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What changed in PROKIDNEY CORP.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PROKIDNEY CORP.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+70 added−69 removedSource: 10-K (2024-12-31) vs 10-K (2024-03-22)

Top changes in PROKIDNEY CORP.'s 2024 10-K

70 paragraphs added · 69 removed · 52 edited across 1 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

52 edited+18 added−17 removed48 unchanged
Biggest changeComparison of Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022 (in thousands): Years Ended December 31, 2023 2022 Change Operating expenses: Research and development $ 106,707 $ 82,070 $ 24,637 General and administrative 44,815 70,937 (26,122 ) Total operating expense 151,522 153,007 (1,485 ) Loss from operations (151,522 ) (153,007 ) 1,485 Interest income 22,083 5,983 16,100 Interest expense (12 ) (215 ) 203 Net loss before taxes (129,451 ) (147,239 ) 17,788 Income tax expense 5,996 896 5,100 Net loss before noncontrolling interest (135,447 ) (148,135 ) 12,688 Net loss attributable to noncontrolling interest (99,979 ) (40,103 ) (59,876 ) Net loss available to Class A ordinary shareholders $ (35,468 ) $ (108,032 ) $ 72,564 Research and development expenses The increase in research and development expenses of approximately $24.6 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by the following: • increases in cost of clinical trials of $16.6 million related primarily to the progress of our Phase 3 program as PROACT 1 continued to enroll additional subjects and as PROACT 2 continued to incur costs related to start-up activities; • increases in cash-based compensation and recruitment costs of approximately $11.0 million related to the hiring of additional employees in 2023; • increases in equity-based compensation costs of approximately $6.2 million due to additional awards granted to employees during 2023; • increases in other research and development costs related to professional fees of approximately $1.6 million; • increases in facilities cost of $1.9 million driven by expansion of facilities for manufacturing and research work; and • increases in materials cost of $1.2 million driven by higher enrollment in our clinical trials; offset by: • decreases in costs of $14.1 million related to equity-based payments for services rendered by a third-party in prior periods, as the cost of those payments was adjusted to the fair value of the awards issued upon their grant date in 2022.
Biggest changeComparison of Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 Change Revenue $ 76 $ – $ 76 Operating expenses: Research and development 127,668 106,707 20,961 General and administrative 56,084 44,815 11,269 Total operating expense 183,752 151,522 32,230 Loss from operations (183,676 ) (151,522 ) (32,154 ) Interest income 19,752 22,083 (2,331 ) Interest expense (9 ) (12 ) 3 Net loss before taxes (163,933 ) (129,451 ) (34,482 ) Income tax (benefit) expense (598 ) 5,996 (6,594 ) Net loss before noncontrolling interest (163,335 ) (135,447 ) (27,888 ) Net loss attributable to noncontrolling interest (102,149 ) (99,979 ) (2,170 ) Net loss available to Class A ordinary shareholders $ (61,186 ) $ (35,468 ) $ (25,718 ) Research and development expenses The increase in research and development expenses of approximately $21.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by the following: • increases in cash-based compensation and recruitment costs of approximately $12.2 million related to the hiring of additional employees in 2024; • increases in cost of clinical study conduct and clinical product manufacturing materials of $7.7 million related primarily to the progress of our Phase 3 study as we resumed enrollment in PROACT 1; • increases in operational costs of $4.5 million as we continue to expand operations to support our Phase 3 clinical reflecting costs related to the remediation of quality management systems and processes in the first half of 2024; partially offset by • decreases in equity-based compensation costs of approximately $3.4 million driven by awards forfeited by terminated employees as well as lower valuations for awards granted in 2024.
Financial Operations Overview Revenue We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all.
Financial Operations Overview Revenue We have not generated any revenue from the sale of products since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all.
General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits and equity-based compensation expenses for individuals involved in our executive, finance, corporate and administrative functions, as well as expenses for outside professional services, including legal, audit, accounting and tax-related services and other consulting fees, facility-related expenses, which include depreciation costs and other allocated expenses for rent and maintenance of facilities, insurance costs, recruiting costs, travel expenses and other general administrative expenses.
General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits and equity-based compensation expenses for individuals involved in our executive, finance, corporate and administrative functions, as well as expenses for outside professional services, including legal, audit, accounting and tax-related services and other consulting fees, facility-related expenses, which include depreciation costs and other allocated expenses for rent and maintenance of facilities, insurance costs, recruiting costs, travel expenses and other general and administrative expenses.
Not applicable. PART II Item 5 . Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol “PROK”. Dividend Policy No cash dividends have ever been declared or paid on the common equity to date by the Company.
Not applicable. PART II Item 5 . Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 87 Market Information Our Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol “PROK”. Dividend Policy No cash dividends have ever been declared or paid on the common equity to date by the Company.
In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product that we do not expect to be commercially available for at least several years, if ever. 98 As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.
In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product that we do not expect to be commercially available for at least several years, if ever. As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.
Developing pharmaceutical products, including conducting clinical trials, is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for any product candidates or generate revenue from the sale of any product candidate for which we may obtain marketing approval.
Developing pharmaceutical products, including conducting clinical trials, is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for any product candidates or generate revenue from the sale of any product candidate for which 92 we may obtain marketing approval.
This is due to the numerous risks and uncertainties associated with developing product candidates, many of which are outside of our control, including the uncertainty of: • the timing and progress of non-clinical and clinical development activities; • the number and scope of non-clinical and clinical programs we decide to pursue; • our ability to maintain our current research and development programs and to establish new ones; • establishing an appropriate safety profile; • the number of sites and patients involved in our clinical trials; • the countries in which the clinical trials are conducted; • per patient trial costs; • successful patient enrollment in, and the initiation of, clinical trials, as well as drop out or discontinuation rates; • the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA and comparable foreign regulatory authorities; • the number of trials required for regulatory approval; • the timing, receipt and terms of any regulatory approvals from applicable regulatory authorities; • our ability to establish new licensing or collaboration arrangements; • the performance of our future collaborators, if any; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; • significant and changing government regulation and regulatory guidance; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; • obtaining, maintaining, defending and enforcing patient claims or other intellectual property rights; • the potential benefits of REACT over other therapies; • launching commercial sales of REACT, if approved, whether alone or in collaboration with others; and • maintaining a continued acceptable safety profile of REACT following approval.
This is due to the numerous risks and uncertainties associated with developing product candidates, many of which are outside of our control, including the uncertainty of: • the timing and progress of nonclinical and clinical development activities; • the number and scope of nonclinical and clinical programs we decide to pursue; • our ability to maintain our current research and development programs and to establish new ones; • establishing an appropriate safety profile; • the number of sites and patients involved in our clinical trials; • the countries in which the clinical trials are conducted; • per patient trial costs; • successful patient enrollment in, and the initiation of, clinical trials, as well as drop out or discontinuation rates; • the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA and comparable foreign regulatory authorities; • the number of trials required for regulatory approval; • the timing, receipt and terms of any regulatory approvals from applicable regulatory authorities; • our ability to establish new licensing or collaboration arrangements; • the performance of our future collaborators, if any; • establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; • significant and changing government regulation and regulatory guidance; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; • obtaining, maintaining, defending and enforcing patient claims or other intellectual property rights; • the potential benefits of rilparencel over other therapies; • launching commercial sales of rilparencel, if approved, whether alone or in collaboration with others; and • maintaining a continued acceptable safety profile of rilparencel following approval.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2023, our disclosure controls and procedures were effective in causing material information relating to us (including our consolidated subsidiaries) to be recorded, processed, summarized and reported by management on a timely basis and to ensure the quality and timeliness of our public disclosures with SEC disclosure obligations.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, our disclosure controls and procedures were effective in causing material information relating to us (including our consolidated subsidiaries) to be recorded, processed, summarized and reported by management on a timely basis and to ensure the quality and timeliness of our public disclosures with SEC disclosure obligations.
