ACHN 2017 Annual Report

Interest income was $3.2 million and $1.2 million for the years ended December 31, 2016 and 2015, respectively. The $2.0 million, or 172%, increase from 2015 to 2016 was primarily due to increased average cash balances. Interest expense was $68,000 and $55,000 for the years ended December 31, 2016 and 2015, respectively. The increase of $13,000, or 24%, was primarily due to higher average debt balances outstanding in 2016. Liquidity and Capital Resources Since our inception, we have financed our operations primarily through proceeds from the sale of equity securities. Through December 31, 2017, we have received approximately $932.4 million in aggregate gross proceeds from stock issuances, including convertible preferred stock, our initial public offering, private placements of our common stock, registered offerings of our common stock and an equity investment by a former collaboration partner. In October 2014, we entered into a Master Security Agreement for a $1.0 million Capital Expenditure Line of Credit, or the 2014 Credit Facility, with Webster Bank, National Association, or Webster. Under the 2014 Credit Facility, we were entitled to draw down equipment loan advances for the purchase of new laboratory equipment through October 3, 2015. Each advance under the 2014 Credit Facility is payable over a three-year term and bears interest at a fixed rate, determined at the time of each advance, equal to the three-year Federal Home Loan Bank of Boston Classic Advance rate plus 4.75%. In October 2014 and March 2015, Webster advanced $440,000 and $229,000, respectively, to us under the 2014 Credit Facility. In May 2016, we entered into an amendment to the Master Security Agreement. The amendment provided for a line of credit for equipment loan advances of $1.4 million, of which approximately $400,000 reflected the outstanding balance as of the date of the amendment, under the Master Security Agreement, dated October 2014 and extended the period during which we were entitled to draw down equipment loan advances through May 26, 2017. In July 2017, Webster agreed to further extend the period during which we were entitled to draw down under the facility through May 28, 2018. Under the facility, purchased equipment serves as collateral for any advances. Each drawdown under the facility is payable over a three-year term and bears interest at a fixed rate, determined at the time of each borrowing, equal to the Three Year Federal Home Loan Bank of Boston Classic Advance rate plus 4.75%. In October 2016, Webster advanced $443,000 to us under the facility. As of December 31, 2017, our debt balance due to borrowings was $301,000 with a weighted average interest rate of 6.02%. As of December 31, 2017, the following amounts remained outstanding under the 2014 Credit Facility and the 2016 Credit Facility: Lender Date Interest Rate (per annum) Principal Amount Outstanding Balance Maturity Date Webster Bank . . . . . . . . . . . . . . . . . . . . . . March 2015 6.20% $228,962 $ 20,774 March 2018 Webster Bank . . . . . . . . . . . . . . . . . . . . . . October 2016 6.01% $443,000 $279,935 October 2019 In February 2017, we filed a universal shelf registration on Form S-3 with the U.S. Securities and Exchange Commission, or SEC, to register for sale from time to time up to $250.0 million of common stock, preferred stock, warrants and/or units in one or more offerings. Further, in February 2017, we entered into a sales agreement with Cantor Fitzgerald & Co., or Cantor, pursuant to which, from time to time, we may offer and sell shares of our common stock having an aggregate offering price of up to $75.0 million through Cantor pursuant to such universal shelf registration statement. We had $330.6 million and $391.5 million in cash, cash equivalents and marketable securities as of December 31, 2017 and 2016, respectively. We regularly review our investments and monitor the financial markets. As of December 31, 2017, our cash, cash equivalents and marketable securities included high-quality financial instruments, primarily money market funds, government sponsored bond obligations and other corporate debt securities which we believe are subject to limited credit risk. 87