Kodiak Sciences Inc. Notes to Consolidated Financial Statements 97 The Company estimated the fair value of the 2019 PSA using the Black-Scholes valuation model and significant assumptions included an expected volatility of 72%, a risk-free rate of 1.67%, expected dividend yield of 0%, and expected term of 6.31 years. In February 2021, the Company granted 190,831 performance-based stock options (“2021 Feb PSO”). These stock options vest 25% upon the achievement of specific clinical development milestones. The remaining awards then vest in 36 successive equal monthly installments after the performance criteria is achieved. The performance criteria for 2021 Feb PSOs was achieved in February 2022 and the awards became fully vested in 2025. The Company estimated the fair value of the 2021 Feb PSO using the Black-Scholes valuation model. Significant assumptions utilized in estimating the fair value of 2021 Feb PSO include an expected volatility of 66%, a risk-free rate of 0.66%, expected dividend yield of 0%, and expected term of 5.94 years. In August 2021, the Company granted 478,750 performance-based stock options (“2021 Aug PSO”). These stock options vest upon the achievement of specific clinical development milestones with the percentage of shares earned being dependent on the relative total stockholder return over the performance period. On December 31, 2023, the requisite performance criteria for the 2021 Aug PSO was not achieved and the shares were cancelled and returned to the plan. No stock-based compensation expense was recognized related to these stock options. 2018 Employee Share Purchase Plan In August 2018, the Company adopted the 2018 Employee Share Purchase Plan (“ESPP”), which became effective on the business day prior to the effectiveness of the registration statement relating to the IPO. A total of 460,000 shares of common stock were initially reserved for issuance under the ESPP. Each offering period is 12 months long, with two purchase periods. ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of (1) the fair market value per share of the common stock on the enrollment date or (2) the fair market value of the common stock on the exercise date. The Company issued 60,535 shares under the ESPP during the year ended December 31, 2025. Stock-Based Compensation Expense Stock-based compensation is classified in the consolidated statements of operations and comprehensive loss as follows (in thousands): Year Ended December 31, 2025 2024 2023 .......................................... Research and development $ 29,503 $ 24,162 $ 44,014 .......................................... General and administrative 29,360 36,051 44,542 .................................. Total stock-based compensation $ 58,863 $ 60,213 $ 88,556 The following is a summary of stock-based compensation expense by award type (in thousands): Year Ended December 31, 2025 2024 2023 ............................................................ LTPIP Program $ 47,585 $ 42,889 $ 53,710 ............................................................... Stock options 10,155 14,010 27,472 ............................................................................ RSUs 964 2,450 4,968 ............................................................................ ESPP 147 71 215 .......................................... Performance-based awards 12 793 2,191 .................................. Total stock-based compensation $ 58,863 $ 60,213 $ 88,556 As of December 31, 2025, the Company had $67.7 million of unrecognized compensation expense related to unvested share-based awards including options granted under the LTPIP Program and ESPP, which is expected to be recognized over a weighted-average period of 1.51 years. 12. Segment Information The Company operates and manages its business as one operating and reportable segment, which is the business of researching, developing and commercializing transformative therapeutics to treat a broad spectrum of retinal diseases. The