SEC Filings

AVEXIS, INC. filed this Form S-1 on 01/15/2016
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AveXis, Inc.

Notes to Consolidated Financial Statements (Continued)

12. Stock-based Compensation (Continued)

Because the performance option contained in the award was not probable of being satisfied until such time as the event (the purchase of shares by JDH or West Summit) occurred, no expense was recognized for the award.

          In connection with the termination of Mr. Carbona's employment in April 2015 (unaudited) (see Note 15), the Stock Purchase and Option Agreement was terminated. In connection with the termination of this agreement, the parties agreed to one-final true-up of the Cross Option. As a result, it was agreed that Mr. Carbona would transfer, for no additional consideration, one-third of the 150,000 stock options that he had been granted in June 2014 to each of JDH and West Summit. Contemporaneously, with such true-up, the parties terminated the Cross Option. Because Mr. Carbona never exercised the Cross Option to acquire additional shares from JDH or West Summit, no expense related to this Cross Option was recognized by the Company in its historical financial statements.

Mr. Carbona Share Exchange

          As discussed in Note 10, on January 30, 2014, the Company entered into an Exchange Agreement pursuant to which Mr. Carbona exchanged 146,628 common shares held by him for 146,628 Class B-1 preferred shares. There was no consideration paid by Mr. Carbona in connection with such exchange.

          Under ASC 718 such exchange was accounted for as a modification of previously issued common stock awards made to Mr. Carbona. Since Mr. Carbona's common shares were replaced with vested Class B-1 preferred shares, the Company recognized $193,549 in additional stock-based compensation cost, representing the difference between the $3.41 fair value of the Class B-1 preferred shares issued in the exchange and the fair value of the common shares surrendered in the exchange. Such amount is included within general and administrative expense in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2014. The Company estimated the fair value of the common stock underlying the award 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).

2014 Stock Plan

          In May 2014, the Company's Board of Directors adopted the 2014 Stock Plan (the "Plan"), which allows for the granting of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards and other stock awards to directors, officers and employees of the Company. The Plan is intended to encourage ownership of common stock by the Company's employees and non-employee directors, in order to attract and retain such people, to induce them to work for the benefit of the Company and to provide additional incentive for them to promote the Company's success. The Plan is administered by the compensation committee of the Company's Board of Directors. The administrator of the Plan has the power to determine the form, amount and timing of each award, the exercise price, and the conditions of exercise. As of December 31, 2014, the number of common shares available for grant under the Plan is equal to 10% of the total number of issued and outstanding shares of the Company's common stock, on a fully-diluted, as-converted basis, but in no event shall exceed 1,198,867 common shares. On July 22, 2015 (unaudited), the Company's Board of Directors approved an increase in the number


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