Kodiak Sciences Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 127 12. Redeemable Convertible Preferred Stock Warrants On August 11, 2017 with the issuance of the 2017 convertible notes (Note 6), the Company issued warrants to purchase 500,000 shares of Series B redeemable convertible preferred stock at an exercise price of $0.01 per share, including warrants issued to related parties to purchase an aggregate of 400,000 shares of Series B redeemable convertible preferred stock. Upon the conversion of the Series B redeemable convertible preferred stock into shares of common stock, the outstanding preferred stock warrants would convert into common stock warrants at an exercise price of $0.01 per share. The outstanding preferred stock warrants terminated at the earlier of August 11, 2022 and a change of control unless exercised. These warrants had a net exercise provision under which their holders may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net number of shares based on the fair market value of the Company’s stock at the time of exercise of the warrants after deduction of the aggregate exercise price. These warrants contained provisions for adjustment of the exercise price and number of shares issuable upon the exercise of warrants in the event of certain stock dividends, stock splits, reorganizations, reclassifications and consolidations. The estimated fair value of the preferred stock warrants on the date of issuance of $1.0 million was recorded as a debt discount. The preferred stock warrant liability had a fair value of $5.0 million immediately prior to conversion into common stock warrants and $2.3 million as of December 31, 2017. The change in fair value was recorded in the consolidated statements of operations and comprehensive loss. Upon the closing of the IPO, 500,000 preferred stock warrants automatically converted into common stock warrants and 100,000 of such warrants were exercised immediately following the closing of the IPO. The common stock warrants were reclassified as equity and the fair value on the date of reclassification was recorded to additional paid-in capital. As of December 31, 2018, 400,000 common stock warrants remained outstanding. 13. Derivative Instruments The redemption features of the 2017 convertible notes met the requirements for separate accounting and were accounted for as a single, compound derivative instrument. The 2017 derivative instrument is recorded at fair value, which was immaterial as of the issuance date, December 31, 2017 and immediately prior to closing of the IPO due to the probability of occurrence of the underlying events being remote. The redemption features of the 2018 convertible notes met the requirements for separate accounting and are accounted for as a single, compound derivative instrument. The 2018 derivative instrument was recorded at fair value, which was $6.6 million as of the issuance date and $8.6 million immediately prior to closing of the IPO. Upon effectiveness of the IPO, the fair value of the 2018 derivative instrument was recorded to additional paid-in capital and the derivative liability was extinguished. 14. Net Loss per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders which excludes shares which are legally outstanding, but subject to repurchase by the Company (in thousands, except share and per share data): Year Ended December 31, 2018 Year Ended December 31, 2017 Year Ended December 31, 2016 Numerator: Net loss attributable to common stockholders..................................... $ (41,443) $ (27,936) $ (17,132) Denominator: Weighted-average shares outstanding ................................................. 15,136,197 7,932,717 7,850,183 Less: weighted-average unvested restricted shares and shares subject to repurchase....................................................... (159,682) (417,381) (638,823) Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted.......................................... 14,976,515 7,515,336 7,211,360 Net loss per share attributable to common stockholders, basic and diluted..................................................................................... $ (2.77) $ (3.72) $ (2.38)