MANNKIND CORP

1. Description of Business and Significant Accounting Policies

The unaudited condensed consolidated financial statements of MannKind Corporation and its subsidiaries (“MannKind,” the “Company,” “we” or “us”), have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information included in this quarterly report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 26, 2026 (the “Annual Report”).

In the opinion of management, all adjustments, consisting only of normal, recurring adjustments, considered necessary for a fair presentation of the results of these interim periods have been included. The results of operations for the three months ended March 31, 2026 may not be indicative of the results that may be expected for the full year.

Financial Statement Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and notes. Actual results could differ from those estimates or assumptions. Management considers many factors in selecting appropriate financial accounting policies and in developing the estimates and assumptions that are used in the preparation of the financial statements. Management must apply significant judgment in this process. These effects could have a material impact on the estimates and assumptions used in the preparation of the condensed consolidated financial statements. The more significant estimates include revenue recognition, including gross-to-net adjustments, stand-alone selling price considerations for recognition of collaboration revenue and measurement of progress related to recognition of deferred revenue for collaboration revenue, the fair value of developed technology and in process research and development ("IPR&D"), assessing long-lived assets for impairment, the fair value of the contingent consideration liability, clinical trial expenses, inventory costing, interest expense on liability for sale of future royalties, stock-based compensation, the determination of the provision for income taxes and corresponding deferred tax assets and liabilities, the valuation allowance recorded against net deferred tax assets, and expected cash flows from royalties received in connection with United Therapeutics' ("UT's") net revenue for the sale of Tyvaso DPI.

Business— MannKind is a biopharmaceutical company focused on the development and commercialization of patient-centric therapies that address serious unmet medical needs for those living with cardiometabolic and orphan lung diseases. The Company is currently commercializing three products: Afrezza (insulin human) Inhalation Powder, an ultra rapid-acting inhaled insulin indicated to improve glycemic control in adults with diabetes; Furoscix (furosemide injection), to treat fluid buildup in patients with chronic heart failure or chronic kidney disease; and the V-Go wearable insulin delivery device, which provides continuous subcutaneous infusion of insulin in adults that require insulin. The Company also developed Tyvaso DPI (treprostinil) inhalation powder, which is approved for the treatment of pulmonary arterial hypertension (“PAH”) and for the treatment of pulmonary hypertension associated with interstitial lung disease (“PH-ILD”). The Company receives a royalty on net sales and revenue from supplies of Tyvaso DPI that it manufactures for its development and marketing partner, United Therapeutics.

Basis of Presentation — The condensed consolidated financial statements have been prepared in accordance with GAAP.

Principles of Consolidation — The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated.

Reclassifications —Certain immaterial amounts reported in prior year's accrued expenses footnote have been reclassified to conform with the current year presentation.

Segment Information — Operating segments are identified as components of an enterprise which engage in business activities that result in revenue and expenses for which separate discrete financial information is available for evaluation by the chief operating decision-maker (the “CODM”) in making decisions regarding resource allocation and assessing performance on a regular basis. The CODM is comprised of the Company's CEO and CFO. To date, the Company has viewed its operations and manages its business as asingle reportable segment operating in the United States of America. The business and accounting policies of the Company's single reportable segment are further explained below. The measure of segment assets is reported as total assets in the consolidated balance sheets. No intra-entity sales or transfers are transacted within the Company.

Thekey metric utilized by the CODM to assess resource allocation and performance is the Company’s segment net income, which is the same as the consolidated net income reported in the condensed consolidated statements of operations. The CODM also analyzes the Company's consolidated net income to evaluate its return on segment assets and to establish budgets and forecasts. The table below shows the details of the Company’s segment revenues and significant expense categories regularly provided to and reviewed by the CODM as well as other significant segment items included in consolidated net income in the condensed consolidated statements of operations:

(1)Includes (gain) loss on foreign currency transaction, expense related to the fair value adjustment of the contingent consideration and income tax expense.

Revenue Recognition — The Company recognizes revenue when its customers obtain control of promised goods or services, in an amount that reflects the consideration which the Company expects to be entitled in exchange for those goods or services.

To determine revenue recognition for arrangements that are within the scope of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers(“ASC 606”), the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract under ASC 606, including when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company has two types of contracts with customers: (i) contracts for commercial product sales with wholesale distributors, specialty and retail pharmacies, and durable medical equipment suppliers ("DMEs") and (ii) collaboration arrangements.

Revenue Recognition — Net Revenue — Commercial Product Sales — The Company sells its products to a limited number of wholesale distributors, specialty and retail pharmacies, DMEs, specialty distributors and direct purchasers in the U.S. and India (collectively, its “Customers”). Wholesale distributors subsequently resell the Company’s products to retail pharmacies and certain medical centers or hospitals. Specialty and retail pharmacies sell directly to patients. In addition to distribution agreements with Customers, the Company enters into arrangements with payers that provide for government mandated and/or privately negotiated rebates, chargebacks, and discounts with respect to the purchase of the Company’s products.

The Company transfers control and recognizes revenue upon delivery of product to wholesale distributors, specialty and retail pharmacies, DMEs, specialty distributors and direct purchasers. Product revenues are recorded net of applicable reserves, including discounts, allowances, rebates, returns and other incentives. See Reserves for Variable Consideration below.

Reserves for Variable Consideration— Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payer rebates, and other incentives, such as voluntary patient assistance, and other allowances that are offered within contracts between the Company and its Customers, payers, and other indirect customers relating to the Company’s sale of its products. These reserves, as further detailed below, are based on the amounts earned, or to be claimed on the related sales, and result in a reduction of accounts receivable or establishment of a current liability. Significant judgment is required in estimating gross-to-net adjustments, including historical experience, payer channel mix, current contract prices under applicable programs, unbilled claims, claim submission time lags and inventory levels in the distribution channel.

Where appropriate, these estimates take into consideration a range of possible outcomes, which are probability-weighted in accordance with the expected value method in ASC 606 for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reduce recognized revenue to the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts.

The amount of variable consideration that 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. The Company’s analysis also contemplates application of the constraint in accordance with the guidance, under which it determined a material reversal of revenue would not occur in a future period for the current period estimates of gross-to-net adjustments and, therefore, the transaction price was not reduced further during the current period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net revenue from commercial product sales and earnings in the period such variances become known.

Trade Discounts and Allowances— The Company generally provides Customers with discounts which include incentives, such as prompt pay discounts, that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, the Company compensates (through trade discounts and allowances) its Customers for sales order management, data, and distribution services. However, the Company has determined such services received to date are not distinct from the Company’s sale of products to the Customer and, therefore, these payments have been recorded as a reduction of revenue and as a reduction to accounts receivable, net.

Product Returns— Consistent with industry practice, the Company generally offers Customers a right of return for unopened product that has been purchased from the Company for a period beginningsix months prior to and ending 12 months after its expiration date, which lapses upon shipment to a patient. The Company estimates the amount of its product sales that may be returned by its Customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized, as well as reductions to accounts receivable, net. The Company currently estimates product returns using its own sales information, including its visibility into the inventory remaining in the distribution channel. The Company's current return reserve percentage is estimated to be in the low single digits. Adjustments to the returns reserve are made when changes in the Company's assumptions result in revised estimates to the Company’s assumptions.

Provider Chargebacks and Discounts— Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase products from the Company. Customers charge the Company for the difference between what they pay for products and the ultimate selling price to the qualified healthcare providers. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability that is recorded in accrued expenses and other current liabilities. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider by Customers, and the Company generally issues credits for such amounts within a few weeks of the Customer’s notification to the Company of the resale. Reserves for chargebacks consist of credits that the Company expects to issue for units that remain in the distribution channel inventories at each reporting period-end that the Company expects will be sold to qualified healthcare providers, and chargebacks that Customers have claimed, but for which the Company has not yet issued a credit.

Government Rebates— The Company is subject to discount obligations under Medicare and state Medicaid programs. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability that is included in accrued expenses and other current liabilities. Estimates around Medicaid have historically required significant judgment due to timing lags in receiving invoices for claims from states. For Afrezza and Furoscix, the Company also estimates the number of patients in the initial and catastrophic phases of the Part D benefit for whom the Company will owe an additional liability under the Medicare Part D Manufacturer Discount Program. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for products that have been recognized as revenue, but which remains in the distribution channel inventories at the end of each reporting period. The Company’s estimates include consideration of historical claims experience, payer channel mix, current contract prices, unbilled claims, claim submission time lags and inventory in the distribution channel.

Payer Rebates— The Company contracts with certain private payer organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. The Company estimates these rebates, including estimates for product that has been recognized as revenue, but which remains in the distribution channel, and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included in accrued expenses and other current liabilities. The Company’s estimates include consideration of historical claims experience, payer channel mix, current contract prices, unbilled claims, claim submission time lags and inventory in the distribution channel.

Other Incentives— Other incentives which the Company offers include voluntary patient support programs, such as the Company's co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with co-payments required by payers. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with the products that have been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability that is included in accrued expenses and other current liabilities.

Revenue Recognition — Collaborations and Services— The Company enters into licensing, research or other agreements under which the Company licenses certain rights to its product candidates to third parties, conducts research or provides other services to third parties. The terms of these arrangements may include but are not limited to payment to the Company of one or more of the following: up-front license fees; development, regulatory, and commercial milestone payments; payments for commercial manufacturing and clinical supply services the Company provides; and royalties on net sales of licensed products and sublicenses of the rights. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment such as determining the performance obligation in the contract and determining the stand-alone selling price for each performance obligation identified in the contract.

