KALA BIO, Inc. 10-Q

Item 1. Financial Statements . KALA BIO, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 1,764 ​ $ 7,557 Short-term investments ​ ​ 7,000 ​ ​ — Prepaid expenses and other current assets ​ ​ 3,554 ​ ​ 1,933 Total current assets ​ ​ 12,318 ​ ​ 9,490 Total assets ​ $ 12,318 ​ $ 9,490 Liabilities and Stockholders' Equity ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 1,044 ​ $ 986 Accrued expenses and other current liabilities ​ ​ 513 ​ ​ 1,508 Total current liabilities ​ ​ 1,557 ​ ​ 2,494 Total liabilities ​ ​ 1,557 ​ ​ 2,494 Commitments and Contingencies (Note 14) ​ ​ ​ ​ ​ ​ Stockholders' equity: ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.001 par value; 5,000,000 shares authorized as of March 31, 2026; 0 and 9,278 shares of Series E Convertible Non-Redeemable Preferred Stock issued and outstanding as of March 31, 2026 and December 31, 2025, 0 and 2,928 shares of Series F Convertible Non-Redeemable Preferred Stock issued and outstanding as of March 31, 2026 and December 31, 2025, 0 and 10,901 shares of Series G Convertible Non-Redeemable Preferred Stock issued and outstanding as of March 31, 2026 and December 31, 2025, 0 and 2,299 shares of Series H Convertible Non-Redeemable Preferred Stock issued and outstanding as of March 31, 2026 and December 31, 2025, 681,818 and 900,000 shares of Series AA Convertible Non-Redeemable Preferred Stock issued and outstanding as of March 31, 2026 and December 31, 2025, respectively ​ ​ 1 ​ ​ 1 Common stock, $ 0.001 par value; 1,500,000,000 and 120,000,000 shares authorized as of March 31, 2026 and December 31, 2025; 18,589,832 and 556,995 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively * ​ ​ 19 ​ ​ 1 Additional paid-in capital ​ ​ 707,262 ​ ​ 701,894 Accumulated deficit ​ ​ ( 696,521 ) ​ ​ ( 694,900 ) Total stockholders' equity ​ ​ 10,761 ​ ​ 6,996 Total liabilities and stockholders' equity ​ $ 12,318 ​ $ 9,490 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * On May 8, 2026, the Company completed a 1 -for-50 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every fifty (50) shares of common stock issued and outstanding immediately prior to May 8, 2026 were converted into one share of common stock, without any change in the par value per share. No fractional shares was issued as a result of the Reverse Stock Split. Stockholders that would hold fractional shares as a result of the Reverse Stock Split are entitled to receive a cash payment in lieu of said fractional shares based on the closing price on the Nasdaq Capital Market on May 7, 2026. The Reverse Stock Split reduced the number of shares of Common Stock outstanding from 929,491,578 shares to approximately 18,589,832 shares. All references to number of shares, and to per share information in the this condensed consolidated financial statements have been retroactively adjusted. See accompanying notes to these unaudited condensed consolidated financial statements. ​ 5 Table of Contents KALA BIO, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Costs and expenses: ​ ​ ​ ​ ​ ​ General and administrative ​ $ 1,741 ​ $ 4,593 Research and development ​ ​ 61 ​ ​ 6,055 Loss on fair value remeasurement of contingent consideration ​ ​ — ​ ​ 21 Total costs and expenses ​ ​ 1,802 ​ ​ 10,669 Loss from operations ​ ​ ( 1,802 ) ​ ​ ( 10,669 ) Other income (expense): ​ ​ ​ ​ ​ ​ Interest income ​ ​ 74 ​ ​ 463 Interest expense ​ ​ — ​ ​ ( 1,091 ) Grant income ​ ​ — ​ ​ 2,350 Other income (expense), net ​ ​ 107 ​ ​ — Total other income (expense) ​ ​ 181 ​ ​ 1,722 Net loss and comprehensive loss ​ $ ( 1,621 ) ​ $ ( 8,947 ) Net loss per share attributable to common stockholders—basic and diluted * ​ $ ( 0.14 ) ​ $ ( 70.49 ) Weighted average shares outstanding—basic and diluted * ​ ​ 11,873,568 ​ ​ 126,917 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Number of shares, and to per share information have been retroactively adjusted to reflect the impact of the Reverse Stock Split. ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ 6 Table of Contents KALA BIO, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2026 ​ ​ Series E ​ Series F ​ Series G ​ ​ Series H ​ ​ Series AA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible ​ Convertible ​ Convertible ​ Convertible ​ Convertible ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Redeemable ​ Non-Redeemable ​ Non-Redeemable ​ Non-Redeemable ​ Non-Redeemable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred Stock ​ Preferred Stock ​ Preferred Stock ​ Preferred Stock ​ Preferred Stock ​ Common Stock ​ Additional ​ ​ ​ ​ Total ​ ​ $0.001 Par Value ​ $0.001 Par Value ​ $0.001 Par Value ​ $0.001 Par Value ​ $0.001 Par Value ​ $0.001 Par Value ​ Paid-In ​ Accumulated ​ Stockholders' ​ ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Deficit ​ Equity Balance as of December 31, 2025 ​ 9,278 ​ $ — ​ 2,928 ​ $ — ​ 10,901 ​ $ — ​ 2,299 ​ $ — ​ 900,000 ​ $ 1 ​ 556,995 ​ $ 1 ​ $ 701,894 ​ ​ ( 694,900 ) ​ $ 6,996 Issuance of common stock to satisfy service contract ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 100,000 ​ ​ — ​ ​ 1,755 ​ ​ — ​ ​ 1,755 Issuance and conversion of Series AAA Preferred Stock ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 17,640,000 ​ ​ 18 ​ ​ 4,084 ​ ​ — ​ ​ 4,102 Conversion of Preferred Stock ​ ( 9,278 ) ​ ​ — ​ ( 2,928 ) ​ ​ — ​ ( 10,901 ) ​ ​ — ​ ( 2,299 ) ​ ​ — ​ ( 218,182 ) ​ ​ — ​ 290,812 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Issuance of common stock for vested restricted stock units ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 2,025 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ ( 471 ) ​ ​ — ​ ​ ( 471 ) Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 1,621 ) ​ ​ ( 1,621 ) Balance as of March 31, 2026 ​ — ​ $ — ​ — ​ $ — ​ — ​ $ — ​ — ​ $ — ​ 681,818 ​ $ 1 ​ 18,589,832 ​ $ 19 ​ $ 707,262 ​ $ ( 696,521 ) ​ $ 10,761 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2025 ​ ​ Series E ​ ​ Series F ​ ​ G ​ ​ Series H ​ ​ Series I ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible ​ Convertible ​ Convertible ​ Convertible ​ Convertible ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Redeemable ​ Non-Redeemable ​ Non-Redeemable ​ Non-Redeemable ​ Non-Redeemable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred Stock ​ Preferred Stock ​ Preferred Stock ​ Preferred Stock ​ Preferred Stock ​ Common Stock ​ Additional ​ ​ ​ ​ Total ​ ​ $0.001 Par Value ​ $0.001 Par Value ​ $0.001 Par Value ​ $0.001 Par Value ​ $0.001 Par Value ​ $0.001 Par Value ​ Paid-In ​ Accumulated ​ Stockholders' ​ ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Deficit ​ Equity Balance as of December 31, 2024 ​ 51,246 ​ $ — ​ 2,928 ​ $ — ​ 10,901 ​ $ — ​ 9,393 ​ $ — ​ 3,286 ​ $ — ​ 121,824 ​ $ — ​ $ 680,252 ​ $ ( 667,920 ) ​ $ 12,332 Issuance of common stock for vested restricted stock units ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 1,210 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Issuance of common stock under employee stock purchase plan ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ 46 ​ ​ — ​ ​ 13 ​ ​ — ​ ​ 13 Conversion of Series H Preferred Stock ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ( 2,984 ) ​ ​ — ​ — ​ ​ — ​ 5,968 ​ ​ — ​ ​ ​ ​ ​ — ​ ​ — Stock-based compensation expense ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 2,310 ​ ​ — ​ ​ 2,310 Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 8,947 ) ​ ​ ( 8,947 ) Balance as of March 31, 2025 ​ 51,246 ​ $ — ​ 2,928 ​ $ — ​ 10,901 ​ $ — ​ 6,409 ​ $ — ​ 3,286 ​ $ — ​ 129,048 ​ $ — ​ $ 682,575 ​ $ ( 676,867 ) ​ $ 5,708 ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ ​ 7 Table of Contents KALA BIO, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 1,621 ) ​ $ ( 8,947 ) Adjustments to reconcile net loss to cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ — ​ ​ 68 Non-cash operating lease cost ​ ​ — ​ ​ 90 Loss on fair value remeasurement of contingent consideration ​ ​ — ​ ​ 21 Amortization of debt discount and other non-cash interest ​ ​ — ​ ​ 186 Stock-based compensation ​ ​ ( 471 ) ​ ​ 2,310 Issuance of Common Stock for service contract ​ ​ 1,755 ​ ​ — Change in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Prepaid expenses and other current assets ​ ​ ( 1,621 ) ​ ​ ( 1,879 ) Other long-term assets ​ ​ — ​ ​ ( 7 ) Accounts payable ​ ​ 58 ​ ​ 303 Accrued expenses and other current liabilities ​ ​ ( 995 ) ​ ​ ( 881 ) Lease liabilities and other long-term liabilities ​ ​ — ​ ​ ( 88 ) Net cash used in operating activities ​ ​ ( 2,895 ) ​ ​ ( 8,824 ) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Payment for short-term investment ​ ​ ( 7,000 ) ​ ​ — Net cash used in investing activities ​ ​ ( 7,000 ) ​ ​ — Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Payment of issuance costs from issuance of common stock and Series I preferred stock ​ ​ — ​ ​ ( 120 ) Proceeds from issuance of Series AAA preferred stock, net of issuance cost ​ ​ 4,102 ​ ​ — Payment of principal on finance lease ​ ​ — ​ ​ ( 28 ) Proceeds from issuance of common stock under employee stock purchase plan ​ ​ — ​ ​ 13 Net cash provided by (used in) financing activities ​ ​ 4,102 ​ ​ ( 135 ) Net (decrease) increase in cash and cash equivalents: ​ ​ ( 5,793 ) ​ ​ ( 8,959 ) Cash and cash equivalents at beginning of period ​ ​ 7,557 ​ ​ 51,181 Cash and cash equivalents at end of period ​ $ 1,764 ​ $ 42,222 ​ ​ ​ ​ ​ ​ ​ Non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Issuance of common stock to satisfy service contract in additional paid-in capital ​ $ 1,755 ​ $ — ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure: ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ — ​ $ 909 ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ ​ 8 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION ​ Nature of Business — KALA BIO, Inc. (the “Company”) was incorporated on July 7, 2009, and is a biopharmaceutical company in transition, evaluating the development of a dedicated, on-premises artificial intelligence (AI) infrastructure platform for the biotechnology industry. Our current focus is leveraging our mesenchymal stem cell secretome platform (the “MSC-S platform”) to test development of a scalable AI platform-as-a-service business to deploy secure, purpose-built AI systems directly within biotechnology and pharmaceutical client environments. We have historically been engaged in the research, development and commercialization of innovative therapies for rare and severe diseases of the front and back of the eye. Our lead product candidate was KPI-012 (“KPI-012”), an MSC-S, which we acquired from Combangio on November 15, 2021. KPI-012 was in clinical development for the treatment of persistent corneal epithelial defects (“PCED”), a rare disease of impaired corneal healing. Based on the results of a Phase 1b clinical safety and efficacy trial of KPI-012 in patients with PCED, we submitted an investigational new drug application to the U.S. Food and Drug Administration (the “FDA”), which was accepted in December 2022. In February 2023, we dosed our first patient in the United States in our CHASE trial (the “CHASE trial”). By September 2025, the CHASE trial did not meet its primary endpoints, and we determined to discontinue our development of KPI-012 and the MSC-S platform. We have since expanded upon our business to evaluate strategic alternatives for our legacy MSC-S assets and capitalize on the substantial intellectual property (IP), proprietary biological datasets, and research experience generated during the clinical trials by starting development of an AI platform. We are in the process of evaluating and transitioning from historical biologics research and development (R&D) activities to an “AI platform-as-a-service” model intended to provide dedicated, on-premises artificial intelligence infrastructure solutions to biotechnology and pharmaceutical customers. Following the discontinuation of the CHASE Phase 2b clinical trial of KPI-012 in September 2025 and the subsequent resolution of our obligations to Oxford Finance, our current operating focus is (i) the monetization or out-licensing of remaining biologics-related assets and (ii) development and commercialization planning for our licensed Researgency agentic AI platform (the “Researgency Platform”). This transition is expected to impact our operating expenses, capital requirements, and sources and uses of cash as described further below. We have refocused our business on two complementary strategic priorities. First, we are preserving and seeking to maximize the value of our MSC-S biologics asset portfolio, including the KPI-012 and KPI-014 product candidates and related intellectual property, through potential licensing, collaboration, and other strategic arrangements with third parties, as well as through evaluation of opportunities to resume preclinical development activities subject to the availability of additional capital. Second, we are building our Researgency business through our exclusive license for the Researgency Platform, which we intend to deploy as a dedicated, on-premises AI infrastructure solution for biotechnology and pharmaceutical companies. We believe this dual-track strategy preserves and creates optionality with respect to our biologics assets while simultaneously pursuing a potential business opportunity in the rapidly growing AI platform market for the biotechnology industry. Reverse Stock Split – On May 8, 2026, we effected a 1-for-50 reverse stock split of our Common Stock (the “Reverse Stock Split”), pursuant to which each ( 50 ) shares of Common Stock were converted into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split, and stockholders who otherwise would have been entitled to receive fractional shares are entitled to receive a cash payment in lieu of such fractional shares. All share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented. Recent Equity Financings On January 8, 2026, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) providing for the sale and issuance by the Company of shares of its 9 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) common stock, par value $ 0.001 per share (“Common Stock”) from time to time, through or to Wainwright as the Company’s sales agent or principal in an “at the market offering” program and as set forth in the ATM Agreement (the “ATM Program”). ​ On January 30, 2026, pursuant to the terms of a Securities Purchase Agreement (the “January 2026 Purchase Agreement”), we issued and sold to certain investors (the “Series AAA Investors”) in a closing (the “Series AAA Closing”) of a private placement (the “Series AAA Private Placement”), an aggregate of 2,100,000 shares of the Company’s Series AAA Convertible Non-Redeemable Preferred Stock (“Series AAA Preferred Stock”) at a price per share of Series AAA Preferred Stock equal to $ 2.00 , for aggregate gross proceeds of $ 4,200 . The Series AAA Closing occurred on January 30, 2026. The terms of the Series AAA Preferred Stock are substantially similar to the terms of the Series AA Preferred Stock. Each share of Series AAA Preferred Stock was convertible into 8.4 shares of common stock for an aggregate total of 17,640,000 shares of Common Stock issuable upon conversion of the Series AAA Preferred Stock. As of March 31, 2026, all of the shares of Series AAA Preferred Stock have been converted into shares of Common Stock. Use of Estimates — The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expense, and related disclosures. The Company bases estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. Estimates and assumptions relied upon in preparing these condensed consolidated financial statements relate to, but are not limited to, the present value of lease liabilities and the corresponding right-of-use assets, the fair value of warrants, stock-based compensation, accrued expenses, contingent consideration, grant income and deferred grant income, the valuation of embedded derivatives and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Actual results may differ from these estimates under different assumptions or conditions. Net Loss per Share Attributable to Common Stockholders —The Company follows the two-class method when computing net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The two-class method is not applicable during periods with a net loss, as the holders of the convertible preferred stock have no contractual obligation to share in losses. For all periods presented, the two-class method was not applicable. Basic net loss per share attributable to common stockholders is computed using the weighted-average number of common shares outstanding during the period. Diluted net loss per share attributable to common stockholders is computed using the weighted average number of common shares outstanding during the period and, if dilutive, the weighted average number of potential shares of common stock, including the assumed exercise of stock options and warrants, the issuance of unvested restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) and convertible preferred stock using the if-converted method. The weighted average number of common shares included in the computation of diluted net loss gives effect to all potentially dilutive common equivalent shares, including outstanding stock options, warrants, unvested RSUs and PSUs and convertible preferred stock using the if-converted method. Common stock equivalent shares are excluded from the computation of diluted net loss per share attributable to common stockholders if their effect is antidilutive. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common 10 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to common stockholders for the three months ended March 31, 2026 and 2025. (See Note 12, “Loss Per Share”). Unaudited Interim Financial Information —The condensed consolidated financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed consolidated financial statements reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position, results of operations, statement of stockholders’ equity and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Annual Report”). The unaudited condensed consolidated financial statements include the accounts of KALA BIO, Inc. and its wholly owned subsidiaries, Kala Pharmaceuticals Security Corporation and Combangio, Inc. (“Combangio”) All intercompany transactions and balances have been eliminated in consolidation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Recently Issued Accounting Pronouncements In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statements. The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Annual Report. There have been no material changes to the significant accounting policies during the three months ended March 31, 2026. ​ ​ 3. FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and its own assumptions (unobservable inputs). The hierarchy consists of three levels: ● Level 1—Quoted prices in active markets for identical assets or liabilities. ● Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. 11 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) ● Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s financial instruments as of March 31, 2026 and December 31, 2025 consisted primarily of cash equivalents and short-term investment loan. Cash equivalents and short-term investments are reported at their respective fair values on the Company’s condensed consolidated balance sheets. ​ 12 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) 4. LICENSE AGREEMENT On March 3, 2026 (the “Effective Date”), the Company and Younet entered into the Younet Agreement pursuant to which the Company obtained the worldwide Exclusive License of Younet’s proprietary, custom biomedical artificial intelligence research platform (the “Researgency Platform”), together with associated trademarks and intellectual property. The term of the Agreement is for 12 months following the Effective Date (the “Initial Term”), with the option by the Company to renew the agreement for successive 12 months terms (each, a “Renewal Term”), in each case by providing notice to Younet pursuant to the terms of the Agreement (the “Extension Notice”). Pursuant to the Agreement, Younet shall also provide to the Company certain deliverables and services related to the Researgency Platform, with certain additional deliverables to be provided by Younet in the event of a Renewal Term, in each case with all operating costs relating to the Researgency Platform to be paid by the Company. In consideration of the services to be performed by Younet under the Younet Agreement, the Company has agreed to pay to Younet for the Initial Term a cash fee of up to $ 530 consisting of (i) $ 80 in cash, which was paid by the Company on the Effective Date, and (ii) in the event the Company delivers to Younet a written notice electing to engage Younet for the continued development of Researgency, $ 450 in cash, payable in 9 monthly installments of $ 50 , pursuant to the terms of the Agreement. Such notice may be provided at any time on or after the first business day of the third month following the Effective Date and such continued development may be terminated upon 30 days notice by the Company. In addition, the Company has agreed to issue to Younet 100,000 shares of the Company’s common stock, par value $ 0.001 per share (the “Common Stock”), within 10 business days of the Effective Date. In addition, each time the Younet Agreement is extended for a Renewal Term, the Company shall (i) pay to Younet $ 250 in cash and (ii) issue to Younet 100,000 shares of Common Stock within 10 business days of the Extension Notice. Except for certain block trades, during the Initial Term and for the twelve months thereafter, Younet shall not sell any Younet Shares on any trading day (as defined in the Younet Agreement) in an amount that exceeds 3 % of the Daily Trading Volume (as defined in the Younet Agreement) for such Trading Day. In addition, Younet has granted to the Company an irrevocable option, exercisable at any time during the Initial Term or any Renewal Terms, to acquire all of the issued and outstanding equity interests of Younet, or, at the Company’s election, substantially all of the assets of Younet, for a total purchase price of $ 55,000 , subject to the terms of the Younet Agreement. If the Company does not deliver an Extension Notice prior to the expiration of the Initial Term or any Renewal Term, the Agreement shall expire automatically at the end of the applicable term. In addition, the Younet Agreement may be terminated by either party (i) for uncured material breach or (ii) due to the insolvency of the other party. Upon termination or expiration, (a) the Exclusive License will terminated, (b) all licenses granted to Younet with respect to KALA Data (as defined in the Younet Agreement) will immediately terminate, (c) all licenses granted to the Company with respect to Younet Background IP (as defined in the Younet Agreement) will survive in accordance with their terms, and (d) all Work Product (as defined in the Younet Agreement) completed as of the date of termination shall be delivered to and owned by the Company. The Younet Agreement additionally includes customary representations and warranties, covenants, and indemnification obligations for a transaction of this nature. ​ ​ 13 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) 5. SHORT-TERM INVESTMENT On February 9, 2026, the Company made a loan (the “Loan”) in the principal amount of $ 7,000 evidenced by a secured promissory note (the “Note”) to Minglemint Solutions LLC (“Minglemint” or “Borrower”) in connection with the Company’s determination that a portion of its cash on hand was in excess of its near-term working capital requirements and operational needs. In order to optimize the return on such excess cash, rather than holding the full balance in a bank deposit account, which offered a materially lower yield, the Company elected to deploy that portion into the Loan, which bears interest at a rate of 8.0 % per annum. The Company believes that the interest rate obtained under the Loan, together with the security interest granted to the Company over all fixtures and personal property of the Borrower, provides a more favorable risk-adjusted return on idle cash than the return available through conventional bank deposit arrangements, while preserving the Company’s ability to meet its anticipated working capital and operational obligations. The Note includes customary event of default provisions, including, but not limited to, for a breach of any representations and warranties or covenants, any bankruptcy or insolvency proceedings of the Borrower, and the failure of the Borrower to pay, upon 15 days ’ written notice of default, any principal amount of the Loan or interest due. The Note provides for a default interest rate of 13.0 % . As described in the Note, upon the occurrence of certain events of default, the Company may, among other remedies, declare the outstanding balance of the Note including all accrued interest thereon immediately due and payable. On May 11, 2026, the Company and the Borrower entered into a Note Amending Agreement (the “Loan Amendment”) which added a provision that the Company has the right at any time and from time to time, on no less than 45 days ’ notice, to demand repayment of all or any portion of the outstanding principal amount of the Loan, including all accrued and unpaid interest thereon and any other amounts owing under the Note by delivering written notice to the Borrower (a “Call Notice”). The Borrower agrees to repay the amount in the Call Notice, and any amount not timely repaid will accrue interest at the default interest rate of 13.0 % . The Note is secured by a continuing first priority lien and security interest in all fixtures and personal property of the Borrower (the “Collateral”), pursuant to the security agreement with the Borrower dated February 9, 2026 (the “Security Agreement”). The Collateral includes, but is not limited to, all accounts, goods, documents, instruments, securities and investment properties, money, accounts and rights to payment of the Borrower, a nd any proceeds, records and obligations relat ing to the foregoing, as more fully detailed in the Security Agreement. 6. GRANT INCOME CIRM Award ​ On August 2, 2023, Combangio, a wholly owned subsidiary of the Company, entered into an award agreement with CIRM for a $ 15,000 grant (as amended from time to time, the “CIRM Award”) to support Combangio’s KPI-012 program for the treatment of PCED. The CIRM Award includes funding for the CHASE Phase 2b clinical trial of KPI-012 for PCED, as well as product and process characterization and analytical development for the program. On September 29, 2025, the Company announced that the CHASE trial of KPI-012 for the treatment of PCED did not meet the primary endpoint of complete healing of PCED as measured by corneal fluorescein staining. The CHASE trial also failed to achieve statistical significance for key secondary efficacy endpoints and did not show any meaningful difference between either KPI-012 treatment arm and the placebo arm. Based on the CHASE trial results, we determined to cease development of KPI-012 and our MSC-S platform. ​ During the three months ended March 31, 2026 and 2025, the Company recognized $ 0 and $ 2,350 of grant income, respectively, related to the CIRM Award on its condensed consolidated statement of operations. As of December 31, 2025, the Company had deferred grant income of $ 0 on its condensed consolidated balance sheet. 14 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) ​ 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets, consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Insurance ​ $ 1,345 ​ $ 1,570 Prepaid License Agreement - Younet (1) ​ ​ 1,755 ​ ​ — Interest Receivables (2) ​ ​ 74 ​ ​ — Other ​ ​ 380 ​ ​ 363 Prepaid expenses and other current assets ​ $ 3,554 ​ $ 1,933 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The Company has agreed to issue to Younet 100,000 shares of the Company’s Common Stock. Amount represents 100,000 common shares at $ 17.55 per share, adjusted based on the recent reverse stock split . See “Note 4. License Agreement” and “Note 16. Subsequent Events” for more information. (2) Interest receivables related to the loan to Minglemint. See “Note 5. Short-term Investment” for more information. ​ ​ ​ ​ ​ ​ ​ 8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Professional services ​ $ 156 ​ $ 800 Development costs ​ ​ 197 ​ ​ 269 Accrued revenue reserves (1) ​ ​ 155 ​ ​ 155 Compensation and benefits ​ ​ 5 ​ ​ 180 Other ​ ​ — ​ ​ 104 Accrued expenses and other current liabilities ​ $ 513 ​ $ 1,508 ​ ​ (1) These amounts represent estimated provisions for product returns, rebates and discounts, prior to the sale of the rights to manufacture, sell, distribute, market and commercialize EYSUVIS and INVELTYS and to develop, manufacture, market and otherwise exploit AMPPLIFY Drug Delivery Technology (the “Commercial Business”) to Alcon. Estimated provisions were deducted from gross revenues at the time revenues were recognized and are included in accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets. These provisions reflected the Company’s best estimates of the amount of consideration to which it was entitled based on the terms of the contract. ​ 9. PRIVATE PLACEMENTS Series AAA Private Placement On November 25, 2025, the Company entered into a Securities Purchase Agreement (the “November 2025 Purchase Agreement”), with a certain investor (the “Series AA Investor”), pursuant to which the Company agreed to issue and sell, in a private placement, shares of the Company’s Series AA Convertible Non-Redeemable Preferred Stock (“Series AA Preferred Stock”) and the Series AAA Preferred Stock of the Company in two closings for aggregate gross 15 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) proceeds of up to $ 6.0 million. On December 11, 2025, the Series AA Investor transferred his rights and obligations under the Series AA Purchase Agreement solely with respect to the shares of Series AAA Preferred Stock and the director nomination rights to AK Holdings Group Inc., a Panamanian company (“AK Holdings”). On January 29, 2026, pursuant to the terms of a certain Rights Purchase Agreement, by and among AK Holdings and the “Series AAA Investors, AK Holdings sold its rights to purchase the Series AAA Preferred Stock (but not its director nomination rights under the November 2025 Purchase Agreement) to the Series AAA Investors. On January 30, 2026, the Company entered into the “Series AAA Purchase Agreement with each of the Series AAA Investors pursuant to which the Company agreed to issue and sell to the Series AAA Investors in the Series AAA Private Placement, an aggregate of 2,100,000 shares of Series AAA Preferred Stock at a price per share of Series AAA Preferred Stock equal to $ 2.00 , for aggregate gross proceeds of $ 4,200 . The Series AAA Closing occurred on January 30, 2026, following (A) the approval at our 2025 annual meeting of stockholders (the “2025 Annual Meeting”) of the proposals to (i) the issue shares of our Common Stock upon conversion of our Series AA Convertible Preferred Stock and Series AAA Convertible Preferred Stock in accordance with Nasdaq Listing Rules 5635(b) and 5635(d) and (ii) amend our Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of Common Stock to 1,500,000,000 , (B) the filing with the Secretary of State of the State of Delaware of the (i) Certificate of Amendment and (ii) Certificate of Designations, Preferences and Rights of Series AAA Convertible Non-Redeemable Preferred Stock (the “Series AAA Certificate of Designations”), and (C) the satisfaction of other customary closing conditions. The terms of the Series AAA Preferred Stock are substantially similar to the terms of the Series AA Preferred Stock. Each share of Series AAA Preferred Stock was convertible into 8.4 shares of Common Stock for an aggregate total of 17,640,000 shares of Common Stock issuable upon conversion of the Series AAA Preferred Stock. The Series AAA Purchase Agreement contains customary representations, warranties and agreements by the Company and customary closing conditions. The representations, warranties and covenants contained in the Purchase Agreement were made solely for the benefit of the parties thereto and as of specific dates and may be subject to limitations agreed upon by the contracting parties. As of March 31, 2026, all of the shares of Series AAA Preferred Stock have been converted to shares of Common Stock . ​ 10. WARRANTS ​ The following table summarizes the common stock warrants outstanding as of March 31, 2026 and December 31, 2025, each exercisable into the number of shares of Common Stock set forth below as of the specified dates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Exercisable at ​ ​ Exercise ​ ​ ​ Expiration ​ ​ ​ Exercisable ​ ​ ​ March 31, ​ December 31, Issued ​ ​ ​ Price Per Share ​ Date ​ From ​ 2026 ​ 2025 2016 ​ $ 413.50 October 2026 September 2017 ​ 6 ​ 6 ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 ​ 6 ​ ​ ​ ​ 16 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) 11. STOCK‑BASED COMPENSATION On June 22, 2023, the Company’s stockholders approved the Company’s Amended and Restated 2017 Equity Incentive Plan (the “2017 Plan”), which amended and restated the Company’s 2017 Equity Incentive Plan, as amended (the “2017 Plan”), to (i) increase the number of shares of Common Stock authorized for issuance thereunder by 25,000 shares; (ii) limit the number of incentive stock options that can be granted under the plan to 154,775 shares of Common Stock; (iii) add an annual limit on non-employee director compensation, including cash and the value of equity awards, of $ 750,000 for incumbent directors and $ 1,000,000 in a director’s first year of service; and (iv) extend the term of the plan (including the duration of the evergreen) to 10 years from June 22, 2023, the date that stockholders approved the plan. In addition, the 2017 Plan provides for an annual increase to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2024 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2033, equal to the lower of (i) 4 % of the sum of (I) the number of outstanding shares of Common Stock on such date and (II) the number of shares of Common Stock issuable upon conversion of any outstanding shares of convertible preferred stock of the Company on such date (without giving effect to any restrictions or limitations on conversion) and (ii) an amount determined by the Company’s board of directors. As of March 31, 2026, there were 26,675 shares of common stock available for grant under the 2017 Plan. No options were granted during the three months ended March 31, 2026. During the three months ended March 31, 2025, the Company granted options for the purchase of 9,508 shares of Common Stock and 1,828 RSUs. During the three months ended March 31, 2026 and 2025 , employees of the Company purchased an aggregate of 0 and 46 shares of Common Stock, respectively, under the Employee Stock Purchase Plan. As of March 31, 2026, a total of 417 RSUs were outstanding. Stock-based compensation expense was classified in the condensed consolidated statements of operations and comprehensive loss as follows for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ 2026 ​ ​ ​ 2025 ​ Research and development $ — ​ $ 740 ​ General and administrative ​ ( 471 ) ​ ​ 1,570 ​ Total $ ( 471 ) ​ $ 2,310 ​ ​ ​ 12. LOSS PER SHARE ​ Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ March 31, ​ 2026 ​ ​ ​ 2025 Numerator: ​ ​ ​ ​ ​ Net loss attributable to common stockholders $ ( 1,621 ) ​ $ ( 8,947 ) Denominator: ​ ​ ​ ​ ​ Weighted-average common shares outstanding, basic and diluted (1) ​ 11,873,568 ​ ​ 126,917 ​ ​ ​ ​ ​ ​ Net loss per share attributable to common stockholders, basic and diluted $ ( 0.14 ) ​ $ ( 70.49 ) 17 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) (1) Included in the weighted-average common shares outstanding, basic and diluted are vested but deferred shares for which all contingencies have been satisfied. Number of shares, and to per share information have been retroactively adjusted to reflect the impact of the Reverse Stock Split. The following potential common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ March 31, ​ 2026 ​ 2025 Options to purchase shares of common stock ​ 9,794 ​ ​ 27,068 Unvested RSUs ​ 416 ​ ​ 11,501 Unexercised warrants ​ 6 ​ ​ 80 Convertible preferred stock (as converted to common stock) ​ 750,000 ​ ​ 149,540 ​ ​ 760,216 ​ ​ 188,189 ​ ​ 13. INCOME TAXES The Company did not record a provision or benefit for income taxes during the three months ended March 31, 2026 and 2025. The Company continues to maintain a full valuation allowance for its U.S. federal and state deferred tax assets. The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and its generation of limited revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Management reevaluates the positive and negative evidence at each reporting period. Realization of the future tax benefits is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Under the provisions of Section 382 of the Internal Revenue Code of 1986, certain substantial changes in the Company’s ownership, including a sale of the Company, or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of net operating loss carryforwards, which could be used annually to offset future taxable income. The Company completed an analysis as of December 31, 2022 and determined that an additional ownership change occurred during December 2022 as a result of the issuance of its Series E Convertible Non-Redeemable Preferred Stock, further limiting the net operating loss carryforwards and research and development tax credits due to the expiration of those attributes. As a result, the utilization of the Company’s net operating loss carryforwards is subject to an annual limitation of $ 222 . The Company has not completed an analysis as of December 31, 2024 but does not expect any change would further limit the net operating loss carryforwards. ​ The Company files its corporate income tax returns in the United States and various states. All tax years since the date of incorporation remain open to examination by the major taxing jurisdictions (state and federal) to which the Company is subject, as carryforward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service (“IRS”) or other authorities if they have or will be used in a future period. The Company is not currently under examination by the IRS or any other jurisdictions for any tax year. As of March 31, 2026 and December 31, 2025, the Company had no uncertain tax positions. The Company’s policy is to recognize interest and penalties related to income tax matters as a component of income tax expense, of which no interest or penalties were recorded for the three months ended March 31, 2026 and 2025. 