AKAO 2017 Annual Report

127 9. Stockholders' Equity Stockholders’ Equity On April 7, 2015, the Company entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the Company may issue and sell shares of its common stock having aggregate sales proceeds of up to $30.0 million from time to time through an ATM equity program under which Cowen acts as sales agent. As of December 31, 2017, the Company had sold 1,105,549 shares of common stock under the Sales Agreement, at a weighted-average price of approximately $4.82 per share for gross proceeds of $5.3 million and net proceeds of $5.1 million after deducting the sales commissions and offering expenses. As of December 31, 2017, $24.7 million of common stock remained available to be sold under the Sales Agreement, subject to certain conditions specified therein. On December 19, 2016, the Company completed an underwritten public offering of 7,475,000 shares of its common stock at a price to the public of $13.50 per share, including the full exercise of the underwriters’ option to purchase an additional 975,000 shares of common stock. The Company received net proceeds from the offering of $94.6 million, after deducting the underwriting discounts and commissions and estimated offering expenses. On May 31, 2017, the Company 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. The Company received net proceeds from the offering of $121.2 million, after deducting the underwriting discounts and commissions and offering expenses. Warrants During 2012 and 2011, the Company issued warrants to Oxford Finance LLC and Silicon Valley Bank (“SVB”) to purchase 20,016 and 10,008 shares, respectively, of its Series C convertible preferred stock at an exercise price of $11.99 per share. The warrants were issued in connection with a loan and security agreement, which was repaid in full in June 2014. The fair value of these warrants at the date of issuance was approximately $163,000 and $86,000, respectively, and was recorded as a debt discount and was amortized as interest expense over the term of the loan using the effective-interest method, with the remaining balance charged to interest expense upon loan repayment. Immediately prior to the closing of the IPO, these warrants automatically converted into warrants exercisable for shares of common stock, resulting in the reclassification of the related preferred stock warrant liabilities to additional paid-in capital. During the year ended December 31, 2017, SVB elected a net exercise of 12,510 warrants to purchase 5,896 shares of common stock. On June 3, 2016, the Company sold 7,999,996 shares of its common stock and warrants to purchase 1,999,999 shares of its common stock pursuant to the Purchase Agreement for aggregate gross proceeds of $25.4 million in the Private Placement. The warrants have an exercise price of $3.66 per share and are exercisable up to five years from the date of issuance. The Company's Chief Executive Officer, a related party, participated in the Private Placement by purchasing 141,453 shares of common stock and a warrant to purchase 35,363 shares of common stock for an aggregate purchase price of $0.5 million. Issuance costs of $0.3 million were offset against equity as a reduction from gross proceeds. At the close of the Private Placement, the estimated fair values of the common stock and warrants issued were $22.9 million and $2.6 million, respectively. As of December 31, 2017, the following warrants to purchase shares of common stock were outstanding and exercisable: Warrant Holder Issue Date In Connection With Warrant to Purchase Shares Exercise Price Expiration Date Oxford Finance LLC..................... 4/30/2012 Loan agreement Common stock 11,676 $ 11.99 11/1/2021 Oxford Finance LLC..................... 11/1/2011 Loan agreement Common stock 5,838 $ 11.99 11/1/2021 Growth Equity Opportunities Fund IV, LLC................................ 6/3/2016 Private Placement Common stock 1,178,782 $ 3.66 6/3/2021 1,196,296