in exchange for a share of certain litigation or settlement proceeds (the “Financing Agreement”). Under the Henderson Agreement, we paid Henderson $19.05 million on October 16, 2026, which included repayment of the $8.5 million litigation finance payable, and the Financing Agreement terminated upon that payment.

PBM Agreement

On October 10, 2026, we entered into a Settlement and Termination Agreement with PBM (the “PBM Agreement”), which fixed the amount payable to PBM in complete satisfaction of its economic rights under the Litigation Funding and Indemnification Agreement, dated as of November 17, 2020 (the “Indemnification Agreement”), by and between PBM and RareGen, under which PBM controls the RareGen Litigation, reimburses Liquidia PAH’s litigation expenses not reimbursed by Henderson and was entitled to the proceeds of the RareGen Litigation to which Henderson is not entitled. Under the PBM Agreement, we paid PBM $19.45 million on October 16, 2026, and the Indemnification Agreement, including our right to indemnification under it, terminated upon that payment. However, PBM will continue to reimburse Liquidia PAH’s residual RareGen Litigation expenses.

PBM is a related party of the Company because it is controlled by Paul B. Manning, a stockholder of the Company who beneficially owns at least 5% of our outstanding common stock and is also a member of our Board of Directors (the “Board”), and it is also owned by Roger A. Jeffs, Ph.D., our Chief Executive Officer and a member of the Board, Damian deGoa, a member of the Board, and Russell Schundler, our General Counsel. The PBM Agreement was reviewed and approved by the disinterested members of the Board.

Seventh Amendment to Revenue Interest Financing Agreement

On October 13, 2026, we entered into a Seventh Amendment (the “Seventh Amendment”) to the revenue interest financing agreement with HealthCare Royalty Partners IV, L.P. (“HCR”) dated January 9, 2023, as amended (the “HCR Agreement”), pursuant to which HCR consented to the letters of credit issued in favor of UTC in connection with the Settlement Agreement. As consideration for such consent, we agreed to increase the minimum cash covenant under the HCR Agreement from $15.0 million to $45.0 million. The Seventh Amendment involvedno fees and did not change the payment terms of the HCR Agreement (seeNote 11 Long-term Debt).

Accounting for the Settlements

The Settlement Agreement, the Sandoz Agreement, the Henderson Agreement and the PBM Agreement resolved litigation that was pending at September 30, 2026 and provided evidence of a liability that existed at that date. Accordingly, we recognized the settlements in the three and nine months ended September 30, 2026, and recorded a charge of $389.7 million, presented as “Litigation settlement, net” in the condensed consolidated statements of operations and comprehensive loss. SeeNote 14 Legal Proceedingsfor the components of the charge and the related balances at September 30, 2026, andNote 16 Subsequent Eventsfor the payments made and events occurring after September 30, 2026.

Risks and Uncertainties

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

We operate in a dynamic and highly competitive industry and believe that changes in any of the following areas could have a material adverse effect on our future financial position, results of operations, or cash flows: advances and trends in new products, technologies and industry standards; results of clinical trials; regulatory approval, market acceptance and third-party payor coverage for our products; development of sales channels; certain strategic relationships; litigation or claims against us, including claims related to intellectual property, product, regulatory, or other matters; and our ability to attract and retain employees necessary to support our growth.

The current global macro-economic environment is volatile, which may result in supply chain constraints and elevated rates of inflation. We rely on single source manufacturers and suppliers for the supply of our products and product candidates, adding to the manufacturing risks we face. In the event of any failure by a supplier, we could be left without backup facilities. Any disruption from these manufacturers or suppliers could have a negative impact on our business, financial position and results of operations. Additionally, see Note 14Legal Proceedingsfor discussion of the settlement of our litigation with UTC, including our agreement to remove the PH-ILD indication from the YUTREPIA label and to cease promotion of YUTREPIA for PH-ILD.

Liquidity and Capital Resources

We have historically incurred recurring annual operating losses and as of September 30, 2026, we had an accumulated deficit of $735.1 million. We have financed our growth and operations through a combination of funds generated from revenues, the issuance of convertible preferred stock and common stock, bank borrowings, bank borrowings with warrants, the issuance of convertible notes and warrants, and other long-term debt.

We expect to incur significant expenses for the foreseeable future as we continue commercialization of YUTREPIA and advance our product candidates through clinical trials, seek regulatory approval of such product candidates and pursue commercialization of any such approved product candidates. These efforts require significant amounts of capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. It is uncertain whether and when, if ever, we will realize sustained revenue from sales of such additional product candidates. Additionally, the HCR Agreement contains fixed quarterly payments and minimum cash covenants that require us to maintain cash and cash equivalents in an amount at least equal to $45.0 million for the remainder of the payment term, which, based on amounts funded as of September 30, 2026, is expected to conclude in 2033. In addition, the UTC Letters of Credit are partially cash collateralized and as of October 23, 2026, $105.4 million of cash and cash equivalents has been legally restricted and is not available for operations until the UTC Payments have been made.

Our future funding requirements will be heavily determined by our ability to continue to successfully commercialize YUTREPIA and the resources needed to support further development of our products and product candidates. We believe we will have sufficient unrestricted cash and cash equivalents to meet our financial obligations, including the settlement payments discussed above, and to comply with minimum cash covenants for at least the next twelve months. We have included anticipated cash inflows from YUTREPIA product sales in our projections; actual cash inflows will depend on our ability to collect our outstanding receivables and the magnitude of potential returns. We have based our estimates on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. In the event revenues and cash inflows from YUTREPIA are insufficient to support our business operations and future capital needs, we expect that we would need further financing or we could be forced to delay, limit, reduce or terminate clinical studies or other ongoing activities, which could have a material adverse effect on our business, results of operations, and financial condition.

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

Basis of Presentation

The unaudited interim condensed consolidated financial statements as of September 30, 2026 and for the three and nine months ended September 30, 2026 and 2025 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments and accruals) necessary for a fair statement of the results for the periods presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The year-end condensed consolidated balance sheet data was derived from our audited consolidated financial statements but does not include all disclosures required by GAAP. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2026. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. Our financial position, results of operations and cash flows are presented in U.S. Dollars.

The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2025, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”).

Consolidation

The accompanying condensed consolidated financial statements include our 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 to be reasonable under the circumstances. We evaluate our estimates on an ongoing basis, including those related to the valuation of stock-based awards, certain accruals, and intangible and contract acquisition cost amortization, and make changes to the estimates and related disclosures as our experience develops or new information becomes known. Actual results will most likely differ from those estimates.

