Kalaris Therapeutics, Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer (“CEO”), and Chief Financial Officer (“CFO”) (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. 121 Based on their evaluation, the CEO and the CFO have concluded that our disclosure controls and procedures were not effective as of December 31, 2025, because of the material weaknesses in our internal control over financial reporting described below. We have identified material weaknesses in our internal control over financial reporting as of December 31, 2024. These material weaknesses have not been fully remediated as of December 31, 2025. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely basis. We did not fully maintain components of the Committee of Sponsoring Organizations of the Treadway Commission framework, including elements of the control environment, risk assessment, monitoring activities, information and communication, and control activities components, relating to: (i) our commitment to attract, develop, and retain competent individuals; (ii) identifying, assessing, and communicating appropriate internal control objectives, (iii) identifying and analyzing risks to achieve these objectives; (iv) selecting, developing, and performing ongoing evaluations to ascertain whether the components of internal controls are present and functioning; (v) communicating accurate information internally and externally, including providing information pursuant to objectives, responsibilities, and functions of internal control; (vi) selecting and developing control activities that contribute to the mitigation of risks and support achievement of objectives and (vii) deploying control activities through policies that establish what is expected and procedures that put policies into action. These material weaknesses could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement of our annual or interim financial statements that would not be prevented or detected. Remediation Efforts and Plans Management has taken actions to remediate the deficiencies in our internal controls over financial reporting, including implementing additional processes and controls designed to address the underlying causes of the above-mentioned material weaknesses. Management’s internal control remediation efforts include the following: • We completed the implementation of multiple financial systems, including a new company-wide enterprise resource planning (ERP) system, which provides additional systematic controls and segregation of duties for our business processes. • We recruited additional accounting personnel with appropriate experience, certification, education and training. For example, following the closing of the Merger, AlloVir’s Chief Accounting Officer serves as our Chief Accounting Officer, and AlloVir’s Controller serves as our Controller. In addition, in April 2025, we appointed a new member to our board of directors, who was also appointed as chair of the audit committee of the board of directors and was deemed to be an audit committee financial expert by our board of directors. Additionally, in August 2025, we hired a Director of Accounting and, in November 2025, we hired a Chief Financial Officer. • We engaged a third-party to assist us with the implementation of internal controls over financial reporting. Specifically, with their assistance, we have begun to design and implement policies, procedures and controls around key business reporting processes and general information technology controls. • We have identified, assessed, and communicated appropriate internal control objectives to key stakeholders across the organization and implemented a risk assessment over financial reporting which is updated and reassessed on a periodic basis. • We have begun to perform manual procedures to validate the completeness and accuracy of certain reports generated from various financial systems that are relevant to the preparation of the financial statements. • We regularly report on the progress of our material weaknesses remediation efforts to key stakeholders across our organization, including our Audit Committee. To the extent that we are not able to retain key individuals or are unable to successfully design and implement required controls, the material weaknesses identified may not be remediated and we may be required to record additional adjustments to our financial statements in the future or otherwise not be able to produce timely or accurate financial statements. The material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above, the controls operate for a sufficient period of time, and management has concluded, through testing, that these controls are effective. These remediation measures will be time-consuming and require financial and operational resources. Our failure to implement and maintain 122 effective internal control over financial reporting could result in errors in our financial statements that may lead to a restatement of our financial statements or cause us to fail to meet our reporting obligations. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision of our management, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth in the Committee of Sponsoring Organizations of the Treadway Commission framework. Our management identified control deficiencies, as previously disclosed, that, individually or in the aggregate, constitute a material weakness in our internal control over financial reporting. While our management, with the oversight of the audit committee of our board of directors, has made progress toward remediating the material weakness, our management has determined that the material weakness has not yet been fully remediated. Consequently, our management has concluded our internal control over financial reporting was not effective as of December 31, 2025. As a non-accelerated filer and a “smaller reporting company”, as defined in Rule 12-b-2 under the Exchange Act, our independent registered public accounting firm is not required to issue an attestation report on the internal control over financial reporting. Changes in Internal Control Over Financial Reporting Except as discussed above under “Remediation Efforts and Plans”, there were no changes in our internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations on Effectiveness of Controls Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. Item 9B. Other Information. (b) Director and Officer Trading Arrangements None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarter ended December 31, 2025. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 123 PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. Item 11. Executive Compensation. The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. 124 PART IV Item 15. E xhibits and Financial Statement Schedules. (1) Consolidated Financial Statements The following documents are included this Annual Report: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations and Comprehensive Loss Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements (2) Financial Statement Schedules All financial statement schedules have been omitted because they are not applicable, not required, or the information required is shown in the consolidated financial statements or the notes thereto. (3) Exhibits The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this Annual Report are listed in the Exhibit Index below. The exhibits listed in the Exhibit Index are incorporated by reference herein. Exhibit Index Exhibit Number Description 2.1+ Agreement and Plan of Merger, dated as of November 7, 2024, by and among the Registrant, Aurora Merger Sub, Inc. and Kalaris Tx, Inc. (formerly, Kalaris Therapeutics, Inc.) (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on November 8, 2024). 3.1 Restated Certificate of Incorporation of the Registrant, dated March 18, 2025 (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on March 18, 2025). 3.2 Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on March 18, 2025). 4.1* Description of the Registrant’s Securities Registered under Section 12 of the Exchange Act 4.2 Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on December 18, 2025). 4.3 Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on December 18, 2025). 10.1# Employment Agreement, dated April 10, 2025, by and between Andrew Oxtoby and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on April 16, 2025). 10.2# Employment Agreement, dated May 12, 2025, by and between Matthew Feinsod and the Registrant (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-39409) filed on May 14, 2025). 10.3# Employment Agreement, dated November 1, 2025, by and between Matthew Gall and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on November 3, 2025). 10.4# Offer Letter, dated December 17, 2024, by and between Brett Hagen and the Registrant, as amended by that certain Offer Letter Amendment, dated April 15, 2025 (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-39409) filed on May 14, 2025). 10.5# Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-39409) filed on May 14, 2025) 10.6# Kalaris Therapeutics, Inc. 2019 Equity Incentive Plan, as amended, and form of award agreements thereunder (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on March 18, 2025). 125 10.7# Kalaris Therapeutics, Inc. 2020 Stock Option and Grant Plan, as amended, and form of award agreements thereunder (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on March 18, 2025). 10.8# Kalaris Therapeutics, Inc. 2020 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.3 to the Registrant’s Registration Statement on Form S-8 (File No. 333-287772) filed on June 4, 2025). 10.9# Form of Indemnification Agreement for Directors of Kalaris Therapeutics, Inc. (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on March 18, 2025). 10.10# Form of Indemnification Agreement for Directors of Kalaris Therapeutics, Inc. (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on March 18, 2025). 10.11 Agreement of Lease, dated as of February 4, 2025, between The Connell Company and Kalaris Therapeutics, Inc. (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on March 18, 2025). 10.12 License Agreement, dated as of April 8, 2021, by and between Kalaris Therapeutics, Inc. (formerly Theia Therapeutics, Inc.) and the Regents of the University of California, as amended by Amendment #1 to the License Agreement (incorporated by reference to Exhibit 10.2 to AlloVir, Inc.’s Registration Statement on Form S-4 (File No. 333-283678) originally filed with the Securities and Exchange Commission on December 9, 2024). 10.13 Royalty Agreement, dated as of July 18, 2024, by and between Kalaris Therapeutics, Inc. and Samsara BioCapital L.P. (incorporated by reference to Exhibit 10.3 to AlloVir, Inc.’s Registration Statement on Form S-4 (File No. 333-283678) originally filed with the Securities and Exchange Commission on December 9, 2024). 10.14 Business Services Agreement, dated as of July 1, 2023, by and between Kalaris Therapeutics, Inc. (formerly Theia Therapeutics, Inc.) and Samsara BioCapital, LLC (incorporated by reference to Exhibit 10.4 to AlloVir, Inc.’s Registration Statement on Form S-4 (File No. 333-283678) originally filed with the Securities and Exchange Commission on December 9, 2024). 10.15 Consulting Agreement, dated as of July 1, 2021, by and between Kalaris Therapeutics, Inc. and Napoleone Ferrara (incorporated by reference to Exhibit 10.6 to AlloVir, Inc.’s Registration Statement on Form S-4 (File No. 333-283678) originally filed with the Securities and Exchange Commission on December 9, 2024). 19.1* Insider Trading Policy 21.1* Subsidiaries of the Registrant 23.1* Consent of Deloitte & Touche, LLP, independent registered public accounting firm of Kalaris Therapeutics, Inc. 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1*# Dodd-Frank Compensation Recovery Policy 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. # Indicates management contract or compensatory plan. + The annexes, schedules, and certain exhibits to the merger agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request. Item 16. Form 10-K Summary . None. 126 SI GNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . Kalaris Therapeutics, Inc. Date: March 17, 2026 By: /s/ Andrew Oxtoby Andrew Oxtoby President and Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Andrew Oxtoby President, Chief Executive Officer and Director March 17, 2026 Andrew Oxtoby (Principal Executive Officer) /s/ Matthew Gall Chief Financial Officer March 17, 2026 Matthew Gall (Principal Financial Officer) /s/ Brett Hagen Chief Accounting Officer March 17, 2026 Brett Hagen (Principal Accounting Officer) /s/ David Hallal Chairman March 17, 2026 David Hallal /s/ Anthony Adamis Director March 17, 2026 Anthony Adamis, M.D /s/ Srinivas Akkaraju Director March 17, 2026 Srinivas Akkaraju, M.D., Ph.D. /s/ Michael Dybbs Director March 17, 2026 Michael Dybbs, Ph.D. /s/ Napoleone Ferrara Director March 17, 2026 Napoleone Ferrara, M.D. /s/ Morana Jovan-Embiricos Director March 17, 2026 Morana Jovan-Embiricos, Ph.D. /s/ Leone Patterson Director March 17, 2026 Leone Patterson 127 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements for the Years Ended December 31, 2025 and 2024: Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 2 Consolidated Balance Sheets F- 4 Consolidated Statements of Operations and Comprehensive Loss F- 5 Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) F- 6 Consolidated Statements of Cash Flows F- 7 Notes to the Consolidated Financial Statements F- 9 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Kalaris Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Kalaris Therapeutics, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America . Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accrued research and development expenses and research and development expenses — Refer to Notes 2 and 6 to the financial statements Critical Audit Matter Description F- 2 The Company estimates manufacturing and product development costs, clinical trial and other research and development expenses based on the services performed. The Company has entered into various agreements with outsourced vendors, contract development and manufacturing organizations and clinical research organizations. The Company records the estimated costs of research and development activities based on the level of services performed, the progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development services provided, but not yet invoiced, are included in accrued expenses on the consolidated balance sheets. We identified the recording of certain third-party research and development costs as a critical audit matter because of the judgments necessary for management to estimate the cost of services provided but not yet invoiced, the significant volume of transactions and the varied nature of audit evidence obtained from vendor to vendor. This required extensive audit effort due to the volume and variability in the arrangements and available information from the vendors and required a high degree of auditor judgment when performing audit procedures to audit management’s estimates of total expenses, accrued research and development expense and evaluating the results of those procedures. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the estimate of research and development expenses and the accrued research and development expense balances included the following, among others: • We met with the Company’s research and development personnel and inspected Board of Directors materials to understand the status of clinical trial activities. We compared this information to the inputs in management’s estimate of the recorded expenses and accrued research and development expenses. • For a sample of contracts, we evaluated the third-party research and development expenses and the accrued research and development expense balances by: o Sending written confirmations directly to contract research organizations or contract development and manufacturing organizations to confirm completeness of agreements and the total budgeted amount and percentage of completion for services provided as of year-end. o Inspecting the development and manufacturing services agreement and related amendments, change orders, statements of work, and agreeing key provisions of the agreements including timeline, budget, and relevant rates, to the Company’s analysis of estimated expenses incurred to date. o Performing substantive testing over the operating expense arising from contract research organizations or contract development and manufacturing organizations activity during the year by obtaining invoices, contracts and other underlying support and comparing to information recorded within the Company’s general ledger to test the occurrence, accuracy, completeness and cutoff of such operating expense. o Testing cash disbursements after period end to test the completeness of the accrual. /s/ Deloitte & Touche LLP San Francisco, California March 17, 2026 We have served as the Company's auditor since 2024. F- 3 Kalaris Therapeutics, Inc. Consolidated Balance Sheets (In thousands, except share and per share data) December 31, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 98,054 $ 1,639 Short-term marketable securities 19,928 — Prepaid expenses and other current assets 827 967 Total current assets 118,809 2,606 Deferred transaction costs — 3,146 Operating lease right-of-use assets 1,475 — Restricted cash 499 — Other non-current assets 953 410 Total assets $ 121,736 $ 6,162 Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) Current liabilities: Accounts payable $ 1,281 $ 1,560 Accrued expenses and other current liabilities (including $ 67 and $ 85 due to a related party) 8,117 2,195 Convertible promissory notes, net of discount of $ 1,298 (including $ 0 and $ 18,670 due to a related party) — 19,541 Derivative liabilities (including $ 0 and $ 995 due to a related party) — 1,042 Tranche liability (including $ 0 and $ 331 due to a related party) — 365 Operating lease liabilities, current 316 — Total current liabilities 9,714 24,703 Royalty obligation – related party 32,076 32,076 Operating lease liabilities, long-term 1,132 — Total liabilities 42,922 56,779 Commitments and contingencies (Note 10) Redeemable convertible preferred stock, $ 0.00001 par value, no shares authorized, issued and outstanding as of December 31, 2025; 75,151,340 shares authorized as of December 31, 2024; 43,151,340 shares issued and outstanding as of December 31, 2024; liquidation preference of $ 0 as of December 31, 2025 — 45,999 Stockholders’ equity (deficit): Common stock, $ 0.0001 and $ 0.00001 par value as of December 31, 2025 and 2024, respectively; 300,000,000 and 86,000,000 shares authorized as of December 31, 2025 and 2024, respectively; 22,902,418 and 1,356,431 shares issued and outstanding as of December 31, 2025 and 2024, respectively 2 — Additional paid-in capital 238,805 19,945 Accumulated other comprehensive income 6 — Accumulated deficit ( 159,999 ) ( 116,561 ) Total stockholders’ equity (deficit) 78,814 ( 96,616 ) Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) $ 121,736 $ 6,162 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Kalaris Therapeutics, Inc. Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share data) Year Ended December 31, 2025 2024 Operating expenses: Research and development (including $ 27 and $ 32,128 for a related party) 30,753 $ 45,042 General and administrative (including $ 322 and $ 230 for a related party) 15,399 6,690 Total operating expenses 46,152 51,732 Loss from operations ( 46,152 ) ( 51,732 ) Other income (expense), net: Change in fair value of tranche liability (including $ 331 and $ 19,064 for a related party) 365 21,012 Change in fair value of derivative liabilities (including $ 1,165 and $ 2,039 for a related party) 1,229 2,084 Interest expense (including $ 1,384 and $ 2,656 for a related party) ( 1,443 ) ( 2,701 ) Loss on extinguishment and on issuance of convertible promissory notes (including $ 169 and $ 34,692 for a related party) ( 186 ) ( 38,018 ) Other income, net 2,749 188 Total other income (expense), net 2,714 ( 17,435 ) Net loss $ ( 43,438 ) $ ( 69,167 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 2.85 ) $ ( 51.77 ) Weighted-average shares outstanding, basic and diluted 15,267,817 1,335,925 Comprehensive loss: Net loss $ ( 43,438 ) $ ( 69,167 ) Other comprehensive income: Unrealized gain on marketable securities, net of tax 6 — Total other comprehensive income 6 — Comprehensive loss $ ( 43,432 ) $ ( 69,167 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 K alaris Therapeuti cs, Inc. Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) (In thousands, except share data) Redeemable Convertible Preferred Stock Common Stock Additional Accumulated Other Total Stockholders’ Shares Amount Shares (1) Amount Paid-in Capital Comprehensive Income Accumulated Deficit Equity (Deficit) Balance at December 31, 2023 41,871,340 $ 44,408 1,362,481 $ — $ 2,377 $ — $ ( 47,394 ) $ ( 45,017 ) Issuance of Series B-2 redeemable convertible preferred stock, net of issuance costs of $ 9 1,280,000 1,591 — — — — — — Capital contributions – in-kind services – related party — — — — 60 — — 60 Premium on issuance of convertible promissory notes — — — — 16,641 — — 16,641 Issuance of common stock upon stock option exercises — — 4,030 — 3 — — 3 Repurchase of common stock in connection with the royalty agreement — — ( 10,080 ) — ( 32 ) — — ( 32 ) Stock-based compensation expense — — — — 895 — — 895 Vesting of restricted stock awards — — — — 1 — — 1 Net loss — — — — — — ( 69,167 ) ( 69,167 ) Balance at December 31, 2024 43,151,340 $ 45,999 1,356,431 $ — $ 19,945 $ — $ ( 116,561 ) $ ( 96,616 ) Premium on issuance of convertible promissory notes — — — — 186 — — 186 Issuance of Series B-2 redeemable convertible preferred stock upon conversion of convertible promissory notes in connection with the Merger 794,499 3,695 — — — — — — Conversion of convertible promissory notes into common stock in connection with the Merger — — 3,418,839 — 20,799 — — 20,799 Conversion of redeemable convertible preferred stock into common stock in connection with the Merger ( 43,945,839 ) ( 49,694 ) 8,859,474 1 49,693 — — 49,694 Recognition of AlloVir common stock outstanding at the closing of the Merger — — 5,067,674 1 104,989 — — 104,990 Transaction costs related to the Merger — — — — ( 5,357 ) — — ( 5,357 ) Issuance of common stock in private placement, net of issuance costs of $ 2,844 — — 4,200,000 — 39,156 — — 39,156 Issuance of pre-funded warrants in private placement, net of issuance costs of $ 542 — — — — 7,458 — — 7,458 Stock-based compensation expense — — — — 1,936 — — 1,936 Unrealized gain on available-for-sale securities, net of tax — — — — — 6 — 6 Net loss — — — — — — ( 43,438 ) ( 43,438 ) Balance at December 31, 2025 — $ — 22,902,418 $ 2 $ 238,805 $ 6 $ ( 159,999 ) $ 78,814 1) The shares of common stock have been retroactively recast in connection with the Merger to reflect the exchange ratio of 0.2016 (Note 3). The accompanying notes are an integral part of these consolidated financial statements. F- 6 Kalaris Therapeutics, Inc. Consolidated S tatements of Cash Flows (In thousands) Year Ended December 31, 2025 2024 Cash flows from operating activities: Net loss ( 43,438 ) $ ( 69,167 ) Adjustments to reconcile net loss to net cash used in operations: Royalty obligation expense – related party — 32,044 Depreciation expense 13 — Stock-based compensation expense 1,936 895 Capital contributions – in-kind services – related party — 60 Change in fair value of derivative liabilities (including $ 1,165 and $ 2,039 for a related party) ( 1,229 ) ( 2,084 ) Change in fair value of tranche liability (including $ 331 and $ 19,064 for a related party) ( 365 ) ( 21,012 ) Non-cash interest expense (including $ 1,384 and $ 2,656 for a related party) 1,443 2,701 Non-cash operating lease expense 53 — Net amortization of premiums and accretion of discounts on marketable securities ( 399 ) — Loss on extinguishment and on issuance of convertible promissory notes (including $ 169 and $ 34,692 for a related party) 186 38,018 Changes in assets and liabilities: Prepaid expense and other current assets 1,810 ( 803 ) Other non-current assets ( 355 ) ( 410 ) Accounts payable ( 88 ) ( 1,027 ) Accrued expenses and other current liabilities (including $ 16 and $ 0 for a related party) 2,144 115 Operating lease liabilities ( 81 ) — Net cash used in operating activities ( 38,370 ) ( 20,670 ) Cash flows from investing activities: Purchases of short-term marketable securities ( 34,523 ) — Maturities of short-term marketable securities 15,000 Purchase of property and equipment ( 200 ) — Net cash used in investing activities ( 19,723 ) — Cash flows from financing activities: Proceeds from issuance of common stock in private placement 42,000 — Proceeds from issuance of pre-funded warrants in private placement 8,000 — Payment of issuance costs ( 1,669 ) Proceeds from the issuance of redeemable convertible preferred stock, net of issuance costs — 1,591 Proceeds from the issuance of convertible promissory notes (including $ 3,402 and $ 19,041 from a related party), net of issuance costs 7,500 19,966 Cash acquired in connection with the Merger 102,113 — Payment of deferred transaction costs and issuance costs ( 2,937 ) ( 2,420 ) Proceeds from the exercise of stock options — 3 Net cash provided by financing activities 155,007 19,140 Net increase (decrease) in cash and cash equivalents and restricted cash 96,914 ( 1,530 ) Cash and cash equivalents and restricted cash, at beginning of the period 1,639 3,169 Cash and cash equivalents and restricted cash, at end of the period 98,553 $ 1,639 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents 98,054 1,639 Restricted cash 499 — Total cash, cash equivalents and restricted cash, at end of the period 98,553 $ 1,639 The accompanying notes are an integral part of these consolidated financial statements. F- 7 Kalaris Therapeutics, Inc. Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2025 2024 Supplemental disclosure of cash flow information: Right-of-use assets obtained in exchange for operating lease liability $ 1,528 $ — Merger transaction costs recognized in additional paid-in capital $ 5,357 $ — Recognition of AlloVir common stock outstanding at the closing of the Merger $ 104,990 $ — Issuance of redeemable convertible preferred stock upon conversion of convertible promissory notes $ 3,695 $ — Conversion of redeemable convertible preferred stock into common stock in connection with the Merger $ 49,694 $ — Conversion of convertible promissory notes and accrued interest in connection with the Merger $ 20,799 $ — Deferred transaction and financing issuance costs included in accounts payable and accrued expenses and other current liabilities $ 1,717 $ 748 Unrealized gain on available-for-sale securities $ 6 $ — Capital contributions – in-kind services – related party $ — $ 60 Premium on issuance of convertible promissory notes (including $ 169 and $ 15,296 for a related party) $ 186 $ 16,641 Repurchase of common stock shares for royalty obligation $ — $ 32 Vesting of restricted stock awards $ — $ 1 The accompanying notes are an integral part of these consolidated financial statements. F- 8 Kala ris Therape utics, Inc. N otes to the Consolidated Financial Statements 1. Nature of the Business Description of the Business Kalaris Therapeutics, Inc. (“Kalaris” or “the Company”) is a clinical stage biopharmaceutical company dedicated to the development and commercialization of treatments for prevalent retinal diseases with major unmet medical needs. The Company is developing TH103, a novel, clinical stage anti-vascular endothelial growth factor (“VEGF”) drug, specifically engineered to achieve extended intraocular retention with enhanced VEGF inhibition in patients with exudative and/or neovascular retinal diseases. On March 18, 2025 (the “Closing Date”), AlloVir, Inc., a Delaware corporation (“AlloVir”), consummated the previously announced merger (the “Merger”) pursuant to the terms of the Agreement and Plan of Merger, dated as of November 7, 2024 (the “Merger Agreement”), by and among AlloVir, Aurora Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of AlloVir (“Merger Sub”) and Kalaris Tx, Inc. (formerly Kalaris Therapeutics, Inc.), a Delaware corporation (“Legacy Kalaris”). At the effective time of the Merger (the “Effective Time”), Merger Sub merged with and into Legacy Kalaris, with Legacy Kalaris continuing as a wholly-owned subsidiary of AlloVir and the surviving corporation of the Merger and, after giving effect to the Merger, Legacy Kalaris became a wholly-owned subsidiary of AlloVir. Immediately following the Effective Time, AlloVir changed its name to “Kalaris Therapeutics, Inc.” At the Effective Time, the Company’s business became primarily the business conducted by Legacy Kalaris. The Company's common stock, which was previously listed on The Nasdaq Capital Market and traded under the ticker symbol “ALVR” through the close of business on the Closing Date, commenced trading on The Nasdaq Global Market under the ticker symbol “KLRS” on March 19, 2025. Refer to Note 3, “ Merger with AlloVir ”, for further details of the Merger. Samsara BioCapital L.P. and its affiliates (collectively, “Samsara”), the Company's majority stockholder and a related party, have provided Legacy Kalaris with significant equity and debt financing since its inception, and management and operational support services to the Company. Refer to Note 16 for further details of the related party transactions with Samsara. Liquidity The Company has incurred significant losses and negative cash flows from operations since its inception. During the years ended December 31, 2025 and 2024 , the Company incurred net losses of $ 43.4 million and $ 69.2 million, respectively. During the years ended December 31, 2025 and 2024, the Company had negative cash flows from operations of $ 38.4 million and $ 20.7 million, respectively. As of December 31, 2025 and December 31, 2024, the Company had an accumulated deficit of $ 160.0 million and $ 116.6 million, respectively. The Company expects to continue to incur substantial losses for the foreseeable future, and its ability to achieve and sustain profitability will depend on the successful development, approval, and commercialization of product candidates and on the achievement of sufficient revenues to support the Company’s operations. Since its inception, the Company has funded its operations primarily with proceeds from sales of its redeemable convertible preferred stock, issuances of convertible promissory notes and a simple agreement for future equity (“SAFE”), from cash and cash equivalents of AlloVir received in the Merger, and with proceeds from the 2025 Private Placement (as defined below). Refer to Note 12 for further details of the 2025 Private Placement. As of December 31, 2025, the Company had cash, cash equivalents and short-term marketable securities of $ 118.0 million. The Company expects that the existing cash, cash equivalents and short-term marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance date of these consolidated financial statements. The Company will need to raise additional financing to continue its product's development for the foreseeable future until it becomes profitable. The Company plans to monitor expenses and raise additional capital through a combination of equity and debt financings, strategic alliances, and licensing arrangements. The Company’s ability to access capital when needed is not assured and, if capital is not available to the Company when, and in the amounts needed, the Company may be required to significantly curtail, delay or discontinue one or more of its research or development programs or the commercialization of any product candidate, or be unable to expand its operations or otherwise capitalize on the Company’s business opportunities, as desired, which could materially harm the Company’s business, financial condition and results of operations. F- 9 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchanges Commission (“SEC”) regarding financial reporting. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). AlloVir and its subsidiaries’ operating results are included in the Company’s consolidated financial statements from the Closing Date of the Merger. All other accompanying financial data as of and for the year ended December 31, 2024, include only the accounts and disclosures of Legacy Kalaris. All intercompany transactions and balances have been eliminated upon consolidation. All historical common share data and per-share amounts prior to the Merger were retrospectively recast to reflect the effect of the exchange ratio of 0.2016 per one share, which was determined in accordance with the Merger Agreement. The number of authorized shares and par value per share were not recast. The conversion ratios for each series of redeemable convertible preferred stock, which were converted into shares of common stock in connection with the closing of the Merger, were proportionally recast. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the accrual of research and development expenses, the fair value of convertible promissory notes, the fair value of derivative liabilities, the fair value of tranche liability, the fair value of Legacy Kalaris' common stock and Legacy Kalaris' redeemable convertible preferred stock, stock-based compensation expense, and valuation of deferred tax assets. Concentrations of Credit Risk and Other Risks and Uncertainties Cash balances are held at financial institutions and account balances may exceed federally insured limits. The Company also had marketable securities in money market funds, which can be subject to certain credit risks. The Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer and monitoring the ongoing creditworthiness of the financial institutions and issuers. To date, the Company has not experienced any losses on its cash and cash equivalents balances and periodically evaluates the creditworthiness of its financial institutions. The Company is subject to risks common to companies in the development stage, including, but not limited to, development and regulatory approval of product candidates, development of markets and distribution channels, dependence on key personnel, and the ability to obtain additional capital as needed to fund its product plans and business operations. To achieve profitable operations, the Company must successfully develop and obtain requisite regulatory approvals for, manufacture, and market its product candidate. There can be no assurance that such product candidate can be developed and approved or manufactured at an acceptable cost and with appropriate performance characteristics, or that such product will be successfully marketed. These factors could have a material adverse effect on the Company’s future financial results. The product candidate being developed by the Company requires approval from the U.S. Food and Drug Administration or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s product candidate will receive the necessary regulatory approvals. If the Company is unable to complete clinical development, obtain regulatory approval for or commercialize its product candidate, or experiences significant delays in doing so, its business will be materially harmed. Cash and Cash Equivalents Cash and cash equivalents include cash in readily available checking accounts and money market funds. The Company considers all highly liquid marketable securities purchased with an original maturity of three months or less as of the purchase date to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. Restricted Cash Cash accounts with any type of restriction are classified as restricted cash. The Company