Achieve Life Sciences, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Common Stock (Tables)

Common Stock (Tables)

9 Months Ended

Sep. 30, 2018

Stock option transactions and the number of stock options outstanding are summarized below:

	Number of			Weighted
	Optioned			Average
	Common			Exercise
	Shares			Price
Balance, December 31, 2017		111,578		$	80.01
Granted		554,400			2.81
Forfeited		(393	)		160.79
Balance, September 30, 2018		665,585		$	15.65

Summary of Fair Value of Each Stock Award for Employees and Directors

The fair value of each stock award for employees and directors is estimated on the grant date and for consultants at each reporting period, using the Black-Scholes option-pricing model based on the weighted-average assumptions noted in the following table:

	Nine Months Ended
	September 30,
	2018			2017
Risk-free interest rates		2.93	%		1.95	%
Expected dividend yield		0	%		0	%
Expected life		5.68			6.00
Expected volatility		88.23	%		86.06	%

Summary of Share-Based Compensation Expense

The results for the periods set forth below included share-based compensation expense for stock options and restricted stock units in the following expense categories of the consolidated statements of loss (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Research and development	$	70	$	43	$	190	$	43
General and administrative	$	140		109		398		109
Total stock-based compensation	$	210	$	152	$	588	$	152

Summary of Restricted Stock Unit Award Activity

The following table summarizes our restricted stock unit award activity during the nine months ended September 30, 2018:

				Weighted
	Number			Average
	of			Grant Date
	Shares			Fair Value
Balance, December 31, 2017		21,066		$	38.87
Released		(5,340	)		55.62
Forfeited or expired		(570	)		97.03
Balance, September 30, 2018		15,156		$	30.78

Summary of Outstanding Warrants

The following is a summary of outstanding warrants to purchase common stock at September 30, 2018:

	Total
	Outstanding		Exercise
	and		price per
	Exercisable		Share		Expiration Date
(1) Series A Warrants issued in July 2014 financing		25,272		440.00	July 2019
(2) Series B Warrants issued in July 2014 financing		6,093		440.00	July 2019
(3) Series A-1 Warrants issued in April 2015 financing		2,175		264.00	October 2020
(4) Warrants issued in September 2017 financing		8,224		34.96	March 2023
(5) Warrants issued in June 2018 financing		3,132,000		4.00	June 2023

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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