SEC Filings

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)

11. Convertible Notes (Continued)

          The fair value of the contingent Class B-1 Milestone Shares was determined to be $0 because the $3.31 purchase price was equal to the fair value of a Class B-1 share as of the contract date. As a result, the Company recorded a discount of $112,835 related to the Class B Option.

          On March 7, 2014, the Company completed a PBM Qualified Financing with PBM and the outstanding principal amount of the Class B Note was converted into 146,627 shares of Class B-1 preferred stock at a conversion price of $3.41 per share and a Class B-2 Warrant to purchase 23,663 shares of Class B-2 preferred stock at an exercise price of $3.55 per share.

          As a result, the unamortized debt discount associated with the Class B Option of $112,835 was recognized immediately as a loss on extinguishment of debt. Such amount has been recorded within interest expense in the consolidated statement of operations for the year ended December 31, 2014.

Deerfield Convertible Note

          On June 19, 2014, the Company and Deerfield entered into a $500,000 secured promissory note (the "Deerfield Note"). The Deerfield Note accrued interest at a rate of 5% per year compounding annually on December 31 of each year. In connection with the issuance of the Deerfield Note, Deerfield was granted a security interest in the Company's intellectual property.

          The outstanding principal and interest on the Deerfield Note was convertible, at the option of Deerfield, upon consummation of a qualified financing (a "Deerfield Qualified Financing") or at any time in which amounts remain unpaid under the Deerfield Note into shares of the same class and series of capital stock of the Company issued to the other investors in the Deerfield Qualified Financing at a conversion price per share equal to the lowest price per share at which the Deerfield Qualified Financing securities are sold by the Company to the investors in the Deerfield Qualified Financing. If the Company failed to complete a Deerfield Qualified Financing, Deerfield would be entitled to a 2.5% origination fee on the principal amount of the Deerfield Note, as well as reimbursement of out of its out of pocket expenses.

          The Company recorded the Deerfield Note in accordance with the guidance found in ASC 470-20. The conversion feature in the Deerfield Note qualifies for the exception from derivative accounting in accordance with ASC 815-40. Under ASC 470-20, the fair value of the liability component of the Deerfield Note was determined to be the principal amount of $500,000 as the Deerfield Note contained no additional conversion or embedded features.

          On August, 11, 2014, the Company completed a Deerfield Qualified Financing with Deerfield and the outstanding principal amount of, and interest and unpaid interest on, the Deerfield Note were converted into 92,023 shares of Class C preferred stock at a conversion price of $5.471 per share.

12. Stock-based Compensation

Mr. Carbona Purchase Right Agreement

          On October 9, 2013, the Company and Mr. Carbona entered into a Purchase Right Agreement. Under the agreement, the Company provided Mr. Carbona an option to purchase


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