ABEONA THERAPEUTICS INC.

Previous wording

Abeona is a commercial-stage biopharmaceutical company developing cell and gene therapies for life-threatening diseases. On April 28, 2025, the U.S. Food and Drug Administration (“FDA”) approved ZEVASKYN® (prademagene zamikeracel) gene-modified cellular sheets, also known as pz-cel, as the first and only autologous cell-based gene therapy for the treatment of wounds in adult and pediatric patients with recessive dystrophic epidermolysis bullosa (“RDEB”), a serious and debilitating genetic skin disease. There is no cure for RDEB, and ZEVASKYN® is the only FDA-approved product to treat RDEB wounds with a single application. ZEVASKYN® was granted Orphan Drug and Rare Pediatric Disease designations by the FDA.

Current wording

We are a commercial-stage biopharmaceutical company developing cell and gene therapies for life-threatening diseases. On April 28, 2025, the FDA approved ZEVASKYN® (prademagene zamikeracel) gene-modified cellular sheets, as the first and only autologous cell-based gene therapy for the treatment of wounds in adult and pediatric patients with RDEB, a serious and debilitating genetic skin disease. There is no cure for RDEB, and ZEVASKYN® is the only FDA-approved product to treat RDEB wounds with a single application. ZEVASKYN® was granted Orphan Drug and Rare Pediatric Disease designations by the FDA.

Previous wording

ZEVASKYN® is manufactured at our current Good Manufacturing Practices (“cGMP”) manufacturing facility in Cleveland, Ohio, and is made available through ZEVASKYN® Qualified Treatment Centers (“QTCs”).

Current wording

ZEVASKYN® is manufactured at our cGMP manufacturing facility in Cleveland, Ohio, and is made available through ZEVASKYN® qualified treatment centers.

Previous wording

Cost of sales during the three months ended September 30, 2025 primarily includes costs associated with the August 2025 production of a full batch of ZEVASKYN®that could not be released due to technical issues that arose in implementing the rapid sterility lot release assay, mandated by the FDA during BLA review. There was no cost of sales in the same period of 2024, as ZEVASKYN®was approved by the FDA in April 2025.

Current wording

Cost of sales during the three months ended March 31, 2026 was $2.7 million and primarily includes costs associated with the commercial sale of ZEVASKYN® including royalties due to our licensor, Stanford. There was no cost of sales in the same period of 2025, as ZEVASKYN®was approved by the FDA in April 2025.

Previous wording

Total research and development spending for the three months ended September 30, 2025 was $4.2 million, as compared to $8.9 million for the same period of 2024, a decrease of $4.7 million. The reduction in expenses was primarily due to costs capitalized into inventory and engineering runs and other production costs that are no longer considered research and development due to FDA approval of ZEVASKYN®in April of 2025.

Current wording

Total research and development spending for the three months ended March 31, 2026 was $9.6 million, as compared to $9.9 million for the same period of 2025, a decrease of $0.3 million. In March 2026, we entered a license and joint development agreement related to PSMA SIR-T™ which included an upfront payment of $7.0 million that was included in research and development expenses. Excluding this transaction, research and development spending decreased $7.4 million. The reduction in expenses was primarily due to costs capitalized into inventory and engineering runs and other production costs that are no longer considered research and development due to FDA approval of ZEVASKYN®in April of 2025.

Previous wording

We expect our research and development activities to continue as we work towards advancing other product candidates towards potential regulatory approval, reflecting costs associated with the following:

Current wording

We expect our research and development activities to increase as we work towards advancing other product candidates towards potential regulatory approval, reflecting costs associated with the following:

Previous wording

Selling, general and administrative expenses primarily consist of payroll and personnel costs, office facility costs, public reporting company related costs, professional fees (e.g., legal expenses), selling and other costs for commercial launch and other general operating expenses not otherwise included in research and development expenses. We expect our selling, general, and administrative costs to continue to increase as we launch ZEVASKYN®and advance other product candidates toward potential regulatory approval.

