Abeona Therapeutics Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

STOCK OPTION PLANS

STOCK OPTION PLANS

12 Months Ended

Dec. 31, 2016

STOCK OPTION PLANS [Abstract]

Stock Based Compensation and Restricted Stock Compensation

NOTE 8 - STOCK OPTION PLANS

Our stock-based employee compensation plans described below:

2015 Equity Incentive Plan

We have a stock awards plan, as amended, (the 2015 Equity Incentive Plan), under which 8,000,000 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 board of directors (or similar governing authority) of any affiliate of the Company. The 2015 Equity Incentive Plan, approved by our shareholders on May 7, 2015, replaced the previously approved stock option plan (the 2005 Equity Incentive Plan).

For the 2015 Equity Incentive Plan, the fair value of options was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in fiscal 2016: dividend yield of 0%; volatility of 109%; risk-free interest rate of 1.10%; and expected lives of 5.0 years. The weighted average fair value of options granted was $2.59 per share during 2016.

The assumptions for fiscal 2015 are: dividend yield of 0%; volatility of 102%; risk-free interest rate of 0.86%; and expected lives of 5.0 years. The weighted average fair value of options granted was $6.90 per share during 2015.

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

	Options		Weighted- average exercise price
Outstanding options at January 1, 2015		-	$	-
Granted, fair value of $5.18 per share		1,994,000		6.90
Outstanding options at December 31, 2015		1,994,000		6.90

Granted, fair value of $2.59 per share	2,622,500		3.29
Exercised	(151,000	)	2.32
Expired/forfeited	(22,500	)	3.23
Outstanding options at December 31, 2016	4,443,000		4.94

Exercisable at December 31, 2016	1,327,687		6.60

The intrinsic value related to the outstanding or exercisable options under this plan at December 31, 2016 was $3,806,000 and $417,000, respectively. At December 31, 2015, the intrinsic value related to the outstanding or exercisable options under this plan was $0.

The total intrinsic value of the options exercised during 2016 was $450,000. No options were exercised in 2015.

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

		Number of		Weighted average				Number of		Weighted average
Range of exercise prices		options outstanding		Remaining life in years		Exercise price		options exercisable		Remaining life in years		Exercise price

$	2.31 – 4.45		2,748,000		9.9	$	3.47		227,271		9.5	$	3.01
$	7.34		1,695,000		9.0	$	7.34		1,100,416		9.0	$	7.34
			4,443,000						1,327,687

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 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 328,560 options were outstanding and exercisable under this plan at December 31, 2016.

For the 2005 Equity Incentive Plan, the fair value of options was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in fiscal 2015: dividend yield of 0%; volatility of 102%; risk-free interest rate of 1.41%; and expected lives of 4.6 years. The weighted average fair value of the options granted was $4.52 per share in 2015.

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

	Options			Weighted- average exercise price

Outstanding options at January 1, 2015		210,084		$	20.19
Granted, fair value of $4.52 per share		120,000			3.25
Outstanding options at December 31, 2015		330,084			13.49
Expired/forfeited		(1,524	)		36.93
Outstanding options at December 31, 2016		328,560			14.57

Exercisable at December 31, 2016		328,560			14.57

The intrinsic value related to the outstanding or exercisable options under this plan at December 31, 2015 was $192,000 and $192,000, respectively.

Further information regarding options outstanding under the 2005 Equity Incentive Plan at December 31, 2015 is summarized below:

		Number of		Weighted average				Number of		Weighted-average
Range of exercise prices		options outstanding		Remaining life in years		Exercise price		options exercisable		Remaining life in years		Exercise price

$	3.25		120,000		4.0	$	3.25		120,000		4.0	$	3.25
$	11.50 - 18.50		200,000		7.6	$	18.33		200,000		7.6	$	18.33
$	30.50 – 150.00		8,560		4.0	$	85.41		8,560		4.0	$	85.41
			328,560						328,560

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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