Share-Based Payment Awards

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plan

The 2023 Long-Term Incentive Plan (the “2023 Plan”), approved by the Company’s stockholders on June 20, 2023 (the “Adoption Date”), originally provided for the issuance of up to 3,500,000 shares of the Company’s common stock reserved for issuance under the 2023 Plan plus any additional shares of the Company’s common stock that were available for grant under the 2008 and the 2016 Incentive Plan (the “2008 & 2016 Plan”) at the Adoption Date or would otherwise become available for grant under the 2008 Plan as a result of subsequent termination or forfeiture of awards under the 2008 or 2016 Plan. Prior to June 18, 2025, the maximum aggregate number of shares available for issuance under the 2023 Plan was equal to (i) 7,500,000 shares, plus (ii) 184,904 shares that were previously available for grant under the Company’s 2016 Equity Incentive Plan (the 2016 Plan) that were transferred to the 2023 Plan on June 20, 2023, plus (iii) any shares granted under the Company’s 2008 Equity Incentive Plan or 2016 Plan (collectively, the Prior Plans) that, on or after the effective date of the 2023 Plan, become available as a result of the termination or forfeiture of awards under the Prior Plans. At the Company’s Annual Meeting of Stockholders held on June 18, 2025, the Company’s stockholders approved an amendment to the 2023 Plan to increase the number of shares authorized for issuance by 2,900,000 shares to 10,400,000 shares under the 2023 Plan. At September 30, 2025, a total of approximately 4,823,270 shares were available for new awards under the 2023 Plan.

Starting March 2022, the Company granted non-statutory stock options to new employees as inducement awards to enter into employment with the Company. The grants were approved by the Compensation Committee of the Board of Directors and awarded in accordance with Nasdaq Listing Rule 5635(c)(4). Although not awarded under any equity incentive plans, the grants are subject to and governed by the terms and conditions of the applicable plan in effect at the time of the grant.

Stock Options

The following table provides a reconciliation of stock option activity under the Company’s equity incentive plan and for inducement awards for the nine months ended September 30, 2025:


	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at December 31, 2024		7,670,647		$	12.47		7.43		7,478
Granted		2,632,485			8.44
Exercised		(234,878	)		4.77
Forfeited		(383,195	)		11.02
Expired		(244,306	)		19.56
Outstanding at September 30, 2025		9,440,753		$	11.42		7.54	$	43,150
Exercisable at September 30, 2025		4,712,557		$	12.47		6.33	$	18,827

The Company's stock options generally vest over four years with 25% vesting after one year of service followed by ratable monthly vesting over the remaining three years. Nonemployee awards are granted similar to the Company’s employee awards. All option grants have a 10-year term. Options to purchase a total of 1,580,623 shares of the Company’s common stock vested during the nine months ended September 30, 2025.

In determining the grant date fair value of option awards during the nine months ended September 30, 2025, the Company applied the Black-Scholes option pricing model based on the following key assumptions:


		Nine Months Ended
		September 30, 2025
Option life (in years)		5.5 - 6.08
Stock volatility		99% - 102%
Risk-free interest rate		3.67% - 4.46%
Expected dividends		0.0%

The following table summarizes information about employee, non-executive director and external consultant stock options for the nine months ended September 30, 2025 (in thousands except per share amount):


	Nine Months Ended
	September 30, 2025
Weighted average grant date fair value per share	$	6.81
Total cash received from exercise of stock options		1,120
Total intrinsic value of stock options exercised		1,015

Time-Vested Restricted Stock Units

Time-vested restricted stock units (RSUs) issued to date under the 2016 Plan and the 2023 Plan generally vest on a ratable annual basis over 3 years. The related stock-based compensation expense is recorded over the requisite service period, which is the vesting period. The fair value of all time-vested RSUs is based on the closing share price of the Company’s common stock on the date of grant.

The following table provides a reconciliation of RSU activity under the 2016 Plan and the 2023 Plan for the nine months ended September 30, 2025:


	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2024		1,315,629		$	11.74
Granted		846,308			8.40
Vested		(621,722	)		10.34
Forfeited		(62,177	)		12.92
Nonvested at September 30, 2025		1,478,038		$	10.37

At September 30, 2025, the weighted average remaining vesting term of the RSUs was 1.38 years.

Employee Stock Purchase Plan

The Company’s Employee Stock Purchase Plan (the ESPP) allows qualified participants to purchase the Company’s common stock twice a year at 85% of the lesser of the average of the high and low sales price of the Company’s common stock on (i) the first trading day of the relevant offering period and (ii) the last trading day of the relevant offering period. The number of shares of the Company’s common stock each employee may purchase under this plan, when combined with all other employee stock purchase plans, is limited to the lower of an aggregate fair market value of $25,000 during each calendar year, or 5,000 shares of the Company’s common stock in any one offering period. The Company has maintained consecutive six-month offering periods since August 1, 2019. During the three and nine months ended September 30, 2025, 63,839 and 119,122 shares of the Company’s common stock were issued pursuant to the ESPP.

The Company estimated the fair value of the option component of the ESPP shares at the date of grant using a Black-Scholes valuation model. During the three and nine months ended September 30, 2025, the compensation expense from ESPP shares was approximately $0.1 million and $0.3 million. During the three and nine months ended September 30, 2024, the compensation expense from ESPP shares was approximately $0.1 million and $0.2 million.

Stock-Based Compensation Expense

The Company’s condensed consolidated statements of operations and comprehensive loss included total compensation expense from stock-based payment awards as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Compensation expense included in:
Research and development	$	2,998	$	3,382	$	9,640	$	14,820
General and administrative		3,430		4,064		11,484		14,020
Total	$	6,428	$	7,446	$	21,124	$	28,840

At September 30, 2025, there was approximately $24.5 million of unrecognized compensation expense related to outstanding equity awards under the 2023 Plan, the 2016 Plan, the inducement awards and the ESPP that is expected to be recognized as expense over a weighted average period of approximately 1.58 years.

During the three and nine months ended September 30, 2025, the Company modified certain stock options in connection with the resignation of board members and terminations of executives resulting in incremental expense of $0.1 million and $0.3 million, respectively.

During the three and nine months ended September 30, 2024, the Company modified certain stock options and restricted stock awards in connection with the resignation of board members and terminations of executives resulting in a reduction of expense of $0.5 million and incremental expense of $5.2 million, respectively.

EyePoint Pharmaceuticals, Inc. 10-Q