Current wording

Selling, general and administrative expenses primarily consist of payroll and personnel costs, office facility costs, public company reporting related costs, professional fees (e.g., legal expenses), selling and commercialization costs and other general operating expenses not otherwise included in research and development expenses. We expect our selling, general, and administrative costs to continue to increase as we expand our commercialization of ZEVASKYN®and pursue development of other product candidates.

Previous wording

Total selling, general and administrative expenses were $19.3 million for the three months ended September 30, 2025, as compared to $6.4 million for the same period of 2024, an increase of $12.9 million. The increase in expenses was primarily due to increases in commercial costs related to our continued commercialization efforts, increased legal costs associated with commercialization, increases of salaries and stock-based compensation due to new hires, and costs related to engineering runs and other production costs that are no longer considered research and development due to FDA approval in April of 2025.

Current wording

Total selling, general and administrative expenses were $19.5 million for the three months ended March 31, 2026, as compared to $9.8 million for the same period of 2025, an increase of $9.7 million. The increase in expenses was primarily due to increases in salaries and stock-based compensation of $5.4 million due to new hires, $1.9 million of costs related to engineering runs with the remainder due to other commercial costs related to our continued commercialization efforts upon FDA approval in April of 2025.

Previous wording

Interest income was $1.7 million for the three months ended September 30, 2025, as compared to $1.2 million in the same period of 2024. The increase resulted from higher earnings on short-term investments driven by increased average short-term investment balances.

Current wording

Interest income was $1.4 million for the three months ended March 31, 2026, as compared to $1.3 million in the same period of 2025. The increase resulted from higher earnings on short-term investments driven by increased average short-term investment balances.

Previous wording

Interest expense was $0.9 million for the three months ended September 30, 2025 compared to $1.1 million in the same period of 2024. Interest expense was due to the credit facility entered into by the Company in January 2024 and decreased as a result of the July 2025 Loan Agreement Amendment.

Current wording

Interest expense was $0.8 million for the three months ended March 31, 2026 compared to $1.0 million in the same period of 2025. Interest expense was due to the credit facility entered into by the Company in January 2024 and decreased as a result of the July 2025 Loan Agreement Amendment plus a reduction of the principal loan amount due to payments made in 2026.

Previous wording

Change in fair value of warrant and derivative liabilities

Current wording

Change in fair value of warrant liabilities

Previous wording

The change in fair value of warrant liabilities was a gain of $2.8 million for the three months ended September 30, 2025. We issued stock purchase warrants that are required to be classified as a liability and valued at fair market value at each reporting period. The gain in the fair value of warrant liabilities was primarily due to the decrease in our stock price over the quarter and a shorter term of the outstanding warrants.

Current wording

The change in fair value of warrant liabilities was a gain of $5.4 million for the three months ended March 31, 2026. We issued stock purchase warrants that are required to be classified as a liability and valued at fair market value at each reporting period. The gain in the fair value of warrant liabilities was primarily due to the decrease in our stock price over the quarter and a shorter term of the outstanding warrants.

Previous wording

The change in fair value of warrant liabilities was a gain of $4.6 million for the nine months ended September 30, 2025. We issued stock purchase warrants that are required to be classified as a liability and valued at fair market value at each reporting period. The gain in the fair value of warrant liabilities was primarily due to the decrease in our stock price as of September 30, 2025 compared to December 31, 2024 and to the shorter term period over period.

Current wording

The change in fair value of warrant liabilities was a gain of $7.2 million for the three months ended March 31, 2025. The gain in the fair value of warrant liabilities was primarily due to the decrease in our stock price year over the year and a shorter term.