Income Tax (Expense) Benefit Income tax expense reflects federal and state taxes on income earned by our subsidiary that is organized as a C corporation for U.S. income tax purposes. Results of Operations In this section we discuss the results of our operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Income Tax (Expense) Benefit Income tax expense reflects federal and state taxes on income earned by our subsidiary that is organized as a C corporation for U.S. income tax purposes. Results of Operations In this section we discuss the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We have also established an information technology management committee which is led by our SVP, Information Technology, Chief Financial Officer, and Chief Legal Officer.
We have also established an information technology management committee which is led by our Chief Information Officer, Chief Financial Officer, and Chief Legal Officer .
If our development efforts for REACT or any other product candidates are successful and result in marketing approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from such agreements.
If our development efforts for rilparencel or any other product candidates are successful and result in marketing approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from such agreements.
In addition, since the closing of the Business Combination we have begun incurring additional costs associated with operating as a public company, including significant legal, audit, accounting, investor and public relations, regulatory, tax-related, director and officer insurance premiums and other expenses.
In addition, since the closing of the Business Combination we have been incurring additional costs associated with operating as a public company, including significant legal, audit, accounting, investor and public relations, regulatory, tax-related, director and officer insurance premiums and other expenses.
Since our inception, we have devoted substantially all of our resources to raising capital, organizing and staffing our Company, business and scientific planning, conducting discovery and research activities, acquiring or discovering product candidates, 94 establishing and protecting our intellectual property portfolio, developing and progressing REACT and preparing for clinical trials, establishing arrangements with third parties for the manufacture of component materials, and providing general and administrative support for these operations.
Since our inception, we have devoted substantially all of our resources to organizing and staffing our Company, business and scientific planning, conducting discovery and research activities, acquiring or discovering product candidates, establishing and protecting our intellectual property portfolio, developing and progressing rilparencel, raising capital and preparing for clinical trials, establishing arrangements with third parties for the manufacture of component materials, and providing general and administrative support for these operations.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. Management based this assessment on criteria described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. Management based this assessment on criteria described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934) as of December 31, 2023.
Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 94 15d-15(e) of the Securities Exchange Act of 1934) as of December 31, 2024.
We expect our expenses to increase substantially if, and as, we: • initiate and continue research and clinical development of our product candidates, including in particular our clinical trials for REACT; • incur third-party manufacturing costs to support our non-clinical studies and clinical trials of our product candidate and, if approved, its commercialization; • seek to identify and develop additional product candidates; • make investment in developing internal manufacturing capabilities; and • seek regulatory and marketing approvals for our product candidates.
We expect our expenses to increase substantially if, and as, we: • initiate and continue research and clinical development of our product candidates, including in particular our clinical trials for rilparencel; • incur third-party manufacturing costs to support our nonclinical studies and clinical trials of our product candidate and, if approved, its commercialization; • seek to identify and develop additional product candidates; • make investment in developing internal manufacturing capabilities; and • seek regulatory and marketing approvals for our product candidates.
For a discussion of the year ended December 31, 2022 compared to December 31, 2021, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 28, 2023.
For a discussion of the year ended December 31, 2023 compared to December 31, 2022, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 22, 2024.
Based on this assessment, management determined that as of December 31, 2023, we maintained effective internal control over financial reporting.
Based on this assessment, management determined that as of December 31, 2024, we maintained effective internal control over financial reporting.
Our Audit Committee of the Board oversees our cybersecurity risk and receives reports from our SVP, Information Technology on a quarterly basis. This includes existing and new cybersecurity risks, status on how management is addressing and/or 92 mitigating those risks, cybersecurity and data privacy incidents (if any), status on key information security initiatives, industry trends, and other areas of importance.
Our Audit Committee of the Board oversees our cybersecurity risk and receives reports from our Chief Information Officer on a quarterly basis. This includes existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any), status on key information security initiatives, industry trends, and other areas of importance.
Such uses were offset by changes in working capital of approximately $16.7 million and non-cash charges and gains on investments of $28.7 million. The non-cash charges primarily consisted of equity-based compensation expense of $30.8 million and depreciation and amortization expense of $3.9 million.
