ACHN 2017 Annual Report

General and Administrative Expenses: General and administrative expenses consist primarily of salaries and benefits for management and administrative personnel, professional and consulting fees for legal, business development, accounting and other services, travel costs and facility-related costs such as rent, utilities and other general office expenses. General and administrative expenses consisted of the following: For the Years Ended Change 2017 2016 2015 2017 vs. 2016 2016 vs. 2015 (in thousands) Personnel costs . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,317 $ 6,136 $ 5,099 $ 181 3% $ 1,037 20% Stock based compensation . . . . . . . . . . . . . . . . . 6,083 6,311 5,572 (228) (4)% 739 13% Professional and consulting fees . . . . . . . . . . . . . 5,929 4,771 11,038 1,158 24% (6,267) (57)% Facilities costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,363 1,114 875 249 22% 239 207% Travel and other costs . . . . . . . . . . . . . . . . . . . . . 4,832 2,371 2,092 2,461 104% 279 13% Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,524 $20,703 $24,676 $3,821 18% $(3,973) (16)% Comparison of the Years Ended December 31, 2017 and 2016 The increase in general and administrative costs from 2016 to 2017 was primarily due to increased corporate legal fees and market related consulting fees combined with our payment of $2.9 million in underwriting fees in connection with the sale by JJDC in November 2017 of all of the shares of our common stock it acquired pursuant to the JJDC Stock Purchase Agreement. These amounts were partially offset by a decrease in corporate taxes. We expect that general and administrative costs during the next year will decrease somewhat from 2017 as we implement our restructuring plan. Comparison of the Years Ended December 31, 2016 and 2015 The decrease in general and administrative costs from 2015 to 2016 was primarily due to decreased business development consulting fees and corporate legal fees that were incurred in 2015 related to the Janssen Agreement, partially offset by increased personnel and non-cash stock compensation largely related to the addition of personnel. Other Income and Expense: Comparison of the Years Ended December 31, 2017 and 2016 Interest income was $4.4 million and $3.2 million for the years ended December 31, 2017 and 2016, respectively. The $1.2 million, or 38%, increase from 2016 to 2017 was primarily due to a greater return on investments during the period. Interest expense was $50,000 and $68,000 for the years ended December 31, 2017 and 2016, respectively. The decrease of $18,000, or 26%, was primarily due to lower average debt balances outstanding in 2017. Comparison of the Years Ended December 31, 2016 and 2015 Other income was $0 and $8.9 million for the years ended December 31, 2016 and 2015, respectively. The $8.9 million decrease was due to the nonrecurring receipt of an $8.9 million payment by a stockholder representing the disgorgement of short swing profits under Section 16(b) of the Securities Exchange Act in 2015. 86