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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2023
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | NOTE 10 – STOCK-BASED COMPENSATION The Company previously granted stock options under its 2005 Equity Incentive Plan (the “2005 Incentive Plan”), under which no further grants can be made. In addition, prior to May 17, 2023, the Company had previously granted stock options and stock awards under the Abeona Therapeutics Inc. 2015 Equity Incentive Plan (the “2015 Incentive Plan”). As of May 17, 2023, no further grants can be made under the 2015 Incentive Plan. The Company now grants stock options and stock awards under the Abeona Therapeutics Inc. 2023 Equity Incentive Plan (the “2023 Incentive Plan”) which was approved by stockholders on May 17, 2023. As of September 30, 2023, there were 156,591 shares available to be granted under the 2023 Incentive Plan. In addition, in 2023, the Company’s board of directors approved various restricted stock awards granted to certain new hires as inducement grants. The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 (in thousands): SCHEDULE OF STOCK BASED COMPENSATION
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | For the three months ended September 30, |  |  | For the nine months ended September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Research and development |  | $ | 339 |  |  | $ | 173 |  |  | $ | 743 |  |  | $ | 729 |
General and administrative |  |  | 1,218 |  |  |  | 459 |  |  |  | 2,511 |  |  |  | 1,489 |
Total stock-based compensation expense |  | $ | 1,557 |  |  | $ | 632 |  |  | $ | 3,254 |  |  | $ | 2,218 |
Stock Options The Company estimates the fair value of each option award on the date of grant using the Black-Scholes option-pricing 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-pricing model utilizing the following assumptions: SCHEDULE OF WEIGHTED-AVERAGE ASSUMPTIONS TO ESTIMATE THE FAIR VALUE OF THE OPTIONS GRANTED
|  | For the nine months ended September 30, |
|  |  | 2023* |  |  |  | 2022 |
Expected volatility (%) |  |  | n/a |  |  |  | 95.1% - 96.0% |
Expected term (years) |  |  | n/a |  |  |  | 6.07 - 6.08 years |
Risk-free interest rate (%) |  |  | n/a |  |  |  | 1.7% - 3.3% |
Expected dividend yield (%) |  |  | n/a |  |  |  | 0% |
* the Company did not grant any stock options in the nine months ended September 30, 2023. The following table summarizes stock option activity for the 2015 Incentive Plan and the 2005 Incentive Plan during the nine months ended September 30, 2023 (there were no stock options granted under the 2023 Incentive Plan during the nine months ended September 30, 2023): SCHEDULE OF STOCK OPTION ACTIVITY
|  |  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (years) |  |  | Aggregate Intrinsic Value (in thousands) |
Outstanding at December 31, 2022 |  |  |  | 240,770 |  |  | $ | 37.04 |  |  |  | 6.42 |  |  | $ | — |
Granted |  |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Cancelled/forfeited |  |  |  | (17,447 | ) |  | $ | 33.40 |  |  |  | — |  |  | $ | — |
Exercised |  |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Outstanding at September 30, 2023 |  |  |  | 223,323 |  |  | $ | 37.33 |  |  |  | 5.69 |  |  | $ | — |
Exercisable |  |  |  | 170,958 |  |  | $ | 36.81 |  |  |  | 5.09 |  |  | $ | — |
Unvested |  |  |  | 52,365 |  |  | $ | 39.03 |  |  |  | 7.65 |  |  | $ | — |
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 September 30, 2023, the total compensation cost related to non-vested option awards not yet recognized was approximately $1.7 million with a weighted average remaining vesting period of 1.5 years. Restricted Stock The following table summarizes restricted stock award activity for the 2023 Incentive Plan, 2015 Incentive Plan and Inducement Grants during the nine months ended September 30, 2023: SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY
|  |  | Number of Awards |  |  | Weighted Average Grant Date Fair Value Per Unit |
Outstanding at December 31, 2022 |  |  |  | 816,958 |  |  | $ | 5.35 |
Granted |  |  |  | 1,817,559 |  |  | $ | 3.96 |
Cancelled/forfeited |  |  |  | (56,398 | ) |  | $ | 4.32 |
Vested |  |  |  | (269,195 | ) |  | $ | 5.44 |
Outstanding at September 30, 2023 |  |  |  | 2,308,924 |  |  | $ | 4.27 |
As of September 30, 2023, there was approximately $8.5 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 2.4 years. The total fair value of restricted stock awards that vested during the nine months ended September 30, 2023 was $1.5 million.

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