2836 |
98-1586514 | |||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Todd C. Girolamo, Esq. ProKidney Corp. 2000 Frontis Plaza Blvd., Ste 250 Winston-Salem, NC 27103 Telephone: (336) 999-7028 |
Megan N. Gates, Esq. Jason S. McCaffrey, Esq. Matthew T. Simpson, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, Massachusetts 02111 Telephone: (617) 542-6000 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
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FS-1 |
• | the anticipated benefits of the Business Combination; |
• | our ability to maintain the listing of our Class A ordinary shares on the Nasdaq Capital Market (“Nasdaq”); |
• | our ability to manage our growth effectively; |
• | the success, cost and timing of our product development activities; |
• | the potential attributes and benefits of our product candidates, and if approved, our products; |
• | our ability to manufacture REACT, our lead product candidate; |
• | our ability to obtain and maintain regulatory approval for our products, and any related restrictions and limitations of any approved product; |
• | our ability to identify, in-license or acquire additional technology; |
• | our ability to maintain our existing license, manufacturing and supply agreements; |
• | our reliance on third parties to conduct, supervise and monitor a certain portion of our research and nonclinical testing and clinical trials for REACT; |
• | our ability to compete with other companies currently marketing or engaged in the biologics market and in the area of treatment of kidney disease, many of which have greater financial and marketing resources than us; |
• | the size and growth potential of the markets for our products, and the ability of each to serve those markets, either alone or in partnership with others; |
• | changes in applicable laws or regulations; |
• | our estimates regarding expenses, revenue, capital requirements and needs for additional financing; |
• | our ability to raise financing in the future; |
• | our financial performance; |
• | our intellectual property rights; |
• | security breaches with respect to computer systems; |
• | economic downturns and political and market conditions beyond our control; |
• | the impact of the COVID-19 pandemic on our business; and |
• | other factors detailed under the section titled “ Risk Factors. |
• | We have incurred significant net losses since inception and we expect to continue to incur significant net losses for the foreseeable future; |
• | Having completed the Business Combination, we will continue to require substantial additional capital to finance our operations; |
• | We have a limited operating history and have not generated any revenue to date, and may never become profitable; |
• | Our business is highly dependent on the success of our lead product candidate, REACT, as well as any other future product candidates that we may advance into clinical development. REACT and our future product candidates will require significant additional clinical development and funding before we may be able to seek regulatory approval for and launch a product commercially; |
• | REACT is based on a novel technology, which makes it difficult to predict the time and cost of product development and of subsequently obtaining regulatory approval; |
• | Clinical development involves a lengthy, complex and expensive process, with an uncertain outcome, and the results of nonclinical studies, previous clinical trials, or interim results of ongoing clinical trials of REACT and any of our future product candidates may not be predictive of future results. Further, we may encounter substantial delays in completing the development of REACT and any of our future product candidates; |
• | Negative public opinion and increased regulatory scrutiny of autologous cell therapy using REACT may adversely impact the development or commercial success of our current and future product candidates; |
• | We are conducting our first Phase 3 clinical trial and may be unable to successfully complete it or any future clinical trials; |
• | The design or execution of our ongoing and future clinical trials may not support marketing approval; |
• | We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success; |
• | Due to our limited resources and access to capital, we must make decisions on the allocation of resources to certain programs and product candidates; |
• | Cell therapies are complex and difficult to manufacture, and we could experience manufacturing problems that result in delays in the development or commercialization of REACT, our lead product candidate, or otherwise harm our business; |
• | Our autologous cell therapy products are patient-specific, and we need to ensure that the correct product is administered to the correct patient; |
• | Delays in obtaining regulatory approval of the manufacturing process and facility to produce REACT or disruptions in the manufacturing process may delay or disrupt our commercialization efforts; |
• | Managing an autologous ex vivo cell therapy supply chain is highly complex; |
• | Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations; |
• | Because we are a “controlled company” within the meaning of the Nasdaq rules, our shareholders may not have certain corporate governance protections that are available to shareholders of companies that are not controlled companies; |
• | Required payments under the Tax Receivable Agreement may be substantial, and in certain cases, payments under the Tax Receivable Agreement may exceed the actual tax benefits that we realize or may be accelerated; and |
• | Because we are a Cayman Islands exempted company, the rights of our shareholders may be different from the rights of shareholders governed by the laws of U.S. jurisdictions. |
Issuer |
ProKidney Corp. |
Class A ordinary shares offered by the Selling Securityholders (representing the PIPE Shares purchased by certain PIPE Investors, shares issued or issuable pursuant to the vesting of restricted stock units, and shares issued or issuable pursuant to the Exchange Agreement) |
232,530,000 shares |
Use of proceeds |
We will not receive any proceeds from the sale of the Class A ordinary shares to be offered by the Selling Securityholders. |
Lock-up agreements |
Certain of our shareholders are subject to certain restrictions on transfer until the termination of applicable lock-up periods. See “Plan of Distribution — Lock-Up Agreements |
Ticker Symbol |
“PROK” for the Class A ordinary shares. |
• | advance the development of REACT and any other future product candidates through clinical development, and, if successful, later-stage clinical trials; |
• | experience delays or interruptions to any future preclinical studies, our current clinical trials, our receipt of services from our third-party service providers on whom we rely, or our supply chain, including delays due to the COVID-19 pandemic, other health crises or events or circumstances beyond our control; |
• | seek regulatory approvals for any future product candidates that may successfully complete clinical trials; |
• | commercialize REACT and any future product candidates, if approved; |
• | increase the amount of research and development activities to discover and develop product candidates and line extensions; |
• | manufacture the materials needed for clinical trials or, following receipt of necessary regulatory approvals, commercial sales, at our manufacturing facilities; |
• | establish and validate commercial-scale cGMP manufacturing facilities and partner with Contract Manufacturing Organizations (“CMOs”); |
• | establish a commercialization infrastructure and scale up internal and external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval; |
• | hire additional executives in clinical development, regulatory, manufacturing, quality control, quality assurance, scientific, public / investor relations general and administrative and management personnel; |
• | expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development and manufacturing efforts, general and administrative functions and our operations as a public company; |
• | establish domestic and global sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with third parties; |
• | maintain, expand and protect our intellectual property portfolio; and |
• | invest in or in-license other technologies or product candidates. |
• | the initiation, progress, timing, costs and results of clinical trials for REACT and any future product candidates; |
• | the clinical development plans we establish for these product candidates; |
• | the timelines of our clinical trials and the overall costs to finish the clinical trials due to the COVID-19 pandemic; |
• | the number and characteristics of product candidates that we develop; |
• | the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA and other comparable foreign regulatory authorities; |
• | whether we are able to enter into and maintain collaboration agreements, including the terms of and timing of payments under any such agreements; |
• | the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; |
• | the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us, REACT or any of our future product candidates; |
• | the effect of competing clinical, technological and market developments; |
• | the costs of maintaining our own commercial-scale cGMP manufacturing facility; |
• | the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; |
• | the revenue, if any, received from commercial sales of REACT and any of our future product candidates for which we receive marketing approval; and |
• | the costs of operating as a public company. |
• | accuracy, including sensitivity and specificity, and reproducibility of results; |
• | reputation among customers; |
• | innovation in offerings or products, if approved; |
• | efficacy and safety profile; |
• | cost; |
• | effectiveness of promotional support; |
• | intellectual property protection; |
• | the intended patient population; and |
• | relative convenience of dosing and administration. |
• | negative or inconclusive results from our clinical trials or positive results from the clinical trials of others for product candidates similar to ours leading to their approval, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or to abandon a program; |
• | product-related side effects experienced by patients or subjects in our clinical trials or by individuals using medicines or therapeutics that we, the FDA, other regulators or others view as relevant to the development of REACT or any of our future product candidates; |
• | delays in submitting Investigational New Drug Applications (“INDS”) or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; |
• | conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials, including our clinical endpoints, and any requirement for additional confirmatory trials; |
• | delays in enrolling subjects in clinical trials, including due to the COVID-19 pandemic, and completion of clinical trials, including under the FDA’s GCPs, the guidelines from International Conference on Harmonization (“ICH Guidelines”), Good Laboratory Practices (“GLP”), and current Good Tissue Practices (“cGTPs”); |
• | inability to maintain compliance with regulatory requirements, including cGMPs, and complying effectively with other procedures; |
• | high drop-out rates of subjects from clinical trials; |
• | inadequate supply or quality of REACT or our future product candidates or other materials necessary for the conduct of our clinical trials; |
• | greater than anticipated clinical trial costs; |
• | inability to compete with other therapies; |
• | poor efficacy of REACT or our future product candidates during clinical trials; |
• | trial results taking longer than anticipated; |
• | trials being subjected to fraud or data capture failure or other technical mishaps leading to the invalidation of our trials; |
• | the results of our trials not supporting application for conditional approval in the European Union, the Asia-Pacific region, and Latin America; |
• | unfavorable FDA or other regulatory agency inspection and review of a clinical trial site; |
• | failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; |
• | delays related to the impact of the spread of the COVID-19 pandemic, including the impact of COVID-19 on the FDA’s ability to continue its normal operations; |
• | delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical development generally or with respect to our technology in particular; |
• | varying interpretations of data by the FDA and similar foreign regulatory agencies; |
• | the completion of Health Technology Assessment (“HTA”) procedures with governmental authorities; |
• | any policy level review of REACT by CMS; |
• | the financing on our other ongoing or future programs; |
• | evolving scientific discovery and technology of cell-based therapies and bioprocessing; or |
• | obsoleteness of manufacturing automation which could require a re-design of parts or equipment to ensure quality replacement component, the delays of which could cause significant delays in manufacturing and loss of sales. |
• | delays or difficulties with patient enrollment in clinical trials; |
• | delays, difficulties or a suspension in clinical trial site initiation, including difficulties in recruiting investigators, proceduralists and clinical staff; |
• | interruptions in our ability to manufacture and deliver the required supply of REACT or future product candidates for clinical trials; |
• | diversion of health care resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; |
• | potential cancellation or postponement of elective procedures scheduled at our clinical trial sites and reduction in operating hours at a significant number of our clinical trial sites; |
• | changes in local regulations as part of a response to the COVID-19 outbreak that among other things (i) may interrupt our ability to manufacture REACT and (ii) may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; |
• | interruption of key clinical trial activities, such as clinical trial site monitoring, and the ability or willingness of subjects to travel to trial sites for scheduled visits and laboratory testing due to limitations on travel imposed or recommended by federal or state governments, employers and others; |
• | limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; |
• | delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; |
• | refusal of the FDA and other regulatory agencies to accept data from clinical trials in these affected geographies; and |
• | decreases or shifts of government funding from regulatory agencies, university research and education. |
• | educating medical personnel regarding the potential side-effect profile of REACT and, as the clinical development program progresses, on observed side effects with REACT; |
• | training medical personnel on the proper use and delivery of REACT; |
• | enrolling sufficient numbers of subjects in clinical trials; and |
• | continuing to develop a manufacturing process to support the clinical development of REACT. |
• | nonclinical or preclinical studies or clinical trials may show the product candidates to be less effective than expected (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities associated with the product or delivery method; |
• | failure to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful and relevant; |
• | failure to receive the necessary regulatory approvals; |
• | manufacturing costs, formulation issues, pricing or reimbursement issues, mechanism of action, logistical constraints or other factors that make a product candidate uneconomical; and |
• | the proprietary rights of others and their competing products and technologies that may prevent one of our product candidates from being commercialized. |
• | delays in sufficiently developing, characterizing, standardizing or controlling a manufacturing process and quality criteria suitable for advanced clinical trials; |
• | delays in developing suitable assays for screening patients for eligibility for trials with respect to certain product candidates; |
• | delays in reaching agreement with the FDA, EMA or other regulatory authorities as to the design or implementation of our clinical trials; |
• | obtaining additional regulatory authorizations to conduct future clinical trials; |
• | reaching agreements on acceptable terms with additional/future clinical trial sites or prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different clinical trial sites; |
• | obtaining institutional review board (“IRB”) or Ethics Committee approval at each additional/future trial site; |
• | recruiting suitable patients to participate in a clinical trial; |
• | having subjects complete a clinical trial or return for post-treatment follow-up; |
• | inspections of clinical trial sites or operations by applicable regulatory authorities, or the imposition of a clinical hold; |
• | clinical sites, CROs or other third parties deviating from trial protocol or dropping out of a trial; |
• | failure to perform in accordance with the applicable regulatory requirements, including FDA’s GCP requirements, or applicable regulatory requirements in other countries; |
• | addressing patient safety concerns that arise during the course of a trial, including occurrence of adverse events associated with the product candidate or the delivery procedure that are viewed to outweigh its potential benefits; |
• | adding a sufficient number of clinical trial sites; |
• | manufacturing sufficient quantities of a product candidate for use in clinical trials; |
• | disruptions in our supply chain, which could result in improper storage, transport or development conditions for our product components, whose treatment is time-sensitive and temperature-sensitive and which are patient-specific; or |
• | interruption of our manufacturing processes, which could lead to our inability to properly administer treatment. |
• | changes in regulatory requirements or guidance, or receive feedback from regulatory authorities that requires us to modify the design of our clinical trials; |
• | clinical trials of REACT or our future product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon development programs; |
• | the number of subjects required for clinical trials of REACT or our future product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or subjects may drop out of these clinical trials at a higher rate than we anticipate; |
• | our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; |
• | we or our investigators might have to suspend or terminate clinical trials of REACT or our future product candidates for various reasons, including non-compliance with regulatory requirements, a finding that REACT or our future product candidates have undesirable side effects or other unexpected characteristics, or a finding that the subjects are being exposed to unacceptable health risks; |
• | the cost of clinical trials of REACT or our future product candidates may be greater than we anticipate and we may not have funds to cover the costs; |
• | the supply or quality of REACT or our future product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; |
• | regulators may revise the requirements for approving REACT or our future product candidates, or such requirements may not be as we anticipate; and |
• | any future collaborators that conduct clinical trials may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us. |
• | incur unplanned costs; |
• | be delayed in obtaining marketing approval for REACT or any of our future product candidates or not obtain marketing approval at all; |
• | obtain marketing approval in some countries and not in others; |
