KALA BIO, Inc.

Current report

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Previous report

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors set forth below and discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025, which could materially affect our business, operating results or financial condition. The risk factors disclosure in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025 is qualified by the information that is described in this Quarterly Report on Form 10-Q. The risks described below and in our Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025 may not be the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, operating results or financial condition.

Previous report

Risks Related to Evaluation of Strategic Options and Bankruptcy Proceedings

Previous report

Our exploration and pursuit of strategic options and additional financing may not be successful.

Previous report

As described above, Oxford Finance swept substantially all of our cash resources from our bank accounts. Subject to consummation of an additional financing transaction with the Individual Lender or another third-party, we plan to continue to comply with its filing obligations under the Securities Exchange Act of 1934, as amended, and resume our exploration of strategic options, which may include a sale, license, merger or other monetization of remaining assets, the seeking of additional financing or, subject to the availability of additional funding, the resumption

Previous report

of certain research and development activities. Any future resumption of our historical research and development activities would depend on completing a strategic transaction that would support our prior operating plans or otherwise obtaining significant additional funding. We have engaged a financial advisor to advise on the exploration of strategic options. There can be no assurance that such exploration of strategic options will result in us pursuing a transaction or obtaining additional financing or that any such transaction or financing will be completed, nor as to the terms on which any such transaction or financing will occur, if at all. If we do not enter into any such transaction or financing prior to the utilization of the proceeds of the Convertible Loan Agreement, we expect that Oxford Finance will resume its efforts to foreclose on our assets.

Previous report

Our exploration of strategic options may not result in the realization of any value for our company or our stockholders. Even if we do consummate a strategic option, the value of our common stock and/or the amount of cash available for distribution to our stockholders, if any, will depend heavily on the proceeds derived from the strategic option, the timing of any distribution to stockholders, as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

Previous report

Our board of directors may elect to commence bankruptcy or insolvency proceedings.

Previous report

Our board of directors may decide that it is in the best interests of our stockholders to commence bankruptcy proceedings. It may be necessary for us to pursue bankruptcy proceedings under Chapter 7 of the United States Bankruptcy Code. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the United States Bankruptcy Code. It is unlikely that there will cash available for distribution to stockholders in connection with a bankruptcy proceeding. Accordingly, holders of our common stock and other securities could lose all or a significant portion of their investment in the company.

Previous report

We are substantially dependent on our remaining employees and consultants, along with any other advisors and consultants we may engage, to facilitate pursuit of strategic options and additional financing.

Previous report

Our ability to successfully identify and consummate any strategic options and obtain additional financing, if any, depends in large part on our ability to retain our remaining employees and consultants along with any other advisors and consultants we may engage. One or more may terminate their engagement with us on short notice. The loss of the services of any of these individuals could potentially harm our ability to identify, evaluate and pursue strategic options and pursue potential additional financing.

Previous report

In the past, securities class action litigation has often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, or the announcement of negative events, such as clinical trial results. These events may also result in investigations by the Securities and Exchange Commission. We may be exposed to such litigation or investigation even if no wrongdoing occurred. Litigation and investigations are usually expensive and divert management’s attention and resources, which could adversely affect any of our remaining cash resources and our ability to consummate a potential strategic option or identify additional funding.

Previous report

Our common stock is currently listed on The Nasdaq Capital Market. We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price of $1.00 per share and either a minimum stockholders’ equity of $2,500,000, or a minimum market value of our common stock of at least $35,000,000, or risk delisting, which would have a material adverse effect on our business. There are many factors that may adversely affect our ability comply with the requirements for continued listing. Many of these factors are outside of our control.

Previous report

On November 10, 2025, we received another deficiency letter from Nasdaq notifying us that we were not in compliance with Nasdaq Listing Rule 5550(b)(2), or the Minimum MVLS Capital Requirement, for continued listing on

Previous report

The Nasdaq Capital Market, as the market value of our listed securities was less than $35,000,000 for the previous 30 consecutive business days. Nasdaq also noted that we do not meet the alternative standards for continued listing on The Nasdaq Capital Market, as we do not have a stockholders’ equity of at least $2.5 million or net income from continued operations of at least $500,000 in the most recently completed fiscal year or for two of the three most recently completed fiscal years.

Previous report

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we have been provided a period of 180 calendar days, or until May 11, 2026, or the Compliance Date, to regain compliance with the Minimum MVLS Capital Requirement. If, at any time before the Compliance Date, the market value of our listed securities closes at $35,000,000 or more for a minimum of 10 consecutive business days, Nasdaq will provide written notification to us that it has regained compliance with the Minimum MVLS Capital Requirement.

Previous report

If we do not regain compliance with the Minimum MVLS Requirement by the Compliance Date, Nasdaq will provide written notification to us that our common stock will be subject to delisting. At that time, we may appeal Nasdaq’s delisting determination to a Nasdaq Listing Qualifications Panel, or the Panel. However, there can be no assurance that, if we receive a delisting notice and appeal the delisting determination to the Panel, such appeal would be successful. We may also fail to satisfy other Nasdaq listing requirements, which could result in Nasdaq initiating a process to delist our common stock.

Previous report

A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to pursue a strategic option and raise capital through alternative financing sources on terms acceptable to us, or at all. In addition, any potential delisting of our common stock from Nasdaq would also make it more difficult for our stockholders to sell their shares in the public market. Moreover, any delisting of our common stock from The Nasdaq Capital Market or a transfer of the listing of our common stock to another nationally recognized stock exchange having listing standards that are less restrictive than The Nasdaq Capital Market, in each case after a specified cure period, are additional events of default under our Loan Agreement.

Previous report

We intend to monitor the market value of our common stock and may, if appropriate, consider available options to regain compliance with the Minimum MVLS Capital Requirement. However, there can be no assurance that we will be able to regain compliance with Nasdaq’s continued listing requirements or that we will maintain compliance with the other Nasdaq Capital Markets listing requirements*.*