Kodiak Sciences Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 100 A reconciliation of the Company’s effective tax rate to the statutory U.S. federal rate is as follows: December 31, 2022 December 31, 2021 December 31, 2020 Federal statutory income tax rate............................................................ 21.0% 21.0% 21.0% State taxes ............................................................................................... 5.8 6.7 4.3 Foreign tax rate differential .................................................................... (4.7) (7.7) (7.9) Change in valuation allowance............................................................... (20.0) (78.3) (17.3) Stock-based compensation...................................................................... (3.9) (1.2) 6.7 Research tax credit.................................................................................. 1.8 2.4 3.8 Sale of future royalties............................................................................ — 0.1 (9.4) Section 162(m)........................................................................................ — (0.8) (1.2) Intangible valuation ................................................................................ — 57.8 — Provision for income taxes ..................................................................... 0.0% 0.0% 0.0% The Company recognizes benefits of uncertain tax positions if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits, as the largest amount of benefit that is more likely than not to be realized upon the ultimate settlement. As of December 31, 2022, 2021 and 2020, none of the unrecognized tax benefits would affect income tax expense with consideration of the valuation allowance. The Company does not anticipate the uncertain tax positions will materially change in the next 12 months. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. The beginning and ending unrecognized tax benefits amounts are as follows (in thousands): December 31, 2022 December 31, 2021 December 31, 2020 Unrecognized tax benefits at beginning of period................................... $ 6,729 $ 4,650 $ 1,838 Increases related to current year tax positions..................................... 849 2,079 2,812 Unrecognized tax benefits at end of period............................................. $ 7,578 $ 6,729 $ 4,650 The Company files income tax returns in the United States and Switzerland. The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions. All tax returns remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits. 10. Preferred Stock As of December 31, 2022 and 2021, the Company’s amended and restated certificate of incorporation authorized the Company to issue up to 10,000,000 shares of preferred stock at the par value of $0.0001 per share. As of December 31, 2022, there are no shares of the Company’s preferred stock issued or outstanding.