UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-15771

ABEONA THERAPEUTICS INC.

(Exact name of registrant as specified in its charter)

Delaware		83-0221517
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)

6555 Carnegie Avenue, 4^thFloor

Cleveland, OH 44103

(Address of principal executive offices, zip code)

(646) 813-4701

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value		ABEO		Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of August 2, 2024 was 43,314,397 shares.

ABEONA THERAPEUTICS INC.

Form 10-Q

For the Quarter Ended June 30, 2024

INDEX

		Page No.
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements:	3

	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	3

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2024 and 2023	4

	Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2024 and 2023	5

	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	32

Item 5.	Other Information	33

Item 6.	Exhibits	33

SIGNATURES		34

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (including information incorporated by reference) contains statements that express management’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “could,” “would,” “seeks,” “estimates,” and variations of such words and similar expressions, and the negatives thereof, are intended to identify such forward-looking statements. Such “forward-looking statements” speak only as of the date made and are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by management that are difficult to predict. Various factors, some of which are beyond the Company’s control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report, except as may otherwise be required by the federal securities laws.

Forward-looking statements necessarily involve risks and uncertainties, and our actual results could differ materially from those anticipated in forward-looking statements due to a number of factors. These statements include statements about, among other things: our ability to address the items raised in the FDA’s complete response letter related to our Biologics License Application for pz-cel; the timing and outcome of our resubmission of a Biologics License Application for pz-cel; our plans to continue development of AAV-based gene therapies designed to treat ophthalmic diseases; the achievement of or expected timing, progress and results of clinical development, clinical trials and potential regulatory approvals; our pipeline of product candidates; our belief that pz-cel could potentially benefit patients with RDEB; our belief in the adequacy of the clinical trial data from our VIITAL™ clinical trial, together with the data generated in the program to date, to support regulatory approvals; our dependence upon our third-party customers and vendors and their compliance with regulatory bodies; our estimates regarding expenses, future revenues, capital requirements, and needs for additional financing; our intellectual property position and our ability to obtain, maintain and enforce intellectual property protection and exclusivity for our proprietary assets; our estimates regarding the size of the potential markets for our product candidates, the strength of our commercialization strategies and our ability to serve and supply those markets; and future economic conditions or performance.

Important factors that could affect performance and cause results to differ materially from management’s expectations are described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated from time to time in the Company’s SEC filings, including this Quarterly Report on Form 10-Q. These factors include: the timing and outcome of our resubmission of the Biologics License Application for pz-cel; our ability to access our existing at-the-market sale agreement; our ability to access additional financial resources and/or our financial flexibility to reduce operating expenses if required; our ability to obtain additional equity funding from current or new stockholders; the potential impacts of global healthcare emergencies, such as pandemics, on our business, operations, and financial condition; our ability to out-license technology and/or other assets, deferring and/or eliminating planned expenditures, restructuring operations and/or reducing headcount, and sales of assets; the dilutive effect that raising additional funds by selling additional equity securities would have on the relative equity ownership of our existing investors, including under our existing at-the-market sale agreement; the outcome of any interactions with the U.S. Food and Drug Administration (“FDA”) or other regulatory agencies relating to any of our products or product candidates; our ability to continue to secure and maintain regulatory designations for our product candidates; our ability to develop manufacturing capabilities compliant with current good manufacturing practices for our product candidates; our ability to manufacture cell and gene therapy products and produce an adequate product supply to support clinical trials and potential future commercialization; the rate and degree of market acceptance of our product candidates for any indication once approved; and our ability to meet our obligations contained in license agreements to which we are party.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Abeona Therapeutics Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

($ in thousands, except share and per share amounts)

(Unaudited)

	June 30, 2024			December 31, 2023

ASSETS
Current assets:
Cash and cash equivalents	$	34,426		$	14,473
Short-term investments		88,282			37,753
Restricted cash		338			338
Other receivables		1,640			2,444
Prepaid expenses and other current assets		1,218			729
Total current assets		125,904			55,737
Property and equipment, net		3,975			3,533
Operating lease right-of-use assets		4,024			4,455
Other assets		100			277
Total assets	$	134,003		$	64,002
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,099		$	1,858
Accrued expenses		4,924			5,985
Current portion of long-term debt		2,222			—
Current portion of operating lease liability		1,792			998
Current portion payable to licensor		4,805			4,580
Other current liabilities		1			1
Total current liabilities		16,843			13,422
Long-term operating lease liabilities		3,018			4,402
Long-term debt		16,133			—
Derivative liabilities		668			—
Warrant liabilities		24,100			31,352
Total liabilities		60,762			49,176
Commitments and contingencies		-			-
Stockholders’ equity:
Preferred stock - $0.01 par value; authorized 2,000,000 shares; No shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		—			—
Common stock - $0.01 par value; authorized 200,000,000 shares; 41,661,993 and 26,523,878 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		417			265
Additional paid-in capital		846,654			764,151
Accumulated deficit		(773,696	)		(749,524	)
Accumulated other comprehensive loss		(134	)		(66	)
Total stockholders’ equity		73,241			14,826
Total liabilities and stockholders’ equity	$	134,003		$	64,002

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

Abeona Therapeutics Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

($ in thousands, except share and per share amounts)

(Unaudited)


	For the three months ended June 30,						For the six months ended June 30,
	2024			2023			2024			2023

Revenues:
License and other revenues	$	—		$	3,500		$	—		$	3,500

Expenses:
Royalties		—			1,575			—			1,575
Research and development		9,218			8,523			16,425			16,564
General and administrative		8,646			5,021			15,769			9,018
Gain on operating lease right-of-use assets		—			(1,065	)		—			(1,065	)
Total expenses		17,864			14,054			32,194			26,092

Loss from operations		(17,864	)		(10,554	)		(32,194	)		(22,592	)

Interest income		1,191			417			2,034			781
Interest expense		(1,072	)		(103	)		(2,024	)		(204	)
Change in fair value of warrant and derivative liabilities		24,927			(8,629	)		7,626			(6,364	)
Other income		224			2,215			386			2,618
Net Income (loss)	$	7,406		$	(16,654	)	$	(24,172	)	$	(25,761	)

Basic income (loss) per common share	$	0.19		$	(0.92	)	$	(0.72	)	$	(1.48	)
Dilutive loss per common share	$	(0.26	)	$	(0.92	)	$	(0.72	)	$	(1.48	)

Weighted average number of common shares outstanding:
Basic		40,010,481			18,017,874			33,662,908			17,464,026
Dilutive		51,226,715			18,017,874			33,662,908			17,464,026

Other comprehensive income (loss):
Change in unrealized gains (losses) related to available-for-sale debt securities		50			(30	)		(68	)		34
Comprehensive income (loss)	$	7,456		$	(16,684	)	$	(24,240	)	$	(25,727	)

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

Abeona Therapeutics Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

($ in thousands, except share amounts)

(Unaudited)

Three months ended June 30, 2024

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Accumulated

Comprehensive

Stockholders’

Amount

Capital

Deficit

Loss

(Deficit) Equity

SEC Form 10-Q filed by Abeona Therapeutics Inc.