ProKidney(US:PROK)2025-05-12 20:17PART I. Financial Information Item 1. Financial Statements For Q1 2025, ProKidney Corp. reported a net loss of $38.0 million, an increase from $35.3 million in Q1 2024, with first revenue of $230,000 from leasing activities Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $406.1 million from $441.1 million at year-end 2024, primarily due to reduced cash and marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $97,805 | $99,120 | | Marketable securities | $230,693 | $259,172 | | Total current assets | $359,662 | $395,884 | | Total assets | $406,061 | $441,073 | | Liabilities and Shareholders' Deficit | | | | Total current liabilities | $32,808 | $36,217 | | Total liabilities | $36,084 | $39,436 | | Total shareholders' deficit | $(998,553) | $(994,954) | | Total liabilities and shareholders' deficit | $406,061 | $441,073 | Condensed Consolidated Statements of Operations For the three months ended March 31, 2025, the company reported its first revenue of $230,000, with an operating loss of $41.4 million and a net loss of $38.0 million Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $230 | $– | | Research and development | $27,263 | $27,233 | | General and administrative | $14,355 | $12,843 | | Total operating expenses | $41,618 | $40,076 | | Operating loss | $(41,388) | $(40,076) | | Interest income | $4,027 | $4,843 | | Net loss before noncontrolling interest | $(37,952) | $(35,333) | | Net loss available to Class A ordinary shareholders | $(16,734) | $(9,492) | | Net loss per share (Basic and diluted) | $(0.13) | $(0.16) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities for Q1 2025 was $29.6 million, an improvement from $34.6 million in the prior year, with a net decrease in cash and cash equivalents of $1.3 million Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash flows used in operating activities | $(29,592) | $(34,646) | | Net cash flows provided by investing activities | $28,289 | $58,399 | | Net cash flows used in financing activities | $(12) | $(13) | | Net change in cash and cash equivalents | $(1,315) | $23,740 | | Cash, beginning of period | $99,120 | $60,649 | | Cash, end of period | $97,805 | $84,389 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's focus on rilparencel for chronic kidney disease, significant equity-based compensation of $6.4 million, and related party transactions - The company is a clinical-stage entity focused on developing rilparencel to preserve kidney function in patients with chronic kidney disease28109 - The company has an "at the market offering" agreement to sell up to $100.0 million of Class A ordinary shares, with $92.1 million remaining available as of March 31, 202586133 Equity-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $2,710 | $3,230 | | General and administrative | $3,706 | $4,450 | | Total | $6,416 | $7,680 | - The company has consulting agreements with Nefro Health, a related party, for R&D services, paying $25,000 per quarter under each of two agreements798081 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's lead product candidate, rilparencel, positive FDA interactions, stable operating expenses, and expected cash runway into mid-2027 - The FDA confirmed that the PROACT 1 (REGEN-006) trial could be sufficient to support a potential Biologics License Application (BLA) submission and that an accelerated approval pathway is available for rilparencel112 - The company expects its existing cash, cash equivalents, and marketable securities as of March 31, 2025, will fund operating expenses and capital expenditure requirements into mid-2027135 Results of Operations Comparison (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $230 | $– | $230 | | Research and development | $27,263 | $27,233 | $30 | | General and administrative | $14,355 | $12,843 | $1,512 | | Loss from operations | $(41,388) | $(40,076) | $(1,312) | | Net loss before noncontrolling interest | $(37,952) | $(35,333) | $(2,619) | - General and administrative expenses increased by $1.5 million, driven by higher cash-based compensation ($1.2 million) and professional fees ($0.8 million), partially offset by lower equity-based compensation129131 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, ProKidney Corp. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, ProKidney Corp. is not required to provide quantitative and qualitative disclosures about market risk149 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective150 - No changes were made in the company's internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls153 PART II. Other Information Legal Proceedings The company is not currently a party to any material legal proceedings - As of the report date, the company is not involved in any material legal proceedings157 Risk Factors The company highlights new risks related to its planned domestication to Delaware, changes to shareholder rights, and potential disruptions at the FDA - The company plans to domesticate from the Cayman Islands to Delaware, which may cause business disruptions, incur significant costs, and result in taxable income for certain shareholders159 - Disruptions at the FDA, including personnel reductions and budget cuts, could hinder the company's ability to obtain guidance and secure timely approval for its product candidates164165166 - Failure to meet NASDAQ's continued listing requirements could result in the de-listing of the company's Class A common stock, negatively affecting its price and liquidity175 Unregistered Sales of Equity Securities and Use of Proceeds There were no sales of unregistered equity securities during the three months ended March 31, 2025 - The company did not conduct any sales of unregistered equity securities in the first quarter of 2025176 Other Information In May 2025, the company agreed to sell its Greensboro property for approximately $19.5 million and entered into new employment agreements with its CEO, CFO, and CLO - On May 8, 2025, the company agreed to sell its real property in Greensboro, North Carolina for approximately $19.5 million in cash180181 Executive Employment Agreement Details (Effective May 2025) | Executive | Title | Base Salary | Target Bonus | Severance Multiple (Post-CIC) | | :--- | :--- | :--- | :--- | :--- | | Bruce Culleton | CEO | $664,000 | 60% | 1.5X | | James Coulston | CFO | $450,000 | 45% | 1.0X | | Todd Girolamo | CLO | $450,000 | 45% | 1.0X |