Item 1.01 Entry into a Material Definitive Agreement
On August 3, 2020, Achieve Life Sciences, Inc. ("Achieve") entered into an
underwriting agreement (the "Underwriting Agreement") with Lake Street Capital
Markets, LLC (the "Underwriter"), pursuant to which Achieve agreed to issue and
sell an aggregate of (a) 476,187 shares of its common stock (the "Shares") and
(b) pre-funded warrants to purchase 142,857 shares of its common stock (the
"Pre-Funded Warrants") to the Underwriters (the "Offering"). The Shares will be
sold at the public offering price of $10.50 per share. The Pre-Funded Warrants
will be sold at a public offering price of $10.499 per Pre-Funded Warrant, which
represents the per share public offering price for the Shares less a $0.001 per
share exercise price for each such Pre-Funded Warrant. Pursuant to the
Underwriting Agreement, Achieve has also granted the Underwriters a 30-day
option to purchase up to an additional 92,856 shares of its common stock. The
Underwriting Agreement contains customary representations and warranties,
conditions to closing, termination provisions and indemnification obligations,
including for liabilities under the Securities Act of 1933, as amended. The
Offering is being made pursuant to the shelf registration statement on Form S-3
(File No. 333-229019) that was filed by Achieve with the Securities and Exchange
Commission ("SEC") on December 26, 2018, and declared effective by the SEC on
February 11, 2019, and a related prospectus supplement.
The Pre-Funded Warrants are exercisable at any time after the date of issuance.
A holder of Pre-Funded Warrants may not exercise the warrant if the holder,
together with its affiliates, would beneficially own more than 9.99% of the
number of shares of common stock outstanding immediately after giving effect to
such exercise. A holder of Pre-Funded Warrants may increase or decrease this
percentage, but not in excess of 19.99%, by providing at least 61 days' prior
notice to Achieve.
Achieve estimates that net proceeds from the Offering will be approximately $5.9
million, after deducting underwriting discounts and commissions and estimated
Offering expenses, and assuming no exercise of the Underwriters' option to
purchase additional shares. Achieve intends to use the net proceeds from the
Offering, together with its existing cash, cash equivalents and marketable
securities, to fund clinical research and development, and for general working
capital. Achieve expects the Offering to close on August 6, 2020, subject to the
satisfaction of customary closing conditions.
The Underwriting Agreement is filed as Exhibit 1.1 to this report and the
foregoing description of the terms of the Underwriting Agreement is qualified in
its entirety by reference to such exhibit. The Pre-Funded Warrant is filed as
Exhibit 4.1 to this report and the foregoing description of the terms of the
Pre-Funded Warrants is qualified in its entirety by reference to such exhibit. A
copy of the opinion of Fenwick & West LLP, relating to the validity of the
securities offered in connection with the Offering, is filed with this Current
Report on Form 8-K as Exhibit 5.1.
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ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
No. Description
1.1 Underwriting Agreement dated August 3, 2020
4.1 Form of Pre-Funded Warrant
5.1 Opinion of Fenwick & West LLP
23.1 Consent of Fenwick & West LLP (included in Exhibit 5.1)
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995 and other
federal securities laws. Any statements contained herein that do not describe
historical facts, including, but not limited to, statements regarding the
expected net proceeds of the Offering and the anticipated use of proceeds of the
Offering, are forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from those discussed in
such forward-looking statements. Such risks and uncertainties include, among
others, the risks identified in Achieve's filings with the SEC, including its
Quarterly Report on Form 10-Q for the three months ended March 31, 2020, filed
with the SEC on May 14, 2020, the prospectus supplement related to the Offering,
and subsequent filings with the SEC. Any of these risks and uncertainties could
materially and adversely affect Achieve's results of operations, which would, in
turn, have a significant and adverse impact on Achieve's stock price. Achieve
cautions you not to place undue reliance on any forward-looking statements,
which speak only as of the date they are made. Achieve undertakes no obligation
to update publicly any forward-looking statements to reflect new information,
events or circumstances after the date they were made or to reflect the
occurrence of unanticipated events.
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