• | obtain marketing approval for indications or patient populations that are not as broad as intended or desired; |
• | obtain marketing approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings or Risk Evaluation and Mitigation Strategy (“REMS”); |
• | be subject to additional post-marketing testing requirements; |
• | be subject to changes in the way the product is administered; or |
• | have regulatory authorities withdraw or suspend their approval of the product or to impose restrictions on its distribution after obtaining marketing approval. |
• | the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; |
• | we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; |
• | the results of our clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; |
• | we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; |
• | the FDA or comparable foreign regulatory authorities may fail to approve our manufacturing processes or facilities of third-party suppliers with which we contract for clinical and commercial supplies; and |
• | the approval policies or regulations of the FDA or comparable foreign authorities may significantly change in a manner rendering our clinical data insufficient for approval. |
• | regulatory authorities may suspend, withdraw or limit approvals of such product, or seek an injunction against its manufacture or distribution; |
• | regulatory authorities may require additional warnings on the label; |
• | we may be required to create a medication guide outlining the risks of such side effects for distribution to patients or other requirements subject to a REMS; |
• | we may be required to change the way the product is administered or conduct additional nonclinical studies or clinical trials; |
• | we could be sued and held liable for harm caused to patients; |
• | we may decide to remove the product from the market; |
• | we may not be able to achieve or maintain third-party payor coverage and adequate reimbursement; |
• | we may be subject to fines, injunctions or the imposition of civil or criminal penalties; and |
• | our reputation and physician or patient acceptance of our products may suffer. |
• | the patient eligibility and exclusion criteria defined in the protocol; |
• | the size and demographics of the patient population required for analysis of the clinical trial’s primary endpoints and the process for identifying patients; |
• | potential disruptions caused by the COVID-19 pandemic, including difficulties in initiating clinical sites, enrolling and retaining subjects, diversion of health care resources away from clinical trials, travel or quarantine policies that may be implemented, and other factors; |
• | the proximity of subjects to clinical trial sites; |
• | the design of the trial; |
• | our ability to recruit clinical trial investigators with the appropriate competencies and experience; |
• | clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; |
• | the availability of competing commercially available therapies and other competing product candidates’ clinical trials; |
• | our ability to obtain and maintain clinical trial subject informed consents; and |
• | the risk that subjects enrolled in clinical trials will drop out of the trials before completion. |
• | our inability to design such product candidates with the pharmacological properties that we desire or attractive pharmacokinetics; |
• | our inability to design and develop a suitable manufacturing process; or |
• | potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be medicines that will receive marketing approval and achieve market acceptance. |
• | a failure in the manufacturing process itself, for example by an error in manufacturing equipment or reagent failure, failure in any step of the manufacturing process, failure to maintain a cGMP environment or failure in quality systems applicable to manufacture, sterility failures, or contamination during process; |
• | product loss or failure due to logistical issues associated with the collection of a patient’s autologous cells or other samples, shipping that material to analytical laboratories, and shipping the final cell therapy back to the location using cold chain distribution where it will be administered to the patient, manufacturing issues associated with the differences in patient starting materials, inconsistency in cell growth and variability in product characteristics; |
• | a lack of reliability or reproducibility in the manufacturing process itself, leading to variability in end manufacture of the cell therapy, which may lead to regulatory authorities placing a hold on a clinical |
trial or requesting further information on the process, which could in turn result in delays to the clinical trials; |
• | product loss or failure due to logistical issues including issues associated with the differences between patients’ autologous cells or characteristics, interruptions to process, contamination, failure to supply patient apheresis material within required timescales (for example, as a result of an import or export hold-up) or supplier error; |
• | inability to have enough manufacturing slots to manufacture cell therapies for patients as and when those patients require manufacture; |
• | inability to procure starting materials or to manufacture starting materials; |
• | interruptions in our supply chain, which may require us to find an alternative manufacturer or supplier for one or more components that we need in the manufacture of REACT, which would in turn require such manufacturer or supplier to be qualified through a BLA and/or MAA supplement, could lead the regulatory agencies to require additional studies if a new manufacturer is relied upon for commercial production, and may involve substantial costs and delays related to switching manufacturers; |
• | loss of or close-down of any manufacturing facility used in the manufacture of our cell therapies, or the inability to find alternative manufacturing capability in a timely fashion; |
• | loss or contamination of patient starting material, requiring the starting material to be obtained again from the patient or the manufacturing process to be re-started; and |
• | a requirement to modify or make changes to any manufacturing process, which may also require comparability testing that delays our ability to make the required modifications or perform any required comparability testing in a timely fashion, require further regulatory approval or require successful tech transfer to CMOs to continue manufacturing. |
• | our ability to recruit the required employees at a suitable level and experience and within required timescales and to maintain employment of such required employees; |
• | our ability to obtain regulatory approval for the facility and for the manufacture of cell therapies at the facility and to satisfy regulatory authorities on an ongoing basis; |
• | our ability to manufacture cell therapies reliably and reproducibly and to timescales sufficient to support required patient administration; |
• | our ability to manufacture cell therapies in compliance with the applicable regulatory requirements, including requirements applicable in both the United States and the European Union, including cGMP, enforced by the FDA and state regulatory authorities; |
• | our ability to develop internal quality controls and processes sufficient to enable manufacture and supply of cell therapies at our Winston-Salem facility; |
• | our ability to establish comparability with currently used manufacturing processes and for such comparability data to be accepted by the appropriate regulatory authorities; and |
• | our ability to fund ongoing development, including equipment requirements necessary for successful manufacture of cell therapies at our facility. |
• | the efficacy and potential advantages of our current or future product candidates compared to alternative treatments; |
• | product labeling or product insert requirements of the FDA, EMA or other foreign regulatory authorities, including any limitations or warnings contained in a product’s approved labeling, including any black box warning or REMS; |
• | the clinical indications for which our current or future product candidates are approved; |
• | availability of alternative treatments already approved or commercially launched in the future; |
• | the ability to offer our products, if approved, for sale at competitive prices; |
• | convenience and ease of administration compared to alternative treatments; |
• | the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies, including where there may be a perception that our therapies, if approved, involve an increased risk of adverse events; |
• | the recommendations with respect to our product candidates in guidelines published by various scientific organizations applicable to us and our product candidates; |
• | the strength of marketing and distribution support; |
• | any restrictions on the use of our products together with other medications; |
• | our ability to hire and retain a sales force in the United States; |
• | the ability to obtain sufficient third-party coverage and adequate reimbursement for our products, including necessary reimbursement codes; |
• | the prevalence and severity of any side effects; |
• | the ability to obtain Current Procedural Terminology (“CPT”) Codes and Resource-Based Relative Value Scale for appropriate provider reimbursement; |
• | the ability to obtain designated International Classification of Diseases (“ICD-10”) codes from the WHO for disease designation; |
• | willingness of provider proceduralists to perform invasive kidney procedures that may cause increased medical liability from procedural-related or cell based adverse events; and |
• | the ability to provide advanced procedural training for delivery of product candidates. |
• | our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; |
• | the inability of sales personnel to obtain access to physicians in order to educate physicians about our product candidates, including product administration and product delivery, once approved; |
• | the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and |
• | unforeseen costs and expenses associated with creating an independent sales and marketing organization. |
• | a covered benefit under its health plan; |
• | safe, effective and medically necessary; |
• | appropriate for the specific patient; |
• | supported by peer-reviewed medical journals; |
• | included in clinical practice guidelines; |
• | cost-effective; and |
• | neither experimental nor investigational. |
• | inability to bring a product candidate to the market; |
• | decreased demand for our products; |
• | injury to our reputation; |
• | withdrawal of clinical trial subjects and inability to continue clinical trials; |
• | initiation of investigations by regulators; |
• | significant costs to defend the related litigation; |
• | reduced resources of our management to pursue our business strategy; |
• | substantial monetary awards to trial subjects; |
• | product recalls, withdrawals or labeling, marketing or promotional restrictions; |
• | loss of revenue; |
• | exhaustion of any available insurance and our capital resources; |
• | the inability to commercialize any products that we may develop; and |
• | decline in our share price. |
• | collaborators have significant discretion in determining the efforts and resources that they will apply; |
• | collaborators may not perform their obligations as expected; |
• | collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs or license arrangements based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities; |
• | collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; |
• | collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products and product candidates if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; |
• | product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of REACT or our future product candidates; |
• | collaborators may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; |
• | collaborators with marketing and distribution rights to REACT or one or more of our future product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; |
• | collaborators may not provide us with timely and accurate information regarding development progress and activity under any future license agreement, which could adversely impact our ability to report progress to our investors and otherwise plan development of REACT or our future product candidates; |
• | disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; |
• | collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; |
• | collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; |
• | if a collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by us; and |
• | collaborations may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates. |
• | restrictions on the manufacturing of the product, the approved manufacturers or the manufacturing process; |
• | restrictions on the labeling or marketing of a product; |
• | restrictions on product distribution or use; |
• | requirements to conduct post-marketing studies or clinical trials; |
• | withdrawal of the product from the market; |
• | product recalls; |
• | warning or untitled letters from the FDA or comparable notice of violations from foreign regulatory authorities; |
• | refusal of the FDA or other applicable regulatory authority to approve pending applications or supplements to approved applications; |
• | fines, restitution or disgorgement of profits or revenues; |
• | suspension or withdrawal of marketing approvals; |
• | suspension of any of our ongoing clinical trials; |
• | product seizure or detention or refusal to permit the import or export of products; and |
• | consent decrees, injunctions or the imposition of civil or criminal penalties. |
• | others may be able to make or use compounds that are similar to the compositions of REACT but that are not covered by the claims of our patents or those of our licensors; |
• | we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications invented or developed using U.S. government funding, leading to the loss of patent rights; |
• | we or our licensors, as the case may be, might not have been the first to file patent applications for these inventions; |
• | others may independently develop similar or alternative technologies or duplicate any of our technologies; |
• | it is possible that our pending patent applications will not result in issued patents; |
• | it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; |
• | it is possible that others may circumvent our owned or in-licensed patents; |
• | it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours; |
• | the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; |
• | the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover REACT; |
• | our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or be held invalid or unenforceable as a result of legal challenges by third parties; |
• | the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors; |
• | it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; |
• | we have engaged in scientific collaborations in the past, and will continue to do so in the future. Such collaborators may develop adjacent or competing products to ours that are outside the scope of our patents; |
• | we may not develop additional proprietary technologies for which we can obtain patent protection; |
• | it is possible that product candidates or diagnostic tests we develop may be covered by third parties’ patents or other exclusive rights; |
• | if any of our owned or in-licensed patents or applications were made with U.S. government funds, it is possible that the U.S. government may assert certain march-in rights to force us or our licensor to grant a license to third-parties to allow them to practice the claimed invention; or |
• | the patents of others may have an adverse effect on our business. |
• | the scope of rights granted under the license agreement and other interpretation-related issues; |
• | the extent to which REACT, our lead product candidate, or any other product candidate’s technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
• | the sublicensing of patent and other rights under our collaborative development relationships; |
• | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
• | the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and |
• | the priority of invention of patented technology. |
• | infringement and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; |
• | substantial damages for infringement, which we may have to pay if a court decides that the product or technology at issue infringes on or violates the third-party’s rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees; |
• | a court prohibiting us from developing, manufacturing, marketing or selling REACT, or from using our proprietary technologies, unless the third-party licenses its product rights to us, which it is not required to do; |
• | if a license is available from a third-party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights for our products and any license that is available may be non-exclusive, which could result in our competitors gaining access to the same intellectual property; and |
• | redesigning REACT or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and time. |
• | identifying, recruiting, integrating, maintaining and motivating additional employees; |
• | managing our development and commercialization efforts effectively, including the clinical and FDA review process for REACT and any other product candidates, while complying with our contractual obligations to contractors and other third parties; and |
• | improving our operational, financial and management controls, reporting systems and procedures. |
• | changes in the valuation of our deferred tax assets and liabilities; |
• | expected timing and amount of the release of any tax valuation allowances; |
• | tax effects of share-based compensation; |
• | costs related to intercompany restructurings; |
• | changes in tax laws, regulations or interpretations thereof; or |
• | lower-than-anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher-than-anticipated future earnings in jurisdictions where we have higher statutory tax rates. |
• | no cumulative voting in the election of directors, which limits the ability of minority shareholders to elect director candidates; |
• | a classified board of directors with three-year staggered terms, which could delay the ability of shareholders to change the membership of a majority of the Board; |
• | the requirement that directors may only be removed from the Board by special resolution; |
• | the right of the Board to elect a director to fill a vacancy of the Board created by the expansion of the Board or the resignation, death, or removal of a director in certain circumstances, which prevents shareholders from being able to fill vacancies on the Board; |
• | a prohibition on shareholders calling an extraordinary general meeting and the requirement that a meeting of shareholders may only be called by members of the Board, which may delay the ability of our shareholders to force consideration of a proposal or to take action, including the removal of directors; and |
• | the right of the Board to issue and set the voting and other rights of preference shares, which could adversely affect the voting power and other rights of the holders of ordinary shares. |
New ProKidney Ordinary Shares |
Ownership |
|||||||
Public Shareholders |
2,170,231 | 0.9 |
% | |||||
Sponsor |
6,890,000 | 2.9 |
% | |||||
Third Party PIPE Investors |
36,840,000 | 15.2 |
% | |||||
Sponsor Related PIPE Investors |
15,640,000 | 6.5 |
% | |||||
ProKidney Unitholders (including the ProKidney Related PIPE Investors) |
