ABEONA THERAPEUTICS INC. 10-Q

ITEM 1. LEGAL PROCEEDINGS We were engaged in an arbitration proceeding with REGENXBIO regarding the former license agreement between the parties relating to use of the AAV9 capsid in our MPS IIIA, MPS IIIB, CLN1 (which has now been sold to Taysha Gene Therapies), and CLN3 programs. The license terminated on May 2, 2020, and on May 25, 2020, we filed an arbitration claim with the American Arbitration Association (“AAA”) alleging that REGENXBIO materially breached the license agreement prior to termination and seeking, among other things, a declaration that as a result of REGENXBIO’s material breach, we were not responsible for payments totaling $28 million (which would otherwise have been due in 2020) plus accrued interest ($6.4 million as of June 30, 2021 based on invoices received from REGENXBIO). REGENXBIO disputed our arbitration claim and filed a counterclaim seeking payment of the $28 million plus interest, which REGENXBIO argued remained due. An arbitration hearing before a tribunal of three AAA arbitrators was held on March 8 and March 9, 2021. On July 13, 2021, the tribunal found in favor of REGENXBIO Inc. in connection with the parties’ arbitration claims and counterclaims. Although the tribunal awarded REGENXBIO $28.0 million plus interest, we believe that prior to the arbitration decision, the two companies had entered into a binding settlement agreement, including $18.0 million payable to REGENXBIO over a two-year period. We intend to seek enforcement of the settlement agreement.