UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM ______________ TO ____________.
Commission file number
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of |
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(I.R.S. Employer |
Incorporation or Organization) |
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Identification Number) |
(Address of Principal Executive Offices)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: |
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Name of exchange on which registered |
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The |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of August 12, 2021, there were
Achieve Life Sciences, Inc.
Index to Form 10-Q
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Item 1 |
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Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 4. |
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Item 1A. |
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Item 6. |
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Items 2, 3 and 4 are not applicable and therefore have been omitted. |
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54 |
2
PART I. FINANCIAL INFORMATION
Item 1. |
Consolidated Financial Statements |
Achieve Life Sciences, Inc.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share and share amounts)
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June 30, |
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December 31, |
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2021 |
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2020 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents [note 5] |
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$ |
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$ |
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Prepaid expenses and other assets |
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Total current assets |
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Property and equipment, net |
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Right-of-use assets [note 7] |
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Other assets and restricted cash [note 5] |
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License agreement [note 3 and 4] |
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Goodwill [note 4] |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities other |
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Accrued clinical liabilities |
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Accrued compensation |
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Current portion of long-term obligations [note 7] |
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Total current liabilities |
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Long-term obligations [note 7] |
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Total liabilities |
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Commitments and contingencies [note 7] |
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Stockholders' equity: |
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Series A convertible preferred stock, $ issued and outstanding at June 30, 2021 and zero issued and outstanding at December 31, 2020. |
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Series B convertible preferred stock, $ issued and outstanding at June 30, 2021 and zero issued and outstanding at December 31, 2020 |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive income |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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Subsequent events [note 8] |
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See accompanying notes.
3
Achieve Life Sciences, Inc.
Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
(In thousands, except per share and share amounts)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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EXPENSES |
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Research and development |
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General and administrative |
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Total operating expenses |
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OTHER INCOME (EXPENSE) |
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Interest income |
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Other expenses |
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( |
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( |
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( |
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Total other income (expense) |
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( |
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( |
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( |
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Net loss and comprehensive loss |
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$ |
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$ |
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Basic and diluted net loss per common share |
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$ |
( |
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$ |
( |
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$ |
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$ |
( |
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Weighted average shares used in computation of basic and diluted net loss per common share |
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See accompanying notes.
4
Achieve Life Sciences, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
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Six Months Ended |
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June 30, |
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2021 |
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2020 |
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Operating Activities: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization [note 3] |
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Stock-based compensation [note 6 [c] and note 6 [d]] |
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Shares issued as settlement with trade vendor |
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— |
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Changes in operating assets and liabilities: |
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Amounts receivable |
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— |
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Prepaid expenses and other assets |
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( |
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Accounts payable |
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( |
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Accrued liabilities other |
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( |
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Accrued clinical liabilities |
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( |
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Accrued compensation |
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( |
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( |
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Lease obligation [note 7] |
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( |
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Net cash used in operating activities |
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( |
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( |
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Financing Activities: |
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Proceeds from the April 2020 private placement, net of issuance costs |
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— |
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Financing costs relating to December 2019 public offering |
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— |
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( |
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Proceeds from exercise of warrants |
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Proceeds from the May 2021 public offering, net of issuance costs |
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— |
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Financing costs relating to purchase agreement with Lincoln Park Capital |
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— |
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( |
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Net cash provided by financing activities |
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Investing Activities: |
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Purchase of property and equipment |
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— |
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( |
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Net cash used in investing activities |
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— |
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( |
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Effect of exchange rate changes on cash |
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— |
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Net increase (decrease) in cash, cash equivalents and restricted cash |
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( |
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Cash, cash equivalents and restricted cash at beginning of the period |
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Cash, cash equivalents and restricted cash at end of the period |
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$ |
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$ |
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See accompanying notes.
5
Achieve Life Sciences, Inc.
Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share amounts)
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Accumulated |
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Additional |
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Other |
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Total, |
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Common Stock |
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Preferred Stock |
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Paid-in |
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Comprehensive |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Income (Loss) |
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Deficit |
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Equity |
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Balance, December 31, 2020 |
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$ |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
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$ |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares issued on exercise of warrants |
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— |
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— |
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— |
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— |
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— |
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Shares issued as settlement with trade vendor |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance, March 31, 2021 |
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$ |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares issued on exercise of warrants |
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— |
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— |
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— |
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— |
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— |
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Shares issued - May 2021 public offering |
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— |
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— |
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— |
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— |
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Shares issued as settlement with trade vendor |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance, June 30, 2021 |
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$ |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Accumulated |
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Additional |
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Other |
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Total, |
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Common Stock |
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Preferred Stock |
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Paid-in |
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Comprehensive |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Income (Loss) |
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Deficit |
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Equity |
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Balance, December 31, 2019 |
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$ |
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$ |
— |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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Costs relating to December 2019 financing |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Costs relating to purchase agreement with Lincoln Park Capital |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Shares issued on conversion of Series B preferred shares |
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( |
) |
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— |
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( |
) |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance, March 31, 2020 |
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$ |
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— |
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$ |
— |
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$ |
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$ |
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|
$ |
( |
) |
|
$ |
|
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Stock-based compensation expense |
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— |
|
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— |
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— |
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— |
|
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— |
|
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|
— |
|
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|
Costs relating to purchase agreement with Lincoln Park Capital |
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|
— |
|
|
|
— |
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|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
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|
— |
|
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|
( |
) |
Shares issued on exercise of warrants |
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|
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— |
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— |
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— |
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— |
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— |
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Shares issued - April 2020 private placement |
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— |
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— |
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— |
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— |
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Shares issued on conversion of preferred shares |
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— |
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— |
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— |
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( |
) |
|
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— |
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— |
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— |
|
Adjustment of fractional shares on reverse stock split |
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|
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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|
|
( |
) |
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|
( |
) |
Balance, June 30, 2020 |
|
|
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$ |
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— |
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$ |
— |
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$ |
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$ |
|
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|
$ |
( |
) |
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$ |
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See accompanying notes.
6
Achieve Life Sciences, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
1. NATURE OF BUSINESS, BASIS OF PRESENTATION AND LIQUIDITY RISK
Achieve Life Sciences, Inc. (referred to as “Achieve,” “we,” “us,” or “our”) is a clinical-stage pharmaceutical company committed to the global development and commercialization of cytisinicline for smoking cessation. We were incorporated in the state of Delaware, and operate out of Vancouver, British Columbia and Seattle, Washington.
The unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required to be presented for complete financial statements. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring items) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The accompanying consolidated Balance Sheet at December 31, 2020 has been derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year then ended. The unaudited consolidated financial statements and related disclosures have been prepared with the assumption that users of the interim financial information have read or have access to the audited consolidated financial statements for the preceding fiscal year. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2020 and filed with the U.S. Securities and Exchange Commission, or the SEC, on March 11, 2021.
The consolidated financial statements include the accounts of Achieve and our wholly owned subsidiaries, Achieve Life Sciences Technologies Inc., Achieve Life Science, Inc., Extab Corporation, and Achieve Pharma UK Limited. All intercompany balances and transactions have been eliminated.
Liquidity
We have historically experienced recurring losses from operations and have incurred an accumulated deficit of $
2. ACCOUNTING POLICIES
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those estimates that we believe are critical and require the use of complex judgment in their application in our audited financial statements for the year ended December 31, 2020 in our Annual Report on Form 10-K filed with the SEC, on March 11, 2021. Since December 31, 2020, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.
3. INTANGIBLES
All of our intangible assets are subject to amortization and are amortized using the straight-line method over their estimated useful life.
We acquired license and supply agreements in relation to cytisinicline upon the acquisition of Extab Corporation, or Extab, on May 18, 2015. The agreements were determined to have a fair value of $
The components of intangible assets were as follows:
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June 30, 2021 |
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December 31, 2020 |
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Gross Carrying |
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Accumulated |
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