What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-18 compared with 2025-03-17 · 53 added, 49 removed, 152 unchanged (40% of the section changed)

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Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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.

We are a clinical-stage biotechnology company with a proprietary cell therapy platform that has the potential to treat CKD using a patient’s own cells.

Our approach seeks to redefine the treatment of CKD, shifting the emphasis away from management of kidney failure to the preservation of kidney function.

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.

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.

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.

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

the last subject visit occurred in January 2023 and the clinical study report was submitted to the FDA in December 2023.

Rilparencel has, to date, been generally well tolerated by subjects with moderate to severe CKD in Phase 1 and 2 clinical testing.

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.

ProKidney’s lead product candidate, rilparencel (also known as REACT®), is a first-in-class, patented, proprietary autologous cell therapy being evaluated in the ongoing Phase 3 REGEN-006 (PROACT 1) for its potential to preserve kidney function in patients with advanced CKD and type 2 diabetes.

Rilparencel received RMAT designation from the FDA.

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, establishing and protecting our intellectual property portfolio, developing and progressing rilparencel, raising capital, sponsoring clinical trials, establishing arrangements with third parties for the manufacture of component materials, and providing general and administrative support for these operations.

We do not have any product candidates approved for sale and have not generated any revenue from product sales.

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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.

Prior to the Domestication and other Restructuring transactions, 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.

The Domestication and other Restructuring transactions resulted in the Company becoming subject to corporate level income taxes in the U.S.

Further, the Post-Domestication Reorganization, which was effective on September 1, 2025, resulted in certain of the Company’s subsidiaries becoming part of a consolidated group and ProKidney-US becoming disregarded as separate from its owner, “PK Holdings” for U.S.

federal income tax purposes

Results of Operations

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Net loss before taxes

Income tax (benefit) expense

Income tax expense (benefit)

Net loss before noncontrolling interest

Net loss attributable to noncontrolling interest

Net loss available to Class A ordinary shareholders

Net loss available to Class A common stockholders

The increase in revenue of approximately $0.8 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by the inclusion of a full year of leasing activities for the year ended December 31, 2025.

For the year ended December 31, 2024, revenue reflected approximately one month of leasing activities.

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;

The decrease in research and development expenses of approximately $13.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by the following:

• decreases in clinical study costs of $18.1 million from our clinical trials that have been completed or terminated;

• decreases in professional fees of $3.3 million related to the remediation of quality and manufacturing compliance deficiencies during the 2024 period;

• decreases in equity-based compensation of $0.6 million driven by forfeitures of awards and lower fair value of new awards granted;

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.

• increases in cash-based compensation and recruitment costs of approximately $6.1 million related to the hiring of additional employees;

• increase in clinical study costs and cost of manufacturing materials for our ongoing Phase 3 trial (PROACT 1) of $2.4 million driven by continued enrollment and increased activities for the trial.

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;

• 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 decrease in general and administrative expenses of approximately $4.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by the following:

• decrease in impairment charges of $5.0 million related to our Greensboro facility as the original charge was recognized in the 2024 period;

• decrease in equity-based compensation of approximately $3.4 million due to forfeitures of awards and lower fair value of recent awards;

• increase in professional fees and other operating expenses of approximately $3.8 million driven by ongoing initiatives in 2025 including the domestication;

• increases in cash-based compensation and recruitment costs of approximately $0.5 million due to the hiring of additional personnel.

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.

The decrease in interest income of approximately $5.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, was driven by lower investment balances and interest rates for the 2025 period.

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.

The increase in income tax expense of approximately $1.0 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, was driven primarily by tax benefits recognized in the year ended December 31, 2024 due to the effects of the change in timing of deductions for qualified research and development costs.

Liquidity and Capital Resources

Sources of liquidity

Since our inception, we have not recognized any revenue and have incurred operating losses and negative cash flows from our operations.

Since our inception, we have incurred operating losses and negative cash flows from our operations.

We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all.

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.

In January 2024, the Company entered into an Open Market Sale Agreement SM (“Sales Agreement”) with Jefferies LLC as the sales agent, pursuant to which the Company may offer and sell, from time to time, through Jefferies, shares of its Class A ordinary shares, par value $0.0001 per share, having an aggregate offering price of up to $100.0 million by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act (the “ATM Offering”).

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.

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.

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.

From our inception through December 31, 2025, we funded our operations primarily through capital contributions from the holders of PK Holdings, the proceeds obtained through the Business Combination and related private placement financing and public equity offerings.

In January 2024, the Company entered into an Open Market Sale Agreement SM (the “2024 Sales Agreement”) with Jefferies LLC as the sales agent, pursuant to which the Company may offer and sell, from time to time, through Jefferies, shares of its Class A common stock, par value $0.0001 per share, having an aggregate offering price of up to $100.0 million by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act (the “ATM Offering”).