Summary of Significant Accounting Policies

Our significant accounting policies are disclosed in Note 2Basis of Presentation, Significant Accounting Policies and Fair Value Measurements of the consolidated financial statements for the years ended December 31, 2025 and 2024, which are included in our 2025 Annual Report on Form 10-K.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03,Disaggregation of Income Statement Expenses (DISE). This guidance requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU 2025-01,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, with early adoption permitted. Except for expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.

In July 2025, the FASB issued ASU 2025-05,Measurement of Credit Losses for Accounts Receivable and Contract Assets. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. We adopted ASU 2025-05 effective January 1, 2026. The adoption of this guidance did not have an impact on our consolidated financial statements.

Cash, Cash Equivalents and Restricted Cash

We consider all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Restricted cash represents cash held at financial institutions that is pledged as collateral for standby letters of credit.

Accounts Receivable, Net

Accounts receivable, net consists of trade receivables which are amounts due from our customers related to product sales and from Sandoz related to service revenue. We record trade receivables net of discounts, chargebacks, and any allowances for potential credit losses. An allowance for credit losses is determined based on the financial condition and creditworthiness of customers and we consider economic factors and events or trends expected to affect future collections experience. Any allowance would reduce the net receivables to the amount that is expected to be collected. We have not recorded any expected credit losses related to outstanding accounts receivable.

Concentration of Credit Risk

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

We are exposed to risks associated with extending credit to customers related to service revenue and product sales. We do not require collateral to secure amounts due from customers. One customer accounted for 100% of service revenue, net. The following table presents the percentage of gross product sales for the nine months ended September 30, 2026 and 2025 and accounts receivable as of September 30, 2026 and December 31, 2025 for our significant customers:

Prelaunch Inventory

We capitalize prelaunch inventory prior to receiving regulatory approval if regulatory approval and subsequent commercialization of a product is probable and we also expect future economic benefit from the sales of the product to be realized. Prior to this conclusion, we expense prelaunch inventory as research and development expense in the period incurred. For prelaunch inventory that is capitalized, we consider a number of specific facts and circumstances, including the product’s shelf life, the product’s current status in the development and regulatory approval process, results from related clinical trials, results from meetings with relevant regulatory agencies prior to the filing of regulatory applications, potential obstacles to the approval process, viability of commercialization and market trends.

Inventory

We value our inventories at the lower-of-cost or net realizable value on an average basis. We began capitalizing YUTREPIA in late 2023, when, based on our assessment of the legal and regulatory process, we concluded that we met the criteria to capitalize expenditures for prelaunch inventory.

Inventories include the cost for materials, third party contract manufacturing and packaging services, and overhead associated with manufacturing. We perform an assessment of the recoverability of inventory during each reporting period and write down any excess and obsolete inventories to their net realizable value in the period in which the impairment is first identified. If they occur, such impairment charges are recorded as a component of cost of product sales. Manufacturing cost is determined using an average cost method, which approximates actual cost. Inventory used for clinical development purposes is expensed to research and development expense when consumed.

Royalties

Royalties incurred in connection with our obligations are included in cost of product sales in the same period as the related product sales are recognized and are further described in Note 13Commitments and Contingencies.

Long-Lived Assets

We review long-lived assets, including definite-life intangible assets, for realizability on an ongoing basis. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. We also review

for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, we perform undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, we group assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Any impairment losses would be recorded in the consolidated statements of operations. In the three months ended September 30, 2026, we recognized impairment losses on the contract acquisition costs and the intangible asset related to the Promotion Agreement in connection with its termination (see Note 5Contract Acquisition Costs and Intangible Assetand Note 14Legal Proceedings).

Goodwill

We assess goodwill for impairment at least annually as of July 1 or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We haveone reporting unit. We have the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, in which case a quantitative impairment test is not required.

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

We completed our annual impairment test as of July 1, 2026 and concluded thatno impairment had occurred. We considered the September 30, 2026 decision in the ‘327 Patent Litigation and the subsequent settlement of our litigation with UTC (see Note 14Legal Proceedings) to be an event requiring an interim assessment of goodwill. Based on a qualitative assessment as of September 30, 2026, we concluded that it was not more likely than not that the fair value of our reporting unit was less than its carrying amount, andno impairment of goodwill was recorded.

Leases

In accordance with ASC 842,Leases (“ASC 842”), we determine if an arrangement is or contains a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At the lease commencement date, we classify leases as operating or finance leases and record a right-of-use asset and a lease liability for all leases with an initial lease term of greater than 12 months based on the present value of the lease payments over the lease term using the discount rate implicit in the lease. If the rate implicit is not readily determinable, we use an estimate of our incremental borrowing rate based upon the available information at the lease commencement date. Operating lease expense is recognized on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less are not recorded in the balance sheet pursuant to the practical expedient available under ASC 842.

Acquired In-Process Research and Development Costs

Acquired in-process research and development (“IPR&D”) expense consists of payments incurred in connection with the acquisition or licensing of products or technologies that do not meet the definition of a business under ASC 805,Business Combinations. Payments for acquired IPR&D as well as future product development milestones are initially treated as the acquisition of an asset but then immediately expensed as there is no future alternative use for the asset. These payments are reflected as a component of research and development expense as well as an investing activity

outflow on our condensed consolidated statements of cash flows due to the nature of the underlying acquisition of an asset. See Note 13Commitments and Contingencies for further discussion of future product development milestones.

Long-term Debt

We recognized a liability related to amounts received pursuant to the HCR Agreement under ASC 470-10,Debt (“ASC 470”) and ASC 835-30,Interest – Imputation of Interest. The liability will be accreted under the effective interest method based upon the amount of contractual future payments to be made pursuant to the HCR Agreement. Amendments are assessed under ASC 470 to determine the appropriate treatment as troubled debt restructurings, extinguishments or modifications. If the timing or amounts of any future payments change, we will prospectively adjust the effective interest and the related amortization of the liability.

Revenue Recognition

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

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

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

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

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

Revenue is measured based on consideration specified in a contract with a customer. We recognize revenue when we satisfy 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.

In the second quarter of 2025, YUTREPIA became available to patients with a prescription in the U.S. and we commenced commercial sales to customers. We sell YUTREPIA to customers, including specialty pharmacies and a specialty distributor who in turn sell YUTREPIA directly to patients, clinics, hospitals, and federal healthcare programs. We offer access programs to allow patients to obtain free prescription fills in certain circumstances. We exclude amounts related to these access programs from both gross and net revenue. The cost of product associated with such access programs is recognized as a selling, general and administrative cost in the condensed consolidated statements of operations.

We have determined that the delivery of YUTREPIA to our customers constitutes a single performance obligation. There are no other promises to deliver goods or services beyond what is specified in each accepted customer order. Product sales are recognized at the transaction price when the customer obtains control of our product, which occurs at a point in time upon delivery of the product to the customer.

