Business Context and Reporting Period
Company: Achieve Life Sciences, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: September 14, 2017
Event: Entry into a Material Definitive Agreement (Purchase Agreement) with Lincoln Park Capital Fund, LLC ("LPC").
Key Financial Metrics and Transaction Details
- Total Offering Capacity: Up to $11,000,000 in aggregate value of Company securities.
- Initial Purchase: $1,000,000 of Units (1 share of Common Stock + 1/4 Warrant per Unit).
- Warrant Terms: Exercise price of $3.496 per share; exercisable 6 months after issuance for a term of 5.5 years. Warrants are only issued with the initial purchase.
- Future Purchases: Company may direct LPC to purchase up to an additional $10,000,000 over a 30-month term, subject to stock price being above $1.00.
- Pricing Mechanism: Based on prevailing market prices without a fixed discount; Company controls timing and amount.
- Issuance for Agreement: 123,516 shares of Common Stock issued to LPC as consideration (no cash proceeds).
- Transaction Costs: Placement agent (Tigress Financial Partners LLC) to receive $10,000 compensation plus up to $5,000 in reimbursed expenses.
Material Changes and Outlook
Use of Proceeds: The Company expects to use proceeds to advance its product candidate cytisine, for general corporate purposes, and potentially to in-license or acquire additional assets.
Management Commentary: The Company retains the right to terminate the agreement at any time at no cost. Actual sales depend on market conditions and the Company's funding determinations.
Restrictions: LPC has covenanted not to engage in short selling or hedging. The Company is restricted from entering into other "variable rate" transactions for 18 months or until the full amount is purchased.
Investor Verification Checklist
- Verify the closing of the initial $1,000,000 purchase expected on September 15, 2017.
- Confirm the impact of the 123,516 shares issued as consideration on existing shareholder dilution.
- Monitor the Company's stock price relative to the $1.00 threshold required for future discretionary sales.
- Review the attached Purchase Agreement (Exhibit 10.1) for specific limitations on accelerated purchases.
- Check for any subsequent filings regarding the utilization of the $10,000,000 remaining capacity.