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Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2024
Stock-Based Compensation |
Stock-Based Compensation | 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 of Directors (the “Evergreen Provision”). On January 1, 2024, the number of shares of common stock available for issuance under the 2020 Plan automatically increased by 2,745,183 shares pursuant to the Evergreen Provision. As of March 31, 2024, there were 984,622 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 March 31, 2024, a total of 635,280 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 of Directors 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 of Directors 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 of Directors, 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 March 31, 2024, a total of 26,650 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 of Directors. On January 1, 2024, the number of shares of common stock available for issuance under the ESPP increased by 150,000 shares. As of March 31, 2024, a total of 639,155 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 three months ended March 31, 2024 and 2023, 67,982 and 81,281 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”), 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: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​
​ | ​ | March 31, | ​
By Expense Category: |  | 2024 |  | 2023 | ​
Cost of revenue | ​ | $ | 64 | ​ | $ | — | ​
Research and development | ​ | ​ | 1,011 | ​ | ​ | 581 | ​
General and administrative | ​ |  | 3,449 | ​ |  | 1,971 | ​
Total stock-based compensation expense | ​ | $ | 4,524 | ​ | $ | 2,552 | ​
​ The following table summarizes the unamortized compensation expense and the remaining years over which such expense would be expected to be recognized, on a weighted average basis, by type of award: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of March 31, 2024
​ | ​ | ​ | ​ | ​ | Weighted
​ | ​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | ​ | Remaining
​ | ​ | ​ | ​ | ​ | Recognition
​ |  | Unamortized |  | Period
​ | ​ | Expense | ​ | (Years)
Stock options | ​ | $ | 13,698 |  | 2.0
Restricted and performance stock units | ​ | $ | 29,115 | ​ | 3.0
​ 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 stock options granted under the Black-Scholes option-pricing model: ​
​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended
​ | ​ | March 31,
​ |  | 2024 |  | 2023
Expected dividend yield | ​ | — | ​ | —
Risk-free interest rate |  | 3.98% |  | 3.46% - 3.64%
Expected volatility |  | 90% |  | 94% - 95%
Expected life (years) |  | 6.1 |  | 5.9 - 6.1
​ The weighted average fair value for options granted during the three months ended March 31, 2024 and 2023 was $9.84 and $4.80 per share, respectively. 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: ​
​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended
​ | ​ | March 31,
​ |  | 2024 |  | 2023
Expected dividend yield | ​ | — | ​ | —
Risk-free interest rate | ​ | 5.27% | ​ | 5.20%
Expected volatility | ​ | 90% | ​ | 64%
Expected life (years) | ​ | 0.50 | ​ | 0.50
​ Stock Option Activity Options generally vest over a four-year period in multiple tranches. ​ The following table summarizes stock option activity during the three months ended March 31, 2024: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ |  | Weighted |  | ​ | ​
​ | ​ | ​ | ​ | Weighted | ​ | Average | ​ | ​ | ​
​ | ​ | ​ | ​ | Average | ​ | Contractual | ​ | Aggregate
​ | ​ | Number of | ​ | Exercise | ​ | Term | ​ | Intrinsic
​ | ​ | Shares | ​ | Price | ​ | (in years) | ​ | Value
Outstanding as of December 31, 2023 |  | 9,573,937 | ​ | $ | 4.80 |  |  |  | ​ |
Granted |  | 7,500 | ​ | ​ | 12.86 |  |  |  | ​ |
Exercised |  | (23,247) | ​ | ​ | 4.27 |  |  |  | ​ |
Cancelled |  | (3,000) | ​ | ​ | 6.37 |  |  |  | ​ |
Outstanding as of March 31, 2024 |  | 9,555,190 | ​ | $ | 4.81 |  | 7.5 | ​ | $ | 95,040
Exercisable as of March 31, 2024 |  | 6,123,944 | ​ | $ | 4.47 |  | 7.2 | ​ | $ | 62,992
Vested and expected to vest as of March 31, 2024 |  | 9,069,464 | ​ | $ | 4.76 |  | 7.5 | ​ | $ | 90,617
​ The aggregate intrinsic value of stock options in the table above represents the difference between the $14.75 closing price of our common stock as of March 31, 2024 and the exercise price of outstanding, exercisable, and vested and expected to vest in-the-money stock options. Restricted Stock Units Restricted Stock Units (“RSUs”) 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 can only be settled in shares of our common stock. RSUs generally vest over a four-year period similar to stock options granted to employees. The tax withholding method used for most RSUs 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 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 is required to remit cash to us to cover the tax withholding liability and the cash is then remitted to taxing authorities by us. A summary of unvested RSU awards outstanding as of March 31, 2024 and changes during the three months ended March 31, 2024 are as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  |  |  | Weighted
​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | Grant-Date
​ | ​ | Number of | ​ | Fair Value
​ | ​ | RSUs | ​ | (per RSU)
Unvested as of December 31, 2023 |  | 1,657,978 | ​ | $ | 6.41
Granted |  | 1,857,325 | ​ |  | 12.54
Vested |  | (383,133) | ​ |  | 6.42
Forfeited |  | (2,277) | ​ |  | 12.50
Unvested as of March 31, 2024 |  | 3,129,893 | ​ | $ | 10.04
​ ​ RSUs granted during the three months ended March 31, 2024, included 520,526 performance-based RSUs granted to our executives. These performance-based RSUs vest upon the later of (a) time-based vesting conditions and (b) the first commercial sale of YUTREPIA in the United States. The time-based vesting condition means 25% of the performance-based RSUs vest one year after grant date and quarterly thereafter for three years, subject to the executive’s continued service.

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