Product sales, net are recorded at the transaction price, which reflects gross product sales reduced by corresponding gross-to-net (“GTN”) adjustments, including estimated cash discounts, government chargebacks, government rebates, specialty distributor fees, copay assistance, and returns. These GTN adjustments represent variable consideration under ASC 606 and are estimated using the expected value method or most likely amount method and are recorded when revenue is recognized on the sale of the product. GTN adjustments are based on available information including the contractual terms with customers, historical trends, industry analogs, communications with customers, and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products, in combination with management’s informed judgments. Overall, these reserves reflect our best estimates of the amount of net cash proceeds we expect to realize from collection of current period gross sales less fees, discounts, and allowances and future estimated cash disbursements for the various GTN categories discussed below.

The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price, only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our original estimates, we will adjust these estimates, which would affect product sales and earnings in the period such variances become known. During the quarter ended September 30, 2026, adjustments to estimated provisions related to prior period sales were less thanone percent of our total revenues for the quarter then ended.

GTN adjustments include:

Veterans Affairs hospitals and 340B entities at prices lower than the list prices charged to customers who directly purchase the product from us. The 340B Drug Discount Program is a U.S. federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations and covered entities at significantly reduced prices. Customers charge us for the difference between what they pay for the product and the statutory selling price to the qualified government entity. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and a corresponding reduction of either accounts receivable or establishment of a current liability. Chargeback amounts are generally determined at the time of resale to the qualified government healthcare provider by customers, and we generally issue credits for such amounts within a few weeks after the customer notifies us of the resale. Reserves for chargebacks consist of chargebacks that customers have claimed, but for which we have not yet issued a credit and credits that we expect to issue for product that has been recognized as revenue, but which remains in the distribution channel inventories at the end of each reporting period. There may be significant lag time between our reported net product sales and receipt of the corresponding government chargeback claims from our customers.

Services revenues, net were generated from the promotional services we performed to encourage the appropriate use of Treprostinil Injection in the U.S. under our Promotion Agreement with Sandoz. In exchange for conducting these promotional services, we were entitled to receive a share of Net Profits (as defined within the Promotion Agreement) based on specified profit levels. The share of Net Profits received was subject to adjustments from Sandoz for certain items, such as distributor chargebacks, rebates, inventory returns, inventory write-offs and other adjustments.

We determined that the performance of the promotional services constitutes a single performance obligation and recognize revenue as we satisfy our performance obligation. The transaction price is equal to our share of Net Profits. As of December 31, 2025, a $1.0 million refund liability was offset against accounts receivable from Sandoz related to expected refund amounts. As of September 30, 2026, there wasno refund liability and the Promotion Agreement was terminated in October 2026.

Research and Development Expense

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

Accrued Research and Development Expenses

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

The significant estimates in our accrued research and development expenses are related to expenses incurred with respect to CROs, CMOs and other vendors in connection with research and development and manufacturing activities. The financial terms of our agreements with CROs and CMOs are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the applicable research and development or manufacturing expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from such estimate, we adjust the accrual or prepaid expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed

relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. There have been no material changes in estimates for the periods presented.

Patent Maintenance

We are responsible for all patent costs, past and future, associated with the preparation, filing, prosecution, issuance, maintenance, enforcement and defense of United States patent applications to which we have rights other than those patents that we license from Pharmosa that are not specific to L606. Such costs are recorded as general and administrative expenses as incurred. To the extent that our licensees share these costs, such benefit is recorded as a reduction of the related expenses.

Stock-Based Compensation

We estimate the grant date fair value of stock-based awards and amortize this fair value to compensation expense over the requisite service period or the vesting period of the respective award. In arriving at stock-based compensation expense, we estimate the number of stock-based awards that will be forfeited due to employee turnover. The forfeiture assumption is based primarily on historical turnover experience. If the actual forfeiture rate is higher than the estimated forfeiture rate, then an adjustment will be made to increase the estimated forfeiture rate, which will result in a decrease to the expense recognized in our financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, then an adjustment will be made to lower the estimated forfeiture rate, which will result in an increase to expense recognized in our financial statements. The expense we recognize in future periods will be affected by changes in the estimated forfeiture rate and may differ from amounts recognized in the current period. See Note 9Stock-Based Compensation.

Income Taxes

The asset and liability method is used in our 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. We record 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.

We 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.

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. Due to their anti-dilutive effect, the calculation of diluted net loss per share excludes the following common stock equivalent shares:

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

Fair Value Measurements

ASC 820, Fair Value Measurements(“ASC 820”) defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price). As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 establishes a three-tiered approach for valuation of financial instruments, which requires that fair value measurements be classified and disclosed in one of three tiers, whether or not recognized on our condensed consolidated balance sheets at fair value. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

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

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

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

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table presents the placement in the fair value hierarchy of financial assets and liabilities measured at fair value as of September 30, 2026 and December 31, 2025:

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

Other Fair Value Disclosures

The carrying amounts reflected in our condensed consolidated balance sheets for cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to their short-term nature. The carrying value and fair value of long-term debt as of September 30, 2026 and December 31, 2025 are as follows:

The fair value is estimated using Level 3 inputs based on a discounted cash flow model incorporating company-specific projections and market-based discount rates of 7.1% to 7.5% as of September 30, 2026 and 12.4% to 12.7% as of December 31, 2025, based on the tenor of the contractual payment, and reflective of debt with similar risk characteristics.

3. Inventory

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

Amounts recognized as Other Assets are comprised entirely of raw materials and work in process inventories not expected to be sold within one year of the date of the condensed consolidated balance sheet.

4. Property, Plant, and Equipment

Property, plant and equipment consisted of the following:

We recorded depreciation and amortization expense related to property, plant and equipment of $0.2 million and $0.3 million for the three months ended September 30, 2026 and 2025, respectively, and of $0.8 million and $0.7 million for the nine months ended September 30, 2026 and 2025, respectively.

5. Contract Acquisition Costs and Intangible Asset

Contract acquisition costs and intangible asset are summarized as follows:

We amortized the value of the contract acquisition costs and intangible asset on a pro-rata basis based on the estimated total service revenue or net profits to be recognized over the period from November 18, 2020 through December 2032, the prior expected termination date of the Promotion Agreement (see Note 2Basis of Presentation, Significant Accounting Policies and Fair Value Measurements). Amortization of contract acquisition costs is recorded as a reduction of service revenue, net, and amortization of the intangible asset is recorded as cost of service revenue.

We recorded amortization related to the contract acquisition costs of $0.2 million and $0.1 million for the three months ended September 30, 2026 and 2025, respectively, and of $0.5 million and $0.4 million for the nine months ended September 30, 2026 and 2025, respectively. We recorded amortization related to the intangible asset of $0.1 million for the three months ended September 30, 2026 and 2025, and of $0.2 million for the nine months ended September 30, 2026 and 2025.

