What changed in this filing

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Item 9A. Controls and Procedures

2023-03-29 compared with 2022-03-31 · 949 added, 1718 removed, 368 unchanged (88% of the section changed)

14 unchanged sentences

for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with

generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations

of our management and directors;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could

have a material effect on the financial statements.

Under the supervision and with the participation of management, including our principal

executive and financial officers, we assessed our internal control over financial reporting as of December 31, 2021, based on criteria

for effective internal control over financial reporting established in Internal Control — Integrated Framework (2013), issued by

the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Our management’s assessment of the effectiveness of

our internal control over financial reporting included testing and evaluating the design and operating effectiveness of our internal

In our management’s opinion, we have maintained effective internal control over financial reporting as of December 31,

to the maintenance of records that in reasonable detail accurately and fairly reflect the

transactions and dispositions of our assets;

reasonable assurance that transactions are recorded as necessary to permit preparation of

financial statements in accordance with generally accepted accounting principles, and that

our receipts and expenditures are being made only in accordance with authorizations of our

management and directors;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of management, including our principal executive

and financial officers, we assessed our internal control over financial reporting as of December

31, 2022, based on criteria for effective internal control over financial reporting established

in Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO).

Our management’s assessment of the

effectiveness of our internal control over financial reporting included testing and evaluating

the design and operating effectiveness of our internal controls.

In our management’s

opinion, we have maintained effective internal control over financial reporting as of December

31, 2022, based on criteria established in the COSO 2013 framework.

31 unchanged sentences

and Executive Officers

Certificate of Incorporation and Bylaws presently provide that our Board shall consist of three to 15 members, divided into three staggered

classes as nearly equal in number as possible.

The Board is currently comprised of nine directors.

Our directors serve for a term of

three years and until the respective election and qualification of their successors.

Pursuant to our Bylaws, the Board selects our Chairman

of the Board and our executive officers.

Each of our executive officers is selected by the Board for a term of one year or until the

executive officer’s successor is duly elected and qualified or until such executive officer’s resignation or removal.

is no family relationship among any of our directors or executive officers.

current directors and executive officers are as follows:

Chief Executive Officer, Director

Accounting Officer

Financial Officer

Amoroso , 44, has been Chairman of the Board since October 15, 2021 and has been a director since March 19, 2021.

Amoroso served

as our President and Chief Executive Officer from March 19, 2021 to October 15, 2021.

Amoroso joined Abeona on July 9, 2020 as Chief

Commercial Officer and was promoted to Chief Operating Officer on November 1, 2020.

Since October 15, 2021, Mr.

Amoroso has served as

President and Chief Executive Officer of Precision BioSciences, Inc., a clinical stage biotechnology company dedicated to improving life

with its novel and proprietary ARCUS genome editing platform.

From August 2018 to January 2020, he served as Senior Vice

President and Head of Worldwide Commercial Operations for Cell Therapy at Kite, a Gilead Company, where he led all operations and functions

charged with bringing the first wide-spread CAR-T cell therapy, YESCARTA®, to major world markets while also preparing the organization

for its future cell therapy pipeline.

Prior to his time at Kite, Mr.

Amoroso served in senior level executive positions at Eisai Inc.

from October 2017 to August 2018, Celgene Corporation (now a subsidiary of Bristol-Myers Squibb Company) from January

2011 to October 2017 and Aventis (now Sanofi) from 2001 to 2011.

Amoroso has worked with companies in the small molecules,

biologics, and cell and gene therapies space across large, medium, and small capitalization companies with his deepest areas of expertise

in rare, oncology diseases.

Amoroso earned his Executive M.B.A.

in Management from the Stern School of Business, New York University,

in Biological Sciences, summa cum laude, from Rider University.

Amoroso’s qualifications to serve on our Board

include his extensive experience in leading teams, both directly and indirectly, across clinical development, regulatory and medical

affairs, corporate affairs, and commercial, both in the U.S.

and globally, with direct operational experience in various pharmaceutical

, 59, became a director on April 14, 2021 and currently serves as a member of the Nominating and Corporate Governance

Committee and of the Compensation Committee.

Alland, a pediatric hematologist-oncologist and accomplished physician-scientist, has

been working in the biopharmaceutical industry since 2001 to bring novel therapies to patients.

Since December 2019, Dr.

has served as Chief Medical Officer of PMV Pharmaceuticals, Inc., a Nasdaq-listed precision oncology company pioneering the discovery

and development of small molecule, tumor-agnostic therapies targeting p53 mutants.

From March 2018 to November 2019, Dr.

Alland served as Chief Medical Officer of Affimed, a clinical-stage immuno-oncology company, and, from January 2016 to March

Alland served as Chief Medical Officer of Tarveda Therapeutics, a clinical stage precision oncology company.

also held leadership positions at AstraZeneca, Bristol-Myers Squibb, Novartis, and Schering-Plough, where she worked on a broad range

of oncology products from early to late stage development and contributed to multiple successful drug approvals.

Alland obtained

her medical degree from New York University School of Medicine, and her B.A.

in Biology from the University of Pennsylvania.

She completed

her residency in Pediatrics at The Children’s Hospital of Philadelphia, and her fellowship in Pediatric Hematology/Oncology at

The New York Hospital and Memorial Sloan-Kettering Cancer Center.

From 1994 to 2000, Dr.

Alland served as Assistant Professor of Pediatrics

at Albert Einstein College of Medicine where she was awarded the James S.

McDonnell Foundation Scholar Award and pursued basic cancer

research while also caring for children with cancer and blood disorders.

Since 2020, Dr.

Alland has served as Director on the Board of

Cytovia Therapeutics, an immune-oncology company developing engineered cellular and antibody therapies to treat cancer.

a member of the Scientific Advisory Council of Columbia University’s Center for Radiological Research, and serves as a scientific

reviewer for the Cancer Prevention and Research Institute of Texas.

Alland’s qualifications to serve on our Board include her

leadership skills and her vast medical and scientific experience serving companies in the biotech and pharmaceutical field.

Alvino , 54, became a director on March 26, 2021 and currently serves as Chair of the Compensation Committee and as a member on

the Audit Committee.

Alvino had previously served as a member of our Board from March 2006 through April 15, 2020.

currently President of Hudson Square Capital LLC, since October 2014.

From 2013 to October 2014, Mr.

Alvino was leading the Life Sciences

efforts of Bradley Woods & Co.

Alvino was Managing Director for Griffin Securities from 2007 to 2013.

He previously worked

at Feinstein Kean Healthcare, an Ogilvy Public Relations Worldwide Company, where he was Senior Vice President, responsible for managing

both investor and corporate communications programs for many private and public companies and acted as senior counsel throughout the

agency’s network of offices.

Prior to working at FKH, Mr.

Alvino served as Vice President of Investor Relations and managed the

New York Office of Allen & Caron, Inc., an investor relations agency.

His base of clients included medical devices, biotechnology,

and e-healthcare companies.

Alvino also spent several years working with Wall Street brokerages including Ladenburg, Thallman &

and Martin Simpson & Co.

Alvino’s qualifications to serve on our Board include his leadership skills and his experience

in the areas of financial management and business strategy in the biopharmaceutical field.

Charles , 60, became a director

on March 26, 2021 and currently serves as Chair of the Nominating and Corporate Governance Committee and as a member of the Audit Committee.

Charles has been a corporate transactions and securities partner at the law firm of Thompson Hine, LLP, since 2010.

She leads Thompson

Hine’s Life Sciences practice and co-heads the securities practice, advising public and emerging biotech and pharmaceutical companies

and internationally.

Charles negotiates complex private and public financing transactions, mergers and acquisitions,

licensing transactions and strategic collaborations.

She serves as outside counsel to a myriad of life sciences companies and is known

in the industry as an astute business advisor, providing valuable insights into capital markets, corporate governance and strategic development.

From 2018 until October 2021, Ms.

Charles served on the Board of Directors and as a member of the Audit Committee and Chair of the Compensation

Committee of Entera Bio, a publicly-traded biotechnology company.

She also serves on the Board of Directors of several private life science

Charles founded the Women in Bio Metro New York chapter and chaired the chapter for five years.

She currently serves on

the national board of Women in Bio.

Charles is also a member of the board of Red Door Community (formerly Gilda’s Club New

York City.) She has been recognized as a Life Sciences Star by Euromoney’s LMG Life Sciences, has been named a BTI Client Service

All-Star, and was named by Crain’s New York Business to the list of 2020 Notable Women in the Law.

Charles holds a J.D degree

from The George Washington University Law School and a B.A.

in Psychology from Barnard College, Columbia University.

graduate of Women in Bio’s Boardroom Ready Program, an Executive Education Program taught by The George Washington University School

Charles’ qualifications to serve on our Board include her leadership skills and her vast legal experience representing

companies in the biotech and pharmaceutical field.

Mann , 46, became a director in June 2020 and serves as Chair of the Audit Committee.

Mann has over 20 years of experience in

the financial and biotechnology industries.

Mann is currently the Chairman and Chief Executive Officer of ASP Isotopes since September

2021 and the Chairman of Varian Biopharmaceuticals since June 2020.

Prior to this, Mr.

Mann was a consultant and analyst for DSAM Partners,

a global hedge fund, from April 2020 to March 2022.

Prior to DSAM partners, Mr.

Mann served as Chief Financial Officer at PolarityTE,

Inc., a biotechnology and regenerative biomaterials company, from June 2018 to March 2020.

From August 2016 to June 2018, he served

as the Healthcare Portfolio Manager for Highbridge Capital Management.

From August 2013 to March 2016, Mr.

Mann served as an analyst

with Soros Fund Management.

Prior to joining Soros Fund Management, Mr.

Mann was an analyst and portfolio manager with Lodestone Natural

Resources and UBS from September 2011 to March 2013.

Prior to moving to the buy-side, Mr.

Mann spent 11 years as a sell-side analyst

at Morgan Stanley and Deutsche Bank.

He started his career as a research scientist at Proctor and Gamble and he has an MA (Cantab) and

an MEng in Chemical Engineering from Cambridge University.

Mann is a CFA charter holder.

Mann’s qualifications to serve

on our Board include his extensive experience in the financial and biotechnology industries.

Silverstein , 39, became a director in March 2020.

Since May 2021, Ms.

Silverstein has served as Chief Financial Officer of Excision

Biotherapeutics, Inc., a clinical-stage biotechnology company developing CRISPR-based therapies intended to cure viral infectious diseases.

From July 2020 to January 2021, Ms.

Silverstein served as Chief Financial Officer of Emendo Biotherapeutics, a next generation gene-editing

company that was acquired in December 2020 by AnGes, Inc., a biopharmaceutical company focused on gene-based medicines.

previously operated in various senior executive corporate finance roles within Abeona Therapeutics, including Chief Financial Officer

from January 2019 to March 2020, Senior Vice President, Finance & Strategy from May 2018 to December 2018 and Vice President,

Finance & Investor Relations from April 2016 to May 2018.

Prior to joining Abeona in 2016, from 2014 to 2016, she served as Head

of Investor Relations at Relmada Therapeutics, Inc., a late-stage biotechnology company addressing diseases of the central nervous system.

Silverstein previously served in senior executive roles within a biotechnology venture fund and various capital markets advisory

Silverstein began her career in the financial services as an investment advisor at Royal Alliance Associates before moving

to the biotechnology industry.

A member of CHIEF, Deloitte’s Chief Financial Officer Program, Women in Bio and the National Investor

Relations Institute (“NIRI”), Ms.

Silverstein holds a B.S.

from the Peter Tobin College of Business at St.

University and earned various accreditations from FINRA.

Silverstein’s qualifications to serve on our Board include her extensive

corporate strategic planning, capital markets and capital raising expertise, business development, compliance and crisis management experience.

Wider, M.D., 57, became a director in May 2015 and currently serves as a member of the Compensation Committee.

Wider is a surgeon

and has served as consultant to numerous entities in the biotechnology space.

He has served as the Chairman and CMO of Emendo Biotherapeutics

In addition, Dr.

Wider served as a director of ARYA Sciences Acquisition Corp.

ARYA) from October 2018 to March

2020, ARYA Sciences Acquisition Corp.

ARYB) from June 2020 to November 2020, and ARYA Sciences Acquisition Corp.

ARYA) from August 2020 to June 2021.

Wider holds an M.D.

from Columbia College of

Physicians and a B.A.

from Princeton University.

Wider’s qualifications to serve our Board include his biotechnology expertise

as well as his experience as a surgeon.

Wuchterl , 52, became a director on April 14, 2021 and currently serves as member of the Nominating and Corporate Governance Committee.

Since April 2021, Mr.

Wuchterl has served as Senior Vice President and Chief Manufacturing Officer at T-knife Therapeutics, a next-generation

T-cell receptor company developing innovative therapeutics for the benefit of solid tumor patients where he is responsible for all Chemistry,

Manufacturing and Controls (“CMC”) functions.

From 2016 to 2021, Mr.

Wuchterl served as Senior Vice President, Technical

Operations and Quality at Audentes Therapeutics (an Astellas Company), a gene therapy company focused on developing and commercializing

innovative products for patients living with serious, life-threatening rare neuromuscular diseases.

From 2012 to 2016, Mr.

Wuchterl served

as Senior Vice President and Chief Operating Officer at Cytovance Biologics, a leading biopharmaceutical contract manufacturing company.

Prior to Cytovance, Mr.

Wuchterl held positions of increasing responsibility with Dendreon, Shire HGT, Amgen, Biogen Idec and Roche.

Wuchterl has a B.S.

in Business Administration from Colorado Technical University and an M.B.A.

from Fitchburg State University.

Wuchterl’s qualifications to serve on Abeona’s board include his over 29 years of experience in the life sciences industries,

with senior roles in operations and CMC across several different product types.

He also brings significant experience building out and

leading new cGMP organizations and facilities.

Seshadri , 46, was appointed our President, Chief Executive Officer and a director on October 15, 2021.

Seshadri joined

Abeona on June 1, 2021 as Head of Research and Clinical Development.

Prior to joining Abeona, from October 2010 to May 2021,

Seshadri served in roles of increasing responsibility at Celgene (now part of Bristol-Myers Squibb) focused on research &

development and commercialization for novel therapies in hematology and oncology, most recently as Executive Director &

Worldwide Brand Leader for Breyanzi® (lisocabtagene maraleucel;

liso-cel), a CD19-directed chimeric antigen receptor (CAR) T

cell therapy for relapsed or refractory large B-cell lymphoma.

While at Celgene, he led franchise level marketing and the project

management office for CAR T commercialization and led teams supporting the successful global launch of Breyanzi.

development project teams for clinical development and regulatory submissions for REVLIMID (lenalidomide) in lymphoma, strategic

go/no-go decisions for Avadomide and IMFINZI (durvalumab) while implementing program-wide efficiency measures, and managed

post-marketing commitments for ISTODAX (romidepsin).

In addition, Dr.

Seshadri had held U.S.

and global marketing lead roles for

Abraxane in non-small cell lung cancer and pancreatic cancer.

Previously, he was Head of Early-Stage Upstream Process

Development for Biologics at Dr.

Reddy’s Laboratories, where he led cell-line development, current Good

Manufacturing Practices (cGMP) cell banking, characterization, and cell culture optimization for biosimilars.

Seshadri completed

in Microbiology, Immunology & Molecular Biology and his post-doc in epigenetics at University of Arizona, and earned

in Finance and Healthcare from the Wharton School of the University of Pennsylvania.

Seshadri’s qualifications

to serve on our Board include his extensive experience across clinical development, regulatory and medical affairs, corporate

affairs, and commercial, with direct operational experience in various pharmaceutical companies.

Carr , 52, served as our Chief Accounting Officer from January 7, 2019 to August 10, 2021 when he was promoted to Chief Financial

Carr again became Chief Accounting Officer on March 14, 2022.

Carr joined Abeona in 2018 as Vice President, Controller.

He has more than 25 years of corporate public accounting experience to the Company.

Previously, from October 2017 to November 2018, he

served as Vice President and Assistant Controller at Coty Inc., a publicly-traded multinational manufacturing company, and, from April

2007 to March 2017, Mr.

Carr served as Chief Accounting Officer at Foster Wheeler AG, a publicly-traded multinational engineering company.

Carr has significant experience managing various accounting, financial reporting, internal controls, tax and treasury matters.

Carr, who is a Certified Public Accountant, began his career at Ernst & Young LLP.

He holds a B.S.

and Master of Professional Accountancy

from West Virginia University.

O’Malley, J.D., Ph.D.

, 53, became our General Counsel on September 20, 2021.

O’Malley joined Abeona in 2019 as Chief

IP Counsel, bringing significant technical and legal expertise to the Abeona team.

Prior to joining Abeona, he was a partner at the prominent

New York patent litigation firm Fitzpatrick Cella Harper & Scinto, where he started his career as a summer associate in 2006, and

then at Venable LLP, which merged with Fitzpatrick in 2018.

While at Fitzpatrick and Venable, Dr.

O’Malley litigated a wide variety

of biopharmaceutical patent cases in the United States District Courts, at the Federal Circuit, and before the U.S.

Patent and Trademark

Office, negotiated numerous settlement and license agreements, and provided many patent opinions in connection with M&A due diligence

in the biotech space.

While attending law school at Benjamin N.

Cardozo School of Law, Dr.

O’Malley served as a judicial intern

to Judge William H.

Pauley in the U.S.

District Court for the Southern District of New York.

Before law school, he earned a Ph.D.

Molecular Biology & Microbiology from Tufts University School of Medicine, where he studied the role of protein-protein interactions

in hepatitis virus assembly, and a B.S.

degree magna cum laude from the University of Massachusetts Dartmouth.

Vazzano , 38, was appointed our Chief Financial Officer effective March 14, 2022.

Before joining Abeona, Mr.

Vazzano served as Chief

Financial Officer of publicly-traded Avenue Therapeutics, Inc.

(“Avenue”) from February 2019 to January 2022.

to that, he served as Avenue’s Vice President of Finance and Corporate Controller since August 2017.

During his tenure at Avenue,

Vazzano secured multiple equity financings for Avenue and served in a leadership role for signing a complex, two-stage acquisition

of Avenue with future contingent value rights.

Prior to joining Avenue, Mr.

Vazzano served as Assistant Corporate Controller at publicly-traded

Intercept Pharmaceuticals, Inc.

from October 2016 to July 2017, where he helped grow the finance and accounting department

during the company’s transition from a development-stage company to a fully integrated commercial organization.

has held various other financial roles at other publicly traded pharmaceutical companies such as Pernix Therapeutics, and NPS Pharmaceuticals.

Vazzano, who is a Certified Public Accountant, began his career at KPMG LLP.

Vazzano has a Bachelor of Science degree in

Accounting from Lehigh University and is a Certified Public Accountant in the State of New Jersey.

Governance Matters

to the Delaware General Corporation Law and our Bylaws, our business, property and affairs are managed by or under the direction of our

Members of the Board are kept informed of our business through discussions with our senior management, including our Chief Executive

Officer, by reviewing materials provided to them and by participating in meetings of the Board and its committees.

The Board is currently

comprised of nine directors.

The Board meets during our fiscal year to review significant developments affecting us and to act on matters

requiring Board approval.

Board has adopted a number of corporate governance documents, including charters for its Audit Committee, Compensation Committee and

Nominating and Corporate Governance Committee, corporate governance guidelines, a code of business conduct and ethics for employees,

executive officers and directors (including its principal executive officer and principal financial officer) and a whistleblower policy

regarding the treatment of complaints on accounting, internal accounting controls and auditing matters.

All of these documents are available

on our website at www.abeonatherapeutics.com under the heading “Investor & Media-Corporate Governance-Governance Documents,”

and a copy of any such document may be obtained, without charge, upon written request to the Company, c/o Investor Relations, 1330 Avenue

of the Americas, 33rd Floor, New York, NY 10019.

Communications with the Board

Board has established a process for stockholders to send communications to it.

Stockholders may send written communications to the Board

or individual directors to Abeona Therapeutics Inc., Board of Directors, c/o Corporate Secretary, 1330 Avenue of the Americas, 33rd Floor,

New York, NY 10019.

Stockholders also may send communications via email to IR@abeonatherapeutics.com with the notation “Attention:

Corporate Secretary” in the subject field.

All communications will be reviewed by the Corporate Secretary of the Company, who will

determine whether such communications are relevant and for a proper purpose and appropriate for Board review and, if applicable, submit

such communications to the Board on a periodic basis.

are listed on the Nasdaq Capital Market (“Nasdaq”) and are subject to the Nasdaq rules and regulations governing director

independence.

The Board has determined that each of Leila Alland, M.D., Mark J.

Alvino, Faith L.

Charles, Paul Mann, Todd Wider, M.D.

and Donald A.

Wuchterl are independent under applicable Nasdaq rules.

Leadership Structure

Board has no set policy with respect to the separation of the roles of Chairman of the Board and principal executive officer.

Amoroso currently serves as our Chairman of the Board and Vishwas Seshadri as Chief Executive Officer (principal executive officer).

Our Board currently does not have a lead independent director.

Board leadership structure is commonly utilized by other public companies in the United States, and we believe that it is effective for

We believe this leadership structure is appropriate for us given the size and scope of our business, the experience and active involvement

of our independent directors and our corporate governance practices, which include regular communication with and interaction between

and among the Chief Executive Officer, Chief Financial Officer, and General Counsel, and the independent directors.

Of the current members

of our Board, six are independent from management.

of Director’s Role in Risk Oversight

Board is responsible for overseeing our management and operations, including overseeing our risk assessment and risk management functions.

We believe that our directors provide effective oversight of risk management functions.

We perform a risk review on a regular basis wherein

the management team evaluates the risks we expect to face in the upcoming year and over a longer-term horizon.

From this risk assessment,

plans are developed to deal with the risks identified.

The results of this risk assessment are provided to the Board for their consideration

In addition, members of our management periodically present to the Board the strategies, issues and plans for the areas of

our business for which they are responsible.

While the Board oversees risk management, our management is responsible for day-to-day risk

management processes.

Additionally, the Board requires that management raise exceptional issues to the Board.

We believe this division

of responsibilities is the most effective approach for addressing the risks we face and that the Board leadership structure supports

this approach.

of Business Conduct and Ethics

have adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all of our employees (including executive

officers) and directors.

and Reports of Beneficial Ownership .

The information required by this Item is incorporated herein by reference from the information

to be contained in our 2023 Proxy Statement to be filed with the SEC within 120 days after December 31, 2022 in connection with the solicitation

of proxies for our 2023 Annual Meeting of Stockholders (the “2023 Proxy Statement”).

We have adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all of our employees (including

executive officers) and directors.

The Code is available on our website at www.abeonatherapeutics.com under the heading “Investors

& Media—Corporate Governance—Governance—Governance Documents.” We intend to satisfy any disclosure

requirements under applicable SEC or Nasdaq rules regarding any waiver of a provision of the Code applicable to any executive

officer or director, by posting such information on such website.

We shall provide to any person without charge, upon request, a copy

Any such request must be made in writing to Abeona Therapeutics Inc., c/o Investor Relations, 1330 Avenue of the Americas,

33 rd Floor, New York, NY 10019.

of the Board of Directors

Board established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.

Each of the committees

of the Board acts pursuant to a separate written charter adopted by the Board.

Audit Committee is currently comprised of Paul Mann (Chair), Mark J.

Alvino and Faith L.

The Board has determined that each

Mann and Alvino qualify as an “audit committee financial expert,” under applicable SEC rules and regulations.

The Audit Committee’s responsibilities and duties are, among other things, to engage the independent auditors, review the audit

fees, supervise matters relating to audit functions and review and set internal policies and procedure regarding audits, accounting and

other financial controls.

The Board has determined that Messrs.

Mann and Alvino and Ms.

Charles are independent under applicable SEC

and Nasdaq rules and regulations.

The Audit Committee acts pursuant to a written charter, which is available on our website under “Investors

& Media-Corporate Governance-Governance Documents.”

Compensation Committee is currently comprised of Mark J.

Alvino (Chair), Leila Alland, M.D.

and Todd Wider, M.D.

All committee members

are non-employee directors under applicable SEC rules and are “outside” directors under Internal Revenue Code Section 162(m).

All committee members also are independent under applicable SEC and Nasdaq rules and regulations.

The Compensation Committee acts

pursuant to a written charter, which is available on our website under “Investors & Media-Corporate Governance-Governance Documents.”

Nominating and Corporate Governance Committee is currently comprised of Faith L.

Charles (Chair), Leila Alland, M.D.

and Donald A.

All committee members are independent under applicable SEC and Nasdaq rules and regulations.

The Nominating and Corporate Governance

Committee is responsible for, among other things, considering potential Board members, making recommendations to the full Board as to

nominees for election to the Board, assessing the effectiveness of the Board and implementing our corporate governance guidelines.

Nominating and Corporate Governance Committee acts pursuant to a written charter, which is available on our website under “Investors

& Media-Corporate Governance-Governance Documents.”

& Media—Corporate Governance—Governance—Governance Documents.” We intend to satisfy the disclosure requirement

regarding any waiver of a provision of the Code applicable to any executive officer or director, by posting such information on such

We shall provide to any person without charge, upon request, a copy of the Code.

Any such request must be made in writing to

Abeona Therapeutics Inc., c/o Investor Relations, 1330 Avenue of the Americas, 33 rd Floor, New York, NY 10019.

corporate governance guidelines and the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance

Committee of the Board of Directors are available on our website at www.abeonatherapeutics.com under the heading “Investors

& Media—Corporate Governance—Governance—Governance Documents.” We shall provide to any person without charge,

upon request, a copy of any of the foregoing materials.

Any such request must be made in writing to Abeona Therapeutics Inc., c/o Investor

Relations, 1330 Avenue of the Americas, 33 rd Floor, New York, NY 10019.

EXECUTIVE COMPENSATION

and Executive Compensation Governance Principles

Company has adopted certain governance principles related to director and executive compensation as follows:

equity awards made to non-employee directors shall be granted on a different date than annual

equity awards to executive officers.

Final deliberations or voting on the compensation of

non-employee directors (including any changes to the annual compensation package) shall be

made at a different Board (or committee) meeting than any deliberations or voting on the

compensation of executive officers (including any changes to the annual compensation package).

an annual basis, the Compensation Committee selects and retains an independent consultant

to compare the Company’s executive compensation levels, policies, practices and procedures

to a set of peer companies selected by the Compensation Committee with input from the independent

The independent consultant prepares and submits to the Compensation Committee

a report summarizing this comparative study and its recommendations relating to executive

compensation.

The Company’s executive officers play no substantive role in the selection

or dismissal of the independent consultant.

an annual basis, qualified experts in the field present recent developments and best practices

concerning executive compensation to the Compensation Committee.

an annual basis, the proposed package for the non-employee director compensation must be

recommended by the Compensation Committee to the Board following the receipt of a report

from an independent consultant analyzing the non-employee director compensation package of

the Company’s peer companies.

Compensation Consultants

2021, the Compensation Committee engaged Radford

(“Radford”) as an independent compensation consultant to provide certain services related to executive and non-employee

director compensation.

Radford assisted with the Compensation Committee’s review of the Company’s annual salary, bonus and

equity compensation plans for executive officers and annual cash and equity compensation for non-employee directors.

Radford does not

provide any other services to the Company unless approved by the Compensation Committee, and no such services were provided in 2021.

After considering the relevant factors, the Company determined that no conflicts of interest have been raised in connection with the

services Radford performed for the Compensation Committee in 2021.

for Board Service in 2021 :

Each director who is not also an Abeona employee is entitled to receive an annual board fee and an annual

committee fee for their service on each Board committee.

These fees are paid in cash quarterly.

In addition, we reimburse each

director, whether an employee or not, for the expense of attending Board and committee meetings.

There were no additional fees paid for

service as a chairperson of a Board committee.

During 2021, the annual board fee was $50,000 and the annual committee fee

was $7,500 per committee served.

addition, incumbent non-employee directors were each granted equity awards valued at $115,000 for service on the Board in 2021 consisting

of 50% in stock options and 50% in restricted stock.

New non-employee directors were each granted equity awards valued at $230,000 consisting

of 50% in stock options and 50% in restricted stock.

All equity awards were granted on a different date than any equity awards to executive

Compensation Table – 2021*

table below represents the compensation paid to our directors during the year ended December 31, 2021:

Leila Alland, M.D.

$ 115,000 (4)

$ 107,199 (5)

Michael Amoroso (7)

Rouhandeh (10)

Vishwas Seshadri (13)

Christine Silverstein

Todd Wider, M.D.

value of stock awards is calculated under ASC 718 as of the grant date using the closing

stock price of our Common Stock.

Our assumptions in determining fair value are described

in Note 11 of Notes to Consolidated Financial Statements in Part II, Item 8.

value of option awards is calculated under ASC 718 as of the grant date using the Black-Scholes

option-pricing model.

Employees are assumed to exercise their options.

The determination

of the fair value of share-based payment awards made on the date of grant is affected by

our Common Stock price as well as assumptions regarding a number of complex and subjective

Our assumptions in determining fair value are described in Note 11 of Notes

to Consolidated Financial Statements in Part II, Item 8.

(3) Effective

April 14, 2021, Dr.

Alland and Mr.

Wuchterl were appointed to the Board.

(4) Represents

the fair value of 77,181 shares of restricted stock granted on May 25, 2021.

Charles and Mr.

Wuchterl held

no restricted stock as of December 31, 2021.

(5) Represents

the fair value of options granted on May 25, 2021 to purchase 98,168 shares of our Common

Charles and Mr.

Wuchterl each had options to purchase

98,168 shares of our Common Stock as of December 31, 2021.

(6) Effective

March 26, 2021, Mr.

Alvino and Ms.

Charles were appointed to the Board.

Amoroso served as our President and Chief Executive Officer from March 19, 2021 until his

resignation on October 15, 2021.

On October 15, 2021, Mr.

Amoroso became Chairman of the

He did not receive any compensation for his Board service while serving as CEO,

and declined renumeration for his services after he became a non-employee director.

(8) Represents

the fair value of 38,590 shares of restricted stock granted on May 25, 2021.

Mann held no restricted stock as of December 31, 2021.

(9) Represents

the fair value of options granted on May 25, 2021 to purchase 49,084 shares of our Common

Mann had options to purchase 49,084 shares of our Common Stock as of December

October 14, 2021, Mr.

Rouhandeh resigned from the Board.

(11) Represents

the fair value of restricted stock granted on May 25, 2021 to purchase 38,590 shares of our

Common Stock.

(12) Represents

the fair value of options granted on May 25, 2021 to purchase 49,084 shares of our Common

Seshadri did not receive compensation for his services as a director.

(14) Represents

the fair value of 38,590 shares of restricted stock granted on May 25, 2021.

Silverstein held 60,000 shares of restricted stock

as of December 31, 2021.

(15) Represents

the fair value of options granted on May 25, 2021 to purchase 49,084 shares of our Common

Silverstein had options to purchase 512,834 shares of our Common Stock as of December

(16) Represents

the fair value of 38,590 shares of restricted stock granted on May 25, 2021.

Wider held no restricted stock as of December 31, 2021.

(17) Represents

the fair value of options granted on May 25, 2021 to purchase 49,084 shares of our Common

Wider had options to purchase 49,084 shares of our Common Stock as of December

following table sets forth the aggregate compensation paid to:

(i) our principal executive officer at the end of fiscal year 2021, Vishwas

(ii) an additional principal executive officer who was no longer serving in that capacity at the end of fiscal year 2021, Michael

and (iii) our only other executive officers other than our principal executive officer who were serving as an executive officer

at the end of fiscal year 2021, Edward Carr and Brendan O’Malley.

Compensation Table

Seshadri (3) President and Chief Executive Officer

Carr (8) Chief Accounting Officer and

Chief Financial Officer

O’Malley (15) General Counsel

Amoroso (18) Former President and

Executive Officer

value of option awards is calculated under ASC 718 as of the grant date using the Black-Scholes

option-pricing model and as of the repricing date using a Hull-White I lattice model.

are assumed to exercise their options.

The determination of the fair value of share-based

payment awards made on the date of grant is affected by our Common Stock price as well as

assumptions regarding a number of complex and subjective variables.

Our assumptions in determining

fair value are described in Note 11 of Notes to Consolidated Financial Statements

in Part II, Item 8.

value of stock awards is calculated under ASC 718 as of the grant date using the closing

stock price of our Common Stock.

Our assumptions in determining fair value are described

in Note 11 of Notes to Consolidated Financial Statements in Part II, Item 8.

Seshadri was promoted to President and Chief Executive Officer on October 15, 2021.

joined the Company on June 1, 2021 and served as SVP, Head of Research and Clinical

Development prior to his appointment to President and Chief Executive Officer.

Seshadri declined to accept a bonus for performance in 2021.

(5) Represents

the fair value of options granted on (i) June 1, 2021 to purchase 400,000 shares of our Common

Stock and (ii) on October 15, 2021 to purchase 300,000 shares of our Common Stock.

(6) Represents

the fair value of restricted stock granted on (i) June 1, 2021 for 300,000 shares of our

Common Stock and (ii) October 15, 2021 for 50,000 shares of our Common Stock.

(7) Represents

employer matching contributions to the Company’s 401(k) Defined Contribution Plan.

Carr was promoted to Chief Financial Officer on August 10, 2021.

Carr joined Abeona in

November 2018 as Controller and served as Chief Accounting Officer from January

2019 until his promotion to Chief Financial Officer.

(9) Represents

a bonus accrued for performance in 2021 and paid in February 2022.

Bonus payments are pro-rated

for the portion of the year employed at the Company.

(10) Represents

the fair value of options granted on (i) March 1, 2021 to purchase 100,000 shares of our

Common Stock and (ii) August 10, 2021 to purchase 476,000 shares of our Common Stock.

(11) Represents

the fair value of restricted stock granted on (i) on March 1, 2021 for 50,000 shares of our

Common Stock and (ii) on August 10, 2021 for 238,000 shares of our Common Stock.

(12) Represents

a bonus accrued for performance in 2020 and paid in January 2021.

Bonus payments are pro-rated

for the portion of the year employed at the Company.

(13) Represents

the fair value of options granted on (i) March 16, 2020 to purchase 51,081 shares of our

Common Stock and (ii) May 20, 2020 to purchase 28,919 shares of our Common Stock as well

as (iii) the incremental fair value of repriced options to purchase 125,000 shares of our

Common Stock as noted above.

(14) Represents

the fair value of restricted stock granted (i) on May 20, 2020 for 40,000 shares of our Common

Stock and (ii) on October 9, 2020 for 143,182 shares of our Common Stock.

O’Malley was promoted to General Counsel on September 20, 2021.

joined Abeona in May 2019 as Chief IP Counsel and served as Head of Legal & IP

from April 2020 until his promotion to General Counsel.

(16) Represents

the fair value of options granted on (i) March 1, 2021 to purchase 100,000 shares of our

Common Stock and (ii) September 20, 2021 to purchase 272,000 shares of our Common Stock.

(17) Represents

the fair value of restricted stock granted on (i) on March 1, 2021 for 50,000 shares of our

Common Stock and (ii) on September 20, 2021 for 136,000 shares of our Common Stock.

Amoroso was promoted to President and Chief Executive Officer on March 19, 2021, and resigned

on October 15, 2021.

Amoroso joined the Company on July 9, 2020 and served as Chief Commercial

Officer until October 31, 2020 when he was promoted to Chief Operating Officer, becoming

the Company’s principal executive officer.

(19) Represents

the fair value of options granted on (i) March 1, 2021 to purchase 400,000 shares of our

Common Stock and (ii) March 19, 2021 to purchase 500,000 shares of our Common Stock.

(20) Represents

the fair value of restricted stock granted on (i) on March 1, 2021 for 200,000 shares of

our Common Stock and (ii) on March 19, 2021 for 250,000 shares of our Common Stock

(21) Represents

the fair value of options granted on (i) July 9, 2020 to purchase 250,000 shares of our Common

Stock and (ii) on November 2, 2020 to purchase 100,000 shares of our Common Stock as well

as (iii) the incremental fair value of repriced options to purchase 250,000 shares of our

Common Stock as noted above.

(22) Represents

the fair value of restricted stock granted on October 9, 2020 for 245,455 shares of our Common

Equity Awards at Fiscal Year-End

following table summarizes the aggregate number of option awards held by our named executive officers (“NEOs”) as of December

Option Awards

Unexercisable

Vishwas Seshadri

Brendan O’Malley

Michael Amoroso

(1) Calculated

based on the closing share price on December 31, 2021 of $0.34.

Seshadri’s options to purchase shares of Common Stock will vest in the following periods:

300,000 options at $0.91 per share granted on October 15, 2021 will be fully vested in October

2025 and 400,000 options granted on June 1, 2021 at $1.71 per share will be fully vested

in June 2025.

Seshadri’s restricted stock will vest in the following periods:

50,000 shares of restricted

stock granted on October 15, 2021 will be fully vested in October 2025;

100,000 shares

of restricted stock granted on June 1, 2021 will be fully vested in June 2022;

200,000 shares of restricted stock granted on June 1, 2021 will be fully vested in

Carr’s options to purchase shares of Common Stock will vest the following periods:

476,000 options granted on August 10, 2021 at $1.26 per share will be fully vested in August

100,000 options granted on March 1, 2021 at $2.34 per share will be fully vested in

16,262 options granted on May 20, 2020 at $1.15 per share will be fully vested

in March 2024;

28,725 options granted on March 16, 2020 at $1.15 per share will be fully

vested in March 2024;

3,320 options granted on April 9, 2019 at $1.15 per share will be fully

vested in April 2023;

and 8,000 options granted on November 19, 2018 at $1.15 per share will

be fully vested in November 2022.