If an arrangement has multiple performance obligations, the allocation of the transaction price is determined from observable market inputs, if available, and the Company uses key assumptions to determine the stand-alone selling price, which may include development timelines, reimbursement rates for personnel costs, discount rates, and probabilities of technical and regulatory success. Revenue is recognized based on the measurement of progress as the performance obligation is satisfied and consideration received that does not meet the requirements to satisfy the revenue recognition criteria is recorded as deferred revenue. Current deferred revenue consists of amounts that are expected to be recognized as revenue in the next 12 months. Amounts that the Company expects will not be recognized within the next 12 months are classified as long-term deferred revenue. However, the timing of recognition is based on the Company’s current estimates and, if the estimates should change in the future, the Company may recognize a different amount of deferred revenue over the next 12-month period. For further information, see Note 10 –Collaborations, Licensing and Other Arrangements.

The Company recognizes upfront license payments as revenue upon delivery of the license only if the license is determined to be a separate unit of accounting from the other undelivered performance obligations. The undelivered performance obligations typically include manufacturing or development services or research and/or steering committee services. If the license is not considered as a distinct performance obligation, then the license and other undelivered performance obligations would be evaluated to determine if such should be accounted for as a single unit of accounting. If concluded to be a single performance obligation, the transaction price for the single performance obligation is recognized as revenue over the estimated period of when the performance obligation is satisfied. If the license is considered to be a distinct performance obligation, then the estimated revenue is included in the transaction price for the contract, which is then allocated to each performance obligation based on the respective standalone selling prices.

Whenever the Company determines that an arrangement should be accounted for over time, the Company determines the period over which the performance obligations will be performed, and revenue will be recognized over the period the Company is expected to complete its performance obligations. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement, including estimating future revenue to be earned over the contract term.

The Company’s collaboration agreements typically entitle the Company to additional payments upon the achievement of development, regulatory and sales milestones. If the achievement of a milestone is considered probable at the inception of the collaboration, the related milestone payment is included with other collaboration consideration, such as upfront fees and research funding, in the Company’s revenue calculation. If these milestones are not considered probable at the inception of the collaboration, the milestones will typically be recognized in one of two ways depending on the timing of when the milestone is achieved. If the milestone is improbable at inception and subsequently deemed probable of achievement, such will be added to the transaction price, resulting in a cumulative adjustment to revenue, based on measurement of progress.

The Company’s collaboration agreements, for accounting purposes, represent contracts with customers and therefore are not subject to accounting literature on collaboration agreements. The Company grants licenses to its intellectual property, supplies raw materials, semi-finished goods or finished goods, provides research and development services and offers sales support for the co-promotion of products, all of which are outputs of the Company’s ongoing activities, in exchange for consideration. Accordingly, the Company concluded that its collaboration agreements must generally be accounted for pursuant to ASC 606.

For collaboration agreements that allow collaboration partners to select additional optioned products or services, the Company evaluates whether such options contain material rights (i.e., have exercise prices that are discounted compared to what the Company would charge for a similar product or service to a new collaboration partner). The exercise price of these options includes a combination of licensing fees, event-based milestone payments and royalties. When these amounts in aggregate are not offered at a discount that exceeds discounts available to other customers, the Company concludes the option does not contain a material right, and therefore is not included in the transaction price at contract inception.

The Company also evaluates grants of additional licensing rights upon option exercises to determine whether such should be accounted for as separate contracts. Any change in transaction price is assessed by management as follows:

•

To the extent the change in estimated variable consideration relates to performance obligations that have been partially or fully satisfied, the effect of the change is recognized as an adjustment to revenue in the period of the change. This adjustment is recorded on a cumulative catch-up basis, reflecting the amount of revenue that would have been recognized if the revised estimate had been used since contract inception.

•

To the extent the change in estimated variable consideration relates to performance obligations that have not yet been satisfied, or when the Company elects to use the practical expedient described above, the effect of the change is recognized prospectively over the remaining performance period.

With respect to the Company's significant collaboration and service agreement with UT that includes a long-term commercial supply agreement (as amended, the “CSA”), the Company initially identified three distinct performance obligations: (1) the license, supply of product to be used in clinical development, and continued development and approval support for Tyvaso DPI (“R&D Services and License”); (2) development activities for the next generation of the product (“Next-Gen R&D Services”); and (3) a material right associated with the manufacturing and supply of product (“Manufacturing Services”). Pre-production activities under the CSA, such as facility expansion services and other administrative services, were recorded to deferred revenue and are recognized over the Manufacturing Services performance obligation as required by ASC 606. Under the CSA, UT issued purchase orders for the supply of Tyvaso DPI with revenue recognized at the point in time in which control of the product is transferred to UT, and deferred revenue is recognized as product is delivered over the CSA term using an output method based on the estimate of the measurement of progress. In January 2026, the Company and UT executed the Seventh Amendment to the CSA (the “Seventh Amendment”) which modified the CSA by establishing minimum annual purchase obligations for commercial supply as well as tiered pricing dependent on the volume of units purchased beginning in 2026 through the end of the CSA term. The Seventh Amendment is accounted for as a termination of the existing contract and the creation of a new contract. The outstanding balance of deferred revenue from the prior contract was carried forward into the new contract and included with the consideration expected to be received under the modified pricing terms. Upon the execution of the Seventh Amendment, the Company assessed the CSA with UT and determined that a material right existed for the optional manufacturing services and elected to account for it using the practical alternative allowed for under ASC 606 (i.e., allocate the transaction price to the optional services by reference to the services expected to be provided and the corresponding expected consideration). Under this practical alternative, the Company has made a policy election to recognize changes in estimated consideration attributable to the contract prospectively, such that the amount of revenue to be recognized per unit for future deliveries is adjusted, without recording a cumulative catch-up to amounts recognized in prior periods. Revenue is then recognized at the point in time in which control of the product is transferred to UT. See Note 10 –Collaborations, Licensing and Other Arrangements.

Revenue Recognition — Royalties — The Company recognizes royalty revenue for a sales-based or usage-based royalty if it is promised in exchange for an intellectual property license. The royalty revenue is recognized as the subsequent sale of the product occurs or, if later and applicable, the satisfaction or partial satisfaction of the performance obligation to which the royalty has been allocated. The Company’s UT License Agreement (as defined in Note 10– Collaborations, Licensing and Other Arrangements) entitles it to receive a 10% royalty on net sales of Tyvaso DPI for the license of the Company’s IP that was considered to be interdependent with the development activities that supported the approval of Tyvaso DPI. Although the Company recognizes a 10% royalty on net revenue from the sale of Tyvaso DPI as revenue, it only collects 9% of future royalties due to its sale in December 2023 of 1% of future royalties as detailed in Note 15– Commitments and Contingencies.

Milestone Payments— At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the customer, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as, or when, the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis.

The Company’s net revenue as shown on the condensed consolidated statement of operations is comprised of the following (in thousands):

(1)

Amounts represent the revenue from Afrezza, Furoscix and V-Go sales to wholesale distributors, specialty and retail pharmacies, DMEs, specialty distributors and direct purchasers and from the manufacture of Tyvaso DPI delivered to UT.

(2)

Amounts represent revenue generated from the Company's collaboration arrangements, including services related to the development agreement with UT as well as arrangements with other collaboration partners. See Note 10 –Collaborations, Licensing and Other Arrangements.

(3)

Amounts represent royalties earned based on UT’s net revenue from Tyvaso DPI sales.

Cost of goods sold and cost of revenue

The cost of goods sold – commercial, excluding amortization of acquired intangibles, of $7.5 million and $3.8 million for the three months ended March 31, 2026 and 2025, respectively, is associated with product revenue for Afrezza, Furoscix and V-Go. The cost of revenue – collaborations and services of $10.0 million and $13.7 million for the three months ended March 31, 2026 and 2025, respectively, is primarily associated with manufacturing activities for Tyvaso DPI.

Cost of Goods Sold — Commercial— Cost of goods sold - commercial is associated with the product revenue for Afrezza, Furoscix and V-Go and includes material, labor costs and manufacturing overhead. Write-offs of inventory and certain other period costs are recorded as expenses in the period in which they are incurred, rather than as a portion of inventory costs. Cost of goods sold excludes the cost of insulin purchased under the Company’s Insulin Supply Agreement (the “Insulin Supply Agreement”) with Amphastar Pharmaceuticals, Inc. (“Amphastar”). The Company incurs a quarterly capacity fee through its agreement with Amphastar which is included in cost of goods sold. See Note 15 –Commitments and Contingencies for additional information on this agreement. All insulin inventory on hand was written off and the full purchase commitment contract to purchase future insulin was accrued as a recognized loss on purchase commitments in prior years.

Cost of Revenues— Collaborations and Services — Cost of revenues for collaborations and services is primarily associated with product revenue for Tyvaso DPI and includes material, labor costs and manufacturing overhead. Write-offs of inventory and certain other period costs are recorded as expenses in the period in which they are incurred, rather than as a portion of inventory costs. Cost of revenues for collaborations and services also includes the cost of product development.

Research and Development ("R&D") — Clinical trial expenses result from obligations under contracts with vendors, consultants and clinical site agreements in addition to internal costs associated with conducting clinical trials. R&D costs are expensed as incurred. Clinical study and certain research costs are recognized over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Nonrefundable advance payments for services to be receivedin the future for use in R&D activities are recorded as prepaid assets and expensed in the period when the services are performed.

Cash, Cash Equivalents and Restricted Cash — The Company considers all highly liquid investments with original maturities of 90 days or less at the time of purchase, that are readily convertible into cash to be cash equivalents. As of March 31, 2026 and December 31, 2025, cash equivalents were comprised of interest-bearing money market funds, U.S. Treasury securities, corporate bonds and commercial paper with original maturities of 90 days or less from the date of purchase.

The Company records restricted cash when cash and cash equivalents are restricted as to withdrawal or usage. Restricted cash under a letter of credit issued in connection with a facility lease assumed by the Company that will not be available for use in the Company’s operations within 12 months of the reporting date is presented in non-current assets.

Available-for-Sale Investments — The Company's available-for-sale investments consist primarily of highly liquid money market funds, commercial bonds and paper, and U.S. Treasury securities that are intended to facilitate liquidity and capital preservation. Available-for-sale investments are measured at fair value with realized gains and losses and unrealized losses related to credit risk reported in other income (expense) in the consolidated statements of operations. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income until realized. These investments with maturities less than 12 months are included in short-term investments and investments with maturities in excess of 12 months are included in long-term investments in the condensed consolidated balance sheets. The accretion of these investments, net of amortization, is recognized as interest income in the condensed consolidated statements of operations. See Note 3– Investments.

Concentration of Credit Risk — Financial instruments that potentially subject the Company to concentration of credit risk consisted of cash and cash equivalents and investments. Cash and cash equivalents are held in high credit quality institutions. Cash equivalents consisted of interest-bearing money market funds and U.S. Treasury securities with original or remaining maturities of 90 days or less at the time of purchase. Investments generally consisted of commercial paper, corporate notes or bonds and U.S. Treasury securities. Cash equivalents and investments are regularly monitored by management.

Accounts Receivable and Allowance for Credit Losses— Accounts receivable are recorded at the invoiced amount and are not interest bearing. Accounts receivable are presented net of an allowance for credit losses if there are estimated losses resulting from the inability of its customers to make required payments. The Company makes ongoing assumptions relating to the collectability of its accounts receivable in its calculation of the allowance for credit losses. The allowance for expected credit losses is based primarily on past collections experience relative to the length of time receivables are past due. However, when available evidence reasonably supports an assumption that future economic conditions will differ from current and historical payment collections, an adjustment is reflected in the allowance for expected credit losses. Accounts receivable are also presented net of an allowance for product returns and trade discounts and allowances because the Company’s customers have the right of setoff for these amounts against the related accounts receivable.

Pre-Launch Inventory— The Company periodically evaluates whether costs incurred to manufacture inventory prior to regulatory approval or commercial validation should be capitalized as inventory or expensed as research and development. Such costs are capitalized only when management determines that the inventory is expected to provide probable future economic benefit and is likely to be used in commercial production. If management is aware of any specific material risks or contingencies other than the normal regulatory reporting process, or if the criteria for capitalizing inventory produced prior to regulatory approval are otherwise not met, the Company would not capitalize such inventory costs, and would instead recognize such costs as R&D expense in the period incurred. See Note 5 –Inventories.

Inventories — Inventories are stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first-out, or FIFO, method. The Company capitalizes inventory costs associated with the Company’s products based on management’s judgment that future economic benefits are expected to be realized; otherwise, such costs are expensed as incurred as cost of goods sold. The Company uses contract manufacturing organizations ("CMOs") in the U.S. and outside of the U.S. to produce its Furoscix inventory and a CMO outside of the U.S. for certain stages of V-Go inventory.

The Company periodically analyzes its inventory levels to identify inventory that may expire or has a cost basis in excess of its estimated realizable value and writes down such inventories, as appropriate. In addition, the Company’s products are subject to strict quality control and monitoring which the Company performs throughout the manufacturing process. If certain batches or units of product no longer meet quality specifications or may become obsolete or are forecasted to become obsolete due to expiration, the Company will record a charge to write down such unmarketable inventory to its estimated net realizable value.

The Company analyzes its inventory levels to identify inventory that may expire or has a cost basis in excess of its estimated realizable value. The Company performs an assessment of projected sales and evaluates the lower of cost or net realizable value and the potential excess inventory on hand at the end of each reporting period. Excess and obsolete inventory identified, if any, are recorded as an inventory write-off within the condensed consolidated statements of operations and comprehensive loss.

Property and Equipment — Property and equipment is recorded at historical cost, net of accumulated depreciation. Depreciation expense is recorded over the assets’ useful lives on a straight-line basis and included in cost of goods sold, research and development, and selling, general and administrative expense in the condensed consolidated statements of operations. See Note 6 –Property and Equipment.

Impairment of Long-Lived Assets — Long-lived assets include property and equipment, operating lease right-of-use assets and other intangible assets. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Assets are considered to be impaired if the carrying value is considered to be unrecoverable.

If the Company believes an asset to be impaired, the impairment recognized is the amount by which the carrying value of the asset exceeds the fair value of the asset. Fair value is determined using market, income or cost approaches as appropriate for the asset. Any write-downs are treated as permanent reductions in the carrying amount of the asset and recognized as an operating loss.

Acquisitions —The Company first determines whether a set of assets acquired constitute a business and should be accounted for as a business combination. If the assets acquired do not constitute a business, the Company accounts for the transaction as an asset acquisition. Business combinations are accounted for by means of the acquisition method of accounting. Under the acquisition method, assets acquired, including developed technology and in-process R&D (“IPR&D”), and liabilities assumed are recorded at their respective fair values as of the acquisition date in the Company’s condensed consolidated financial statements. Leases are recorded at the net present value of the remaining lease payments. The excess of the fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. A gain on bargain purchase is recorded if the fair value of the net assets acquired exceeds the fair value of the consideration transferred. Contingent consideration obligations incurred in connection with a business combination (including the assumption of an acquiree’s liability arising from an acquisition it consummated prior to the Company’s acquisition) are recorded at their fair values on the acquisition date and remeasured at their fair values each subsequent reporting period until the related contingencies have been resolved. The resulting changes in fair values are recorded in earnings. Measurement period adjustments related to acquired assets and liabilities may be recorded within one year of the acquisition date and are recognized in earnings in the period in which the adjustments are identified. The accompanying consolidated balance sheet as of March 31, 2026 includes certain assets acquired and liabilities assumed based on management’s preliminary estimates of their respective fair values such as valuation of acquired intangible assets, contingent liabilities and deferred tax assets and liabilities. The Company expects to finalize these fair value measurements as additional information becomes available, including completion of its review of acquired contractual arrangements and other relevant facts and circumstances. See Note 2– Business Combinations.

In contrast, asset acquisitions are accounted for by using a cost accumulation and allocation model. Under this model, the cost of the acquisition is allocated to the assets acquired and liabilities assumed. IPR&D projects with no alternative future use are recorded in R&D expense upon acquisition, and contingent consideration obligations incurred in connection with an asset acquisition are recorded when it is probable that they will occur and they can be reasonably estimated.

Goodwill and Other Intangible Assets —The fair value of acquired intangible assets is determined using either a cost approach or an income approach. The cost approach establishes fair value based on the cost of reproducing or replacing the asset, less depreciation for functional or economic obsolescence. The income approach, referred to as the excess earnings method, utilizes Level 3 fair value inputs to determine the present value of future economic benefits to be derived from ownership of the intangible asset. Market participant valuations assume a global view considering all potential jurisdictions and indications based on discounted after-tax cash flow projections, risk adjusted for estimated probability of technical and regulatory success.

The Company tests for impairment annually on a reporting unit basis, at the beginning of the Company’s fourth fiscal quarter and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge will be recorded.

Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful life. Estimated useful lives are determined considering the period assets are expected to contribute to future cash flows. Finite-lived intangible assets are tested for impairment when facts or circumstances suggest that the carrying value of the asset may not be recoverable. If the carrying value exceeds the projected undiscounted pretax cash flows of the intangible asset, an impairment loss equal to the excess of the carrying value over the estimated fair value (discounted after-tax cash flows) is recognized.

IPR&D acquired in a business combination is considered an indefinite-lived intangible asset until the completion or abandonment of the associated R&D efforts. During the R&D period, the asset is not amortized but rather is tested for impairment annually, or when facts or circumstances suggest that the carrying value of the asset may not be recoverable. Once the R&D efforts are completed, the Company accounts for the resulting asset as a finite-lived intangible asset. If the R&D efforts are abandoned, the asset balance is written off to R&D expense.

Recognized Loss on Purchase Commitments — The Company reviews the terms of the long-term supply agreements and assesses the need for any accrual for estimated losses, such as lower of cost or net realizable value, that will not be recovered by future product sales. The recognized loss on purchase commitments is reduced as inventory items are received or as the liability is extinguished. See Note 15 –Commitments and Contingencies.

Milestone Rights Liability — In July 2013, in conjunction with the execution of a (now repaid) loan agreement with Deerfield Private Design Fund II, L.P. and Deerfield Private Design International II, L.P. (collectively, “Deerfield”), the Company entered into a Milestone Rights Purchase Agreement (the “Milestone Rights Agreement”) pursuant to which the Company issued certain milestone rights to Deerfield Private Design Fund II, L.P. and Horizon Santé FLML SÀRL (the “Original Milestone Purchasers”). The foregoing milestone rights provided the Original Milestone Purchasers certain rights to receive payments of up to $90.0 million upon the occurrence of specified strategic and Afrezza sales milestones, $45.0 million of which remains payable as of March 31, 2026 upon achievement of such milestones (collectively, the “Milestone Rights”). In December 2021, the Milestone Rights were purchased by Barings Global Special Situations Credit Fund 4 (Delaware), L.P. and Barings Global Special Situations Credit 4 (LUX) S.ar.l. (together, the “Milestone Purchasers”). As a result, the Milestone Purchasers have assumed the rights and obligations of the Original Milestone Purchasers and are now entitled to all rights under the Milestone Rights Agreement. The Milestone Rights liability is reported at fair value at the date of the agreement which is periodically offset against payments. See Note 11 –Fair Value of Financial Instruments.