In October 2026, we entered into the Sandoz Agreement in connection with the Settlement Agreement (see Note 1Businessand Note 14Legal Proceedings), under which the Promotion Agreement terminates upon release of the Sandoz Payment to Sandoz, other than Sandoz's obligation to pay net profits for the third quarter of 2026 and provisions that survive termination. Because the termination ends our promotion services for Treprostinil Injection and the related net profits, we determined that the contract acquisition costs and the intangible asset have no remaining future cash flows and that their fair value iszero. We recognized impairment losses equal to their carrying amounts of $6.4 million for the contract acquisition costs and $2.7 million for the intangible asset in the three and nine months ended September 30, 2026. The impairment losses are included in Litigation settlement, net in the condensed consolidated statements of operations and comprehensive loss.

6. Indemnification Asset with Related Party and Litigation Finance Payable

Under the Financing Agreement, Henderson funded $10.0 million of Liquidia PAH’s legal and litigation expenses related to the RareGen Litigation (referred to as “Deployments”) in exchange for a share of certain litigation or settlement proceeds. Deployments received from Henderson were recorded as a litigation finance payable.

Litigation proceeds were to be split equally between Liquidia PAH and Sandoz. Unless there was an event of default by Henderson, litigation proceeds received by Liquidia PAH were to be applied first to repayment of total Deployments received. Litigation proceeds in excess of Deployments received were to be split between Liquidia PAH and Henderson according to a formula. Unless there was an event of default by PBM, all proceeds received by Liquidia PAH were to be paid to PBM as described further below.

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

As of December 31, 2025, the Indemnification Asset and Litigation Finance Payable were classified as long-term assets and liabilities, respectively, as it was considered unlikely that the RareGen Litigation would conclude within twelve months.

In October 2026, in connection with the Settlement Agreement, we entered into the Henderson Agreement and the PBM Agreement (see Note 1Businessand Note 14Legal Proceedings), under which we paid Henderson $19.05 million and PBM $19.45 million on October 16, 2026 in complete satisfaction of their rights under the Financing Agreement and the Indemnification Agreement, which terminated upon those payments. Because the settlements fixed the amount and timing of these payments, at September 30, 2026 the Litigation Finance Payable of $8.5 million is classified as a current liability and the Indemnification Asset was reduced tozero, with the $8.5 million write-off and the $19.45 million payable to PBM included in Litigation settlement, net in the condensed consolidated statements of operations and comprehensive loss. The $19.45 million due to PBM at September 30, 2026 is presented separately in the condensed consolidated balance sheet as it is due to a related party. The $10.5 million by which the Henderson payment exceeded the Litigation Finance Payable is also included in the Litigation settlement liability in the condensed consolidated balance sheet and in Litigation settlement, net in the condensed consolidated statements of operations and comprehensive loss as of and for the three and nine months ended September 30, 2026.

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

8. Stockholders’ Deficit

Warrants

During the nine months ended September 30, 2026 and 2025,46,970 and 459,315 warrants to purchase shares of common stock were exercised, respectively. Outstanding warrants consisted of the following as of September 30, 2026:

9. Stock-Based Compensation

2020 Long-Term Incentive Plan

Our 2020 Long-Term Incentive Plan (the “2020 Plan”) provides for the granting of stock appreciation rights, stock awards, stock units, and other stock-based awards and for accelerated vesting under certain change of control transactions. The number of shares of our common stock available for issuance under the 2020 Plan will automatically increase on January 1 of each year through 2030, by an amount equal to the smaller of (a)4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the Board (the “Evergreen Provision”). On January 1, 2026, the number of shares of common stock available for issuance under the 2020 Plan automatically increased by 3,488,165 shares pursuant to the Evergreen Provision. As of September 30, 2026, there were 3,380,316 shares available for future grants under the 2020 Plan.

The 2020 Plan replaced all prior equity award plans and such plans have been discontinued. However, the awards outstanding under the prior equity award plans will continue to remain in effect in accordance with their terms. Awards that are forfeited under these prior plans upon cancellation, termination or expiration will not be available for grant under

the 2020 Plan. As of September 30, 2026, a total of 234,482 shares of common stock were reserved for issuance related to the remaining outstanding equity awards granted under the prior plans.

2022 Inducement Plan

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

310,000 shares of our common stock were reserved for issuance pursuant to equity awards that may be granted under the 2022 Inducement Plan, and the 2022 Inducement Plan will be administered by the Compensation Committee. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, equity awards under the 2022 Inducement Plan may only be made to an employee who has not previously been an employee or member of the Board, or following a bona fide period of non-employment by us, if he or she is granted such equity awards in connection with his or her commencement of employment with us and such grant is an inducement material to his or her entering into employment with us. As of September 30, 2026, a total of 27,608 shares were available for issuance under the 2022 Inducement Plan.

Employee Stock Purchase Plan

In November 2020, stockholders approved the Liquidia Corporation 2020 Employee Stock Purchase Plan (the “ESPP”). The number of shares of our common stock available for issuance under the ESPP will automatically increase on January 1 of each year through 2030, by the lesser of (a)1.0% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, (b)150,000 shares, or (c) an amount determined by the Board. On January 1, 2026, the number of shares of common stock available for issuance under the ESPP increased by 150,000 shares. As of September 30, 2026, a total of 567,176 shares of common stock are reserved for issuance under the ESPP. The ESPP allows eligible employees to purchase shares of our common stock at a discount through payroll deductions, subject to plan limitations. Unless otherwise determined by the administrator, the common stock will be purchased for the accounts of employees participating in the ESPP at a price per share that is 85% of the lesser of the fair market value of our common stock on the first and last trading day of the offering period. During the nine months ended September 30, 2026 and 2025,75,506 and 192,060 shares were issued under the ESPP, respectively.

Stock-Based Compensation Valuation and Expense

We account for employee stock-based compensation plans using the fair value method. The fair value method requires us to estimate the grant-date fair value of stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. The fair value of each option grant is estimated using a Black-Scholes option-pricing model. For restricted stock units (“RSUs”) and performance stock units (“PSUs”), the grant-date fair value is based upon the market price of our common stock on the date of the grant. This fair value is then amortized to compensation expense over the requisite service period or vesting term.

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

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:

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

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

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

Stock Options

Options generally vest over afour-year period in multiple tranches.

The following table summarizes stock option activity during the nine months ended September 30, 2026:

No options were granted during the nine months ended September 30, 2026 and 2025. The aggregate intrinsic value of stock options in the table above represents the difference between the $30.26 closing price of our common stock as of September 30, 2026 and the exercise price of outstanding, exercisable, and vested and expected to vest in-the-money stock options.

