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STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
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):

 

   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:

 

   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:

 

   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:

 

            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:

 

   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:

 

            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:

 

   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.