Previous wording

We recorded a current income tax expense of $0.3 million for the nine months ended September 30, 2025. We did not record an income tax expense for the nine months ended September 30, 2024 as we generated sufficient tax losses, after consideration of discrete items. The current income tax expense for the nine months ended September 30, 2025 was driven by pre-tax income from the gain on sale of the PRV, offset by the favorable impact of the One Big Beautiful Bill Act, enacted on July 4, 2025. The legislation restored immediate expensing of domestic R&D expenditures, reinstated 100% bonus depreciation, and provided more favorable rules for determining the limitation on business interest expense, which collectively reduced the Company’s taxable income and resulting income tax expense for the nine months ended September 30, 2025.

Current wording

We recorded a current income tax expense of $2,000 for the three months ended March 31, 2026. We did not record an income tax expense for the three months ended March 31, 2025 as we generated sufficient tax losses, after consideration of discrete items.

Previous wording

Cash Flows for the Nine Months Ended September 30, 2025 and 2024

Current wording

Cash Flows for the Three Months Ended March 31, 2026 and 2025

Previous wording

Net cash used in operating activities was $58.4 million for the nine months ended September 30, 2025, primarily comprised of our net income of $91.6 million, offset by a decrease in operating assets and liabilities of $4.8 million and net non-cash charges of $145.2 million. Non-cash charges consisted primarily of $152.4 million gain on sale of priority review voucher for which the cash proceeds are recorded in investing activities, $4.6 million of gain as a result of the change in fair value of warrant and derivative liabilities, $8.2 million of stock-based compensation and $1.7 million of depreciation and amortization.

Current wording

Net cash used in operating activities was $19.8 million for the three months ended March 31, 2026, primarily comprised of our net loss of $17.1 million and decreases in operating assets and liabilities of $1.4 million and net non-cash charges of $1.3 million. Non-cash charges consisted primarily of $5.4 million of gain as a result of the change in fair value of warrant liabilities, $3.0 million of stock-based compensation and $0.7 million of depreciation and amortization.

Previous wording

Net cash used in operating activities was $39.5 million for the nine months ended September 30, 2024, primarily comprised of our net loss of $54.4 million and decreases in operating assets and liabilities of $0.5 million and net non-cash charges of $15.5 million. Non-cash charges consisted primarily of $7.5 million of the change in fair value of warrant and derivative liabilities, $4.7 million of stock-based compensation, $1.1 million of non-cash interest expense and $1.5 million of depreciation and amortization.

Current wording

Net cash used in operating activities was $18.4 million for the three months ended March 31, 2025, primarily comprised of our net loss of $12.0 million and decreases in operating assets and liabilities of $3.4 million and net non-cash charges of $3.0 million. Non-cash charges consisted primarily of $7.2 million of gain as a result of the change in fair value of warrant liabilities, $2.7 million of stock-based compensation and $0.5 million of depreciation and amortization.

Previous wording

Net cash used in investing activities was $58.1 million for the nine months ended September 30, 2024, primarily comprised of proceeds from maturities of short-term investments of $90.2 million, offset by purchases of short-term investments of $146.5 million and capital expenditures of $1.8 million.

Current wording

Net cash provided by investing activities was $5.0 million for the three months ended March 31, 2026, primarily comprised of proceeds from maturities of short-term investments of $24.9 million, offset by purchases of short-term investments of $19.0 million and capital expenditures of $0.9 million.

Previous wording

Net cash provided by investing activities was $95.5 million for the nine months ended September 30, 2025, primarily comprised of net proceeds from sale of priority review voucher of $152.4 million, proceeds from maturities of short-term investments of $118.8 million, offset by purchases of short-term investments of $168.9 million and capital expenditures of $6.8 million.

Current wording

Net cash provided by investing activities was $4.2 million for the three months ended March 31, 2025, primarily comprised of proceeds from maturities of short-term investments of $54.2 million, offset by purchases of short-term investments of $48.6 million and capital expenditures of $1.4 million.

Previous wording

Net cash provided by financing activities was $22.4 million for the nine months ended September 30, 2025, primarily comprised of proceeds of $17.3 million from open market sales of common stock pursuant to the ATM Agreement (as defined below) and proceeds of $5.2 million from the exercise of stock purchase warrants.

Current wording

Net cash provided by financing activities was $6.8 million for the three months ended March 31, 2025, primarily comprised of proceeds of $6.8 million from open market sales of common stock pursuant to the ATM Agreement (as defined below).

Previous wording

Our principal source of liquidity is cash, cash equivalents, restricted cash and short-term investments, collectively referred to as our cash resources. As of September 30, 2025, our cash resources were $207.5 million. We believe that our current cash and cash equivalents, restricted cash and short-term investments are sufficient to fund operations through at least the next 12 months from the date of this report on Form 10-Q. We may need to secure additional funding to carry out all of our planned research and development and potential commercialization 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.

Current wording

Our principal source of liquidity is cash, cash equivalents, restricted cash and short-term investments, collectively referred to as our cash resources. As of March 31, 2026, our cash resources were $168.3 million. We believe that our current cash and cash equivalents, restricted cash and short-term investments are sufficient to fund operations through at least the next 12 months from the date of this report on Form 10-Q. We may need to secure additional funding to carry out all of our planned research and development and potential commercialization 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.

Previous wording

We have an open market sale agreement with Jefferies LLC (as amended, the “ATM Agreement”) pursuant to which, we may sell from time to time, through Jefferies LLC, shares of our common stock for an aggregate sales price of up to $75.0 million. Any sales of shares pursuant to this agreement are made under our effective “shelf” registration statement on Form S-3 that is on file with and has been declared effective by the SEC. We sold 3,510,889 shares of our common stock under the ATM Agreement and received $17.3 million of net proceeds during the nine months ended September 30, 2025. We sold 1,902,376 shares of our common stock under the ATM Agreement and received $10.0 million of net proceeds during the nine months ended September 30, 2024. Under the ATM Agreement and as of September 30, 2025, we have remaining shares of our common stock for an aggregate sales price of up to $51.5 million.

Current wording

We have an open market sale agreement with Jefferies LLC (as amended, the “ATM Agreement”) pursuant to which, we may sell from time to time, through Jefferies LLC, shares of our common stock for an aggregate sales price of up to $75.0 million. Any sales of shares pursuant to this agreement are made under our effective “shelf” registration statement on Form S-3 that is on file with and has been declared effective by the SEC. We sold 1,312,283 shares of our common stock under the ATM Agreement and received $6.8 million of net proceeds during the three months ended March 31, 2025. There were no sales of our common stock under the ATM agreement during the three months ended March 31, 2026. Under the ATM Agreement and as of March 31, 2026, we have remaining shares of our common stock for an aggregate sales price of up to $51.5 million.

Previous wording

We may incur losses for the next several years as we continue to invest in commercialization, product research and development, preclinical studies, clinical trials, and regulatory compliance and cannot provide assurance that we will ever be able to generate sufficient product sales or royalty revenue to achieve profitability on a sustained basis, or at all.

Current wording

We may incur losses for the next several years as we continue to invest in commercialization, product research and development, preclinical studies, clinical trials, and regulatory compliance and cannot assure that we will ever be able to generate sufficient product sales or royalty revenue to achieve profitability on a sustained basis, or at all.

Previous wording

Due to uncertainties and certain of the risks described above, under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report, it is not possible to reliably predict future spending or time to completion by project or product category or the period in which material net cash inflows from significant projects are expected to commence. If we are unable to timely complete a particular project, our research and development efforts could be delayed or reduced, our business could suffer depending on the significance of the project and we might need to raise additional capital to fund operations, as discussed above.

Current wording

Due to uncertainties and certain of the risks described above, under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report, it is not possible to reliably predict future spending or time to completion by project or product category or the period in which material net cash inflows from significant projects are expected to commence. If we are unable to timely complete a particular project, our research and development efforts could be delayed or reduced, our business could suffer depending on the significance of the project and we might need to raise additional capital to fund operations, as discussed in the risks above.