has restricted cash deposits with a bank, which serve as collateral for a letter of credit issued to the landlord of the Company’s leased facility for a security deposit. The Company classified this amount as restricted cash in the accompanying consolidated balance sheets. F- 10 Fair Value Measurement ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements, as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The majority of our financial assets have been classified as Level 1. Our financial assets (which typically include cash equivalents and marketable equity securities) have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observation market inputs included reportable tables, benchmark yields, broker quotes, bids, offers, current spot rates and other industry and economic events. Segment Information Operating segments are defined as components of an enterprise for which separate and discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company operates and manages its business as one reportable and operating segment, which is the business of developing retinal therapies. The chief executive officer, who is the chief operating decision maker (the “CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Acquisitions The Company evaluates acquisitions of assets and other similar transactions to assess whether the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen test is met, the transaction is accounted for as an asset acquisition. If the screen test is not met, further determination is required as to whether the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs. Goodwill is not recognized in an asset acquisition. In an asset acquisition, the cost allocated to the acquired in-process research and development assets with no alternative future use is charged to research and development expense at the acquisition date. F- 11 Deferred Transaction Costs Deferred transaction costs capitalized were $ 3.1 million as of December 31, 2024 . There were no deferred transaction costs capitalized as of December 31, 2025. Deferred transaction costs relate to legal, consulting, and accounting fees incurred in connection with the Merger. The Company capitalizes certain legal, consulting, and accounting fees that are directly associated with in-process equity financings as deferred transaction costs in the consolidated balance sheets until such financings are consummated. After consummation of an equity financing or upon the consummation of the Merger, these costs are recorded as a reduction of the proceeds from the offering in stockholders' equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering. Should the Company choose to not initiate such financing, the deferred transaction costs would be immediately expensed as operating expenses in the consolidated statements of operations and comprehensive loss. All deferred transaction costs were recognized to additional paid-in capital upon the consummation of the Merger. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty of the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the statements of operations and comprehensive loss. Tranche Liability Under the convertible note financing’s amended note purchase agreement, Legacy Kalaris was eligible to receive additional proceeds in the Convertible Note Financing prior to the closing to the Merger to fund Legacy Kalaris’s operations prior to the closing of the Merger at three subsequent closings upon Legacy Kalaris’s written notice to investors and subject to Samsara’s consent. The investors’ right to receive additional convertible promissory notes in subsequent tranches of this convertible note financing with a predetermined conversion price was concluded to be a freestanding financial instrument that was required to be accounted for separately as a liability at fair value. The Company estimated fair value of the tranche liability at inception and remeasured it at the end of each reporting period until the tranche liability expired or was settled. The changes in the fair value were recorded as a change in fair value of tranche liability in the statements of operations and comprehensive loss. In connection with the closing of the Merger, the outstanding convertible promissory notes issued by the Company in October and November 2024 converted into shares of common stock and the tranche liability expired. Convertible Promissory Notes Derivative Liabilities The convertible promissory notes contained embedded features that provided the noteholder with multiple settlement alternatives. Certain of these settlement features provided the noteholder the right to receive cash or a variable number of shares upon a change in control or the completion of a capital raising transaction by the Company (the “redemption features”). The redemption features of the convertible promissory notes met the requirements for separate accounting and were accounted for as compound derivative instruments recorded as a liability at fair value at inception and were subject to remeasurement to fair value at each reporting period when outstanding, with any changes in fair value recorded as a change in fair value of derivative liabilities in the statements of operations and other comprehensive loss (Note 4). Derivative liabilities were classified in the balance sheets as current consistent with the classification of the respective convertible promissory notes they were related to. The Company estimated the fair value of the derivative liabilities embedded in the convertible promissory notes using a with-and-without scenario analysis, which involved valuing the whole instrument on an as-is basis and then valuing the instrument without the embedded derivative. The difference between the entire instrument with the embedded derivatives compared to the instrument without the embedded derivatives was the fair value of the derivative liabilities. A significant increase in probabilities of qualified financing or redemption scenario, a change of control scenario and a decrease in a discount rate would significantly increase the estimated fair value of derivative liabilities. In connection with the closing of the Merger, all outstanding convertible promissory notes, other than the AlloVir Note (as defined below), converted into shares of either redeemable convertible preferred stock or common stock in accordance with the terms of the agreements and the derivatives expired. Royalty Obligation – Related Party In July 2024, the Company entered into a royalty agreement with Samsara (Note 6). In exchange for the shares of common stock the Company redeemed from Samsara, the Company is obligated to pay royalties on a product-by-product and country-by-country basis at low single-digit royalty rates on future net product sales. Given the significant related party relationships with Samsara, the Company concluded that the royalty agreement is a funded research and development agreement under ASC 730-20, Research and Development Arrangements . The Company recognized the royalty obligation at its estimated fair value at the effective date of the agreement. Once royalty payments are deemed probable and estimable, and if such amounts exceed the royalty obligation balance, the Company will impute interest to accrete the royalty obligation on a prospective basis based on such estimates. If and when the Company makes royalty payments under the royalty agreement, the royalty obligation balance will be reduced. F- 12 Redeemable Convertible Preferred Stock The Company recorded redeemable convertible preferred stock at fair value on the date of issuance, net of issuance costs. The redeemable convertible preferred stock was recorded separately from stockholders’ equity (deficit) because the shares contained deemed liquidation features that were not solely within the Company’s control. The holders of the preferred stock controlled a majority of the votes of the board of directors of the Company. Accordingly, the preferred stock was classified as temporary equity in the Company’s consolidated balance sheets. The Company did not adjust the carrying values of the redeemable convertible preferred stock to the liquidation preferences of such stock because it was uncertain whether or when a deemed liquidation event would occur that would obligate the Company to pay the liquidation preferences to holders of redeemable convertible preferred stock. Subsequent adjustments to the carrying values to the liquidation preferences would be made only when it became probable that such a deemed liquidation event would occur. In connection with the closing of the Merger, all outstanding shares of redeemable convertible preferred stock were converted into shares of common stock. Research and Development Expenses Research and development expenses are charged to expenses as incurred. Research and development expenses include payroll and personnel related expenses, license fees, laboratory supplies, consulting costs, external contract research and development expenses and allocated overhead costs, including software and other miscellaneous expenses incurred in connection with its research and development programs. The Company estimates manufacturing and product development costs, clinical trial and other research and development expenses based on the services performed. The Company has entered into various agreements with outsourced vendors, contract development and manufacturing organizations and clinical research organizations. The financial terms of these contracts are subject to negotiation, which vary by contract and may result in payments that do not match the periods over which materials or services are provided. Generally, these agreements set forth the scope of work to be performed at a fixed fee, unit price or on a time and materials basis. The Company records the estimated costs of research and development activities based on the level of services performed, the progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development services provided, but not yet invoiced, are included in accrued expenses on the consolidated balance sheets. Advance payments for goods or services for future research and development activities are deferred as prepaid expenses and are expensed as the goods are delivered or the related services are performed. The Company makes these estimates based on facts and circumstances known at that time. If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Amounts ultimately incurred in relation to amounts accrued for these services at a reporting date may be substantially higher or lower than the Company’s estimates. To date, there have been no material differences between estimates of such expenses and the amounts actually incurred. Stock-Based Compensation Expense The Company provides stock-based awards in the form of stock options and restricted stock awards to its employees, directors and consultants. The Company accounts for stock-based compensation expense by measuring and recognizing compensation expense for all stock-based awards based on estimated grant-date fair values. For awards with service-based vesting conditions, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service or vesting period. The vesting period generally approximates the expected service period of the awards. The Company accounts for forfeitures as they occur. The Company estimates the fair value of stock options using the Black-Scholes option valuation model. The Black-Scholes model requires the input of subjective assumptions, including expected volatility, expected dividend yield, expected term, risk-free rate of return and the estimated fair value of the underlying common stock on the date of grant. Prior to the Merger, the fair value of the Company’s common stock on the date of grant was determined by the Board, taking into consideration its most recently available third-party valuations of common stock as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the grant date. Foreign Currency Transactions The functional currency for the Company and all of its subsidiaries is the U.S. Dollar. Transactions denominated in foreign currencies are initially measured in U.S. dollars using the exchange rate on the date of the transaction. Foreign currency denominated monetary assets and liabilities are subsequently remeasured at the end of each reporting period using the exchange rate at that date, with the corresponding foreign currency transaction gain or loss recorded in other income (expense), net in the consolidated statements of operations and comprehensive loss. F- 13 Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. The Company's comprehensive loss includes unrealized gains (losses) on available-for-sale securities. Pre-Funded Warrants Warrants are accounted for based on the specific terms of the warrant agreements. The Company's pre-funded warrants are indexed to the Company's common stock and meet the criteria to be classified as equity. Proceeds from the issuance of pre-funded warrants are recorded within additional paid-in capital and are not subject to remeasurement. Refer to Note 12 and Note 14 for further information regarding the pre-funded warrants issued by the Company. Net Loss Per Share Attributable to Common Stockholders Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. The Company’s potentially dilutive securities include convertible promissory notes, redeemable convertible preferred stock, common stock subject to repurchase, unvested restricted stock awards, and stock options. These potentially dilutive securities have been excluded from the computation of diluted net loss per share as their inclusion would be antidilutive. Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities as the redeemable convertible preferred stock and common stock subject to repurchase are considered participating securities. The redeemable convertible preferred stock does not have a contractual obligation to share in the Company’s losses, and common stock subject to repurchase and unvested restricted stock awards are considered contingently issuable shares for accounting purposes. As such, the net loss is attributed entirely to common stockholders. Because the Company has reported a net loss for the reporting periods presented, the diluted net loss per common share is the same as basic net loss per common share for those periods. Issued and unexercised pre-funded warrants are classified as a component of equity in the Company's consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of shares of common stock upon exercise. All shares underlying pre-funded warrants are included in the weighted-average number of shares of common stock used to calculate basic and diluted net loss per common share because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date of the pre-funded warrants. Commitments and Contingencies The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range. Income Taxes The Company accounts for income taxes using the asset and liability method; under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, if all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to the provision of income taxes in the period when such determination is made. F- 14 As of December 31, 2025 and 2024, the Company maintained a valuation allowance against its deferred tax assets as the Company concluded it had not met the “more likely than not” to be realized threshold. Changes in the valuation allowance when they are recognized in the provision for income taxes may result in a change in the estimated annual effective tax rate. Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Tax positions that meet the more-likely-than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with the taxing authority. Interest and penalties related to unrecognized tax benefits are included within the provision for income tax. Short-Term Marketable Securities The Company classifies all investments with an original maturity of less than one year upon purchase as short-term marketable securities. Short-term marketable securities consist of U.S. treasury securities classified as available-for-sale. The Company's short-term marketable securities are classified as available-for-sale as they are available to fund current operations, even if the Company intends to hold the marketable securities to maturity. Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in other comprehensive income (loss) until realized. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization or accretion is included in other income (expense), net in the consolidated statements of operations and comprehensive loss. Realized gains and losses are determined using the specific identification method and are included in other income (expense), net in the consolidated statements of operations and comprehensive loss. Interest on available-for-sale securities is included in other income (expense), net in the consolidated statements of operations and comprehensive loss. Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company's property and equipment is comprised of furniture and fixtures, and the estimated useful life is five years . Depreciation and amortization begin at the time the asset is placed in service. Repairs or maintenance costs are expensed as incurred. Upon the sale or retirement of property and equipment, the costs and related accumulated depreciation and amortization are eliminated and the resulting gain or loss is reflected in the consolidated statements of operations and comprehensive loss. The property and equipment, net balance is included within other non-current assets in the consolidated balance sheets. Depreciation expense and accumulated depreciation were immaterial as of December 31, 2025 . Leases The Company accounts for leases in accordance with ASC 842, Leases (“ASC 842”). The Company determines whether an arrangement is or contains a lease at the inception of the arrangement and whether such a lease should be classified as a financing lease or operating lease at the commencement date of the lease. The Company does not have any leases classified as financing leases. Operating leases with a term greater than one year are recognized on the consolidated balance sheets as operating right-of-use asset (“ROU asset”) and operating lease liabilities. The Company elected not to recognize the ROU assets and lease liabilities for leases with lease terms of one year or less (short-term leases). Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the lease term. ROU assets are further adjusted for initial direct costs, prepaid rent, or incentives received, if any. The Company considers the lease term to be the noncancelable period that it has the right to use the underlying asset, together with any periods where it is reasonably certain it will exercise an option to extend (or not terminate) the lease. As the interest rate implicit in the Company’s lease contracts is not readily determinable, the Company utilizes its incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments. Operating lease cost is recognized on a straight-line basis over the lease term. The Company has elected not to separate lease and non-lease components for its real estate leases and instead accounts for each separate lease component and the non-lease components associated with that lease component as a single lease component. Variable lease payments are not included in the measurement of ROU assets and lease liabilities, but rather are recognized as incurred. The Company is responsible for additional costs of improvements in excess of the tenant improvement allowance, and recorded excess costs as payments in the measurement of lease liabilities. Capitalized Software Implementation Costs The Company incurred costs to implement cloud computing arrangements hosted by third-party vendors. ASC 350-40, Internal-Use Software , requires hosting arrangements that are service contracts to follow the guidance of internal-use software to determine which implementation costs can be capitalized. Implementation costs incurred during the application development stage are capitalized until the software is ready for its intended use. The costs are then amortized on a straight-line basis over the term of the associated hosting arrangement and are recognized as an operating expense within the consolidated statement of operations and comprehensive loss. As of December 31, 2025, the Company capitalized $ 0.2 million in software implementation costs within other non-current assets on the consolidated balance sheets. F- 15 Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU 2023-09, Income Taxes (Topic 740) In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for fiscal years beginning after December 15, 2024 for all public entities. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented. As of December 31, 2025, the Company adopted this ASU retrospectively, which only impacts the Company's income tax disclosures with no impact to its operations, cash flows, or financial condition. Recently Issued Accounting Pronouncements Not Yet Adopted ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this ASU do not change or remove current expense disclosure requirements; however, the amendments affect where such information appears in the notes to the financial statements because entities are required to include certain current disclosures in the same tabular format as the other disaggregation requirements in the amendments. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the updated standard will have on its consolidated financial statement disclosures and financial reporting processes. ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software to modernize the accounting for software costs and increase the operability of the recognition guidance considering different methods of software development. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the updated standard will have on its consolidated financial statement disclosures. 3. Merger with AlloVir On March 18, 2025 , the Merger closed, and, pursuant to the Merger Agreement, Merger Sub merged with and into Legacy Kalaris with Legacy Kalaris continuing as a wholly owned subsidiary of AlloVir and the surviving corporation of the Merger. Upon completion of the Merger, AlloVir changed its name to “Kalaris Therapeutics, Inc.” and Legacy Kalaris was renamed to “Kalaris Tx, Inc.” Subject to the terms and conditions of the Merger Agreement, at the Effective Time, all issued and outstanding shares of the Legacy Kalaris’ common stock (including common stock issued upon conversion of Legacy Kalaris’ redeemable convertible preferred stock and outstanding convertible promissory notes, other than the AlloVir Note (as defined below)) converted into the right to receive 0.2016 shares of AlloVir’s common stock calculated in accordance with an exchange ratio equal to 1:0.2016 (the “Exchange Ratio”). Each award of restricted shares of Legacy Kalaris’ common stock that was unvested and outstanding was converted into and exchanged for the right to receive a number of restricted shares of AlloVir common stock based on the Exchange Ratio. Each outstanding option to purchase shares of Legacy Kalaris’ common stock under the Legacy Kalaris’ 2019 Equity Incentive Plan (the “2019 Plan”), whether vested or unvested, was converted into an option to acquire a number of shares of AlloVir’s common stock based on the Exchange Ratio. Exercise prices of assumed options were determined as the product of the exercise price immediately prior to the Effective Time multiplied by the reciprocal of the Exchange Ratio, and rounding up to the nearest whole cent. There were no changes to any other terms of such options or restricted share awards. Immediately prior to the Effective Time, (i) the outstanding principal and accrued but unpaid interest on convertible promissory notes issued by Legacy Kalaris in January 2025 (other than the AlloVir Note) converted into 794,499 shares of Series B-2 redeemable convertible preferred stock (the “Series B-2 Stock”) at a price of $ 4.7851 per share, which then converted on a one-for-one basis into shares of Legacy Kalaris common stock, and (ii) the outstanding principal and accrued but unpaid interest on convertible notes issued by Legacy Kalaris in 2024 converted into shares of Legacy Kalaris’ common stock at a price of $ 6.20 per share. F- 16 In January 2025, Legacy Kalaris issued a convertible promissory note in an aggregate principal amount of up to $ 7.5 million to AlloVir (the “AlloVir Note”) under which AlloVir funded a principal amount of $ 3.75 million in January 2025. The AlloVir Note accrued interest on the initial advance commencing on the date of such advance, at an interest rate of 8.0 % per annum. At the Effective Time, the AlloVir Note was cancelled. Immediately prior to the Effective Time, each option to purchase shares of AlloVir’s common stock (each, an “AlloVir Option”) that was outstanding immediately prior to the Effective Time, whether vested or unvested, survived the Closing and remains outstanding in accordance with its terms, provided that (i) each unexercised and outstanding AlloVir Option with an exercise price per share equal to or greater than $ 92.00 was cancelled for no consideration, and (ii) each AlloVir Option that had an exercise price per share less than $ 92.00 , was unvested and unexercised as of the Effective Time, was accelerated in full. Additionally, immediately prior to the Effective Time, each outstanding and unvested AlloVir restricted stock unit was accelerated in full and settled in shares of AlloVir’s common stock. The aggregate number of shares that AlloVir issued to Legacy Kalaris’ securityholders (including all holders of outstanding convertible notes) at the closing of the Merger was 13,634,744 shares of AlloVir's common stock. Immediately following the Merger, Legacy Kalaris securityholders owned approximately 74.47 % of the outstanding shares of the Company’ common stock on a fully-diluted basis and pre-closing AlloVir securityholders owned approximately 25.53 % of the outstanding shares of the Company’s common stock on a fully-diluted basis. The number of shares of the Company's common stock issued and outstanding immediately following the closing of the Merger was as follows: AlloVir’s common stock outstanding 5,043,652 AlloVir’s restricted stock units accelerated and settled in common stock 24,022 Common stock issued to Legacy Kalaris' securityholders at the Effective Time 13,634,744 18,702,418 The Merger was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Legacy Kalaris was deemed to be the accounting acquirer for financial reporting purposes. This determination was primarily based on the fact that, immediately following the Merger: (1) Legacy Kalaris’ stockholders owned a substantial majority of the voting rights of the Company, inclusive of Samsara; (2) Legacy Kalaris designated a majority of the initial members of the board of directors of the Company; and (3) other than with respect to the Company’s chief financial officer, for which the Company had commenced a search for a qualified candidate, the Company's senior management (which are determined by the board of directors of the Company) held all key positions in senior management of the Company. For accounting purposes, the Merger is treated as the equivalent of Legacy Kalaris issuing stock to acquire the net assets of AlloVir. The reported operating results prior to the Merger are those of Legacy Kalaris. The net assets of AlloVir were recorded at their carrying value in the consolidated financial statements of the Company. Historical common stock share, restricted share awards, common stock options and exercise prices data of Legacy Kalaris have been retroactively recast based on the Exchange Ratio. AlloVir’s net assets acquired included the following: $ 102.1 million of cash and cash equivalents, $ 1.7 million of prepaid expenses and other current assets, and $ 2.6 million of accounts payable and accrued expenses. The Company recognized approximately $ 1.5 million related to AlloVir’s directors’ and officers’ insurance and $ 0.1 million of share-based compensation expense related to the acceleration of vesting of stock options and restricted stock units as general and administrative expenses at the Effective Time. The Company also incurred transaction costs related to the Merger of approximately $ 5.4 million, which were recorded as a reduction to additional paid-in capital in the consolidated statement of redeemable convertible preferred stock and stockholders’ equity (deficit) for the year ended December 31, 2025 . F- 17 4. Short-Term Marketable Securities The following table summarizes the amortized cost and estimated fair value of the Company’s U.S. government treasury securities, which are considered to be available-for-sale marketable securities and are included in short-term marketable securities on the consolidated balance sheet as of December 31, 2025 (in thousands): December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term marketable securities: U.S. government treasury securities $ 19,922 $ 6 $ — $ 19,928 Total short-term marketable securities $ 19,922 $ 6 $ — $ 19,928 The Company did no t have any short-term marketable securities as of December 31, 2024. Certain short-term debt securities with original maturities of less than three months are included in cash and cash equivalents on the consolidated balance sheets and are not included in the table above. As of December 31, 2025, all marketable securities had contractual maturities within one year. The Company holds debt securities with high credit quality and has determined that there was no material change in the credit risk of any of its debt securities. There were no securities with an unrealized loss position for less than 12 months as of December 31, 2025 . 5. Fair Value Measurements The Company’s fair value hierarchy for its financial instruments measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024, were as follows (in thousands): Fair Value Measurements As of December 31, 2025 Total Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 94,394 $ 94,394 $ — $ — U.S. government treasury securities — — — — Total cash equivalents $ 94,394 $ 94,394 $ — $ — Short-term marketable securities: U.S. government treasury securities $ 19,928 $ 19,928 $ — $ — Total short-term marketable securities $ 19,928 $ 19,928 $ — $ — Fair Value Measurements As of December 31, 2024 Total Level 1 Level 2 Level 3 Assets: Money market funds (included in cash equivalents) $ 1,009 $ 1,009 $ — $ — Total fair value of assets $ 1,009 $ 1,009 $ — $ — Liabilities: Derivative liabilities (including $ 995 for a related party) $ 1,042 $ — $ — $ 1,042 Tranche liability (including $ 331 for a related party) 365 — — 365 Total fair value of liabilities $ 1,407 $ — $ — $ 1,407 The Company classifies its money market funds and U.S. government treasury securities as Level 1 assets under the fair value hierarchy, as these assets have been valued using quoted market prices in active markets without any valuation adjustment. The Company classifies its derivative liabilities and tranche liability as Level 3 liabilities under the fair value hierarchy as these liabilities have been valued using pricing models with unobservable inputs supported by little or no market activity that are significant to the fair value of the liabilities. The carrying amounts of prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to their short-term maturities. During the periods presented, the Company has not changed the manner in which it values liabilities that are measured at estimated fair value using Level 3 inputs. There were no transfers within the hierarchy for any period presented. F- 18 The Company issued the following financial instruments to be accounted for at fair value on a recurring basis: derivative liabilities embedded in convertible promissory notes, and the tranche liability related to the convertible note financing (Note 8). The Company estimated the fair value of the derivative liabilities embedded in the convertible promissory notes using a with-and-without scenario analysis. The Company estimated that the embedded change of control feature fair values were minimal based on the low probability of the change of control events during the year ended December 31, 2024. The following assumptions were used to determine the estimated fair value of the derivative liabilities related to the redemption features as of the issuance dates: At Issuance Date (January 10, 2025) Expected term (in years) 0.2 – 0.3 Probability of achievement 0.0 % – 80.0 % Discount rate 8.50 % The following assumptions were used to determine the estimated fair value of the derivative liabilities related to the redemption features as of the issuance date and as of December 31, 2024: Issuance Dates December 31, 2024 Expected term (in years) 0.4 – 1.3 0.2 – 0.4 Probability of achievement 0.0 % – 90.0 % 0.0 % – 80.0 % Discount rate 9.5 % – 18.7 % 9.0 % As all outstanding convertible promissory notes, other than the AlloVir Note, were converted on March 18, 2025, in connection with the closing of the Merger, the derivative liabilities expired and their fair values were immaterial at the time of conversion. The fair value of the tranche liability related to the convertible promissory notes issued in October and November 2024 was estimated using the probability weighted model with the following Level 3 input assumptions: the timing of issuing convertible notes and notes conversion, probabilities of conversion scenarios, the estimated fair value of the Company’s shares into which the note was convertible and a discount rate. The significant assumptions were as follows as of December 31, 2024: December 31, 2024 Expected term (in years) 0.2 -  0.4 Probability of achievement 0.0 % -  80.0 % Discount rate 9.0 % In March 2025, the Company and other noteholders entered into an acknowledgment of conversion and termination agreement to cancel all unfunded tranches and the tranche liability expired unexercised. The following table provides a roll-forward of the aggregate fair values of the Company’s outstanding Level 3 financial instruments during the years ended December 31, 2025 and 2024 (in thousands): Derivative liabilities Tranche liability Balance as of December 31, 2023 $ — $ — Initial fair value at issuance 3,126 21,377 Change in fair value ( 2,084 ) ( 21,012 ) Balance as of December 31, 2024 $ 1,042 $ 365 Initial fair value at issuance 187 — Change in fair value ( 1,229 ) ( 365 ) Balance as of December 31, 2025 $ — $ — F- 19 6. Balance Sheet Components Prepaid expenses and other current assets Prepaid expenses and other current assets as of December 31, 2025 and 2024, consisted of the following (in thousands): December 31, December 31, 2025 2024 Prepaid research and development expenses $ 323 $ 388 Prepaid insurance 185 54 Prepaid taxes 211 — Prepaid professional and legal costs 30 525 Other prepaid expenses and other current assets 78 — Total prepaid expenses and other current assets $ 827 $ 967 Accrued expenses and other current liabilities Accrued expenses and other current liabilities as of December 31, 2025 and 2024, consisted of the following (in thousands): December 31, December 31, 2025 2024 Accrued research and development expenses $ 4,295 $ 659 Accrued compensation expense 1,601 591 Accrued professional and legal costs 442 308 Accrued transaction expenses 1,717 567 Accrued patent reimbursement costs — 48 Other accrued expenses and other current liabilities 62 22 Total accrued expenses and other current liabilities $ 8,117 $ 2,195 Property and Equipment, net The property and equipment, net balance is included within other non-current assets in the consolidated balance sheets. Depreciation expense and accumulated depreciation were immaterial as of December 31, 2025. The Company did not hold property and equipment, net as of December 31, 2024 . 7. Significant Agreements License Agreement with the University of California, San Diego In April 2021, the Company entered into a license agreement with UCSD (as amended, the “UCSD Agreement”) pursuant to which the Company obtained (i) an exclusive license under the patent rights to make, use, sell, offer for sale, and import licensed products and (ii) a non-exclusive license to use the technology with a right to sublicense, each (i) and (ii) related to new anti-VEGF agents and novel long-acting VEGF inhibitors for intraocular neovascularization for the treatment of patients with retinal pathologies. As partial consideration for the license, the Company agreed to pay UCSD $ 0.2 million and was obligated to issue shares of its common stock to UCSD equal to 5 % of the fully diluted issued and outstanding securities of the Company until such time as an aggregate of $ 5.0 million in gross proceeds from the sale of equity securities had been raised by the Company. In June 2022, after the closing of the Series A financing, the Company issued 137,234 shares of its common stock to UCSD. The Company was also obligated to pay $ 0.1 million of patent costs incurred prior to the effective date and is required to reimburse future patent expenses incurred by UCSD during the term of the UCSD Agreement. Under the UCSD Agreement, the Company is required to make annual license maintenance payments of $ 10,000 during the first four anniversaries and $ 15,000 on the fifth and every subsequent anniversary of the effective date. The Company is obligated to pay an aggregate of up to $ 4.6 million upon the achievement of various development and regulatory milestones and low single-digit royalties on net sales of licensed products. The royalty is payable, on a licensed product-by-licensed product and country-by country basis, until expiration of the last-to-expire issued patent of the applicable licensed product in the country of sale or the manufacture. If the Company enters into a sublicensing agreement, it is required to pay UCSD a sublicense fee as a percentage of the fair market value of any sublicense fee received that is not earned royalties for each sublicense granted. The sublicense fee percentage ranges from 50 % if the applicable sublicense agreement is entered into within one year from the UCSD Agreement effective date and decreases to 10 % if the applicable sublicense agreement is entered into after the first dosing of a patient for a phase 2 clinical trial. F- 20 In case of a closing of a merger, or sale of at least 50 % of the voting stock of the Company or the sale by the Company of all or substantially all of its assets (collectively referred to as “Liquidity Event”), the Company is obligated to make a one-time cash milestone payment to UCSD ranging from $ 0.1 million to $ 1.0 million based on the valuation of the Company’s outstanding shares at the Liquidity Event closing date. The Merger did not meet the definition of the Liquidity Event. The UCSD Agreement is effective until the expiration date of the longest-lived patent rights or last to be abandoned patent or future patent of the licensed products, whichever is later. The Company can terminate the agreement upon 60 days written notice. UCSD can terminate the agreement in the event of an uncured material breach, such as a failure to make payments due, or to perform under the UCSD Agreement or a violation of any other material term of the UCSD Agreement, that is not cured by the Company within 60 days after a written breach notice provided by UCSD. The acquisition of the license under the UCSD Agreement, including patent rights and know-how, was accounted for as an asset acquisition. As the acquired technology did not have an alternative future use, the Company recognized the $ 0.2 million initial cash consideration, $ 0.1 million patent reimbursement costs incurred prior to the effective date, and $ 0.2 million related to the obligation to issue shares of the Company’s common stock as research and development expenses. The obligation to issue shares of common stock included two components, the initial shares obligation and the additional shares obligation. The fair value of the initial share obligation was estimated as $ 0.1 million based on the fair value of 55,440 shares of common stock, which represented 5 % of the outstanding fully diluted equity at the effective date. As the initial share obligation was indexed to the Company’s own stock, it was recorded as additional paid-in capital. The additional shares obligation was recognized when the next round of financing closed in March 2022. The Company estimated the fair value of an additional 81,794 shares of common stock as $ 0.2 million and recognized it as research and development expenses and additional paid-in capital in March 2022. The Company concluded that the contingent payment upon the closing of the Liquidity Event is a derivative liability and should be accounted for at fair value and re-measured until its settlement or expiration. The Company recognized $ 0.2 million and $ 0.1 million in patent reimbursement costs for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company recognized $ 0.03 million and $ 0.2 million related to the UCSD Agreement in accrued expenses and other current liabilities in the consolidated balance sheet. Over the life of the agreement through December 31, 2025, development milestones totaling $ 0.1 million have been achieved by the Company and incurred as research and development expenses. The Company did no t achieve any development milestones and did not incur any related milestone expense during the year ended December 31, 2025. The Company achieved the first development milestone in August 2024 and incurred $ 0.1 million as research and development expense during the year ended December 31, 2024 . The assignment fee derivative liability fair value was estimated to be zero as of December 31, 2025 and 2024, as the probability of the Liquidity Event was estimated to be zero. Royalty Agreement with Samsara – Related Party In July 2024, the Company entered into a royalty agreement (the “Royalty Agreement”) with Samsara, the majority stockholder of the Company and a related party. Under the Royalty Agreement, the Company redeemed 10,080 shares of its common stock issued to Samsara under a restricted stock purchase agreement in exchange for the Company’s agreement to pay Samsara a low single-digit percentage tiered royalty on net sales, if any, of the Company’s products developed using the technology licensed under the UCSD Agreement. Such royalties are payable on a product-by-product and country-by-country basis until the later of (i) ten years after the first commercial sale of such product in such country and (ii) the expiration of the last-to-expire issued claim of the Company’s patents for such product in such country. The Company identified two elements in the Royalty Agreement: repurchased shares, and future royalty payments to Samsara. The repurchase of shares was accounted at an estimated fair value of $ 32,000 as a reduction of common stock and additional paid-in-capital in the consolidated balance sheet and the statement of redeemable convertible preferred stock and shareholders’ deficit. The Company recorded $ 32.1 million as a long-term liability related to the obligation to make royalty payments to Samsara. The fair value of the royalty obligation was estimated using a risk-adjusted net present value model, based on the contractual royalty rates applied to the future net sales forecast, adjusted by the probability of success of product development and discounted to the effective date of the Royalty Agreement using a 25.0 % discount rate. The excess of the royalty liability over the fair value of the repurchased shares of $ 32.0 million was recorded as a research and development expense in July 2024. Once royalty payments to Samsara are deemed probable and estimable, and if such amounts exceed the initially recorded royalty obligation balance, the Company will impute interest to accrete the liability on a prospective basis based on such estimates. If and when the Company makes royalty payments under the Royalty Agreement, the royalty obligation balance will be reduced. From July 2024 through December 31, 2025 , royalty payments were not probable and estimable and, therefore, no interest expense was recognized for the royalty liability. F- 21 8. Convertible Promissory Notes 2024 Convertible Promissory Note In March 2024, the Company issued a convertible promissory note to Samsara (the “2024 Note”) for total proceeds of up to $ 10.0 million. The 2024 Note was payable in two advances at Samsara’s discretion, carried an annual interest rate of 10 %, and had an original maturity date of March 2025 . In March and May 2024, Samsara advanced to the Company $ 5.0 million for an aggregate advance of $ 10.0 million under the 2024 Note. All unpaid interest and principal were due and payable upon request of Samsara on or after maturity, or in the event of default. The Company could not prepay the principal amount and accrued interest at any time before maturity without the consent of Samsara. In the event that the Company issued and sold shares of its redeemable convertible preferred stock to investors following the issuance date of the 2024 Note in a single transaction or a series of related transactions that resulted in either (i) gross proceeds of at least $ 10.0 million (excluding conversion of the (a) 2024 Note and any other convertible notes or convertible securities issued by the Company and then outstanding and (b) aggregate gross proceeds to the Company yielded by any cash investment by Samsara, or (ii) designated as a qualified financing by Samsara (a “2024 Note Qualified Financing”)), then the outstanding principal amount of the 2024 Note and any unpaid accrued interest would automatically convert into shares of redeemable convertible preferred stock issued in the 2024 Note Qualified Financing at a conversion price equal to 80 % of the per share price paid by investors for the redeemable convertible preferred stock in the 2024 Note Qualified Financing. Upon a change in control, the 2024 Note, at the election of Samsara, would either (i) become due and payable in cash upon the closing of such change in control, in an amount equal to twice the outstanding principal amount plus any unpaid accrued interest, or (ii) convert into shares of the Company’s Series B-2 Stock. The conversion would have been based on a price equal to 100 % of the total aggregate consideration paid for each share of the Company’s capital stock on an as-converted to common stock basis (including any earn-out amounts). Unless earlier converted or repaid in connection with the 2024 Note Qualified Financing or a change in control on or prior to the maturity date, or at any time at Samsara’s option, Samsara could have elected to convert the 2024 Note and any unpaid accrued interest into the Company’s common stock at a conversion price equal to the Series B-2 Stock conversion price then in effect. The 2024 Note contained customary representations and warranties and event of default provisions. Upon any event of default, Samsara could declare the principal and unpaid accrued interest under the 2024 Note immediately due and payable. The 2024 Note was issued to Samsara at the estimated fair value of $ 12.1 million at the issuance date. Since the convertible promissory notes were issued to a related party and considered not at arm’s length, the total premium of $ 2.1 million, which was the difference between the fair value at the issuance date and the principal amount of the note, was recognized as a loss on issuance of convertible promissory notes – related party in the consolidated statement of operations and comprehensive loss and as additional paid-in-capital in the consolidated statement of redeemable convertible preferred stock and stockholders’ equity (deficit) in March and May 2024 when amounts were advanced under the 2024 Note. The Company recognized a $ 0.2 million loss on extinguishment and on issuance of convertible promissory notes to a related party for the year ended December 31, 2025. The Company recognized a $ 38.0 million loss on extinguishment and on issuance of convertible promissory notes, of which $ 34.7 million was to a related party for the year ended December 31, 2024 . The fair value of convertible promissory notes at issuance was estimated using the probability weighted settlements scenarios model discounted to present value with the following range of assumptions: expected term of 0.4 – 1.3 years, probabilities of scenario achievement of 0.0 % – 90.0 % and discount rates of 12.3 % – 18.7 %. The 2024 Note contained embedded features that provided Samsara the right to receive cash or a variable number of shares upon a change in control or the completion of a capital raising transaction by the Company. These embedded features were required to be bifurcated and accounted for separately as a compound derivative instrument. The embedded features were initially and subsequently measured at fair value, with changes in the fair value recorded as a change in fair value of derivative liabilities – related party in the consolidated statements of operations and comprehensive loss. The total fair value at issuance of the derivative instrument issued with the 2024 Note was $ 2.1 million, inclu ding $ 1.1 milli on for the convertible promissory note issued in March 2024. The derivative liability created a discount on the advances under the 2024 Note that was amortized using the effective interest rate method over the term of the respective advance and recorded as a non-cash interest expense. The Company recognized a change in the fair value of derivative liability of $ 0.5 million for the year ended December 31, 2025. The Company recognized a change in the fair value of derivative liability of $ 1.6 million for the year ended December 31, 2024. The 2024 Note was converted into shares of common stock, and the derivative liability expired in connection with the closing of the Merger on March 18, 2025. F- 22 For the year ended December 31, 2025, interest expense for the 2024 Note was $ 0.8 million, consisting of $ 0.2 million of contractual interest expense and $ 0.6 million in amortization of debt discount arising from the separation of the derivative instrument. For the year ended December 31, 2024, interest expense for the 2024 Note was $ 2.3 million, including $ 0.7 million of contractual interest expense and $ 1.6 million in amortization of debt discount arising from the separation of the derivative instrument. In connection with the closing of the Merger, the $ 10.0 million aggregate outstanding principal amount and $ 0.9 million accrued interest of the 2024 Note were converted into 1,757,951 shares of Legacy Kalaris common stock at a conversion price of $ 6.20 per share. The 2024 Note was no longer outstanding as of December 31, 2025. 2024 and 2025 Bridge Notes In October 2024, the Company entered into a convertible note purchase agreement with Samsara to sell and issue convertible promissory notes for an aggregate principal amount of up to $ 25.0 million. In November 2024, the Company amended the agreement and other existing preferred stockholders of the Company joined the agreement. In October 2024, the Company issued to Samsara a convertible promissory note with an aggregate principal amount of approximately $ 9.0 million (the “October 2024 Note”). In November 2024, the Company issued additional notes with an aggregate principal amount of approximately $ 1.0 million to Samsara and other investors (the “November 2024 Notes”, and together with the October 2024 Note, the “2024 Bridge Notes”). The October and November 2024 issuance of convertible notes is referred to as the “First Tranche Closing”. The Company had the right to draw up to an additional $ 15.0 million in three subsequent tranche closings of up to a maximum aggregate principal amount of $ 5.0 million in each such closing (each, the “Subsequent Tranche Closing”). The 2024 Bridge Notes carried an annual interest rate of 8 %, and had an original maturity date of May 2025 . In the event that the Company issued and sold shares of its redeemable convertible preferred stock to investors following the respective issuance date of the 2024 Bridge Notes in a single transaction or a series of related transactions that results in either (i) gross proceeds of at least $ 10.0 million (excluding conversion of the (a) 2024 Bridge Notes and any other convertible notes or convertible securities issued by the Company and then outstanding and (b) aggregate gross proceeds to the Company yielded by any cash investment by Samsara), or (ii) designated as a qualified financing by Samsara (a “2024 Bridge Notes Qualified Financing”), then the outstanding principal amount of the 2024 Bridge Notes and any unpaid accrued interest would automatically convert into shares of redeemable convertible preferred stock issued in the 2024 Bridge Notes Qualified Financing at a conversion price equal to 80 % of the per share price paid by investors for the redeemable convertible preferred stock in the 2024 Bridge Notes Qualified Financing. Upon a change in control, the 2024 Bridge Notes, at the election of Samsara, would either (i) become due and payable in cash upon the closing of such change in control, in an amount equal to twice the outstanding principal amount plus any unpaid accrued interest, or (ii) convert into shares of the Company’s Series B-2 Stock at a price equal to 100 % of the total aggregate consideration to be paid for each share of the Company’s capital stock on an as-converted to common stock basis (including any earn-out amounts) as determined by the board of directors of the Company in its sole discretion, provided that if the conversion occurred due to the closing of the Merger, only clause (ii) would apply to such conversion. Unless earlier converted or repaid in connection with the 2024 Bridge Notes Qualified Financing or a change in control on or prior to the maturity date, or at any time at Samsara’s option, Samsara could have elected to convert the 2024 Bridge Notes and any unpaid accrued interest into the Company’s common stock at a conversion price equal to the Series B-2 Stock conversion price then in effect (the “2024 Bridge Notes Optional Conversion”). The 2024 Bridge Notes contained customary representations and warranties and event of default provisions. Upon any event of default, Samsara could declare the principal and unpaid accrued interest under the 2024 Bridge Notes immediately due and payable. The Company determined that the investors’ right to receive additional convertible promissory notes at a predetermined conversion price under each of the Subsequent Tranche Closing represented freestanding instruments that should be accounted for separately as liabilities, initially recorded and subsequently remeasured at fair value until their exercise or expiration (the “Tranche Liability”). The Tranche Liability was initially recorded at $ 21.4 million. The change in the fair value of the Tranche Liability was $ 21.0 million for the year ended December 31, 2024. As of December 31, 2024, the Tranche Liability fair value was $ 0.4 million. The decrease in fair value was a result of modification of tranche amounts and parties agreeing to convert each of the subsequent Tranche Closings at a price per share equal to the Company Value Per Share, as defined in the Merger Agreement. The fair value of the Tranche Liability was estimated using the probability weighted scenario analysis discounted to the current period (Note 5). The 2024 Bridge Notes were issued to Samsara and other existing preferred stockholders of the Company at the estimated fair value of $ 24.5 million at the issuance dates. The premium of $ 14.5 million, which was the difference between the fair value at the issuance date and the principal amount of the notes, was recognized as additional paid-in-capital in the consolidated statement of redeemable convertible preferred stock and stockholders’ equity (deficit) at the issuance date. The fair value of the notes at issuance was estimated using the probability weighted settlements scenarios model discounted to present value with the following range of assumptions: expected term of 0.4 - 0.6 years, probabilities of scenario achievement of 0 % - 60 % and a discount rate of 9.5 %. The aggregate estimated fair value of the 2024 Bridge Notes and the Tranche Liability was $ 45.9 million as of the issuance date. The F- 23 Company recognized the excess of the aggregated fair value over net cash proceeds received as non-pro rata distribution to the stockholders, resulting in a loss of $ 35.9 million at the issuance date, which was recorded as a loss on issuance of convertible promissory notes in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024. The 2024 Bridge Notes contained embedded features that provided Samsara and other stockholders the right to receive cash or a variable number of shares upon a change in control or the completion of a capital raising transaction by the Company. These embedded features were required to be bifurcated and accounted for separately as a compound derivative instrument. The embedded features were initially and subsequently measured at fair value with changes in the fair value recorded as a change in fair value of derivative liabilities in the consolidated statements of operations and comprehensive loss. The fair value at issuance of the derivative instrument issued with the 2024 Bridge Notes was $ 1.0 million. The derivative liabilities created a discount on the advances under the 2024 Bridge Notes that were amortized using the effective interest rate method over the term of the respective advance and recorded as a non-cash interest expense. The change in the fair value of derivative liabilities related to the 2024 Bridge Notes was $ 0.5 million for the year ended December 31, 2025. The 2024 Bridge Notes were converted into shares of common stock and the derivative liability expired in connection with the closing of the Merger on the Closing Date. Pursuant to the Merger Agreement, the Company was permitted to enter into a series of financings to fund its operations prior to the closing of the Merger in an amount not to exceed $ 15.0 million in the aggregate on a to be converted post-money basis, with up to $ 7.5 million to be provided by AlloVir and up to $ 7.5 million to be provided by Legacy Kalaris’ stockholders. In January 2025, the Company amended its 2024 Bridge Notes agreement and changed the amounts of Subsequent Tranche Closings from $ 5.0 million for each tranche to $ 3.75 million for the first two tranches and $ 7.5 million for the third tranche. No other changes were made to the terms of the 2024 Bridge Notes. In January 2025, Samsara and other investors funded an aggregate principal amount of $ 3.75 million in convertible promissory notes (the “2025 Bridge Notes”). The 2025 Bridge Notes’ terms were similar to the 2024 Note's terms. Samsara and other investors agreed that the 2025 Bridge Notes would convert into shares of Series B-2 Stock at a price per share equal to the Company Value Per Share, as defined in the Merger Agreement, at the closing of the Merger. The 2025 Bridge Notes were issued to Samsara and other existing preferred stockholders of the Company at the estimated fair value of $ 3.9 million at the issuance dates. The premium of $ 0.2 million, which was the difference between the fair value at the issuance date and the principal amount of the notes, was recognized as additional paid-in-capital in the consolidated statement of redeemable convertible preferred stock and stockholders’ equity (deficit) at the issuance date. The fair value of the notes at issuance was estimated using the probability weighted settlements scenarios model discounted to present value with the following range of assumptions: expected term of 0.2 - 0.3 years, probabilities of scenario achievement of 20 % - 80 % and a discount rate of 8.5 %. The 2025 Bridge Notes contained embedded features that provided Samsara and other stockholders the right to receive cash or a variable number of shares upon a change in control or the completion of a capital raising transaction by the Company. These embedded features were required to be bifurcated and accounted for separately as a com pound derivative instrument. The embedded features were initially and subsequently measured at fair value, with changes in the fair value recorded as a change in fair value of derivative liabilities in the consolidated statements of operations and comprehensive loss. The fair value at issuance of the derivative instrument issued with the 2025 Bridge Notes was $ 0.2 million. The derivative liabilities created a discount on the advances under the 2025 Bridge Notes that were amortized using the effective interest rate method over the term of the respective advance and recorded as a non-cash interest expense. The change in the fair value of derivative liabilities related to the 2025 Bridge Notes was $ 0.2 million for the year ended December 31, 2025. The 2025 Bridge Notes were converted into shares of Series B-2 Stock and the derivative liability expired in connection with the closing of the Merger on the Closing Date. The total interest expense for the 2024 Bridge Notes and 2025 Bridge Notes was $ 0.6 million for the year ended December 31, 2025. For the year ended December 31, 2025, total interest expense consisted of $ 0.2 million of contractual interest expense and $ 0.4 million in amortization of debt discount arising from the separation of the derivative instrument. The total interest expense for the 2024 Bridge Notes and 2025 Bridge Notes was $ 0.4 million for the year ended December 31, 2024. For the year ended December 31, 2024 , total interest expense consisted of $ 0.1 million of contractual interest expense and $ 0.3 million in amortization of debt discount arising from the separation of the derivative instrument. In connection with the closing of the Merger, the $ 10.0 million aggregate outstanding principal amount and $ 0.3 million accrued interest of the 2024 Bridge Notes converted into 1,660,888 shares of Legacy Kalaris common stock at a conversion price of $ 6.20 per share and the 2024 Bridge Notes were no longer outstanding as of December 31, 2025 . In connection with the closing of the Merger, the $ 3.75 million aggregate outstanding principal amount and $ 0.1 million accrued interest of the 2025 Bridge Notes converted into 794,499 shares of Series B-2 Stock at a price of $ 4.7851 per share, which then converted on a one-for-one basis into shares of Legacy Kalaris common stock, and subsequently into 160,165 shares of AlloVir common stock. In March 2025, the Company and other noteholders entered into an acknowledgment of conversion and termination agreement to cancel all unfunded tranches included in the 2024 Bridge Notes. The Company recognized a gain of $ 0.4 million in the change in fair value of the tranche liability for the year ended December 31, 2025. F- 24 January 2025 AlloVir Convertible Promissory Note In January 2025, the Company issued the AlloVir Note under which AlloVir funded a principal amount of $ 3.75 million. At the closing of the Merger on March 18, 2025, the AlloVir Note was cancelled in accordance with its terms. As of December 31, 2025 , the Company does not have any outstanding convertible promissory notes, derivative liabilities or the tranche liability. 9. Leases In February 2025, the Company entered into an operating lease agreement for office space in Berkeley Heights, New Jersey. In accordance with ASC 842, the Company has determined the lease commencement occurred in September 2025 upon substantial completion of lessor-owned improvements. The lease is expected to terminate in December 2031 , however, the Company has the option to extend the lease term twice for an additional three years . As of December 31, 2025 , it is not reasonably certain that the Company will exercise this option to extend. The Company can terminate the lease after four years and four months after the lease commencement date with a termination penalty of $ 0.3 million. In addition to the base rent, the Company will pay its share of operating expenses and taxes. The lessor provided a tenant improvement allowance of up to $ 0.4 million, which the Company fully utilized as of December 31, 2025. The Company is responsible for additional improvement expense incurred in excess of the tenant improvement allowance and has incurred $ 0.1 million of excess costs as of December 31, 2025. The Company records excess costs as payments in the measurement of lease liabilities. In connection with the signing of the lease, the Company secured a letter of credit in favor of the lessor in the amount of $ 0.5 million, which will be reduced to $ 0.2 million over five years. The letter of credit is recorded as restricted cash in the consolidated balance sheet as of December 31, 2025. The following table summarizes the presentation of the Company's operating lease on its consolidated balance sheet as of December 31, 2025 (in thousands): Leases Balance sheet classification December 31, 2025 Assets: Operating lease assets Operating lease right-of-use assets $ 1,475 Total lease assets $ 1,475 Liabilities: Current: Operating lease liabilities Operating lease liability, current $ 316 Noncurrent: Operating lease liabilities Operating lease liability, long-term 1,132 Total lease liabilities $ 1,448 The components of lease cost under ASC 842 included within general and administrative expenses in the Company’s consolidated statements of operations and comprehensive loss were as follows for the year ended December 31, 2025 (in thousands): Lease cost Year Ended December 31, 2025 Operating lease cost $ 117 Variable lease cost 6 Total lease cost $ 123 As of December 31, 2025, the weighted-average remaining lease term for the operating lease was 6.0 years, and the weighted-average discount rate was 13.12 % . Cash paid for amounts included in the measurement of lease liabilities was $ 0.1 million for the year ended December 31, 2025. F- 25 Future minimum annual lease commitments under the Company's non-cancelable operating lease as of December 31, 2025 was as follows (in thousands): Year ended December 31, Amount 2026 $ 335 2027 342 2028 349 2029 356 2030 363 Thereafter 338 Total lease payments 2,083 Less: interest ( 635 ) Present value of operating lease liabilities $ 1,448 10. Commitments and Contingencies Leases The Company's commitments under its operating leases are described in Note 9. Research and Development Agreements The Company enters into various agreements in the ordinary course of business, such as those with suppliers, contract development and manufacturing organizations, clinical research organizations, and other research and development vendors. These agreements provide for termination at the request of either party, generally with less than one year’s notice. Therefore, they are cancellable contracts and, if canceled, are not expected to have a material effect on the Company’s financial condition, results of operations, or cash flows. License and Royalty Agreements The Company is required to pay certain milestone payments contingent upon the achievement of specific development and regulatory events in accordance with the UCSD Agreement (Note 7). Over the life of the agreement through December 31, 2025, the Company achieved development milestones totaling $ 0.1 million, which were recorded as research and development expenses. No other milestones were achieved or probable as of December 31, 2025 and 2024. The Company is required to pay royalties on commercial sales of products developed under the UCSD Agreement. The Company’s product candidate was in clinical development as of December 31, 2025 , and no such royalties were due. The Company is obligated to pay royalties to Samsara under the Royalty Agreement (Note 7). The Company recognized an initial royalty obligation liability in the amount of $ 32.1 million, which was based on its estimated fair value at the effective date of the Royalty Agreement. Once royalty payments to Samsara are deemed probable and estimable, and if such amounts exceed the royalty liability balance, the Company will impute interest to accrete the royalty obligation on a prospective basis based on such estimates. As of December 31, 2025, these royalties were not probable and estimable. Legal Contingencies The Company, from time to time, may be a party to litigation arising in the ordinary course of business. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount is reasonably estimable, the Company will accrue a liability for the estimated loss. Litigation Related to the Merger Two complaints have been filed by purported AlloVir stockholders as individual actions against AlloVir and the members of its board of directors in the Supreme Court of the State of New York, New York County, captioned Keller v. AlloVir, Inc. et al., No. 650989/2025 (N.Y. Sup. Ct. Feb. 20, 2025), and Morgan v. AlloVir, Inc. et al., No. 650965/2025 (N.Y. Sup. Ct. Feb. 19, 2025) (the “Complaints”). The Complaints allege that the proxy statement/prospectus describing the transaction between Legacy Kalaris and AlloVir misrepresented and/or omitted certain purportedly material information, and assert claims for negligent misrepresentation and concealment and negligence under New York common law. The Complaints seek various remedies including, among other things, an order enjoining the consummation of the merger, requiring the defendants to file an amended proxy statement/prospectus, rescinding the merger or granting rescissory damages, and awarding costs, including plaintiff’s attorneys’ fees and experts’ fees, and other relief the court may deem just and proper. AlloVir and Legacy Kalaris deny the allegations in the Complaints and deny that any further F- 26 disclosure beyond that already contained in the proxy statement/prospectus was required under applicable law. The Company has not recorded any liabilities in connection with the Complaints. Litigation Related to Legacy Operations of AlloVir On January 19, 2024, a purported stockholder of AlloVir filed a lawsuit, captioned Zerbato v. AlloVir, Inc. et al., No. 1:24-cv-10152 (D. Mass.) (the “Securities Class Action”), in the U.S. District Court for the District of Massachusetts (the “Court”) against AlloVir and two of its officers purportedly on behalf of a putative class of stockholders. On April 16, 2024, the Court appointed stockholders Harry Levin and Julio Maurice Bueno as lead plaintiffs and their counsel as lead counsel in the action. On June 17, 2024, lead plaintiffs filed their amended complaint. In the amended complaint, lead plaintiffs asserted claims purportedly on behalf of a putative class of stockholders consisting of persons who purchased or otherwise acquired AlloVir securities between January 11, 2023 and December 21, 2023, inclusive. The amended complaint asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and the related regulations, alleging that the defendants made false and misleading statements and omissions to investors relating to AlloVir’s three Phase 3 studies of posoleucel. The complaint sought, among other things, damages, prejudgment and post-judgment interest, and attorneys’ fees, expert fees and other costs. On April 14, 2025 , the parties executed a definitive stipulation and agreement of settlement resolving the claims in the Securities Class Action for $ 1.0 million. On July 30, 2025, the Court entered an order granting final approval of the settlement and dismissing the Securities Class Action with prejudice. On October 21, 2024, a purported AlloVir stockholder filed a derivative lawsuit, captioned Lister v. Brainard et al., No. 1:24-cv-12658 (D. Mass.), in the U.S. District Court for the District of Massachusetts against certain of AlloVir’s officers and directors and naming AlloVir as a nominal defendant. The derivative complaint alleged, purportedly on behalf of AlloVir, violations of Section 14(a) of the Securities Exchange Act of 1934, breach of fiduciary duties, unjust enrichment, waste of corporate assets, gross mismanagement, and abuse of control against the individual defendants and contribution under Sections 10(b) and 21D of the Securities Exchange Act of 1934 against Dr. Brainard and Mr. Sinha. These claims were based on substantially identical allegations as the complaint in the above-listed Securities Class Action. The lawsuit sought, among other things, an award of damages and restitution in favor of AlloVir, certain changes to AlloVir’s corporate governance, and attorneys’ fees and costs. On August 1, 2025, the plaintiff filed a notice voluntarily dismissing the derivative lawsuit without prejudice. Guarantees and Indemnifications In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of December 31, 2025 and December 31, 2024 , the Company does not have any material indemnification claims that were probable or reasonably possible. 11. Redeemable Convertible Preferred Stock In January 2024, the Company issued 1,280,000 shares of Series B-2 Stock at a price of $ 1.25 per share for gross cash proceeds of $ 1.6 million. Upon the closing of the Merger on March 18, 2025, all outstanding shares of redeemable convertible preferred stock were automatically converted into shares of common stock and no redeemable convertible preferred stock was outstanding as of December 31, 2025. Redeemable convertible preferred stock as of December 31, 2024, consisted of the following (in thousands, except shares): December 31, 2024 Shares Authorized Shares Issued and Outstanding Aggregate Liquidation Preference Net Carrying Value Series A 25,194,245 25,194,245 $ 25,194 $ 24,965 Series B-1 9,957,095 9,957,095 9,957 11,222 Series B-2 40,000,000 8,000,000 10,000 9,812 Total redeemable convertible preferred stock 75,151,340 43,151,340 $ 45,151 $ 45,999 The holders of the Company’s redeemable convertible preferred stock had the following rights and preferences prior to the conversion of the redeemable convertible preferred stock into common stock upon the closing of the Merger: F- 27 Liquidation Preference In the event of any liquidation, dissolution, or winding up of the Company, or a deemed liquidation event, including a merger or consolidation, or a sale or other disposition of all or substantially all of the Company’s assets, the holders of shares of Series A redeemable convertible preferred stock (the “Series A Stock”), Series B-1 redeemable convertible preferred stock (the “Series B-1 Stock”) and Series B-2 Stock were entitled to receive, before any payments are made to the holders of common stock, an amount per share equal to the Series A Stock, Series B-1 Stock and Series B-2 Stock original issuance price of $ 1.00 , $ 1.00 and $ 1.25 per share, respectively, plus any dividends declared but unpaid. If the Company’s legally available assets were insufficient to satisfy the Series A Stock, Series B-1 Stock and Series B-2 Stock liquidation preference, then proceeds would be distributed with equal priority and pro rata among the holders of the Series A Stock, Series B-1 Stock and Series B-2 Stock in proportion to the preferential amount each holder was otherwise entitled to receive. After the payment of the full liquidation preference of the redeemable convertible preferred stock, the Company’s remaining assets legally available for distribution, if any, would be distributed ratably to the holders of common stock and redeemable convertible preferred stock on an as-if-converted basis. Conversion Shares of redeemable convertible preferred stock were convertible into common stock at the option of the holder at a conversion ratio that equaled the original issue price for such series, adjusted for any anti-dilution adjustments, divided by the conversion price for such series, in effect on the date of the conversion. The initial conversion price per share for convertible preferred stock was the original issuance price. The conversion ratios were one-for-4.9603 for each series of redeemable convertible preferred stock as of March 18, 2025 and December 31, 2024, as adjusted for the Exchange Ratio. Each share of redeemable convertible preferred stock was automatically convertible into shares of common stock at the then-effective conversion ratio immediately upon (i) the vote or written consent of the holders of at least the majority of the outstanding shares of redeemable convertible preferred stock, (ii) the closing of a firm-commitment underwritten public offering with gross proceeds to the Company of at least $ 75.0 million and a public offering price which is at least $ 3.75 per share, adjusted for any anti-dilution adjustments, or (iii) closing of a special purpose acquisition company (a “SPAC”) transaction. A SPAC transaction is any business combination pursuant to which the Company was merged into, or otherwise combined with a SPAC listed on a national securities exchange, or a subsidiary of such SPAC, and the shares of capital stock of the Company outstanding immediately prior to such transaction continued to represent, immediately following such combination, a majority, by voting power, of the capital stock of the surviving or resulting corporation. Dividends The Company could not pay any dividends on common stock of the Company unless the holders of redeemable convertible preferred stock then outstanding first or simultaneously received dividends at the same rate as dividends paid with respect to common stock or any class or series that was not convertible into common stock, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to redeemable convertible preferred stock. If the Company declared, paid or set aside, a dividend on shares of more than one class or series of capital stock of the Company, the dividend payable to the holders of each series of redeemable convertible preferred stock was calculated based upon the dividend on the class or series of capital stock that would have resulted in the highest dividend for such series of preferred stock. Through March 18, 2025, no dividends had been declared or paid. Voting Rights Each holder of redeemable convertible preferred stock was entitled to the number of votes equal to the number of shares of common stock into which such shares of preferred stock held by such holder could then be converted. The holders of redeemable convertible preferred stock voted together with the holders of common stock as a single class and on an as-converted to common stock basis. The holders of shares of the Series A Stock, voting as a separate class, were entitled to elect three members of the board of directors. The holders of the shares of common stock, voting as a separate class, were entitled to elect one director of the Company. The holders of common stock and redeemable convertible preferred stock, voting together as a single class on an as-converted basis, were entitled to elect all remaining members of the board of directors, if any. F- 28 Redemption The Company’s redeemable convertible preferred stock was classified as temporary equity in the accompanying consolidated balance sheets in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities whose redemption was based upon deemed liquidation events not solely within the Company’s control, including a merger or consolidation, or, a sale or other disposition of all or substantially all of the Company’s assets. The Company determined not to adjust the carrying values of the redeemable convertible preferred stock to the liquidation preferences of such shares because of the uncertainty of whether or when such events would occur. 12. Stockholders ’ Equity (Deficit) As of December 31, 2025 the Company’s certificate of incorporation authorized the Company to issue 300,000,000 shares of common stock, par value $ 0.0001 per share. As of December 31, 2024 , Legacy Kalaris’s certificate of incorporation authorized Legacy Kalaris to issue 86,000,000 shares of common stock, par value $ 0.00001 per share. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of preferred stock. The holders of the Company’s common stock are entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders, and the holders of our common stock do not have any cumulative voting rights. The number of authorized shares of common stock may from time to time be increased or decreased (but not below the number of shares of such class outstanding) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of the Company. 2025 Private Placement On December 17, 2025, the Company entered into a Securities Purchase Agreement (the “2025 Securities Purchase Agreement”) with certain institutional investors (the “PIPE Investors”) named therein. Pursuant to the 2025 Securities Purchase Agreement, the Company issued and sold to the PIPE Investors in a private placement (the “2025 Private Placement”) an aggregate of (i) 4,200,000 shares of the Company’s common stock at a purchase price of $ 10.00 per share, for aggregate gross processed of $ 42.0 million, and (ii) pre-funded warrants (“Pre-Funded Warrants”) to purchase up to an aggregate of 800,000 shares of the Company’s common stock at a purchase price of $ 9.9999 per Pre-Funded Warrant, which represents the per share purchase price of the Company’s common stock less the $ 0.0001 per share exercise price for each Pre-Funded Warrant , for total aggregate proceeds of $ 8.0 million. The Pre-Funded Warrants are exercisable at any time after the date of issuance and will be exercisable until the Pre-Funded Warrant is exercised in full. The 2025 Private Placement closed on December 22, 2025, for aggregate gross proceeds of $ 50.0 million, before deducting placement agent fees and offering expenses of $ 3.4 million, for net proceeds of $ 46.6 million. Under the terms of the Pre-Funded Warrants, the Company may not effect the exercise of any portion of such Pre-Funded Warrant, and a holder of will not be entitled to exercise any portion of such Pre-Funded Warrant, if, upon giving effect to such exercise, the holder, together with its affiliates, would beneficially own more than 4.99 % or 9.99 %, at the option of the holder, of the number of shares of common stock outstanding immediately after giving effect to such exercise. The holders of Pre-Funded Warrants may increase or decrease such percentage by providing at least 61 days ’ prior notice to the Company, provided that such percentage may in no event exceed 19.99 %. The Pre-Funded Warrants are indexed to the Company's common stock and none of the provisions of the warrant would require a cash settlement. Therefore, the Pre-Funded Warrants were classified as a component of equity in the Company's consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of shares of common stock upon exercise. As of December 31, 2025, no Pre-Funded Warrants were exercised. Common Stock As of December 31, 2025 and 2024, shares of common stock reserved for future issuance were as follows: December 31, December 31, 2025 2024 Redeemable convertible preferred stock, as converted — 8,699,309 Outstanding stock option awards 2,142,278 1,144,690 Pre-funded warrants to purchase common stock 800,000 — Shares available for future options grants under the Equity Plans 1,310,403 222,724 Shares available for grant under the 2020 ESPP 119,326 — Total shares reserved for future issuance 4,372,007 10,066,723 F- 29 13. Stock-Based Compensation Equity Plans At the closing of the Merger, the Company assumed the 2019 Plan. In connection with the Merger, AlloVir’s stockholders approved an amendment to AlloVir's 2020 Stock Option and Grant Plan (as amended, the “2020 Plan” and together with the 2019 Plan, the “Equity Plans”) to increase the number of shares reserved for future issuance under the 2020 Plan, which is subject to an annual increase on January 1 of each year from 2026 and thereafter, such that the number of shares of common stock reserved and available for issuance under the 2020 Plan is cumulatively increased by 5 % of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or such lesser number of shares as approved by the plan administrator; to establish the maximum aggregate number of shares of stock that may be issued in the form of incentive stock options (“ISOs”) shall not exceed 15,250,000 and to extend the term of the 2020 Plan to the tenth anniversary of the closing of the Merger. Under the Equity Plans, the Company may grant ISOs, nonqualified stock options (“NSO”), restricted stock awards (“RSAs”), restricted stock unit awards and other stock awards to the Company’s employees, officers, non-employee directors, consultants, and advisors. Options to purchase common stock may be granted at a price not less than the fair market value as established by the board of directors in the case of both NSOs and ISOs. Stock option grants under the Equity Plans generally vest over four years. All options expire no later than ten years from the date of grant. The exercise price of ISOs granted to an employee who owns more than 10 % of the voting power of all classes of stock of the Company shall be no less than 110 % of the estimated fair market value of the underlying common stock on the grant date, and the contractual term is no longer than five years . As of December 31, 2025, 1,588,703 shares of common stock had been authorized for issuance and 396,646 shares were available for future grants under the 2019 Plan and 2,269,474 shares of common stock had been authorized for issuance and 913,757 shares were available for future grants under the 2020 Plan. Stock Options The Company has granted stock options with service-based vesting conditions. Stock options typically vest over four years and have a maximum term of ten years. The Company typically grants stock options to employees and non-employees at exercise prices deemed to be equal to the fair value of the common stock at the time of grant. The Black-Scholes-option pricing model, used to estimate the fair value of stock-based awards, requires the use of the following assumptions: • Fair Value of Common Stock. Prior to the Merger, the fair market value of Legacy Kalaris' common stock was determined by the board of directors of Legacy Kalaris with assistance from management of Legacy Kalaris and external valuation experts. The approach to estimating the fair market value of common stock is consistent with the methods outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately- Held-Company Equity Securities Issued as Compensation (the “Practice Aid”). After the closing of the Merger, the fair value of common stock is the Company’s closing price per share on the Nasdaq Global Market on the grant date. • Expected Term. The expected term of options granted represents the period of time that the options are expected to be outstanding. Due to the lack of historical exercise history, the expected term of the Company’s employee and non-employee stock options has been determined by calculating the midpoint of the contractual term of the options and the weighted-average vesting period. • Expected Volatility. The expected stock price volatility assumption was determined by examining the historical volatilities for comparable public companies, as the Company did not have any trading history for the common stock. • Risk-Free Interest Rate. The risk-free interest rate assumption is based on the U.S. Treasury zero-coupon issued in effect at the time of grant for periods corresponding with the expected term of the option. • Dividends. The Company has not paid any dividends on its common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used. F- 30 The assumptions that the Company used in the Black-Scholes option-pricing model to determine the grant date fair value of stock options granted during the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 Expected term (in years) 5.52 - 6.12 5.18 - 6.06 Expected volatility 98.69 % - 100.96 % 103.18 % - 104.88 % Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 3.66 % - 4.09 % 3.48 % - 4.56 % Fair value of common stock range $ 2.95 -$ 5.88 $ 2.88 -$ 11.29 A summary of option activity under the Equity Plans for the year ended December 31, 2025 is as follows: Outstanding Awards Number of Shares Underlying Outstanding Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2024 1,144,690 $ 0.81 Options granted 1,208,719 $ 6.51 Options cancelled ( 211,131 ) $ 1.27 Outstanding, December 31, 2025 2,142,278 $ 3.98 8.88 9,552 Shares exercisable December 31, 2025 611,902 $ 1.46 8.16 4,274 Vested and expected to vest, December 31, 2025 2,142,278 $ 3.98 8.88 9,552 Aggregate intrinsic value represents the difference between the fair value of the underlying common stock and the exercise price as of December 31, 2025 . No options were exercised during the year ended December 31, 2025. The weighted-average fair value of options exercised during years ended December 31, 2025 and 2024 was immaterial. The aggregate intrinsic value of options exercised during the years ended December 31, 2025 and 2024 was immaterial. The total fair value of options that vested during the years ended December 31, 2025 and 2024 was $ 1.4 million and $ 0.4 million, respectively. The weighted-average grant date fair value of options granted for the years ended December 31, 2025 and 2024 was $ 5.23 and $ 0.60 per option, respectively. As of December 31, 2025, the total unrecognized stock-based compensation expense was $ 6.2 million, which is expected to be recognized over a weighted-average period of 2.9 years. RSAs In February 2022, the Company issued RSAs to its former president for 203,670 shares and a consultant for 13,577 shares, in each case, at a purchase price of $ 0.005 per share under the 2019 Plan. The shares related to the former president’s award vest monthly over four years starting from January 2021, while the shares related to the consultant’s award vest monthly over six years starting from January 2020. If and when an RSA vests, the Company will issue one share of common stock for each whole RSA that has vested, subject to satisfaction of the employee's tax withholding obligations. The unvested RSAs are subject to the Company’s right of repurchase upon termination of services at a repurchase price equal to their original purchase price. Shares purchased pursuant to these awards participate in dividends and voting, are legally outstanding, and are presented as outstanding shares; however, for accounting purposes, shares purchased by employees pursuant to RSAs are not considered issued until they vest according to their respective vesting schedules. Unvested awards are excluded from the calculation of net loss attributable to common stockholders as these are considered contingently issuable shares and require services to be performed as these shares continue to vest. Proceeds received from the issuance of RSAs are recorded as a share repurchase liability within accrued expenses and other current liabilities on the consolidated balance sheet and reclassified to additional paid-in capital as such awards vest. F- 31 A summary of RSAs activity under the 2019 Plan for the year ended December 31, 2025 is as follows: Restricted Stock Awards Weighted Average Grant Date Fair Value Unvested as of December 31, 2024 1,839 $ 1.71 Vested ( 1,698 ) 1.74 Unvested as of December 31, 2025 141 $ 1.74 No RSAs were granted during the years ended December 31, 2025 and 2024. The total fair value of RSAs vested during the years ended December 31, 2025 and 2024 was immaterial. No RSAs were repurchased or cancelled during the years ended December 31, 2025 and 2024 . 2020 Employee Stock Purchase Plan The Company can issue common stock shares to its employees under the 2020 Employee Stock Purchase Plan (the “2020 ESPP”). The number of shares of common stock reserved and available for issuance under the 2020 ESPP is cumulatively increased on each January 1 by the lesser of (i) 53,161 shares of common stock, (ii) 1 % of the number of shares of common stock issued and outstanding on the immediately preceding December 31, and (iii) such number of shares of common stock as determined by the plan administrator. On December 31, 2025, there was an aggregate of 119,326 shares reserved for future issuance under the 2020 ESPP. The ESPP allows eligible employees to authorize payroll deductions of up to 15 % of their base salary or wages up to $ 25,000 annually to be applied toward the purchase of shares of the Company's common stock on the last trading day of the offering period. Participating employees will purchase shares of the Company's common stock at a discount of up to 15 % on the lesser of the closing price of the Company's common stock on the Nasdaq Global Market (i) on the first trading day of the offering period or (ii) the last day of any offering period. The Company utilizes the Black Scholes option pricing model to compute the fair market value of the shares and stock-based compensation expense is recognized over the offering period. Six-month offering periods commence each January 1 and July 1 during the term of the plan, with the plan administrator having the right to establish different offering periods. The Company did no t issue shares of common stock under the 2020 ESPP during the year ended December 31, 2025. Stock-Based Compensation Expense Stock-based compensation expense included in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024 is as follows (in thousands): Year Ended December 31, 2025 2024 Research and development expenses $ 530 $ 333 General and administrative expenses 1,406 562 Total stock-based compensation expense $ 1,936 $ 895 F- 32 14. Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share attributable to common stockholders for the years ended December 31, 2025 and 2024 was calculated as follows (in thousands, except share and per share data): Year Ended December 31, 2025 2024 Numerator: Net loss attributable to common stockholders, basic and diluted $ ( 43,438 ) $ ( 69,167 ) Denominator: Weighted average common shares outstanding 15,268,733 1,358,586 Less: Weighted-average common shares subject to repurchase ( 916 ) ( 22,661 ) Weighted-average shares outstanding, basic and diluted 15,267,817 1,335,925 Net loss per share attributable to common stockholders, basic and diluted $ ( 2.85 ) $ ( 51.77 ) As described in Note 12, the Pre-Funded Warrants to purchase up to an aggregate of 800,000 shares of the Company’s common stock at a purchase price of $ 9.9999 per Pre-Funded Warrant were classified as a component of equity in the Company's consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of shares of common stock upon exercise. All of the shares underlying the Pre-Funded Warrants have been included in the weighted-average number of shares of common stock used to calculate basic and diluted net loss per common share for the year ended December 31, 2025, because the shares may be issued for little or no consideration, are fully vested, and are exercisable after the original issuance date of the Pre-Funded Warrants. The potential shares of common stock were excluded from the computation of diluted net loss per share attributable to common stockholders as of December 31, 2025 and 2024 because including them would have had an anti-dilutive effect. The excluded shares were as follows: December 31, 2025 2024 Redeemable convertible preferred stock, as converted — 8,699,309 Outstanding options to purchase common stock 2,142,278 1,144,690 Unvested restricted stock awards 141 1,839 2024 Note 1 — 3,360,787 Total 2,142,419 13,206,625 1 As of December 31, 2024, the conversion of the 2024 Note into common stock or redeemable convertible preferred stock was dependent on the price of shares that may be issued in connection with the 2024 Note Qualified Financing. The number of shares herein is calculated based on the conversion of the 2024 Note’s outstanding principal and accrued and unpaid interest as of December 31, 2024 into the Company’s preferred stock at the price of $ 6.20 per share. 15. Income Taxes Loss before provision for income taxes for the years ended December 31, 2025 and 2024 consisted of the following (in thousands): Year Ended December 31, 2025 2024 Federal $ ( 43,438 ) $ ( 69,167 ) Foreign — — Loss before provision for income taxes $ ( 43,438 ) $ ( 69,167 ) F- 33 The provision for income taxes for the years ended December 31, 2025 and 2024 consisted of the following (in thousands): December 31, 2025 2024 Current income tax (benefit) expense: Federal $ — $ — State — — Foreign — — Total current income tax benefit — — Deferred income tax (benefit) expense: — — Federal — — State — — Foreign — — Total deferred income tax benefit — — Total income tax expense (benefit): $ — $ — The reconciliation of the effective tax rate for income taxes from the federal statutory rate for the years ended December 31, 2025 and 2024 was as follows (in thousands): Year Ended December 31, 2025 2024 Income tax computed at federal statutory rate $ ( 9,122 ) 21.0 % $ ( 14,525 ) 21.0 % State taxes — 0.0 % — 0.0 % Tax credits - research and development tax credits 375 - 0.9 % ( 378 ) 0.5 % Change in valuation allowance 8,545 - 19.6 % 11,642 - 16.8 % Nontaxable or nondeductible items Loss on extinguishment and on issuance of convertible promissory notes — 0.0 % 3,571 - 5.2 % Other 202 - 0.5 % ( 310 ) 0.5 % Effective income tax rate $ — 0.0 % $ — 0.0 % The Company’s effective tax rate differs from the statutory rate primarily due to continued losses and the maintenance of a full valuation allowance on deferred tax assets, resulting in zero income tax expense for the period. The following table presents significant components of the Company’s deferred tax assets and liabilities as of December 31, 2025 and 2024 (in thousands): December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 24,990 $ 7,360 Capitalized R&D expenditures 24,869 5,115 Research credits 1,851 2,226 Accrued expenses and reserves 1,561 1,472 Other — 3 R&D funding arrangement 9,037 7,291 Total deferred tax assets 62,308 23,467 Less valuation allowance ( 62,308 ) ( 23,467 ) Net deferred tax assets $ — $ — A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. The Company has reviewed its positive and negative evidence and has concluded that it is more likely than not that the net deferred tax assets will not be realized; therefore, the Company continues to maintain a valuation allowance. The valuation allowance increased by $ 13.5 million and $ 12.2 million during the years ended December 31, 2025 and 2024 , respectively, primarily due to the generation of F- 34 net operating losses, and capitalized R&D expenditures. In addition, there was $ 25.3 million of change in valuation allowance as a result of purchase accounting adjustments related to the transaction, resulting in a total increase of $ 38.8 million for the year ended December 31, 2025. The Company has net operating loss carryforwards for federal and state income tax purposes of $ 103.3 million and $ 46.8 million, respectively, as of December 31, 2025 . The federal net operating loss carryforwards are not subject to expiration but are limited to 80 % of the taxable income in the year the carryforward is used. State net operating loss carryforwards, if not utilized, will expire beginning in 2039. As of December 31, 2025, the Company has federal and state research and development credit carryforwards of $ 1.7 million and $ 0.9 million, respectively. The federal credits will expire beginning in 2040 and the state credits will expire beginning in 2028. Under Section 382 of the Tax Code, the ability to utilize net operating losses carryforwards or other tax attributes, such as research tax credits, in any taxable year may be limited if the Company has experienced an “ownership change.” Generally, Section 382 ownership change occurs if there is a cumulative increase of more than 50 percentage points in the stock ownership of one or more stockholders or groups of stockholders who own at least 5% of a corporation’s stock within a specified testing period. Similar rules may apply under state tax laws. The Company has completed the Section 382 analysis from inception through the year ended December 31, 2024. The Company experienced an ownership change in March 2022 related to the redeemable convertible preferred stock financing. Net operating loss of $ 3.6 million generated prior to the 2022 change in ownership will be permanently limited for California tax purposes. Net federal operating losses are not limited as they can be carried forward indefinitely. The Company has not performed a Section 382 study as of the year ended December 31, 2025. During this time, the Company may experience ownership changes as a result of future financing or other changes in stock ownership. For tax years beginning after December 31, 2024, the One Big Beautiful Bill Act (“OBBBA”) enacted a new rule under Section 174A allowing companies to immediately expense any domestic research and developmental (“R&D”) expenditures. For domestic R&D, companies may either immediately expense or elect to capitalize and amortize over at least 60 months under Section 174A. However, foreign R&D continues to require capitalization subject to the mandatory 15-year amortization period under Section 174. The Company has elected to continue amortizing the previously capitalized costs over their remaining life and will immediately expense any domestic R&D expenditures. Any foreign R&D costs will continue to be capitalized and amortized over 15 years in accordance with the requirements of Section 174. The Company provides for U.S. federal, state, and applicable foreign income and withholding taxes on the financial reporting basis over the tax basis of its foreign subsidiary investment because the Company does not have the intentions and ability to indefinitely reinvest the undistributed earnings of its foreign subsidiaries. As a result, deferred taxes have not been recorded for the outside basis differences in its foreign subsidiary as of December 31, 2025 to the extent such differences are expected to result in future taxable income upon repatriation. The Company reviews its ability and intentions to indefinitely reinvest its foreign earnings at each balance sheet. The following summarizes the Company's income taxes paid (net of refunds received) for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Federal $ — $ — State — — Foreign — — Total $ — $ — Uncertain Tax Positions A reconciliation of the beginning and ending balances of the unrecognized tax benefits during the years ended December 31, 2025 and 2024, is as follows (in thousands): F- 35 Year Ended December 31, 2025 2024 Beginning Balance $ 680 $ 514 Increase (decrease) based on current year tax positions — 166 Increase (decrease) for prior year tax positions ( 125 ) — Ending Balance $ 555 $ 680 The entire amount of the unrecognized tax benefits would no t impact on the Company’s effective tax rate if recognized, due to the valuation allowance. The Company has elected to include interest and penalties as a component of tax expense. During the years ended December 31, 2025 and 2024 , the Company did no t recognize accrued interest and penalties related to unrecognized tax benefits. The Company files tax returns in the U.S. and other various states where it has activity. The Company is currently not under examination in any of these jurisdictions and all its tax years remain effectively open to examination due to net operating loss carryforwards. 16. Related Parties Samsara BioCapital L.P. and Affiliates Since the Company’s inception, Samsara has provided in-kind research and development and general and administrative services to the Company. From April 2022, Samsara also began to provide general and administrative services for cash consideration related to (i) accounting and controllership, (ii) human resources, and (iii) executive assistance. In July 2023, the Company and Samsara entered into a Business Services Agreement (the “BSA”) that governs the provision of such services. The BSA has a term of five years and may be terminated upon 15 days written notice by either party. The Company recognized $ 0.3 million and $ 0.2 million for the years ended December 31, 2025 and 2024, respectively, as general and administrative expenses, related to the services provided by Samsara under the BSA. The Company recognized immaterial amounts for the years ended December 31, 2025 and 2024, as research and development expenses, related to the services provided by Samsara under the BSA. In-kind services of $ 0.1 million were estimated at fair value and recognized as capital contributions to additional paid-in capital for the year ended December 31, 2024. Samsara stopped providing in-kind services in July 2024. As of December 31, 2025 and 2024, the Company recognized $ 0.1 million and $ 0.1 million in accrued expenses and other current liabilities in the consolidated balance sheets related to the services provided by Samsara under the BSA. As of December 31, 2025 and 2024, the Company recognized immaterial amounts in accounts payable in the consolidated balance sheets related to the services provided by Samsara under the BSA. The Company recognized a $ 32.1 million royalty obligation - related party, as a long-term liability, under the Royalty Agreement as of December 31, 2025 and 2024. The Company issued Samsara convertible promissory notes (Note 8), redeemable convertible preferred stock and common stock. In July 2024, the Company entered into a Royalty Agreement with Samsara (Note 7). Members of the Company’s management and board of directors received $ 0.1 million and $ 0.1 million in consulting fees for each of the years ended December 31, 2025 and 2024 . 17. Defined Contribution plan The Company sponsors a 401(k) plan (the “401(k) Plan”), which is designed to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. Eligible employees can elect to contribute to the 401(k) Plan, subject to certain limitations on eligible compensation. The Company may match employee contributions in amounts to be determined at the Company’s sole discretion. The Company’s matching contributions during each of the years ended December 31, 2025 and 2024 were immaterial. 18. Segment Reporting The Company operates and manages its business as one reportable and operating segment. The CODM regularly reviews and evaluates net loss, as reported in the consolidated statements of operations and comprehensive loss, for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods on an aggregate basis. The CODM does not review assets at a different level or category than the amounts disclosed in the consolidated balance sheets as total assets. All of the Company’s long-lived assets are located in the United States. F- 36 The following is the Company’s summary of segment loss, including significant segment expenses for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 External research and development expenses: CDMO, CRO and other third-party preclinical studies, clinical trials and consulting costs $ 25,108 $ 10,324 License fees, milestone payments, and annual maintenance fees related to acquired technologies 10 32,099 Internal research and development personnel expenses 5,244 2,490 Other research and development costs 391 129 General and administrative personnel expenses 4,447 1,940 Other general and administrative expenses 10,952 4,750 Interest expense 1,443 2,701 Other segment items 1 ( 4,157 ) 14,734 Net loss $ ( 43,438 ) $ ( 69,167 ) 1 Other segment items include change in fair value of tranche liability, change in fair value of derivative liabilities, loss on extinguishment and on issuance of convertible promissory notes and other income, net. F- 37