180,000,000 | 74.5 |
% | |||||
|
|
|
|
|||||
Total Shares Outstanding |
241,540,231 | 100.00 |
% |
• | the accompanying notes to the unaudited pro forma condensed combined financial information; |
• | the historical unaudited condensed financial statements of SCS as of and for the three months ended March 31, 2022, the historical audited condensed financial statements for SCS as of December 31, 2021 and for the period from February 25, 2021 (date of inception) through December 31, 2021, and the related notes, in each case, included elsewhere in this prospectus; |
• | the historical unaudited consolidated financial statements of Legacy ProKidney as of and for the three months ended March 31, 2022, the historical audited consolidated financial statements of Legacy ProKidney as of and for the year ended December 31, 2021, and the related notes, in each case, included elsewhere in this prospectus; and |
• | other information relating to SCS and Legacy ProKidney contained in this prospectus, including the Business Combination Agreement and the description of certain terms thereof set forth under “ Summary of the Prospectus—Recent Developments—Business Combination Agreement Management’s Discussion and Analysis of Financial Condition and Results of Operations |
SCS Historical |
ProKidney Historical |
Transaction Accounting Adjustments (Note 3) |
Note |
Proforma Combined |
||||||||||||||||
Current assets |
||||||||||||||||||||
Cash and cash equivalents |
$ | 52 | $ | 29,802 | $ | 531,461 | (a | ) | $ | 561,315 | ||||||||||
Prepaid assets |
543 | 592 | — | 1,135 | ||||||||||||||||
Prepaid clinical |
— | 4,855 | — | 4,855 | ||||||||||||||||
Other current assets |
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets |
595 | 35,249 | 531,461 | 567,305 | ||||||||||||||||
Investments held in Trust Account |
250,034 | — | (250,034 | ) | (b | ) | — | |||||||||||||
Fixed assets, net |
— | 11,103 | — | 11,103 | ||||||||||||||||
Right of use assets, net |
— | 1,673 | — | 1,673 | ||||||||||||||||
Deferred offering costs |
— | 5,108 | (5,108 | ) | (c | ) | — | |||||||||||||
Intangible assets, net |
— | 374 | — | 374 | ||||||||||||||||
Other long term assets |
124 | — | — | 124 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
$ | 250,753 | $ | 53,507 | $ | 276,319 | $ | 580,579 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Current liabilities |
||||||||||||||||||||
Accounts payable |
$ | 27 | $ | 2,509 | $ | (34 | ) | $ | 2,502 | |||||||||||
Lease liabilities |
— | 328 | — | 328 | ||||||||||||||||
Accrued expenses and other |
5,342 | 8,117 | — | 13,459 | ||||||||||||||||
Related party notes payable |
— | 20,000 | (20,000 | ) | (d | ) | — | |||||||||||||
Income taxes payable |
— | 958 | — | 958 | ||||||||||||||||
Advances from related party |
44 | — | (44 | ) | (e | ) | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities |
5,413 | 31,912 | (20,078 | ) | 17,247 | |||||||||||||||
Long term liabilities |
||||||||||||||||||||
Deferred underwriting fee payable |
7,700 | — | (7,700 | ) | (f | ) | — | |||||||||||||
Lease liabilities, net of current portion |
— | 1,428 | — | 1,428 | ||||||||||||||||
Tax Receivable Agreement liability |
— | — | — | (g | ) | — | ||||||||||||||
Temporary equity: |
||||||||||||||||||||
Class A ordinary shares subject to possible redemption |
250,000 | — | (250,000 | ) | (h | ) | — | |||||||||||||
Redeemable noncontrolling interest |
— | — | 422,491 | (i | ) | 422,491 | ||||||||||||||
ProKidney Corp.: |
||||||||||||||||||||
ProKidney Corp. Class A ordinary shares |
— | — | 58 | (j | ),(h),(o) | 58 | ||||||||||||||
ProKidney Corp. Class B ordinary shares |
— | — | 18 | (k | ) | 18 | ||||||||||||||
SCS: |
||||||||||||||||||||
SCS Preference shares, $0.0001 par value |
— | — | — | — | ||||||||||||||||
SCS Class A ordinary shares, $0.0001 par value |
— | — | — | — | ||||||||||||||||
SCS Class B ordinary shares, $0.0001 par value |
1 | — | (1 | ) | (o | ) | — | |||||||||||||
ProKidney: |
||||||||||||||||||||
ProKidney - Class A Units |
— | 186,500 | (186,500 | ) | (k | ) | — | |||||||||||||
ProKidney - Class B Units |
— | 62,663 | (62,663 | ) | (k | ) | — | |||||||||||||
Additional paid-in capital |
131,531 | (k | ),(l) | 131,531 | ||||||||||||||||
Accumulated deficit |
(12,361 | ) | (228,996 | ) | 249,163 | (k | ) | 7,806 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total equity |
(12,360 | ) | 20,167 | 131,606 | 139,413 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities, redeemable noncontrolling interest and equity |
$ | 250,753 | $ | 53,507 | $ | 276,319 | $ | 580,579 | ||||||||||||
|
|
|
|
|
|
|
|
SCS Historical |
ProKidney Historical |
Transaction Accounting Adjustments (Note 3) |
Note |
Proforma Combined |
||||||||||||||||
Current assets |
||||||||||||||||||||
Cash and cash equivalents |
$ | 440 | $ | 20,558 | $ | 551,493 | (a | ) | $ | 572,491 | ||||||||||
Prepaid assets |
505 | 588 | — | 1,093 | ||||||||||||||||
Prepaid clinical |
— | 6,100 | — | 6,100 | ||||||||||||||||
Other current assets |
— | 25 | — | 25 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets |
945 | 27,271 | 551,493 | 579,709 | ||||||||||||||||
Investments held in Trust Account |
250,008 | — | (250,008 | ) | (b | ) | — | |||||||||||||
Fixed assets, net |
— | 11,358 | — | 11,358 | ||||||||||||||||
Right of Use assets, net |
— | 1,241 | — | 1,241 | ||||||||||||||||
Intangible assets, net |
— | 428 | — | 428 | ||||||||||||||||
Other long term assets |
248 | — | — | 248 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
$ | 251,201 | $ | 40,298 | $ | 301,485 | $ | 592,984 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Current liabilities |
||||||||||||||||||||
Accounts payable |
$ | 1,870 | $ | 2,834 | $ | — | $ | 4,704 | ||||||||||||
Lease liabilities |
— | 267 | — | 267 | ||||||||||||||||
Accrued expenses and other |
— | 9,213 | — | 9,213 | ||||||||||||||||
Advances from related party |
10 | — | (10 | ) | (c | ) | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current liabilities |
1,880 | 12,314 | (10 | ) | 14,184 | |||||||||||||||
Long term liabilities |
||||||||||||||||||||
Deferred underwriting fee payable |
7,700 | — | (7,700 | ) | (d | ) | — | |||||||||||||
Lease liabilities, net of current portion |
— | 1,067 | — | 1,067 | ||||||||||||||||
Tax Receivable Agreement liability |
— | — | — | (m | ) | — | ||||||||||||||
Temporary equity: |
||||||||||||||||||||
Class A ordinary shares subject to possible redemption |
250,008 | — | (250,008 | ) | (e | ) | — | |||||||||||||
Redeemable noncontrolling interest |
— | — | 430,480 | (f | ) | 430,480 | ||||||||||||||
New ProKidney: |
||||||||||||||||||||
New ProKidney Class A ordinary shares |
— | — | 58 | (g | ),(e),(l) | 58 | ||||||||||||||
New ProKidney Class B ordinary shares |
— | — | 18 | (h | ) | 18 | ||||||||||||||
SCS: |
||||||||||||||||||||
SCS Preference shares, $0.0001 par value |
— | — | — | — | ||||||||||||||||
SCS Class A ordinary shares, $0.0001 par value |
— | — | — | — | ||||||||||||||||
SCS Class B ordinary shares, $0.0001 par value |
1 | — | — | (1) | (l | ) | — | |||||||||||||
ProKidney: |
||||||||||||||||||||
ProKidney - Class A Units |
— | 186,500 | (186,500 | ) | (h | ) | — | |||||||||||||
ProKidney - Class B Units |
— | 1,927 | (1,927 | ) | (h | ) | — | |||||||||||||
Additional paid-in capital |
128,648 | (h | ),(i) | 128,648 | ||||||||||||||||
Accumulated deficit |
(8,388 | ) | (161,510 | ) | 188,427 | (h | ) | 18,529 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total equity |
(8,387 | ) | 26,917 | 128,723 | 147,253 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities, redeemable noncontrolling interest and equity |
$ | 251,201 | $ | 40,298 | $ | 301,485 | $ | 592,984 | ||||||||||||
|
|
|
|
|
|
|
|
SCS Historical |
ProKidney Historical |
Transaction Accounting Adjustments (Note 3) |
Note |
Proforma Combined |
||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||
Research and development |
$ | — | $ | 28,490 | $ | — | $ | 28,490 | ||||||||||||||||
Operation and formation costs |
4,006 | — | — | 4,006 | ||||||||||||||||||||
General and administrative |
— | 37,972 | — | 37,972 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses |
4,006 | 66,462 | — | 70,468 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating loss |
(4,006 | ) | (66,462 | ) | — | (70,468 | ) | |||||||||||||||||
Other income |
||||||||||||||||||||||||
Interest expense |
— | (14 | ) | — | (14 | ) | ||||||||||||||||||
Interest income |
25 | — | (8 | ) | (aa | ) | 17 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total other income |
25 | (14 | ) | (8 | ) | 3 | ||||||||||||||||||
Net loss before income taxes |
(3,981 | ) | (66,476 | ) | (8 | ) | (70,465 | ) | ||||||||||||||||
Income tax expense |
— | 1,010 | — | (bb | ) | 1,010 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss |
(3,981 | ) | (67,486 | ) | (8 | ) | (71,475 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss attributable to noncontrolling interest |
— | — | (53,264 | ) | (cc | ) | (53,264 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss available to Class A ordinary shares |
$ | (3,981 | ) | $ | (67,486 | ) | $ | 53,256 | $ | (18,211 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Weighted average Class A ordinary shares, basic and diluted |
61,540,231 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net loss per share attributable to Class A ordinary shares, basic and diluted |
$ | (0.30 | ) | (dd | ) |
SCS Historical |
ProKidney Historical |
Transaction Accounting Adjustments (Note 3) |
Note |
Proforma Combined |
||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||
Research and development |
$ | — | $ | 46,255 | $ | — | $ | 46,255 | ||||||||||||||||
Operation and formation costs |
2,333 | — | 2,333 | |||||||||||||||||||||
General and administrative |
— | 8,855 | — | 8,855 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses |
2,333 | 55,110 | — | 57,443 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating loss |
(2,333 | ) | (55,110 | ) | — | (57,443 | ) | |||||||||||||||||
Other income |
||||||||||||||||||||||||
Interest income |
8 | 2 | (8 | ) | (aa | ) | 2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total other income |
8 | 2 | (8 | ) | 2 | |||||||||||||||||||
Net loss before income taxes |
(2,325 | ) | (55,108 | ) | (8 | ) | (57,441 | ) | ||||||||||||||||
Income tax expense |
— | 38 | — | (bb | ) | 38 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss |
(2,325 | ) | (55,146 | ) | (8 | ) | (57,479 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss attributable to noncontrolling interest |
— | — | (42,834 | ) | (cc | ) | (42,834 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss available to Class A ordinary shares |
$ | (2,325 | ) | $ | (55,146 | ) | $ | 42,826 | $ | (14,645 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Weighted average Class A ordinary shares, basic and diluted |
61,540,231 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net loss per share attributable to Class A ordinary shares, basic and diluted |
$ | (0.24 | ) | (dd | ) |
1. |
Description of Transaction |
• | prior to the Closing: (i) Legacy ProKidney amended and restated the ProKidney Limited Partnership Agreement to be in the form of the Second Amended and Restated ProKidney Limited Partnership Agreement, which became effective upon the completion of the Business Combination; (ii) GP amended and restated its constitution, which became effective upon the completion of the Business Combination; (iii) SCS obtained the requisite approvals to amend and restate its amended and restated the memorandum and articles of association then in effect to be in the form of the Charter, which became effective upon the completion of the Business Combination; (iv) (A) each issued and outstanding Legacy ProKidney Class B Unit that was not vested pursuant to the terms of the applicable award agreement with the PMEL Existing Holder as of such time was recapitalized into one PMEL RCU, which would, when vested in accordance with the applicable award agreement, automatically convert into a Post-Combination ProKidney Common Unit (and the associated Legacy ProKidney Class B PMEL RSR would vest) and (B) all other issued and outstanding Legacy ProKidney Class A Units and ProKidney Class B Units were recapitalized into an aggregate number of Post-Combination ProKidney Common Units equal to (x) 175,000,000 minus (y) the number of PMEL RCUs issued pursuant to the foregoing clause (A); (v) Legacy ProKidney completed a restructuring of PMEL; and (vi) Legacy ProKidney issued 5,000,000 Post-Combination ProKidney Common Units pursuant to certain Subscription Agreements in connection with the election by certain holders to purchase Post-Combination ProKidney Common Units in lieu of SCS Class A ordinary shares; and |
• | at the Closing: (i) Legacy ProKidney issued to SCS a number of Post-Combination ProKidney Common Units equal to the number of fully diluted outstanding SCS ordinary shares as of immediately prior to the Closing (but after giving effect to all redemptions of SCS Class A ordinary shares and the purchase of SCS Class A ordinary shares and/or Post-Combination ProKidney Common Units pursuant to the PIPE Investment), in exchange for (a) (x) ProKidney Class B ordinary shares, which shares have no economic rights but entitle the holders thereof to vote on all matters on which shareholders of the combined company are entitled to vote generally, and (y) ProKidney Class B PMEL RSRs, which shall convert into ProKidney Class B ordinary shares upon the vesting of the associated PMEL RCUs (as described above), (b) an amount in cash equal to the aggregate proceeds obtained by SCS in the PIPE Investment and (c) an amount in cash equal to the aggregate proceeds available for release to SCS from the Trust Account (after giving effect to all redemptions of SCS Class A ordinary shares and after payment of any deferred underwriting commissions being held in the Trust Account and payment of certain transaction expenses); (ii) Legacy GP resigned as the general partner of Legacy ProKidney and GP was be admitted as the general partner of Legacy ProKidney; (iii) Legacy ProKidney distributed to the Closing ProKidney Unitholders the ProKidney Class B ordinary shares and ProKidney Class B PMEL RSRs received pursuant to clause (i)(a) (x) and (y) above; and (iv) the Earnout Participants received the Earnout Rights, which Earnout Rights will vest in three equal tranches upon the achievement of certain ProKidney share price milestones or certain change of control events. When |
vested, the Earnout RCUs will automatically convert into Post-Combination ProKidney Common Units and the associated Earnout RSRs will automatically convert into ProKidney Class B ordinary shares, respectively. |
• | The individual controlling Legacy ProKidney prior to the Business Combination also controls the combined company as a result of the Voting Agreement, which provides Tolerantia with the majority of the votes related to the appointment and removal of the majority of the Board; |
• | The Legacy ProKidney unitholders prior to the Closing comprise a majority of the voting power of the combined company following the Closing; |
• | Senior management of Legacy ProKidney prior to the Closing comprise the senior management of the combined company following the Closing; and |
• | The operations of Legacy ProKidney prior to the Closing comprise the ongoing operations of the combined company following the Closing. |
Units |
Percentage |
|||||||
Interest in ProKidney LP held by the Issuer |
61,540,231 | 25.5 | % | |||||
Noncontrolling interest in the Issuer |
180,000,000 | 74.5 | % | |||||
|
|
|
|
|||||
Total |
241,540,231 | 100.0 | % |
2. |
Adjustments to Unaudited Pro Forma Condensed Combined Financial Information |
3. |
Transaction Adjustments |
(a) | Represents pro forma adjustments to cash and cash equivalents to reflect the following: |
(in thousands) |
Note |
|||||||
SCS cash held in Trust Account |
(1 | ) | $ | 250,034 | ||||
Payment of deferred underwriting fees |
(2 | ) | (7,700 | ) | ||||
PIPE Financing |
(3 | ) | 574,800 | |||||
Payment to redeeming Public Stockholders |
(4 | ) | (228,329 | ) | ||||
Payment of other transaction costs |
(5 | ) | (37,300 | ) | ||||
Repayment of related party notes payable |
(6 | ) | (20,000 | ) | ||||
Repayment of related party advance |
(7 | ) | (44 | ) | ||||
|
|
|||||||
Excess cash to balance sheet from Business Combination |
$ |
531,461 |
||||||
|
|
(1) | Reflects the liquidation and reclassification of investments held in the Trust Account to cash and cash equivalents. |
(2) | Reflects the payment of $7.7 million of underwriters’ fees deferred by SCS and which were paid at the Closing. |
(3) | Reflects the gross proceeds of $574.8 million from the issuance and sale of 57.5 million ProKidney Class A ordinary shares at $10.00 per share pursuant to the Subscription Agreements entered into with PIPE Investors in connection with the PIPE Investment. |
(4) | Represents the payments made to the holders of SCS Class A ordinary shares in connection with the redemption of 22,829,769 SCS Class A ordinary shares. |
(5) | Represents transaction costs of $37.3 million incurred by Legacy ProKidney prior to, or concurrent with, the Closing that were cash settled upon Closing in accordance with the Business Combination Agreement. Of that amount, approximately $17.5 million related to investment transaction fees; $11.9 million related to equity financing fees associated with the PIPE Investment, and the remaining $7.9 million related to direct and incremental costs such as legal, tax, accounting, third-party advisory and other miscellaneous fees. This amount excluded the $7.7 million of deferred underwriting fees related to the SCS initial public offering as described in note (2) above, any amounts relating to the ProKidney Promissory Notes, which were repaid at the Closing, and other SCS transaction costs. |
(6) | Represents repayment of amounts drawn on ProKidney Promissory Notes. |
(7) | Repayment of related party advance. |
(b) | Reflects the liquidation and reclassification of investments held in the Trust Account to cash and cash equivalents. |
(c) | Represents reclassification of Legacy ProKidney deferred offering costs incurred through March 31, 2022 to additional paid in capital as an offset to the proceeds from the transaction. |
(d) | Reflects repayment of amounts drawn on the ProKidney Promissory Notes. |
(e) | Repayment of related party advance. |
(f) | Reflects the payment of $7.7 million of underwriters’ fees deferred by SCS for which payment is due upon the Closing. |
(g) | Upon the completion of the Business Combination, the combined company became a party to the Tax Receivable Agreement. Under the terms of the Tax Receivable Agreement, the combined company is required to pay to certain parties to the agreement 85% of the tax savings that it is deemed to realize in certain circumstances as a result of certain tax attributes that exist following the Transaction and that are created thereafter, including as a result of payments made under the Tax Receivable Agreement. The combined company does not expect to record net deferred tax assets related to the tax basis adjustments associated with the exchange of Paired Interests as those deferred tax assets are not more |
likely than not expected to be realized in accordance with ASC 740—Income Taxes. Accordingly, the combined company has not recorded a liability related to the Tax Receivable Agreement as of December 31, 2021, as the liability is not considered to be probable in accordance with ASC 450—Contingencies. |
(h) | Reflects the reclassification of SCS Class A ordinary shares, giving effect to the redemption of 22,829,769 SCS Class A ordinary shares. |