Carr’s restricted stock will vest in the following periods:

238,000 shares of restricted

stock granted on August 10, 2021 will be fully vested in August 2025;

50,000 shares of

restricted stock granted on March 1, 2021 will be fully vested in March 2025;

30,000 shares of restricted stock granted on May 20, 2020 will be fully vested in

O’Malley’s options to purchase shares of Common Stock will vest the following

272,000 options granted on September 20, 2021 at $1.21 per share will be fully vested

in September 2025;

100,000 options granted on March 1, 2021 at $2.34 per share will be fully

vested in March 2025;

10,162 options granted on May 20, 2020 at $1.15 per share will be fully

vested in March 2024;

17,950 options granted on March 16, 2020 at $1.15 per share will be

fully vested in March 2024;

and 19,476 options granted on May 31, 2019 at $1.15 per share

will be fully vested in May 2023.

O’Malley’s restricted stock will vest in the following periods:

136,000 shares

of restricted stock granted on September 20, 2021 will be fully vested in September

50,000 shares of restricted stock granted on March 1, 2021 will be fully vested

in March 2025;

and 18,750 shares of restricted stock granted on May 20, 2020 will

be fully vested in March 2024.

Amoroso’s options to purchase shares of Common Stock will vest the following periods:

500,000 options granted on March 19, 2021 at $2.18 per share will be fully vested in March

400,000 options granted on March 1, 2021 at $2.34 per share will be fully vested in

72,916 options granted on November 2, 2020 at $1.07 per share will be fully vested

in November 2024;

and 161,455 options granted on July 9, 2020 at $1.15 per share will be

fully vested in July 2024.

Amoroso’s restricted stock will vest in the following periods:

250,000 shares of restricted

stock granted on March 19, 2021 will be fully vested in March 2025 and 200,000 shares

of restricted stock granted on March 1, 2021 will be fully vested in March 2025.

Pursuant to Agreements and Plans

and Chief Executive Officer

Seshadri entered into an employment agreement with the Company when he joined as SVP, Head of Research & Clinical Development on

June 1, 2021.

In his role as SVP, Head of Research & Clinical Development, Dr.

Seshadri received an annual base salary of $400,000

and was eligible for an annual discretionary bonus with a target of 40% of his annual base salary.

On June 1, 2021, Dr.

granted stock options to purchase 400,000 shares of the Company’s Common Stock pursuant to the Company’s 2015 Equity Incentive

Plan, with 25% vesting on June 1, 2022 and the remaining 75% vesting in 36 equal monthly installments thereafter.

On June 1, 2021, Dr.

Seshadri was granted 300,000 restricted shares of Common Stock pursuant to the Company’s 2015 Equity Incentive Plan, with 150,000

shares vesting on June 1, 2022 and the remaining 150,000 shares vesting in three installments of 50,000 shares annually thereafter starting

on June 1, 2023.

October 15, 2021, Dr.

Seshadri was appointed President, Chief Executive Officer, and Director.

In his new role as President and Chief

Executive Officer, Dr.

Seshadri receives an annual base salary of $500,000 and will be eligible for an annual discretionary bonus with

a target of 50% of his annual base salary.

In connection with his appointment to President and Chief Executive Officer, Dr.

was granted 50,000 shares of restricted stock and options to purchase 300,000 shares of common stock of the Company.

The options vest

25% on the one-year anniversary of the grant date and the remaining 75% vesting in 36 equal monthly installments thereafter.

The restricted

stock will vest 25% on the one-year anniversary of the grant date and the remaining 75% vesting in equal annual installments over the

following 36 months.

Under the terms of his employment agreement

dated October 6, 2021, Dr.

Seshadri and the Company may

each terminate Dr.

Seshadri’s employment for any reason upon written notice to the other party.

Seshadri’s employment

is terminated by the Company other than for Cause, or by Dr.

Seshadri for Good Reason (as each term is defined in his employment agreement),

Seshadri will be entitled to (i) a payment equal to the sum of his base salary plus his target annual bonus opportunity, (ii) payment

equal to the cost of the premium for his health coverage under the Company’s health plan for him and his dependents for the twelve-month

period following his termination date, (iii) a pro-rata bonus for the year of termination and (iv) accelerated vesting equivalent to

12 months of continued employment from the Termination Date (disregarding such termination for such purpose) with respect to all unvested

equity and any other long-term incentive awards granted to Dr.

Seshadri and then outstanding on the Termination Date.

The Company’s

obligations in the preceding sentence are conditioned upon, among other things, Dr.

Seshadri’s execution and nonrevocation of a

release of claims in favor of the Company and its affiliates.

Seshadri remains continuously employed through the date of a Change in Control (as that term is defined in his employment

agreement), all outstanding equity compensation awards will become fully vested and exercisable immediately.

Accounting Officer and Former Chief Financial Officer

Board appointed Mr.

Carr as Chief Accounting Officer effective January 7, 2019.

He was entitled to an annual base salary of $300,000,

effective January 1, 2020 and a target annual bonus opportunity equal to 35% of his base salary.

The amount of the annual bonus actually

paid depended on the extent to which the performance goals are achieved or exceeded as determined by the Board.

Carr is eligible

to participate in all employee benefit plans that the Company may establish for similarly situated employees, if and to the extent he

is eligible pursuant to the terms of such plans and Company policies, which may be modified by the Company at its discretion.

January 1, 2021, Mr.

Carr’s annual base salary was increased to $336,000 and his annual discretionary bonus target was 35% of his

annual base salary.

March 1, 2021, Mr.

Carr was granted (i) stock options to purchase 100,000 shares of the Company’s Common Stock pursuant to the

Company’s 2015 Equity Incentive Plan, with 25% vesting on March 1, 2022 and the remaining 75% vesting in 36 equal monthly installments

thereafter and (ii) 50,000 restricted shares of Common Stock pursuant to the Company’s 2015 Equity Incentive Plan, with 25% vesting

on each of March 1, 2022, March 1, 2023, March 1, 2024 and March 1, 2025.

August 10, 2021, Mr.

Carr was appointed as Chief Financial Officer.

In his new role, Mr.

Carr received an annual base salary of $400,000

and was eligible for an annual discretionary bonus with a target of 40% of his annual base salary.

In connection with his appointment

to Chief Financial Officer, Mr.

Carr was granted 238,000 shares of restricted stock and options to purchase 476,000 shares of common

stock of the Company.

The options vest 25% on the one-year anniversary of the grant date and the remaining 75% vesting in 36 equal monthly

installments thereafter.

The restricted stock will vest 25% on the one-year anniversary of the grant date and the remaining 75% vesting

in equal annual installments over the following 36 months.

March 3, 2022, Mr.

Carr notified the Company of his resignation effective March 31, 2022.

On March 14, 2022, Mr.

Carr ceased being the

Chief Financial Officer and became the Chief Accounting Officer, a position he will hold through March 31, 2022.

the terms of his employment agreement dated August 10, 2021,

Carr and the Company may each terminate Mr.

Carr’s employment for any reason upon written notice to the other party.

Carr’s employment is terminated by the Company other than for Cause, or by Mr.

Carr for Good Reason (as each term is defined in

his employment agreement), Mr.

Carr will be entitled to (i) a payment equal to the sum of twelve months of his annual base salary plus

twelve months of his annual target annual bonus opportunity and (ii) payment equal to the cost of the premium for his health coverage

under the Company’s health plan for him and his dependents for the twelve-month period following his termination date.

employment is terminated by the Company other than for Cause, or by Mr.

Carr for Good Reason (as each term is defined in his employment

agreement) within twelve months following a Change of Control, Mr.

Carr will be entitled to (i) a payment equal to the sum of twelve

months of his annual base salary plus twelve months of his annual target annual bonus opportunity and (ii) payment equal to the cost

of the premium for his health coverage under the Company’s health plan for him and his dependents for the twelve-month period following

his termination date.

The Company’s obligations in the preceding sentence are conditioned upon, among other things, Mr.

execution and nonrevocation of a release of claims in favor of the Company and its affiliates.

Carr remains continuously employed through the date of a Change in Control (as that term is defined in his employment agreement),

all outstanding equity compensation awards will become fully vested and exercisable immediately.

O’Malley joined Abeona in 2019 as Chief IP Counsel.

He was entitled to an annual base salary of $321,000, effective January 1,

2021 and a target annual bonus opportunity equal to 35% of his base salary.

The amount of the annual bonus actually paid depended on

the extent to which the performance goals are achieved or exceeded as determined by the Board.

O’Malley is eligible to participate

in all employee benefit plans that the Company may establish for similarly situated employees, if and to the extent he is eligible pursuant

to the terms of such plans and Company policies, which may be modified by the Company at its discretion.

September 20, 2021, Dr.

O’Malley was appointed SVP, General Counsel.

In his new role, Dr.

O’Malley receives an annual

base salary of $372,000 and is eligible for an annual discretionary bonus with a target of 40% of his annual base salary.

In connection

with his appointment as SVP, General Counsel, Dr.

O’Malley was granted 136,000 shares of restricted stock and options to purchase

272,000 shares of common stock of the Company.

The options vest 25% on the one-year anniversary of the grant date and the remaining 75%

vesting in 36 equal monthly installments thereafter.

The restricted stock will vest 25% on the one-year anniversary of the grant date

and the remaining 75% vesting in equal annual installments over the following 36 months

the terms of his employment agreement dated September 16, 2021,

O’Malley and the Company may each terminate Dr.

O’Malley’s employment for any reason upon written notice to the

O’Malley’s employment is terminated by the Company other than for Cause, or by Dr.

Good Reason (as each term is defined in his employment agreement), Dr.

O’Malley will be entitled to (i) a payment equal to the

sum of twelve months of his annual base salary plus twelve months of his annual target annual bonus opportunity and (ii) payment equal

to the cost of the premium for his health coverage under the Company’s health plan for him and his dependents for the twelve-month

period following his termination date.

O’Malley’s employment is terminated by the Company other than for Cause, or

O’Malley for Good Reason (as each term is defined in his employment agreement) within twelve months following a Change of

O’Malley will be entitled to (i) a payment equal to the sum of twelve months of his annual base salary plus twelve

months of his annual target annual bonus opportunity and (ii) payment equal to the cost of the premium for his health coverage under

the Company’s health plan for him and his dependents for the twelve-month period following his termination date.

The Company’s

obligations in the preceding sentence are conditioned upon, among other things, Dr.

O’Malley’s execution and nonrevocation

of a release of claims in favor of the Company and its affiliates.

O’Malley remains continuously employed through the date of a Change in Control (as that term is defined in his employment

agreement), all outstanding equity compensation awards will become fully vested and exercisable immediately.

President and Chief Executive Officer

Amoroso had entered into a letter agreement with the Company dated March 19, 2021 in connection with his appointment to President and

Chief Executive Officer.

Pursuant to such agreement, Mr.

Amoroso received an annual base salary of $550,000 and will be eligible

for an annual discretionary bonus with a target of 50% of his annual base salary.

In connection with his appointment to President and

Chief Executive Officer, Mr.

Amoroso was granted 250,000 shares of restricted stock and options to purchase 500,000 shares of common

stock of the Company.

The options vest 25% on the one-year anniversary of the grant date and the remaining 75% vesting in 36 equal monthly

installments thereafter.

The restricted stock will vest 25% on the one-year anniversary of the grant date and the remaining 75% vesting

in equal quarterly installments over the following 36 months.

Amoroso’s agreement, Mr.

Amoroso and the Company may each terminate Amoroso’s employment for any reason upon

written notice to the other party.

Amoroso’s employment was terminated by the Company other than for Cause, or by Mr.

for Good Reason (as each term is defined in his employment agreement), Mr.

Amoroso would have been entitled to (i) a payment

equal to the sum of his base salary plus his target annual bonus opportunity, (ii) payment equal to the cost of the premium for

his health coverage under the Company’s health plan for him and his dependents for the twelve-month period following his termination

date, and (iii) accelerated vesting equivalent to 12 months of continued employment from the Termination Date (disregarding such

termination for such purpose) with respect to all unvested equity and any other long-term incentive awards granted to him and then outstanding

on the Termination Date.

The Company’s obligations in the preceding sentence were conditioned upon, among other things, Mr.

execution and nonrevocation of a release of claims in favor of the Company and its affiliates.

Amoroso remained continuously employed through the date of a Change in Control (as that term is defined in the employment agreement),

all outstanding equity compensation awards would become fully vested and exercisable immediately.

Company’s executives are provided usual and customary retirement benefits available to all employees, including the NEOs.

include thrift savings (401(k)), life insurance, accidental death and dismemberment insurance, medical/dental insurance, vision insurance,

long-term disability insurance and a Company-sponsored pension plan.

We provide matching contributions under our 401(k) to all employees,

including the NEOs.

COMMITTEE DISCUSSION ON EXECUTIVE COMPENSATION

Compensation Committee operates under a written charter adopted by the Board and is responsible for making all compensation decisions

for the Company’s directors and named executives including determining base salary and annual incentive compensation amounts and

recommending stock option grants and other stock-based compensation under our equity incentive plans.

The Compensation Committee charter

can be found on our under “Investor & Media-Corporate Governance-Governance Documents.”

information required by this Item is contained in the 2023 Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

solely upon information made available to us, the following table sets forth certain information with respect to the beneficial ownership

of our Common Stock as of March 21, 2022 by (i) each person who is known by us to beneficially own more than five percent of any class

of our Common Stock;

(ii) each of our directors and nominees;

(iii) each of our named executive officers;

and (iv) all of our executive

officers and directors as a group.

The address of each holder listed below, except as otherwise indicated, is 1330 Avenue of the Americas,

33 rd Floor, New York, NY 10019.

Amount and Nature of

Beneficial Ownership

Name and Address of Beneficial Owner

Directors, Director Nominees, and Named Executive Officers:

Leila Alland,

Michael Amoroso (5)

Paul Mann (6)

Christine Silverstein (7)

Todd Wider, M.D.

Vishwas Seshadri (8)

Edward Carr (9)

Brendan O’Malley

All Directors, Director Nominees, and Named Executive Officers as a group (consisting of 11 persons)

5% Beneficial Owners:

Rouhandeh (11)

Adage Capital Partners,

Includes outstanding

shares of Common Stock held plus all shares of Common Stock issuable upon exercise of options, warrants and other rights exercisable

within 60 days after March 21, 2022.

Based upon 147,378,022

shares of Common Stock issued and outstanding as of March 21, 2022.

Wuchterl are each known to beneficially own an aggregate of 77,181 shares of our Common Stock and presently exercisable options

for the purchase of 98,168 shares pursuant to the 2015 Equity Incentive Plan.

Alvino is known

to beneficially own an aggregate of 82,181 shares of our Common Stock and presently exercisable options for the purchase of 98,168

shares pursuant to the 2015 Equity Incentive Plan.

Amoroso is known

to beneficially own an aggregate of 604,637 shares of our Common Stock and presently exercisable options for the purchase of 414,596

shares of our Common Stock pursuant to the 2015 Equity Incentive Plan.

are each known to beneficially own an aggregate of 38,590 shares of our Common Stock and presently exercisable options for the purchase

of 49,084 shares pursuant to the 2015 Equity Incentive Plan.

Silverstein is known

to beneficially own an aggregate of 118,590 shares of our Common Stock and presently exercisable options for the purchase of 417,862

shares of our Common Stock pursuant to the 2015 Equity Incentive Plan.

Seshadri is known

to beneficially own an aggregate of 350,000 shares of our Common Stock.

Carr is known to

beneficially own an aggregate of 400,169 shares of our Common Stock and presently exercisable options for the purchase of 110,896

shares of our Common Stock pursuant to the 2015 Equity Incentive Plan.

known to beneficially own an aggregate of 204,750 shares of our Common Stock and presently exercisable options for the purchase of

97,525 shares of our Common Stock pursuant to the 2015 Equity Incentive Plan.

Beneficial ownership

Rouhandeh includes (i) 503,590 shares held directly by Mr.

Rouhandeh, (ii) presently exercisable options for the purchase

of 1,024,114 shares pursuant to the 2015 Equity Incentive Plan, (iii) presently exercisable options for the purchase of 80,000 shares

pursuant to the 2005 Equity Incentive Plan, (iv) 229 shares held by the Sophie C.

Rouhandeh Trust, 229 shares held by the Chloe H.

Rouhandeh Trust, and 714 shares held by the SHR Family Trust (collectively, the “Trusts”), and (v) 11,079,292 shares

and 1,364,196 shares held by each of SCO Capital Partners LLC and Beach Capital LLC, respectively.

Rouhandeh serves as trustee

of each of the Trusts.

He is also the Chief Investment Officer and managing member of SCO Capital Partners LLC and managing member

of Beach Capital LLC.

The address for each of Mr.

Rouhandeh, SCO Capital Partners LLC and Beach Capital LLC is 1330 Avenue of the

Americas, 33 rd Floor, New York, NY 10019.

Rouhandeh disclaims his beneficial ownership of such shares except to the

extent of his pecuniary interest therein.

Based on information

set forth in a Schedule 13G/A filed with the SEC on February 10, 2022 by Adage Capital Partners, L.P.

and related entities.

Capital Partners L.P.’s address is 200 Clarendon Street, 52 nd Floor, Boston, MA 02116.

our knowledge, except as noted above, no person or entity is the beneficial owner of more than 5% of the voting power of the Company’s

Common Stock.

Authorized for Issuance Under Equity Compensation Plans

The information

set forth under the caption “Equity Compensation Plan Information” in Item 5 of this Form 10-K is incorporated by reference

information required by this Item is contained in the 2023 Proxy Statement and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Relationships and Related Transactions

occasion we may engage in certain related party transactions.

Pursuant to our Audit Committee charter, our policy is that all related

party transactions are reviewed and approved by the Audit Committee.

There were no related party transactions in 2021.

The information

set forth under the caption “Director Independence” in Item 10 of this Form 10-K is incorporated by reference herein.

information required by this Item is contained in the 2023 Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

following table presents fees for professional audit services rendered by Whitley Penn LLP for the audit of our annual financial statements

for the years ended December 31, 2021 and 2020, and fees billed for other services rendered during the respective periods.

Types of Fees

Audit Fees (1)

Audit-Related Fees (2)

All Other Fees (4)

Audit fees for 2021 and 2020 were for professional

services rendered for the audit of our financial statements for the fiscal year and reviews of our quarterly financial statements

included in our Form 10-Q filings.

