The 2016 Long-Term Incentive Plan (the 2016 Plan), approved by the Company’s stockholders on December 12, 2016 provided for the issuance of up to 300,000 shares of the Company’s common stock plus any additional shares of the Company’s common stock that were available for grant under the 2008 Incentive Plan (the 2008 Plan). Stockholders approved amendments to the 2016 Plan on June 25, 2019, June 22, 2021, and November 10, 2022, respectively, which increased the number of shares authorized for issuance by 1,100,000, 2,500,000, and 2,000,000 shares, respectively. At March 31, 2023, a total of approximately 156,000 shares were available for new awards.

Starting March 2022, the Company also 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 the 2016 Plan or the 2008 Plan, the grants are subject to and governed by the terms and conditions of the 2016 Plan.

The following table provides a reconciliation of stock option activity under the Company’s equity incentive plans and for inducement awards for the three months ended March 31, 2023:


	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at January 1, 2023		4,082,555		$	13.79
Granted		2,003,895			3.27
Exercised		—			—
Forfeited		(17,354	)		9.04
Expired		—			—
Outstanding at March 31, 2023		6,069,096		$	10.33		8.33	$	6
Exercisable at March 31, 2023		2,075,691		$	16.73		6.63	$	—

The Company has granted stock options with 25% of the option vesting after one year 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 509,000 shares of the Company’s common stock vested during the three months ended March 31, 2023. Starting February 2021, the Company (i) ceased vesting ratable monthly over four years and (ii) retained 25% vesting after one year followed by ratable monthly vesting over the remaining three years.

The following table summarizes information about employee, non-executive director and external consultant stock options for the three months ended March 31, 2023 (in thousands except per share amount):


	Three Months
	Ended
	March 31, 2023
Weighted average grant date fair value per share	$	2.28
Total cash received from exercise of stock options		—
Total intrinsic value of stock options exercised		—

Time-vested restricted stock units (RSUs) issued to date under the 2016 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 for the three months ended March 31, 2023:


	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2023		509,170		$	10.81
Granted		—			—
Vested		(196,102	)		11.12
Forfeited		(2,051	)		10.74
Nonvested at March 31, 2023		311,017		$	10.62

At March 31, 2023, the weighted average remaining vesting term of the RSUs was 1.36 years.

On June 25, 2019, the Company’s stockholders approved the adoption of the EyePoint Pharmaceuticals, Inc. 2019 Employee Stock Purchase Plan (the ESPP) and authorized up to 110,000 shares of common stock reserved for issuance to participating employees. At the Company’s Annual Meeting of Stockholders held on June 22, 2021, the Company’s stockholders approved an amendment to the ESPP to increase the number of shares authorized for issuance by 250,000 shares. 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-month period ended March 31, 2023, 63,721 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 months ended March 31, 2023 and 2022, the compensation expense from ESPP shares was approximately $47,000 and $33,000.

The Company’s condensed consolidated statements of comprehensive loss included total compensation expense from stock-based payment awards for the three months ended March 31, 2023 and 2022, respectively, as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Compensation expense included in:
Research and development	$	1,240	$	1,473
Sales and marketing		430		409
General and administrative		1,380		1,595
	$	3,050	$	3,477

At March 31, 2023, there was approximately $11.9 million of unrecognized compensation expense related to outstanding equity awards under the 2016 Plan, the 2008 Plan, the inducement awards and the ESPP that is expected to be recognized as expense over a weighted average period of approximately 1.7 years.