The initial fair value estimate of the Milestone Rights was calculated using the income approach in which the cash flows associated with the specified contractual payments were adjusted for both the expected timing and the probability of achieving the milestones and discounted to present value using a selected market discount rate. The expected timing and probability of achieving the milestones was developed with consideration given to both internal data, such as progress made to date and assessment of criteria required for achievement, and external data, such as market research studies. The discount rate was selected based on an estimation of required rate of returns for similar investment opportunities using available market data. The Milestone Rights liability is remeasured as the specified milestone events are achieved. Specifically, as each milestone event is achieved, the portion of the initially recorded Milestone Rights liability that pertains to the milestone event being achieved, is remeasured to the amount of the specified related milestone payment. The resulting change in the balance of the Milestone Rights liability due to remeasurement is recorded in the Company’s condensed consolidated statements of operations as interest expense. Furthermore, the Milestone Rights liability is reduced upon the settlement of each milestone payment. As a result, each milestone payment would be effectively allocated between a reduction of the recorded Milestone Rights liability and an expense representing a return on a portion of the Milestone Rights liability paid to the investor for the achievement of the related milestone event. See Note 8 –Accrued Expenses and Other Current Liabilities and Note 15 –Commitments and Contingencies.

Fair Value of Financial Instruments— The Company applies various valuation approaches in determining the fair value of its financial assets and liabilities within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 — Significant inputs to the valuation model are unobservable.

Income Taxes — The provisions for federal, foreign, state and local income taxes are calculated on pre-tax income based on current tax law and include the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. A valuation allowance is recorded to reduce net deferred income tax assets to amounts that are more likely than not to be realized.

For uncertain tax positions, the Company determines whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Penalties, if probable and reasonably estimable, are recognized as a component of income tax expense. The Company has reduced its deferred tax assets for uncertain tax positions but has not recorded liabilities for income tax expense, penalties, or interest.

Contingencies — The Company records a loss contingency for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These accruals represent management’s best estimate of probable loss. Disclosure also is provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation and may revise its estimates.

Stock-Based Compensation— Share-based payments to employees, including grants of restricted stock units (“RSUs”), performance-based restricted stock units ("Performance RSUs"), performance-based non-qualified stock options awards (“PNQs”), restricted stock units with market conditions (“Market RSUs”), options and the compensatory elements of employee stock purchase plans, are recognized in the condensed consolidated statements of operations based upon the fair value of the awards at the grant date. RSUs are valued based on the market price on the grant date. Market RSUs are valued using a Monte Carlo valuation model and RSUs with performance conditions are evaluated for the probability that the performance conditions will be met and estimates the date at which the performance conditions will be met in order to properly recognize stock-based compensation expense over the requisite service period. The Company uses the Black-Scholes option valuation model to estimate the grant date fair value of employee stock options and the compensatory elements of employee stock purchase plans. See Note 14 –Stock-Based Compensation Expense.

Net Income or Loss Per Share of Common Stock — Basic net income or loss per share ("EPS") is computed by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the effect of potential common stock issuances resulting from assumed stock option exercises and vesting of RSUs, unless the effect is anti-dilutive, when applying the treasury stock method, as well as potential dilution under the if-converted method for convertible debt securities. For periods where the Company has presented a net loss, potentially dilutive securities are excluded from the computation of diluted EPS as they would be anti-dilutive.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses, which amends ASC 220-40, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40), to require disaggregated disclosure of income statement expenses for public entities. This ASU 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. The objective of this ASU is to address requests from investors for more detailed information about the types of expenses included in commonly presented expense captions. This ASU is effective for all public entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. While the Company does not anticipate a material impact on its financial position, results of operations, or cash flows, adoption of this ASU will result in additional disclosures related to the disaggregation of income statement expenses.

In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which modifies the accounting for software costs under Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software. The objective of this ASU is to better align the accounting with how software is being developed by removing all references to prescriptive and sequential software development. Instead, an entity is required to start capitalizing software costs when both management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used for its intended purpose. This ASU is effective for all entities subject to the internal-use software guidance in Subtopic 350-40 for annual reporting periods beginning after December 15, 2027. Early adoption is permitted at the start of an annual period. The Company is currently evaluating the potential impact of this ASU on its financial position, results of operations or cash flows.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s condensed consolidated financial position or results of operations upon adoption.

2. Business Combinations

On October 7, 2025 (the "Merger Date"), the Company completed its merger with scPharmaceuticals Inc. ("scPharma") at a price of $5.35 per share in cash plusone non-tradable contingent value right ("CVR") per share, which represents the right to receive up to an aggregate amount of $1.00 per CVR in cash upon the achievement of certain regulatory and net sales milestones on or prior to the applicable milestone outside dates, for total consideration of up to $6.35 per share in cash, representing a total equity value of approximately $303.8 million and representing a total deal value of up to approximately $363.5 million if the CVR milestones are achieved at the maximum payment amount.

Accounting Treatment

The merger with scPharma was accounted for as a business combination using the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recognized at their respective fair values as of the Merger Date and resulted in the recognition of a developed technology intangible asset of $194.0 million and an IPR&D intangible asset of $129.6 million. The excess of purchase price over the fair value of the net assets acquired in this transaction was recorded as $65.7 million in goodwill. See Note 7 –Goodwill and Other Intangible Assets.

The fair value of the acquired developed technology related to the on-body infusor and the IPR&D were derived using an income approach, specifically a projected discounted cash flow method, adjusted for the probability of regulatory and commercial success. The projected discounted cash flow models used to estimate the Company’s Developed technology and IPR&D reflect significant assumptions regarding the estimates a market participant would make in order to evaluate a commercial drug and a drug development asset, including the following:

•

The extent, character and utility of the intangible assets

•

The cost-savings attributes of the intangible assets

•

The nature of the functional or economic obsolescence of each intangible asset, and,

•

The relative risk and uncertainty associated with an investment in intangible assets

The determination of the fair value of the developed technology and IPR&D intangible assets as such, required management to make significant estimates and assumptions related to future cash flows and the discount rate. The discount rates used in the determination of fair value for developed technology and IPR&D were both 23% and both used a royalty rate of 10%. The developed technology and IPR&D are both level 3 in the fair value hierarchy described above in Note 1 –Description of Business and Significant Accounting Policies.

Contingent Value Right ("CVR")

The contingent consideration for the CVR is included in Contingent consideration - short term and Contingent consideration - long term in the table above and in the consolidated balance sheets and is achieved through the following milestones:

Milestone 1: Receipt of FDA approval of a drug-device combination product comprising high concentration furosemide (the "ReadyFlow Formulation") delivered either in an autoinjector or a self-dose injection delivery system (such milestone, “Milestone 1”) with (a) $0.75 per CVR if Milestone 1 is achieved by September 30, 2026, (b) $0.50 per CVR if Milestone 1 is achieved by December 31, 2026 and (c) $0.25 per CVR if Milestone 1 is achieved by June 30, 2027.

Milestone 2: Achievement in any trailing consecutive 12-month period ending prior to and including December 31, 2026 of at least $110.0 million of worldwide net sales of Furoscix and, if any, the ReadyFlow Formulation (collectively, the “Products”) in such 12-month period (“Milestone 2”) with (a) $0.25 per CVR upon the achievement of $120.0 million of worldwide net sales in such period and (b) between $0.10 and $0.25 per CVR if, as of December 31, 2026, the highest worldwide net sales in any trailing 12-month period were between $110.0 million and $120.0 million, which payment will be calculated on a straight-line basis such that the payment per CVR increases proportionally as worldwide net sales increase from $110.0 million to $120.0 million. Milestone 2 will not be achieved if trailing worldwide net sales are less than $110.0 million during this period. No payment shall be made if the highest worldwide net sales in any trailing twelve-month period are less than $110.0 million.

The CVR was valued using both a Scenario-Based Method for Milestone 1 and a Monte Carlo Simulation Method for Milestone 2 to estimate the probability of success. The probability adjusted cash flow included significant estimates and assumptions pertaining to commercialization events and net sales received by the Company during the term of the CVR Agreement (as discussed above). See Note 11 –Fair Value of Financial Instruments for the key assumptions used in determining fair value.

The contingent consideration liability is remeasured each subsequent reporting period until the related contingencies have been resolved. For the three months ended March 31, 2026, the Company recorded $2.8 million to other expense as a result of the remeasurement of the fair value of the contingent consideration liability obtained from the acquisition of scPharma. The following table summarizes the activities within the account balance as of March 31, 2026 (in thousands):

Measurement period adjustments

During the three months ended March 31, 2026, the Company didnot record any measurement period adjustments to its acquired assets and liabilities. The Company expects to finalize the purchase price allocation within the one year measurement period, ending October 7, 2026.

3. Investments

Cash Equivalents— Cash equivalents consist of highly liquid investments with original maturities of 90 days or less at the time of purchase that are readily convertible into cash.

Available-for-Sale Investments Portfolio—The Company's investments portfolio consists of highly liquid money market funds, commercial bonds and paper, and U.S. Treasury securities (collectively, the "Investments") for which the Company accounts for as available-for-sale. Unrealized gains and losses are recorded in other comprehensive income.

The contractual maturities of the Investments are summarized below (in thousands):

(1)

The investments due in one year or less include cash equivalents of $28.1 million as of March 31, 2026 and $36.4 million as of December 31, 2025.

The fair values of the Investments are disclosed below (dollars in thousands):

As of March 31, 2026 and December 31, 2025, there was $0.6 million and $0.7 million, respectively, of accrued interest receivable on investments which is included in prepaid expense and other current assets in our condensed consolidated balance sheets.

Available-for-Sale Investment — Thirona — In June 2021 and January 2022, the Company purchased $3.0 million and $5.0 million, respectively, of convertible promissory notes issued by Thirona Bio, Inc. ("Thirona"). Following Thirona’s cessation of operations in September 2025 after recent clinical trial results, the Company determined the investment was other-than-temporarily impaired and recorded a $6.6 million impairment loss, inclusive of the write-off of $1.3 million of previously recognized unrealized gains, representing the fair value at that time. The Company also wrote off approximately $1.1 million of interest receivable, with the impairment recorded in other income (expense) in the consolidated statements of operations for the year ended December 31, 2025.