18 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) 14. COMMITMENTS AND CONTINGENCIES Stanford License Agreement — In October 2019, Combangio entered into a license agreement with The Board of Trustees of The Leland Stanford Junior University (“Stanford”), which was amended in February 2020 and subsequently transferred to the Company by operation of law upon our acquisition of Combangio in 2021 (the “Combangio Acquisition”). Pursuant to the license agreement with Stanford (the “Stanford Agreement”), the Company has a worldwide, exclusive, sublicensable license under certain patent rights (“licensed patents”), directed to methods to promote eye wound healing, to make, have made, use, import, offer to sell and sell products (“licensed products”) that are covered by the licensed patents for use in all fields. Under the Stanford Agreement, the Company is required to pay Stanford annual license maintenance fees in the low-to-mid five figures which are creditable against earned royalties owed to Stanford for the same year, an aggregate of up to $ 1,075 for the achievement of specified development and regulatory milestones, and an aggregate of up to $ 1,100 for the achievement of specified sales milestones. Stanford is also entitled to receive tiered royalties in a low single digit percentage range on net sales of licensed products that are covered by a valid claim of a licensed patent. A mounts paid to Stanford in the three months ended March 31, 2026 and 2025 were $ 0 and de minimis, respectively. Litigation — The Company is not currently subject to any material legal proceedings. Contingencies related to the Merger Agreement — In connection with the Combangio Acquisition, the Company agreed to make additional payments based on the achievement of certain milestone events related to KPI-012. The Company recognized certain contingent consideration liabilities at fair value on the acquisition date, and revalues the remaining obligations each reporting period. The total potential maximum payout for the milestone payments, which have been recorded as liabilities at fair value, is $ 40,000 and the milestone payments are contingent upon the achievement of specified development, regulatory and commercialization milestones. Following the achievement of the dosing of the first patient in the Company’s CHASE trial (the “First Dosing Milestone”) in February 2023, the Company paid an aggregate of $ 2,500 in cash and $ 2,354 in shares of the Company’s Common Stock (representing an aggregate of 2,100 shares of the Company’s common stock) to the former Combangio equity holders in March 2023. The Company paid the remaining amount due in connection with the First Dosing Milestone of $ 146 in cash in January 2024. Additionally, pursuant to the merger agreement for the Combangio Acquisition, the Company could trigger potential future sales-based milestone payments of up to $ 65,000 and cash royalty payment obligations in the mid-to-high single digits. Because the achievement of these sales-based milestones related to KPI-012 was not considered probable as of March 31, 2026 or December 31, 2025, such contingencies have not been recorded in the Company’s condensed consolidated financial statements. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones. ​ 15. SEGMENT ​ Operating segments are identified as components of an enterprise about which separate discrete financial information is made available for evaluation by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The CODM is the Company’s interim Chief Executive Officer. The Company manages its operations as one operating and reportable segment for the purposes of assessing performance and making operating decisions. The Company's current focus is the development and commercialization of a biotech AI Platform through its exclusive license. All of the Company’s tangible assets are held in the United States. The CODM uses net loss as reported on the consolidated statements of operations and comprehensive loss to analyze cash flows in assessing performance of the segment and deciding how to allocate resources. The measure of segment assets is reported on the consolidated balance sheet as total assets. 19 Table of Contents KALA BIO, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) The table below provides information about the Company’s segment, including significant segment expenses, other segment items and a reconciliation to net loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Costs and expenses: ​ ​ ​ ​ ​ ​ Research and development: ​ ​ ​ ​ ​ ​ KPI‑012 development costs ​ $ — ​ $ 2,807 Employee‑related costs for research and development personnel ​ ​ 61 ​ ​ 2,932 Other research and development costs (1) ​ ​ — ​ ​ 316 General and administrative ​ ​ 1,741 ​ ​ 4,593 Other segment expense (income), net (2) ​ ​ ( 181 ) ​ ​ ( 1,701 ) Net loss ​ $ ( 1,621 ) ​ $ ( 8,947 ) ​ (1) Includes facility related costs and depreciation. (2) Includes Loss on fair value remeasurement of contingent consideration, Interest income, Interest expense, Grant income and Other income (expense), net. ​ ​ 16. SUBSEQUENT EVENTS ​ Reverse Stock Split ​ Subsequent to March 31, 2026, the Company effected a 1-for-50 reverse stock split of its Common Stock, pursuant to which each fifty ( 50 ) shares of Common Stock were converted into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split, and stockholders who otherwise would have been entitled to receive fractional shares are entitled to receive a cash payment in lieu of such fractional shares. All share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented. ​ ​ ​ 20 Table of Contents