Abeona Therapeutics Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

NOTE 6 – STOCK-BASED COMPENSATION

The following table summarizes stock-based option compensation for the three months ended March 31, 2019 and 2018:

	For the three months ended March 31,
	2019		2018
Research and development	$	1,032,000	$	1,056,000
General and administrative		1,071,000		844,000
Stock-based compensation expense included in operating expense		2,103,000		1,900,000

Total stock-based compensation expense		2,103,000		1,900,000
Tax benefit		-		-
Stock-based compensation expense, net of tax	$	2,103,000	$	1,900,000

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:

		Expected volatility – we estimate the volatility of our share price at the date of grant using a “look-back” period which coincided with the expected term, defined below. We believe using a “look-back” period which coincides with the expected term is the most appropriate measure for determining expected volatility.
		Expected term – we estimate the expected term using the “simplified” method, as outlined in Staff Accounting Bulletin No. 107, “Share-Based Payment.”
		Risk-free interest rate – we estimate 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 – we use an expected dividend yield of zero because we have not declared or paid a cash dividend, nor do we have any plans to declare a dividend.

We used the following weighted-average assumptions to estimate the fair value of the options granted for the periods indicated:

	For the three months ended March 31,
	2019			2018
Expected volatility		109	%		109	%
Expected term		5 years			5 years
Risk-free interest rate		2.46	%		2.37	%
Expected dividend yield		0	%		0	%

For the three months ended March 31, 2019, we granted 201,000 stock options and the weighted-average fair value was $5.29 and the weighted-average exercise price was $6.69. For the three months ended March 31, 2018, we granted 645,000 stock options and the weighted-average fair value was $10.83 and the weighted-average exercise price was $13.72.

The following table summarizes restricted common stock compensation expense for the three months ended March 31, 2019 and 2018:

	For the three months ended March 31,
	2019		2018
Research and development	$	-	$	-
General and administrative		172,000		172,000
Stock-based compensation expense included in operating expense		172,000		172,000

Total stock-based compensation expense		172,000		172,000
Tax benefit		-		-
Stock-based compensation expense, net of tax	$	172,000	$	172,000

We did not grant any common stock to directors or employees during the three months ended March 31, 2019 and 2018.