4. Accounts Receivable

Accounts receivable, net consists of the following (in thousands):

As of March 31, 2026, there wasno allowance for credit losses and doubtful accounts for commercial accounts receivable or credit losses for collaborations and services accounts receivable. As of March 31, 2026 and December 31, 2025, the Company's three customers representing the largest individual accounts receivable balances accounted for approximately 54% and 68% of commercial accounts receivable, respectively. As of March 31, 2026 and December 31, 2025, the Company's collaboration partner, UT, comprised 96% and 94%, respectively, of the collaborations and services accounts receivable.

UT comprised of approximately 62% and 75% of consolidated revenues for thethree months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026, no single commercial customer accounted for 10% or more of the Company’s consolidated revenues. For the three months ended March 31, 2025, one other commercial customer accounted for approximately 11% of the Company’s consolidated revenues.

5. Inventories

Inventories consist of the following (in thousands):

Work-in-process and finished goods as of March 31, 2026 and December 31, 2025 include conversion costs and exclude the cost of insulin. All insulin inventory on hand was written off in prior years and the projected loss on the purchase commitment contract to purchase future insulin was accrued in prior years. See Note 15 –Commitments and Contingencies under Contingencies — Commitments. Raw materials inventory included $1.7 million and $0.8 million of pre-launch inventory as of March 31, 2026 and December 31, 2025, respectively, which consisted of fumaryl diketopiperazine and autoinjector components.

The Company analyzed its inventory levels to identify inventory that may expire or has a cost basis in excess of its estimated realizable value. The Company also performed an assessment of projected sales and evaluated the lower of cost or net realizable value and the potential excess inventory on hand as of March 31, 2026 and December 31, 2025. Inventory that did not meet acceptable standards, or was forecasted to become obsolete due to expiration, is reserved for inventory obsolescence in the condensed consolidated balance sheets and recorded as costs of goods sold in the condensed consolidated statements of operations.

6. Property and Equipment

Property and equipment consisted of the following (dollars in thousands):

Depreciation expense related to property and equipment was as follows (in thousands):

During each of the three months ended March 31, 2026 and 2025, the Company retired $0.1 million of manufacturing equipment, computer hardware and software, computer equipment, lab equipment, and building improvements, as it was no longer in service. The net book value for the disposed assets in both periods wasde minimis.

7. Goodwill and Other Intangible Assets

Goodwill — Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. Goodwill is tested at least annually for impairment by assessing qualitative factors in determining whether it is more likely than not that the fair value of net assets is below their carrying amounts. See Note 1 –Description of Business and Significant Accounting Policies.

In 2022, the Company recorded additions of $1.9 million to Goodwill related to its acquisition of V-Go. In 2025, the Company recorded additions of $65.7 million to Goodwill related to its merger with scPharma.

Intangible Assets— Intangible assets consisted of the following (dollars in thousands):

(1)

Included within Other intangible assets on the consolidated balance sheets.

Amortization expense related to the Developed technology - on-body infusor ("on-body infusor") was $4.3 million for the three months ended March 31, 2026. The on-body infusor was acquired from scPharma in October 2025. See Note 2 –Business Combinations. The estimated annual amortization expense for the on-body infusor will be approximately $17.3 million per year for the years ended December 31, 2026 through 2036. Amortization expense related to the Developed technology - V-Go wasde minimis for the three months ended March 31, 2026 and 2025. The estimated annual amortization expense for the Developed technology - V-Go will be approximately $0.2 million per year for the years ended December 31, 2026 through 2029.

The ReadyFlow Formulation is an indefinite-lived intangible asset, and as such is not amortized but rather is tested for impairment annually, or when facts or circumstances indicate the carrying value of the asset may not be recoverable. Once available for use, the intangible asset will be accounted for as a finite-lived intangible asset. If the R&D efforts are abandoned, the IPR&D asset balance will be written off to R&D expense. The ReadyFlow Formulation was acquired from scPharma in October 2025 and was determined to be a Level 3 asset. See Note 11 –Fair Value of Financial Instruments for a description of the fair value hierarchy.

The iSPERSE License – IPR&D is an indefinite-lived intangible asset, and as such is not amortized but rather is tested for impairment annually, or when facts or circumstances indicate the carrying value of the asset may not be recoverable. Upon completion of the underlying R&D efforts, the intangible asset will be accounted for as a finite-lived intangible asset. If the R&D efforts are abandoned, the IPR&D asset balance will be written off to R&D expense. The iSPERSE License IPR&D was acquired from Pulmatrix in July 2024.

The Company evaluates its other intangible assets for potential impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. See Note 1 –Description of Business and Significant Accounting Policies.

8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities were comprised of the following (in thousands):

(1)

See Note 15– Commitments and Contingencies under Contingencies — Milestone Rights.

(2)

See Note 15– Commitments and Contingencies under Loss Contingencies — Returns Reserve for Acquired Product.

9. Borrowings

The Company’s borrowings as of March 31, 2026 are as follows (in thousands):

Blackstone Credit Facility

On August 6, 2025 (the “Closing Date”), the Company entered into a senior secured term loan agreement, which was subsequently amended on August 24, 2025 (as amended, the “Credit Agreement”), with Blackstone Alternative Credit Advisors LP, as Blackstone Representative and Lead Arranger (in such capacity, “Blackstone”), the lenders party thereto from time to time, the subsidiary guarantors party thereto from time to time, and Wilmington Trust, National Association, as administrative agent and collateral agent for the lenders (in such capacity, the “Agent”).

Pursuant to the credit facility provided for by the Credit Agreement (the “Blackstone Credit Facility”), the lenders (i) funded a $75 million initial term loan on the Closing Date; (ii) provided $250.0 million in delayed draw term loans on October 7, 2025 in connection with the transactions contemplated by the merger agreement with scPharma, with an additional $50.0 million in delayed draw term loan commitments remaining available under the Credit Agreement subject to certain customary draw down conditions, and (iii) made available up to $300.0 million in the form of uncommitted delayed draw term loans, which the Company may borrow in the future subject to mutual agreement with Blackstone and the lenders under the Credit Agreement. After deducting debt issuance costs payable by the Company, the net proceeds from the Blackstone Credit Facility were approximately $317.7 million. Amortization of debt issuance costs related to the Blackstone Credit Facility for thethree months ended March 31, 2026 were approximately $0.4 million. As of March 31, 2026, the unamortized debt issuance costs were $6.3 million.

The Blackstone Credit Facility will mature on August 6, 2030 (the “Maturity Date”). The Company elected to borrow the existing term loans as SOFR Loans, which bear interest at a rate per annum equal to one, three or six month term SOFR (at the Company’s election), subject to a 2.00% floor (the “Adjusted Term SOFR”), plus a margin of 4.75%. Upon the occurrence and continuation of an event of default under the Credit Agreement, interest on the term loans accrues at the applicable rate plus 2.00% per annum. Interest is paid quarterly or, if the Company elects 1-month SOFR, monthly. The interest rate margin for a SOFR loan increases to 5.00% at any time the Company’s ratio of indebtedness to adjusted EBITDA (measured on a trailing four quarter basis) is greater than or equal to 5.00:1.00 as of the most recent fiscal quarter for which the Company has delivered financial statements. As of March 31, 2026, the effective interest rate is 9.09% per annum. Term loans under the Credit Agreement are funded net of an upfront fee payable by the Company. The Company shall pay the delayed draw term loan lenders a ticking fee at a rate per annum equal to 1.00% of the daily unused portion of the delayed draw term loan commitments beginning on the one year anniversary of the agreement through the end of the delayed draw commitment period, payable quarterly in arrears.

All term loans under the Blackstone Credit Facility, as well as any accrued and unpaid interest and fees, are repayable on the Maturity Date. The Company has the option to prepay the loans under the Blackstone Credit Facility in whole or in part, subject to early prepayment fees in an amount equal to (a) the greater of (i) the present value of the sum of (x)3.00% of the principal amount to be prepaid as if that amount would otherwise be prepaid on the first anniversary of the Closing Date, and (y) the amount of all interest which would otherwise have accrued under the Credit Agreement for the period from the date of such prepayment to the first anniversary of the Closing Date, assuming an interest rate for such period equal to the sum of the applicable margin for SOFR Loans plus Adjusted Term SOFR as of the date of determination, computed using a discount rate equal to the treasury rate as of such date plus 50 basis points (the “Make Whole Premium”) and (ii)3.00% of the principal amount to be prepaid if prepayment occurs on or prior to the first anniversary of the Closing Date, (b)3.00% of principal prepaid if prepayment occurs after the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date, (c)1.00% of principal prepaid if prepayment occurs after the second anniversary of the Closing Date and prior to or on the third anniversary of the Closing Date and (d)0.00% after the third anniversary of the Closing Date. In addition, subject to the terms and conditions of the Credit Agreement, the Company is required to make a mandatory prepayment of the term loans upon occurrence of certain events such as upon certain assets sales, events of loss, incurrence of debt not permitted to be incurred under the Credit Agreement, or a change of control.

The Company’s obligations under the Blackstone Credit Facility are guaranteed by each of the Company’s subsidiaries and any future subsidiaries, subject to limited exceptions set forth in the Credit Agreement, and are secured by a first-priority perfected security interest (subject to permitted liens), on substantially all of the assets of the Company and the subsidiary guarantors, including intellectual property.

The Credit Agreement includes representations and warranties, affirmative covenants (including reporting obligations), negative covenants and events of default that are usual and customary for facilities of this type, in each case, subject to certain permitted exceptions as set forth therein. The Credit Agreement also contains a financial covenant for the benefit of the lenders, which requires the Company to have liquidity of atleast $40.0 million as of the last business day of each fiscal quarter ending after the Closing Date, with liquidity defined as our unrestricted cash and cash equivalents which are subject to a control agreement, in favor of the Agent, for the benefit of the lenders.

As of March 31, 2026, there were no events of default and the Company was in compliance with all covenants under the Credit Agreement.

Senior convertible notes

In March 2021, the Company issued $230.0 million aggregate principal amount of senior convertible notes (the “senior convertible notes”) in a private offering. The Company’s net proceeds from the March 2021 offering were approximately $222.7 million, after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by the Company. The senior convertible notes were issued pursuant to an indenture, dated March 4, 2021 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. The senior convertible notes were general unsecured obligations of the Company and matured on March 1, 2026. The senior convertible notes bore cash interest from March 4, 2021 at an annual rate of 2.50% payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021.

On December 17, 2024, the Company entered into separate, privately negotiated exchange agreements (the "Exchange Agreements") with certain holders (the “Holders”) of the senior convertible notes. Under the terms of the Exchange Agreements, the Holders agreed to exchange an aggregate principal amount of approximately $193.7 million of the senior convertible notes in exchange for an aggregate of 26,749,559 shares of the Company’s common stock. In addition, pursuant to the exchange agreements, the Company made an aggregate cash payment of approximately $89.2 million to the Holders for additional exchange consideration. Immediately following the exchange, approximately $36.3 million in aggregate principal amount of the senior convertible notes remained outstanding.

On March 4, 2026, the Company settled the remaining $36.3 million aggregate principal amount of the senior convertible notes, all of which were tendered for conversion prior to the maturity date of March 1, 2026. The settlement was made on March 4, 2026 with $35.5 million in cash and 569,023 shares of the Company’s common stock. The issuance of shares in connection with the repayment resulted in a loss on settlement of debt of approximately $0.9 million which was recorded in the condensed consolidated statements of operations for the three months ended March 31, 2026.

10. Collaborations, Licensing and Other Arrangements

Revenue from collaborations and services were as follows (in thousands):

(1)

Amounts consist of revenue recognized for Manufacturing Services to UT for the periods presented.

United Therapeutics License Agreement — In September 2018, the Company and UT entered into an exclusive global license and collaboration agreement (the “UT License Agreement”), pursuant to which UT is responsible for global development, regulatory and commercial activities with respect to Tyvaso DPI.

Total revenue from UT was as follows (in thousands):

(1)

Amounts consist of royalties associated with the UT License Agreement. The contract asset related to the royalties receivable of $29.5 million and $27.0 million as of March 31, 2026 and 2025, respectively, was included in prepaid expense and other current assets in the condensed consolidated balance sheets and collected in the following quarter.

Pursuant to the UT License Agreement, the Company receives a 10% royalty on net sales of Tyvaso DPI. In December 2023, the Company sold a 1% royalty on future net sales of Tyvaso DPI to a royalty purchaser, with the Company retaining a 9%royalty. In

August 2021, the Company and UT entered into the CSA pursuant to which the Company is responsible for manufacturing and supplying to UT, and UT is responsible for purchasing from the Company in accordance with the contractual terms. In addition, UT is responsible for supplying treprostinil at its expense in quantities necessary to enable the Company to manufacture Tyvaso DPI as required by the CSA.

The remaining performance obligation under the CSA, including the material right related to the tiered pricing within the contract, as amended and discussed below, is for manufacturing services to deliver product throughout the contract term. The revenue recognized under the CSA for manufacturing services is comprised of the sale of product to UT, recognition of previously deferred revenue, and reimbursements from other agreements for individual performance obligations. The portion of revenue related to each deliverable included in UT CSA revenue (in thousands) is as follows:

There have been various amendments to the CSA since inception. Under the Seventh Amendment, the term of the CSA continues until December 31, 2031 (unless earlier terminated) and is thereafter renewed automatically for additional, successive two-year terms unless (i) UT provides notice to the Company at least 24 months in advance of such renewal that UT does not wish to renew the CSA or (ii) the Company provides notice to UT at least 48 months in advance of such renewal that the Company does not wish to renew the CSA. The Company and UT each have normal and customary termination rights, including termination for material breach that is not cured within a specific timeframe or in the event of liquidation, bankruptcy or insolvency of the other party.

Under the Seventh Amendment, UT will provide notice of their purchase quantity on or prior to October 15th of each year. Additionally, the Seventh Amendment defines a tiered pricing structure based on annual purchase volume. Under the practical alternative for measuring material rights, revenue is recognized on a per unit basis based on the allocation of expected consideration to the manufacturing services performance obligation over the remaining contract term. The Company recognizes changes in estimated consideration resulting from changes in future estimated purchase quantities prospectively, such that the amount of revenue to be recognized per unit for future deliveries is adjusted, without recording a cumulative catch-up to amounts recognized in prior periods. Revenue is then recognized at the point in time in which control of the product is transferred to UT.

During 2024, the Company entered into additional agreements for individual performance obligations which are accounted for separately as they are distinct from Manufacturing Services and offered at a standalone selling price, for which we recognized revenue of $2.4 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively. Revenue for these arrangements is recognized at the point in time that the related service is delivered.

Under the terms of the UT License Agreement, UT has an option to develop additional dry powder inhalation therapies. In August 2025, UT exercised its option, which was memorialized in an amendment to the UT License Agreement (the "First Amendment"), and is treated as a separate contract for revenue recognition purposes under ASC 606. Under the First Amendment, the Company will formulate a dry powder formulation of ralinepag, an investigational molecule, using its proprietary Technosphere platform, and United Therapeutics will conduct preclinical and clinical development. This development program has been designated MNKD-1501. Per the First Amendment, the Company received an upfront payment of $5.0 million in 2025 and is eligible to receive up to $35.0 million in development milestones. The $35.0 million in development milestones is considered constrained due to the inherent uncertainty in the timing and likelihood of achieving the associated milestones. The Company is also eligible to receive 10% royalties on net sales of any resulting product. As of March 31, 2026, $2.0 million of the initial upfront payment has been recognized as revenue, based on the input measure of progress, and the remaining $3.0 million is included within deferred revenue - short term on the Company's consolidated balance sheets.

As of March 31, 2026, deferred revenue from UT consisted of $50.4 million, of which $11.5 million was classified as current and $38.9 million was classified as long-term on the condensed consolidated balance sheet. As of December 31, 2025, deferred revenue consisted of $55.3 million, of which $15.3 million was classified as current and $40.0 million was classified as long-term on the condensed consolidated balance sheet.

Cipla License and Distribution Agreement— In May 2018, the Company and Cipla Ltd. (“Cipla”) entered into an exclusive agreement for the marketing and distribution of Afrezza in India and the Company received a $2.2 million nonrefundable license fee which was fully recognized as revenue from collaborations and services as of December 31, 2025. Under the terms of the agreement,

Cipla is responsible for obtaining regulatory approvals to distribute Afrezza in India and for all marketing and sales activities of Afrezza in India. The Company is responsible for supplying Afrezza to Cipla, and began recording commercial product sales from this agreement in the fourth quarter of 2025. The Company is entitled to minimum purchase commitment revenue and royalties on Afrezza sales in India once cumulative gross sales have reached a specified threshold. In December 2024, the Central Drugs Standard Control Organisation ("CDSCO") in India approved Afrezza for adults and, accordingly, the Company was entitled to the regulatory milestone payment from Cipla totaling $1.1 million, which was recognized as revenue from collaborations and services in the year ended December 31, 2024.

The Company recorded $0.1 million of revenue from commercial product sales to Cipla in India for the three months ended March 31, 2026. There wereno commercial product sales to India for thethree months ended March 31, 2025.

Amphastar — In November 2024, the Company entered into a co-promotion agreement which provides the terms and conditions upon which the Company's sales force shall promote Baqsimi (glucagon) nasal powder to designated health care professionals in territories where the Company currently promotes Afrezza. Per the terms of the co-promotion agreement, as amended in December 2025, Amphastar is obligated to pay fixed quarterly payments to the Company through December 31, 2026. The Company identified a single performance obligation satisfied over time. Revenue is recognized based on the measurement of progress. The Company recognized $0.5 million in collaborations and services revenue from this agreement on its condensed consolidated statements of operations for both of the three months ended March 31, 2026 and 2025.

11. Fair Value of Financial Instruments

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the overall fair value measurement. The Company uses the exit price method for estimating the fair value of loans for disclosure purposes. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy are described in Note 1 –Description of Business and Significant Accounting Policies.

The carrying amounts reported in the condensed consolidated financial statements for cash, accounts receivable, accounts payable, and accrued expenses and other current liabilities (excluding the Milestone Rights liability) approximate their fair value due to their relatively short maturities. The fair value of the senior convertible notes, Milestone Rights liability, Financing liability, Liability for sale of future royalties and Contingent consideration liability are disclosed below.

Financial Liabilities —The following tables set forth the fair value of the Company’s financial instruments (Level 3 in the fair value hierarchy) (in millions):

(1)

Fair value was determined by applying a Monte Carlo simulation method for the calculation of the potential payment and the Geometric Brownian Motion forecasting model to estimate the underlying revenue. Market based inputs and other Level 3 inputs were used to forecast future revenue. The key inputs used included a risk-free rate of 4.09%, dividend yield of 0%, volatility of 43.0%, period of 7 years and credit risk of 12.0%.

(2)

Fair value was determined by applying a discounted cash flow analysis with a hypothetical yield of 9.0%. A change in yield of + or –2% would result in a fair value of $95.8 million and $122.6 million, respectively.

(3)

Fair value was determined by applying a discounted cash flow analysis with a hypothetical yield of 10.0%. A change in yield of + or –2% would result in a fair value of $87.9 million and $105.4 million, respectively.

