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)

12. Stock-based Compensation (Continued)

Warrants Granted to Non-Employees

          On March 17, 2014, the Company entered into a letter agreement (the "Letter Agreement") with Pavilion XI Partners, LLC ("Pavilion") to provide certain payments and warrants for consulting services to be provided to the Company by Pavilion. Under the Letter Agreement, the Company granted Pavilion warrants to purchase an aggregate of 175,000 shares of common stock as described below.

          On August 5, 2014, the Company issued to Pavilion a warrant to purchase 100,000 shares of common stock at an exercise price of $3.41 per share (the "First Warrant"). The First Warrant became exercisable as follows: 50,000 shares were exercisable immediately upon issuance; 25,000 shares became exercisable upon the purchase by PBM of the Class B Milestone Shares; and 25,000 shares became exercisable on January 26, 2015. The First Warrant was exercised in full in May 2015 (unaudited).

          Also on August 5, 2014, the Company issued to Pavilion a warrant to purchase 75,000 shares of common stock at an exercise price of $6.82 per share (the "Second Warrant"). The Second Warrant would only begin to vest if the principal of Pavilion became a full time employee of the Company on or before January 1, 2015. If the principal of Pavilion was not a full time employee of the Company by such date, the Second Warrant would be become null and void. As of December 31, 2014, there had been no performance commitment or measurement date for the Second Warrant and as a result no compensation expense had been recognized by the Company with respect to the Second Warrant. Because the principal of Pavilion did not become a full time employee of the Company by January 1, 2015, on such date, the Second Warrant expired and was forfeited.

          The following table summarizes activity for stock warrants granted to non-employees:

 
 
Number of
warrants
 

Unvested warrants at December 31, 2013

     

Warrants granted

    175,000  

Warrants vested

    (50,000 )

Warrants forfeited

     

Warrants exercised

     

Unvested warrants at December 31, 2014

    125,000  

Warrants granted (unaudited)

     

Warrants vested (unaudited)

    (50,000 )

Warrants forfeited (unaudited)

    (75,000 )

Unvested warrants at September 30, 2015 (unaudited)

     

          The First Warrant was revalued each period until the award vested. Compensation expense was recorded on a straight-line basis over the vesting period of each separated vesting tranche of the award. The First Warrant had a grant date fair value of $146,000. The Company recorded compensation expense of $0, $243,863, $98,490 and $358,637 in the years ended December 31, 2013 and 2014 and the nine months ended September 30, 2014 and 2015 (unaudited), respectively,

F-42



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