The shares were offered and sold pursuant to the Company’s shelf registration statement on Form S-3.

During the year ended December 31, 2024, we sold 4,170,791 shares of our Class A common stock under the 2024 Sales Agreement for net proceeds of approximately $7.7 million.

In July 2025, we terminated the 2024 Sales Agreement and entered into a new Open Market Sale Agreement SM (“2025 Sales Agreement”) with Jefferies, as the sales agent, pursuant to which we may offer and sell, from time to time, through Jefferies, shares of our Class A common stock having an aggregate offering price of up to $200.0 million by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act.

The shares are offered and sold pursuant to our shelf registration statement on Form S-3.

During the year ended December 31, 2025, we sold 7,452,342 shares of our Class A common stock under the 2025 Sales Agreement for net proceeds of approximately $24.2 million.

As of December 31, 2025, there was approximately $175.0 million remaining available to be sold under the 2025 Sales Agreement.

In June 2024, the Company sold 46,886,452 of its Class A common stock in an underwritten public offering at a price of $2.42 per share.

Additionally, in June 2024, the Company sold 11,030,574 of its Class A common stock to certain investment entities at a price of $2.42 per share in a concurrent registered direct offering pursuant to share purchase agreements.

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.

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• seek to identify and develop additional product candidates;

• make investment in developing internal manufacturing capabilities;

• make investments in developing internal manufacturing capabilities;

• seek regulatory and marketing approvals for our product candidates.

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Net cash flows used in operating activities

Net cash flows provided by (used in) investing activities

Net cash flows provided by (used in) financing activities

Net cash flows provided by investing activities

Net cash flows provided by financing activities

Net change in cash and cash equivalents

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Net cash used in operating activities was approximately $120.1 million for the year ended December 31, 2025, reflecting a net loss before noncontrolling interest of approximately $151.6 million.

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.

Such uses were offset by changes in working capital of approximately $1.3 million and non-cash charges and gains on investments totaling $30.2 million.

The non-cash charges primarily consisted of equity-based compensation expense of $25.3 million, depreciation and amortization expense of $6.6 million, loss on disposal of equipment of $1.4 million and an impairment charge of $0.3 million.

Gains on investments in marketable securities were $3.4 million.

The changes in working capital primarily relate to the timing of payments made to our vendors for services performed.

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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 $30.8 million, depreciation and amortization expense of $3.9 million and gains on investments in marketable securities of $6.0 million.

The changes in working capital primarily relate to the timing of payments made to our vendors for services performed.

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.

The approximate $6.2 million decrease in cash used in operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by a decrease in net loss before noncontrolling interest after adjusting for the non-cash charges and gains on investments of approximately $8.9 million offset by the impact of changes in working capital driven by the timing of payments to our vendors.

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.

The cash provided by investment activities during the year ended December 31, 2024 was primarily related to net investment activity of $49.9 million partially offset by the purchase of two facilities in Winston-Salem, North

Carolina that we occupied subject to real estate leases for $22.5 million.

The cash used in investing activities during the year ended December 31, 2023 was primarily related to the investment of a portion of the proceeds raised through the Business Combination in marketable securities coupled with the purchase of land and a building in Greensboro, North Carolina for $25.5 million.

Net cash provided by investing activities were approximately $104.0 million and $20.4 million for the years ended December 31, 2025 and 2024, respectively.

The cash provided by investment activities during the year ended December 31, 2025 was primarily related to net investment activity of $100.9 million and the sale of our facility in Greensboro, North Carolina, which

provided net proceeds of $18.2 million.

These were partially offset by capital spending for facility expansion of $15.2 million.

The cash provided by investing activities during the year ended December 31, 2024 was primarily related to net investment activity of $49.9 million partially offset by the purchase of two facilities in Winston-Salem, North Carolina for $22.5 million.

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 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.

Net cash provided by financing activities was $25.6 million and $144.4 million for the years ended December 31, 2025 and 2024, respectively.

The cash provided by financing activities for the years ended December 31, 2025 and 2024 was related to the sale of our Class A common stock and exercise of employee stock options.

Critical Accounting Policies and Significant Judgments and Estimates

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JOBS Act Accounting Election

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”).

We are an emerging growth company, as defined in the JOBS Act.

The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards applicable to public companies, allowing them to delay the adoption of those standards until those standards would otherwise apply to private companies.

We have elected to use this extended transition period under the JOBS Act.

As a result, our consolidated financial statements may not be comparable to the financial statements of companies that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our ordinary shares less attractive to investors.

Quantitative and Qualitative Disclosures About Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis