Abeona Therapeutics (ABEO) 10-Q 15 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 15, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	ABEONA THERAPEUTICS INC.
Entity Central Index Key	318,306
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		40,255,082
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 63,212,000	$ 69,142,000
Receivables	148,000	124,000
Prepaid expenses and other current assets	463,000	155,000
Total current assets	63,823,000	69,421,000
Property and equipment, net	748,000	721,000
Licensed technology, net	8,181,000	8,384,000
Goodwill	32,466,000	32,466,000
Other assets	66,000	66,000
Total assets	105,284,000	111,058,000
Current liabilities
Accounts payable	1,463,000	3,694,000
Payable due to Plasma Technologies, LLC	4,000,000	4,000,000
Current portion of deferred revenue	602,000	602,000
Total current liabilities	6,065,000	8,296,000
Deferred revenue, net of current portion	3,513,000	3,664,000
Total liabilities	9,578,000	11,960,000
Commitments and contingencies
Stockholders' equity
Common stock - $.01 par value; authorized 200,000,000 shares; issued, 40,255,082 at March 31, 2017 and 40,254,457 at December 31, 2016	403,000	403,000
Additional paid-in capital	433,023,000	431,168,000
Accumulated deficit	(337,720,000)	(332,473,000)
Total stockholders' equity	95,706,000	99,098,000
Total liabilities and stockholders' equity	$ 105,284,000	$ 111,058,000

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	40,255,082	40,254,457

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues
License revenues	$ 151,000	$ 151,000
Royalties	35,000	84,000
Total revenues	186,000	235,000
Expenses
Research and development	2,198,000	1,855,000
General and administrative	3,022,000	4,366,000
Depreciation and amortization	250,000	174,000
Total expenses	5,470,000	6,395,000
Loss from operations	(5,284,000)	(6,160,000)
Interest and miscellaneous income	39,000	618,000
Interest and other expense	(2,000)	(2,000)
Total non operating income (expense)	37,000	616,000
Net loss	$ (5,247,000)	$ (5,544,000)
Basic and diluted loss per common share (in dollars per share)	$ (0.13)	$ (0.17)
Weighted average number of common shares outstanding (in shares)	40,254,679	32,743,013

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($)	Common Stock [Member]	Common Stock [Member]Employees and Directors [Member]	Additional paid-in capital [Member]	Additional paid-in capital [Member]Employees and Directors [Member]	Accumulated deficit [Member]	Accumulated deficit [Member]Employees and Directors [Member]	Total	Employees and Directors [Member]
Balance at Dec. 31, 2016	$ 403,000		$ 431,168,000		$ (332,473,000)		$ 99,098,000
Balance (in shares) at Dec. 31, 2016	40,254,457
Restricted common stock issued		$ 0		$ 362,000		$ 0		$ 362,000
Restricted common stock issued (in shares)		0
Common stock issued for cash exercise of options	$ 0		1,000		0		1,000
Common stock issued for cash exercise of options (in shares)		625
Stock based compensation expense	0		1,492,000		0		1,492,000
Net loss	0		0		(5,247,000)		(5,247,000)
Balance at Mar. 31, 2017	$ 403,000		$ 433,023,000		$ (337,720,000)		$ 95,706,000
Balance (in shares) at Mar. 31, 2017	40,255,082

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net loss	$ (5,247,000)	$ (5,544,000)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	250,000	174,000
Stock option compensation expense	1,492,000	1,592,000
Restricted common stock expense issued to directors, employees and consultants	362,000	1,892,000
Change in operating assets and liabilities:
Receivables	(24,000)	(129,000)
Prepaid expenses and other current assets	(308,000)	114,000
Other assets	0	(40,000)
Accounts payable	(2,231,000)	167,000
Contingent consideration liability	0	(591,000)
Deferred revenue	(151,000)	(151,000)
Net cash used in operating activities	(5,857,000)	(2,516,000)
Cash flows from investing activities:
Capital expenditures	(74,000)	(227,000)
Net cash used in investing activities	(74,000)	(227,000)
Cash flows from financing activities:
Proceeds from exercise of stock options	1,000	0
Net cash provided by financing activities	1,000	0
Net decrease in cash and cash equivalents	(5,930,000)	(2,743,000)
Cash and cash equivalents at beginning of period	69,142,000	40,138,000
Cash and cash equivalents at end of period	$ 63,212,000	$ 37,395,000

Interim Financial Statements

Interim Financial Statements	3 Months Ended
	Mar. 31, 2017
Interim Financial Statements [Abstract]
Interim Financial Statements	(1) Interim Financial Statements The condensed consolidated balance sheet as of March 31, 2017, the condensed consolidated statements of operations for the three months ended March 31, 2017 and 2016, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2017, and the condensed consolidated statements of cash flows for the three months ended March 31, 2017 and 2016, were prepared by management without audit. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, except as otherwise disclosed, necessary for the fair presentation of the financial position, results of operations, and changes in financial position for such periods, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these interim financial statements be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for the period ended March 31, 2017 are not necessarily indicative of the operating results which may be expected for a full year. The condensed consolidated balance sheet as of December 31, 2016 contains financial information taken from the audited Abeona consolidated financial statements as of that date. As of March 31, 2017, we had 4,770,935 options and 3,736,617 warrants that were not included in the EPS calculation as their effect would be antidilutive.

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2017
Intangible Assets [Abstract]
Intangible Assets	(2) Intangible Assets Intangible assets consist of the following (in thousands): March 31, 2017 December 31, 2016 Gross carrying value Accumulated amortization Gross carrying value Accumulated amortization Amortizable intangible assets Licensed technology $ 9,608 $ 1,427 $ 9,608 $ 1,224 Amortization expense related to intangible assets totaled $203,000 for the three months ended March 31, 2017 and totaled $145,000 for the three ended March 31, 2016. The aggregate estimated amortization expense for intangible assets remaining as of March 31, 2017 is as follows (in thousands): 2017 $ 610 2018 812 2019 812 2020 812 2021 812 over 5 years 4,323 Total $ 8,181

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2017
Fair Value Measurements [Abstract]
Fair Value Measurements	(3) Fair Value Measurements We calculate the fair value of our assets and liabilities which qualify as financial instruments and include additional information in the notes to the condensed consolidated financial statements when the fair value is different than the carrying value of these financial instruments. The estimated fair value of receivables, prepaids and other, accounts payable and payable due to Plasma Technologies, LLC approximate their carrying amounts due to the relatively short maturity of these instruments. U.S. 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 date. 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: · Level 1 – Quoted prices in active markets for identical assets or liabilities. · Level 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. · Level 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. The guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We 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. Financial assets and liabilities measured at fair value on a non-recurring and recurring basis as of March 31, 2017 and December 31, 2016 are summarized below: (in thousands) As of March 31, 2017 Level 1 Level 2 Level 3 Total Gains (Losses) Description Non-recurring Assets: Licensed technology (net) $ 8,181 $ - $ - $ 8,181 $ - Goodwill 32,466 - - 32,466 - As of December 31, 2016 Level 1 Level 2 Level 3 Total Gains (Losses) Description Non-recurring Assets: Licensed technology (net) $ 8,384 $ - $ - $ 8,384 $ - Goodwill 32,466 - - 32,466 - Recurring Liabilities: Contingent consideration $ - $ - $ - $ - $ 1,391

Stock Based Compensation and Re

Stock Based Compensation and Restricted Stock Compensation	3 Months Ended
	Mar. 31, 2017
Stock Based Compensation and Restricted Stock Compensation [Abstract]
Stock Based Compensation and Restricted Stock Compensation	(4) Stock Based Compensation and Restricted Stock Compensation For the three months ended March 31, 2017, we recognized stock-based compensation expense of $1,492,000 for granted options. For the three months ended March 31, 2016 we recognized stock-based compensation expense of $1,592,000. The following table summarizes stock-based compensation for the three months ended March 31, 2017 and 2016: Three months ended March 31, 2017 2016 Research and development $ 356,000 $ 341,000 General and administrative 1,136,000 1,251,000 Stock-based compensation expense included in operating expense $ 1,492,000 $ 1,592,000 For the three months ended March 31, 2017, we granted no stock options and for the three months ended March 31, 2016 we granted 1,315,000 stock options. For the three months ended March 31, 2017, we recognized restricted common stock compensation expense of $362,000 for granted restricted common stock. For the three months ended March 31, 2016, we recognized restricted stock compensation expense of $1,892,000 for granted restricted common stock compensation expense. The following table summarizes restricted common stock compensation expense for the three months ended March 31, 2017 and 2016: Three months ended March 31, 2017 2016 Research and development $ - $ 62,000 General and administrative 362,000 1,830,000 Stock-based compensation expense included in operating expense $ 362,000 $ 1,892,000 For the three months ended March 31, 2017 and 2016 no stock was granted to directors or officers.

Litigation

Litigation	3 Months Ended
	Mar. 31, 2017
Litigation [Abstract]
Litigation	(5) Litigation We are not currently subject to any material pending proceeding.

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2017
Intangible Assets [Abstract]
Schedule of amortizable intangible assets	Intangible assets consist of the following (in thousands): March 31, 2017 December 31, 2016 Gross carrying value Accumulated amortization Gross carrying value Accumulated amortization Amortizable intangible assets Licensed technology $ 9,608 $ 1,427 $ 9,608 $ 1,224
Amortization expense related to intangible assets	The aggregate estimated amortization expense for intangible assets remaining as of March 31, 2017 is as follows (in thousands): 2017 $ 610 2018 812 2019 812 2020 812 2021 812 over 5 years 4,323 Total $ 8,181

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Measurements [Abstract]
Financial assets and liabilities measured at fair value on recurring basis	Financial assets and liabilities measured at fair value on a non-recurring and recurring basis as of March 31, 2017 and December 31, 2016 are summarized below: (in thousands) As of March 31, 2017 Level 1 Level 2 Level 3 Total Gains (Losses) Description Non-recurring Assets: Licensed technology (net) $ 8,181 $ - $ - $ 8,181 $ - Goodwill 32,466 - - 32,466 - As of December 31, 2016 Level 1 Level 2 Level 3 Total Gains (Losses) Description Non-recurring Assets: Licensed technology (net) $ 8,384 $ - $ - $ 8,384 $ - Goodwill 32,466 - - 32,466 - Recurring Liabilities: Contingent consideration $ - $ - $ - $ - $ 1,391

Stock Based Compensation and 14

Stock Based Compensation and Restricted Stock Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Summarization of stock-based compensation	The following table summarizes stock-based compensation for the three months ended March 31, 2017 and 2016: Three months ended March 31, 2017 2016 Research and development $ 356,000 $ 341,000 General and administrative 1,136,000 1,251,000 Stock-based compensation expense included in operating expense $ 1,492,000 $ 1,592,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Summarization of stock-based compensation	The following table summarizes restricted common stock compensation expense for the three months ended March 31, 2017 and 2016: Three months ended March 31, 2017 2016 Research and development $ - $ 62,000 General and administrative 362,000 1,830,000 Stock-based compensation expense included in operating expense $ 362,000 $ 1,892,000

Interim Financial Statements (D

Interim Financial Statements (Details)	3 Months Ended
	Mar. 31, 2017shares
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,770,935
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3,736,617

Intangible Assets (Details)

Intangible Assets (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Amortizable intangible assets [Abstract]
Amortization expense related to intangible assets	$ 203,000	$ 145,000
Amortization expense for intangible assets [Abstract]
2,017	610,000
2,018	812,000
2,019	812,000
2,020	812,000
2,021	812,000
over 5 years	4,323,000
Total	8,181,000		$ 8,384,000
Licensed Technology [Member]
Amortizable intangible assets [Abstract]
Gross carrying value	9,608,000		9,608,000
Accumulated amortization	$ 1,427,000		$ 1,224,000

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Nonrecurring [Member]
Assets [Abstract]
Licensed technology (net)	$ 8,181	$ 8,384
Goodwill	32,466	32,466
Nonrecurring [Member] | Licensed Technology [Member]
Liabilities [Abstract]
Total gains (losses)	0	0
Nonrecurring [Member] | Goodwill [Member]
Liabilities [Abstract]
Total gains (losses)	0	0
Nonrecurring [Member] | Level 1 [Member]
Assets [Abstract]
Licensed technology (net)	0	0
Goodwill	0	0
Nonrecurring [Member] | Level 2 [Member]
Assets [Abstract]
Licensed technology (net)	0	0
Goodwill	0	0
Nonrecurring [Member] | Level 3 [Member]
Assets [Abstract]
Licensed technology (net)	8,181	8,384
Goodwill	$ 32,466	32,466
Recurring [Member]
Liabilities [Abstract]
Contingent consideration		0
Recurring [Member] | Contingent Consideration [Member]
Liabilities [Abstract]
Total gains (losses)		1,391
Recurring [Member] | Level 1 [Member]
Liabilities [Abstract]
Contingent consideration		0
Recurring [Member] | Level 2 [Member]
Liabilities [Abstract]
Contingent consideration		0
Recurring [Member] | Level 3 [Member]
Liabilities [Abstract]
Contingent consideration		$ 0

Stock Based Compensation and 18

Stock Based Compensation and Restricted Stock Compensation (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based and Restricted Stock Compensation Expense [Abstract]
Stock-based compensation expense included in operating expense	$ 1,492,000	$ 1,592,000
Stock Options [Member]
Share-based and Restricted Stock Compensation Expense [Abstract]
Stock-based compensation expense included in operating expense	$ 1,492,000	$ 1,592,000
Share-based Arrangements Awards Granted [Abstract]
Stock options granted (in shares)	0	1,315,000
Restricted Stock [Member]
Share-based and Restricted Stock Compensation Expense [Abstract]
Stock-based compensation expense included in operating expense	$ 362,000	$ 1,892,000
Restricted Stock [Member] | Directors and Employees [Member]
Share-based Arrangements Awards Granted [Abstract]
Stock options granted (in shares)	0	0
Research and Development [Member] | Stock Options [Member]
Share-based and Restricted Stock Compensation Expense [Abstract]
Stock-based compensation expense included in operating expense	$ 356,000	$ 341,000
Research and Development [Member] | Restricted Stock [Member]
Share-based and Restricted Stock Compensation Expense [Abstract]
Stock-based compensation expense included in operating expense	0	62,000
General and Administrative [Member] | Stock Options [Member]
Share-based and Restricted Stock Compensation Expense [Abstract]
Stock-based compensation expense included in operating expense	1,136,000	1,251,000
General and Administrative [Member] | Restricted Stock [Member]
Share-based and Restricted Stock Compensation Expense [Abstract]
Stock-based compensation expense included in operating expense	$ 362,000	$ 1,830,000