Table of Contents
AveXis, Inc.
Notes to Consolidated Financial Statements (Continued)
12. Stock-based Compensation (Continued)
reflect
the relative increased risk arising from the inability to readily sell the shares of a private company. The Company also considered recent secondary sales of the common stock in arms-length
transactions between stockholders. During the three months ended September 30, 2015, a total 615,589 shares of common stock were sold, each for $18.48 per share. The Company gave some weight to
the transactions given their material size and that several outside investors were involved. However, the Company observed that all the buyers were existing investors and/or related parties;
therefore, they may not represent an arms-length transaction. Based on above, the Company derived the fair value of its common stock to be $18.17 per share as of September 30, 2015.
Restricted Stock Granted to Non-Employees
In January 2014, the Company issued 2,334,391 shares of restricted common stock to a member of the Company's Board of Directors
pursuant to a consulting agreement for scientific advisory services to be performed by the director on behalf of the Company. Of these shares, 583,597 common shares were vested at the time of grant
and the remaining restricted shares are scheduled to vest in the amount of 25% per year on the second, third and fourth anniversary of the grant date. The unvested shares are subject to repurchase at
$0.00007 per share, by the Company should the advisor's consulting arrangement terminate for certain specified reasons (see Note 20).
The
unvested shares under the award are being revalued each period until they vest. Compensation expense is recorded using the Graded Vesting Attribution Method over the vesting period
of each separate vesting tranche of the award. The award had a grant date fair value of $3,535,419. The Company recorded compensation expense of $0, $5,749,791 and $14,464,714 in
the years ended December 31, 2013 and 2014 and the nine months ended September 30, 2015 (unaudited), respectively, related to this award, within research and development expense in the
consolidated statements of operations.
The
following table summarizes restricted stock activity:
|
|
|
|
|
|
|
Number of
common shares
|
|
Nonvested shares at December 31, 2013 |
|
|
— |
|
Shares granted |
|
|
2,334,391 |
|
Shares vested |
|
|
(583,597 |
) |
|
|
|
|
|
|
Nonvested shares at December 31, 2014 |
|
|
1,750,794 |
|
Shares granted |
|
|
— |
|
Shares vested |
|
|
— |
|
|
|
|
|
|
|
Nonvested shares at September 30, 2015 (unaudited) |
|
|
1,750,794 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
restricted common shares that are subject to repurchase by the Company represent unvested, forfeitable equity instruments issued to the consultant in consideration for future
services. The repurchase feature, therefore is the equivalent to a forfeiture provision and is in effect an in-substance service period. As such, these shares are not reflected as issued equity for
accounting purposes until the future services are received (see Note 20).
F-40