Such uses were offset by changes in working capital of approximately $16.7 million and non-cash charges and gains on investments of $28.7 million. The non-cash charges primarily consisted of equity-based compensation expense of $30.8 million, depreciation and amortization expense of $3.9 million and gains on investments in marketable securities of $6.0 million.
Expenses Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with our research and development activities, including the development of REACT.
Expenses Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with our research and development activities, including the development of rilparencel.
Because REACT is a personalized treatment composed of cells prepared from a patient’s own kidney, there is no need for treatment with immunosuppressive therapies, which are required during a patient’s lifetime when a patient receives a kidney transplant from another, allogeneic donor.
Because rilparencel is a personalized treatment composed of cells prepared from a patient’s own kidney, there is no need for treatment with immunosuppressive therapies that are required during a patient’s lifetime when a patient receives a kidney transplant from another, allogeneic donor.
Income tax expense The increase in income tax expense of approximately $5.1 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, was driven primarily by the increase in the valuation allowance which was impacted by the timing of deductions for qualified research and development costs.
Income tax expense The increase in income tax expense of approximately $6.6 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, was driven primarily by the increase in the valuation allowance which was impacted by the timing of deductions for qualified research and development costs.
Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B . Other Information.
From our inception through December 31, 2023, we funded our operations primarily through capital contributions from the holders of PKLP and the proceeds obtained through the Business Combination and related private placement financing.
From our inception through December 31, 2024, we funded our operations primarily through capital contributions from the holders of PKLP, the proceeds obtained through the Business Combination and related private placement financing and public equity offerings.
Security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation. Incidents are evaluated to determine materiality as well as operational and business impact and reviewed for privacy impact. As part of the above processes, we engage external auditors and consultants to assess our internal cybersecurity programs and compliance with applicable practices and standards.
Additionally, we engage external auditors and consultants to assess our internal cybersecurity program and our compliance with applicable practices and standards. Security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation. Incidents are evaluated to determine materiality as well as operational and business impact and reviewed for privacy impact.
The approximate $13.0 million increase in cash used in operating activities for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by an increase in net loss before noncontrolling interest after adjusting for the non-cash charges and gains on investments of approximately $36.1 million offset by the impact of changes in working capital driven by the timing of payments to our vendors.
The approximate $36.3 million increase in cash used in operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by an increase in net loss before noncontrolling interest after adjusting for the non-cash charges and gains on investments of approximately $24.3 million coupled with the impact of changes in working capital driven by the timing of payments to our vendors.
Financing Activities Net cash (used in) and provided by financing activities was $(9.6 million) and $548.5 million for the years ended December 31, 2023 and 2022, respectively.
Financing Activities Net cash provided by (used in) financing activities was $144.4 million and $(9.6 million) for the years ended December 31, 2024 and 2023, respectively.
The changes in working capital primarily relate to the timing of payments made to our vendors for services performed. Net cash used in operating activities was approximately $77.1 million for the year ended December 31, 2022, reflecting a net loss before noncontrolling interest of $148.1 million primarily driven by changes in working capital of approximately $6.5 million.
The changes in working capital primarily relate to the timing of payments made to our vendors for services performed. Net cash used in operating activities was approximately $90.1 million for the year ended December 31, 2023, reflecting a net loss before noncontrolling interest of approximately $135.4 million.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized, even when there is no alternative future use for the research and development. The capitalized amounts are recorded as prepaid clinical and are expensed as the related goods are delivered or the services are performed.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized, even when there is no alternative future use for the research and development.
Investing Activities Net cash used in investing activities were approximately $330.0 million and $1.7 million for the years ended December 31, 2023 and 2022, respectively.
Investing Activities Net cash provided by (used in) investing activities were approximately $20.4 million and $(330.0 million) for the years ended December 31, 2024 and 2023, respectively.
