UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On November 12, 2024, ProKidney Corp. (the "Company") issued a press release to announce its financial results for the quarter ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1.
The information in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
Description |
99.1 |
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104 |
Cover Page Interactive Data File (embedded within Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PROKIDNEY CORP. |
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Date: |
November 12, 2024 |
By: |
/s/ James Coulston |
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James Coulston |
Exhibit 99.1
ProKidney Reports Third Quarter 2024 Financial Results along with Regulatory and Clinical Development Updates Following Successful FDA Type B Meeting
WINSTON-SALEM, N.C., November 12, 2024 – ProKidney Corp. (Nasdaq: PROK) (“ProKidney” or the “Company"), a leading late clinical-stage cellular therapeutics company focused on chronic kidney disease (CKD), today reported financial results for the third quarter ended September 30, 2024, and gave several regulatory and clinical development updates.
“Following a successful FDA Type B meeting, we are pleased to announce that the FDA agrees that the Phase 3 PROACT 1 study could be sufficient to support a potential BLA submission and full regulatory approval, validating our recent decision to focus on expediting PROACT 1,” stated Bruce Culleton, M.D., Chief Executive Officer. “Notably, the FDA also confirmed that ProKidney could consider using eGFR slope as a surrogate endpoint on an accelerated approval pathway for rilparencel. We look forward to continuing our dialogue with the FDA, under RMAT designation, to accelerate rilparencel’s path to market and address the high unmet need in patients with advanced CKD and diabetes.”
Regulatory and Clinical Development Updates
Third Quarter 2024 Financial Highlights
Liquidity: Cash, cash equivalents and marketable securities as of September 30, 2024, totaled $406.8 million, compared to $363.0 million on December 31, 2023. We expect that our existing cash, cash equivalents and marketable securities held on September 30, 2024, will enable us to fund our operating expenses and capital expenditure requirements into 2027.
R&D Expenses: Research and development expenses were $31.3 million for the three months ended September 30, 2024, compared to $32.2 million for the same period in 2023. The decrease of $0.9 million was driven primarily by decreases in costs for clinical operations of approximately $2.5 million driven by the wind down of activities related to PROACT 2 as well as decreases in the cost for other trials. Additionally, we have seen decreases in spending on manufacturing process development and equity-based compensation costs of approximately $1.8 million and $1.9 million, respectively. These decreases have been partially offset by increases in cash compensation costs of approximately $3.5 million as we continue to hire additional personnel in the areas of clinical development, quality and manufacturing and increases in operational costs of $1.4 million as we continue to expand operations and purchase materials to support our Phase 3 clinical program.
G&A Expenses: General and administrative expenses were $17.7 million for the three months ended September 30, 2024, compared to $14.4 million for the same period in 2023. The increase of $3.3 million has been primarily driven by the recognition of a non-cash impairment charge of $5.3 million related to our Greensboro facility and increases in cash compensation of approximately $2.0 million. These increases have been partially offset by decreases in equity-based compensation of approximately $4.1 million.
Net Loss Before Noncontrolling Interest: Net loss before noncontrolling interest was $41.1 million and $42.0 million for the three months ended September 30, 2024 and 2023, respectively.
Shares outstanding: Class A and Class B ordinary shares outstanding as of September 30, 2024, totaled 291,661,950.
About the Phase 3 REGEN-006 (PROACT 1) Clinical Trial
REGEN-006 is an ongoing Phase 3, randomized, blinded, sham controlled safety and efficacy study of rilparencel in subjects with type 2 diabetes and advanced CKD. The study protocol was amended in 1H 2024 to focus on a subset of patients with stage 4 CKD (eGFR 20-30ml min/1.73m2) and late stage 3b CKD (eGFR 30-35ml min/1.73m2) with accompanying albuminuria (urine albumin-to-creatinine ratio, or UACR less than 5,000 mg/g for patients with eGFR 20-30ml min/1.73m2 and 300-5,000 mg/g for patients with eGFR 30-35ml min/1.73m2). The total planned enrollment is approximately 685 subjects. Subjects are randomized (1:1) to the treatment group and the sham control group prior to kidney biopsy or a sham biopsy procedure, respectively. Subjects in the treatment group are to receive the first rilparencel injection within 18 weeks of kidney biopsy. After three months it is intended that a second rilparencel injection be given into the contralateral kidney. Subjects in the control group, who previously underwent the sham biopsy procedure, are to receive two sham injections at similar time points as the treatment group. The primary objective is to assess the efficacy of up to two rilparencel injections using a minimally invasive percutaneous approach. The primary composite endpoint is the time from first injection to the
earliest of: at least 40% reduction in eGFR; eGFR <15 mL/min/1.73m², and/or chronic dialysis, and/or renal transplant; or renal or cardiovascular death.
About ProKidney Corp.
ProKidney, a pioneer in the treatment of chronic kidney disease through innovations in cellular therapy,
was founded in 2015 after a decade of research. ProKidney’s lead product candidate, rilparencel (also known as REACT®), is a first-of-its-kind, patented, proprietary autologous cellular therapy being evaluated in Phase 2 and Phase 3 studies for its potential to preserve kidney function in diabetic patients at high risk of kidney failure. Rilparencel has received Regenerative Medicine Advanced Therapy (RMAT) designation from the FDA. For more information, please visit www.prokidney.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. ProKidney’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s beliefs that the FDA agrees that the Company’s Phase 3 REGEN-006 (PROACT 1) trial could be sufficient to support a potential BLA submission and full regulatory approval and that the Company could consider using eGFR slope as a surrogate endpoint on an accelerated approval pathway for rilparencel, expectations with respect to financial results and expected cash runway, including the Company’s expectation that current cash will support operating plans into 2027, future performance, development and commercialization of products, if approved, the potential benefits and impact of the Company’s products, if approved, potential regulatory approvals, the size and potential growth of current or future markets for the Company’s products, if approved, the advancement of the Company’s development programs into and through the clinic and the expected timing for reporting data, the making of regulatory filings or achieving other milestones related to the Company’s product candidates, and the advancement and funding of the Company’s developmental programs, generally. Most of these factors are outside of the Company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: the inability to maintain the listing of the Company’s Class A ordinary shares on the Nasdaq; the inability to implement business plans, forecasts, and other expectations or identify and realize additional opportunities, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably and retain its key employees; the risk of downturns and a changing regulatory landscape in the highly competitive biotechnology industry; the risk that results of the Company’s clinical trials may not support approval; the risk that the FDA could require additional studies before approving the Company’s drug candidates; the inability of the Company to raise financing in the future; the inability of the Company to obtain and maintain regulatory clearance or approval for its products, and any related restrictions and limitations of any cleared or approved product; the inability of the Company to identify, in-license or acquire additional technology; the inability of Company to compete with other companies currently marketing or engaged in the biologics market and in the area of treatment of kidney diseases; the size and growth potential of the markets for the Company’s products, if approved, and its ability to serve those markets, either alone or in partnership with others; the Company’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing; the Company’s financial performance; the Company’s intellectual property rights; uncertainties inherent in cell therapy research and development, including the actual time it takes to initiate and complete clinical studies and the timing and content of decisions
made by regulatory authorities; the fact that interim results from our clinical programs may not be indicative of future results; the impact of geo-political conflict on the Company’s business; and other risks and uncertainties included under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. The Company cautions readers that the foregoing list of factors is not exclusive and cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
Investor Contacts:
ProKidney
Ethan Holdaway
Ethan.Holdaway@prokidney.com
LifeSci Advisors, LLC
Daniel Ferry
Daniel@lifesciadvisors.com
ProKidney Corp. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except for share data)
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September 30, 2024 |
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December 31, 2023 |
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(Unaudited) |
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Assets |
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Cash and cash equivalents |
$ |
108,088 |
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$ |
60,649 |
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Marketable securities |
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298,724 |
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302,301 |
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Interest receivable |
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5,102 |
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1,375 |
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Prepaid assets |
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6,227 |
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3,399 |
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Prepaid clinical |
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11,053 |
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6,413 |
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Other current assets |
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1,031 |
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9 |
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Total current assets |
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430,225 |
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374,146 |
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Fixed assets, net |
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38,519 |
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42,143 |
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Right of use assets, net |
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6,049 |
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4,263 |
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Total assets |
$ |
474,793 |
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$ |
420,552 |
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Liabilities and Shareholders' Deficit |
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Accounts payable |
$ |
2,850 |
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$ |
5,098 |
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Lease liabilities |
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1,067 |
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803 |
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Accrued expenses and other |
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21,264 |
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17,665 |
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Income taxes payable |
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– |
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1,472 |
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Total current liabilities |
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25,181 |
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25,038 |
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Income tax payable, net of current portion |
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772 |
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568 |
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Lease liabilities, net of current portion |
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5,372 |
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3,610 |
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Total liabilities |
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31,325 |
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29,216 |
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Commitments and contingencies |
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Redeemable noncontrolling interest |
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1,423,180 |
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1,494,732 |
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Shareholders’ deficit |
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Class A ordinary shares, $0.0001 par value; 500,000,000 shares |
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13 |
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6 |
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Class B ordinary shares, $0.0001 par value; 500,000,000 shares |
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16 |
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17 |
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Additional paid-in capital |
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199,509 |
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36,114 |
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Accumulated other comprehensive (loss) gain |
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321 |
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130 |
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Accumulated deficit |
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(1,179,571 |
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(1,139,663 |
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Total shareholders' deficit |
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(979,712 |
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(1,103,396 |
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Total liabilities and shareholders' deficit |
$ |
474,793 |
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$ |
420,552 |
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ProKidney Corp. and Subsidiaries
Consolidated Statements of Operations - Unaudited
(in thousands, except for share and per share data)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Operating expenses |
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Research and development |
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$ |
31,250 |
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$ |
32,198 |
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$ |
87,887 |
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$ |
84,179 |
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General and administrative |
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17,723 |
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14,419 |
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44,218 |
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43,133 |
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Total operating expenses |
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48,973 |
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46,617 |
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132,105 |
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127,312 |
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Operating loss |
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(48,973 |
) |
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(46,617 |
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(132,105 |
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(127,312 |
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Other income (expense): |
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Interest income |
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5,580 |
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5,541 |
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14,960 |
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16,803 |
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Interest expense |
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(2 |
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(2 |
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(7 |
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(9 |
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Net loss before income taxes |
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(43,395 |
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(41,078 |
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(117,152 |
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(110,518 |
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Income tax (benefit) expense |
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(2,342 |
) |
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913 |
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(2,300 |
) |
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3,205 |
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Net loss before noncontrolling |
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(41,053 |
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(41,991 |
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(114,852 |
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(113,723 |
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Net loss attributable to noncontrolling interest |
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(23,143 |
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(31,007 |
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(74,944 |
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(83,956 |
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Net loss available to Class A ordinary shareholders |
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$ |
(17,910 |
) |
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$ |
(10,984 |
) |
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$ |
(39,908 |
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$ |
(29,767 |
) |
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Weighted average Class A ordinary shares outstanding: |
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Basic and diluted |
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126,173,463 |
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61,592,876 |
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87,818,229 |
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61,565,298 |
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Net loss per share attributable to Class A ordinary shares: |
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Basic and diluted |
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$ |
(0.14 |
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$ |
(0.18 |
) |
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$ |
(0.45 |
) |
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$ |
(0.48 |
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ProKidney Corp. and Subsidiaries
Consolidated Statements of Cash Flows - Unaudited
(in thousands)
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Nine Months Ended September 30, |
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2024 |
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2023 |
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Cash flows from operating activities |
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Net loss before noncontrolling interest |
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$ |
(114,852 |
) |
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$ |
(113,723 |
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Adjustments to reconcile net loss before noncontrolling interest to net cash flows used |
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Depreciation and amortization |
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3,858 |
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2,707 |
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Equity-based compensation |
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22,424 |
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37,216 |
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Gain on marketable securities, net |
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(5,521 |
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(3,675 |
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Impairment charges |
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5,324 |
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– |
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Loss on disposal of equipment |
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186 |
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21 |
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Changes in operating assets and liabilities |
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Interest receivable |
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(3,728 |
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(714 |
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Prepaid and other assets |
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(8,489 |
) |
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5,094 |
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Accounts payable and accrued expenses |
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(114 |
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7,774 |
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Income taxes payable |
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(1,268 |
) |
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|
615 |
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Net cash flows used in operating activities |
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(102,180 |
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(64,685 |
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Cash flows from investing activities |
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Purchases of marketable securities |
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(277,291 |
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(301,701 |
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Sales and maturities of marketable securities |
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286,625 |
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100,187 |
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Purchase of equipment and facility expansion |
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(4,000 |
) |
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(32,625 |
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Net cash flows provided by (used in) investing activities |
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5,334 |
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(234,139 |
) |
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Cash flows from financing activities |
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Proceeds from sales of Class A ordinary shares, net of offering costs |
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144,325 |
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– |
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Payments on finance leases |
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(40 |
) |
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(39 |
) |
Net cash flows provided by (used in) financing activities |
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144,285 |
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(39 |
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Net change in cash and cash equivalents |
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47,439 |
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(298,863 |
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Cash, beginning of period |
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60,649 |
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490,252 |
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Cash, end of period |
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$ |
108,088 |
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$ |
191,389 |
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Supplemental disclosure of non-cash investing and financing activities: |
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Right of use assets obtained in exchange for lease obligations |
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$ |
2,621 |
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$ |
714 |
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Exchange of Class B ordinary shares |
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$ |
15,357 |
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$ |
64 |
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Impact of equity transactions and compensation on redeemable noncontrolling interest |
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$ |
18,748 |
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$ |
3,207 |
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Change in redemption value of noncontrolling interest |
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$ |
– |
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$ |
79 |
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Equipment and facility expansion included in accounts payable and |
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$ |
910 |
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$ |
1,386 |
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