Audit-related fees are for services related to our

registration statements on Forms S-3 and S-8 and other fees.

fees are for professional services rendered for tax compliance, tax advice, and tax planning service.

other fees are for services, other than those described above, rendered to us.

decisions regarding the selection of an independent registered public accounting firm and approval of accounting services and fees are

made by our Audit Committee in accordance with the provisions of the Sarbanes-Oxley Act of 2002 and related SEC rules.

Audit Committee selected Whitley Penn LLP to serve as the Company’s independent registered public accounting firm for the fiscal

year ending December 31, 2022.

Whitley Penn LLP has served as Abeona’s independent registered public accounting firm since September

on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Audit Committee pre-approves all audit and non-audit services provided by the independent registered public accounting firm prior to

the engagement with respect to such services.

In 2021 and 2020, the Audit Committee approved all of the services listed under

the preceding captions “Audit Fees” and “Audit-Related Fees.”

information required by this Item is contained in the 2023 Proxy Statement and is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following financial statements are submitted as part of this report:

following financial statements are submitted as part of this report:

Report of Independent Registered Public Accounting Firm (PCAOB ID 726 )

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(incorporated by reference to Exhibit 3.1 of our Form 10-Q for the quarter ended March 31, 2019)

Certificate of Amendment to Restated Certificate of Incorporation of Abeona Therapeutics Inc.

(incorporated by reference to Exhibit 3.1 of our Form 8-K filed on June 30, 2022)

Amended and Restated Bylaws of Abeona Therapeutics Inc.

(incorporated by reference to Exhibit 3.1 of our Form 8-K filed on May 21, 2020)

Form of Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Redeemable Preferred Stock (incorporated by reference to Exhibit 3.1 of our Form 8-K filed on May 2, 2022).

Form of Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Redeemable Preferred Stock (incorporated by reference to Exhibit 3.2 of our Form 8-K filed on May 2, 2022).

2015 Equity Incentive Plan (incorporated by reference to Exhibit 4.1 to our Form S-8 filed May 11, 2015)

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Form of Indemnification Agreement, between the Company and directors and officers of the Company (incorporated by reference to Exhibit 10.1 to our Form 8-K filed on October 16, 2020)

Letter Agreement, dated October 6, 2021, between the Company and Vishwas Seshadri

Offer Letter, effective October 19, 2018, by and between the Company and Edward Carr (incorporated by reference to Exhibit 10.1 of Form 8-K filed on November 9, 2018)

Letter Agreement, dated September 12, 2019, amending Offer Letter between the Company and Edward Carr, dated November 8, 2018 (incorporated by reference to Exhibit 10.3 of our Form 10-Q for the quarter ended September 30, 2019)

Offer Letter, dated June 18, 2020, between the Company and Edward Carr (incorporated by reference to Exhibit 10.1 of our Form 8-K filed on June 23, 2020)

Letter Agreement, dated August 10, 2021, between the Company and Edward Carr (incorporated by reference to Exhibit 10.1 of our Form 10-Q for the quarter ended September 30, 2021)

Letter Agreement, dated September 16, 2021, between the Company and Brendan O’Malley

Letter Agreement, dated October 6, 2021, between the Company and Vishwas Seshadri (incorporated by reference to Exhibit 10.6 of our Form 10-K for the year ended December 31, 2021)

Letter Agreement, dated September 16, 2021, between the Company and Brendan O’Malley (incorporated by reference to Exhibit 10.11 of our Form 10-K for the year ended December 31, 2021)

Letter Agreement, dated February 28, 2022, between the Company and Joseph Vazzano (incorporated by reference to Exhibit 10.1 of our Form 10-Q for the quarter ended March 31, 2022)

Open Market Sale Agreement, dated August 17, 2018, by and between the Company and Jefferies LLC (incorporated by reference to Exhibit 1.1 of Form 8-K filed on August 20, 2018)

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Settlement Agreement and Mutual Release, dated November 12, 2021, between the Company and REGENXBIO Inc.

(incorporated by reference to Exhibit 10.14 of our Form 10-K for the year ended December 31, 2021)

Form of Securities Purchase Agreement between Abeona Therapeutics Inc.

and the investors thereto, dated April 29, 2022 (incorporated by reference to Exhibit 10.1 of our Form 8-K filed on May 2, 2022)

Form of Registration Rights Agreement by and among Abeona Therapeutics Inc.

and the investors named therein, dated April 29, 2022 (incorporated by reference to Exhibit 10.2 of our Form 8-K filed on May 2, 2022)

License Agreement by and between Abeona Therapeutics Inc.

and Ultragenyx Pharmaceutical Inc., dated May 16, 2022 (incorporated by reference to Exhibit 10.3 of our Form 10-Q for the quarter ended June 30, 2022)

Subsidiaries of the registrant

Consent of Whitley Penn LLP

Principal Executive Officer Certification Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Principal Financial Officer Certification Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Principal Executive Officer Certification and Principal Financial Officer Certification Pursuant to 18 U.S.C.

Principal Executive Officer Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

Principal Financial Officer Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

Certification Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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on its behalf by the undersigned, thereunto duly authorized.

ABEONA THERAPEUTICS INC.

THERAPEUTICS INC.

March 29, 2023

/s/ Vishwas Seshadri

Vishwas Seshadri

President, Chief Executive Officer and Director

Principal Executive Officer

and Chief Executive Officer

Executive Officer)

to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the

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March 29, 2023

/s/ Vishwas Seshadri

Vishwas Seshadri

President, Chief Executive Officer and Director

Principal Executive Officer

Chief Executive Officer and Director

Executive Officer)

March 29, 2023

/s/ Edward Carr

Chief Accounting Officer

Principal Financial and Accounting Officer

Joseph Vazzano

Financial Officer

Financial and Accounting Officer)

March 29, 2023

/s/ Leila Alland

Leila Alland, Director

Alland, Director

March 29, 2023

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March 29, 2023

/ s/ Michael Amoroso

Michael Amoroso, Director

Chairman of the Board

Michael Amoroso

Amoroso, Director

March 29, 2023

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March 29, 2023

/s/ Paul Mann

Paul Mann, Director

Mann, Director

March 29, 2023

/s/ Christine Silverstein

Christine Silverstein, Director

Christine Silverstein

Silverstein, Director

March 29, 2023

/s/ Todd Wider

Todd Wider, Director

Wider, Director

March 29, 2023

/s/ Donald A.

Wuchterl, Director

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Balance Sheets

thousands, except share and per share amounts)

Current assets:

1 unchanged sentence

Short-term investments

Restricted cash

Accounts receivable

Prepaid expenses, other current assets and restricted cash

Other receivables

Prepaid expenses and other current assets

Total current assets

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Licensed technology, net

Other assets and restricted cash

$ 151,198,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Current portion of lease liability

Current portion of PPP loan payable

Current portion of payable to licensor

Deferred revenue

Other current liabilities

Total current liabilities

PPP loan payable

Payable to licensor

Other long-term liabilities

Long-term lease liabilities

Warrant liabilities

Other long-term liabilities

Total liabilities

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authorized 2,000,000 shares;

no issued and

outstanding shares at December 31, 2021 and 2020

No shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively

Common stock - $ 0.01 par value;

authorized 200,000,000 shares;

outstanding 147,205,422 at December 31, 2021;

issued and outstanding 96,131,678 at December 31, 2020

17,719,720 and 5,888,217 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

( 655,640,000 )

( 570,704,000 )

Accumulated other comprehensive loss

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Total liabilities and stockholders’ equity

$ 151,198,000

accompanying notes are an integral part of these consolidated statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Statements of Operations and Comprehensive Loss

thousands, except share and per share amounts)

For the years ended December 31,

License and other revenues

Total revenues

Research and development

General and administrative

Depreciation and amortization

Goodwill impairment charge

Licensed technology impairment charge

Impairment of goodwill

Impairment of licensed technology

Impairment of right-of-use lease assets

Impairment of construction-in-progress

Total expenses

Loss from operations

( 89,836,000 )

( 81,420,000 )

Gain on settlement with licensor

PPP loan payable forgiveness income

Interest and miscellaneous income

Interest and other expense

( 3,670,000 )

( 4,115,000 )

$ ( 84,936,000 )

$ ( 84,234,000 )

Interest income

Interest expense

Change in fair value of warrant liabilities

Deemed dividends related to Series A and Series B Convertible Redeemable Preferred Stock

Net loss attributable to Common Shareholders

Basic and diluted loss per common share

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Other comprehensive income (loss):

Change in unrealized gains/(losses) related to available-for-sale debt securities

Change in unrealized gains

(losses) related to available-for-sale debt securities

Foreign currency translation adjustments

Comprehensive loss

$ ( 84,953,000 )

$ ( 84,244,000 )

accompanying notes are an integral part of these consolidated statements.

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Statements of Stockholders’ Equity

thousands, except share amounts)

Convertible Redeemable

Preferred Stock

Accumulated Other

Comprehensive

Stockholders’

Balance, December 31, 2019

$ 664,064,000

$ ( 486,470,000 )

Balance at December 31, 2020

$ ( 570,704 )

Stock option-based compensation expense

Restricted stock-based compensation expense

Stock-based compensation expense

Issuance of common stock in connection with the exercise of stock options

Issuance of common stock in connection with restricted share awards, net of cancellations

Issuance of common stock in connection with the exercise of pre-funded warrants

Issuance of common stock for cash under open market sale agreement

Issuance of common stock for cash under open market sale agreement, shares

Issuance of common stock and stock purchase warrants in connection with public offering, net of offering costs

Issuance of common stock and stock purchase warrants in connection with public offering, net of

offering costs, shares

( 84,234,000 )

Other comprehensive loss

Balance, December 31, 2020

$ 672,304,000

$ ( 570,704,000 )

Issuance of common stock and stock purchase warrants in connection with public offering, net of offering costs and warrant liability

Issuance of common stock, net of offering costs under open market sale agreement (ATM)

Other comprehensive income

Balance at December 31, 2021

$ ( 655,640 )

Stock option-based compensation expense

Restricted stock-based compensation expense

Issuance of common stock in connection with the exercise of stock options

Issuance of common stock in connection with restricted share awards, net of cancellations

Issuance of common stock for cash under open market sale agreement

Issuance of common stock and stock purchase warrants in connection with public offering, net of offering costs

Beginning balance

$ ( 655,640 )

Stock-based compensation expense

Issuance of common stock in connection with restricted share awards, net of cancellations and shares settled for tax withholding settlement

Issuance of common stock and stock purchase warrants in connection with private placement offering, net of offering costs and warrant liability

Issuance of common stock, net of offering costs under open market sale agreement (ATM)

Issuance of Series A and Series B Convertible Redeemable Preferred Stock

Deemed dividends related to Series A and Series B Convertible Redeemable Preferred Stock

Redemption of Series A and Series B Convertible Redeemable Preferred Stock

( 1,000,006 )

Reverse stock split adjustment

Other comprehensive loss

Balance, December 31, 2021

Balance at December 31, 2022

$ ( 695,336 )

Ending Balance

$ ( 695,336 )

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Cash flows from operating activities:

$ ( 84,936,000 )

$ ( 84,234,000 )

Adjustments to reconcile net loss to cash used in operating activities:

Non-cash goodwill impairment charge

Non-cash licensed technology impairment charge

Non-cash gain on settlement with licensor

( 6,743,000 )

Depreciation and amortization

Stock option-based compensation expense

Restricted stock-based compensation expense

Stock-based compensation expense

Non-cash gain on settlement with licensor

Non-cash PPP loan payable forgiveness income

( 1,758,000 )

Non-cash interest expense

Non-cash impairment of goodwill

Change in fair value of warrant liabilities

Non-cash impairment of licensed technology

Non-cash impairment of right-of-use lease assets

Non-cash impairment of construction-in-progress

Accretion and interest on short-term investments

Amortization of right-of-use lease assets

Non-cash interest

Loss on disposal of property and equipment

Gain on lease termination

Change in operating assets and liabilities:

Accounts receivable

( 3,000,000 )

Prepaid expenses, other current assets and restricted cash

Other assets and restricted cash

Accounts payable, accrued expenses, lease liabilities and other liabilities

( 2,178,000 )

Payable to licensor

( 16,412,000 )

Other receivables

Prepaid expenses and other current assets

Accounts payable, accrued expenses and lease liabilities

Deferred revenue

Change in payable to licensor

Net cash used in operating activities

( 65,665,000 )

( 35,019,000 )

Cash flows from investing activities:

Capital expenditures

( 4,151,000 )

( 1,336,000 )

Proceeds from disposal of property and equipment

Purchases of short-term investments

( 20,163,000 )

( 170,472,000 )

Proceeds from maturities of short-term investments

Net cash provided by/(used in) investing activities

( 83,714,000 )

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Proceeds from loan payable

Proceeds from issuance of common stock and warrants in public offering

Payment of offering costs in public offering

Proceeds from open market sales of common stock

Proceeds from exercise of stock options

Proceeds from ATM sales of common stock, net of issuance costs

Proceeds from issuance of common stock and warrants in public offering, net of issuance costs

Proceeds from issuance of common stock and warrants in private offering, net of issuance costs

Proceeds from exercise of stock options and net settlement of restricted share awards

Proceeds from issuance of Series A and Series B Convertible Redeemable Preferred Stock, net of issuance costs

Redemption of Series A and Series B Convertible Redeemable Preferred Stock

Net cash provided by financing activities

Net increase/(decrease) in cash, cash equivalents and restricted cash

( 116,797,000 )

Net (decrease)increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of year

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Total cash, cash equivalents and restricted cash

Cash paid for interest

Cash paid for taxes

Additions to right-of-use lease assets obtained from new operating lease liabilities resulting from modification of original lease arrangement

Supplemental non-cash flow information:

Additions (deletions) to right-of-use lease assets obtained from new operating lease liabilities resulting from modification of original lease arrangement

Deletions to operating lease liabilities obtained from new operating lease liabilities resulting from modification of original lease arrangement

accompanying notes are an integral part of these consolidated statements.

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1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Operations

Therapeutics Inc.

(together with our subsidiaries, “we,” “our,” “Abeona” or the

“Company”), a Delaware corporation, is a clinical-stage biopharmaceutical company developing gene and cell therapies for

life-threatening rare genetic diseases.

Our lead clinical program is EB-101, an autologous, gene-corrected cell therapy for

recessive dystrophic epidermolysis bullosa (“RDEB”), which is currently in the pivotal Phase 3 VIITAL™ clinical

Following a comprehensive portfolio review in early 2022, we have decided to focus our research and development resources on

the VIITAL™ readout while actively pursuing a potential commercialization partner for EB-101 with the objective of reducing

operating expenses and extending our cash runway.

As part of this portfolio prioritization, we have intensified our pursuit of a

strategic partnership to take over development activities for our adeno-associated virus (“AAV”)-based gene

therapy ABO-102 for Sanfilippo syndrome type A (“MPS IIIA”) and we have discontinued development of our AAV-based gene

therapy ABO-101 for Sanfilippo syndrome type B (“MPS IIIB”).

We plan to continue development of AAV-based gene therapies

designed to treat ophthalmic and other diseases and next-generation AAV-based gene therapies using the novel AIM™ capsid

platform that we have exclusively licensed from the University of North Carolina at Chapel Hill (“UNC”), and internal

AAV vector research programs.

(together with the Company’s subsidiaries, “Abeona” or the “Company”), a Delaware

corporation, is a clinical-stage biopharmaceutical company developing cell and gene therapies for life-threatening diseases.

Company’s lead clinical program is EB-101, an autologous, engineered cell therapy currently in development for recessive

dystrophic epidermolysis bullosa (“RDEB”).

The Company’s development portfolio also features AAV-based gene

therapies designed to treat high unmet medical need ophthalmic diseases using the novel AIM™ capsid platform that the Company

has exclusively licensed from the University of North Carolina at Chapel Hill, and internal AAV vector research programs.

June 30, 2022, the Company filed a Certificate of Amendment to the Company’s Restated Certificate of Incorporation with the Secretary

of State of the State of Delaware (the “Certificate of Amendment”), to effectuate a reverse stock split of the Company’s

outstanding common stock, par value $ 0.01 per share (“Common Stock”), at an exchange ratio of 25-to-1 (the “Reverse

Stock Split”).

The Reverse Stock Split was effective on July 1, 2022.

The number of authorized shares of Common Stock immediately

after the Reverse Stock Split (“New Common Stock”) remains at 200,000,000 shares.

All share and per share information has

been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated.

a result of the Reverse Stock Split, every 25 shares of Common Stock outstanding immediately prior to the effectiveness of the Reverse

Stock Split were combined and converted into one share of New Common Stock without any change in the par value per share.

No fractional

shares were issued in connection with the Reverse Stock Split.

Stockholders who would otherwise be entitled to a fraction of one share

of New Common Stock as a result of the Reverse Stock Split instead received an amount in cash equal to such fraction multiplied by the

closing sale price of Common Stock on the Nasdaq Capital Market on July 1, 2022, as adjusted for the Reverse Stock Split.

Proportionate

adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock

options, restricted stock and warrants outstanding at July 1, 2022, which resulted in a proportional decrease in the number of shares

of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock and warrants,

and, in the case of stock options and warrants, a proportional increase in the exercise price of all such stock options and warrants.

In addition, the number of shares reserved for issuance under the Company’s 2015 Equity Incentive Plan were reduced proportionately.

and Sources of Liquidity

consolidated financial statements have been prepared on the going concern basis, which assumes the Company will have sufficient cash

to pay its operating expenses, as and when they become payable, for a period of at least 12 months from the date the financial report

of December 31, 2022, the Company had cash, cash equivalents, restricted cash and short-term investments of $ 52.5 million.

ended December 31, 2022, the Company had cash outflows from operations of $ 43.5 million.

The Company has not generated significant revenues

and has not achieved profitable operations.

There is no assurance that profitable operations will ever be achieved, and, if achieved,

could be sustained on a continuing basis.

In addition, development activities, clinical and nonclinical testing, and commercialization

of the Company’s product candidates will require significant additional financing.

Company is subject to a number of risks similar to other life science companies, including, but not limited to, risks related to the

successful discovery and development of product candidates, obtaining the necessary regulatory approval to market the Company’s

product candidates, raising additional capital to continue to fund the Company’s operations, development of competing drugs and

therapies and protection of proprietary technology.

As a result of these and other risks and the related uncertainties, there can be

no assurance of the Company’s future success.

Company believes that its current cash and cash equivalents, restricted cash and short-term investments are sufficient resources to fund

operations through at least the next 12 months from the date of this report on Form 10-K.

The Company may need to secure additional funding

to carry out all of its planned research and development activities.

