ACHN 2017 Annual Report

Achillion Pharmaceuticals, Inc. Notes to Financial Statements—(Continued) (in thousands, except per share amounts) total of cash, cash equivalents and restricted cash. As a result, restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years. Early adoption is permitted, and the new guidance is to be applied retrospectively. The Company does not believe ASU 2016-18 will have a material effect on its financial position and results of operations. In January 2017, FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new guidance is effective for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years. The Company does not believe ASU 2017-01 will have a material effect on its financial position and results of operations. In May 2017, FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. ASU No. 2017-09 does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification. ASU No. 2017-09 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted. The Company does not believe ASU No. 2017-09 will have a material effect on its financial position and results of operations. 3. Financing Activities Public Offerings In February 2015, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Leerink Partners LLC and Deutsche Bank Securities Inc., as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to a public offering of shares of the Company’s common stock, par value $0.001 per share, at a price of $10.25 per share less underwriting discounts and commissions (the “Offering”). The Company issued and sold to the Underwriters an aggregate of 13,800 shares of common stock in connection with the Offering. The Offering resulted in net proceeds to the Company of $132,558. 4. Earnings (Loss) Per Share Basic earnings (loss) per share (“EPS”) is calculated in accordance with Accounting Standards Codification (“ASC”) 260, “Earnings Per Share,” by dividing net income or loss attributable to common stockholders by the weighted average common stock outstanding. Diluted EPS is calculated by adjusting weighted average common shares outstanding for the dilutive effect of common stock options and warrants. In periods in which a net loss is recorded, no effect is given to potentially dilutive securities, since the effect would be antidilutive. Securities that could potentially dilute basic EPS in the future were not included in the computation of diluted EPS because to do so would have been antidilutive. The calculations of basic and diluted net loss per share are as follows: Years Ended December 31, 2017 2016 2015 (in thousands) Net loss (numerator) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (85,236) $ (61,706) $ (5,030) Weighted-average shares, in thousands (denominator) . . . . . . . . 137,180 136,667 125,592 Basic and diluted net loss per share . . . . . . . . . . . . . . . . . . . . . . . $ (0.62) $ (0.45) $ (0.04) F-15