AKAO 2017 Annual Report

95 On May 4, 2017, we entered into the Grant Agreement with the Gates Foundation and were awarded up to approximately $10.5 million in grant funding over a three-year research term, of which approximately $3.2 million of committed funding was received in May 2017. Concurrently with the Grant Agreement, we entered into a Common Stock Purchase Agreement with the Gates Foundation, pursuant to which we agreed to sell 407,331 shares of our contingently redeemable common stock to the Gates Foundation in a private placement at a purchase price per share equal to $24.55, for gross proceeds to us of $10.0 million. On May 31, 2017, we completed an underwritten public offering of 5,750,000 shares of its common stock at a price to the public of $22.50 per share, including the closing of the full exercise of the underwriters’ option to purchase an additional 750,000 shares of common stock on June 9, 2017. We received net proceeds from the offering of $121.2 million, after deducting the underwriting discounts and commissions and offering expenses. In September 2017, we were awarded a C-Scape Contract valued at up to $18.0 million in grant funding from BARDA to support the development of C-Scape. The C-Scape Contract includes a base period with committed funding of $12.0 million and subsequent option periods that, if exercised, would bring the total value of the award to $18.0 million. On February 26, 2018, we entered into a new loan and security agreement with Silicon Valley Bank, pursuant to which Silicon Valley Bank agreed to make available to us term loans with an aggregate principal amount of up to $50.0 million, $20.9 million of which was used to repay our loan with Solar Capital Ltd., $4.1 million of which was provided to us on February 26, 2018 and $25.0 million of which remains available for borrowing. On February 27, 2018, we filed an amended Registration Statement on Form S-3 (the “2018 Shelf Registration Statement”) covering the offering of up to $250.0 million of common stock, preferred stock, debt securities, warrants and units. In addition, on February 27, 2018, we filed a prospectus supplement to the 2018 Shelf Registration Statement covering the offering, issuance and sale of up to $50.0 million shares of our common stock in ATM offerings pursuant to a Common Stock Sales Agreement entered into with Cowen and Company, LLC (the “2018 Sales Agreement”) on February 27, 2018. At December 31, 2017, we had working capital of $141.5 million and unrestricted cash, cash equivalents and short-term investments of $164.8 million. We have never been profitable and have incurred net losses in each year since the commencement of our operations. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and associated general and administrative costs. We expect to incur substantial losses from operations in the foreseeable future as we advance plazomicin and other product candidates through preclinical and clinical development, seek regulatory approval, and prepare for, if approved, commercialization. Management expects that, based on its current operating plans, our existing cash, cash equivalents and short-term investments, will be sufficient to fund our current planned operations for at least the next twelve months from the issuance of this report. We will be required to obtain further funding through public or private equity offerings, debt financings, collaboration and licensing arrangements or other sources to invest in the commercial launch of plazomicin and continued progress with our research and development efforts. Adequate additional financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We perform all of our manufacturing in conjunction with third parties. Additionally, we currently utilize third- party CROs to carry out our clinical development and are building a sales organization in preparation for commercial launch of plazomicin expected in 2018, if our NDA is approved by the PDUFA date. We will need substantial additional funding to support our operating activities and adequate funding may not be available to us on acceptable terms, or at all.