(i) | As discussed in Note 1 to these unaudited pro forma condensed consolidated financial statements, the combined company will consolidate ProKidney, but does not own 100% of the economic interest in ProKidney. The noncontrolling interest reflecting actual redemptions is 74.5%. |
(j) | Reflects the gross proceeds of $574.8 million, net of an adjustment for the associated par value, from the issuance and sale of 57.5 million ProKidney Class A ordinary shares at $10.00 per share pursuant to the Subscription Agreements entered into with PIPE Investors in connection with the PIPE Investment. |
(k) | Represents the recapitalization of the Legacy ProKidney Class A and Class B Units upon issuance of ProKidney Class B ordinary shares and Class B PMEL RSRs to Closing ProKidney Unitholders. |
(l) | Represents pro forma adjustments to additional paid in capital to reflect the following: |
(in thousands) |
Note |
|||||||
PIPE Financing |
(j | ) | $ | 574,743 | ||||
Reclassification of ordinary shares subject to redemption to permanent equity |
(h | ) | 21,705 | |||||
Issuance of Class B ordinary shares to existing ProKidney owners |
(k | ) | (18 | ) | ||||
Transaction related fees |
(m | ) | (37,300 | ) | ||||
Issuance of Earnout Shares |
(n | ) | — | |||||
Reclassification of ProKidney deferred offering costs to equity upon close |
(c | ) | (5,108 | ) | ||||
Noncontrolling interest |
(i | ) | (422,491 | ) | ||||
|
|
|||||||
Adjusted additional paid in capital |
$ |
131,531 |
||||||
|
|
(m) | Represents transaction costs of $37.3 million incurred by Legacy ProKidney prior to, or concurrent with, the Closing that were cash settled upon Closing in accordance with the Business Combination Agreement. Of that amount, approximately $17.5 million related to investment transaction fees; $11.9 million related to equity financing fees associated with the PIPE financing and the remaining $7.9 million related to direct and incremental costs such as legal, tax, accounting, third-party advisory and other miscellaneous fees. This amount excluded the $7.7 million of deferred underwriting fees related to the SCS initial public offering as described in note (2) above, any amounts relating to the ProKidney Promissory Notes, which were repaid at the Closing, and other SCS transaction costs. |
(n) | Represents the issuance of 17,500,000 Earnout Rights to Earnout Participants upon Closing. As discussed in Note 2 to the unaudited condensed consolidated financial statements, the adjustment to recognize the Earnout Rights would have no net impact on any financial statement line item as it would simultaneously increase and decrease additional paid-in capital. |
(o) | Represents the exchange of SCS Class A ordinary shares, SCS Class B ordinary shares and related director restricted stock units held by the Sponsor and an independent director of SCS for ProKidney Class A ordinary shares. |
(aa) | Represents the adjustment to eliminate interest income related to the investment held in Trust Account. |
(bb) | Does not reflect a pro forma adjustment to income tax expense as Legacy ProKidney has historically been in a net loss position. Legacy ProKidney files as a partnership for federal and state income tax |
purposes. As such, each partner is responsible for reporting income or loss to the extent required by federal and state income tax regulations, based upon their respective share of Legacy ProKidney income and expenses. ProKidney-US is a limited liability company and has elected to be treated as a C corporation, therefore, a provision for federal and state taxes has been recorded. Income tax expense of the combined company may differ from historical results due to the change in structure of ProKidney. |
(cc) | Represents the adjustment for the net loss attributable to noncontrolling interest. The noncontrolling interest, giving effect to redemptions, is 74.5%. |
(dd) | Represents the loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2021. As the Business Combination and related equity transactions are being reflected as if they had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted net income per share assumes that the shares issuable relating to the Business Combination were outstanding for the entirety of the period presented. |
(a) | Represents pro forma adjustments to cash and cash equivalents to reflect the following: |
(in thousands) |
Note |
|||||||
SCS cash held in Trust Account |
(1 | ) | $ | 250,008 | ||||
Payment of deferred underwriting fees |
(2 | ) | (7,700 | ) | ||||
PIPE Financing |
(3 | ) | 574,800 | |||||
Payment to redeeming Public Shareholders |
(4 | ) | (228,305 | ) | ||||
Payment of other transaction costs |
(5 | ) | (37,300 | ) | ||||
Repayment of related party advance |
(6 | ) | (10 | ) | ||||
|
|
|||||||
Excess cash to balance sheet from Business Combination |
$ |
551,493 |
||||||
|
|
(1) | Reflects the liquidation and reclassification of investments held in the Trust Account to cash and cash equivalents. |
(2) | Reflects the payment of $7.7 million of underwriters’ fees deferred by SCS and which were paid at the Closing. |
(3) | Reflects the gross proceeds of $574.8 million from the issuance and sale of 57.5 million ProKidney Class A ordinary shares at $10.00 per share pursuant to the Subscription Agreements entered into with PIPE Investors in connection with the PIPE Investment. |
(4) | Represents the payments made to the holders of SCS Class A ordinary shares in connection with the redemption of 22,829,769 SCS Class A ordinary shares. |
(5) | Represents transaction costs of $37.3 million incurred by Legacy ProKidney prior to, or concurrent with, the Closing that were cash settled upon Closing in accordance with the Business Combination Agreement. Of that amount, approximately $17.5 million related to investment transaction fees; $11.9 million related to equity financing fees associated with the PIPE financing and the remaining $7.9 million related to direct and incremental costs such as legal, tax, accounting, third-party advisory and other miscellaneous fees. This amount excludes the $7.7 million of deferred underwriting fees related to the SCS initial public offering as described in note (2) above, any amounts relating to the ProKidney Promissory Notes, which were repaid at the Closing, and other SCS transaction costs. |
(6) | Repayment of related party advance. |
(b) | Reflects the liquidation and reclassification of investments held in the Trust Account to cash and cash equivalents. |
(c) | Repayment of related party advance. |
(d) | Reflects the payment of $7.7 million of underwriters’ fees deferred by SCS and which were paid at the Closing. |
(e) | Reflects the reclassification of SCS Class A ordinary shares, giving effect to the redemption of 22,829,769 SCS Class A ordinary shares. |
(f) | As discussed in Note 1 to these unaudited pro forma condensed consolidated financial statements, the combined company will consolidate ProKidney but does not own 100% of the economic interest in Legacy ProKidney. The noncontrolling interest reflecting actual redemptions is 74.5%. |
(g) | Reflects the gross proceeds of $574.8 million, net of an adjustment for the associated par value, from the issuance and sale of 57.5 million ProKidney Class A ordinary shares at $10.00 per share pursuant to the Subscription Agreements entered into with PIPE Investors in connection with the PIPE Investment. |
(h) | Represents the recapitalization of the Legacy ProKidney Class A and Class B Units upon issuance of ProKidney Class B ordinary shares and Class B PMEL RSRs to Closing ProKidney Unitholders. |
(i) | Represents pro forma adjustments to additional paid in capital to reflect the following: |
(in thousands) |
Note |
|||||||
PIPE Financing |
(g | ) | $ | 574,743 | ||||
Reclassification of ordinary shares subject to redemption to permanent equity |
(e | ) | 21,703 | |||||
Issuance of Class B ordinary shares to existing ProKidney owners |
(h | ) | (18 | ) | ||||
Transaction related fees |
(j | ) | (37,300 | ) | ||||
Issuance of Earnout Shares |
(k | ) | — | |||||
Noncontrolling interest |
(f | ) | (430,480 | ) | ||||
|
|
|||||||
Adjusted additional paid in capital |
$ |
128,648 |
||||||
|
|
(j) | Represents transaction costs of $37.3 million incurred by Legacy ProKidney prior to, or concurrent with, the Closing that were cash settled upon Closing in accordance with the Business Combination Agreement. Of that amount, approximately $17.5 million related to investment transaction fees; $11.9 million related to equity financing fees associated with the PIPE financing and the remaining $7.9 million related to direct and incremental costs such as legal, tax, accounting, third-party advisory and other miscellaneous fees. This amount excluded the $7.7 million of deferred underwriting fees related to the SCS initial public offering as described in note (2) above, any amounts relating to the ProKidney Promissory Notes, which were repaid at the Closing, and other SCS transaction costs. |
(k) | Represents the issuance of 17,500,000 Earnout Rights to Earnout Participants upon Closing. As discussed in Note 2 to the unaudited condensed consolidated financial statements, the adjustment to recognize the Earnout Rights would have no net impact on any financial statement line item as it would simultaneously increase and decrease additional paid-in capital. |
(l) | Represents the exchange of SCS Class A ordinary shares, SCS Class B ordinary shares and related director restricted stock units held by the Sponsor and an independent director of SCS for ProKidney Class A ordinary shares. |
(m) | Upon the completion of the Business Combination, the combined company became a party to the Tax Receivable Agreement. Under the terms of the Tax Receivable Agreement, the combined company is required to pay to certain parties to the agreement 85% of the tax savings that it is deemed to realize in certain circumstances as a result of certain tax attributes that exist following the Transaction and that are created thereafter, including as a result of payments made under the Tax Receivable Agreement. The combined company does not expect to record net deferred tax assets related to the tax basis adjustments associated with the exchange of Paired Interests as those deferred tax assets are not more likely than not expected to be realized in accordance with ASC 740—Income Taxes. Accordingly, the combined company has not recorded a liability related to the Tax Receivable Agreement as of December 31, 2021, as the liability is not considered to be probable in accordance with ASC 450—Contingencies. |
(aa) | Represents the adjustment to eliminate interest income related to the investment held in Trust Account. |
(bb) | Does not reflect a pro forma adjustment to income tax expense as Legacy ProKidney has historically been in a net loss position. Legacy ProKidney files as a partnership for federal and state income tax purposes. As such, each partner is responsible for reporting income or loss to the extent required by federal and state income tax regulations, based upon their respective share of Legacy ProKidney income and expenses. ProKidney-US is a limited liability company and has elected to be treated as a C corporation, therefore, a provision for federal and state taxes has been recorded. Income tax expense of the combined company may differ from historical results due to the change in structure of ProKidney. |
(cc) | Represents the adjustment for the net loss attributable to noncontrolling interest. The noncontrolling interest, giving effect to actual redemptions, is 74.5%. |
(dd) | Represents the loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2021. As the Business Combination and related equity transactions are being reflected as if they had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted net income per share assumes that the shares issuable relating to the Business Combination were outstanding for the entirety of the period presented. |
* |
Plan to launch an additional phase 3 trial REGEN-016 in the first quarter of 2023. |
• | Obtain regulatory approval for and successfully commercialize REACT, initially as a treatment for patients with chronic kidney disease caused by diabetes. REGEN-006, in the fourth quarter of 2021 with the first Informed Consent Form signed and the first subject randomized into the trial in the first quarter of 2022. Our second Phase 3 trial, REGEN-016, is planned to randomize, or “launch,” in the first quarter of 2023 outside the United States. A long term follow up trial, REGEN-008, is expected to launch in late 2023, for subjects who received REACT as part of our trials REGEN-006, REGEN-007 and REGEN-016. |
• | Expand the clinical development of REACT for the treatment of additional indications, including CKD caused by Congenital Anomalies of the Kidney and Urinary Tract and hypertension. REGEN-004, a Phase 1 clinical trial that is designed to assess the ability of REACT to prevent, stop, or delay the negative effects of CAKUT. We aim to complete the enrollment and obtain additional interim data by the end of 2022. Results from interim data may not be indicative of results from future data as patient enrollment continues and more patient data becomes available and will be viewed with caution until the final data are available. Hypertension related CKD is the second most common cause of CKD in adults. Future trials may address CKD in this population. |
• | Discover and develop additional product candidates for the treatment of kidney diseases utilizing our cell therapy approach. in-license from or collaborate with third parties to develop product candidates that, based on our understanding of kidney diseases and pathways, we believe are promising therapeutics. |
• | Maintain and continually refine our sophisticated internal expertise in manufacturing our products |
* | Based on ProKidney management estimates and analysis |
• | increased the planned sample size from 500 to 600 subjects in both REGEN-006 and REGEN-016; |
• | removed the increase in UACR of at least 30% and of at least 30 mg/g, using the random urine microalbumin/urine creatinine ratio sustained for 90 days, from the primary composite endpoint for both REGEN-006 and REGEN-016; and |
• | added a sham control arm and single blind component to the design of REGEN-016. |
• | at least 40% reduction in eGFR, using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days; |
• | eGFR <15 mL/min/1.73m² using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days and/or chronic dialysis, and/or renal transplant; or |
• | renal or cardiovascular death. |
• | at least 40% reduction in eGFR, using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days; |
• | eGFR <15 mL/min/1.73m² using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days and/or chronic dialysis, and/or renal transplant; or |
• | renal or cardiovascular death. |
• | completion of nonclinical laboratory tests and animal studies according to GLP, and applicable requirements for the humane use of laboratory animals or other applicable regulations; |
• | submission to the FDA of an application for an IND which must become effective before human clinical trials may begin; |
• | approval of the protocol and related documentation by an IRB, or ethics committee at each clinical trial site before each clinical trial may be initiated; |
• | performance of adequate and well-controlled human clinical trials according to applicable IND regulations, good clinical practices, or GCPs and other clinical-trial related regulation, to evaluate the safety and efficacy of the investigational biological product for each proposed indication; |
• | submission to the FDA of a BLA for marketing approval that includes sufficient evidence of establishing the safety, purity, and potency of the proposed biological product for each proposed indication, including from results of nonclinical testing and clinical trials; |
• | satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity and, if applicable, compliance with the FDA’s cGTPs for the use of human cellular and tissue products; |
• | potential FDA audit of the nonclinical study and clinical trial sites to assure compliance with GLP and GCP and the integrity of the clinical data submitted in support of the BLA; |
• | review of the product candidate by an FDA advisory committee, where appropriate or if applicable; |
• | payment of user fees for FDA review of the BLA (unless a fee waiver applies); and |
• | FDA review and approval, or licensure, of the BLA. |
• | Phase 1 |
• | Phase 2 |
• | Phase 3 |
• | restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; |
• | fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials; |
• | refusal of the FDA to approve pending NDAs/BLAs or supplements to approved NDAs/BLAs, or suspension or revocation of product approvals; |
• | product seizure or detention, or refusal to permit the import or export of products; |
• | injunctions or the imposition of civil or criminal penalties; and |
• | consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs; or mandated modification of promotional materials and labeling and the issuance of corrective information. |
• | The holder of a marketing authorization must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, who is responsible for oversight of that |
system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports (“PSURs”). |
• | All new MAAs must include a risk management plan (“RMP”), describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the marketing authorization. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies. RMPs and PSURs are routinely available to third parties requesting access, subject to limited redactions. |
• | All advertising and promotional activities for the product must be consistent with the approved Summary of Product Characteristics (“SmPC”), and therefore all off-label promotion is prohibited. Direct-to-consumer |
• | the AKS, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order, arrangement or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal health care program, such as the Medicare and Medicaid programs; a person or entity does not need to have actual knowledge of the AKS or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA or federal civil money penalties statute; |
• | the federal civil and criminal false claims laws and civil monetary penalty laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal health care programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payers if they are deemed to “cause” the submission of false or fraudulent claims. The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; |
• | the Civil Monetary Penalties Law (beneficiary inducement law), which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program; |
• | HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, health care benefits, items or services relating to health care matters; similar to the AKS, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; |
• | the federal transparency requirements under the ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which requires applicable manufacturers of medicines, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S. Department of Health and Human Services (“DHHS”) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, certified nurse midwives and teaching hospitals, as well as ownership and investment interests held by the providers described above and their immediate family; and |
• | the FCPA and other anti-corruption laws and regulations pertaining to our financial relationships and interactions with foreign government officials, which prohibit U.S. companies and their employees, officers, and representatives from paying, offering to pay, promising, or authorizing the payment of |
anything of value to any foreign government official (including, potentially, healthcare professionals in countries in which we operate or may sell our products), government staff member, political party, or political candidate to obtain or retain business or to otherwise seek favorable treatment. |
• | external research and development expenses incurred under agreements with CROs and other scientific development services; |
• | costs of other outside consultants, including their fees and related travel expenses; |
• | costs related to compliance with quality and regulatory requirements; |
• | costs of laboratory supplies and acquiring and developing clinical trial materials; |
• | payments made under third-party licensing agreements; |
• | personnel-related expenses, including salaries, bonuses, benefits and share-based compensation expenses, for individuals involved in research and development activities; and |
• | facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, insurance and other internal operating costs. |
• | 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 including 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, particularly in light of the current COVID-19 pandemic environment; |
• | the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the U.S. Food and Drug Administration (“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, particularly in light of the current COVID-19 pandemic environment; |
• | 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, should it obtain regulatory approval. |
Three Months Ended March 31, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
Operating expenses: |
||||||||||||
Research and development |
$ | 28,490 | $ | 9,859 | $ | 18,631 | ||||||
General and administrative |
37,972 | 1,744 | 36,228 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expense |
66,462 | 11,603 | 54,859 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(66,462 | ) | (11,603 | ) | (54,859 | ) | ||||||
|
|
|
|
|
|
|||||||
Interest expense |
(14 | ) | — | (14 | ) | |||||||
|
|
|
|
|
|
|||||||
Net loss before taxes |
(66,476 | ) | (11,603 | ) | (54,873 | ) | ||||||
|
|
|
|
|
|
|||||||
Income tax expense (benefit) |
1,010 | 6 | 1,004 | |||||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | (67,486 | ) | $ | (11,609 | ) | $ | (55,877 | ) | |||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
Operating expenses: |
||||||||||||
Research and development |
$ | 46,255 | $ | 21,042 | $ | 25,213 | ||||||
General and administrative |
8,855 | 5,982 | 2,873 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expense |
55,110 | 27,024 | 28,086 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(55,110 | ) | (27,024 | ) | (28,086 | ) | ||||||
|
|
|
|
|
|
|||||||
Other income |
||||||||||||
Interest income |
2 | 43 | (41 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net loss before taxes |
(55,108 | ) | (26,981 | ) | (28,127 | ) | ||||||
|
|
|
|
|
|
|||||||
Income tax expense (benefit) |
38 | (232 | ) | 270 | ||||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | (55,146 | ) | $ | (26,749 | ) | $ | (28,397 | ) | |||
|
|
|
|
|
|
• | 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. |
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Net cash used in operating activities |
$ | (15,459 | ) | $ | (7,256 | ) | ||
Net cash used in investing activities |
(839 | ) | (1,389 | ) | ||||
Net cash provided by financing activities |
25,542 | 19,993 | ||||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
$ | 9,244 | $ | 11,348 | ||||
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Net cash used in operating activities |
$ | (50,299 | ) | $ | (25,181 | ) | ||
Net cash used in investing activities |
(5,191 | ) | (5,456 | ) | ||||
Net cash provided by financing activities |
71,470 | 19,989 | ||||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
$ | 15,980 | $ | (10,648 | ) | |||
|
|
|
|
• | the names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member and the voting rights of shares; |
• | the date on which the name of any person was entered on the register as a member; and |
• | the date on which any person ceased to be a member. |
• | we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with; |
• | the shareholders have been fairly represented at the meeting in question; |
• | the arrangement is such as a businessman would reasonably approve; and |
• | the arrangement is not one that would more properly be sanctioned under some other provision of the Cayman Islands Companies Act or that would amount to a “fraud on the minority.” |
• | a company is acting, or proposing to act, illegally or beyond the scope of its authority; |
• | the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or |
• | those who control the company are perpetrating a “fraud on the minority.” |
• | annual reporting requirements are minimal and consist mainly of a statement that the company has conducted its operations mainly outside of the Cayman Islands and has complied with the provisions of the Cayman Islands Companies Act; |
• | an exempted company’s register of members is not open to inspection; |
• | an exempted company does not have to hold an annual shareholder meeting; |
• | an exempted company may issue negotiable or bearer shares or shares with no par value; |
• | an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 30 years in the first instance); |
• | an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
• | an exempted company may register as a limited duration company; and |
• | an exempted company may register as a segregated portfolio company. |
a) | the purchaser is a relevant financial business required to comply with the Regulations or is a majority-owned subsidiary of such a business; or |
b) | assessed as having a low degree of risk of money laundering and terrorist financing in accordance with the Regulations (each a “Low Risk Country”) or is a majority-owned subsidiary of such subscriber; or |
c) | the purchaser is a central or local government organization, statutory body or agency of government in the Cayman Islands or a Low Risk Country; or |
d) | the purchaser is a company that is listed on a recognized stock exchange and subject to disclosure requirements which impose requirements to ensure adequate transparency of beneficial ownership, or is a majority-owned subsidiary of such a company; or |
e) | the purchaser is a pension fund for a professional association, trade union or is acting on behalf of employees of an entity referred to in sub-paragraphs (a) to (d); or |
f) | the application is made through a nominee or the applicant is relying on an introduction from an introducer, which nominee or introducer, as applicable, falls within one of sub-paragraphs (a) to (e). In this situation the company may rely on a written assurance from the nominee or the introducer (as applicable) which confirms (i) that the requisite identification and verification procedures on the applicant for business and (for introducers only) its beneficial owners have been carried out; (ii) the nature and intended purpose of the business relationship; (iii) that the nominee or the introducer has identified the source of funds of the applicant for business; (iv) (for introducers only) that the introducer is supervised or monitored by an overseas regulatory authority and has measures in place to comply with customer due diligence and record keeping requirements; and (v) that the nominee or introducer shall make available on request and without delay copies of any identification and verification data or information and relevant documents. |
• | where this is necessary for the performance of our rights and obligations under any purchase agreements; |
• | where this is necessary for compliance with a legal and regulatory obligation to which we are subject (such as compliance with anti-money laundering, counter-terrorist financing, prevention of proliferation financing, financial sanctions and FATCA/CRS requirements); and/or |
• | where this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental rights or freedoms. |
• | be informed about the purposes for which your personal data are processed; |
• | access your personal data; |
• | stop direct marketing; |
• | restrict the processing of your personal data; |
• | have incomplete or inaccurate personal data corrected; |
• | ask us to stop processing your personal data; |
• | be informed of a personal data breach (unless the breach is unlikely to be prejudicial to you); |
• | complain to the Data Protection Ombudsman; and |
• | require us to delete your personal data in some limited circumstances. |
• | 1% of the total number of ordinary shares then outstanding; or |
• | the average weekly reported trading volume of ordinary shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the |
• | Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials) other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | each person known to the Company to be the beneficial owner of more than 5% of the outstanding Company ordinary shares; |
• | each of Company’s executive officers and directors; and |
• | all executive officers and directors of the Company as a group. |
Name and Address of Beneficial Owner(1) |
Class A Ordinary Shares |
Class B Ordinary Shares |
% of Total Voting Power |
|||||||||
Directors and Named Executive Officers |
||||||||||||
Tim Bertram, Ph.D.(2) |
— | 2,696,468 | 1.2 | % | ||||||||
Pablo Legorreta(3)(11) |
— | 94,677,968 | 40.8 | % | ||||||||
William F. Doyle(4) |
— | 1,350,469 | * | |||||||||
Jennifer Fox |
— | — | — | |||||||||
José Ignacio Jiménez Santos |
— | — | — | |||||||||
Alan M. Lotvin(5) |
— | 1,350,469 | * | |||||||||
John M. Maraganore, Ph.D.(6) |
— | 450,156 | * | |||||||||
Brian J.G. Pereira, M.D(7) |
— | 1,350,469 | * | |||||||||
Uma Sinha, Ph.D. |
30,000 | — | * | |||||||||
Deepak Jain, Ph.D.(8) |
— | 937,836 | * | |||||||||
Joseph Stavas, M.D., MPH(9) |
— | 735,391 | * | |||||||||
All Directors and Executive Officers as a Group (14 persons) |
30,000 | 103,453,062 | 44.6 | % | ||||||||
Greater-than-Five Percent Holders: |
||||||||||||
Tolerantia, LLC(3)(11) |
— | 94,677,968 | 40.8 | % | ||||||||
Control Empresarial de Capitales, S.A. de C.V. (formerly Inversora Carso, S.A. de C.V.)(10)(11) |
— | 63,118,645 | 27.2 | % | ||||||||
Chamath Palihapitiya(12) |
13,273,000 | — | 5.5 | % | ||||||||
SC PIPE Holdings LLC(12) |
9,500,000 | — | 3.9 | % | ||||||||
Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, as Trustee of Trust I14165(14) |
5,000,000 | — | 2.2 | % | ||||||||
IHCI Investments LP(15) |
5,000,000 | — | 2.2 | % | ||||||||
Jupiter CAN LP(16) |
5,000,000 | — | 2.2 | % | ||||||||
Morgan Stanley Investment Management Inc.(17) |
10,000,000 | — | 4.3 | % | ||||||||
Averill Master Fund, Ltd.(18) |
3,140,000 | — | 1.4 | % |
* | Indicated beneficial ownership of less than 1%. |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o ProKidney Corp., 2000 Frontis Plaza Blvd., Ste 250, Winston-Salem, North Carolina, 27103. |
(2) | Represents 2,696,468 Class B ordinary shares issued as consideration in the Business Combination and does not include 2,248,469 Class B ordinary shares issuable upon the vesting of PMEL RCUs. |
(3) | Represents 94,677,968 Class B ordinary shares held by Tolerantia, LLC (“Tolerantia”), a Delaware limited liability company, which is an affiliate controlled and majority-owned by Mr. Pablo Legorreta. Mr. Legorreta controls the voting and disposition of the shares held by Tolerantia. Mr. Legorreta disclaims beneficial ownership of the shares held by Tolerantia except to the extent of his indirect pecuniary interest therein. The business address of Tolerantia is 110, East 59th Street, Suite 3300, New York, New York, 10022. |
(4) | Represents 1,350,469 Class B ordinary shares issued as consideration in the Business Combination and does not include 163,857 Class B ordinary shares issuable upon the vesting of PMEL RCUs. |
(5) | Represents 1,350,469 Class B ordinary shares issued as consideration in the Business Combination and does not include 163,857 Class B ordinary shares issuable upon the vesting of PMEL RCUs. |
(6) | Represents 450,156 Class B ordinary shares issued as consideration in the Business Combination and does not include 163,857 Class B ordinary shares issuable upon the vesting of PMEL RCUs. |
(7) | Represents 1,350,469 Class B ordinary shares issued as consideration in the Business Combination and does not include 163,857 Class B ordinary shares issuable upon the vesting of PMEL RCUs. |
(8) | Represents 937,836 Class B ordinary shares issued as consideration in the Business Combination and does not include 630,103 Class B ordinary shares issuable upon the vesting of PMEL RCUs. |
(9) | Represents 735,391 Class B ordinary shares issued as consideration in the Business Combination and does not include 315,650 Class B ordinary shares issuable upon the vesting of PMEL RCUs. |
(10) | Information in the table and footnote is based upon information provided to us by the direct shareholder, Control Empresarial de Capitales S.A. de C.V., acting as successor of Inversora Carso S.A. de C.V. by virtue of a merger (“CEC”). Represents 63,118,645 Class B ordinary shares held by CEC. Members of the Slim family, directly or indirectly, own all of the issued and outstanding voting equity securities of CEC. Therefore, the Slim family may be deemed to beneficially own indirectly the Class B ordinary shares held by CEC. CEC is a sociedad anónima de capital variable organized under the laws of the United Mexican States (“Mexico”). The Slim family has an address of Paseo de las Palmas 736, Colonia Lomas de Chapultepec, 11000 Ciudad de Mexico, Mexico and Control Empresarial has an address of Paseo de las Palmas 781, Piso 3, Colonia Lomas de Chapultepec, Seccion III, Migual Hidalgo, Ciudad de Mexico, Mexico, 11000. |
(11) | The Voting Agreement provides that from the Closing until the third anniversary of the Closing, CEC shall vote all ordinary shares beneficially held by it in a manner proportionate to the manner in which all other Class B ordinary shares not held by CEC, including the Class B ordinary shares beneficially held by Tolerantia, are voted, with respect to the election, appointment, or removal of any director to the Board. As a result, Tolerantia may be deemed to share beneficial ownership of CEC’s ordinary shares. |
(12) | The business address of each of Chamath Palihapitiya and SC PIPE Holdings LLC is c/o SC Master Holdings, LLC 506 Santa Cruz Avenue, Suite 300. |
(13) | Consists of 9,500,000 Class A ordinary shares held of record by SC PIPE Holdings LLC and 3,773,000 Class A ordinary shares held of record by SC Master Holdings, LLC. Mr. Palihapitiya may be deemed to beneficially own (within the meaning of Rule 13d-3 under the Exchange Act) securities held by SC PIPE Holdings LLC and/or SC Master Holdings, LLC by virtue of his control over such entities. |
(14) | Consists of 5,000,000 Class A ordinary shares held of record by Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, acting solely and exclusively in its capacity as trustee of the trustee of Trust I14165 (the “Trust”), whose record holders are the Trust Beneficiaries (as defined below), issued in connection with, and, upon the closing of, the PIPE Placement. Each of (i) Bertha Paula Michel Gonzalez, (ii) Maria Magdalena Michel Gonzalez and (iii) Maximino Jose Michel Gonzalez (collectively, the “Trust Beneficiaries”), has voting and dispositive power over, one-third of the total number of Class A ordinary shares held by the Trust. The address of the Trust is Boulevard Manuel Avila Camacho No. 40, Piso 7, Lomas De Chapultepec, Ciudad De México 11000. The address of each of the Trust Beneficiaries is Bosque De Radiatas 6-602, Bosques De Las Lomas, Cuajimalpa 05120, Mexico. |
(15) | Consists of 5,000,000 Class A ordinary shares held of record by IHCI Investments LP issued in connection with, and, upon the closing of, the PIPE Placement. The address of IHCI Investments LP is 1188 Union, Montreal QC H3B 0E5, Canada. |
(16) | Consists of 5,000,000 Class A ordinary shares held of record by Jupiter CAN LP issued in connection with, and, upon the closing of, the PIPE Placement. The address of Jupiter CAN LP is 5930 Royal Lane, Suite E, #117, Dallas TX 75230-3896. |
(17) | Morgan Stanley Investment Management Inc. is the adviser or sub-adviser, as the case may be, of each of (i) Brighthouse Funds Trust I: Morgan Stanley Discovery Portfolio, holding 497,653 Class A ordinary shares, (ii) ERAFP Actions Mid Cap USA I holding 12,443 Class A ordinary shares, (iii) Growth Trust holding 245,905 Class A ordinary shares, (iv) Inception Trust holding, 166,790 Class A ordinary shares, (v) Johnson & Johnson Pension and Savings Master Trust (JJ9L) holding 15,421 Class A ordinary shares, (vi) Johnson & Johnson Pension and Savings Master Trust (JJ9LDB) holding 136,426 Class A ordinary shares, (vii) Kinstead Global Equity Pool holding 16,039 Class A ordinary shares, (viii) Lawrencium Atoll Investments Ltd. holding 34,707 Class A ordinary shares, (ix) Master Trust for Defined Contribution Plans of American Airlines, Inc. and Affiliates holding 109,253 Class A ordinary shares, (x) Morgan Stanley Funds (UK)—Global Insight Fund holding 7,231 Class A ordinary shares, (xi) Morgan Stanley Insight Fund holding 1,421,688 Class A ordinary shares, (xii) Morgan Stanley Institutional Fund Trust—Discovery Portfolio holding 800,384 Class A ordinary shares, (xiii) Morgan Stanley Institutional Fund, Inc.—Inception Portfolio holding 332,167 Class A ordinary shares, (xiv) Morgan Stanley Institutional Fund, Inc.—Counterpoint Global Portfolio holding 3,802 Class A ordinary shares, (xv) Morgan Stanley Institutional Fund, Inc.—Global Endurance Portfolio holding 19,748 Class A ordinary shares, (xvi) Morgan Stanley Institutional Fund, Inc.—Global Insight Portfolio holding 67,622 Class A ordinary shares, (xvii) Morgan Stanley Institutional Fund, Inc.—Growth Portfolio holding 3,865,953 Class A ordinary shares, (xviii) Morgan Stanley Investment Funds—Counterpoint Global Fund holding 1,657 Class A ordinary shares, (xiv) Morgan Stanley Investment Funds—Global Endurance Fund holding 34,186 Class A ordinary shares, (xx) Morgan Stanley Investment Funds—Global Insight Fund holding 293,852 Class A ordinary shares, (xxi) Morgan Stanley Investment Funds—US Growth Fund holding 1,549,102 Class A ordinary shares, (xxii) Morgan Stanley Investment Funds—US Insight Fund holding 46,844 Class A ordinary shares, (xxiii) Morgan Stanley Variable Insurance Fund, Inc.—Discovery Portfolio holding 79,084 Class A ordinary shares, (xxiv) Morgan Stanley Variable Insurance Fund, Inc.—Growth Portfolio holding 242,043 Class A ordinary shares (collectively, the “MS Accounts”) and holds voting and dispositive power with respect to shares of record held by each of the MS Accounts. Each of the MS accounts received their respective Class A ordinary shares in connection with the issuance of, and, upon the closing of, the PIPE Placement. The address of Morgan Stanley Investment Management Inc., acting as adviser or sub-adviser, as the case may be, of each of the MS Accounts is 522 Fifth Avenue, New York, NY 10036. |
(18) | Consists of 3,140,000 Class A ordinary shares held of record by Averill Master Fund, Ltd. issued in connection with, and, upon the closing of, the PIPE Placement. The address of Averill Master Fund, Ltd. is 540 Madison Avenue, 7th Floor, New York, NY 10022. |
Name of Selling Securityholder |
Class A Ordinary Shares |
Class B Ordinary Shares (or Securities Convertible into Class B Ordinary Shares) |
Percentage Voting Power |
Number of Ordinary Shares Offered |
Number of Ordinary Shares Beneficially Owned After the Offered Shares are Sold |
Percentage Voting Power |
||||||||||||||||||
Anna-Maria and Stephen Kellen Foundation, Inc.(1) |