Restricted and Performance Stock Units

RSUs and PSUs represent the right to receive shares of our common stock at the end of a specified time period and/or upon the achievement of a specific milestone. RSUs and PSUs can only be settled in shares of our common stock.

RSUs generally vest over afour-year period similar to stock options granted to employees. RSUs granted to directors generally vest over aone-year period. PSUs granted to our executive officers during 2026 and 2025 included 523,004 and 749,793, respectively.

The PSUs granted during 2026 vest in multiple tranches over four years following the achievement of performance goals based on net product sales of YUTREPIA. The PSUs granted during 2025 vest in multiple tranches over four years following the achievement of the first commercial sale of YUTREPIA in the United States.

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

The following table summarizes our RSU and PSU activity duringthe nine months ended September 30, 2026:

10. Leases

In February 2026, we entered into a cancellable operating sublease for additional office space in Durham, North Carolina that consists of approximately 10,000 square feet of space. The lease expires on January 31, 2028, with the option toextend forone year with appropriate notice.

In June 2025, we entered into a non-cancelable operating lease for a second manufacturing and office space in Morrisville, North Carolina that consists of approximately 70,131 square feet of space. The lease expires on November 1, 2036, with the option toextend fortwo additional periods offive years each with appropriate notice. The payments under this lease are subject to escalation clauses. The lease is not expected to commence until late 2026. As the lease commencement date has not yet occurred, no right-of-use asset or lease liability has been recognized in the current period condensed consolidated financial statements. Concurrent with the execution of the lease, we provided the landlord an automatically renewable standby letter of credit in the amount of$3.3 million. The standby letter of credit is collateralized by a high-yield savings account, which is classified as restricted cash, long-term in our condensed consolidated balance sheets.

We are also party to a non-cancelable operating lease for our laboratory, manufacturing and office space in Morrisville, North Carolina. The lease expires on December 31, 2031, with an option toextend for an additional period offive years with appropriate notice. We have not included the optional extension period in the measurement of lease liabilities because it is not reasonably certain that we will exercise the option to extend. The payments under this lease are subject to escalation clauses.

Operating lease cost is allocated between inventory, research and development, and selling, general, and administrative expenses based on the usage of the leased facilities. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset.

Lease Balances, Costs, and Future Minimum Payments

Leases with an initial term of 12 months or less are not recorded on the balance sheet. As of September 30, 2026, we have not entered into any short-term leases. For lease agreements entered into or reassessed after the adoption of ASC 842 we combine lease and non-lease components, if any. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

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

The weighted average remaining lease term and discount rates as of September 30, 2026 were as follows:

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

Lease liability maturities as of September 30, 2026, were as follows:

The table above excludes $36.3 million ofestimated fixed payment obligations under our lease for a second manufacturing and office space in Morrisville, North Carolina that has not yet commenced.

11. Long-term Debt

On January 9, 2023, we entered into the HCR Agreement, as amended, pursuant to which and subject to the terms and conditions contained therein, HCR has paid us an aggregate investment amount of$175.0 million (the “Investment Amount”).$25.0 million remains available for funding upon mutual agreement of HCR and us.

On October 13, 2026, we and HCR entered into the Seventh Amendment, under which HCR consented to the letters of credit issued in favor of UTC in connection with the Settlement Agreement (see Note 14Legal Proceedings) and the related reimbursement obligations as permitted debt under the HCR Agreement, subject to conditions that their aggregate stated amount is not increased, reinstated after a drawing, or renewed or replaced after expiration without HCR’s consent. As consideration for the consent, the minimum cash covenant was increased from $15.0 million to $45.0 million of cash and cash equivalents. The Seventh Amendment involvedno fees and did not change any of the payment terms of the HCR Agreement.

As consideration for the Investment Amount and pursuant to the HCR Agreement, we have agreed to pay HCR according to a fixed quarterly payment schedule. As of September 30, 2026, we were required to pay $45.8 million within one year of the balance sheet date, which is classified as current in our condensed consolidated balance sheet.

Aggregate payments to HCR are capped at 175% of the funded portion of the Investment Amount (the “Hard Cap”), plus an amount, if any, that HCR would need to receive to yield an internal rate of return of (i)18% on the first $67.5 million funded, (ii)16% on the next $57.5 million funded, (iii)13% on the next $50.0 million funded, and (iv)12% on the next $25.0 million funded (the “IRR True-Up Payment”), unless the HCR Agreement is earlier terminated. If a change of control occurs or upon the occurrence of an event of default, HCR may accelerate payments due under the HCR Agreement up to the Hard Cap, plus the IRR True-Up Payment, plus any other obligations payable under the HCR Agreement.

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

The HCR Agreement contains certain restrictions on our ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, dispose of assets, pay dividends and distributions, subject to certain exceptions. In addition, the HCR Agreement contains a financial covenant that requires us to maintain cash and cash equivalents in an amount at least equal to $45.0 million for the remainder of the payment term, which based on amounts funded as of September 30, 2026, concludes in 2033.

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

We recorded the total funds received from HCR under the terms of the HCR Agreement as a liability. Cumulative fees to the lender and third parties of approximately $1.0 million are reflected as a discount on the long-term debt and are being accreted over the term using the effective interest method. All amendments to date were treated as debt modifications in accordance with ASC 470,Debt. The HCR Agreement’s initial effective interest rate was 17.3%, which decreased to 17.2% following the Third Amendment. Following the Fourth Amendment, the effective interest rate was 18.0% and was 16.0% following the Fifth Amendment. Following the Sixth Amendment, the effective interest rate was 15.8%. Following the funding on June 23, 2025, the effective interest rate was 14.4%. We use the contractual payment schedule to determine the interest expense to record to accrete the liability to the amount ultimately due. Over the course of the HCR Agreement, the effective interest rate may be affected by potential changes in contractual payments.

The following table presents the changes in the HCR Agreement payable during the nine months ended September 30, 2026:

The fixed contractual annual payments on long-term debt as of September 30, 2026 are as follows:

12. Income Taxes

We account for income taxes in accordance with ASC 740,Income Taxes. Income tax benefit for interim periods is based on the estimated annual effective tax rate, applied to year‑to‑date pre‑tax loss, adjusted for discrete items recognized in the period in which they occur.

During the three and nine months ended September 30, 2026, we recorded an income tax benefit of $30.1 million and $19.2 million, respectively, resulting in an effective tax rate of 11.3% and 15.0%, respectively, that includes the effects of various permanent book-to-tax adjustments, state/local taxes and partial release of valuation allowance. During both the three and nine months ended September 30, 2025, we recordedno income tax provision, resulting in an effective tax rate of 0%.

Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and tax basis of assets and liabilities. Management assesses the realizability of deferred tax assets each reporting period based on all available positive and negative evidence, including historical operating results, projections of future taxable income, and the timing of the reversal of existing temporary differences.

We are currently projecting future taxable income associated with the commercial launch of YUTREPIA in June of 2025 and our broader operating plan. While these developments represent positive evidence, management has concluded that such evidence was not sufficient as of the interim reporting date to support a full release of the valuation allowance. Continued improvement in operating results and the accumulation of additional positive evidence could result in a change in our assessment of the realizability of our deferred tax assets in a future reporting period. Accordingly, it is

reasonably possible that all or a portion of the valuation allowance could be released within the next twelve months. Any such release could result in the recognition of a material income tax benefit in the period in which the determination is made. The timing and amount of any potential release will depend upon our evaluation of the positive and negative evidence existing at the time of that assessment.

There have been no significant changes in uncertain tax positions during the nine months ended September 30, 2026.

13. Commitments and Contingencies

Vectura License Agreement

On October 27, 2025, we entered into an exclusive licensing agreement (the “Vectura License Agreement”) with Vectura Limited (“Vectura”), which provided for, among other things, (i) the exclusive right for us to develop, manufacture and commercialize for use in the United States (the “Vectura Territory”) products containing treprostinil, including L606, administered via Vectura’s nebulizer device (the “Vectura Device”) for treatment in the field of hypertension and interstitial lung diseases, including PAH and PH-ILD and (ii) that Vectura shall be responsible for manufacturing and supplying us with clinical and commercial supplies of the Vectura Device.

Under the Vectura License Agreement, we paid Vectura an upfront payment of $2.0 million during 2025 and we will pay (i) certain development milestone payments of up to $12.0 million; (ii) certain sales milestone payments of up to $92.5 million tied to commercial sales in the Vectura Territory and (iii) royalty payments with royalty rates ranging in the middle single digits tied to commercial sales in the Vectura Territory. As of September 30, 2026, development milestones of $1.0 million have been achieved under the Vectura License Agreement. The Vectura License Agreement also provides us with rights of first negotiation to add additional territories and indications during the term thereof.

Pharmosa License Agreement and Device License Agreement

In June 2023, we entered into a License Agreement with Pharmosa pursuant to which we were granted an exclusive license in North America to develop and commercialize L606, an inhaled, sustained-release formulation of treprostinil currently being evaluated for the treatment of PAH and PH-ILD, and a non-exclusive license for the manufacture, development and use (but not commercialization) of such licensed product in most countries outside North America (the “Pharmosa License Agreement”). On October 2, 2024, we and Pharmosa entered into a First Amendment to the Pharmosa License Agreement (the “First Amendment”) which, among other things, expands our licensed territory beyond North America to include key markets in Europe, Japan and elsewhere.

Concurrently with the execution of the First Amendment, we and Pharmosa also entered into a Device License Agreement (the “Device License Agreement”). Pursuant to the terms of the Device License Agreement, Pharmosa will provide (i) an exclusive license to Liquidia Technologies for the right to develop, manufacture, use and commercialize Pharmosa’s next-generation smart-technology nebulizers (the “Device”) for use with L606 in most countries (subject to certain exceptions) (the “Pharmosa Territory”) and (ii) a non-exclusive license to Liquidia Technologies for the right to develop, manufacture and use (but not commercialize) the Device outside of the Pharmosa Territory.

Under the terms of the Pharmosa License Agreement, as amended, we will be responsible for development, regulatory and commercial activities of L606 in the Pharmosa Territory. Pharmosa will manufacture clinical and commercial supplies of the liposomal formulation through its global supply chain and support us in establishing a redundant global supply chain. In consideration for these exclusive rights, we paid Pharmosa an upfront license fee of $10 million and paid an additional $3.5 million upfront license fee in 2024 in connection with the rights granted in the First Amendment and the Device License Agreement. In addition to the upfront fees, we will pay Pharmosa potential development milestone payments tied to clinical development and approvals in PAH and/or PH-ILD of up to $37.75 million, potential sales milestones of up to $185 million in North America and $150 million outside North America and two tiers of low, double-digit royalties on all net sales of L606. Pharmosa will also receive a $10 million milestone payment for each additional indication approved by the FDA after PAH and PH-ILD and each additional product approved by the FDA under the license, a $2.0 million milestone payment for each additional indication approved by the EMA after PAH and PH-ILD, and a $0.5 million milestone payment for each additional indication approved by the PMDA after PAH and

PH-ILD. As of September 30, 2026, no development milestones have been achieved under the Pharmosa License Agreement. We also retain the first right to negotiate for development and commercialization of L606 in other territories should Pharmosa seek a partner, subject to satisfaction of certain conditions as set forth in the Pharmosa License Agreement.

UNC License Agreement

In December 2008, we entered into the Amended and Restated License Agreement with The University of North Carolina at Chapel Hill (“UNC”) for the use of certain patent rights and technology relating to our PRINT technology (the “UNC License Agreement”). As part of the UNC License Agreement, we hold an exclusive license to certain research and development technologies and processes in various stages of patent pursuit, for use in our research and development and commercial activities, with a term until the expiration date of the last to expire patent subject to the UNC License Agreement, subject to industry standard contractual compliance. Under the UNC License Agreement, we are obligated to pay UNC royalties equal to a low single digit percentage of all net sales of drug products whose manufacture, use or sale includes any use of the technology or patent rights covered by the UNC License Agreement, including YUTREPIA. We may grant sublicenses of UNC licensed intellectual property in return for specified payments based on a percentage of any fee, royalty or other consideration received.

Employment Agreements and Executive Severance and Change in Control Plan

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

Purchase Obligations

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

On July 14, 2023, we entered into an Amended and Restated Commercial Manufacturing Services and Supply Agreement (as amended, the “CSA”) with Lonza Tampa LLC (“Lonza”). Lonza is our sole supplier for encapsulation and packaging services for YUTREPIA. Pursuant to the terms of the CSA, we deliver bulk treprostinil powder, manufactured using our proprietary PRINT technology, and Lonza encapsulates and packages it. The CSA was effective upon signing, will be in effect until December 31, 2028 and may thereafter be extended upon the mutual written agreement of the parties in accordance with the terms of the CSA. We are required to provide Lonza with quarterly forecasts of our expected production requirements for the following 24-month period, the first twelve months of which is considered a binding, firm order. We are required to purchase certain minimum annual order quantities, which may be adjusted by us after the thirteenth month after receipt of regulatory approval for YUTREPIA. The CSA provides for tiered pricing depending upon the batch size ordered.