Cash Flows Cash Flows for the Years Ended December 31, 2023 and 2022 The following table provides information regarding our cash flows for the years ended December 31, 2023 and 2022 (in thousands): Years Ended December 31, 2023 2022 Net cash flows used in operating activities $ (90,069 ) $ (77,089 ) Net cash flows used in investing activities (329,983 ) (1,738 ) Net cash flows (used in) provided by financing activities (9,551 ) 548,521 Net change in cash and cash equivalents $ (429,603 ) $ 469,694 Operating Activities Net cash used in operating activities was approximately $90.1 million for the year ended December 31, 2023, reflecting a net loss before noncontrolling interest of approximately $135.4 million.
Cash Flows Cash Flows for the Years Ended December 31, 2024 and 2023 The following table provides information regarding our cash flows for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 Net cash flows used in operating activities $ (126,351 ) $ (90,069 ) Net cash flows provided by (used in) investing activities 20,414 (329,983 ) Net cash flows provided by (used in) financing activities 144,408 (9,551 ) Net change in cash and cash equivalents $ 38,471 $ (429,603 ) Operating Activities Net cash used in operating activities was approximately $126.4 million for the year ended December 31, 2024, reflecting a net loss before noncontrolling interest of approximately $163.3 million.
Additionally, we have leased a total of approximately 12,400 square feet of office and laboratory space in the Research Triangle Park area of North Carolina under leases expiring in July 2027 and March 2028, respectively. Finally, we have leased approximately 7,400 square feet of office space in Boston, Massachusetts under a lease that expires in January 2029.
We have also leased approximately 14,700 square feet of office and warehouse space in Winston-Salem under leases that expire in 2027. Additionally, we have leased a total of approximately 12,400 square feet of office and laboratory space in the Research Triangle Park area of North Carolina under leases expiring in July 2027 and March 2028, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. As used in this Annual Report on Form 10-K, the “Company”, the “Registrant”, “we” or “us” refer to ProKidney Corp. and its subsidiaries.
As used in this Annual Report on Form 10-K, the “Company”, the “Registrant”, “we” or “us” refer to ProKidney Corp. and its subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes that appear elsewhere in this report.
We expect that our general and administrative expenses will increase significantly for the foreseeable future as our business expands and we hire additional personnel to support our operations.
We expect that our general and administrative expenses will increase for the foreseeable future as our business expands and we hire additional personnel to support our operations. 90 Other Income (Expense) Other income consists primarily of interest income earned on cash, cash equivalents and marketable securities.
Overview We are a clinical-stage biotechnology business with a transformative proprietary cell therapy platform capable of treating multiple chronic kidney diseases using a patient’s own cells isolated from the patient intended for treatment.
Overview We are a clinical-stage biotechnology company with a transformative proprietary cell therapy platform that has the potential to treat multiple chronic kidney diseases using a patient’s own cells isolated from the patient intended for treatment. Our approach seeks to redefine the treatment of CKD, shifting the emphasis away from management of kidney failure to the preservation of kidney function.
REACT is a product that includes Selected Renal Cells (“SRC”) prepared from a patient’s own, autologous, renal cells. SRC are formulated into a product for reinjection into the patient’s kidneys using a minimally invasive outpatient procedure that can be repeated if necessary.
Our lead product candidate, rilparencel, is designed to preserve kidney function in a CKD patient’s diseased kidneys. Rilparencel is a product that includes autologous SRC prepared from a patient’s own kidney cells. SRC are formulated into a product for reinjection into the patient’s kidneys using a minimally invasive outpatient procedure that is repeatable, if necessary.
Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of any of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of REACT or potential future product candidates, if approved.
We are also unable to predict when, if ever, material net cash inflows will commence from the sale of rilparencel or potential future product candidates, if approved.
Holders As of March 21, 2024, we had approximately 61,621,330 Class A ordinary shares issued and outstanding held by 39 holders of record and approximately 167,722,201 Class B ordinary shares issued and outstanding held by three holders of record.
Holders As of March 17, 2025, we had approximately 129,536,121 Class A ordinary shares issued and outstanding held by 41 holders of record and approximately 163,161,528 Class B ordinary shares issued and outstanding held by three holders of record.
These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error and mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of controls.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of controls.
We have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.
