SEC Filings

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

          The following summarizes the assumptions we used to estimate the fair value of stock options that we granted to employees for the period indicated:

 
  Year Ended
December 31,

  Nine Months
Ended
September 30,
 
 
 
2014
 
2014
 
2015
 

Expected volatility

    86.94 %   86.94 %   80.80 %

Risk-free interest rate

    1.16 %   1.16 %   1.89 %

Expected term (in years)

    4.19     4.19     6.08  

Expected dividend yield

    0 %   0 %   0 %

          In addition to stock options and stock warrants, we have also incurred stock-based compensation expense in connection with other equity transactions involving employees and directors.

          In October 2013, we issued 1,176,588 shares of common stock to our former Chief Executive Officer, John Carbona, for an aggregate purchase price of $0.02. As the award was fully vested on the date of grant and there was no service to be performed by Mr. Carbona in order to retain the shares, we recognized compensation expense in the amount of $1.2 million, representing the difference between the fair value of the shares on the date of grant, which we estimated to be $1.04 per share, and the $0.02 paid by Mr. Carbona. Such amount is included within general and administrative expense in the statements of operations for the year ended December 31, 2014.

          On January 30, 2014, two of our stockholders entered into an agreement with Mr. Carbona, pursuant to which they sold 392,287 common shares to Mr. Carbona for a purchase price per share of $0.00007, or $28.44 in the aggregate. As the shares sold to Mr. Carbona were fully vested on the date of the purchase and there was no service to be performed by Mr. Carbona in order to retain the shares, we recognized compensation expense in the amount of $0.6 million representing the difference between the fair value of the shares on the date of agreement and the amount paid by Mr. Carbona to the two stockholders to purchase the shares. This amount is included within general and administrative expense in our statement of operations for the year ended December 31, 2014.

          In January 2014, we entered into an exchange agreement with Mr. Carbona, pursuant to which he exchanged 202,347 common shares held by him for 202,347 shares of Class B-1 preferred stock. There was no additional consideration paid by Mr. Carbona in connection with such exchange. Because Mr. Carbona's common shares were replaced with vested Class B-1 preferred shares, we recognized $0.2 million in additional stock-based compensation expense, representing the difference between the fair value of the Class B-1 preferred shares issued in the exchange, which we estimated to be $2.47 per share, and the fair value of the common shares surrendered in the exchange, which we estimated to be $1.51 per share.

          In January 2014, we issued 2,334,391 shares of restricted common stock to Dr. Brian Kaspar, a director of the company, pursuant to a consulting agreement for scientific advisory services to be performed by Dr. Kaspar. Of these shares, 583,597 shares were vested at the time of grant. The remaining shares vested in full on January 1, 2016 upon the effectiveness of Dr. Kaspar's employment agreement. The non-vested shares under the award were revalued each period until they vested. Compensation expense is recorded utilizing the Graded Vesting Attribution Method. The award had a grant date fair value of $3.5 million. We recorded compensation expense of $5.7 million for the year ended December 31, 2014 and $14.5 million for the nine months ended September 30, 2015, respectively, related to this award. As a result of the vesting in full of the remainder of this award in January 2016, we anticipate incurring a material charge to research and development expense in the first quarter of 2016. Using the $18.17 per share fair value of our common stock as of September 30, 2015, we would recognize additional research and

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