In addition, in January 2020, we entered into a multi-year supply agreement with LGM Pharma, LLC (“LGM”) to supply active pharmaceutical ingredients (“APIs”) for YUTREPIA. Under the supply agreement with LGM, we are required to provide rolling forecasts, a portion of which will be considered a binding, firm order, subject to an annual minimum purchase commitment of $2.7 million for the term of the agreement. The agreement expires five years from the first marketing authorization approval for YUTREPIA.

As of September 30, 2026, we have non-cancelable commitments for product manufacturing and supply costs of approximately $81.7 million.

Other Contingencies and Commitments

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

14. Legal Proceedings

‘327 Patent Litigation

In connection with an amendment to the Company’s new drug application (“NDA”) for YUTREPIA filed in July 2023 to add PH-ILD as an indication for YUTREPIA, UTC filed a complaint for patent infringement against the Company in the U.S. District Court for the District of Delaware (Case No. 1:23-cv-00975-RGA) (the “‘327 Patent Litigation”), asserting infringement by the Company of U.S. Patent No. 10,716,793, entitled “Treprostinil Administration by Inhalation” (the “‘793 Patent”), which was subsequently amended to include allegations of infringement of U.S. Patent No. 11,826,327, entitled “Treatment for Interstitial Lung Disease” (the “‘327 Patent”). In February 2024, UTC stipulated to the dismissal of the claims in the ‘327 Patent Litigation related to the ‘793 Patent. In September 2026, the Court issued an opinion finding that claims 1 and 14 of the ‘327 Patent were valid and infringed by YUTREPIA.

Prior to the Settlement Agreement, UTC was seeking injunctive relief that would have required YUTREPIA to be removed from the market and could have pursued damages based on our commercialization of YUTREPIA, and we were not able to reasonably estimate a range of potential losses. The Settlement Agreement fixed the amounts payable by us in resolution of the ‘327 Patent Litigation and the other matters described in this Note 14*Legal Proceedings.*In connection with the Settlement Agreement, the ‘327 Patent Litigation was dismissed with prejudice. See “Settlement of Litigation with UTC and Related Agreements” below.

‘782 Patent Litigation

In May 2025, UTC filed a complaint for patent infringement against the Company in the U.S. District Court for the Middle District of North Carolina (Case No. 1:25CV368) (the “‘782 Patent Litigation”), asserting infringement by the Company of U.S. Patent No. 11,357,782, entitled “Treprostinil Administration By Inhalation.”

Prior to the Settlement Agreement, UTC was seeking injunctive relief that would have required YUTREPIA to be removed from the market and could have pursued damages based on our commercialization of YUTREPIA, and we were not able to reasonably estimate a range of potential losses. The Settlement Agreement fixed the amounts payable by us in resolution of the ‘782 Patent Litigation and the other matters described in this Note 14*Legal Proceedings.*In connection with the Settlement Agreement, the ‘782 Patent Litigation was dismissed with prejudice. See “Settlement of Litigation with UTC and Related Agreements” below.

Trade Secret Litigation

In December 2021, UTC filed a complaint in the Superior Court in Durham County, North Carolina, alleging that the Company and a former UTC employee who later joined the Company as an employee many years after terminating his employment with UTC (the “Former Employee”) conspired to misappropriate certain trade secrets of UTC and engaged in unfair or deceptive trade practices (the “Trade Secret Litigation”).

Prior to the Settlement Agreement, UTC was seeking injunctive relief that would have required YUTREPIA to be removed from the market and could have pursued damages based on our commercialization of YUTREPIA, and we were not able to reasonably estimate a range of potential losses. The Settlement Agreement fixed the amounts payable by us in resolution of the Trade Secret Litigation and the other matters described in this Note 14Legal Proceedings. In connection with the Settlement Agreement, the claims against the Company in the Trade Secret Litigation were dismissed with prejudice. See “Settlement of Litigation with UTC and Related Agreements” below.

Breach of Contract Litigation

In May 2024, UTC filed a second complaint in the Superior Court in Durham County, North Carolina (the “Breach of Contract Litigation”) against the Former Employee, alleging that he breached prior employment agreements with UTC by failing to assign to UTC his interest in patents obtained by the Company that are alleged to have relied upon or benefitted from certain inventions, discoveries, materials, authorship, derivatives and results developed by the Former Employee while he was employed by UTC. The Company was also named as a defendant in this lawsuit.

Prior to the Settlement Agreement, UTC was seeking declaratory judgment such that all right, title and interest in and to any patentable or unpatentable inventions, discoveries, and ideas made or conceived by the Former Employee while employed by the Company should be assigned and transferred to UTC because they involved the use of UTC’s confidential information. The Settlement Agreement fixed the amounts payable by us in resolution of the Breach of Contract Litigation and the other matters described in this Note 14Legal Proceedings. In connection with the Settlement Agreement, the claims against the Company in the Breach of Contract Litigation were dismissed with prejudice. See “Settlement of Litigation with UTC and Related Agreements” below.

‘494 Patent Litigation

On April 21, 2025, the Company filed a complaint for patent infringement against UTC in the U.S. District Court for the Middle District of North Carolina (Case No. 1:25-cv-00299) (the “‘494 Patent Litigation”), asserting infringement by UTC of U.S. Patent No. 10,898,494, entitled “Dry Powder Treprostinil for the Treatment of Pulmonary Hypertension” with respect to its Tyvaso DPI product. The ‘494 Patent Litigation was stayed until resolution of the Breach of Contract Litigation.

In connection with the Settlement Agreement, the ‘494 Patent Litigation was dismissed with prejudice. See “Settlement of Litigation with UTC and Related Agreements” below.

RareGen Litigation

In April 2019, Sandoz and Liquidia PAH (then known as RareGen) initiated the RareGen Litigation by filing a complaint against UTC and Smiths Medical (now ICU Medical) in the District Court of New Jersey (Case No. 3:19-cv-10170), alleging that UTC 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 in the RareGen Litigation adding a claim that UTC breached a settlement agreement that was entered into in 2015, in which UTC 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.

In connection with the Settlement Agreement, the Sandoz Agreement, the Henderson Agreement and the PBM Agreement, the RareGen Litigation was dismissed with prejudice. See “Settlement of Litigation with UTC and Related Agreements” below.

Settlement of Litigation with UTC and Related Agreements

On October 13, 2026, we entered into the Settlement Agreement with UTC, which resolved, without admission of liability by either party, all pending litigation between us and UTC, including the ‘327 Patent Litigation, the ‘782 Patent Litigation, the Trade Secret Litigation, the Breach of Contract Litigation, the ‘494 Patent Litigation and the RareGen Litigation.

Under the Settlement Agreement, we agreed to pay UTC $185.0 million within thirty business days of October 13, 2026 and an additional $145.4 million intwo installments of $72.7 million due on or before January 31, 2027 and April 30, 2027, for total consideration of $330.4 million, and UTC agreed to pay us $10.0 million within thirty business days of October 13, 2026 in resolution of the RareGen Litigation. On October 19, 2026, we paid UTC the $185.0 million initial payment, and we received the $10.0 million payment from UTC on October 16, 2026. We agreed not to appeal the District Court’s September 30, 2026 decision in the ‘327 Patent Litigation, to remove the PH-ILD indication from the YUTREPIA label upon FDA approval of a label supplement that we have submitted, and to cease promotion of YUTREPIA for PH-ILD, and UTC agreed not to assert the patents at issue against the sale of YUTREPIA for the treatment of PAH. The Settlement Agreement does not grant us a license to UTC’s patents.

Following our initial payment, the parties filed to dismiss the resolved proceedings, and the parties’ mutual releases become effective upon the conditions set forth in the Settlement Agreement, including the exchange of the initial payments and the dismissals. To secure the payments to UTC, on October 23, 2026, we caused irrevocable standby

letters of credit to be issued in the aggregate amount of $145.4 million in favor of UTC (see Note 16Subsequent Events). The fees for the letters of credit are expensed over the period they are outstanding. No liability is recorded for the letters of credit because they secure our unpaid recorded obligation to UTC.

The Settlement Agreement required us to secure a settlement of the RareGen Litigation. Accordingly, in October 2026 we entered into the Sandoz Agreement, the Henderson Agreement and the PBM Agreement described in Note 1Business, under which we agreed to pay $21.75 million to Sandoz, $19.05 million to Henderson and $19.45 million to PBM, a related party, in complete satisfaction of those parties’ interests in the RareGen Litigation and in connection with the termination of the Promotion Agreement, the Financing Agreement and the Indemnification Agreement, respectively. The amounts payable under these agreements were determined as part of the negotiation of the Settlement Agreement, the Sandoz Agreement, the Henderson Agreement and the PBM Agreement and do not reflect arm's-length price discovery for the value of the RareGen Litigation.

The Settlement Agreement and the related agreements resolved litigation that was pending at September 30, 2026 and provided evidence of a liability that existed at that date. Accordingly, we recognized the settlements in the three and nine months ended September 30, 2026 and recorded a charge of $389.7 million, presented as "Litigation settlement, net" within operating expenses in the condensed consolidated statements of operations and comprehensive loss. At September 30, 2026, our condensed consolidated balance sheet includes current assets and current liabilities in the aggregate of $380.7 million, representing the net cash to be paid under the Settlement Agreement and the related agreements. The charge and current liabilities are comprised of the following components:

The indemnification asset, related party, previously classified as a long-term asset, was reduced tozero (see Note 6Indemnification Asset with Related Party and Litigation Finance Payable). We determined that because the termination of the Promotion Agreement ends our promotion services for Treprostinil Injection and the related net profits, the contract acquisition costs and the intangible asset related to the Promotion Agreement have no remaining future cash flows and recognized non-cash impairment losses equal to their carrying amounts at September 30, 2026 of $6.4 million and $2.7 million, respectively (see Note 5Contract Acquisition Costs and Intangible Asset). The amounts payable under

the Settlement Agreement and the related agreements are fixed, and we do not expect to incur any loss in excess of the amounts accrued.

15. Segment Information

We operate as asingle business segment focused on revolutionizing care for patients with challenging respiratory and vascular diseases. The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by our Chief Executive Officer, the chief operating decision maker (“CODM”), in assessing segment performance and deciding how to allocate resources on a consolidated basis. The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The CODM measures segment profit and loss by net loss as reported in the condensed consolidated income statements. The CODM uses net loss to monitor budget and forecast versus actual results to assess segment performance and to allocate resources across the organization. The measure of segment assets is reported on the condensed consolidated balance sheet as total assets.

The following table summarizes segment revenue, segment loss, and significant segment expenses regularly reported to the CODM during the three and nine months ended September 30, 2026 and 2025:

16. Subsequent Events

We evaluated subsequent events through the date these condensed consolidated financial statements were issued. Other than as described below and in Note 1Businessand Note 14Legal Proceedings, no other subsequent events requiring recognition or disclosure were identified.

Settlement of Litigation with UTC

On October 13, 2026, we entered into the Settlement Agreement with UTC and, between October 8 and October 11, 2026, the Sandoz Agreement, the Henderson Agreement and the PBM Agreement described in Note 1Businessand Note 14Legal Proceedings. The settlements were recognized in the condensed consolidated financial statements for the quarter ended September 30, 2026 because they resolved litigation that was pending, and provided evidence of a liability that existed, at that date.

The following events occurred after September 30, 2026 and will be reflected in our financial statements for the year ending December 31, 2026.

UTC Letters of Credit

On October 23, 2026, JPMorgan Chase Bank, N.A. issued irrevocable standby letters of credit in the aggregate amount of $145.4 million in favor of UTC for the account of Liquidia Technologies, Inc. to secure the UTC Payments. The letters of credit secure our recorded obligation to UTC and do not increase our total liabilities; a drawing by UTC would create a reimbursement obligation to the issuing bank in place of the corresponding amount payable to UTC. The UTC Letters of Credit are partially cash collateralized and as of October 23, 2026, $105.4 million of cash and cash equivalents has been legally restricted until the UTC Payments have been made.

Settlement Payments and Termination of Agreements

On October 14, 2026, we deposited the $21.75 million Sandoz Payment into escrow. On October 16, 2026, we paid Henderson $19.05 million and PBM $19.45 million, upon which the Financing Agreement and the Indemnification Agreement terminated and the Litigation Finance Payable of $8.5 million was extinguished at its carrying amount. On October 19, 2026, we paid UTC the $185.0 million initial payment under the Settlement Agreement, and we received the $10.0 million payment from UTC on October 16, 2026. In October 2026, following such payments, the parties filed stipulations of dismissal with prejudice in the resolved proceedings. On October 26, 2026, the Sandoz Payment was released to Sandoz, Sandoz assigned its interest in the RareGen Litigation to us and the Promotion Agreement was terminated. These payments settled the liabilities and the receivable recorded at September 30, 2026 and will not result in any additional charge in our financial statements for the year ending December 31, 2026.

Seventh Amendment to HCR Agreement

On October 13, 2026, we entered into the Seventh Amendment described in Note 11Long-term Debt, under which the minimum cash covenant was increased from $15.0 million to $45.0 million as consideration for HCR’s consent to the UTC Letters of Credit. The amendment involvedno fees and did not change the payment terms of the HCR Agreement.