| STOCK-BASED COMPENSATION |
NOTE
13 – STOCK-BASED COMPENSATION
The
Company has two stock-based compensation plans: (1) Abeona Therapeutics Inc. 2015 Equity Incentive Plan (the “2015 Incentive Plan”),
which was approved by stockholders on May 7, 2015, and last amended on August 31, 2022 and (2) Abeona Therapeutics Inc. 2005 Equity Incentive
Plan (the “2005 Incentive Plan”), under which no further grants can be made.
Under
the Company’s 2015 Equity Incentive Plan, as amended, up to 1,440,000 shares of its 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, 2022, the Company had 109,544 shares available for future issuance
under the 2015 Equity Incentive Plan. The maximum contractual term of awards is 10 years.
Under
the 2005 Equity Incentive Plan, as amended, shares of the Company’s 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.
The
following table summarizes stock-based compensation (in thousands):
SCHEDULE OF STOCK BASED COMPENSATION
| |
|
2022 |
|
|
2021 |
|
| |
|
For the year ended December 31, |
|
| |
|
2022 |
|
|
2021 |
|
| |
|
|
|
|
|
|
| Research and development |
|
$ |
925 |
|
|
$ |
3,299 |
|
| General and administrative |
|
|
2,126 |
|
|
|
5,617 |
|
| Total stock-based compensation expense |
|
$ |
3,051 |
|
|
$ |
8,916 |
|
Stock
Options
The
Company estimates the fair value of each option award on the date of grant using the Black-Scholes option valuation model. The Company
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:
| |
● |
Expected
volatility – the Company estimates the volatility of the share price at the date of grant using a “look-back” period
which coincides with the expected term, defined below. The Company believes using a “look-back” period which coincides
with the expected term is the most appropriate measure for determining expected volatility. |
| |
|
|
| |
● |
Expected
term – the Company estimates the expected term using the “simplified” method, as outlined in SEC Staff Accounting
Bulletin No. 107, “Share-Based Payment.” |
| |
|
|
| |
● |
Risk-free
interest rate – the Company estimates the risk-free interest rate using the U.S. Treasury yield curve for periods equal to
the expected term of the options in effect at the time of grant. |
| |
|
|
| |
● |
Dividends
– the Company uses an expected dividend yield of zero because the Company has not declared nor paid a cash dividend, nor are
there any plans to declare a dividend. |
The
Company estimated the fair value of stock options granted in the periods presented utilizing a Black-Scholes option-valuation model utilizing
the following assumptions:
SCHEDULE OF WEIGHTED-AVERAGE ASSUMPTIONS TO ESTIMATE THE FAIR VALUE OF THE OPTIONS GRANTED
| |
|
For the year ended December 31, |
|
| |
|
2022 |
|
|
2021 |
|
| |
|
|
|
|
|
|
| Expected volatility |
|
|
95.1% - 96.0% |
|
|
|
91.6% - 99.8% |
|
| Expected term |
|
|
6.07 - 6.08 years |
|
|
|
5.25 - 6.08 years |
|
| Risk-free interest rate |
|
|
1.7% - 3.3% |
|
|
|
0.8% - 1.4% |
|
| Expected dividend yield |
|
|
0% |
|
|
|
0% |
|
The
Company accounts for forfeitures as they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures
arise.
The
following table summarizes stock option information for the 2015 Equity Incentive Plan:
SCHEDULE OF STOCK OPTIONS ACTIVITY
| |
|
Number of Options |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Remaining Contractual Term (years) |
|
|
Aggregate Intrinsic Value (in thousands)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Outstanding at December 31, 2020 |
|
|
222,430 |
|
|
$ |
55.25 |
|
|
|
6.86 |
|
|
$ |
— |
|
| Granted |
|
|
195,092 |
|
|
$ |
43.75 |
|
|
|
— |
|
|
$ |
— |
|
| Cancelled/forfeited |
|
|
(78,101 |
) |
|
$ |
101.75 |
|
|
|
— |
|
|
$ |
— |
|
| Exercised |
|
|
(25,227 |
) |
|
$ |
33.00 |
|
|
|
— |
|
|
$ |
— |
|
| Outstanding at December 31, 2021 |
|
|
314,194 |
|
|
$ |
38.48 |
|
|
|
7.63 |
|
|
$ |
— |
|
| Granted |
|
|
7,760 |
|
|
$ |
5.30 |
|
|
|
— |
|
|
$ |
— |
|
| Cancelled/forfeited |
|
|
(84,384 |
) |
|
$ |
39.25 |
|
|
|
— |
|
|
$ |
— |
|
| Exercised |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
| Outstanding at December 31, 2022 |
|
|
237,570 |
|
|
$ |
37.11 |
|
|
|
6.50 |
|
|
$ |
— |
|
| Exercisable |
|
|
153,695 |
|
|
$ |
36.34 |
|
|
|
5.49 |
|
|
$ |
— |
|
| Unvested |
|
|
83,875 |
|
|
$ |
38.53 |
|
|
|
8.33 |
|
|
$ |
— |
|
The
aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair
value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s
common stock. As of December 31, 2022, the total compensation cost related to non-vested option awards not yet recognized was approximately
$2.8 million with a weighted average remaining vesting period of 2.1 years.
