Achieve Life Sciences announces $20M loan refinancing

Achieve Life Sciences has entered into a $20 million debt refinancing agreement with Silicon Valley Bank. The new loan agreement refinances the existing debt facility with SVB and SVB Capital and extends the maturity date from August 1, 2024 to December 1, 2027. Under the terms of the new agreement, the $20 million term loan facility is structured into three tranches, with the first tranche of $10 million received at loan closing. The second tranche of $5 million will be available upon the U.S. Food and Drug Administration’s acceptance of filing the New Drug Application for cytisinicline, and the final $5 million tranche will be available at SVB’s discretion and subject to SVB’s credit committee approval. Under the terms of the agreement, the outstanding principal will accrue interest at a floating rate per annum equal to the greater of 7.0% and the prime rate minus 1.0%. The loan facility includes an interest-only period through December 31, 2025, followed by 24 monthly payments of principal plus interest through the maturity date of December 1, 2027. Additional provisions include the option for a six-month extension to the interest-only period and maturity date upon achieving certain regulatory and financial milestones. Subject to certain terms and conditions, the initial outstanding debt may be converted into shares of Achieve’s common stock at SVB’s election at any time prior to repayment of such debt, at a conversion price equal to $7.00 per share, subject to customary adjustment provisions. Subsequent tranches may be converted at a conversion price calculated based on a premium to the closing price of Achieve’s stock at the applicable time, with a minimum conversion price of $4.854 per share. While the loan remains outstanding, SVB is not permitted to short sell or engage in any other hedging transaction with respect to Achieve’s common stock. Achieve has the right at any time to repay and retire all of the outstanding convertible debt prior to its conversion by payment of a premium determined based on the date of such repayment.