On July 11, 2022, the stockholders of the Company approved the ProKidney Corp. 2022 Incentive Equity Plan (the “2022 Plan”) which provides for the issuance of equity-based awards to the Company’s employees, non-employee directors, individual consultants, advisors and other service providers. The 2022 Plan provides for the issuance of equity awards in the form of incentive

stock options, which are intended to satisfy the requirements of Section 422 of the Internal Revenue Code of 1986, as amended, or nonqualified stock options, which are not intended to meet those requirements, stock appreciation rights, restricted stock, restricted stock units, performance awards or other cash or stock-based awards as determined appropriate by the plan administrator. In settlement of its obligations under this plan, the Company will issue new shares of Class A common stock.

The Company has issued incentive and non-qualified stock option awards under the 2022 Plan to certain employees, individual consultants and non-employee directors of the Company. Given that the Company has established a full valuation allowance against its deferred tax assets, the Company has recognized no tax benefit related to these awards.

The Company uses the Black-Scholes option pricing model to calculate the fair value of time-vested stock options granted. These awards generally vest ratably over a three or four-year period and the option awards expire after a term of ten years from the date of grant. The fair value of stock options granted was estimated using the following assumptions during the six months ended June 30, 2025:

The following table summarizes the activity related to the Company’s time-vested stock option awards granted under the 2022 Plan for the six months ended June 30, 2025:


	Number of Shares			Weighted Average Exercise Price
Time-vested options outstanding at January 1, 2025		19,778,670		$	5.45
Granted		12,478,509			1.18
Forfeited		(3,146,681	)		3.50
Time-vested options outstanding at June 30, 2025		29,110,498		$	3.83
Time-vested options exercisable at June 30, 2025		9,274,222		$	6.26
Weighted average remaining contractual life	7.6 years
Time-vested options vested and expected to vest at June 30, 2025		29,110,498		$	3.83
Weighted average remaining contractual life	8.6 years

As of June 30, 2025, the Company had total unrecognized stock-based compensation expense of approximately $37,836,000 related to the time-vested grants under the 2022 Plan, which is expected to be recognized on a straight-line basis over a weighted average period of 2.8 years. The weighted average grant date fair value for the option grants during the six months ended June 30, 2025 and 2024 was $0.95 and $1.33, respectively.

The aggregate intrinsic value of the in-the-money time-vested awards outstanding and those exercisable as of June 30, 2025 was $0 in each instance.

The Company has issued stock options to certain of its employees which vest based on the achievement of both operational performance metrics and service rendered over a specific time period. The following table summarizes the activity related to the Company’s performance-based stock option awards granted under the 2022 Plan for the six months ended June 30, 2025:


	Number of Shares			Weighted Average Exercise Price
Performance-based options outstanding at January 1, 2025		1,671,250		$	1.62
Forfeited		(277,500	)		1.88
Performance-based options outstanding at June 30, 2025		1,393,750		$	1.57
Performance-based options exercisable at June 30, 2025		893,750		$	1.50
Weighted average remaining contractual life	8.5 years
Performance-based options vested and expected to vest at June 30, 2025		1,393,750		$	1.57
Weighted average remaining contractual life	8.5 years

As of June 30, 2025, the Company had no remaining unrecognized stock-based compensation expense related to its performance-based awards.

The Deed for the Establishment of a Limited Partnership of PKLP, dated as of August 5, 2021 (the “Limited Partnership Agreement”) which replaced the Amended and Restated Limited Liability Company Agreement of ProKidney LLC as the governing document of the parent entity in the Company, allowed for the issuance of Profits Interests (as defined in the Limited Partnership Agreement) to employees, directors, other service providers of the Company and others denominated in the form of one or more Class B Units of PKLP (as defined in the Limited Partnership Agreement).

Under the Limited Partnership Agreement, Legacy GP determined the terms and conditions of the Profits Interests issued. The threshold value assigned to each grant was not to be less than the fair market value of PKLP on the date of grant. Profits Interests awarded would vest at a rate of 25% on the latter of the first anniversary of employment and the first anniversary of the Acquisition Date with the remaining 75% to vest in increments of 25% on each anniversary following the first anniversary date, ratably over a three or four-year period from the date of grant, in annual installments of 33.3% over the three-year period from the date of grant, in increments of 6.25% each calendar quarter following the first anniversary date, or were fully vested upon issuance.

On January 17, 2022, PKLP amended and restated its Limited Partnership Agreement (the “Amended and Restated Limited Partnership Agreement”) which provided that certain qualified distribution events would result in holders of Profits Interests receiving disproportionate distributions from PKLP until each such holder’s valuation threshold had been reduced to zero in order to “catch up” such holder’s distributions to its pro rata share of aggregate cumulative distributions, and once sufficient distributions to a holder of Profits Interests had been made in accordance with the foregoing, the associated Class B Units of PKLP would automatically be converted into Class A Units of PKLP (as defined in the Limited Partnership Agreement).

Upon consummation of the Business Combination discussed in Note 1, PKLP’s existing Class B and B-1 Units were “caught up” and were converted into Class A Units of PKLP. The resulting vested and unvested Class A Units of PKLP were then recapitalized into Post-Combination ProKidney Common Units or Restricted Common Units of the Company, respectively. This recapitalization resulted in a decrease in the number of awards held by each participant. As such, the number of Profits Interests and related per unit values within these financial statements have been adjusted to reflect this recapitalization. Upon recapitalization, the Restricted Common Units maintained the vesting schedules associated with the original Profits Interest awards.

The following table summarizes the activity related to the Profits Interest awards for the six months ended June 30, 2025:


	Number of Shares			Weighted Average Grant Date Fair Value
Unvested awards outstanding at January 1, 2025		1,755,686		$	7.37
Vested		(959,764	)		7.37
Forfeited		(53,238	)		7.36
Unvested awards outstanding at June 30, 2025		742,684		$	7.38

As of June 30, 2025, the unrecognized compensation expense related to these awards was $3,042,000. The current weighted average remaining period over which the unrecognized compensation expense is expected to be recognized is 0.6 years.

The aggregate intrinsic value of the unvested profits interests outstanding at June 30, 2025 was $440,000. The aggregate fair value of profits interests vested during the six months ended June 30, 2025 and 2024 was $1,582,000 and $1,914,000, respectively.

Compensation expense related to equity-based awards is included in research and development and general and administrative expense as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Research and development	$	2,867	$	3,402	$	5,577	$	6,633
General and administrative		3,673		4,406		7,380		8,856
Total equity-based compensation expense	$	6,540	$	7,808	$	12,957	$	15,489

The following table summarizes our equity-based compensation by type of award (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Time-vested stock options	$	5,214	$	5,575	$	10,162	$	10,755
Performance-based stock options		–		310		5		569
Legacy profits interests		1,326		1,923		2,790		4,165
Total equity-based compensation expense	$	6,540	$	7,808	$	12,957	$	15,489