On December 17, 2019, Achieve Life Sciences, Inc., a Delaware corporation (the "Company"), reported that entered into an Underwriting Agreement (the "Underwriting Agreement") with Ladenburg Thalmann & Co. Inc. (the "Underwriter"), pursuant to which the Company agreed to issue and sell, in a registered public offering by the Company (the "Public Offering"), (a) 9,577,504 Class A Units (the "Class A Units"), with each Class A Unit consisting of one share of the Company’s common stock, par value $0.001 per share (the "Common Stock"), and a warrant to purchase one share of Common Stock (each warrant exercisable for one whole share of Common Stock, a "Warrant"), with each Class A Unit to be offered to the public at an offering price of $0.60 per Class A Unit and (b) 6,256 Class B Units (the "Class B Units", and collectively with the Class A Units, the "Units"), with each Class B Unit consisting of one share of Series B Preferred Stock, par value $0.001 per share (the "Series B Preferred Stock"), convertible into 1,666 shares of Common Stock and Warrants to purchase 1,666 shares of Common Stock, with each Class B Unit to be offered to the public at an offering price of $999.60 per Class B Unit (Filing, 8-K, OncoGenex Pharmaceuticals, DEC 17, 2019, View Source [SID1234552557]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
In addition, pursuant to the Underwriting Agreement, the Company granted the Underwriter a 45 day option (the "Overallotment Option") to purchase up to 3,000,000 additional shares of Common Stock and/or Warrants to purchase up to 3,000,000 shares of Common Stock solely to cover over-allotments. The Overallotment Option was exercised in full on December 17, 2019. The Class A Units and Class B Units were not certificated and the shares of Common Stock, Series B Preferred Stock and Warrants comprising such Units were immediately separable and were issued separately in the Public Offering. The Units were offered by the Company pursuant to (i) the registration statement on Form S-1 (File No. 333-234530), and each amendment thereto, which was initially filed with the Securities and Exchange Commission (the "Commission") on November 6, 2019 and declared effective by the Commission on December 17, 2019 (the "Registration Statement").
On December 19, 2019, the Company issued and sold (i) 12,577,504 shares of Common Stock (which includes 3,000,000 shares of Common Stock sold pursuant to the exercise of the Overallotment Option), (ii) 6,256 shares of Series B Preferred Stock and (iii) 23,000,000 Warrants (which includes 3,000,000 Warrants sold pursuant to the exercise of the Overallotment Option) pursuant to the Registration Statement and the Underwriting Agreement. The net proceeds to the Company, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company will be approximately $12.4 million.
Each Warrant is immediately exercisable, expires on the five (5) year anniversary of the date of issuance and is exercisable at a price per share of Common Stock of $0.60, subject to adjustment in the event of subsequent equity sales of common stock or securities convertible into common stock for an exercise price per share less than the exercise price per share of the warrants then in effect, provided, however, that the exercise price of the warrants cannot be reduced to an amount less than $0.06 per share of Common Stock. Additionally, subject to certain exceptions, if, after the closing date of the Public Offering, (i) the volume weighted average price of the Common Stock for each of 30 consecutive trading days (the "Measurement Period"), which Measurement Period commences on the closing date, exceeds 300% of the exercise price (subject to adjustments for stock splits, recapitalizations, stock dividends and similar transactions), (ii) the average daily trading volume for such Measurement Period exceeds $500,000 per trading day and (iii) certain other equity conditions are met, and subject to a beneficial ownership limitation, then the Company may call for cancellation of all or any portion of the Warrants then outstanding.
The foregoing summaries of the Underwriting Agreement and the Warrants do not purport to be complete and are subject to, and qualified in their entirety by, such documents attached as Exhibits 1.1 and 4.1, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.