1,000,000 | * | 1,000,000 | — | — | % | ||||||||||||||||||
Averill Master Fund, Ltd.(2) |
3,140,000 | 1.4 | % | 3,140,000 | — | — | % | |||||||||||||||||
Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, as Trustee of Trust I14165(3) |
5,000,000 | 2.2 | % | 5,000,000 | — | — | % | |||||||||||||||||
Brighthouse Funds Trust I: Morgan Stanley Discover y Portfolio(4) |
497,653 | * | 497,653 | — | — | % | ||||||||||||||||||
Brown University(5) |
1,000,000 | * | 1,000,000 | — | — | % | ||||||||||||||||||
Carlos X. Del Rio(6) |
27,500 | * | 27,500 | — | — | % | ||||||||||||||||||
Control Empresarial de Capitales, S.A. de C.V. (formerly Inversora Carso, S.A. de C.V.)(7) |
|
63,118,645 |
|
|
27.2 |
% |
63,118,645 | — | — | % |
Name of Selling Securityholder |
Class A Ordinary Shares |
Class B Ordinary Shares (or Securities Convertible into Class B Ordinary Shares) |
Percentage Voting Power |
Number of Ordinary Shares Offered |
Number of Ordinary Shares Beneficially Owned After the Offered Shares are Sold |
Percentage Voting Power |
||||||||||||||||||
CP WY REMAINDER INTEREST TRUST U/A/D DATED DECEMBER 22, 2021(8) |
3,000,000 | |
1.3 |
% |
3,000,000 | — | — | % | ||||||||||||||||
David Spiegel(9) |
10,000 | * | 10,000 | — | — | % | ||||||||||||||||||
Denise and Michael Kellen Foundation, Inc.(10) |
100,000 | * | 100,000 | — | — | % | ||||||||||||||||||
DJG Associated, LLC(11) |
600,000 | * | 600,000 | — | — | % | ||||||||||||||||||
Donald P. Spencer and Vickie Riccardo JTWROS(12) |
50,000 | * | 50,000 | — | — | % | ||||||||||||||||||
ERAFP Actions Mid Cap USA I(4) |
12,443 | * | 12,443 | — | — | % | ||||||||||||||||||
Fourteen Plus Twelve Partners, LLC(13) |
200,000 | * | 200,000 | — | — | % | ||||||||||||||||||
George W. Siguler Family Trust (14) |
125,000 | * | 125,000 | — | — | % | ||||||||||||||||||
Growth Trust(4) |
245,905 | * | 245,905 | — | — | % | ||||||||||||||||||
Hill Family Alternative Investments LLC(15) |
500,000 | * | 500,000 | — | — | % | ||||||||||||||||||
Hottinger AG(16) |
100,000 | * | 100,000 | — | — | % | ||||||||||||||||||
IHCI Investments LP(17) |
5,000,000 | 2.2 | % | 5,000,000 | — | — | % | |||||||||||||||||
Inception Trust(4) |
166,790 | * | 166,790 | — | — | % | ||||||||||||||||||
Johnson & Johnson Pension and Savings Master Trust (JJ9L)(4) |
15,421 | * | 15,421 | — | — | % | ||||||||||||||||||
Johnson & Johnson Pension and Savings Master Trust (JJ9LDB)(4) |
136,426 | |
* |
|
136,426 | — | — | % | ||||||||||||||||
Juan Maria Pedro David Michel(18) |
800,000 | * | 800,000 | — | — | % | ||||||||||||||||||
Jupiter CAN(19) |
5,000,000 | 2.2 | % | 5,000,000 | — | — | % | |||||||||||||||||
Kinstead Global Equity Pool(4) |
16,039 | * | 16,039 | — | — | % | ||||||||||||||||||
KJB Associated LLC(20) |
200,000 | * | 200,000 | — | — | % | ||||||||||||||||||
Lawrencium Atoll Investments Ltd.(4) |
34,707 | * | 34,707 | — | — | % | ||||||||||||||||||
Leman Management Nominees Limited(21) |
2,000,000 | * | 2,000,000 | — | — | % | ||||||||||||||||||
Luis Felipe Mancera de Arrigunaga(22) |
80,000 | * | 80,000 | — | — | % | ||||||||||||||||||
Marina Kellen French Foundation(23) |
100,000 | * | 100,000 | — | — | % | ||||||||||||||||||
Master Trust for Defined Contribution Plans of American Airlines, Inc. and Affiliates(4) |
109,253 | |
* |
|
109,253 | — | — | % | ||||||||||||||||
Max Pierre David Michel(24) |
800,000 | * | 800,000 | — | — | % | ||||||||||||||||||
MGG Strategic SICAF SIF, for and on behalf of its compartment, MGG Strategic(25) |
1,000,000 | |
* |
|
1,000,000 | — | — | % | ||||||||||||||||
Mikel Andoni Arriola Peñalosa (26) |
15,000 | * | 15,000 | — | — | % | ||||||||||||||||||
Monique Berthe Michele Madeleine David Michel(27) |
800,000 | * | 800,000 | — | — | % | ||||||||||||||||||
Morgan Stanley Funds (UK)—Global Insight Fund(4) |
7,231 | * | 7,231 | — | — | % | ||||||||||||||||||
Morgan Stanley Insight Fund(4) |
1,421,688 | * | 1,421,688 | — | — | % | ||||||||||||||||||
Morgan Stanley Institutional Fund Trust—Discovery Portfolio(4) |
800,384 | |
* |
|
800,384 | — | — | % | ||||||||||||||||
Morgan Stanley Institutional Fund, Inc.—Counterpoint Global Portfolio(4) |
3,802 | |
* |
|
3,802 | — | — | % | ||||||||||||||||
Morgan Stanley Institutional Fund, Inc.—Global Endurance Portfolio(4) |
19,748 | |
* |
|
19,748 | — | — | % | ||||||||||||||||
Morgan Stanley Institutional Fund, Inc.—Global Insight Portfolio(4) |
67,622 | |
* |
|
67,622 | — | — | % | ||||||||||||||||
Morgan Stanley Institutional Fund, Inc.—Growth Portfolio(4) |
3,865,953 | 1.7 | % | 3,865,953 | — | — | % | |||||||||||||||||
Morgan Stanley Institutional Fund, Inc.—Inception Portfolio(4) |
332,167 | * | 332,167 | — | — | % | ||||||||||||||||||
Morgan Stanley Investment Funds—Counterpoint Global Fund(4) |
1,657 | |
* |
|
1,657 | — | — | % | ||||||||||||||||
Morgan Stanley Investment Funds—Global Endurance Fund(4) |
34,186 | * | 34,186 | — | — | % | ||||||||||||||||||
Morgan Stanley Investment Funds—Global Insight Fund(4) |
293,852 | * | 293,852 | — | — | % | ||||||||||||||||||
Morgan Stanley Investment Funds—US Growth Fund(4) |
1,549,102 | * | 1,549,102 | — | — | % |
Name of Selling Securityholder |
Class A Ordinary Shares |
Class B Ordinary Shares (or Securities Convertible into Class B Ordinary Shares) |
Percentage Voting Power |
Number of Ordinary Shares Offered |
Number of Ordinary Shares Beneficially Owned After the Offered Shares are Sold |
Percentage Voting Power |
||||||||||||||||||
Morgan Stanley Investment Funds—US Insight Fund(4) |
46,844 | * | 46,844 | — | — | % | ||||||||||||||||||
Morgan Stanley Variable Insurance Fund, Inc.—Discovery Portfolio(4) |
79,084 | |
* |
|
79,084 | — | — | % | ||||||||||||||||
Morgan Stanley Variable Insurance Fund, Inc.—Growth Portfolio(4) |
242,043 | |
* |
|
242,043 | — | — | % | ||||||||||||||||
Nogra Group SICAF-SIF, for and on behalf of its compartment, Nogra Group SICAF—SIF—GG Strategic (the Investor)(28) |
1,200,000 | |
* |
|
1,200,000 | — | — | % | ||||||||||||||||
Pamela Mallon Siguler Family Trust(29) |
125,000 | * | 125,000 | — | — | % | ||||||||||||||||||
Paul Mower(30) |
7,500 | * | 7,500 | — | — | % | ||||||||||||||||||
ProKidney Management Equity LLC(31) |
22,203,387 | 5.6 | % | 22,203,387 | — | — | % | |||||||||||||||||
iPrime Participations LLC(32) |
300,000 | * | 300,000 | — | — | % | ||||||||||||||||||
Regina Mancera Bustamante(33) |
100,000 | * | 100,000 | — | — | % | ||||||||||||||||||
Ricardo José Garza Bustamante(34) |
50,000 | * | 50,000 | — | — | % | ||||||||||||||||||
SC PIPE Holdings LLC(35) |
9,500,000 | 4.1 | % | 9,500,000 | — | — | % | |||||||||||||||||
Stephen M. Kellen 2004 Trust FBO Annabelle Garrett(36) |
75,000 | * | 75,000 | — | — | % | ||||||||||||||||||
Stephen M. Kellen 2004 Trust FBO Andrew Gundlach(37) |
75,000 | * | 75,000 | — | — | % | ||||||||||||||||||
Stephen M. Kellen 2004 Trust FBO Caroline L. Kellen(38) |
75,000 | * | 75,000 | — | — | % | ||||||||||||||||||
Stephen M. Kellen 2004 Trust FBO Christopher N. Kellen(39) |
75,000 | * | 75,000 | — | — | % | ||||||||||||||||||
Sukumar Nagendran(40) |
10,000 | * | 10,000 | — | — | % | ||||||||||||||||||
Tensleep Group LLC(41) |
10,000 | * | 10,000 | — | — | % | ||||||||||||||||||
Tolerantia, LLC(42) |
94,677,968 | 40.8 | % | 94,677,968 | — | — | % | |||||||||||||||||
WECMA Family, LLC(43) |
250,000 | * | 250,000 | — | — | % | ||||||||||||||||||
Uma Sinha, Ph.D.(44) |
30,000 | * | 30,000 | — | — | % |
** | Less than 1%. |
(1) | Consists of 1,000,000 Class A ordinary shares. The address of Anna-Maria and Stephen Kellen Foundation, Inc. is 1345 Avenue of the Americas, 47th Floor, New York, NY 10105. |
(2) | Consists of 3,140,000 Class A ordinary shares. The address of Averill Master Fund, Ltd. is 540 Madison Avenue, 7th Floor, New York, NY 10022. |
(3) | Consists of 5,000,000 Class A ordinary shares held of record by Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, acting solely and exclusively in its capacity as trustee of the trustee of Trust I14165 (the “Trust”), whose record holders are the Trust Beneficiaries (as defined below). Each of (i) Bertha Paula Michel Gonzalez, (ii) Maria Magdalena Michel Gonzalez and (iii) Maximino Jose Michel Gonzalez (collectively, the “Trust Beneficiaries”), has voting and dispositive power over, one-third of the total number of Class A ordinary shares held by the Trust. The address of the Trust is Boulevard Manuel Avila Camacho No. 40, Piso 7, Lomas De Chapultepec, Ciudad De México 11000. The address of each of the Trust Beneficiaries is Bosque De Radiatas 6-602, Bosques De Las Lomas, Cuajimalpa 05120, Mexico. |
(4) | Morgan Stanley Investment Management Inc. is the adviser or sub-adviser, as the case may be, of each of (i) Brighthouse Funds Trust I: Morgan Stanley Discovery Portfolio, holding 497,653 Class A ordinary shares, (ii) ERAFP Actions Mid Cap USA I holding 12,443 Class A ordinary shares, (iii) Growth Trust holding 245,905 Class A ordinary shares, (iv) Inception Trust holding, 166,790 Class A ordinary shares, (v) Johnson & Johnson Pension and Savings Master Trust (JJ9L) holding 15,421 Class A ordinary shares, (vi) Johnson & Johnson Pension and Savings Master Trust (JJ9LDB) holding 136,426 Class A ordinary shares, (vii) Kinstead Global Equity Pool holding 16,039 Class A ordinary shares, (viii) Lawrencium Atoll Investments Ltd. holding 34,707 Class A ordinary shares, (ix) Master Trust for Defined Contribution Plans of American Airlines, Inc. and Affiliates holding 109,253 Class A ordinary shares, (x) Morgan Stanley Funds (UK)—Global Insight Fund holding 7,231 Class A ordinary shares, (xi) Morgan Stanley Insight Fund holding 1,421,688 Class A ordinary shares, (xii) Morgan Stanley Institutional Fund Trust—Discovery Portfolio holding 800,384 Class A ordinary shares, (xiii) Morgan Stanley Institutional Fund, Inc.—Inception Portfolio holding 332,167 Class A ordinary shares, (xiv) Morgan Stanley Institutional Fund, Inc.—Counterpoint Global Portfolio holding 3,802 Class A ordinary shares, (xv) Morgan Stanley Institutional Fund, Inc.—Global Endurance Portfolio holding 19,748 Class A ordinary shares, (xvi) Morgan Stanley Institutional Fund, Inc.—Global Insight Portfolio holding 67,622 Class A ordinary shares, (xvii) Morgan Stanley Institutional Fund, |
Inc.—Growth Portfolio holding 3,865,953 Class A ordinary shares, (xviii) Morgan Stanley Investment Funds—Counterpoint Global Fund holding 1,657 Class A ordinary shares, (xiv) Morgan Stanley Investment Funds—Global Endurance Fund holding 34,186 Class A ordinary shares, (xx) Morgan Stanley Investment Funds—Global Insight Fund holding 293,852 Class A ordinary shares, (xxi) Morgan Stanley Investment Funds—US Growth Fund holding 1,549,102 Class A ordinary shares, (xxii) Morgan Stanley Investment Funds—US Insight Fund holding 46,844 Class A ordinary shares, (xxiii) Morgan Stanley Variable Insurance Fund, Inc.—Discovery Portfolio holding 79,084 Class A ordinary shares, (xxiv) Morgan Stanley Variable Insurance Fund, Inc.—Growth Portfolio holding 242,043 Class A ordinary shares (collectively, the “MS Accounts”) and holds voting and dispositive power with respect to shares of record held by each of the MS Accounts. The address of Morgan Stanley Investment Management Inc., acting as adviser or sub-adviser, as the case may be, of each of the MS Accounts is 522 Fifth Avenue, New York, NY 10036. |
(5) | Consists of 1,000,000 Class A ordinary shares. The address of Brown University is 121 South Main Street, 9th floor, Providence RI, 02903. |
(6) | Consists of 27,500 Class A ordinary shares. The address of Carlos X. Del Rio is Monte Everest 440, Col. Lomas de Chapultepec, Ciudad de México, 11000, Mexico. |
(7) | Information in the table and footnote is based upon information provided to us by the direct shareholder, Control Empresarial de Capitales S.A. de C.V., acting as successor of Inversora Carso S.A. de C.V. by virtue of a merger (“CEC”). Consists of 63,118,645 Class B ordinary shares held by CEC, which may be exchanged, together with a corresponding number of Post-Combination ProKidney Common Units, pursuant to the Exchange Agreement, for 63,118,645 Class A ordinary shares. Members of the Slim family, directly or indirectly, own all of the issued and outstanding voting equity securities of CEC. Therefore, the Slim family may be deemed to beneficially own indirectly the Class B ordinary shares held by CEC. CEC is a sociedad anónima de capital variable organized under the laws of the United Mexican States (“Mexico”). The Slim family has an address of Paseo de las Palmas 736, Colonia Lomas de Chapultepec, 11000 Ciudad de Mexico, Mexico and Control Empresarial has an address of Paseo de las Palmas 781, Piso 3, Colonia Lomas de Chapultepec, Seccion III, Migual Hidalgo, Ciudad de Mexico, Mexico, 11000. |
(8) | Consists of 3,000,000 Class A ordinary shares. The address of CP WY REMAINDER INTEREST TRUST U/A/D DATED DECEMBER 22, 2021 is 506 Santa Cruz Avenue, Suite 300 Menlo Park, California 94025. |
(9) | Consists of 10,000 Class A ordinary shares. |
(10) | Consists of 100,000 Class A ordinary shares. The address of Denise and Michael Kellen Foundation, Inc. is 1345 Avenue of the Americas, 47th Floor, New York, NY 10105. |
(11) | Consists of 600,000 Class A ordinary shares. The address of DJG Associated, LLC is 62 Vineyard Lane, Greenwich, CT 06831. |
(12) | Consists of 50,000 Class A ordinary shares. The address of Donald P. Spencer and Vickie Riccardo JTWROS is 370 Palmetto Road, St. Augustine, FL 32080. |
(13) | Consists of 200,000 Class A ordinary shares. The address of Fourteen Plus Twelve Partners, LLC is 62 Vineyard Lane, Greenwich, CT 06831. |
(14) | Consists of 125,000 Class A ordinary shares. The address of George W. Siguler Family Trust is 893 Ponte Vedra Blvd, Ponte Vedra Beach, FL 32082. |
(15) | Consists of 500,000 Class A ordinary shares. The address of Hill Family Alternative Investments LLC is 834 Fifth Avenue, 10B, New York, NY 10065. |
(16) | Consists of 100,000 Class A ordinary shares. The address of Hottinger AG is 60 Rue du Stand, Geneva 1204, Switzerland. |
(17) | Consists of 5,000,000 Class A ordinary shares. The address of IHCI Investments LP is 1188 Union, Montreal QC H3B 0E5, Canada. |
(18) | Consists of 800,000 Class A ordinary shares. The address of Juan María Pedro David Michel is Bosque de Radiatas 6-602, Bosques de las Lomas, Cuajimalpa 05120, Mexico. |
(19) | Consists of 5,000,000 Class A ordinary shares. The address of Jupiter CAN LP is 5930 Royal Lane, Suite E, #117, Dallas, TX 75230. |
(20) | Consists of 200,000 Class A ordinary shares. The address of KJB Associated LLC is 860 United Nations Plz Apt #33D, New York, NY 10017. |
(21) | Consists of 2,000,000 Class A ordinary shares. The address of Leman Management Nominees Limited is Wessex House 2nd Floor, 45 Reid Street, Hamilton HM 12, Bermuda. |
(22) | Consists of 80,000 Class A ordinary shares. The address of Luis Felipe Mancera de Arrigunaga is Colina 52 Lomas de Bezarcs 11910, Mexico City, Mexico. |
(23) | Consists of 100,000 Class A ordinary shares. The address of Marina Kellen French Foundation is 1345 Avenue of the Americas, 47th Floor, New York, NY 10105. |
(24) | Consists of 800,000 Class A ordinary shares. The address of Max Pierre David Michel is Bosque de Radiatas 6-602-103, |
(25) | Consists of 1,000,000 Class A ordinary shares. The address of MGG Strategic SICAF SIF, for and on behalf of its compartment, MGG Strategic is 18 Avenue de la Porte Neuve, Luxembourg 2227, Luxembourg. |
(26) | Consists of 15,000 Class A ordinary shares. The address of Mikel Andoni Arriola Peñalosa is Av. Paseo de la Reforma 2693, 401-C, Lomas de Bezares, Miguel Hidalgo, Mexico City 11910, Mexico. |
(27) | Consists of 800,000 Class A ordinary shares. The address of Monique Berthe Michele Madeleine David Michel is Bosque de Radiatas 6-602-103, |
(28) | Consists of 1,200,000 Class A ordinary shares. The address of GG 1978 SICAF SIF, for and on behalf of its compartment, GG Strategic (the Investor) is 18 Avenue de la Porte Neuve, Luxembourg 2227, Luxembourg. |
(29) | Consists of 125,000 Class A ordinary shares. The address of Pamela Mallon Siguler Family Trust is 893 Ponte Vedra Blvd, Ponte Vedra Beach, FL 32082. |
(30) | Consists of 7,500 Class A ordinary shares. The address of Paul Mower is 614 Lakota Lane (PO Box 4112), Jackson, WY 83001. |
(31) | Consists of (i) 12,927,348 13,045,190 Class B ordinary shares, (ii) 117,842 Class B ordinary shares issuable upon the vesting of PMEL RCUs within 60 days of July 31, 2022 and (iii) 9,158,197 PMEL RCUs held by ProKidney Management Equity LLC on behalf of individual unitholders. Upon vesting of the PMEL RCUS, the aggregate of 22,203,387 Class B ordinary shares may be exchanged, together with a corresponding number of Post-Combination ProKidney Common Units, pursuant to the Exchange Agreement, for a total of 22,203,387 Class A ordinary shares. |
(32) | Consists of 300,000 Class A ordinary shares. The address of Prime Participations LLC is 110 East 59th Street, 33rd Fl, New York, NY 10022. |
(33) | Consists of 100,000 Class A ordinary shares. The address of Regina Mancera Bustamante is Bosque de Tulipanes 14, Col. Bosques de las Lomas, Cuajimalpa 05120, Mexico. |
(34) | Consists of 50,000 Class A ordinary shares. The address of Ricardo José Garza Bustamante is Av de Los Poetas 100, RCA 901, Col. Cumbres de Santa Fe, Mexico City 05600, Mexico. |
(35) | The business address of SC PIPE Holdings LLC is c/o SC Master Holdings, LLC 506 Santa Cruz Avenue, Suite 300. |
(36) | Consists of 75,000 Class A ordinary shares. The address of Stephen M. Kellen 2004 Trust FBO Annabelle Garrett is 1345 Avenue of the Americas, 47th Floor, New York, NY 10105. |
(37) | Consists of 75,000 Class A ordinary shares. The address of Stephen M. Kellen 2004 Trust FBO Andrew Gundlach is 1345 Avenue of the Americas, 47th Floor, New York, NY 10105. |
(38) | Consists of 75,000 Class A ordinary shares. The address of Stephen M. Kellen 2004 Trust FBO Caroline L. Kellen is 1345 Avenue of the Americas, 47th Floor, New York, NY 10105. |
(39) | Consists of 75,000 Class A ordinary shares. The address Stephen M. Kellen 2004 Trust FBO Christopher N. Kellen is 1345 Avenue of the Americas, 47th Floor, New York, NY 10105. |
(40) | Consists of 10,000 Class A ordinary shares. |
(41) | Consists of 10,000 Class A ordinary shares. The address of Tensleep Group LLC is 140 S. Cache St. (PO Box 4112), Jackson, WY 83001. |
(42) | Consists of 94,677,968 Class B ordinary shares held by Tolerantia, which may be exchanged, together with a corresponding number of Post-Combination ProKidney Common Units, pursuant to the Exchange Agreement, for 94,677,968 Class A ordinary shares. Tolerantia is an affiliate controlled and majority-owned by Mr. Pablo Legorreta. Mr. Legorreta controls the voting and disposition of the shares held by Tolerantia. Mr. Legorreta disclaims beneficial ownership of the shares held by Tolerantia except to the extent of his indirect pecuniary interest therein. The business address of Tolerantia is 110, East 59th Street, Suite 3300, New York, New York, 10022. |
(43) | Consists of 250,000 Class A ordinary shares. The address of WECMA Family, LLC is 893 Ponte Vedra Blvd, Ponte Vedra Beach, FL 32082. |
(44) | Consists of 30,000 Class A ordinary shares. The address of Uma Sinha, Ph.D. is c/o ProKidney Corp., 2000 Frontis Plaza Blvd., Ste 250, Winston-Salem, North Carolina, 27103. |
Name |
Age |
Position | ||||
Executive Officers: |
||||||
Tim Bertram, Ph.D. |
66 | Chief Executive Officer and Director | ||||
James Coulston, CPA |
46 | Chief Financial Officer | ||||
Deepak Jain, Ph.D. |
68 | Chief Operating Officer | ||||
Darin J. Weber, Ph.D. |
54 | Senior Vice President of Regulatory Development | ||||
Todd C. Girolamo |
57 | Chief Legal Officer | ||||
