3.	Capital Availability

We incurred net losses of $11,828,000 and $22,228,000 for the three and six months ended June 30, 2014 and $3,211,000 and $10,877,000 for the three and six months ended June 30, 2013, respectively. We have an accumulated deficit of $323,133,000 as of June 30, 2014. Additionally, we have used net cash of $18,137,000 and $17,014,000 to fund our operating activities for the six months ended June 30, 2014 and 2013, respectively. To date, these operating losses have been funded primarily from outside sources of invested capital.

We have been placing, and will continue to place, significant effort into raising additional capital that will provide adequate capital resources to allow us to continue to fund our future operations. Based on our cash and cash equivalents on hand of $12,760,000 at June 30, 2014 and our minimum liquidity requirements of the Loan Agreement that require us to make principal and interest payments of $868,000 per month beginning in August 2014 and maintain at least three months of cash on hand, we must raise additional capital in August 2014 to avoid an event of default by August 31, 2014. If we are unable to raise additional capital as planned, we will not have sufficient cash on hand to avoid an event of default under the Loan Agreement, which, absent a waiver or modification of the loan terms, would allow the lender to cause the loan amount of $28,670,000 to be immediately due and payable. Our financing plans include pursuing additional cash through strategic corporate partnerships and engaging in future sales of equity, as well as obtaining a modification of the terms of the Loan Agreement. While we have an established history of raising capital through these platforms, and we are currently involved in negotiations with multiple parties, there is no guarantee that adequate funds will be available when needed from additional debt or equity financing, development and commercialization partnerships or from other sources, or on terms acceptable to us. There is also no guarantee that our lender would agree to a modification of the Loan Agreement, or on terms that are acceptable to us. If our efforts to obtain sufficient additional funds are not successful, in addition to the lender’s ability to cause the loan amount to be immediately due and payable, we would also be required to delay, scale back, or eliminate some or all of our research or product development, manufacturing operations, administrative operations, including our employee base, and clinical or regulatory activities, which could negatively affect our ability to achieve certain corporate goals.

The Company continues to seek additional capital through product revenues, strategic transactions, including extension opportunities under the awarded BARDA contract, and from other financing alternatives.