(4)

Fair value was determined to be $24.0 million for Milestone 1 using a probability weighted expected return methodology based on the Company's estimate of probability of achievement of regulatory approval which was 85% across various timepoints and a discount rate of 11.4%. A change in estimate of probability and discount rate for Milestone 1 of + or –2% would result in a fair value of $24.9 million and $23.1 million, respectively. Fair value was determined to be $5.0 million for Milestone 2 using a Monte Carlo simulation method based on a 51.9% volatility and 11.4% discount rate. Market based inputs and other Level 3 inputs were used to forecast future revenue. A change in discount rate on Milestone 2 of + or –2% would result in a fair value of $5.0 million and $5.1 million, respectively.

(1)

Fair value was determined by applying a discounted cash flow analysis to the straight note with a hypothetical yield of 5.0%, volatility of 40.3% and a Monte Carlo simulation for the value of the conversion feature. A change in yield of + or –2% would result in a fair value of $39.0 million and $39.5 million, respectively.

(2)

Fair value was determined by applying a Monte Carlo simulation method for the calculation of the potential payment and the Geometric Brownian Motion forecasting model to estimate the underlying revenue. Market based inputs and other Level 3 inputs were used to forecast future revenue. The key inputs used included a risk-free rate of 3.94%, dividend yield of 0%, volatility of 43.0%, period of 7 years and credit risk of 10%.

(3)

Fair value was determined by applying a discounted cash flow analysis with a hypothetical yield of 7.0%. A change in yield of + or –2% would result in a fair value of $106.7 million and $140.6 million, respectively.

(4)

Fair value was determined by applying a discounted cash flow analysis with a hypothetical yield of 8%. A change in yield of + or –2% would result in a fair value of $148.3 million and $192.3 million, respectively.

(5)

Fair value was determined to be $23.7 million for Milestone 1 using a probability weighted expected return methodology based on the Company's estimate of probability of achievement of regulatory approval which was 85% across various timepoints and a discount rate of 10%. A change in estimate of probability and discount rate for Milestone 1 of + or –2% would result in a fair value of $24.7 million and $22.7 million, respectively. Fair value was determined to be $2.6 million for Milestone 2 using a Monte Carlo simulation method based on a 25.2% volatility and 10% discount rate. Market based inputs and other Level 3 inputs were used to forecast future revenue. A change in discount rate on Milestone 2 of + or –2% would result in a fair value of $2.6 million and $2.7 million, respectively.

Milestone Rights Liability— The fair value measurement of the Milestone Rights liability is sensitive to the discount rate and the timing of achievement of milestones. The Company utilized a Monte-Carlo Simulation Method to simulate the Afrezza net sales under a neutral framework to estimate the potential payments and the Geometric Brownian Motion forecasting model to estimate the underlying revenue. The Company then discounted the future expected payments at cost of debt with a term equal to the simulated time to payout based on cumulative sales. See Note 15 –Commitments and Contingencies.

Financing Liability — The Sale-Leaseback Transaction in November 2021 resulted in a financing liability. See Note 15 –Commitments and Contingencies.

Liability for Sale of Future Royalties — The sale of a portion of our royalty rights in December 2023 resulted in a liability for sale of future royalties. See Note 15 –Commitments and Contingencies.

Contingent Consideration Liability — The acquisition of scPharma in October 2025 resulted in a contingent consideration liability. See Note 2 –Business Combinations.

12. Common and Preferred Stock

The Company is authorized to issue 800,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of undesignated preferred stock, par value $0.01 per share, issuable in one or more series as designated by the Company’s board of directors. No other class of capital stock is authorized. As of March 31, 2026 and December 31, 2025,308,907,331 and 307,832,587 shares of common stock, respectively, were issued and outstanding andno shares of preferred stock were outstanding.

In February 2018, the Company entered into a controlled equity offering sales agreement with Cantor Fitzgerald & Co. (“Cantor Fitzgerald”), as sales agent, which was amended and restated in February 2025 (as amended, the “CF Sales Agreement”). Pursuant to the CF Sales Agreement, the Company may offer and sell, from time to time, through Cantor Fitzgerald, shares of the Company’s common stock. Cantor Fitzgerald may sell shares by any method deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act of 1933, as amended. On February 26, 2025, the Company filed a sales agreement prospectus under a registration statement on Form S-3, which became effective upon filing, covering the sale of up to $200.0 million of our common stock through Cantor Fitzgerald under the CF Sales Agreement. There have beenno sales under the CF Sales Agreement since 2023.

During the three months ended March 31, 2026, the Company received $0.3 million from the market price stock purchase plan ("MPSPP") for 102,580 shares of common stock. There were no shares of common stock issued under the MPSPP for thethree months ended March 31, 2025.

For shares of common stock issued pursuant to the Company's 2004 employee stock purchase plan ("ESPP"), see Note 14 –Stock-Based Compensation Expense.

13. Earnings per Common Share

The following tables summarize the components of the basic and diluted EPS computations (in thousands, except per share amounts):

For the three months ended March 31, 2026, diluted net loss per share was the same as basic net loss per share because the inclusion of potential common shares would have been antidilutive. Potentially dilutive securities outstanding for the three months ended March 31, 2026 were 3.0 million shares of common stock underlying RSUs and Market RSUs and 3.5 million shares underlying options and PNQs.

For the three months ended March 31, 2025, diluted net income per share excluded the weighted average effect of 4.9 million shares of common stock underlying RSUs and Market RSUs and 0.3 million shares underlying options and PNQs as they were antidilutive.

14. Stock-Based Compensation Expense

Total stock-based compensation expense recognized in the condensed consolidated statements of operations is included in the following categories (in thousands):

Total stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows (in thousands):

The following table summarizes information pertaining to RSUs:

As of March 31, 2026, there was $58.4 million of unrecognized stock-based compensation expense related to RSUs, Market RSUs and Performance RSUs, which is expected to be recognized over a weighted average period of approximately 2.0 years.

The following table summarizes information pertaining to options:

The following table summarizes the key assumptions used by the Company to value the stock option awards granted during the three months ended March 31, 2026. The Company didnot grant options during the three months ended three months ended March 31, 2025.

As of March 31, 2026, there was $11.3 million of unrecognized stock-based compensation expense related to stock options, which is expected to be recognized over a weighted average period of approximately 3.9 years.

Employee Stock Purchase Plan

The Company provides all employees, including executive officers, the ability to purchase common stock at a discount under the ESPP. The ESPP is designed to comply with Section 423 of the Internal Revenue Code and provides all employees with the opportunity to purchase up to $25,000 worth of common stock (based on the undiscounted fair market value at the commencement of the offering period) each year at a purchase price that is the lower of 85% of the fair market value of the common stock on either the date of purchase or the commencement of the offering period. An employee may not purchase more than 5,000 shares of common stock on any purchase date. The executives’ rights under the ESPP are the same as those of all other employees.

There were approximately 1.9 million shares of common stock available for issuance under the ESPP as of March 31, 2026.

15. Commitments and Contingencies

Guarantees and Indemnifications— In the ordinary course of its business, the Company makes certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. The Company, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that may enable it to recover a portion of any future amounts paid. The Company believes the fair value of these indemnification agreements is minimal and therefore has not recorded any liability for these indemnities in the condensed consolidated balance sheets. The Company accrues for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable and the amount can be reasonably estimated. No such losses have been recorded to date.

Litigation— The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. The Company does not anticipate the final disposition of any matters will have a material adverse effect on the results of operations, financial position, or cash flows of the Company. The Company maintains liability insurance coverage to protect the Company’s assets from losses arising out of or involving activities associated with ongoing and normal business operations. The Company records a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company’s policy is to accrue for legal expenses in connection with legal proceedings and claims as they are incurred.

Contingencies — Milestone Rights— In July 2013, the Company entered into the Milestone Rights Agreement with the Original Milestone Purchasers, pursuant to which the Company granted the Milestone Rights to receive payments up to $90.0 million upon the occurrence of specified strategic and sales milestones, of which $45.0 million remains payable to the Milestone Purchasers as of March 31, 2026.

The Milestone Rights Agreement includes customary representations and warranties and covenants by the Company, including restrictions on transfers of intellectual property related to Afrezza. The Milestone Rights are subject to acceleration in the event the Company transfers its intellectual property related to Afrezza in violation of the terms of such agreement.

As of March 31, 2026, the remaining Milestone Rights liability balance was $2.5 million and consisted of $0.5 million of current liability, which was presented as accrued expenses and other current liabilities, and $2.0 million of long-term liability, which was presented as milestone liabilities in the condensed consolidated balance sheets. The value of the Milestone Rights liability was based on initial fair value estimates calculated using the income approach and is reduced by milestone achievement payments made.

Liability for Sale of Future Royalties — In December 2023, the Company executed a Purchase and Sale Agreement (the “PSA”) with Sagard Healthcare Partners Funding Borrower SPE 2, LP (“Sagard”). Pursuant to the PSA, Sagard paid the Company $150.0 million (the “Upfront Proceeds”), net of $0.4 million in reimbursements of Sagard’s fees and expenses (the “Reimbursements”), for the purchase of a 1% royalty on future net sales of Tyvaso DPI by UT under the terms of the UT License Agreement (the “Sagard Royalty”). Sagard will also pay the Company a milestone of $50.0 million if net sales of Tyvaso DPI meet or exceed $1.9 billion for any 12 consecutive months on or prior to December 31, 2026 (“Net Sales Threshold A”), or a milestone of $45.0 million if net Sales Threshold A is not met and net sales of Tyvaso DPI meet or exceed $2.3 billion for any 12 consecutive months on or prior to September 30, 2027 (“Net Sales Threshold B”), resulting in a purchase price not to exceed $200.0 million (the “Purchase Price”). If Net Sales Thresholds A and B are not met and net sales of Tyvaso DPI meet or exceed $3.5 billion for any calendar year after September 30, 2027, no royalties will be payable to Sagard for the remainder of that year. The PSA applies to net sales of Tyvaso DPI generated during October 1, 2023 through December 31, 2042 (the “Termination Date”) and will automatically terminate upon payment of the final royalty owed to Sagard thereafter. Upon the Termination Date, ownership of the Sagard Royalty will revert to the Company.

