NOTE 11 – STOCK-BASED COMPENSATION

We have two stock-based compensation plans as follows: (1) Abeona Therapeutics Inc. 2015 Equity Incentive Plan, which was approved by stockholders on May 7, 2015 and last amended on May 20, 2020 and (2) Abeona Therapeutics Inc. 2005 Equity Incentive Plan, which no further grants can be made under this plan.

Stock Option Repricing: On November 10, 2020, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) unanimously approved the repricing of all stock options outstanding under the Abeona Therapeutics Inc. 2015 Equity Incentive Plan held by current employees of the Company that had an exercise price per share between $1.16 and $17.30 (the “Eligible Stock Options”). As a result of the repricing, the exercise price of the Eligible Stock Options was set to $1.15 per share, equal to the closing sale price of the Company’s common stock on November 10, 2020. Stock options held by members of the Board were not included in the repricing. Except for the modified exercise price, all other terms and conditions of each of the Eligible Stock Options remain in full force and effect. The fair value of the Eligible Stock Options was determined using the Hull White I lattice model. There were 79 grantees of Eligible Stock Options and the incremental compensation cost resulting from the modification was $0.6 million.

On November 17, 2020, the Compensation Committee unanimously approved the repricing of all stock options outstanding under the Abeona Therapeutics Inc. 2015 Equity Incentive Plan and the Abeona Therapeutics Inc. 2005 Equity Incentive Plan held by the four current members of the Board that had an exercise price per share between $1.29 and $18.50 (the “Eligible Director Stock Options”). As a result of the repricing, the exercise price of the Eligible Director Stock Options was set to $1.28 per share, equal to the closing sale price of the Company’s common stock on November 17, 2020. Except for the modified exercise price, all other terms and conditions of each of the Eligible Stock Options remain in full force and effect. The fair value of the Eligible Director Stock Options was determined using the Hull White I lattice model. There were four grantees of Eligible Director Stock Options and the incremental compensation cost resulting from the modification was $0.5 million.

2015 Equity Incentive Plan

Under our 2015 Equity Incentive Plan, as amended, up to 18,000,000 shares of our authorized but unissued common stock are reserved for issuance to employees, consultants, or to non-employee members of the Board or to any member of the board of directors (or similar governing authority) of any affiliate of the Company. As of December 31, 2021, we had 1,388,108 shares available for future issuance under our 2015 Equity Incentive Plan. The maximum contractual term of awards is 10 years.

Stock Options: We estimate the fair value of each option award on the date of grant using the Black-Scholes option valuation model. We then recognize the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period). The Black-Scholes model incorporates the following assumptions:

We used the following weighted-average assumptions to estimate the grant date fair value of the stock options granted for the years indicated:

 SCHEDULE OF WEIGHTED-AVERAGE ASSUMPTIONS TO ESTIMATE THE FAIR VALUE OF THE OPTIONS GRANTED

We account for forfeitures as they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures arise.

Summarized stock option information for the 2015 Equity Incentive Plan is as follows:

SCHEDULE OF OPTIONS ACTIVITY

The intrinsic value related to the outstanding options under this plan was $0 and $1.7 million, as of December 31, 2021 and 2020, respectively. The intrinsic value related to the exercisable options under this plan was $0 and $0.7 million as of December 31, 2021 and 2020, respectively.

The total intrinsic value of the options exercised was $0.6 million and $0 during the years ended December 31, 2021 and 2020, respectively.

Further information regarding options outstanding under the 2015 Equity Incentive Plan as of December 31, 2021 is summarized below:

 SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE

As of December 31, 2021, the total compensation cost related to non-vested options not recognized is $6.6 million. The expected weighted average period over which the total compensation costs related to non-vested options will be recognized is 2.8 years.

Restricted Common Stock: Summarized stock option information for the 2015 Equity Incentive Plan is as follows:

 SCHEDULE OF RESTRICTED COMMON STOCK ACTIVITY

The fair market value of the restricted common stock awards vested was $3.6 million and $1.3 million during the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, the total compensation cost related to restricted common stock not recognized is $3.6 million. The expected weighted average period over which the total compensation costs related to restricted common stock will be recognized is 3.0 years.

2005 Equity Incentive Plan

Under the 2005 Equity Incentive Plan, as amended, shares of our authorized but unissued common stock were reserved for issuance to employees, consultants, or to non-employee members of the Board or to any member of the board of directors (or similar governing authority) of any affiliate of the Company. As of January 20, 2015, no additional shares were available for grant under the 2005 Equity Incentive Plan. A total of 80,000 options were outstanding and exercisable under this plan as of December 31, 2021.

Summarized information for the 2005 Equity Incentive Plan is as follows:

 SCHEDULE OF OPTIONS ACTIVITY

The intrinsic value related to the outstanding or exercisable options under this plan was $0 as of December 31, 2021 and 2020.

Further information regarding options outstanding under the 2005 Equity Incentive Plan as of December 31, 2021 is summarized below:

 SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE