Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

v3.22.1
STOCK-BASED COMPENSATION
3 Months Ended
Mar. 31, 2022
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

NOTE 9 – STOCK-BASED COMPENSATION

 

We have 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 May 20, 2020 and (2) Abeona Therapeutics Inc. 2005 Equity Incentive Plan (the “2005 Inventive Plan”), under which no further grants can be made.

 

The following table summarizes stock-based compensation expense for the three months ended March 31, 2022 and 2021:

 

(in thousands)   2022     2021  
    For the three months ended March 31,  
(in thousands)   2022     2021  
Research and development   $ 372     $ 1,155  
General and administrative     490       795  
Stock based compensation expense   $ 862     $ 1,950  

 

 

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:

 

   Expected volatility - we estimate the volatility of our share price at the date of grant using a “look-back” period which coincides 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.

 

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:

 

    2022     2021  
    For the three months ended March 31,  
    2022     2021  
Expected volatility     95 %     99 %
Expected term     6.08 years       6.08 years  
Risk-free interest rate     1.73 %     1.00 %
Expected dividend yield     0 %     0 %

 

The following table summarizes stock option activity for the 2015 Incentive Plan during the three months ended March 31, 2022 :

 

    Number of Options     Weighted Average Exercise Price    

Weighted Average Remaining

Contractual

Term (years)

    Aggregate Intrinsic Value (in thousands)  
Outstanding at December 31, 2021     7,854,851     $ 1.54       7.63     $ -  
Granted     104,000     $ 0.26       -     $ -  
Cancelled/forfeited     (937,048 )   $ 1.40       -     $ -  
Exercised     -     $ -       -     $ -  
Outstanding at March 31, 2022     7,021,803     $ 1.54       7.24     $ 6  
Exercisable     3,516,716     $ 1.51       5.49     $ -  
Unvested     3,505,087     $ 1.57       8.98     $ 6  

 

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 March 31, 2022, the total compensation cost related to non-vested option awards not yet recognized is approximately $5.0 million with a weighted average remaining vesting period of 2.6 years.

 

The following table summarizes stock option activity for the 2005 Incentive Plan during the three months ended March 31, 2022 :

    Number of Options     Weighted Average Exercise Price    

Weighted Average Remaining

Contractual Term (years)

    Aggregate Intrinsic Value (in thousands)  
Outstanding at December 31, 2021     80,000     $ 1.28       1.80     $          -  
Cancelled/forfeited     -     $ -       -     $ -  
Exercised     -     $ -       -     $ -  
Outstanding at March 31, 2022     80,000     $ 1.28       1.54     $ -  
Exercisable     80,000     $ 1.28       1.54     $ -  
Unvested     -     $ -       -     $ -  

 

 

Restricted Stock:

 

The following table summarizes restricted stock award activity during the three months ended March 31, 2022:

 

    Number of Awards     Weighted Average Grant Date Fair Value  
Outstanding at December 31, 2021     2,431,515     $ 1.86  
Granted     252,000     $ 0.28  
Cancelled/forfeited     (377,523 )   $ 1.58  
Vested     (357,658 )   $ 2.31  
Outstanding at March 31, 2022     1,948,334     $ 1.63  

 

As of March 31, 2022, there is approximately $2.8 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 2.7 years.