Libbie P. McKenzie, M.D. |
49 | Chief Medical Officer | ||||
Non-Employee Directors: |
||||||
Pablo Legorreta |
58 | Chairman of the Board, Director | ||||
William F. Doyle |
60 | Director | ||||
Alan M. Lotvin, M.D. |
60 | Director | ||||
Brian J.G. Pereira, M.D. |
63 | Director | ||||
Uma Sinha, Ph.D. |
65 | Director | ||||
John M. Maraganore, Ph.D. |
59 | Director | ||||
José Ignacio Jimenez Santos |
47 | Director | ||||
Jennifer Fox |
51 | Director |
• | the Class I directors are William F. Doyle, Alan M. Lotvin, M.D., Brian J. G. Pereira, M.D., and their terms will expire at the annual general meeting of shareholders to be held in 2023; |
• | the Class II directors are Jennifer Fox, John M. Maraganore, Ph.D. and José Ignacio Jiménez Santos, and their terms will expire at the annual general meeting of shareholders to be held in 2024; and |
• | the Class III directors are Tim Bertram, Ph.D., Pablo Legorreta and Uma Sinha, Ph.D., and their terms will expire at the annual general meeting of shareholders to be held in 2025. |
• | helping the Board oversee corporate accounting and financial reporting processes; |
• | managing the selection, engagement, qualifications, independence and performance of a qualified firm to serve as the independent registered public accounting firm to audit ProKidney’s consolidated financial statements; |
• | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, ProKidney’s interim and year-end operating results; |
• | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
• | reviewing related person transactions; |
• | obtaining and reviewing a report by the independent registered public accounting firm at least annually that describes ProKidney’s internal quality control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and |
• | approving or, as permitted, pre-approving, audit and permissible non-audit services to be performed by the independent registered public accounting firm. |
• | reviewing and approving the compensation of the chief executive officer, other executive officers and senior management; |
• | reviewing and recommending to the Board the compensation of directors; |
• | administering the ProKidney Incentive Equity Plan and other benefit programs; |
• | reviewing, adopting, amending and terminating incentive compensation and equity plans, severance agreements, profit sharing plans, bonus plans, change-of-control |
• | reviewing and establishing general policies relating to compensation and benefits of the employees, including the overall compensation philosophy. |
• | identifying and evaluating candidates, including the nomination of incumbent directors for re-election and nominees recommended by shareholders, to serve on the ProKidney Board; |
• | considering and making recommendations to the Board regarding the composition and chairmanship of the committees of the ProKidney Board; |
• | developing and making recommendations to the Board regarding corporate governance guidelines and matters, including in relation to corporate social responsibility; and |
• | overseeing periodic evaluations of the performance of the Board, including its individual directors and committees. |
• | attract, retain and motivate senior management leaders who are capable of advancing ProKidney’s mission and strategy and, ultimately, creating and maintaining its long-term equity value. Such leaders must engage in a collaborative approach and possess the ability to execute its business strategy in an industry characterized by competitiveness and growth; |
• | reward senior management in a manner aligned with ProKidney’s financial performance; and |
• | align senior management’s interests with ProKidney’s equity owners’ long-term interests through equity participation and ownership. |
• | Tim Bertram, Ph.D., Chief Executive Officer; |
• | Deepak Jain, Ph.D., Chief Operating Officer; and |
• | Joseph Stavas, M.D., MPH, Senior Vice President of Clinical Development. |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) (1) |
Non- Incentive Equity Plan ($) |
All Other Compensation ($) (2) |
Total ($) |
||||||||||||||||||
Tim Bertram, Ph.D. |
2021 | $ | 489,258 | $ | 360,000 | $ | — | $ | 24,503 | $ | 873,761 | |||||||||||||
Chief Executive Officer |
||||||||||||||||||||||||
Deepak Jain, Ph.D. |
2021 | $ | 401,694 | $ | 216,000 | $ | — | $ | 14,522 | $ | 632,216 | |||||||||||||
Chief Operating Officer |
||||||||||||||||||||||||
Joseph Stavas, M.D., MPH |
2021 | $ | 530,110 | $ | 145,000 | $ | — | $ | 14,522 | $ | 689,632 | |||||||||||||
Senior Vice President of Clinical Development |
(1) | Reflects bonuses actually paid for the 12-month period from January 1, 2021 to December 31, 2021, and excludes payments made in 2021 for 2020 bonuses, for each executive officer. |
(2) | Reflects the amounts of all other compensation paid to the named individuals for the year ended December 31, 2021, which comprise of (1) the matching contributions to the 401(k) plan; (2) allowance paid to Dr. Bertram, and (3) insurance premiums with respect to a group life insurance policy, a group short- term disability policy, a group long-term disability policy, an accidental death and dismemberment policy, and flexible spending accounts paid on behalf of each of Dr. Bertram, Dr. Jain and Dr. Stavas. |
Equity Awards (1) |
||||||||||||||||||||
Name |
Grant Date |
Number of Profits Interest that Have Vested (#) |
Market Value of Profits Interest Units that Have Vested ($) |
Number of Profits Interest that Have Not Vested (#) |
Market Value of Profits Interest Units that Have Not Vested ($) (3) |
|||||||||||||||
Tim Bertram, Ph.D. |
9/30/2019 | (2) |
2,773,973 | $ | 998,630 | 924,658 | $ | 332,877 | ||||||||||||
Deepak Jain, Ph.D. |
9/30/2019 | (3) |
924,657 | $ | 332,877 | 308,220 | $ | 110,959 | ||||||||||||
Joseph Stavas, M.D., MPH |
11/1/2019 | ( 4) |
693,493 | $ | 249,657 | 539,384 | $ | 194,178 |
(1) | There was no public market for the Profits Interests. For purposes of this disclosure, the equity value of the Profits Interests was determined using contemporaneous valuations using methodologies consistent with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation |
(2) | Represents 3,698,631 Profits Interests granted on September 30, 2019, with the first 25% of such Profits Interests vested on January 7, 2020, and the remaining 75% vested in increments of 6.25% each calendar quarter thereafter, subject to continued employment of the NEO on each vesting date. |
(3) | Represents 1,232,877 Profits Interests granted on September 30, 2019, with the first 25% of such Profits Interests vested on January 7, 2020, and the remaining 75% vested in increments of 6.25% each calendar quarter thereafter, subject to continued employment of the NEO on each vesting date. |
(4) | Represents 1,232,877 Profits Interests granted on November 1, 2019, with the first 25% of such Profits Interests vested on November 1, 2020, and the remaining 75% vested in increments of 6.25% each calendar quarter thereafter, subject to continued employment of the NEO on each vesting date. |
• | any person who is, or at any time during the applicable period was, one of ProKidney’s officers or one of ProKidney’s directors; |
• | any person who is known by ProKidney to be the beneficial owner of more than five percent (5%) of its voting shares; or |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law sister-in-law |
• | financial institutions or financial services entities; |
• | broker-dealers; |
• | governments or agencies or instrumentalities thereof; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | expatriates or former long-term residents of the United States; |
• | persons that actually or constructively own five percent or more (by vote or value) of our shares; |
• | persons that acquired our Class A ordinary shares pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation; |
• | insurance companies; |
• | dealers or traders subject to a mark-to-market |
• | persons holding our Class A ordinary shares as part of a “straddle,” constructive sale, hedge, conversion or other integrated or similar transaction; |
• | U.S. Holders (as defined below) whose functional currency is not the U.S. dollar; |
• | partnerships (or entities or arrangements classified as partnerships or other pass-through entities for U.S. federal income tax purposes) and any beneficial owners of such partnerships; |
• | tax-exempt entities; |
• | controlled foreign corporations; and |
• | passive foreign investment companies. |
8 |
NTD: Non-U.S. tax disclosures to be provided by local counsel. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity taxable as a corporation) organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code) have authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under Treasury Regulations to be treated as a United States person. |
• | the U.S. Holder’s gain will be allocated ratably over the U.S. Holder’s holding period for such U.S. Holder’s Class A ordinary shares; |
• | the amount of gain allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain, or to the period in the U.S. Holder’s holding period before the first day of the first taxable year in which ProKidney was a PFIC, will be taxed as ordinary income; |
• | the amount of gain allocated to other taxable years (or portions thereof) of the U.S. Holder and included in such U.S. Holder’s holding period would be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and |
• | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder in respect of the tax attributable to each such other taxable year of such U.S. Holder. |
1. | That no law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to the Company or its operations; and |
2. | In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable: |
2.1 | On or in respect of the shares, debentures or other obligations of the Company; or |
2.2 | by way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Act (as amended). |
• | purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus; |
• | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
• | block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
• | an over-the-counter |
• | through trading plans entered into by a Selling Securityholder pursuant to Rule 10b5-1 under the Exchange Act that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans; |
• | short sales; |
• | distribution to employees, members, limited partners or stockholders of the Selling Securityholders; |
• | through the writing or settlement of options or other hedging transaction, whether through an options exchange or otherwise; |
• | by pledge to secured debts and other obligations; |
• | delayed delivery arrangements; |
• | to or through underwriters or agents; |
• | in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents; |
• | in privately negotiated transactions; |
• | in options transactions; and |
• | through a combination of any of the above methods of sale, as described below, or any other method permitted pursuant to applicable law. |
PAGE |
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Audited Consolidated Financial Statements for Social Capital Suvretta Holdings Corp. III |
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FS-2 |
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FS-3 |
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FS-4 |
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FS-5 |
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FS-6 |
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FS-7 |
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Unaudited Consolidated Financial Statements for Social Capital Suvretta Holdings Corp. III |
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FS-20 |
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FS-21 |
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FS-22 |
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FS-23 |
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FS-24 |
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Audited Consolidated Financial Statements for ProKidney LP and Subsidiaries |
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FS-39 |
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FS-40 |
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FS-41 |
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FS-42 |
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FS-43 |
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FS-44 |
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Unaudited Consolidated Financial Statements for ProKidney LP and Subsidiaries |
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FS-56 |
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FS-57 |
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FS-58 |
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FS-59 |
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FS-60 |
ASSETS |
||||
Current Assets |
||||
Cash |
$ | |||
Prepaid expenses |
||||
|
|
|||
Total Current Assets |
||||
Non-current prepaid insurance |
||||
Marketable Securities held in Trust Account |
||||
|
|
|||
TOTAL ASSETS |
$ |
|||
|
|
|||
LIABILITIES, TEMPORARY EQUITY AND PERMANENT DEFICIT |
||||
Current liabilities |
||||
Accounts payable |
$ | |||
Accrued expense |
|
|
|
|
Advances from related party |
||||
|
|
|||
Total Current Liabilities |
||||
Deferred underwriting fee payable |
||||
|
|
|||
TOTAL LIABILITIES |
||||
|
|
|||
Commitments and Contingencies (Note 6) |
||||
Temporary Equity |
||||
Class A ordinary shares subject to possible redemption, |
||||
|
|
|||
Permanent Deficit |
||||
Preference shares, $ |
||||
Class A ordinary shares, $ |
||||
Class B ordinary shares, $ |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
|
|
|||
Total Permanent Deficit |
( |
) | ||
|
|
|||
TOTAL LIABILITIES, TEMPORARY EQUITY AND PERMANENT DEFICIT |
$ |
|||
|
|
Operating and formation costs |
$ | |||
|
|
|||
Loss from operations |
( |
) | ||
Other income: |
||||
Interest earned on marketable securities held in Trust Account |
||||
|
|
|||
Net loss |
$ |
( |
) | |
|
|
|||
Basic and diluted weighted average shares outstanding, Class A ordinary shares |
||||
|
|
|||
Basic and diluted net loss per share, Class A ordinary shares |
$ |
( |
) | |
|
|
|||
Basic and diluted weighted average shares outstanding, Class B ordinary shares |
||||
|
|
|||
Basic and diluted net loss per share, Class B ordinary shares |
$ |
( |
) | |
|
|
Temporary Equity |
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Permanent Deficit |
|||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||
Balance—February 25, 2021 (inception) |
— |
$ |
— |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||||||
Issuance of Class B ordinary shares to Sponsor |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Sale of discounts and offering expenses |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||
Remeasurement of Class A ordinary shares to redemption value |
— |
— |
— |
— |
— |
( |
) |
( |
) |
( |
) | |||||||||||||||||||||||||
Sale of |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Forfeiture of Founder Shares |
— |
— |
— |
— |
( |
) |
( |
) |
— |
— |
||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance — December 31, 2021 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
||||
Net loss |
$ | ( |
) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
||||
Formation costs paid by Sponsor in exchange for issuance of Founder Shares |
||||
Interest earned on marketable securities held in Trust Account |
( |
) | ||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accounts payable |
||||
Accrued expenses |
|
|
|
|
|
|
|||
Net cash used in operating activities |
( |
) | ||
|
|
|||
Cash Flows from Investing Activities: |
||||
Investment of cash into Trust Account |
( |
) | ||
|
|
|||
Net cash used in investing activities |
( |
) | ||
|
|
|||
Cash Flows from Financing Activities: |
||||
Proceeds from sale of Public Shares, net of underwriting discounts paid |
||||
Proceeds from sale of Private Placement Shares |
||||
Advances from related party |
||||
Repayment of advances from related party |
( |
) | ||
Proceeds from promissory note — related party |
||||
Repayment of promissory note—related party |
( |
) | ||
Payment of offering costs |
( |
) | ||
|
|
|||
Net cash provided by financing activities |
||||
|
|
|||
Net Change in Cash |
||||
Cash — Beginning of period (inception) |
||||
|
|
|||
Cash — End of period |
$ |
|||
|
|
|||
Non-Cash Investing and Financing Activities: |
||||
Offering costs paid by Sponsor in exchange for issuance of Founder Shares |
$ | |||
|
|
|
|
|
Remeasurement of Class A ordinary share subject to possible redemption |
$ | |||
|
|
|||
Deferred underwriting fee payable |
$ | |||
|
|
Gross proceeds |
$ | |||
Less: |
||||
Class A ordinary shares issuance costs |
( |
) | ||
Plus: |
||||
Increase of carrying value to redemption value |
||||
Class A ordinary shares subject to possible redemption |
$ |
|||
For the Period from February 25, 2021 (Inception) Through December 31, 2021 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per ordinary share |
||||||||
Numerator: |
||||||||
Allocation of net loss |
$ |
( |
) |
$ |
( |
) | ||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net loss per ordinary share |
$ |
( |
) |
$ |
( |
) |
Level 1: |
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
Level 2: |
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
Level 3: |
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description |
Level |
December 31, 2021 |
||||||
Assets: |
||||||||
Marketable securities held in Trust Account |
1 | $ |
March 31, 2022 |
December 31, 2021 |
|||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash |
$ | $ | ||||||
Prepaid expenses |
||||||||
|
|
|
|
|||||
Total Current Assets |
||||||||
Non-current prepaid insurance |
||||||||
Marketable securities held in Trust Account |
||||||||
|
|
|
|
|||||
TOTAL ASSETS |
$ |
$ |
||||||
|
|
|
|
|||||
LIABILITIES, TEMPORARY EQUITY AND PERMANENT DEFICIT |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expense |
||||||||
Advances from related party |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Deferred underwriting fee payable |
||||||||
|
|
|
|
|||||
Total Liabilities |
||||||||
|
|
|
|
|||||
Commitments and Contingencies (Note 6) |
||||||||
Temporary Equity |
||||||||
Class A ordinary shares subject to possible redemption, |
||||||||
Permanent Deficit |
||||||||
Preference shares, $ |
||||||||
Class A ordinary shares, $ |
||||||||
Class B ordinary shares, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Permanent Deficit |
( |
) |
( |
) | ||||
|
|
|
|
|||||
TOTAL LIABILITIES, TEMPORARY EQUITY AND PERMANENT DEFICIT |
$ |
$ |
||||||
|
|
|
|
For the Three Months Ended March 31, 2022 |
For the Period from February 25, 2021 (Inception) Through March 31, 2021 |
|||||||
Operating and formation costs |
$ | $ | ||||||
|
|
|
|
|||||
Loss from operations |
( |
) |
( |
) | ||||
Other income: |
||||||||
Interest earned on marketable securities held in Trust Account |
||||||||
|
|
|
|
|||||
Net loss |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares |
||||||||
|
|
|
|
|||||
Basic and diluted net loss per share, Class A ordinary shares |
$ |
( |
) |
$ | ||||
|
|
|
|
|||||
Basic and diluted weighted average shares outstanding, Class B ordinary shares |
||||||||
|
|
|
|
|||||
Basic and diluted net loss per share, Class B ordinary shares |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
Temporary Equity |
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Permanent Deficit |
|||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||
Balance—January 1, 2022 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||
Remeasurement for Class A ordinary shares to redemption amount |
— | ( |
) | — | — | — | — | — | ||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance—March 31, 2022 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary Equity |
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Permanent Equity |
|||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||
Balance—February 25, 2021 (inception) |
— | $ | — | — | $ | — | $ | $ | $ | $ | ||||||||||||||||||||||||||
Issuance of Class B ordinary shares to |
— | — | — | — | — | |
||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance—March 31, 2021 |
— | $ | — | — | $ | — | $ |
$ |
$ |
( |
) | $ |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2022 |
For the Period from February 25, 2021 (Inception) Through March 31, 2021 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Formation costs paid by Sponsor in exchange for issuance of Founder Shares |
||||||||
Interest earned on marketable securities held in Trust Account |
( |
) | — | |||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses |
— | |||||||
Advances from related party |
— | |||||||
Accrued expenses and accounts payable |
||||||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
Cash Flows from Financing Activities: |
||||||||
Proceeds from promissory note — related party |
— | |||||||
Payment of offering costs |
— | ( |
) | |||||
|
|
|
|
|
||||
Net cash provided by financing activities |
— |
|||||||
|
|
|
|
|||||
Net Change in Cash |
( |
) |
— |
|||||
Cash — Beginning of period (inception) |
— | |||||||
|
|
|
|
|||||
Cash — End of period |
$ |
$ |
— |
|||||
|
|
|
|
|||||
Non-Cash Investing and Financing Activities: |
||||||||
Offering costs paid by Sponsor in exchange for issuance of Founder Shares |
$ | — | $ | |||||
|
|
|
|
|||||
Remeasurement of Class A ordinary shares subject to possible redemption |
$ | — | $ | — | ||||
|
|
|
|
|||||
Offering costs included in accrued offering costs |
$ | — | $ | |||||
|
|
|
|
Gross proceeds |
$ | |||
Less: |
||||
Class A ordinary shares issuance costs |
( |
) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
|
|
|||
Class A ordinary shares subject to possible redemption, December 31, 2021 |
||||
|
|
|
|
|
Plus: |
||||
Remeasurement of carrying value to redemption value |
( |
) | ||
|
|
|||
Class A ordinary shares subject to possible redemption, March 31, 2022 |
$ |
|||
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2022 |
For the Period from February 25, 2021 (Inception) Through March 31, 2021 |
|||||||||||||||
Class A |
Class B |
Class A |
Class B |
|||||||||||||
Basic and diluted net loss per ordinary share |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net loss |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
Denominator: |
||||||||||||||||
Basic and diluted weighted average shares outstanding |
||||||||||||||||
Basic and diluted net loss per ordinary share |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) |
Level 1: |
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: |
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: |
Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description |
Level |
March 31, 2022 |
December 31, 2021 |
|||||||||
Assets: |
||||||||||||
Marketable securities held in Trust Account |
1 | $ | $ |
December 31, |
||||||||
2021 |
2020 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Prepaid assets |
||||||||
Prepaid clinical |
||||||||
Other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Fixed assets, net |
||||||||
Right of use assets, net |
||||||||
Intangible assets, net |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Lease liabilities |
||||||||
Accrued expenses and other |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Lease liabilities, net of current portion |
||||||||
Commitments and contingencies |
||||||||
Members’ equity: |
||||||||
Class A Units ( |
||||||||
Class B Units ( |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total members’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | $ | ||||||
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Revenue |
$ | $ | ||||||
Operating expenses |
||||||||
Research and development |
||||||||
General and administrative |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
Operating loss |
( |
) | ( |
) | ||||
Other income |
||||||||
Interest income |
||||||||
|
|
|
|
|||||
Net loss before income taxes |
( |
) | ( |
) | ||||
Income tax expense (benefit) |
( |
) | ||||||
|
|
|
|
|||||
Net and comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Weighted average Class A Units outstanding: |
||||||||
Basic and diluted |
||||||||
Net loss per Class A Unit: |
||||||||
Basic and diluted |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
Class A |
Class B |
Accumulated Deficit |
Total Members’ Equity |
|||||||||||||||||
Units |
Amount |
Profits Interests |
||||||||||||||||||
Balance as of January 1, 2020 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
Capital contribution |
— | — | ||||||||||||||||||
Equity-based compensation |
— | — | — | |||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2020 |
( |
) | ||||||||||||||||||
Capital contribution |
— | — | ||||||||||||||||||
Equity-based compensation |
— | — | — | |||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2021 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash flows |
||||||||
Depreciation and amortization |
||||||||
Equity-based compensation |
||||||||
Changes in operating assets and liabilities |
||||||||
Other assets |
( |
) | ( |
) | ||||
Accounts payable and accrued expenses |
||||||||
|
|
|
|
|||||
Net cash flows used in operating activities |
( |
) | ( |
) | ||||
Cash flows used in investing activities |
||||||||
Proceeds from sale of equipment |
||||||||
Purchase of equipment and facility expansion |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash flows used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities |
||||||||
Payments on finance leases |
( |
) | ( |
) | ||||
Net cash contribution |
||||||||
|
|
|
|
|||||
Net cash flows from financing activities |
||||||||
Net change in cash and cash equivalents |
( |
) | ||||||
Cash, beginning of period |
||||||||
|
|
|
|
|||||
Cash, end of period |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosure of non-cash investing activities: |
||||||||
Equipment and facility expansion included in accounts payable and accrued expenses |
$ | $ | ||||||
|
|
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Compensation |
$ | $ | ||||||
Clinical study related costs |
||||||||
Facility expansion costs |
||||||||
Accrued legal |
||||||||
Manufacturing improvement costs |
||||||||
Other accrued expenses |
||||||||
Total accrued expenses and other |
$ | $ | ||||||
Computer equipment and software |
5 years | |
Furniture and equipment |
7 years | |
Leasehold improvements |
December 31, 2021 |
December 31, 2020 |
|||||||
Furniture and equipment |
$ | $ | ||||||
Computer equipment and software |
||||||||
Leasehold improvements |
||||||||
Construction in progress |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
Total fixed assets, net |
$ | $ | ||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Gross carrying amount |
$ | $ | ||||||
Accumulated amortization |
||||||||
Net carrying amount |
$ | $ | ||||||
Level 1 – | Unadjusted quoted prices in active markets for identical assets or liabilities | |
Level 2 – | Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable through correlation with market data | |
Level 3 – | Unobservable inputs that are supported by little or no market data, which require the reporting entity to develop its own assumptions |
December 31, 2021 |
December 31, 2020 |
|||||||
Current: |
||||||||
Federal |
$ | $ | ( |
) | ||||
State |
( |
) | ||||||
Total current income tax expense (benefit) |
( |
) | ||||||
Deferred: |
||||||||
Federal |
||||||||
State |
||||||||
Total deferred income tax expense |
||||||||
Income tax expense (benefit) |
$ | $ | ( |
) | ||||
December 31, 2021 |
December 31, 2020 |
|||||||
Current: |
||||||||
Income taxes at statutory rate |
% | % | ||||||
State taxes, net of federal benefit |
||||||||
LLC flow-through structure |
( |
) | ( |
) | ||||
Federal Credits |
||||||||
Provision to return adjustment |
||||||||
Change in valuation allowance |
( |
) | ( |
) | ||||
Other |
( |
) | ||||||
Effective income tax rate |
( |
)% | % | |||||
December 31, 2021 |
December 31, 2020 |
|||||||
Deferred tax assets: |
||||||||
Accrued bonus |
$ | $ | ||||||
Fixed assets |
||||||||
Federal credit carryforwards |
||||||||
Leases |
||||||||
Start-up costs |
||||||||
Deferred tax assets before valuation allowance |
||||||||
Valuation allowance |
||||||||
Total deferred tax assets |
||||||||
Deferred tax liabilities: |
||||||||
Intangible assets |
||||||||
Fixed assets |
||||||||
Prepaid expenses |
||||||||
Total deferred tax liabilities |
||||||||
Net deferred tax asset |
$ | $ | ||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Unrecognized tax benefits (gross): |
||||||||
Benefits at the beginning of the year |
$ | $ | ||||||
Increase related to prior year tax positions |
||||||||
Decrease related to prior year tax positions |
||||||||
Increase related to current year tax positions |
||||||||
Benefits at the end of the year |
$ | $ | ||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Operating leases: |
||||||||
Right of use assets |
$ | $ | ||||||
Operating lease liabilities, current |
||||||||
Operating lease liabilities, noncurrent |
||||||||
Total operating lease liabilities |
$ | $ | ||||||
Finance leases: |
||||||||
Right of use assets |
$ | $ | ||||||
Finance lease liabilities, current |
||||||||
Finance lease liabilities, noncurrent |
||||||||
Total finance lease liabilities |
$ | $ | ||||||
Operating Leases |
Finance Leases |
Total |
||||||||||
2022 |
$ | $ | $ | |||||||||
2023 |
||||||||||||
2024 |
||||||||||||
2025 |
||||||||||||
2026 |
||||||||||||
Thereafter |
||||||||||||
Total lease payments |
||||||||||||
Less: imputed interest |
( |
) | ( |
) | ( |
) | ||||||
Present value of lease liabilities |
$ | $ | $ | |||||||||
Units outstanding January 1, 2020 |
||||
Issued 2020 |
||||
Units outstanding December 31, 2020 |
||||
Issued 2021 |
||||
Units outstanding December 31, 2021 |
||||
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Numerator |
||||||||
Net loss available to Class A Unit holders |
$ | ( |
) | $ | ( |
) | ||
Denominator |
||||||||
Weighted average Class A Units outstanding, basic and diluted |
||||||||
Net loss per Class A Unit |
||||||||
Net loss per Class A Unit, basic and diluted |
$ | ( |
) | $ | ( |
) |
Number of Shares |
Weighted Average Grant Date Fair Value |
|||||||
Awards outstanding at December 31, 2020 |
$ | |||||||
Vested |
( |
) | ||||||
Awards outstanding at December 31, 2021 |
$ | |||||||
Total equity value (in thousands) |
$ | |||
Expected volatility of total equity |
% | |||
Discount for lack of market |
% | |||
Expected time to exit event |
March 31, 2022 |
December 31, 2021 |
|||||||
(Unaudited) |
||||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Prepaid assets |
||||||||
Prepaid clinical |
||||||||
Other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Fixed assets, net |
||||||||
Right of use assets, net |
||||||||
Deferred offering costs |
||||||||
Intangible assets, net |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Lease liabilities |
||||||||
Accrued expenses and other |
||||||||
Income taxes payable |
||||||||
Related party notes payable |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Lease liabilities, net of current portion |
||||||||
Members’ equity: |
||||||||
Class A Units ( |
||||||||
Class B Units ( |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total members’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | $ | ||||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Revenue |
$ | $ | ||||||
Operating expenses |
||||||||
Research and development |
||||||||
General and administrative |
||||||||
Total operating expenses |
||||||||
Operating loss |
( |
) | ( |
) | ||||
Interest expense |
( |
) | ||||||
Net loss before income taxes |
( |
) | ( |
) | ||||
Income tax expense |
||||||||
Net and comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
Weighted average Class A Units outstanding: |
||||||||
Basic and diluted |
||||||||
Net loss per Class A Unit: |
||||||||
Basic and diluted |
$ | ( |
) | $ | ( |
) | ||
For the three months ended March 31, 2022 |
||||||||||||||||||||
Class a |
Class B |
Accumulated Deficit |
Total Members’ Equity |
|||||||||||||||||
Units |
Amounts |
Profits Interests |
||||||||||||||||||
Balance as of December 31, 2021 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
Capital contribution |
— | — | — | |||||||||||||||||
Equity-based payments |
— | — | — | |||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of March 31, 2022 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2021 |
||||||||||||||||||||
Class A |
Class B |
Accumulated Deficit |
Total Members’ Equity |
|||||||||||||||||
Units |
Amounts |
Profits Interests |
||||||||||||||||||
Balance as of December 31, 2020 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
Capital contribution |
— | — | ||||||||||||||||||
Equity-based payments |
— | — | — | |||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of March 31, 2021 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash flows |
||||||||
Depreciation and amortization |
||||||||
Equity-based compensation expense |
||||||||
Changes in operating assets and liabilities |
||||||||
Other assets |
( |
) | ||||||
Accounts payable and accrued expenses |
||||||||
Income taxes payable |
— | |||||||
|
|
|
|
|||||
Net cash flows used in operating activities |
( |
) | ( |
) | ||||
Cash flows used in investing activities |
||||||||
Purchase of equipment and facility expansion |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash flows used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities |
||||||||
Payments on finance leases |
( |
) | ( |
) | ||||
Borrowings under related party notes payable |
— | |||||||
Net cash contribution |
||||||||
|
|
|
|
|||||
Net cash flows provided by financing activities |
||||||||
Net change in cash and cash equivalents |
||||||||
Cash, beginning of period |
||||||||
|
|
|
|
|||||
Cash, end of period |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosure of non-cash investing activities: |
||||||||
Right of use assets obtained in exchange for lease obligations |
$ | $ | — | |||||
|
|
|
|
|||||
Equipment and facility expansion included in accounts payable and accrued expenses |
$ | $ | ||||||
|
|
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Compensation |
$ | $ | ||||||
Clinical study related costs |
||||||||
Accrued legal |
||||||||
Manufacturing improvement costs |
||||||||
Other accrued expenses |
||||||||
Total accrued expenses and other |
$ | $ | ||||||
Computer equipment and software |
||
Furniture and equipment |
||
Leasehold improvements |
March 31, 2022 |
December 31, 2021 |
|||||||
Furniture and equipment |
$ | $ | ||||||
Computer equipment and software |
||||||||
Leasehold improvements |
||||||||
Construction in progress |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
Total fixed assets, net |
$ | $ | ||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Gross carrying amount |
$ | $ | ||||||
Accumulated amortization |
||||||||
Net carrying amount |
$ | $ | ||||||
• | Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities |
• | Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable through correlation with market data |
• | Level 3 – Unobservable inputs that are supported by little or no market data, which require the reporting entity to develop its own assumptions |
March 31, 2022 |
December 31, 2021 |
|||||||
Operating leases: |
||||||||
Right of use assets |
$ | $ | ||||||
Operating lease liabilities, current |
||||||||
Operating lease liabilities, noncurrent |
||||||||
Total operating lease liabilities |
$ | $ | ||||||
Finance leases: |
||||||||
Right of use assets |
$ | $ | ||||||
Finance lease liabilities, current |
$ | $ | ||||||
Finance lease liabilities, noncurrent |
||||||||
Total finance lease liabilities |
$ | $ | ||||||
Operating Leases |
Finance Leases |
Total |
||||||||||
2022 (remaining nine months) |
$ | $ | $ | |||||||||
2023 |
||||||||||||
2024 |
||||||||||||
2025 |
||||||||||||
2026 |
||||||||||||
Thereafter |
||||||||||||
Total lease payments |
||||||||||||
Less: imputed interest |
( |
) | ( |
) | ( |
) | ||||||
Present value of lease liabilities |
$ | $ | $ | |||||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Numerator |
||||||||
Net loss available to Class A Unit holders |
$ | ( |
) | $ | ( |
) | ||
Denominator |
||||||||
Weighted average Class A Units outstanding, basic and diluted |
||||||||
Net loss per Class A Unit |
||||||||
Net loss per Class A Unit, basic and diluted |
$ | ( |
) | $ | ( |
) |
Number of Shares |
Weighted Average Grant Date Fair Value |
|||||||
Unvested awards outstanding at January 1, 2022 |
$ | |||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Unvested awards outstanding at March 31, 2022 |
$ | |||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Research and development |
$ | $ | — | |||||
General and administrative |
||||||||
Total equity-based compensation expense |
$ | $ | ||||||
OPM |
PWERM |
|||||||
Total equity value (in thousands) |
$ | $ | ||||||
Expected volatility of total equity |
% | % | ||||||
Discount for lack of market |
% | % | ||||||
Expected time to exit event |
Expense |
Estimated Amount |
|||
Securities and Exchange Commission registration fee |
$ | 187,100 | ||
Accounting fees and expenses |
* | |||
Legal fees and expenses |
* | |||
Financial printing and miscellaneous expenses |
* | |||
|
|
|||
Total |
$ | 187,100 | ||
|
|
* | These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be defined at this time. |
(a) | Exhibits |
Exhibit Number |
Exhibit Description |
Filed Herewith |
Incorporated by Reference herein from Form or Schedule |
Filing Date |
SEC File/ Reg. Number |
|||||||||||
23.2 | Consent of Ernst & Young LLP, independent registered public accounting firm. | X | ||||||||||||||
23.3 | Consent of Walkers (Cayman) LLP (included in Exhibit 5.1). | |||||||||||||||
24.1 | Power of Attorney (included on the signature page hereof) | |||||||||||||||
101.INS | Inline XBRL Instance Document | X | ||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL) | X | ||||||||||||||
107.1 | Calculation of Registration Fee | X |
† | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a) (5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
@ | Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. |
+ | Management contract or compensatory plan or arrangement. |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes |
in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided however |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
PROKIDNEY CORP. | ||
By: | /s/ Tim Bertram, Ph.D. | |
Tim Bertram, Ph.D. | ||
Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Tim Bertram, Ph.D. Tim Bertram, Ph.D. |
Chief Executive Officer and Director (Principal Executive Officer) |
August 8, 2022 | ||
/s/ James Coulston, CPA James Coulston, CPA |
Chief Financial Officer (Principal Financial and Accounting Officer) | August 8, 2022 | ||
/s/ Pablo Legorreta Pablo Legorreta |
Chairman | August 8, 2022 | ||
/s/ William F. Doyle William F. Doyle |
Director | August 8, 2022 | ||
/s/ Jennifer Fox Jennifer Fox |
Director | August 8, 2022 | ||
/s/ José Ignacio Jimenez José Ignacio Jimenez Santos |
Director | August 8, 2022 | ||
/s/ Alan M. Lotvin, M.D. Alan M. Lotvin, M.D. |
Director | August 8, 2022 | ||
/s/ John M. Maraganore, Ph.D. John M. Maraganore, Ph.D |
Director | August 8, 2022 | ||
/s/ Brian J.G. Pereira, M.D. Brian J.G. Pereira, M.D. |
Director | August 8, 2022 | ||
/s/ Uma Sinha, Ph.D. Uma Sinha, Ph.D. |
Director | August 8, 2022 |