Given the Company’s continuing involvement with the generation of Tyvaso DPI revenue under the UT License Agreement and CSA, which includes the Company’s supply and manufacture of Tyvaso DPI, and the Company’s retention and associated defense and maintenance obligations of the intellectual property required in the manufacture of Tyvaso DPI, the Upfront Proceeds were recorded as a liability for sale of future royalties (the “Royalty Liability”) on the condensed consolidated balance sheets, and any proceeds from future milestones will be added to the Royalty Liability balance upon receipt. Although the Company is not obligated to repay any portion of the Purchase Price to Sagard, the Royalty Liability under the PSA is secured by a security interest granted to Sagard in the underlying 1% royalty rights and any proceeds therefrom. As a result of the PSA, transaction costs totaling $4.4 million (including the Reimbursements) are reported net of the Royalty Liability balance and amortized to interest expense in the condensed consolidated statements of operations over the life of the PSA using the effective interest method. Unamortized transaction costs were approximately $3.9 million as of both March 31, 2026 and December 31, 2025.

The Company will continue to recognize the full 10% of future royalty revenues in its condensed consolidated statements of operations, with the Sagard Royalty being non-cash revenue for the Company. As royalty payments are earned by and remitted to Sagard, the balance of the Royalty Liability will be effectively repaid as it is amortized over the life of the PSA. To amortize the Royalty Liability, the Company estimated the total amount of future royalty payments to be made to Sagard over the life of the PSA. The excess of those future estimated royalty payments over the Purchase Price proceeds received is recognized in the condensed consolidated statements of operations as non-cash interest expense over the life of the PSA utilizing an imputed effective interest rate. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement. The interest rate may vary during the term of the agreement depending on a number of factors, including the amount and timing of forecasted royalty payments which affects the timing and ultimate amount of reductions to the liability. The Company will evaluate the effective interest rate periodically based on its forecasted royalty payments utilizing the prospective method.

The Company periodically assesses the forecasted royalty payments using a combination of historical results, internal projections and forecasts from external sources. To the extent such payments, or the timing of such payments, are materially different than original estimates, the Company will prospectively adjust the effective interest rate and amortization of the Royalty Liability.

The following table shows the activity within the Royalty Liability account as well as the effective interest rate (dollars in thousands):

Sale-Leaseback Transaction— In November 2021, the Company sold certain land, building and improvements located in Danbury, CT (the "Property") to an affiliate of Creative Manufacturing Properties (the "Purchaser") for a sales price of $102.3 million, subject to the terms and conditions contained in a purchase and sale agreement.

Effective with the closing of the Sale-Leaseback Transaction, the Company and the Purchaser entered into a lease agreement (the “Lease”), pursuant to which the Company leased the Property from the Purchaser for an initial term of 20 years, with four renewal options of five years each. The total annual rent under the Lease starts at approximately $9.5 million per year, subject to a 50% rent abatement during the first year of the Lease, and will increase annually by (i) 2.5% in the second through fifth year of the Lease and (ii) 3% in the sixth and each subsequent year of the Lease, including any renewal term, utilizing a weighted average discount rate of 9.0%. The Company is responsible for payment of operating expenses, property taxes and insurance for the Property. The Purchaser will hold a security deposit of $2.0 million during the Lease term. Pursuant to the terms of the Lease, the Company has four options to repurchase the Property, in 2026, 2031, 2036 and 2041, for the greater of (i) $102.3 million or (ii) the fair market value of the Property.

Effective with the closing of the Sale-Leaseback Transaction, the Company and the Purchaser also entered into a right of first refusal agreement (the “ROFR”), pursuant to which the Company has a right to re-purchase the Property from the Purchaser in accordance with terms and conditions set forth in the ROFR. Specifically, if the Purchaser receives, and is willing to accept, a bona fide purchase offer for the Property from a third-party purchaser, the Company has certain rights of first refusal to purchase the Property on the same material terms as proposed in such bona fide purchase offer.

As of March 31, 2026, the related financing liability was $103.2 million, which was recognized in the condensed consolidated balance sheet and of which $92.8 million was long-term and $10.4 million was current. As of December 31, 2025, the related financing liability was $103.4 million, of which $93.1 million was long-term and $10.3 million was current.

Financing liability information was as follows (dollars in thousands):

The Company's remaining financing liability payments were as follows (in thousands):

Commitments— In July 2014, the Company entered into the Insulin Supply Agreement pursuant to which Amphastar manufactures for and supplies to the Company certain quantities of recombinant human insulin for use in Afrezza. Under the terms of the Insulin Supply Agreement, Amphastar is responsible for manufacturing the insulin in accordance with the Company’s specifications and agreed-upon quality standards.

In December 2023, the Company and Amphastar amended the Insulin Supply Agreement to extend the term, restructure the annual purchase commitments and include a capacity fee for certain future periods. The Company's remaining purchase commitments and estimated capacity fee liability as of March 31, 2026 were as follows (€ in millions):

(1)

During the three months ended March 31, 2026, the Company incurred a capacity fee of €0.8 million, or $0.9 million, which was recognized as cost of goods sold for commercial sales in our condensed consolidated statement of operations.

Pursuant to the amendment, the term of the Insulin Supply Agreement expires on the later of December 31, 2034 and the completion of the total remaining purchase commitment quantities, unless terminated earlier, and can be renewed for additional, successivetwo-year terms upon 12 months’ written notice given prior to the end of the initial term or any additional two-year term. The Company and Amphastar each have normal and customary termination rights, including termination for a material breach that is not cured within a specific time frame or in the event of liquidation, bankruptcy or insolvency of the other party. In addition, the Company may terminate the Insulin Supply Agreement upon two years’ prior written notice to Amphastar without cause or upon 30 days’ prior written notice to Amphastar if a controlling regulatory authority withdraws approval for Afrezza, provided, however, in the event of a termination pursuant to either of the latter two scenarios, the provisions of the Insulin Supply Agreement require the Company to pay the full amount of all unpaid purchase commitments due over the initial term within 60 calendar days of the effective date of such termination.

The Company periodically reviews the terms of the long-term Insulin Supply Agreement and assesses the need for any accrual for estimated losses, such as lower-of-cost or net-realizable-value that will not be recovered by future product sales. The recognized loss on purchase commitments of $64.6 million and $66.0 million is included in our condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively, and is reduced as inventory items are received or such liability is extinguished.

As a result of the increase in future cash flows for the excess capacity fees and extended term included in the amendment of the Insulin Supply Agreement, the Company analyzed the need for additional estimated losses and concluded that an increase in the recognized loss on purchase commitments was not required as the net realizable value of inventory resulting from the purchase commitment was in excess of the carrying value. Increases in costs associated with the amendment will be recognized through inventory as incurred.

Office Leases — In May 2017, the Company executed an office lease with Russell Ranch Road II LLC for the Company’s corporate offices in Westlake Village, California, which was renewed in April 2022. Pursuant to the renewal, the monthly lease payments of $79,543 began in February 2023 and are subject to 3% annual increases, plus the estimated cost of maintaining the property and common areas by the landlord, and are further subject to a six-month base rent concession beginning February 2023. The Company was also entitled to a one-time allowance up to $0.9 million as reimbursement for tenant improvements or the purchase of furniture, fixtures or equipment. Of the $0.9 million allowance, an amount up to $0.7 million may be applied as an additional base rent concession. The Company has no further right to extend the lease term beyond July 31, 2028.

In July 2024, the Company assumed certain leased real property (the "Bedford Lease") in connection with the Pulmatrix transaction. The Bedford Lease pertains to certain premises in a building located in Bedford, Massachusetts. The monthly base rent payments of $101,282 are subject to 3% annual increases, plus the estimated cost of maintaining the property and common areas by the landlord. The Company also assumed from Pulmatrix a $0.7 million obligation to repay landlord-funded tenant improvements at a rate of $6,000 per month through the end of the lease term in November 2033. The Company has the right to extend the lease term for anadditional five-year term.

In October 2025, the Company assumed a 9,342 square foot facility in Burlington, Massachusetts in connection with the acquisition of scPharma which was previously entered into as a sublease in August 2023 and extends through August 2029. The monthly lease payments are $28,805 and are subject to fixed annual increases of $779.

Lease information was as follows (dollars in thousands):

(1)

Operating right-of-use assets related to offices and the manufacturing facility for V-Go are included in other assets in the condensed consolidated balance sheets.

(2)

Operating lease liability – current is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets.

The Company's future minimum office lease payments were as follows (in thousands):

16. Income Taxes

During the three months ended March 31, 2026 and 2025, the Company recorded income tax expense of $0.3 million and $0.5 million, respectively, related to state taxes, which was calculated using the discrete year-to-date method. The effective tax rate differs from the federal statutory tax rate of 21% primarily due to the existence of valuation allowances against net deferred tax assets and current liabilities resulting from the estimated state income tax liabilities.

Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and concluded, in accordance with the applicable accounting standards, that net deferred tax assets should be fully reserved.

The Company has assessed its position with regards to uncertainty in tax positions and has not recognized a liability for unrecognized tax benefits. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the three months ended March 31, 2026, the Company recognized ade minimis amount of interest and penalties. The Company’s tax years since 2022 remain subject to examination by tax authorities.

In June 2024, California enacted Senate Bills 167 and 175 ("SB 167" and "SB 175"). SB 167 suspends the use of net operating losses ("NOLs") and limits the use of business credits to $5.0 million for the 2024-2026 tax years. Under SB 175, the NOL suspension and credit limitations will not apply for the 2025 and 2026 tax years if certain budget goals are met. Although the Company does not expect this legislation to have a material effect on its results of operations or cash flows, management continues to evaluate anypotential impact.