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, 2014

Gross proceeds of $24.0 million and underwriting discounts and commissions and offering expenses of $1.6 million were allocated as follows:


	Common Stock		Series B Pre-funded Common Stock Warrants		Series A Common Stock Warrants		Series B Common Stock Warrants
Units Issued		5,559,866		1,340,538		2,779,933		670,269
Gross Proceeds (in thousands)	$	14,084	$	3,387	$	5,261	$	1,268
Underwriting discount and offering expense (in thousands)	$	885	$	213	$	428	$	103

Summary of Stock Options Activity

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


	Number of Optioned Common Shares			Weighted Average Exercise Price
	#			$
Balance, December 31, 2013		1,007,491			11.39
Option grants		356,097			9.47
Option expired		(12,169	)		18.93
Option exercises		(10,000	)		3.00
Option forfeitures		(55,557	)		11.71

Balance, September 30, 2014		1,285,862			10.77

Summary of Fair Value of Option Awards

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,
	2014			2013

Risk-free interest rates		1.83	%		1.15	%

Expected dividend yield		0	%		0	%

Expected life		5.9 years			5.8 years

Expected volatility		81.51	%		87.02	%

Summary of Share-Based Compensation Expense for Stock Options and Restricted Stock

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 September 30,				Nine Months Ended September 30,
(In thousands)	2014		2013		2014		2013
	$		$		$		$
Research and development		513		410		1,454		1,137
General and administrative		439		477		1,514		1,353


Total share-based compensation		952		887		2,968		2,490

Summary of Restricted Stock Unit Award Activity

The following table summarizes our restricted stock unit award activity during the nine months ended September 30, 2014:


	Stock Awards			Weighted- Average Grant Date Fair Value
	#			$
Outstanding January 1		356,589			12.06
Granted		801,800			6.55
Vested		(199,849	)		7.00
Forfeited or expired		(275,732	)		11.22

Outstanding September 30		682,808			7.41

Summary of Outstanding Warrants

The following is a summary of outstanding warrants to purchase common stock at September 30, 2014:


	Total Outstanding and Exercisable		Exercise price per Share		Expiration Date
(1) Warrants issued in October 2010 financing		1,587,301	$	20.00	October 2015
(2) Series A Warrants issued in July 2014 financing		2,779,933	$	4.00	July 2019
(3) Series B Warrants issued in July 2014 financing		670,269	$	4.00	July 2019
(4) Pre-Funded Series B Warrants issued in July 2014 financing		1,340,538	$	0.01	July 2019

Summary of Fair Value of Warrants Issued

The estimated fair value of warrants issued and classified as liabilities is reassessed at each reporting date using the Black-Scholes option pricing model. The Pre-Funded Series B warrants are classified as equity and are not reassessed for their fair value at the end of each reporting date. The following assumptions were used to value the warrants that are classified as liabilities on the following reporting dates:

Warrants issued in October 2010 Financing


	Nine Months Ended September 30,
	2014			2013

Risk-free interest rates		0.15	%		0.36	%

Expected dividend yield		0	%		0	%

Expected life		1.06 years			2.06 years

Expected volatility		102.90	%		40.66	%

Series A and Series B Warrants issued in July 2014 Financing


	Nine Months Ended September 30,
	2014			2013

Risk-free interest rates		1.68	%		—

Expected dividend yield		0	%		—

Expected life		4.75 years			—

Expected volatility		61.81	%		—

- 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.

+ References + Details