1. NATURE OF BUSINESS, BASIS OF PRESENTATION AND LIQUIDITY RISK

Achieve Life Sciences, Inc. (referred to as “Achieve,” “we,” “us,” or “our”) is a late-stage clinical specialty pharmaceutical company with the sole mission to address the global nicotine dependence epidemic through the development and commercialization of cytisinicline. We were incorporated in the state of Delaware, and operate out of Bothell, Washington and Vancouver, British Columbia.

The unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required to be presented for complete financial statements. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring items) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The accompanying consolidated Balance Sheet at December 31, 2025 has been derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year then ended. The unaudited consolidated financial statements and related disclosures have been prepared with the assumption that users of the interim financial information have read or have access to the audited consolidated financial statements for the preceding fiscal year. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025 and filed with the U.S. Securities and Exchange Commission, or the SEC, on March 24, 2026.

The consolidated financial statements include the accounts of Achieve and our wholly owned subsidiaries, Achieve Life Sciences Technologies Inc., Achieve Life Science, Inc., Extab Corporation, or Extab, and Achieve Pharma UK Limited. All intercompany balances and transactions have been eliminated.

Liquidity Risk

We have historically experienced recurring losses from operations and have incurred an accumulated deficit of $270.4 million through March 31, 2026 and $260.2 million through December 31, 2025. As of March 31, 2026 and December 31, 2025, we had cash, cash equivalents and marketable securities of $29.3 million and $36.4 million, respectively. As of March 31, 2026 and December 31, 2025, we had a positive working capital balance of $19.2 million and $30.8 million, respectively. For the three months ended March 31, 2026, we incurred a net loss of $10.2 million and net cash used in operating activities was $6.9 million. For the three months ended March 31, 2025, we incurred a net loss of $12.8 million and net cash used in operating activities was $11.1 million. In April 2026, we entered into a securities purchase agreement with certain institutional and accredited investors for a private placement of our securities. We received gross proceeds of approximately $180.0 million from the private placement, before deducting placement agent fees and other expenses. We estimate net proceeds to be approximately $168.6 million after deducting estimated placement agent fees and other expenses of approximately $11.4 million (see Note 10 "Subsequent Events").

We have historically financed our operations through equity offerings, debt financings and government grants. While we believe that we will be able to settle our commitments and liabilities in the normal course of business as they fall due during the next 12 months, as a late-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or from other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to support our ongoing clinical development and commercialization activities.