We expect that our existing cash, cash equivalents and marketable securities held at December 31, 2024, will enable us to fund our operating expenses and capital expenditure requirements into mid-2027. We have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.
Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. 100 Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, with the Company have been detected.
Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.
Such uses were partially offset by non-cash charges of $77.5 million. The non-cash charges primarily consisted of equity-based compensation expense of $74.5 million and depreciation and amortization expense of $3.0 million. The changes in working capital primarily relate to the timing of payments made to our vendors for services performed.
Such uses were offset by changes in working capital of approximately $4.0 million and non-cash charges and gains on investments of $33.0 million. The non-cash charges primarily consisted of equity-based compensation expense of $29.4 million, depreciation and amortization expense of $5.4 million, an impairment charge of $5.3 million and gains on investments in marketable securities of $7.0 million.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes that appear elsewhere in this report. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, assumptions and beliefs.
In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, assumptions and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.
REACT has been generally well tolerated by subjects with moderate to severe DKD in Phase 1 and 2 clinical testing to date. We also recently completed a Phase 1 clinical trial for REACT in subjects with congenital anomalies of the kidney and urinary tract (“CAKUT”).
Rilparencel has, to date, been generally well tolerated by subjects with moderate to severe CKD in Phase 1 and 2 clinical testing.
Interest income The increase in interest income of approximately $16.0 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, was driven by interest received on higher average cash and investments in marketable debt securities balances coupled with higher interest rates.
Interest income The decrease in interest income of approximately $2.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, was driven by interest received on lower average cash and investments in marketable debt securities balances as a result of ongoing research and development and general and administrative expenses, offset by $136.6 million of proceeds from a public offering in June 2024.
This includes 1) defined roles and incident response initiation processes, 2) incident detection and analysis, 3) containment, eradication and recovery, and 4) post-incident analysis. Such incident responses and related matters of cybersecurity are overseen by leaders from our Information Technology, Manufacturing, Clinical Operations, Regulatory and Legal teams.
This includes 1) defined roles and incident response initiation processes, 2) incident detection and analysis, 3) containment, eradication and recovery, and 4) post-incident analysis.
We are currently conducting a Phase 3 development program and multiple Phase 2 clinical trials for REACT in subjects with moderate to severe diabetic kidney disease (“DKD”). REACT has received regenerative medicine advanced therapy (“RMAT”) designation from the United States Food and Drug Administration (the “FDA”).
We are currently conducting a Phase 3 development program and an ongoing Phase 2 clinical trial for rilparencel in subjects with moderate to severe CKD and diabetes. Rilparencel has received RMAT designation from the FDA.
General and administrative expenses The decrease in general and administrative expenses of approximately $26.1 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by the following: • decreases in equity-based compensation of approximately $33.0 million related to the recognition of compensation cost in 2022 for Class B-1 Units sold at less than their fair value to employees, board members and other service providers of the Company; 97 • decreases in costs associated with the Business Combination, including certain insurance costs of approximately $4.4 million; • decreases in equity-based compensation expense of approximately $2.7 million which was driven by the reversal of equity-based compensation expense for unvested awards granted to terminated employees; offset by: • increases in legal and professional fees of approximately $7.3 million attributable, in part, to operating as a public company and marketing strategy; • increases in cash-based compensation and recruitment costs of approximately $4.7 million due to the hiring of additional personnel and severance costs incurred for terminated employees; and • increases in other general and administrative costs to support expanded operations of approximately $2.0 million.
General and administrative expenses The increase in general and administrative expenses of approximately $11.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by the following: • increases in cash-based compensation and recruitment costs of approximately $5.4 million due to the hiring of additional personnel and severance costs incurred for terminated employees; 91 • the recognition of an impairment charge of $5.3 million related to our Greensboro facility; • increases in equity-based compensation costs of $1.9 million related to additional awards granted to employees during 2024; partially offset by • decreases in operating costs of $2.1 million related to decreased legal costs, professional fees and other operating costs.
The primary driver of the financing activities for the year ended December 31, 2023 was the repurchase 99 of Class A ordinary shares while the financing activities for the year ended December 31, 2022 reflect the proceeds received from the Business Combination.
The cash provided by financing activities for the year ended December 31, 2024 was related to the sale of our Class A ordinary shares while cash used in financing activities for the year ended December 31, 2023 was primarily related to the repurchase of our Class A ordinary shares.
We employ a range of tools and services, including regular network and endpoint monitoring, audits, vulnerability assessments and penetration testing to inform our risk identification and assessment. Additionally, we engage external auditors and consultants to assess our internal cybersecurity program and our compliance with applicable practices and standards.
Such incident responses and related matters of cybersecurity are overseen by leaders from our Information Technology, Manufacturing, Clinical Operations, Regulatory and Legal teams. 86 We employ a range of tools and services, including regular network and endpoint monitoring, audits, vulnerability assessments and penetration testing to inform our risk identification and assessment.
Research and development activities are central to our business model. We expect that our research and development expenses will increase significantly for the foreseeable future as REACT moves into later stages of clinical development. 95 The successful development of REACT and any product candidates we may develop in the future is highly uncertain.
The capitalized amounts are recorded as prepaid clinical and are expensed as the related goods are delivered or the services are performed. 89 Research and development activities are central to our business model. We expect that our research and development expenses will increase significantly for the foreseeable future as we continue to develop rilparencel and prepare for potential commercialization.
Removed
We have leased a total of approximately 110,700 square feet of office, manufacturing and research space in Winston-Salem, North Carolina, under leases that expire between September 2026 and August 2029. This includes office space in Winston-Salem, which serves as our principal executive offices.
Added
As part of the above processes, we engage external auditors and consultants to assess our internal cybersecurity programs and compliance with applicable practices and standards .
Removed
During 2023, we also purchased a 210,000 square foot facility and approximately 22 acres of land in Greensboro, North Carolina, in preparation for our commercial manufacturing needs in the event that REACT receives regulatory approval. Item 3 . Legal Proceedings. From time to time, we may become involved in litigation or other legal proceedings.
Added
In November 2024, we purchased two buildings in Winston-Salem, North Carolina, portions of which buildings we previously occupied pursuant to real estate leases. The two buildings represent total usable space of approximately 180,000 square feet. The portion of the buildings we currently occupy are used for office, manufacturing and research space.
Removed
Issuer Purchases of Equity Securities The following table reports information regarding repurchases of the Company’s Class A ordinary shares during the quarter ended December 31, 2023: 93 Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2023 – $ – – – November 1 - 30, 2023 7,256,367 $ 1.309 – – December 1 - 31, 2023 – $ – – – Total 7,256,367 – – (1) On November 19, 2023, ProKidney Corp.
Added
The remaining portion of these buildings are leased by us to third parties under lease agreements that expire between 2026 and 2029. As of December 31, 2024, we also owned a 210,000 square foot facility and approximately 22 acres of land in Greensboro, North Carolina. This property is being actively marketed for sale.
Removed
(the “Company”) entered into a Share Repurchase Agreement (the “Share Repurchase Agreement”) with SC PIPE Holdings LLC and SC Master Holdings, LLC (the “Selling Shareholders”), pursuant to which the Company agreed to repurchase an aggregate of its 7,256,367 Class A ordinary shares, par value $0.0001 per share from the Selling Shareholders for a purchase price per share of $1.309 (the “Share Repurchase”).
Added
Finally, we have leased approximately 7,400 square feet of office space in Boston, Massachusetts under a lease that expires in January 2029. Item 3 . Legal Proceedings. From time to time, we may become involved in litigation or other legal proceedings.
Removed
The aggregate price paid by the Company in the Share Repurchase is approximately $9.5 million. The Share Repurchase closed on November 21, 2023. The Share Repurchase was unanimously approved by ProKidney’s Board of Directors and was not made as part of any existing share repurchase program. Item 6 . RESERVED. Item 7 .
Added
Issuer Purchases of Equity Securities There were no repurchases of the Company’s Class A ordinary shares during the quarter ended December 31, 2024. Item 6 . RESERVED. Item 7 . Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Removed
Our actual results could differ materially from those discussed in the forward-looking statements.
