SEC Filings

S-1
AVEXIS, INC. filed this Form S-1 on 01/15/2016
Entire Document
 

Table of Contents


AveXis, Inc.

Notes to Consolidated Financial Statements (Continued)

12. Stock-based Compensation (Continued)

852,600 shares of the Company's common stock, par value $0.0001, for an aggregate purchase price of $0.02 (the "Purchase Right"). The Purchase Right was exercisable until October 11, 2013.

          The Purchase Right was exercised by Mr. Carbona in the allotted time and settled in cash. As a result, the Company issued 852,600 shares of common stock to Mr. Carbona.

          As the award was fully vested on the date of grant and there was no service to be performed by Mr. Carbona in order to retain the shares, the Company recognized compensation expense in the amount of $1,227,744 representing the difference between the fair value of the shares on the date of grant and the $0.02 paid by Mr. Carbona. Such amount is included within general and administrative expense in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2013. The Company estimated the fair value of the common stock underlying the award to be $1.44 per share utilizing the framework of the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the "AICPA Practice Guide"), including an independent third party valuation (see the discussion regarding the Company's October 9, 2013 common stock valuation below).

Mr. Carbona Stock Purchase and Option Agreement

          On January 30, 2014, JDH, West Summit and Mr. Carbona entered into a Stock Purchase and Option Agreement. Under the agreement, JDH and West Summit sold 284,266 common shares to Mr. Carbona for the price per share of $0.0001, or $28.44 in the aggregate. Additionally, the agreement contained a cross option (the "Cross Option"), which provided Mr. Carbona the option to buy one-third of any eligible shares acquired in the future by JDH or West Summit for the price paid by them to acquire the shares, and provided JDH or West Summit the option to buy one-third of any eligible shares acquired in the future by Mr. Carbona, JDH or West Summit for the price paid by them to acquire the shares. The Cross Option would only terminate upon a reorganization or merger of the Company, a sale of the assets of the Company or an initial public offering.

          As the shares sold to Mr. Carbona were fully vested on the date of the purchase and there was no service to be performed by Mr. Carbona in order to retain the shares, the Company recognized compensation expense in the amount of $594,088 representing the difference between the fair value of the shares on the date of agreement and the amount paid by Mr. Carbona to JDH and West Summit. Such amount is included within general and administrative expense in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2014. The Company estimated the fair value of the common stock on the date of the agreement to be $2.09 per common share utilizing the framework of the AICPA Practice Guide, including an independent third party valuation (see the discussion regarding the Company's January 28, 2014 common stock valuation below).

          Although the Cross Option was fully vested on the grant date, it was not exercisable unless one of the other parties (JDH or West Summit) to the agreement acquired additional shares of stock in the future (a performance condition). Because the agreement contained a performance condition, the Company concluded that the award was an equity classified award. ASC 718 indicates that a company should recognize compensation cost for awards with performance conditions if and when the company concludes that it is probable that the performance condition will be achieved, net of an estimate of pre-vesting forfeitures over the requisite service period.

F-32



© AveXis, Inc. All Rights Reserved.