Kodiak Sciences Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 119 Tenant Improvement Allowance Payable In May 2013, the Company entered into a tenant improvement allowance agreement with its landlord. The agreement allowed the Company to draw down $0.3 million for tenant improvements related to the office lease over the period from the execution of the agreement to October 2018. The interest rate is 8% per year over the lease period. This tenant improvement allowance was repaid in October 2018. In March 2016, the Company entered into a lease amendment, under which the Company is allowed to draw down an additional allowance of $0.4 million for tenant improvements related to the office lease over the period from the execution of the agreement to October 2023. The interest rate is 8% per year over 10 years. Principal and interest are payable on the first day of every month. As of December 31, 2018 and 2017, the current portion of the tenant improvement allowance payable in accrued and other current liabilities was less than $0.1 and $0.1 million, respectively. As of December 31, 2018 and 2017, the non-current portion of the tenant improvement allowance payable in other liabilities was $0.3 million and $0.4 million, respectively. Legal Proceedings From time to time, the Company may become involved in legal proceedings arising from the ordinary course of its business. Management is currently not aware of any matters that could have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company records a legal liability when it believes that it is both probable that a liability may be imputed, and the amount of the liability can be reasonably estimated. Significant judgment by the Company is required to determine both probability and the estimated amount. Indemnification To the extent permitted under Delaware law, the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’s request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not specified in the agreements; however, the Company has director and officer insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal. 8. Income Taxes The Company has not recorded any income tax expense. The Company has a net operating loss and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets. The components of loss before income taxes were as follows (in thousands): Year Ended December 31, 2018 Year Ended December 31, 2017 Year Ended December 31, 2016 United States ............................................................................................. $ (17,273) $ (3,240) $ (14,632) Foreign ...................................................................................................... (24,170) (24,696) (2,500) Total loss before income taxes.................................................................. $ (41,443) $ (27,936) $ (17,132)