Note 10: Equity-Based Compensation

2022 Incentive Equity Plan

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.

Time-Vested 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 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, 2026:

As of June 30, 2026, the Company had total unrecognized stock-based compensation expense of approximately $40,103,000 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 2.9 years. The weighted average grant date fair value for the option grants during the six months ended June 30, 2026 and 2025 was $1.91 and $0.95, respectively.

The aggregate intrinsic value of the in-the-money time-vested awards outstanding and those exercisable as of June 30, 2026 was $11,988,000 and $5,121,000, respectively.

Performance-Based Awards

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, 2026:

As of June 30, 2026, the Company had no remaining unrecognized stock-based compensation expense related to its performance-based awards.

Legacy Profits Interests

In periods prior to the Business Combination, the Company issued Profits Interests (as defined in The Deed for the Establishment of a Limited Partnership of PKLP, dated as of August 5, 2021 (the “Limited Partnership Agreement”)) to employees, directors, other service providers of the Company and others.

The Profits Interests vested at a rate of 25% on the latter of the first anniversary of employment and the first anniversary of January 17, 2022 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.

Upon consummation of the Domestication and other Restructuring transactions, PK Holdings issued Restricted Common Units to the then-current holders of the Profits Interest awards subject to the same provisions as existed prior to the Domestication.

As of June 30, 2026, there was no remaining unrecognized compensation expense related to these awards.

The aggregate intrinsic value of the unvested profits interests outstanding at June 30, 2026 was insignificant. The aggregate fair value of profits interests vested during the six months ended June 30, 2026 and 2025 was $1,675,000 and $1,582,000, respectively.

Equity-Based Compensation Expense