Further
information regarding options outstanding under the 2015 Equity Incentive Plan as of December 31, 2022 is summarized below:
SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE
| |
|
|
|
|
|
|
|
|
Weighted-Average |
|
|
|
|
|
Weighted-Average |
|
| Range of Exercise Prices |
|
|
Number of Options Outstanding |
|
|
Remaining Life In Years |
|
|
Exercise Price |
|
|
Number of Options Exercisable |
|
|
Remaining Life in Years |
|
|
Exercise Price |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
4.00 |
|
|
$ |
22.75 |
|
|
|
25,040 |
|
|
|
8.9 |
|
|
$ |
17.25 |
|
|
|
6,794 |
|
|
|
8.8 |
|
|
$ |
21.25 |
|
| |
25.50 |
|
|
|
47.00 |
|
|
|
157,535 |
|
|
|
5.6 |
|
|
|
33.17 |
|
|
|
122,143 |
|
|
|
4.8 |
|
|
|
32.80 |
|
| |
54.50 |
|
|
|
58.50 |
|
|
|
54,795 |
|
|
|
8.0 |
|
|
|
57.04 |
|
|
|
24,558 |
|
|
|
7.8 |
|
|
|
57.07 |
|
| |
164.75 |
|
|
|
183.50 |
|
|
|
200 |
|
|
|
6.1 |
|
|
|
164.75 |
|
|
|
200 |
|
|
|
6.1 |
|
|
|
164.75 |
|
| |
|
|
|
|
|
|
|
|
237,570 |
|
|
|
|
|
|
|
|
|
|
|
153,695 |
|
|
|
|
|
|
|
|
|
The
following table summarizes stock option information for the 2005 Incentive Plan:
SCHEDULE OF STOCK OPTIONS ACTIVITY
| |
|
Number of Options |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Remaining Contractual Term (years) |
|
|
Aggregate Intrinsic Value (in thousands)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Outstanding at December 31, 2020 |
|
|
4,992 |
|
|
$ |
213.75 |
|
|
|
2.87 |
|
|
$ |
— |
|
| Cancelled/forfeited |
|
|
(1,792 |
) |
|
$ |
538.25 |
|
|
|
— |
|
|
$ |
— |
|
| Exercised |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
| Outstanding at December 31, 2021 |
|
|
3,200 |
|
|
$ |
32.00 |
|
|
|
1.80 |
|
|
$ |
— |
|
| Cancelled/forfeited |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
| Exercised |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
| Outstanding at December 31, 2022 |
|
|
3,200 |
|
|
$ |
32.00 |
|
|
|
0.79 |
|
|
$ |
— |
|
| Exercisable |
|
|
3,200 |
|
|
$ |
32.00 |
|
|
|
0.79 |
|
|
$ |
— |
|
| Unvested |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
Further
information regarding options outstanding under the 2005 Equity Incentive Plan as of December 31, 2022 is summarized below:
SCHEDULE
OF OPTIONS OUTSTANDING AND EXERCISABLE
| |
|
|
|
|
|
|
|
|
Weighted-Average |
|
|
|
|
|
Weighted-Average |
|
| Range of Exercise Prices |
|
|
Number of Options Outstanding |
|
|
Remaining Life In Years |
|
|
Exercise Price |
|
|
Number of Options Exercisable |
|
|
Remaining Life in Years |
|
|
Exercise Price |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
32.00 |
|
|
$ |
32.00 |
|
|
|
3,200 |
|
|
|
0.8 |
|
|
$ |
32.00 |
|
|
|
3,200 |
|
|
|
0.8 |
|
|
$ |
32.00 |
|
| |
|
|
|
|
|
|
|
|
3,200 |
|
|
|
|
|
|
|
|
|
|
|
3,200 |
|
|
|
|
|
|
|
|
|
Restricted
Stock:
The
following table summarizes restricted stock award activity:
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY
| |
|
Number of Awards |
|
|
Weighted Average Grant Date Fair Value Per Unit |
|
| |
|
|
|
|
|
|
| Outstanding at December 31, 2020 |
|
|
118,100 |
|
|
$ |
44.50 |
|
| Granted |
|
|
115,627 |
|
|
$ |
43.00 |
|
| Cancelled/forfeited |
|
|
(32,776 |
) |
|
$ |
50.50 |
|
| Vested |
|
|
(103,691 |
) |
|
$ |
38.75 |
|
| Outstanding at December 31, 2021 |
|
|
97,260 |
|
|
$ |
46.50 |
|
| Granted |
|
|
779,722 |
|
|
$ |
3.12 |
|
| Cancelled/forfeited |
|
|
(32,498 |
) |
|
$ |
38.80 |
|
| Vested |
|
|
(27,526 |
) |
|
$ |
48.63 |
|
| Outstanding at December 31, 2022 |
|
|
816,958 |
|
|
$ |
5.35 |
|
As
of December 31, 2022, there was approximately $3.7 million of total unrecognized compensation expense related to unvested restricted
stock awards, which is expected to be recognized over a weighted average vesting period of 2.9 years. The total fair value of restricted
stock awards that vested was $1.3 million and $3.6 million during the years ended December 31, 2022 and 2021, respectively.
|