SEC Filings

S-1
AVEXIS, INC. filed this Form S-1 on 01/15/2016
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Table of Contents


AveXis, Inc.

Notes to Consolidated Financial Statements (Continued)

10. Capitalization (Continued)

          The Class C Milestone Event occurred in March 2015 and on March 17, 2015, the Class C Milestone Shares were purchased by Deerfield and Roche in exchange for an aggregate purchase price of $5,000,020 in cash (unaudited).

Class D Preferred Stock Issuance (unaudited)

          On September 3, 2015, the Company entered into a Class D Stock Purchase Agreement pursuant to which the Company issued and sold an aggregate of 2,241,380 shares of Class D preferred stock at a price per share of $29.00 for an aggregate of $64,787,549, net of issuance costs.

11. Convertible Notes

Class B Note

          On January 30, 2014, the Company entered into the Class B Purchase Agreement with PBM (see Note 10). Under the Class B Purchase Agreement, the Company sold to PBM a $500,000 convertible promissory note (the "Class B Note") and granted PBM the Class B Option. The Class B Note had a stated maturity of January 31, 2016 and accrued interest at 8% per annum. The Class B Note could not be prepaid without the prior written consent of PBM.

          If the Company were to receive gross proceeds of $500,000 or more from the issuance or sale of any equity securities to PBM or another third party, any time prior to January 31, 2016, (a "PBM Qualified Financing"), the Class B Note would automatically convert, at the price per share paid by the investors in the PBM Qualified Financing, into the class of equity securities sold in the PBM Qualified Financing.

          If the Company completed a financing that was not considered a PBM Qualified Financing any time prior to January 31, 2016, PBM, at its option, could convert the Class B Note, at the price per share paid by the investors in such a financing transaction, into the class of equity securities sold in the financing transaction.

          Additionally, PBM, at its option, could elect to convert the Class B Note at any time prior to the earlier of the maturity date or the closing of a PBM Qualified Financing, into shares of the Company's Class B-1 preferred stock at a conversion price of $3.41 per share. Finally, if not earlier converted, The Class B Note would automatically convert into shares of the Company's Class B-1 preferred stock at a conversion price of $3.41 per share at maturity.

          The Company recorded the Class B Note in accordance with the guidance found in ASC 470-20. The conversion feature in the Class B Note qualifies for the exception from derivative accounting in accordance with ASC 815-40. The Company therefore allocated the $500,000 in proceeds received from PBM to the Class B Note, the Class B Option and the contingent Class B-1 Milestone shares based on their relative fair values.

          The fair value of the Class B Option on the date of issuance, as calculated using the Black-Scholes model was $112,835, using the following assumptions: exercise price of $3.41 per share; Class B-1 preferred stock price of $3.41 per share; volatility of 45%; term of one month; a dividend yield of 0%; and an interest rate of 0.40%.

F-30



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