PROKIDNEY CORP. Leases Disclosure
Note 5: Leases
The Company has operating leases for real estate (primarily office space) and certain equipment with various expiration dates. The Company also has finance leases for certain equipment which are not considered material. During the year ended December 31, 2024, the Company purchased two multi-tenant buildings in Winston-Salem, North Carolina, which it had previously occupied under the terms of a real estate lease. In connection with this purchase, the Company assumed the existing lease agreements held with certain third parties which leased space in these buildings.
Lessee Leases
For the years ended December 31, 2025, 2024 and 2023, the Company’s operating lease cost was $1,255,000, $1,976,000, and $1,062,000, respectively. During the year ended December 31, 2025, cash paid for operating leases was $1,039,000.
The following table summarizes the classification of operating and finance lease assets and obligations in the Company's Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024 (in thousands):
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Operating leases: |
|
|
|
|
|
|
||
of use assets |
|
$ |
3,590 |
|
|
$ |
2,869 |
|
|
|
|
|
|
|
|
||
lease liabilities, current |
|
$ |
1,054 |
|
|
$ |
740 |
|
lease liabilities, noncurrent |
|
|
2,905 |
|
|
|
2,393 |
|
Total operating lease liabilities |
|
$ |
3,959 |
|
|
$ |
3,133 |
|
|
|
|
|
|
|
|
||
Finance leases: |
|
|
|
|
|
|
||
of use assets |
|
$ |
74 |
|
|
$ |
97 |
|
|
|
|
|
|
|
|
||
lease liabilities, current |
|
$ |
17 |
|
|
$ |
25 |
|
lease liabilities, noncurrent |
|
|
60 |
|
|
|
78 |
|
Total finance lease liabilities |
|
$ |
77 |
|
|
$ |
103 |
|
Maturities of lease liabilities for the Company’s operating and finance leases are as follows as of December 31, 2025 (in thousands):
|
|
Operating Leases |
|
|
Finance Leases |
|
|
Total |
|
|||
2026 |
|
$ |
1,429 |
|
|
$ |
22 |
|
|
$ |
1,451 |
|
2027 |
|
|
1,292 |
|
|
|
22 |
|
|
|
1,314 |
|
2028 |
|
|
1,075 |
|
|
|
22 |
|
|
|
1,097 |
|
2029 |
|
|
457 |
|
|
|
22 |
|
|
|
479 |
|
2030 |
|
|
420 |
|
|
|
— |
|
|
|
420 |
|
Thereafter |
|
|
251 |
|
|
|
— |
|
|
|
251 |
|
Total lease payments |
|
|
4,924 |
|
|
|
88 |
|
|
|
5,012 |
|
Less: imputed interest |
|
|
(965 |
) |
|
|
(11 |
) |
|
|
(976 |
) |
Present value of lease liabilities |
|
$ |
3,959 |
|
|
$ |
77 |
|
|
$ |
4,036 |
|
The weighted average remaining lease term for operating leases is 3.9 years, and 4.0 years for the finance lease. The weighted average discount rate is 11.0% and 5.6% for operating and finance leases, respectively.
Lessor Leases
The Company leases a portion of its facilities in Winston-Salem, North Carolina under agreements that are classified as operating leases. In addition to the rental payments, tenants pay a fixed rate for their pro rata share of real estate taxes, insurance and other facility operating expenses. These amounts are recognized as revenues on a straight-line basis over the term of the related leases. For leasing revenues where collectability is not considered probable, lease income is recognized on a cash basis and all previously recognized tenant accounts receivables, including straight-line rent, are fully reserved in the period in which the lease income is determined not to be probable of collection. These lease agreements terminate between 2026 and 2029.
The leasing revenue for the years ended December 31, 2025 and 2024 was $893,000 and $76,000, respectively. There was no such revenue for the year ended December 31, 2023. Future minimum lease payments under non-cancelable operating leases as of December 31, 2025 excluding the effect of straight-line rent and variable rental payments are as follows (in thousands):
|
|
Total |
|
|
2026 |
|
$ |
522 |
|
2027 |
|
|
495 |
|
2028 |
|
|
289 |
|
2029 |
|
|
13 |
|
2030 |
|
|
— |
|
Thereafter |
|
|
— |
|
Total |
|
$ |
1,319 |
|
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 18, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Mar 22, 2024 | |
| 2022 | Mar 28, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.