MNKD 2017 Annual Report

position, together with our short-term debt obligations and anticipated operating losses due to increased effort on commercialization and research and development projects, raises substantial doubt about our ability to continue as a going concern. The extent of our additional funding requirements will depend on a number of factors, including: • the degree to which Afrezza is commercially successful; • the degree to which we are able to generate revenue from our Technosphere drug delivery platform; • the costs of developing and commercializing Afrezza on our own in the United States, including the costs of expanding our commercialization capabilities; • the costs of finding regional collaboration partners for the development and commercialization of Afrezza in foreign jurisdictions; • the demand by any or all of the holders of our debt instruments to require us to repay or repurchase such debt securities if and when required; • our ability to repay or refinance existing indebtedness, and the extent to which our notes with conversion options or any other convertible debt securities we may issue are converted into or exchanged for shares of our common stock; • the rate of progress and costs of our clinical studies and research and development activities; • the costs of procuring raw materials and operating our manufacturing facilities; • our obligation to make milestone payments pursuant to a Milestone Rights Purchase Agreement (the “Milestone Agreement”) with Deerfield and Horizon Santé FLML SÁRL (collectively, the “Milestone Purchasers”), which requires us to make contingent payments to the Milestone Purchasers, totaling up to $90.0 million, upon us achieving specified commercialization milestones (the “Milestone Rights”); • our success in establishing strategic business collaborations or other sales or licensing of assets, and the timing and amount of any payments we might receive from any such transactions; • actions taken by the FDA and other regulatory authorities affecting Afrezza and our product candidates and competitive products; • the emergence of competing technologies and products and other market developments; • the costs of preparing, filing, prosecuting, maintaining and enforcing patent claims and other intellectual property rights or defending against claims of infringement by others; • the level of our legal and litigation expenses; and • the costs of discontinuing projects and technologies, and/or decommissioning existing facilities, if we undertake any such activities. We have raised capital in the past through the sale of equity and debt securities and we may in the future pursue the sale of additional equity and/or debt securities, or the establishment of other funding facilities including asset-based borrowings. There can be no assurances, however, that we will be able to raise additional capital in the future on acceptable terms, or at all. Issuances of additional debt or equity securities or the issuance of common stock upon conversion of outstanding convertible debt securities or upon the exercise of our currently outstanding warrants for shares of our common stock could impact the rights of the holders of our common stock and will dilute their ownership percentage. Moreover, the establishment of other funding facilities may impose restrictions on our operations. These restrictions could include limitations on additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem our stock or make investments. We also will need to raise additional capital by pursuing opportunities for the licensing or sale of certain intellectual property and other assets. We cannot offer assurances, however, that any strategic collaborations, sales of securities or sales or licenses of assets will be available to us on a timely basis or 17