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, 2017

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

STOCK OPTION PLANS

NOTE 8 – STOCK OPTION PLANS

Our stock-based employee compensation plans are described below:

2015 Equity Incentive Plan

We have a stock awards plan, as amended, (the 2015 Equity Incentive Plan), under which 10,000,000 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. 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 2017: dividend yield of 0%; volatility of 111%; risk-free interest rate of 1.81%; and expected lives of 5.0 years. The weighted average fair value of options granted was $11.35 per share during 2017.

The assumptions for fiscal 2016 are: 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.

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

			Weighted-
			average
			exercise
	Options		price
Outstanding options at January 1, 2016		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

Granted, fair value of $11.35 per share		1,077,000		14.31
Exercised		(81,719)		4.22
Expired/forfeited		(325,314)		5.52
Outstanding options at December 31, 2017		5,112,967		9.07

Exercisable at December 31, 2017		2,471,135		5.48
Options vested during the twelve months ended December 31, 2017		1,143,448		4.19

Non-vested options at December 31, 2016		3,115,313		4.24
Non-vested options at December 31, 2017		2,641,832		8.21

The intrinsic value related to the outstanding or exercisable options under this plan at December 31, 2017 was $45,988,000 and $25,614,000, respectively. At December 31, 2016, the intrinsic value related to the outstanding or exercisable options under this plan was $3,806,000 and $417,000, respectively.

The total intrinsic value of the options exercised during 2017 was $641,000. The total intrinsic value of the options exercised during 2016 was $450,000.

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
	options		Remaining		Exercise		Options		Remaining		Exercise
Range of exercise prices	outstanding		life in years		Price		exercisable		life in years		price

$2.31 – 4.45		2,723,092		8.9	$	3.64		1,137,177		8.9	$	3.31
$7.34		1,497,875		8.0	$	7.34		1,333,958		8.0	$	7.34
$16.00 – 16.70		892,000		10.0	$	16.06		-		10.0		-
		5,112,967						2,471,135

At December 31, 2017 the total compensation cost related to non-vested options not recognized is $17,384,000. The expected weighted average period over which the total compensation costs related to non-vested options not yet vested is 3.23.

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 317,760 options were outstanding and exercisable under this plan at December 31, 2017.

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

			Weighted-
			average
			exercise
	Options		price
Outstanding options at January 1, 2016		330,084	$	13.49
Expired/forfeited		(1,524)		36.93
Outstanding options at December 31, 2016		328,560		14.57

Expired/forfeited		(11,800)		21.53
Outstanding options at December 31, 2017		316,760		14.31

Exercisable at December 31, 2017		316,760		14.31

The intrinsic value related to the outstanding or exercisable options under this plan at December 31, 2017 was $1,529,000.

Further information regarding options outstanding under the 2005 Equity Incentive Plan at December 31, 2017 is summarized below:

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

$3.25		120,000		3.0	$	3.25		120,000		3.0	$	3.25
$11.50 - 18.50		189,000		7.0	$	18.35		189,000		7.0	$	18.35
$30.50 – 150.00		7,760		3.2	$	86.79		7,760		3.2	$	86.79
		316,760						316,760