SEC Filings

10-Q
AVEXIS, INC. filed this Form 10-Q on 08/10/2017
Entire Document
 

3.Property and Equipment, Net

 

Property and equipment, net, consists of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

    

2017

    

2016

Furniture

 

$

714

 

$

108

Equipment

 

 

24,602

 

 

230

Leasehold improvements

 

 

4,458

 

 

777

Construction in progress

 

 

11,311

 

 

23,162

Property and equipment, gross

 

 

41,085

 

 

24,277

Less: accumulated depreciation

 

 

(790)

 

 

(76)

Property and equipment, net

 

$

40,295

 

$

24,201

 

Depreciation expense was $484,000 and $16,000 for the three months ended June 30, 2017 and 2016, respectively, and $729,000 and $27,000 for the six months ended June 30, 2017 and 2016, respectively.

 

4.Accrued Expenses and Other Current Liabilities

 

Accrued expenses consist of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

    

2017

    

2016

Accrued manufacturing development costs

 

$

8,529

 

$

7,167

Accrued payroll, bonus and deferred compensation

 

 

2,929

 

 

3,841

Accrued construction in progress

 

 

3,374

 

 

2,979

Accrued clinical trial costs

 

 

1,036

 

 

389

Accrued professional and consulting fees

 

 

1,702

 

 

1,588

Other

 

 

1,322

 

 

830

Accrued expenses and other current liabilities

 

$

18,892

 

$

16,794

 

 

5.Accrued Indemnification Obligation

 

In January 2014, the Company issued 2,334,391 shares of restricted common stock to a member of its Board of Directors (Dr. Brian Kaspar, see Note 6), a related party, pursuant to a consulting agreement for scientific advisory services to be performed by the director on behalf of the Company. In connection with the restricted stock purchase agreement, the Company agreed to indemnify Dr. Kaspar for any taxes, interest, fines, penalties or other costs and expenses that Dr. Kaspar may incur in the future should the Internal Revenue Service succeed in a tax determination that the stock price paid by Dr. Kaspar (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.  In January 2016, the Company entered into an employment agreement with Dr. Kaspar.

 

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.

 

As a result, the Company issued Dr. Kaspar an amended Form 1099 for the 2014 tax year reflecting an aggregate fair value of the restricted stock grant of $3.5 million. Due to the indemnity obligation contained in Dr. Kaspar’s restricted stock purchase agreement, the Company was required to reimburse Dr. Kaspar for the taxes he paid following the amendment of Dr. Kaspar’s 2014 personal income tax return. As a result, the Company has concluded that payment of such indemnity is probable as of December 31, 2016 and June 30, 2017.

 

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

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