SEC Filings

AVEXIS, INC. filed this Form S-1/A on 02/09/2016
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Table of Contents

AveXis, Inc.

Notes to Consolidated Financial Statements (Continued)

8. Accrued Indemnification Obligation (Continued)

price paid by consultant (which was par value) was lower than the fair market value of the stock on the date of grant. The indemnification term is in effect for six years after the due date of the tax return for the year in which the stock was issued (April 15, 2021).

          In connection with the preparation of the Company's audited consolidated financial statements for the year ended December 31, 2014, the Company determined that the per share fair value of the Company's common stock on January 28, 2014, the grant date, was $1.51 (see Note 12).

          As a result, the Company intends to issue the consultant an amended Form 1099 for the 2014 tax year reflecting an aggregate fair value of the restricted stock grant of $3,535,419. Due to the indemnity obligation contained in the consultant's restricted stock purchase agreement, the Company will ultimately be required to reimburse the consultant for the taxes he will pay following receipt of the amended Form 1099 and the amendment of the consultant's 2014 personal income tax return. As a result, the Company has concluded that payment of such indemnity is probable as of December 31, 2014.

          Additionally, the Company intends to gross-up such indemnification payment for the tax that will be payable by the consultant on the indemnity payment.

          As a result, the Company has accrued $4,080,500 at December 31, 2014, representing the Company's best estimate of the ultimate tax indemnification and gross-up payment to be made to the consultant. Such amount has been recorded as research and development expense in the Company's consolidated statements of operations for the year ended December 31, 2014.

9. Notes Payable

          Notes payable consists of the following:

  December 31,    
September 30,

Note Payable, AveXis — White Rock Capital Partners, L.P. 

  $ 250,000   $   $  

Note Payable, Sixeva — White Rock Capital Partners, L.P. 


  $ 350,000   $   $  

White Rock Capital Partners, L.P. Note, AveXis, Inc.

          On September 25, 2012, the Company and White Rock Capital Partners, L.P. ("White Rock") entered into an unsecured promissory note (the "White Rock Note") in the principal amount of $250,000, pursuant to which White Rock loaned the Company $250,000. The White Rock Note carried interest at a rate of 5% per annum and had a stated maturity of September 25, 2013. The White Rock Note could be voluntarily prepaid at any time prior to maturity without penalty.

          As of December 31, 2013, the White Rock Note remained outstanding and was in default. The outstanding principal and interest on the White Rock Note was ultimately repaid on August 14, 2014 with a portion of the proceeds received from the issuance of Class C preferred stock (see Note 10).


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