Table of Contents
Notes to Consolidated Financial Statements (Continued)
3. Consolidated Variable Interest Entities (Continued)
No additional investments were made by the Company in BioLife Dallas during the year ended December 31, 2014 or thereafter.
that the Company had the power to direct the activities of BioLife Dallas that most significantly impacted the entity's economic performance the Company concluded that BioLife
Dallas was a VIE which should be consolidated for financial statement purposes as of its inception date and until the Company's disposal of BioLife Dallas on January 30, 2014 (see
to the BioLife Dallas operating agreement, the net losses for each reporting period were allocated to the members of BioLife Dallas in accordance with their respective
percentage ownership interests, provided however that, to the extent any allocation of net losses would cause any members to have a deficit balance in their adjusted capital account at the end of such
taxable year, such allocation of net loss was to be reallocated among the other members in accordance with their respective ownership interests. As a result, the net losses realized by BioLife Dallas
were initially allocated to the non-controlling interests based on their ownership percentages through 2011, at which time their capital accounts were reduced to zero and all subsequent losses through
the date of the Company's disposal of BioLife Dallas on January 30, 2014, were allocated to the Company.
September 28, 2015 (unaudited), the Company and Sixeva entered into a Payment and Release Agreement with BioLife Dallas, pursuant to which the Company agreed to pay $575,337
of the outstanding payable owed by the Company to BioLife Dallas, and BioLife Dallas agreed to forgive $84,500 of the outstanding payable related to amounts owed to it by Sixeva.
of the Company's investors, JDH and West Summit, are equity holders of BioLife Dallas, and the principals of JDH and West Summit are former directors of the Company.
Sixeva, Inc. ("Sixeva") was formed by Mr. John Carbona ("Mr. Carbona"), the Company's former Chief Executive
Officer and director, on July 8, 2013. Sixeva had 1,000,000 shares of common stock outstanding from inception through December 31, 2014.
500,000 shares of common stock were purchased and held by Carbona Capital LLC, an entity affiliated with Mr. Carbona, for $50.00 and 500,000 shares of common stock were purchased and
held by Carbona Charitable Remainder Trust, an entity affiliated with Mr. Carbona, for $50.00. In addition to the above equity, Sixeva was funded through borrowings pursuant to a $100,000
promissory note from White Rock Capital Partners, L.P. (see Note 9).
inception, all of the employees of Sixeva provided administrative services that were directly related to the development of AVXS-101 on behalf of the Company and Sixeva was
reimbursed for such services by the Company.
to the Company having the right to receive the benefits of the VIE (the services being performed by Sixeva's employees in the development of AVXS-101), the Company is the primary
beneficiary of Sixeva and therefore has consolidated Sixeva in its consolidated financial statements from Sixeva's inception.
connection with the termination of Mr. Carbona's employment with the Company in April 2015 (unaudited) (see Note 15), all of the outstanding common shares of Sixeva
were transferred to the Company, resulting in the Company owning 100% of its outstanding common stock and Sixeva