Added
We also completed a Phase 1 clinical trial for rilparencel in subjects with CKD due to congenital anomalies of the kidney and urinary tract (“CAKUT”) for which 88 the last subject visit occurred in January 2023 and the clinical study report was submitted to the FDA in December 2023.
Removed
Our approach seeks to redefine the treatment of chronic kidney disease (“CKD”), shifting the emphasis away from management of kidney failure to the restoration, preservation or improvement of kidney function to stop or delay progression of CKD. Our lead product candidate, which we refer to as REACT (rilparencel), is designed to preserve kidney function in a CKD patient’s diseased kidneys.
Added
We do not have any product candidates approved for sale and have not generated any revenue from product sales. Other Trends and Uncertainties We continue to monitor the impacts of ongoing macroeconomic conditions and geopolitical events. An escalation of geopolitical tensions or the implementation of global trade restrictions could adversely impact our business, financial condition or results of operations.
Removed
We do not have any product candidates approved for sale and have not generated any revenue from product sales. Other Trends and Uncertainties In 2022, various central banks around the world (including the Federal Reserve in the United States) raised interest rates.
Added
Global conflicts, tariffs, labor disruptions, and regulations continue to create volatility in global markets and contribute to supply chain shortages and pricing volatility. We continue to actively collaborate with our suppliers to minimize shortages and reduce supply and price volatility.
Removed
While these rate increases have not had a significant adverse impact on the Company to date, the impact of such rate increases on the overall financial markets and the economy may adversely impact the Company in the future, including by making capital more difficult and costly to obtain on reasonable terms and when needed.
Added
Beginning in the year ended December 31, 2024, we recognized revenue related to leasing activities associated with existing lease agreements assumed through the acquisition of two buildings in Winston-Salem, North Carolina where we also conduct our manufacturing operations.
Removed
In addition, the global economy has experienced and is continuing to experience high levels of inflation and global supply chain disruptions. We continue to monitor these supply chain, inflation and interest rate factors, as well as the uncertainty resulting from the overall economic environment.
Added
The successful development of rilparencel and any product candidates we may develop in the future is highly uncertain. Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of any of our product candidates.
Removed
In addition, although we have no operations in or direct exposure to Russia, Belarus, Ukraine, Israel and Palestine, we have experienced limited constraints in availability and increasing costs required to obtain some materials and supplies due, in part, to the negative impact of the Russia-Ukraine military conflict on the global economy, which contributed to global supply chain disruptions.
Added
The shares are offered and sold pursuant to the Company’s shelf registration statement on Form S-3. As of December 31, 2024, we have sold $7.9 million worth of Class A ordinary shares under the Sales Agreement for net proceeds of $7.7 million, leaving $92.1 million available to be sold.
Removed
To date, our business has not been materially impacted by the conflict; however, as the conflict continues or worsens, it may adversely impact our business, financial condition or results of operations.
Added
In June 2024, the Company sold 46,886,452 of its Class A ordinary shares in an underwritten public offering at a price of $2.42 per share.
Removed
We also anticipate increased expenses associated with being a public company, including costs for legal, audit, accounting, investor and public relations, tax-related services, director and officer insurance, and regulatory costs related to compliance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) as well as listing standards applicable to companies listed on a national securities exchange. 96 Other Income (Expense) Other income consists primarily of interest income earned on cash, cash equivalents and marketable securities.
Added
Additionally, in June 2024, the Company sold 11,030,574 of its Class A ordinary shares to certain investment entities at a price of $2.42 per share in a concurrent registered direct offering pursuant to share purchase agreements.
Removed
The shares are offered and sold pursuant to the Company’s shelf registration statement on Form S-3. We expect that our existing cash, cash equivalents and marketable securities held at December 31, 2023, will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025.
Added
The net proceeds to the Company from the offerings were approximately $136.7 million, after deducting the underwriting discounts and commissions and offering expenses payable by the Company. The shares were offered and sold pursuant to the Company’s shelf registration statement on Form S-3.

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