If the Company is unable to obtain additional financing or generate

license or product revenue, the lack of liquidity and sufficient capital resources could have a material adverse effect on its future

of Significant Accounting Policies

summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows:

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consolidated financial statements include the financial statements of Abeona Therapeutics Inc.

and our wholly-owned subsidiaries.

intercompany balances and transactions have been eliminated in consolidation.

and Sources of Liquidity

financial statements have been prepared on the going concern basis, which assumes the Company will have sufficient cash to pay its operating

expenses, as and when they become payable, for a period of at least 12 months from the date the financial report was issued.

of December 31, 2021, we had cash, cash equivalents, restricted cash and short-term investments of $ 50.9

and net assets of $ 51.4 million.

For the year ended December 31, 2021, we had cash outflows from operations of $ 65.7

We have not generated significant product revenues and have not achieved profitable operations.

There is no assurance that profitable

operations will ever be achieved, and, if achieved, could be sustained on a continuing basis.

In addition, development activities, clinical

and nonclinical testing, and commercialization of our products will require significant additional financing.

are subject to a number of risks similar to other life science companies, including, but not limited to, risks related to the successful

discovery and development of product candidates, obtaining the necessary regulatory approval to market our product candidates, raising

additional capital to continue to fund our operations, development of competing drugs and therapies, protection of proprietary technology

and market acceptance of our products.

As a result of these and other risks and the related uncertainties, there can be no assurance

of our future success.

Following a comprehensive portfolio

review in early 2022, we have decided to focus our research and development resources on the EB-101 program with the objective of reducing

operating expenses and extending our cash runway.

As part of this portfolio prioritization, we have intensified our pursuit of a strategic

partnership to take over development activities for our AAV-based gene therapy ABO-102 for MPS IIIA and we have discontinued

development of our AAV-based gene therapy ABO-101 for MPS IIIB.

Based upon these current operating plans, our ability to access additional

financial resources and/or our financial flexibility to further reduce operating expenses if required, we believe that we have sufficient

resources to fund operations through at least the next 12 months from the date of this report on Form 10-K.

We will need to secure additional

funding beyond the next 12 months to carry out all of our planned research and development activities.

If we are unable to obtain additional

financing or generate license or product revenue, the lack of liquidity and sufficient capital resources could have a material adverse

effect on our future prospects.

and the Company’s wholly-owned subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation.

preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of

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Actual results could differ from these estimates and assumptions.

Reclassifications

comparative figures have been reclassified to conform to the current year presentation.

The Company reclassified depreciation and amortization

costs of $ 3.2

million and $ 0.1

million to research and development and general

and administrative expenses, respectively, on the consolidated statements of operations and comprehensive loss during the year ended

December 31, 2021.

The Company also reclassified certain rent expenses of $ 1.2

million from general and administrative to research

and development expenses on the consolidated statements of operations and comprehensive loss during the year ended December 31, 2021,

respectively.

Additionally, the Company also reclassified $ 5.0

million of restricted cash from prepaid expenses,

other current assets and restricted cash and $ 0.9

million of restricted cash from other assets

and restricted cash to restricted cash on the consolidated balance sheets as of December 31, 2021.

2022, the Company identified errors in the accounting for certain common stock warrants that were issued in 2021.

The common stock warrants

were not indexed to the Company’s own stock and therefore should have been classified as liabilities at their estimated fair value

instead of additional paid-in capital.

Although the errors were immaterial to prior periods, the 2021 financial statements are restated

below in accordance with Staff Accounting Bulletin No.

108, “Considering the Effects of Prior Year Misstatements when Quantifying

Misstatements in Current Year Financial Statements”, due to the significance of the out-of-period correction to the 2021 period.

There was no impact to the Company’s consolidated statements of operations and comprehensive loss.

The Company evaluated the materiality of these errors on both a quantitative and qualitative basis under the guidance of ASC 250, “Accounting

Changes and Errors Corrections,” and determined that it did not have a material impact on previously issued financial statements.

reconciliation of the effects of the restatement to amounts in the previously reported consolidated financial statements for the year

ended December 31, 2021 are as follows (in thousands):

SCHEDULE OF EFFECTS OF THE RESTATEMENT TO AMOUNTS IN THE PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS

of December 31, 2021

Balance Sheet

stockholders’ equity

of December 31, 2021

Statement of Stockholders’ Equity

paid-in capital, December 31, 2021

stockholders’ equity, December 31, 2021

and Cash Equivalents

consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

We maintain deposits

primarily in financial institutions, which may at times exceed amounts covered by insurance provided by the U.S.

Federal Deposit Insurance

Corporation (“FDIC”).

We have not experienced any losses related to amounts in excess of FDIC limits.

Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

maintains deposits primarily in financial institutions, which may at times exceed amounts covered by insurance provided by the U.S.

Deposit Insurance Corporation (“FDIC”).

The Company has not experienced any losses related to amounts in excess of FDIC limits.

cash serves as collateral for office space.

investments consist of investments in U.S.

2 unchanged sentences

treasury securities.

We determine the appropriate classification

of the securities at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date.

We classify our short-term investments as available-for-sale pursuant to Accounting Standards Codification (“ASC”) 320, Investments

– Debt and Equity Securities .

The Company determines the appropriate

classification of the securities at the time they are acquired and evaluate the appropriateness of such classifications at each balance

The Company classifies its short-term investments as available-for-sale pursuant to Accounting Standards Codification (“ASC”)

320, Investments – Debt and Equity Securities .

Investments classified as current have maturities of less than one year.

We review our short-term

investments for other-than-temporary impairment whenever the fair value of a marketable security is less than the amortized cost and

evidence indicates that a short-term investment’s carrying amount is not recoverable within a reasonable period of time.

The Company reviews its short-term investments for other-than-temporary impairment whenever the fair value of a marketable security is

less than the amortized cost and evidence indicates that a short-term investment’s carrying amount is not recoverable within a

reasonable period of time.

and Equipment

1 unchanged sentence

Depreciation is provided using the straight-line method over estimated useful lives ranging from

three to seven years for equipment and five to ten years for leasehold improvements.

Expenditures for major renewals and betterments

that extend the useful lives are capitalized.

Expenditures for normal maintenance and repairs are expensed as incurred.

The cost of assets

sold or abandoned, and the related accumulated depreciation are eliminated from the accounts and any gains or losses are recognized in

the accompanying consolidated statements of operations of the respective period.

account for leases in accordance with ASC 842, Leases .

Right-of-use lease assets represent our right to use an underlying asset

for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

The measurement of lease

liabilities is based on the present value of future lease payments over the lease term.

As our leases do not provide an implicit rate,

we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value

of future lease payments.

The right-of-use asset is based on the measurement of the lease liability and includes any lease payments made

prior to or on lease commencement and excludes lease incentives and initial direct costs incurred, as applicable.

Rent expense for our

operating leases is recognized on a straight-line basis over the lease term.

We do not have any leases classified as finance leases.

leases do not have significant rent escalation, holidays, concessions, material residual value guarantees, material restrictive covenants

or contingent rent provisions.

Our leases include both lease (e.g., fixed payments including rent, taxes, and insurance costs) and non-lease

components (e.g., common-area or other maintenance costs), which are accounted for as a single lease component as we have elected the

practical expedient to group lease and non-lease components for all leases.

three to seven years.

Leasehold improvements are amortized over the shorter of the asset’s useful life or the life of the lease

term ranging from five to ten years.

Expenditures for major renewals and betterments that extend the useful lives are capitalized.

for normal maintenance and repairs are expensed as incurred.

The cost of assets sold or abandoned, and the related accumulated depreciation

are eliminated from the accounts and any gains or losses are recognized in the accompanying consolidated statements of operations of

the respective period.

Company accounts for leases in accordance with ASC 842, Leases .

Right-of-use lease assets represent the Company’s right

to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising

from the lease.

The measurement of lease liabilities is based on the present value of future lease payments over the lease term.

Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available

at the lease commencement date in determining the present value of future lease payments.

The right-of-use asset is based on the measurement

of the lease liability and includes any lease payments made prior to or on lease commencement and excludes lease incentives and initial

direct costs incurred, as applicable.

Rent expense for the Company’s operating leases is recognized on a straight-line basis over

the lease term.

The Company does not have any leases classified as finance leases.

Company’s leases do not have significant rent escalation, holidays, concessions, material residual value guarantees, material restrictive

covenants or contingent rent provisions.

The Company’s leases include both lease (e.g., fixed payments including rent, taxes, and

insurance costs) and non-lease components (e.g., common-area or other maintenance costs), which are accounted for as a single lease component

as the Company has elected the practical expedient to group lease and non-lease components for all leases.

leases include one or more options to renew.

The exercise of lease renewal options is typically at our sole discretion;

therefore, the

majority of renewals to extend the lease terms are not included in our right-of-use assets and lease liabilities as they are not reasonably

certain of exercise.

We regularly evaluate the renewal options and when they are reasonably certain of exercise, we include the renewal

period in our lease term.

information and disclosures required under ASC 842 are included in Note 14.

have entered into agreements to license the rights to certain technologies.

We recorded the purchase price paid for the license, which

represents fair value, on our consolidated balance sheet.

We maintain licensed technology on our consolidated balance sheet until either

the licensed technology agreement underlying it is completed or the asset becomes impaired.

When we determine that an asset has become

impaired or we abandon a project, we write down the carrying value of the related intangible asset to its fair value and take an impairment

charge in the period in which the impairment occurs.

Licensed technology is amortized over the life of the patent or the agreement and

periodically reviewed for impairment.

test our intangible assets for impairment on an annual basis, or more frequently if indicators are present or changes in circumstance

suggest that impairment may exist.

Events that could result in an impairment, or trigger an interim impairment assessment, include the

receipt of additional clinical or nonclinical data regarding our drug candidate or a potentially competitive drug candidate, changes

in the clinical development program for a drug candidate or new information regarding potential sales for the drug.

In connection with

each annual impairment assessment and any interim impairment assessment, we compare the fair value of the asset as of the date of the

assessment with the carrying value of the asset on our consolidated balance sheet.

considered the status of our discussions with REGENXBIO in March 2020 as a potential indicator of impairment in accordance with ASC 360-10-35-21.

Our impairment test indicated that the carrying value of the license agreement exceeded its fair value and we recorded a $ 32.9 million

non-cash impairment charge in 2020.

We did not recognize any impairment charges to related licensed technology in 2021.

accordance with ASC 350, Intangibles — Goodwill and Other, goodwill is tested annually for impairment and whenever changes

in circumstances occur that would indicate impairment.

Additional information and disclosures required under ASC 350 are included in

of December 31, 2021 and 2020, restricted cash of $ 5.0 million and nil , respectively, is recorded within “Prepaid expenses, other

current assets and restricted cash” and $ 0.9 million and $ 1.0 million, respectively, is recorded within “Other assets and

restricted cash” in the accompanying consolidated balance sheets and are included as a component of cash, cash equivalents and

restricted cash on our consolidated statements of cash flows.

Restricted cash serves as collateral for the payable to licensor due in

November 2022 as well as collateral for office space.

The exercise of lease renewal options is typically at the Company’s sole discretion;

therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use assets and lease liabilities

as they are not reasonably certain of exercise.

The Company regularly evaluates the renewal options and when they are reasonably certain

of exercise, the Company includes the renewal period in its lease term.

Company has entered into agreements to license the rights to certain technologies.

The Company records the purchase price paid for the

license, which represents fair value, on its consolidated balance sheet.

Licensed technology is amortized over the life of the patent

or the agreement.

The Company maintain licensed technology on its consolidated balance sheet until either the licensed technology agreement

underlying it is completed or the asset becomes impaired.

When the Company determine that an asset has become impaired, as discussed

below, or the Company abandons a project, the Company writes down the carrying value of the related intangible asset to its fair value

and recognizes an impairment charge in the period in which the impairment occurs.

of Long-Lived Assets

assets consist of property and equipment, licensed technology, and right-of-use assets.

tests its long-lived assets for impairment when events and circumstances indicate that the carrying value of an asset or group of

assets may not be fully recoverable.

If indicators are present or changes in circumstance suggest that impairment may exist, the

Company assesses the recoverability of the affected long-lived assets or group of assets by determining whether the carrying value

of such assets or group of assets can be recovered through undiscounted future operating cash flows.

If the carrying amount is not

recoverable, the Company measures the amount of any impairment by comparing the carrying value of the asset or group of assets to

its fair value.

represents the excess of the purchase price of acquired businesses over the estimated fair value of the identifiable net assets acquired.

Goodwill is not amortized but is tested for impairment at least annually at the reporting unit level or more frequently if events or

changes in circumstances indicate that the asset might be impaired.

Impairment loss, if any, is recognized based on a comparison of the

fair value of the asset to its carrying value, without consideration of any recoverability.

The Company tests goodwill for impairment

annually during the fourth quarter and whenever indicators of impairment exist by first assessing qualitative factors to determine whether

it is more likely than not that the fair value is less than its carrying amount.

If the Company concludes it is more likely than not

that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is performed.

If the Company

concludes that goodwill is impaired, it will record an impairment charge in its consolidated statement of operations and comprehensive

Company operates in a single segment.

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operations on a consolidated basis for the purpose of allocating resources.

account for contracts with customers in accordance with ASC 606, Revenue from Contracts with Customers .

ASC 606 applies to all

contracts with customers, except for contracts that are within the scope of other standards.

Under ASC 606, an entity recognizes revenue

when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects

to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an entity determines are within

the scope of ASC 606, the entity performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance

obligations in the contract;

Company accounts for contracts with customers in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards.

Under ASC 606, an

entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration

that the entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an

entity determines are within the scope of ASC 606, the entity performs the following five steps:

(i) identify the contract(s) with a

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations

in the contract;

(iv) allocate the transaction

price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

information and disclosures required under ASC 606 are included in Note 10.

and Development Expenses

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expense, lab supplies, preclinical and development cost, clinical trial expense, manufacturing, regulatory, and consulting.

The cost of materials and equipment or facilities that are acquired for research and development activities and that have alternative

future uses are capitalized when acquired.

of materials and equipment or facilities that are acquired for research and development activities and that have alternative future uses

are capitalized when acquired.

and Administrative Expenses

and administrative expenses primarily consist of personnel, contract personnel, personnel-related expenses to support our administrative

and operating activities, facility costs and professional expenses (i.e., legal expenses) and investor relations fees.

and administrative expenses primarily consist of personnel, contract personnel, personnel-related expenses to support the Company’s

administrative and operating activities, facility costs and professional expenses (i.e., legal expenses) and investor relations fees.

taxes are accounted for under the asset and liability method.

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A valuation allowance is provided for deferred tax assets to the extent their realization is in doubt.

account for uncertain income tax positions in accordance with ASC 740, Income Taxes .

Interest costs and penalties related to income

taxes are classified as interest expense and general and administrative costs, respectively, in our consolidated financial statements.

For 2021 and 2020, we did not recognize any uncertain tax positions, interest or penalty expense related to income taxes.

It is not reasonably

likely for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months.

and state income tax returns as necessary.

The federal return generally has a three-year statute of limitations and most states have

a four-year statute of limitations;

however, the taxing authorities are allowed to review the tax year in which the net operating loss

was generated when the loss is utilized on a tax return.

We currently do not have any open income tax audits.

Per Common Share

have presented basic and diluted loss per common share on the statement of operations and comprehensive loss.

Basic and diluted net loss

per share is computed by dividing net loss by the weighted-average number of shares of common stock.

do not include the potential impact of dilutive securities in diluted net loss per share, as the impact of these items is anti-dilutive.

Potential dilutive securities result from outstanding restricted stock, stock options, and stock purchase warrants.

We did not include

the following potentially dilutive securities in the computation of diluted net loss per common share during the periods presented:

OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

For the years ended December 31,

Restricted stock

Company accounts for uncertain income tax positions in accordance with ASC 740, Income Taxes .

Interest costs and penalties related

to income taxes are classified as interest expense and general and administrative costs, respectively, in the consolidated financial

For 2022 and 2021, the Company did not recognize any uncertain tax positions, interest or penalty expense related to income

It is not reasonably likely for the amounts of unrecognized tax benefits to significantly increase or decrease within the next

The Company files U.S.

federal and state income tax returns as necessary.

The federal return generally has a three-year statute

of limitations and most states have a four-year statute of limitations;

however, the taxing authorities are allowed to review the tax

year in which the net operating loss was generated when the loss is utilized on a tax return.

The Company currently does not have any

open income tax audits.

Loss Per Share

and diluted net loss per share is computed by dividing net loss attributable to common shareholders by the weighted-average number of

shares of common stock.

The Company does not include the potential impact of dilutive securities in diluted net loss per share, as the

impact of these items is anti-dilutive.

Potential dilutive securities result from outstanding restricted stock, stock options, and stock

purchase warrants.

following table sets forth the potential securities that could potentially dilute basic income/(loss) per share in the future that were

not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the periods presented:

SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

For the year ended December 31,

Stock options

Stock purchase warrants

account for stock-based compensation expense in accordance with ASC 718, Stock Based Compensation .

We measure the cost of the

employee/director/consultant services received in exchange for an award of equity instruments based on the grant date fair value for

the employees and directors and vesting date fair value for consultants of the award.

We use the Black-Scholes option pricing model to

determine the fair value of options on the grant date which includes assumptions for expected volatility, risk-free interest rate, dividend

yield and estimated expected term.

We use the closing price of our common stock as quoted on the Nasdaq to determine the fair value of

Restricted stock

We account for forfeitures as they occur, which may result in the reversal of compensation costs in subsequent periods

as the forfeitures arise.

fair value of modifications to share-based awards are determined using Hull White I lattice model which includes assumptions for expected

volatility, risk-free interest rate, dividend yield and performance period.

If a share-based compensation award is modified after the

grant date, incremental compensation expense, if any, is recognized in an amount equal to the excess of the fair value of the modified

award over the fair value of the original award immediately before the modification.

Incremental compensation expense for vested awards

is recognized immediately.

For unvested awards, the sum of the incremental compensation expense and the remaining unrecognized compensation

expense for the original award on the modification date is recognized over the modified service period.

following table summarizes stock option-based option compensation for 2021 and 2020, which was allocated as follows:

SCHEDULE OF STOCK BASED COMPENSATION

For the years ended December 31,

Research and development

General and administrative

Stock option-based compensation expense included in operating expense

Total stock option-based compensation expense

Stock option-based compensation expense, net of tax

following table summarizes restricted stock-based compensation for 2021 and 2020, which was allocated as follows:

SCHEDULE OF STOCK BASED COMPENSATION

For the years ended December 31,

Research and development

General and administrative

Restricted stock-based compensation expense included in operating expense

Total restricted stock-based compensation expense

Restricted stock-based compensation expense, net of tax

information and disclosures required under ASC 718 are included in Note 11.

Company accounts for stock-based compensation expense in accordance with ASC 718, Stock Based Compensation .

The Company measures

the cost of the employee/director/consultant services received in exchange for an award of equity instruments based on the grant date

fair value for the employees and directors and vesting date fair value for consultants of the award.

The Company uses the Black-Scholes

option pricing model to determine the fair value of options on the grant date which includes assumptions for expected volatility, risk-free

interest rate, dividend yield and estimated expected term.

The Company uses the closing price of its common stock as quoted on the Nasdaq

to determine the fair value of restricted stock.

The Company accounts for forfeitures as they occur, which may result in the reversal

of compensation costs in subsequent periods as the forfeitures arise.

November 3, 2022, the Company issued warrants to purchase 7,609,879 shares of common stock, with an exercise price of $ 4.75 per share,

subject to customary adjustments thereunder.

On December 17, 2021, the Company issued warrants to purchase 1,788,000 shares of common

stock, with an exercise price of $ 9.75 (post-split) per share, subject to customary adjustments thereunder.

The warrants issued in 2022

and 2021 were determined to be freestanding instruments as they are legally detachable and separately exercisable from each other and

from the common stock issued.

common stock warrants are accounted for as liabilities on the consolidated balance sheets at their estimated fair value because they

are not indexed to the Company’s own stock.

The warrants are revalued on each subsequent balance sheet date until such instruments

are exercised or expire, with any changes in the fair value between reporting periods recorded in the consolidated statements of operations

and comprehensive loss.

Adopted Accounting Pronouncements

August 2020, the FASB issued ASU No.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity” (“ASU 2020-06”), which simplifies the accounting for convertible instruments by eliminating

the requirement to separately account for embedded conversion features as an equity component in certain circumstances.

A convertible

debt instrument will be reported as a single liability instrument with no separate accounting for an embedded conversion feature unless

separate accounting is required for an embedded conversion feature as a derivative or under the substantial premium model.

The ASU simplifies

the diluted earnings per share calculation by requiring that an entity use the if-converted method and that the effect of potential share

settlement be included in diluted earnings per share calculations.

Further, the ASU requires enhanced disclosures about convertible instruments.

The Company adopted ASU 2020-06 as of January 1, 2022, and there was no material impact on the consolidated financial statements upon

2 – SHORT-TERM INVESTMENTS

following table summarizes the available-for-sale investments held as of December 31, 2021 and 2020.

SCHEDULE OF AVAILABLE-FOR-SALE INVESTMENTS HELD

following table provides a summary of the short-term investments (in thousands):

SCHEDULE OF AVAILABLE FOR SALE SHORT-TERM INVESTMENTS

December 31, 2022

government and agency securities and treasuries

amortized cost of the available-for-sale investments, which is adjusted for amortization of premiums and accretion of discounts to maturity,

was $ 12,087,000 and $ 82,448,000 as of December 31, 2021 and 2020, respectively.

There were no significant realized gains or losses recognized

on the sale or maturity of available-for-sale investments during the years ended December 31, 2021 or 2020.

Amortized Cost

Gross Unrealized Gain

Gross Unrealized Loss

Available-for-sale, short-term investments:

treasury and federal agency securities

Total available-for-sale, short-term investments

December 31, 2021

Amortized Cost

Gross Unrealized Gain

Gross Unrealized Loss

Available-for-sale, short-term investments

treasury securities

Total available-for-sale, short-term investments

of December 31, 2022, the available-for-sale securities classified as short-term investments mature in one year or less.

Unrealized losses

on available-for-sale securities as of December 31, 2022 were not significant and were primarily due to changes in interest rates, including

market credit spreads, and not due to increased credit risks associated with specific securities.

None of the short-term investments

have been in a continuous unrealized loss position for more than 12 months.

Accordingly, no other-than-temporary impairment was recorded

for the year ended December 31, 2022.

were no significant realized gains or losses recognized on the sale or maturity of available-for-sale investments during the years ended

December 31, 2022 or 2021.

3 – PROPERTY AND EQUIPMENT

and equipment consist of the following:

and equipment are stated at cost and depreciated or amortized using the straight-line method based on useful lives as follows (in thousands):

SCHEDULE OF PROPERTY AND EQUIPMENT

As of December 31,

Useful lives (years)

Laboratory equipment

Furniture and office equipment

Furniture, software and office equipment

Leasehold improvements

Construction work-in-progress

accumulated depreciation and amortization

Property and equipment, net

Depreciation and amortization on

property and equipment was $ 3.1

million and $ 3.2 million for 2021

and 2020, respectively.

Shorter of remaining lease term or useful life

Construction-in-progress

accumulated depreciation

Total property and equipment, net

and amortization on property and equipment was $ 3.1 million and $ 3.3 million for 2022 and 2021, respectively.

During the year ended December

31, 2022, the Company incurred a loss on disposal of equipment of $ 0.1 million which is reflected in other income (expense) in the consolidated

statements of operations and comprehensive loss.

March 31, 2022, the Company announced that it was pursuing a strategic partner to take over development activities of ABO-102 and that

it was discontinuing development of ABO-101.

As a result, the Company determined the construction-in-progress that was dedicated to the

ABO-101 and ABO-102 programs had no future value, and thus recorded an impairment charge of $ 1.8 million for the year ended December

31, 2022, which was net of a cash refund from the builder of approximately $ 1.5 million.

4 – LICENSED TECHNOLOGY

November 4, 2018, we entered into a license agreement with REGENXBIO Inc.

May 15, 2015, the Company acquired Abeona Therapeutics LLC, which had an exclusive license through Nationwide Children’s Hospital

to the AB-101 and AB-102 patent portfolios for developing treatments for patients with Sanfilippo Syndrome Type A and Type B.

is amortized over the life of the license of 20 years .

On March 31, 2022, the Company announced that it was pursuing a strategic partner

to take over development activities of ABO-102 and that it was discontinuing development of ABO-101.

As a result, the Company determined

the remaining value of the licensed technology had no future value and thus recorded an impairment charge of $ 1.4 million for the year

ended December 31, 2022.

following table provides a summary of licensed technology (in thousands):

SCHEDULE OF LICENSED TECHNOLOGY

As of December 31,

Licensed technology

Less accumulated amortization

Less impairment charge

Total licensed technology, net

expense on licensed technology was approximately $ 29,000 and $ 116,000 for the years ended December 31, 2022 and 2021, respectively.

following table provides a summary of the changes in the carrying amount of goodwill (in thousands):

SCHEDULE OF GOODWILL

As of December 31,

Goodwill at the beginning of the year

Less impairment charge

Goodwill at the end of the year

there was no recorded goodwill as of December 31, 2022, the Company did not perform its annual goodwill impairment test for 2022.

Company completed its annual goodwill impairment test as of year-end 2021 and determined that the carrying value of its net assets exceeded

fair value using its market capitalization as a proxy for fair value.

In accordance with ASC 350, the Company recognized an impairment

loss for the excess of the carrying value over the fair value but limited to the total amount of goodwill recorded on its consolidated

balance sheet.

As a result, the Company recorded a goodwill impairment charge of $ 32.5 million for the year ended December 31, 2021.

6 – FAIR VALUE MEASUREMENTS

Company calculates the fair value of the Company’s assets and liabilities that qualify as financial instruments and includes additional

information in the notes to the consolidated financial statements when the fair value is different than the carrying value of these financial

The estimated fair value of accounts receivable, prepaid expenses and other current assets, other assets, accounts payable,

accrued expenses, payables to licensor and deferred revenue approximate their carrying amounts due to the relatively short maturity of

these instruments.

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in

the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement

This guidance establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value.

The hierarchy

requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs used

to measure fair value are as follows:

1 - Quoted prices in active markets for identical assets or liabilities.

2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active

quoted prices for identical or similar assets and liabilities in markets that are not active;

or other inputs that are observable

or can be corroborated by observable market data.

3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets

and liabilities.

This includes certain pricing models, discounted cash flow methodologies and similar valuation techniques that use

significant unobservable inputs.

Company has segregated all financial assets and liabilities that are measured at fair value on a recurring basis (at least annually)

into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement

date in the table below.

following table provides a summary of financial assets measured at fair value on a recurring and non-recurring basis (in thousands):

SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING AND NON-RECURRING BASIS

Fair Value at December 31, 2022

Recurring Assets

Cash equivalents

Money market fund

Short-term investments

treasury and federal agency securities

Total assets measured at fair value

Warrant liabilities

Total liabilities measured at fair value

Fair Value at December 31, 2021

Recurring Assets:

Cash equivalents

Money market fund

Short-term investments

treasury and federal agency securities

Total recurring assets

Non-recurring Assets

Licensed technology, net

Total assets measured at fair value

Warrant liabilities

Total liabilities measured at fair value

warrant liabilities are valued using significant inputs not observable in the market.

Accordingly, the warrant liability is measured

at fair value on a recurring basis using unobservable inputs and are classified as Level 3 inputs within the fair value hierarchy.

value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value

and such changes could result in a significant increase or decrease in the fair value.

The Company’s valuation of the common stock

warrants utilized the Black-Scholes option-pricing model, which incorporated assumptions and estimates to value the common stock warrants.

The Company assessed these assumptions and estimates at the end of each reporting period.

Assumptions used to estimate the fair value

of the warrants in the Black-Scholes option-pricing model are as follows:

OF ESTIMATE FAIR VALUE OF WARRANTS

of December 31,

Common share price

Expected term (years)

Risk-free interest rate (%)

Volatility (%)

of December 31, 2022, the Company had outstanding warrant liabilities related to the 2022 private placement that allow the holders to

purchase 7,609,879 shares of common stock at a weighted average exercise price of $ 4.75 per share.

The expiration date for these warrant

liabilities is November 2027.

As of December 31, 2022 and 2021, the Company had outstanding warrant liabilities related to the 2021 public

offering that allow the holders to purchase 1,788,000 shares of common stock at a weighted average exercise price of $ 9.75 per share.

The expiration date for these warrant liabilities is December 2026.

following table provides a summary of the activity on the warrant liabilities (in thousands):

OF ACTIVITY OF WARRANT LIABILITIES

As of December 31,

Beginning warrant liabilities

Fair value of warrants issued in connection with public offering

Fair value of warrants issued in connection with private offering

Gain recognized in earnings from change in fair value

Ending warrant liabilities

7 – LOAN PAYABLE

May 2, 2020, the Company received loan proceeds in the amount of approximately $ 1.8 million (the “PPP Loan”) under the Paycheck

Protection Program (“PPP”).

The PPP was established under the Coronavirus Aid, Relief and Economic Security Act, as amended

(“CARES Act”) and is administered by the U.S.

Small Business Administration (“SBA”).

Under the terms of the CARES

Act, PPP loan recipients can apply for loan forgiveness.

The loan forgiveness for all or a portion of PPP loans was determined, subject

to limitations, based on the use of loan proceeds over the 24 weeks after the loan proceeds are disbursed.

In July 2021, the Company

received notice from the SBA that its PPP loan was forgiven.

The extinguishment of the PPP loan payable was recorded as PPP loan payable

forgiveness income in the statement of operations and comprehensive loss and as non-cash PPP loan payable forgiveness income in the statements

of cash flows during the year ended December 31, 2021.

8 – SETTLEMENT LIABILITY

November 4, 2018, the Company entered into a license agreement with REGENXBIO Inc.

(“REGENXBIO”) to obtain rights to an exclusive

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was being amortized over the life of the patent of eight years .

On November 1, 2019, we entered into an amendment of the original license

On November 1, 2019, the Company entered into an amendment of the original

license agreement.

The amended agreement replaced the $ 10 million payment due on November 4, 2019 with a $ 3 million payment due on November

4, 2019 and an additional $ 8 million payment (which included $ 1 million of interest) that would have been due no later than April 1,

That $ 8 million payment that had been scheduled to be paid by April 1, 2020 and the $ 20 million payment that had been due to be paid

on November 4, 2020 were both recorded as payable to licensor on the consolidated balance sheet.

The Company disputed that it was responsible

for the $ 8 million and $ 20 million payments, and those payments were the subject of an arbitration between the Company and REGENXBIO

as noted below.

to the April 1, 2020 deadline, we engaged REGENXBIO in discussions in an attempt to renegotiate the financial terms of the agreement,

but we were unable to reach an agreement, and we did not make the $ 8

payment due by April 1, 2020.

On April 17, 2020, REGENXBIO sent us a written demand for the $ 8

fee, payable within a 15-day cure period after receipt of the demand letter.

The license terminated on May

when the 15-day period expired.

We considered the status of our discussions with REGENXBIO in March 2020 as a potential indicator of

impairment in accordance with ASC 360-10-35-21.

Our impairment test indicated that the carrying value of the license agreement exceeded

its fair value and we recorded a $ 32.9

non-cash impairment charge during the three months ended March 31, 2020.

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

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.

13, 2021, the tribunal found in favor of REGENXBIO in connection with the parties’ arbitration claims and counterclaims.

awarded REGENXBIO $ 28.0 million plus interest.

August 9, 2021, we filed a second arbitration claim with the AAA asserting that a settlement had been reached before the tribunal’s

award in the first arbitration was issued.

On September 14, 2021, REGENXBIO filed its answer, a counterclaim seeking attorney fees and

costs, and a request for permission to file a case dispositive motion.

A preliminary hearing was held on November 1, 2021, during which

the AAA tribunal set timetables for discovery and for REGENXBIO’s filing of its case dispositive motion.

Those timetables were

formalized in a procedural order issued by the tribunal on November 8, 2021.

Under the schedule set by the tribunal, REGENXBIO’s

opening brief in support of its case dispositive motion was filed on November 8, 2021, briefing was scheduled to be completed on December

29, 2021, and oral argument was scheduled for January 14, 2022.

REGENXBIO had also filed suit in the New York State Supreme Court Commercial

Division seeking enforcement of the original arbitration award, and we had requested that the Court stay that proceeding until the second

arbitration was complete.

Oral argument on our request for a stay was set for March 10, 2022.

November 12, 2021, we entered into a settlement agreement (“Settlement Agreement”) with REGENXBIO to resolve all current

disputes between the parties including the aforementioned AAA arbitration and New York State Supreme Court action.

In accordance with

the Settlement Agreement, we agreed to pay REGENXBIO a total of $ 30

payable as follows:

(1) $20 million

that was paid in November 2021 after execution of the Settlement Agreement, (2) $5 million on the first anniversary of the effective

date of the Settlement Agreement, and (3) $5 million upon the earlier of:

(i) the third anniversary of the effective date of the Settlement

Agreement or (ii) the closing of a Strategic Transaction, as defined in the Settlement Agreement.

the Settlement Agreement’s terms, the prior license agreement between the parties is not reinstituted, and any future license agreement

would need to be negotiated separately and require consideration in addition to the consideration set forth in the Settlement Agreement.

of December 31, 2021, we have recorded the payable to licensor in the balance sheet based on the present value of the remaining payments

due to REGENXBIO under the Settlement Agreement.

As of December 31, 2021, we have also recorded $ 5 million of restricted cash within

prepaid expenses, other current assets and restricted cash in the balance sheet that serves as collateral for the payment owed to REGENXBIO

on the first anniversary of the effective date of the Settlement Agreement.

The accounting for the Settlement Agreement resulted

gain on settlement with licensor in the statement of operations and comprehensive loss during the year ended December 31, 2021 and a

$ 6.7 million

non-cash gain on settlement with licensor in the statement of cash flows during the year ended December 31, 2021.

May 15, 2015, we acquired Abeona Therapeutics LLC, which had an exclusive license through Nationwide Children’s Hospital to the

AB-101 and AB-102 patent portfolios for developing treatments for patients with Sanfilippo Syndrome Type A and Type B.

The license is

amortized over the life of the license of 20 years.

technology consists of the following:

OF LICENSED TECHNOLOGY

Licensed technology

Less accumulated amortization

Licensed technology, net

aggregate estimated amortization expense for intangible assets remaining as of December 31, 2021 is as follows:

OF AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS

on licensed technology was $ 116,000 and $ 1.4 million for the years ended December 31, 2021 and 2020, respectively.

of December 31, 2021 and 2020, goodwill of nil and $ 32.5 million, respectively, was recorded on the Company’s consolidated balance

The changes in the carrying amount of goodwill are as follows:

For the years ended December 31,

Goodwill at the beginning of the year

Goodwill impairment charge

( 32,466,000 )

Goodwill at the end of the year

completed our annual goodwill impairment test as of year-end 2021 and determined that the carrying value of our net assets exceeded fair

value using our market capitalization as a proxy for fair value.

In accordance with ASC 350, we recognized an impairment loss for the

excess of the carrying value over the fair value but limited to the total amount of goodwill recorded on our consolidated balance sheet.

As a result, we recorded a goodwill impairment charge of $ 32.5

for the year ended December 31, 2021.

completed our annual goodwill impairment test as of year-end 2020 and determined that the fair value of our net assets exceeded the carrying

As a result, the Company did not recognize any impairment charges related to goodwill for the year ended December 31, 2020.

6 – LOAN PAYABLE

May 2, 2020, we received loan proceeds in the amount of approximately $ 1.8

million (the “PPP Loan”) under the

Paycheck Protection Program (“PPP”).

The PPP was established under the Coronavirus Aid, Relief and Economic Security Act,

as amended (“CARES Act”) and is administered by the U.S.

Small Business Administration (“SBA”).

Under the terms

of the CARES Act, PPP loan recipients can apply for loan forgiveness.

The loan forgiveness for all or a portion of PPP loans was determined,

subject to limitations, based on the use of loan proceeds over the 24 weeks after the loan proceeds are disbursed.

In July 2021, we received

notice from the SBA that our PPP loan was forgiven.

The extinguishment of the PPP loan payable was recorded as PPP loan payable

forgiveness income in the statement of operations and comprehensive loss and as non-cash PPP loan payable forgiveness income in the statement

of cash flows during the year ended December 31, 2021.

That $ 8 million payment that had been scheduled to be paid by April 1, 2020 and the $ 20 million payment that had been due to be

paid on November 4, 2020 were both recorded as payable to licensor on the consolidated balance sheet.

The Company disputed that it was

responsible for the $ 8 million and $ 20 million payments, and those payments were the subject of an arbitration between the Company and

to the April 1, 2020 deadline, the Company engaged REGENXBIO in discussions in an attempt to renegotiate the financial terms of the agreement,

but the Company was unable to reach an agreement, and did not make the $ 8 million payment due by April 1, 2020.

On April 17, 2020, REGENXBIO

sent the Company a written demand for the $ 8 million fee, payable within a 15-day cure period after receipt of the demand letter.

license terminated on May 2, 2020 , when the 15-day period expired.

November 12, 2021, the Company entered into a settlement agreement (“Settlement Agreement”) with REGENXBIO to resolve all

existing disputes between the parties.

In accordance with the Settlement Agreement, the Company agreed to pay REGENXBIO a total of $ 30.0

million, payable as follows:

(1) $20.0 million paid in November 2021 after execution of the Settlement Agreement, (2) $5.0 million on

the first anniversary of the effective date of the Settlement Agreement, and (3) $5.0 million upon the earlier of (i) the third anniversary

of the effective date of the Settlement Agreement or (ii) the closing of a Strategic Transaction, as defined in the Settlement Agreement.

Under the Settlement Agreement’s terms, the prior license agreement between the parties is not reinstituted, and any future license

agreement would need to be negotiated separately and require consideration in addition to the consideration set forth in the Settlement

The accounting for the Settlement Agreement resulted in a $ 6.7 million gain on settlement with licensor in the statements

of operations and comprehensive loss during the year ended December 31, 2021 and a $ 6.7 million non-cash gain on settlement with licensor

in the statements of cash flows during the year ended December 31, 2021.

of December 31, 2022 and 2021, the Company recorded the payables due to REGENXBIO in the consolidated balance sheets based on the present

value of the remaining payments due to REGENXBIO under the Settlement Agreement using an interest rate of 9.6 %.

The current portion of

the payable due in November 2022 was nil and $ 4.6 million as of December 31, 2022 and 2021, respectively and the long-term portion due

in November 2024 was $ 4.2 million and $ 3.8 million as of December 31, 2022 and 2021, respectively.

As of December 31, 2021, the Company

recorded $ 5.0 million of restricted cash in the consolidated balance sheet that served as collateral for the payment made to REGENXBIO

in November 2022.

9 – ACCRUED EXPENSES

expenses as of December 31, 2021 and 2020 consisted of the following:

of Accrued expenses

following table provides a summary of the components of accrued expenses (in thousands):

SCHEDULE OF ACCRUED EXPENSES

As of December 31,

Accrued employee compensation

1 unchanged sentence

Accrued sublicense fee owed to licensor

Accrued expenses

8 - FAIR VALUE MEASUREMENTS

calculate the fair value of our assets and liabilities that qualify as financial instruments and include additional information in the

notes to the consolidated financial statements when the fair value is different than the carrying value of these financial instruments.

The estimated fair value of prepaid expenses and other current assets, other assets, accounts payable, accrued expenses, loan payable

and deferred revenue approximate their carrying amounts due to the relatively short maturity of these instruments.

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in

the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement

This guidance establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value.

The hierarchy

requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs used

to measure fair value are as follows:

1 – Quoted prices in active markets for identical assets or liabilities.

2 – Observable inputs other than quoted prices included in Level 1, such as quoted

prices for similar assets and liabilities in active markets;

quoted prices for identical

or similar assets and liabilities in markets that are not active;

or other inputs that are

observable or can be corroborated by observable market data.

3 – Unobservable inputs that are supported by little or no market activity and that

are significant to the fair value of the assets and liabilities.

This includes certain pricing

models, discounted cash flow methodologies and similar valuation techniques that use significant

unobservable inputs.

guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair

have segregated all financial assets and liabilities that are measured at fair value on a recurring basis (at least annually) into the

most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in

the table below.

assets and liabilities measured at fair value on a recurring and non-recurring basis as of December 31, 2021 and 2020 are summarized

OF FAIR VALUE, ASSETS AND LIABILITIES MEASURED ON RECURRING AND NON-RECURRING BASIS

Gains/(Losses)

Short-term investments

Non-recurring

Licensed technology, net

( 32,466,000 )

Gains/(Losses)

Short-term investments

Non-recurring

Licensed technology, net

$ ( 32,916,000 )

9 – STOCKHOLDERS’ EQUITY

Public Offering of Common Stock and Stock Purchase Warrants

December 21, 2021, we closed an underwritten public offering of 44,700,000

shares of common stock at a public offering price

per share and stock purchase warrants to purchase

shares of common stock at an exercise price of

The net proceeds to the Company were approximately $ 16.0

million, after deducting $ 1.5 million

of underwriting discounts and commissions and estimated offering expenses payable by the Company.

of December 31, 2021, there were 44,700,000 stock purchase warrants outstanding.

The stock purchase warrants expire on December 21, 2026.

During such time as each warrant is outstanding, the holder of the warrant is entitled to participate in any dividends or other distribution

of assets to holders of shares of common stock.

Public Offering of Common Stock and “Pre-Funded” Warrants

December 24, 2019, we closed an underwritten public offering of 32,382,945 shares of common stock at a public offering price of $ 2.50

In addition, as part of the offering, we sold “pre-funded” warrants to purchase up to an aggregate of 9,017,055

shares of common stock at a purchase price of $ 2.4999 per pre-funded warrant, which equals the public offering price per share of the

common stock less the $ 0.0001 per share exercise price of each pre-funded warrant.

The gross proceeds to the Company were approximately

$ 103.5 million, before deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company.

October 2020, all of the 9,017,055 “pre-funded” warrants were exercised and converted into 9,017,055 shares of common stock.

We received a negligible amount of cash from the exercise of these pre-funded warrants during 2020.

10 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Total accrued expenses

Company leases space under operating leases for manufacturing and laboratory facilities in Cleveland, Ohio, as well as administrative

offices in New York, New York.

The Company also leases certain office equipment under operating leases, which have a non-cancelable lease

term of less than one year and, therefore, the Company has elected the practical expedient to exclude these short-term leases from the

Company’s right-of-use assets and lease liabilities.

2022, the Company announced a strategic partner to take over development activities of ABO-102 and that the Company was discontinuing

development of ABO-101.

As a result, the Company determined the portion of the lease that was dedicated to the future facility for the

ABO-101 and ABO-102 programs, had no future value and thus, the Company recorded an impairment charge of $ 1.6 million for the year ended

December 31, 2022.

November 2022, the Company entered into a sublease agreement with an unrelated third party to occupy approximately 5,700 square feet

of the Company’s administrative offices in New York, New York.

Because the future sublease income under the executed sublease agreement

is less than the amount the Company pays its landlord, the Company recorded an impairment charge of $ 0.9 million for the year ended December

The Company expects to receive approximately $ 1.1 million in future sublease income through September 2025.

following table provides a summary of the components of lease costs and rent (in thousands):

SCHEDULE OF COMPONENTS OF LEASE COST

For the year ended December 31,

Operating lease cost

Variable lease cost

Short-term lease cost

Total operating lease costs

minimum lease payments and obligations, which do not include short-term leases, of the Company’s operating lease liabilities as

of December 31, 2022 were as follows (in thousands):

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

Future minimum lease payments and obligations

Operating Leases

Total undiscounted operating lease payments

imputed interest

Present value of operating lease liabilities

weighted-average remaining term of the Company’s operating leases was 76 months and the weighted-average discount rate used to

measure the present value of the Company’s operating lease liabilities was 7.2 % as of December 31, 2022.

cash receipts from the Company’s sublease agreements as of December 31, 2022 are as follows (in thousands):

SCHEDULE OF FUTURE CASH RECEIPTS FROM OPERATING SUBLEASE

Future cash receipts

Total future cash receipts

A and B Convertible Redeemable Preferred Stock

May 2, 2022, the Company consummated an offering with certain institutional investors for the private placement of 1,000,006 shares of

the Company’s Series A Convertible Redeemable Preferred Stock (the “Series A Preferred Stock”) and 250,005 shares of

the Company’s Series B Convertible Redeemable Preferred Stock (the “Series B Preferred Stock” and together with the

Series A Preferred Stock, the “Preferred Stock”).

The shares, which have since been redeemed in accordance with their terms

described below and are thus no longer outstanding as of December 31, 2022, had an aggregated stated value of $ 25.0 million.

of the Preferred Stock had a purchase price of $ 19.00 , representing an original issue discount of 5 % of the stated value.

In connection

with this offering, the Company had net proceeds of $ 22.5 million and recognized a deemed dividend of $ 3.8 million.

In connection with

this transaction, the Company placed $ 26.3 million into an escrow account for any future redemption which consisted of the gross proceeds

of $ 25.0 million and the redemption value of $ 1.3 million.

Preferred Stock was convertible, at the option of the holders and, in certain circumstances, by the Company, into shares of Common Stock

at a conversion price of $ 11.25 per share.

The holders of the Series A Preferred Stock and Series B Preferred Stock had the right to

require the Company to redeem their shares of preferred stock for cash at 105% of the stated value of such shares commencing after the

earlier of the receipt of stockholder approval of an amendment to the Company’s Restated Certificate of Incorporation to effect

a reverse stock split and 60 days after the closing of the issuances of the Series A Preferred Stock and Series B Preferred Stock and

until 90 days after such closing.

The Company had the option to redeem the Series A Preferred Stock for cash at 105% of the stated value

commencing after the 90th day following the closing of the issuance of the Series A Preferred Stock, subject to the holders’ rights

to convert the shares prior to such redemption.

As a result, the Preferred Stock was recorded separately from stockholders’ equity

because it was redeemable upon the occurrence of redemption events that were considered not solely withing the Company’s control.

As such, during the year ended December 31, 2022, the Company recognized approximately $ 3.8 million in deemed dividends related to the

Preferred Stock in the consolidated statements of operations and comprehensive loss and the consolidated statements of changes in stockholders’

June 17, 2022, the holders of all 1,000,006 shares of Series A Preferred Stock and 250,005 shares of Series B Preferred Stock exercised

their right to cause the Company to redeem all such shares for $ 26.3 million, which represented a price equal to 105% of the stated value.

The redemption of these shares was paid out of the escrow account noted above.

Stock and Warrants

July 1, 2022, the Company’s stock underwent a 25:1 Reverse Stock Split.

The number of authorized shares of Common Stock immediately

after the Reverse Stock Split remained at 200,000,000 shares.

December 21, 2021, the Company closed an underwritten public offering of 1,788,000 post-split shares of common stock at a public offering

price of $ 9.75 post-split per share and stock purchase warrants to purchase 1,788,000 post-split shares of common stock at an exercise

price of $ 9.75 post-split.

The net proceeds to the Company were approximately $ 16.0 million, after deducting $ 1.5 million of underwriting

discounts and commissions and offering expenses payable by the Company.

The net proceeds were allocated to the warrant liability as noted

below with the remainder of $ 7.0 million recorded in common stock and additional paid-in capital.

In the event of certain fundamental

transactions involving the Company, the holders of the stock purchase warrants may require the Company to make a payment based on a Black-Scholes

valuation, using specific inputs that are not considered indexed to the Company’s stock in accordance with ASC 815, Derivatives

and Hedging (“ASC 815”).

Therefore, the Company accounted for the stock purchase warrants as liabilities and were recorded

at the closing date fair value of $ 9.0 million which was based on a Black-Scholes option pricing model.

The remainder of the proceeds

were allocated to common stock issued and recorded as a component of equity.

of December 31, 2022, there were 1,788,000 post-split stock purchase warrants issued in connection with the public offering outstanding.

These stock purchase warrants expire on December 21, 2026 .

During such time as each warrant is outstanding, the holder of the warrant

is entitled to participate in any dividends or other distribution of assets to holders of shares of common stock.

There was no warrant

activity during the year ended December 31, 2022.

Market Sale Agreement

August 17, 2018, the Company entered into an open market sale agreement with Jefferies LLC (as amended, the “ATM Agreement”)

pursuant to which, the Company may sell from time to time, through Jefferies LLC, shares of its common stock for an aggregate sales price

of up to $ 150.0 million.

Any sales of shares pursuant to this agreement are made under the Company’s effective “shelf”

registration statement on Form S-3 that is on file with and has been declared effective by the SEC.

The Company is currently subject

to General Instruction I.B.6 of Form S-3, as a result of which the amount of funds the Company can raise through primary public offerings

of securities in any 12-month period using its registration statement on Form S-3 is limited to one-third of the aggregate market value

of the voting and non-voting common equity held by non-affiliates.

The Company remains subject to this one-third limitation until such

time as its public float exceeds $75 million.

The Company sold 3,479,016 and 146,872 post-split shares during the years ended December

31, 2022 and 2021, respectively, of its common stock under the ATM Agreement and received $ 12.8 million and $ 8.1 million of net proceeds

during the years ended December 31, 2022 and 2021, respectively.

Placement Offerings

November 3, 2022, the Company sold 7,065,946 shares of its common stock, and in lieu of shares of common stock, pre-funded warrants exercisable

for 543,933 shares of common stock, and accompanying warrants to purchase 7,609,879 shares of its common stock to a group of new and

existing institutional investors in a private placement.

The offering price for each share of common stock and accompanying warrant was

$ 4.60 , and the offering price for each pre-funded warrant and accompanying warrant was $ 4.59 , which equaled the offering price per share

of the common stock and accompanying warrant, less the $ 0.01 per share exercise price of each pre-funded warrant.

Each accompanying warrant

represents the right to purchase one share of the Company’s common stock at an exercise price of $ 4.75 per share of common stock.

The pre-funded warrants were exercised in December 2022 and converted to 543,933 shares of commons stock.

Total shares sold and converted

during the year ended December 31, 2022 were 7,609,879 for an aggregate purchase price of $ 35.0 million gross, or $ 32.6 million net of

related costs of $ 1.5 million which was expensed to general and administrative expenses and $ 0.9 million which was recorded as a reduction

to additional paid-in-capital.

The net proceeds were allocated to the warrant liability as noted below with the remainder of $ 12.9 million

and $ 0.1 million recorded in additional paid-in capital and common stock, respectively.

In the event of certain fundamental transactions

involving the Company, the holders of the stock purchase warrants may require the Company to make a payment based on a Black-Scholes

valuation, using specific inputs that are not considered indexed to the Company’s stock in accordance with ASC 815.

the Company accounted for the stock purchase warrants as liabilities and were recorded at the closing date fair value of $ 22.0 million

which was based on a Black-Scholes option pricing model.

The remainder of the proceeds were allocated to common stock issued and recorded

as a component of equity.

of December 31, 2022, there were 7,609,879 warrants outstanding related to this private placement offering.

The warrants expire on November

During such time as each warrant is outstanding, the holder of the warrant is entitled to participate in any dividends or other

distribution of assets to holders of shares of common stock.

12 – LICENSE/SUPPLIER AGREEMENTS

and Inventory Purchase Agreements Relating to CLN1 Disease

In August 2020, we entered into sublicense and inventory purchase agreements

with Taysha Gene Therapies (“Taysha”) relating to a potential gene therapy for CLN1 disease.

Under the sublicense agreement,

Taysha received worldwide exclusive rights to intellectual property and know-how relating to the research, development, and manufacture

of the potential gene therapy, which we had referred to as ABO-202.

Under the inventory purchase agreement, we sold to Taysha certain

inventory and other items related to ABO-202.

We assessed these contracts at contract inception and determined that, under ASC 606, the

two contracts would be combined and accounted for as a single contract, with a single performance obligation.

We assessed the nature

of the promised license to determine whether the license has significant stand-alone functionality and evaluated whether such functionality

can be retained without ongoing activities by us and determined that the license has significant stand-alone functionality.

we have no ongoing activities associated with the license to support or maintain the license’s utility.

Based on this, we determined

that the pattern of transfer of control of the license to Taysha was at a point in time.

August 2020, the Company entered into sublicense and inventory purchase agreements with Taysha Gene Therapies (“Taysha”)

relating to a potential gene therapy for CLN1 disease.

Under the sublicense agreement, Taysha received worldwide exclusive rights to

intellectual property and know-how relating to the research, development, and manufacture of the potential gene therapy, which the Company

had referred to as ABO-202.

Under the inventory purchase agreement, the Company sold to Taysha certain inventory and other items related

The Company assessed these contracts at contract inception and determined that, under ASC 606, the two contracts would be

combined and accounted for as a single contract, with a single performance obligation.

The Company assessed the nature of the promised

license to determine whether the license has significant stand-alone functionality and evaluated whether such functionality can be retained

without ongoing activities by the Company and determined that the license has significant stand-alone functionality.

Furthermore, the

Company has no ongoing activities associated with the license to support or maintain the license’s utility.

Based on this, the

Company determined that the pattern of transfer of control of the license to Taysha was at a point in time.

transaction price of the contract includes (i) $ 7.0 million of fixed consideration, (ii) up to $ 26.0 million of variable consideration

3 unchanged sentences

and regulatory events occurring.

At inception, we evaluated whether the milestone conditions had been achieved and if it was probable

that a significant revenue reversal would not occur before recognizing the associated revenue and determined that these milestone payments

were not within our control or the licensee’s control, such as regulatory approvals, and were not considered probable of being

achieved until those approvals were received.

Accordingly, at inception, we fully constrained the $ 26.0 million of event-based milestone

payments until such time that it is probable that significant revenue reversal would not occur.

The sales-based milestone payments and

other royalty-based payments are based on a level of sales for which the license is deemed to be the predominant item to which the royalties

We will recognize revenue for these payments at the later of (i) when the related sales occur, or (ii) when the performance obligation

to which some or all of the royalty has been allocated has been satisfied or partially satisfied.

To date, we have not recognized any

sales-based or royalty revenue resulting from this licensing arrangement.

this arrangement, we recognized $ 7.0

million of revenue during the year ended December

31, 2020, which amount related solely to fixed consideration.

During the year ended December 31, 2021, Taysha achieved an event-based

milestone payment and, accordingly, we recognized $ 3.0

million of revenue.

As of December 31, 2021,

we have a contract asset for $ 3.0

million consisting of our accounts receivable

balance of $ 3.0 million but do no t

have any contract liabilities as a result of this transaction.

We collected the $ 3.0

million of cash in January 2022 in full satisfaction

of the contract asset.

At inception, the Company evaluated whether the milestone conditions had been achieved and if it was

probable that a significant revenue reversal would not occur before recognizing the associated revenue and determined that these milestone

payments were not within the Company’s control or the licensee’s control, such as regulatory approvals, and were not considered

probable of being achieved until those approvals were received.

Accordingly, at inception, the Company fully constrained the $ 26.0 million

of event-based milestone payments until such time that it is probable that significant revenue reversal would not occur.

The sales-based

milestone payments and other royalty-based payments are based on a level of sales for which the license is deemed to be the predominant

item to which the royalties relate.

The Company will recognize revenue for these payments at the later of (i) when the related sales

occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially

To date, the Company has not recognized any sales-based or royalty revenue resulting from this licensing arrangement.

this arrangement, the Company recognized nil and $ 3.0 million in revenue during the year ended December 31, 2022 and 2021, respectively

based on event-based-milestone payments.

The Company has no contract assets as of December 31, 2022 and $ 3.0 million as of December 31,

Contract assets are included in accounts receivable on the consolidated balance sheets.

As of December 31, 2022 and 2021, the Company

does not have any contract liabilities as a result of this transaction.

Agreement Relating to Rett Syndrome:

In October 2020, we entered into a sublicense agreement with Taysha for a gene therapy for Rett

syndrome and MECP2 gene constructs and regulation of their expression.

The agreement grants Taysha worldwide exclusive rights to intellectual

property developed by scientists at the University of North Carolina at Chapel Hill, the University of Edinburgh and us, and our know-how

relating to the research, development, and manufacture of the gene therapy for Rett syndrome and MECP2 gene constructs and regulation

of their expression.

assessed the nature of the promised license to determine whether the license has significant stand-alone functionality and evaluated

whether such functionality can be retained without ongoing activities by us and determined that the license has significant stand-alone

functionality.

Furthermore, we have no ongoing activities associated with the license to support or maintain the license’s utility.

Based on this, we determined that the pattern of transfer of control of the license to Taysha was at a point in time.

October 2020, the Company entered into a sublicense agreement with Taysha for a gene therapy for Rett syndrome and MECP2 gene constructs

and regulation of their expression.

The agreement grants Taysha worldwide exclusive rights to intellectual property developed by scientists

at the University of North Carolina at Chapel Hill, the University of Edinburgh and the Company, and the Company’s know-how relating

to the research, development, and manufacture of the gene therapy for Rett syndrome and MECP2 gene constructs and regulation of their

Company assessed the nature of the promised license to determine whether the license has significant stand-alone functionality and evaluated

whether such functionality can be retained without ongoing activities by the Company and determined that the license has significant

stand-alone functionality.

Furthermore, the Company has no ongoing activities associated with the license to support or maintain the

license’s utility.

Based on this, the Company determined that the pattern of transfer of control of the license to Taysha was at

a point in time.

transaction price of the contract includes (i) $ 3.0 million of fixed consideration, (ii) up to $ 26.5 million of variable consideration

3 unchanged sentences

and regulatory events occurring.

We evaluated whether the milestone conditions have been achieved and if it is probable that a significant

revenue reversal would not occur before recognizing the associated revenue.

We determined that these milestone payments are not within

our control or the licensee’s control, such as regulatory approvals, and are not considered probable of being achieved until those

approvals are received.

Accordingly, we have fully constrained the $26.5 million of event-based milestone payments until such time that

it is probable that significant revenue reversal would not occur.

The sales-based milestone payments and other royalty-based payments

are based on a level of sales for which the license is deemed to be the predominant item to which the royalties relate.

We will recognize

revenue for these payments at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or

all of the royalty has been allocated has been satisfied or partially satisfied.

We received the $ 3.0 million of fixed consideration

during the year ended December 31, 2020.

To date, we have not recognized any sales-based or royalty revenue resulting from this licensing

this arrangement, we recognized $ 3.0 million of revenue during the year ended December 31, 2020, which amount related solely to fixed

consideration.

We did not recognize any related revenue during the year ended December 31, 2021.

As of December 31, 2021, we do no t have

any contract assets or contract liabilities as a result of this transaction.

The Company evaluated whether the milestone conditions have been achieved and if it is probable that

a significant revenue reversal would not occur before recognizing the associated revenue.

The Company determined that these milestone

payments are not within the Company’s control or the licensee’s control, such as regulatory approvals, and are not considered

probable of being achieved until those approvals are received.

Accordingly, the Company has fully constrained the $ 26.5 million of event-based

milestone payments until such time that it is probable that significant revenue reversal would not occur.

The sales-based milestone payments

and other royalty-based payments are based on a level of sales for which the license is deemed to be the predominant item to which the

royalties relate.

The Company will recognize revenue for these payments at the later of (i) when the related sales occur, or (ii) when

the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied.

the Company has not recognized any sales-based or royalty revenue resulting from this licensing arrangement.

this arrangement, the Company recognized $ 1.0 million and nil in revenue during the year ended December 31, 2022 and 2021, respectively

based on event-based-milestone payments.

As of December 31, 2022 and 2021, the Company does not have any contract assets or contract

liabilities as a result of this transaction.

License Agreement

May 16, 2022, the Company and Ultragenyx Pharmaceutical Inc.

(“Ultragenyx”) entered into an exclusive license agreement (the

“License Agreement”) for AAV gene therapy ABO-102 for the treatment of Sanfilippo syndrome type A (MPS IIIA).

Under the License

Agreement, Ultragenyx assumed responsibility for the ABO-102 program from the Company, with the exclusive right to develop, manufacture,

and commercialize ABO-102 worldwide.

Also pursuant to the License Agreement, following regulatory approval, the Company is eligible to

receive tiered royalties from mid-single-digit up to 10% on net sales and up to $ 30.0 million in commercial milestone payments.

forms of consideration comprise the transaction price to which the Company expects to be entitled in exchange for transferring the related

intellectual property and certain, contractually-specified transition services to Ultragenyx.

The sales-based royalty and milestone payments

are subject to the royalty recognition constraint.

As such, these fees are not recognized as revenue until the later of:

(a) the occurrence

of the subsequent sale, and (b) the performance obligation to which they relate has been satisfied.

Additionally,

pursuant to the License Agreement, Ultragenyx will reimburse the Company for certain development and transition costs actually incurred

by the Company.

These costs are passed through to Ultragenyx without mark-up.

The Company has determined that these costs are not incurred

for the purpose of satisfying any performance obligation under the License Agreement.

Accordingly, the reimbursement of these costs is

recognized as a reduction of research and development costs.

As of December 31, 2022 and 2021, the Company does not have any contract

assets or contract liabilities as a result of this transaction.

13 – STOCK-BASED COMPENSATION

have two stock-based compensation plans as follows:

Company has two stock-based compensation plans:

(1) Abeona Therapeutics Inc.

2015 Equity 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, which no further grants

can be made under this plan.

Option Repricing:

On November 10, 2020, the Compensation Committee of the Company’s Board of Directors (the “Compensation

Committee”) unanimously approved the repricing of all stock options outstanding under the Abeona Therapeutics Inc.

Incentive Plan held by current employees of the Company that had an exercise price per share between $ 1.16 and $ 17.30 (the “Eligible

Stock Options”).

As a result of the repricing, the exercise price of the Eligible Stock Options was set to $ 1.15 per share, equal

to the closing sale price of the Company’s common stock on November 10, 2020.

Stock options held by members of the Board were not

included in the repricing.

Except for the modified exercise price, all other terms and conditions of each of the Eligible Stock Options

remain in full force and effect.

The fair value of the Eligible Stock Options was determined using the Hull White I lattice model.

were 79 grantees of Eligible Stock Options and the incremental compensation cost resulting from the modification was $ 0.6 million.

November 17, 2020, the Compensation Committee unanimously approved the repricing of all stock options outstanding under the Abeona Therapeutics

2015 Equity Incentive Plan and the Abeona Therapeutics Inc.

2005 Equity Incentive Plan held by the four current members of the Board

that had an exercise price per share between $ 1.29 and $ 18.50 (the “Eligible Director Stock Options”).

As a result of the

repricing, the exercise price of the Eligible Director Stock Options was set to $ 1.28 per share, equal to the closing sale price of the

Company’s common stock on November 17, 2020.

Except for the modified exercise price, all other terms and conditions of each of

the Eligible Stock Options remain in full force and effect.

The fair value of the Eligible Director Stock Options was determined using

the Hull White I lattice model.

There were four grantees of Eligible Director Stock Options and the incremental compensation cost resulting

from the modification was $ 0.5 million.

Equity Incentive Plan

our 2015 Equity Incentive Plan, as amended, up to 18,000,000 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.

As of December

31, 2021, we had 1,388,108 shares available for future issuance under our 2015 Equity Incentive Plan.

The maximum contractual

term of awards is 10 years.

We estimate the fair value of each option award on the date of grant using the Black-Scholes option valuation model.

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.

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.

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

following table summarizes stock-based compensation (in thousands):

SCHEDULE OF STOCK BASED COMPENSATION

For the year ended December 31,

Research and development

General and administrative

Total stock-based compensation expense

Company estimates the fair value of each option award on the date of grant using the Black-Scholes option valuation model.

then recognize the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over

1 unchanged sentence

The Black-Scholes model incorporates the following assumptions:

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.

believe using a “look-back” period which coincides with the expected term is

the most appropriate measure for determining expected volatility.

term – we estimate the expected term using the “simplified” method, as

outlined in Staff Accounting Bulletin No.

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.

term – the Company estimates the expected term using the “simplified” method, as outlined in SEC Staff Accounting

107, “Share-Based Payment.”

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.

– 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.

used the following weighted-average assumptions to estimate the grant date fair value of the stock options granted for the years indicated:

OF WEIGHTED-AVERAGE ASSUMPTIONS TO ESTIMATE THE FAIR VALUE OF THE OPTIONS GRANTED

For the years ended December 31,

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.

– 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.

Company estimated the fair value of stock options granted in the periods presented utilizing a Black-Scholes option-valuation model utilizing

the following assumptions:

SCHEDULE OF WEIGHTED-AVERAGE ASSUMPTIONS TO ESTIMATE THE FAIR VALUE OF THE OPTIONS GRANTED

For the year ended December 31,

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

Expected dividend yield

account for forfeitures as they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures

stock option information for the 2015 Equity Incentive Plan is as follows:

OF OPTIONS ACTIVITY

Outstanding options at January 1, 2020

Granted, fair value of $ 1.88 per share

Expired/forfeited

1.7 % - 3.3 %

Outstanding options at December 31, 2020

Granted, fair value of $ 1.36 per share

Expired/forfeited

0.8 % - 1.4 %

Outstanding options at December 31, 2021

Non-vested options at December 31, 2020

Non-vested options at December 31, 2021

intrinsic value related to the outstanding options under this plan was $ 0 and $ 1.7 million, as of December 31, 2021 and 2020, respectively.

The intrinsic value related to the exercisable options under this plan was $ 0 and $ 0.7 million as of December 31, 2021 and 2020, respectively.

total intrinsic value of the options exercised was $ 0.6 million and $ 0 during the years ended December 31, 2021 and 2020, respectively.

Expected dividend yield

Company accounts for forfeitures as they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures

following table summarizes stock option information for the 2015 Equity Incentive Plan:

SCHEDULE OF STOCK OPTIONS ACTIVITY

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value

(in thousands)

Outstanding at December 31, 2020

Cancelled/forfeited

Outstanding at December 31, 2021

Cancelled/forfeited

Outstanding at December 31, 2022

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.

information regarding options outstanding under the 2015 Equity Incentive Plan as of December 31, 2022 is summarized below:

OF OPTIONS OUTSTANDING AND EXERCISABLE

SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE

Weighted-Average

Range of exercise

life in years

of December 31, 2021, the total compensation cost related to non-vested options not recognized is $ 6.6 million.

The expected weighted

average period over which the total compensation costs related to non-vested options will be recognized is 2.8 years.

Common Stock :

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

OF RESTRICTED COMMON STOCK ACTIVITY

Outstanding awards at January 1, 2020

( 1,875,384 )

Outstanding awards at December 31, 2020

( 2,592,259 )

Outstanding awards at December 31, 2021

fair market value of the restricted common stock awards vested was $ 3.6 million and $ 1.3 million during the years ended December 31,

2021 and 2020, respectively.

of December 31, 2021, the total compensation cost related to restricted common stock not recognized is $ 3.6 million.

The expected weighted

average period over which the total compensation costs related to restricted common stock will be recognized is 3.0 years.

Equity Incentive Plan

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 80,000 options were outstanding and exercisable under this plan as of December 31, 2021.

information for the 2005 Equity Incentive Plan is as follows:

OF OPTIONS ACTIVITY

Outstanding options at January 1, 2020

Expired/forfeited

Outstanding options at December 31, 2020

Expired/forfeited

Outstanding options at December 31, 2021

intrinsic value related to the outstanding or exercisable options under this plan was $ 0 as of December 31, 2021 and 2020.

Range of Exercise Prices

Number of Options Outstanding

Remaining Life In Years

Exercise Price

Number of Options Exercisable

Remaining Life in Years

Exercise Price

following table summarizes stock option information for the 2005 Incentive Plan:

SCHEDULE OF STOCK OPTIONS ACTIVITY

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value

(in thousands)

Outstanding at December 31, 2020

Cancelled/forfeited

Outstanding at December 31, 2021

Cancelled/forfeited

Outstanding at December 31, 2022

information regarding options outstanding under the 2005 Equity Incentive Plan as of December 31, 2022 is summarized below:

2 unchanged sentences

Weighted-Average

Range of exercise

life in years

Range of Exercise Prices

Number of Options Outstanding

Remaining Life In Years

Exercise Price

Number of Options Exercisable

Remaining Life in Years

Exercise Price

following table summarizes restricted stock award activity:

SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY

Number of Awards

Weighted Average Grant Date Fair Value Per Unit

Outstanding at December 31, 2020

Cancelled/forfeited

Outstanding at December 31, 2021

Cancelled/forfeited

Outstanding at December 31, 2022

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.

14 – 401(k) PLAN

have a tax-qualified employee savings and retirement plan (the “401(k) Plan”) covering all our employees in the United States.

Pursuant to the 401(k) Plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit

($ 19,500 in 2021 and 2020 for employees who are under age 50 and $ 26,000 in 2021 and 2020 for employees who are age 50 and older) and

to have the amount of such reduction contributed to the 401(k) Plan.

The 401(k) Plan is intended to qualify under Section 401 of the

Internal Revenue Code so that contributions by employees or by us to the 401(k) Plan, and income earned on 401(k) Plan contributions,

are not taxable to employees until withdrawn from the 401(k) Plan, and so that contributions by us, if any, will be deductible by us

At the direction of each participant, we invest the assets of the 401(k) Plan in any of over 50 investment options.

contributions under the 401(k) Plan were $ 0.4 million and $ 0.3 million for the years ended December 31, 2021 and 2020, respectively.

Company has a tax-qualified employee savings and retirement plan (the “401(k) Plan”) covering all the Company’s employees

in the United States.

Pursuant to the 401(k) Plan, employees may elect to reduce their current compensation by up to the statutorily

prescribed annual limit ($ 20,500 in 2022 and $ 19,500 in 2021 for employees who are under age 50 and $ 27,000 in 2022 and $ 26,000 in 2021

for employees who are age 50 and older) and to have the amount of such reduction contributed to the 401(k) Plan.

The 401(k) Plan is intended

to qualify under Section 401 of the Internal Revenue Code so that contributions by employees or by us to the 401(k) Plan, and income

earned on 401(k) Plan contributions, are not taxable to employees until withdrawn from the 401(k) Plan, and so that contributions by

us, if any, will be deductible by us when made.

At the direction of each participant, the Company invests the assets of the 401(k) Plan

in any of over 50 investment options.

Company contributions under the 401(k) Plan were $ 0.3 million and $ 0.4 million for the years ended

December 31, 2022 and 2021, respectively.

15 – INCOME TAXES

tax expense differs from the statutory amounts for each of the following years:

tax expense differs from the statutory amounts for each of the following years (in thousands):

OF INCOME TAX EXPENSE

For the years ended December 31,

For the year ended December 31,

Income taxes at U.S.

statutory rate

$ ( 17,836,000 )

$ ( 17,689,000 )

Current year reserve

1 unchanged sentence

Total tax expense

taxes are provided for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities.

The temporary differences that give rise to deferred tax assets and liabilities were as follows:

taxes are provided for the temporary differences between the financial reporting bases and the tax bases of the Company’s assets

and liabilities.

The temporary differences that give rise to deferred tax assets and liabilities were as follows (in thousands):

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

For the year ended December 31,

Deferred tax assets (liabilities):

8 unchanged sentences

Valuation allowance

( 78,320,000 )

Net deferred taxes

of December 31, 2021, we had approximately $ 338.1

of net operating loss carryforwards and approximately $ 4.7

of December 31, 2022, the Company had approximately $ 359.0 million of net operating loss carryforwards and approximately $ 4.5 million

of general business credit carryforwards.

These carryforwards expire as follows:

These carryforwards expire as follows (in thousands):

OF NET OPERATING LOSS AND GENERAL BUSINESS CREDIT CARRYFORWARDS

Net operating

carryforwards

General business

business credit

carryforwards

$ 122,321,000

of December 31, 2021, we had approximately $ 215.8 million

of net operating loss carryforwards that do not expire and can be carried forward indefinitely.

Such net operating loss

carryforwards can only be used to offset 80 %

of taxable income in any given tax year.

In addition, our net operating loss carryforwards may be subject to limitation due to ownership changes.

acquired MacroChem Corporation on March 25, 2009 and Somanta Pharmaceuticals, Inc.

incurred post 2017 do not expire and can only be used to offset 80 % of taxable income in any tax year.

As of December 31, 2022, the Company

had approximately $ 245.0 million of net operating loss carryforwards that do not expire and can be carried forward indefinitely.

net operating loss carryforwards can only be used to offset 80 % of taxable income in any given tax year.

In addition, the Company’s

net operating loss carryforwards may be subject to limitation due to ownership changes.

Company acquired MacroChem Corporation on March 25, 2009 and Somanta Pharmaceuticals, Inc.

on January 4, 2008.

Both of these corporations were

loss-making entities at the time of acquisition.

As a result, the net operating losses related to those acquisitions may be subject to

annual limitations.

Both of these corporations

were loss-making entities at the time of acquisition.

As a result, the net operating losses related to those acquisitions may be subject

to annual limitations.

16 – COMMITMENTS AND CONTINGENCIES

lease space under operating leases for manufacturing and laboratory facilities and administrative offices in Cleveland, Ohio, as well

as administrative offices in New York, New York.

We also lease certain office equipment under operating leases, which have a non-cancelable

lease term of less than one year and, therefore, we have elected the practical expedient to exclude these short-term leases from our

right-of-use assets and lease liabilities.

of lease cost under ASC 842 for the years ended December 31, 2021 and 2020 are as follows:

OF COMPONENTS OF LEASE COST

For the years ended December 31,

Operating lease cost

Variable lease cost

Short-term lease cost

following table presents information about the amount and timing of cash flows arising from operating leases under ASC 842 as of December

OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES

Maturity of lease liabilities:

Total undiscounted operating lease payments

imputed interest

Present value of operating lease liabilities

Balance sheet classification:

Current portion of lease liability

Long-term lease liability

Total operating lease liabilities

Other information:

Weighted-average remaining lease term for operating leases

Weighted-average discount rate for operating leases

Company recognizes a liability for a contingency when it is probable that liability has been incurred and when the amount of loss can

be reasonably estimated.

When a range of probable loss can be estimated, the Company accrues the most likely amount of such loss, and

if such amount is not determinable, then the Company accrues the minimum of the range of probable loss.

As of December 31, 2022 and 2021,

there was no litigation against the Company.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures