Stoke Therapeutics, Inc. Stock Compensation Disclosure

9. Stock-Based Compensation

In June 2019, the Company’s board of directors and stockholders approved the 2019 Equity Incentive Plan (the “2019 Plan”) which became effective on June 17, 2019 and replaced the Company’s 2014 Equity Incentive Plan (the “2014 Plan”). In addition to the shares of common stock reserved for future issuance under the 2014 Plan that were added to the 2019 Plan

upon its effective date, the Company initially reserved 2,200,000 shares of common stock for issuance under the 2019 Plan. The number of shares reserved for issuance under the Company’s 2019 Plan will increase automatically on January 1 of each of 2020 through 2029 by the number of shares equal to 4% of the aggregate number of outstanding shares of the Company’s common stock as of the immediately preceding December 31, or a lesser number as may be determined by the Company’s board of directors.

In April 2023, the Company’s board of directors adopted the Stoke Therapeutics, Inc. 2023 Inducement Plan (the “2023 Plan”). As permitted by Nasdaq stock market rules, the Company’s stockholders were not required to approve the Inducement Plan. The Inducement Plan provides for up to 1,000,000 shares of the Company’s common stock under awards granted to newly hired employees. An “award” is any right to receive common stock of the Company through nonstatutory stock options or restricted stock units.

As of December 31, 2024 there were no shares available for future issuance under the 2014 Plan, 2,410,682 shares were available for future issuance under the 2019 Plan and 19,100 shares were available under the 2023 Plan.

In December 2023, the Company offered employees with outstanding option grants that had an exercise price of greater than $14.00 per share the opportunity to exchange those options for a number of restricted stock units with a fair value equal to the then fair value of the options surrendered. As a result, there was no material incremental compensation expense associated with those RSUs issued in exchange for options. The RSUs vest annually over a period of one to two years. In the aggregate, 2,907,127 options were exchanged for 730,602 RSUs.

During the years ended December 31, 2024 and 2023, the Company granted options to purchase 2,797,612 and 1,599,227 shares of common stock to certain of its employees, and directors, respectively. The options vest over a period of up to four years. During the year ended December 31, 2024 and 2023, the Company granted 716,000 and 1,538,302 restricted stock units to its employees. The restricted stock units vest over a period of up to four years. During the year ended December 31, 2024, the Company granted 372,000 performance stock units to its employees. The performance stock units vest up to three years once the performance metrics have been achieved.

The weighted average grant date fair value for stock options granted during the years ended December 31, 2024 and 2023 was $10.00 and $6.13, respectively. The aggregate grant date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $28.0 million and $9.8 million, respectively. The aggregate intrinsic value of stock options exercised during the year ended December 31, 2024 and 2023 was $8.5 million and $0.9 million, respectively.

Stock-based compensation

The Company recorded stock-based compensation expense of $27.5 million and $25.3 million during the years ended December 31, 2024 and 2023, respectively. Of the total stock-based compensation recorded during the years ended 2024 and 2023, $13.4 million and $2.3 million, respectively, is related to restricted stock units. Additionally, for the year ended December 31, 2024, $2.5 million of stock-based compensation is related to performance stock units. There were no grants of performance stock units prior to 2024.

As of December 31, 2024, there was $29.9 million of unrecognized compensation cost related to unvested stock options granted under the 2019 and the 2023 Plans. Compensation expense is expected to be recognized over a weighted average period of 2.8 years as of December 31, 2024. As of December 31, 2024, there was $18.5 million of unrecognized stock-based compensation related to restricted stock units and $1.9 million related to performance stock units. The compensation expense for RSUs and PSUs is expected to be recognized over a weighted average period of 2.4 years.

2019 Employee stock purchase plan

In June 2019, the Company adopted the 2019 Employee Stock Purchase Plan (“ESPP”), which became effective on June 18, 2019. The Company initially reserved 315,000 shares of common stock for sale under the ESPP. At December 31, 2024, the Company had 1,591,602 shares available for issuance under the plan. The average grant date fair value per share under the plan was $9.87 for 2024. The total ESPP stock-based compensation expense for the year ended December 31, 2024 was $0.4 million and for the year ended December 31, 2023 was $0.3 million. The number of shares reserved for issuance under the ESPP will increase automatically on January 1st of each of the first ten calendar years following the first offering date by the number of shares equal to the lesser of 1% of the total outstanding shares of the Company’s common stock as of the immediately preceding December 31 or a lower amount determined by the Company’s board of directors. The aggregate number of shares issued over the term of the ESPP will not exceed 3,150,000 shares of the Company’s common stock.