KALA BIO, Inc.
For the period ended Jun 30, 2026. Filed Aug 19, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 19, 2026
KALA$0.16+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001104659-26-062397
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-19.
0001104659-26-098783
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 112 current paragraphs.
45 unchanged; 26 reworded; 31 added; 2 removed; 2 previous and 10 current paragraphs rearranged.
Tables are not compared: 3 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
Business and Operations Update
Current report
Notwithstanding our streamlined cost structure, we have continued to actively operate and develop our business during the period and through the date of this Quarterly Report.
Current report
We have devoted significant time and resources, together with our intellectual property counsel, to maintaining and protecting our intellectual property portfolio. During the period, we strategically renewed, or continued the prosecution and maintenance of, our patent estate across much of the territory in which it is protected, keeping the portfolio in good standing. In connection with this review, which has included consultations with members of prior management and operating personnel, we identified potential additional regulatory designations and molecular characteristics of our intellectual property that we believe may support additional avenues for developing the underlying science, and we are evaluating those opportunities.
Current report
In addition, using the Researgency Platform under our exclusive license, we have processed and analyzed proprietary data sets and other information to train and operate models directed at potential commercial applications. This work remains in development. We have also engaged with industry participants, including at biotechnology industry conferences, to develop further insight into the market for artificial intelligence applications in biotechnology and to inform our commercialization strategy. There can be no assurance that these initiatives will result in commercially viable products or services.
Current report
Strategic Growth and Acquisition Initiatives
Current report
As part of our forward corporate development strategy, we are actively evaluating, and from time to time engaging in preliminary discussions regarding, potential acquisitions, investments, joint ventures and other strategic transactions that we believe may be accretive to our business and synergistic with our data-sovereign biomedical and computing initiatives, including opportunities that may be enabled by the acquisition or development of artificial intelligence data center infrastructure intended to serve this vertical. Having devoted substantial time and resources to administrative matters and to establishing an operational, governance and capital markets foundation for the Company, we believe we are now positioned to pursue growth-oriented transactions consistent with this strategy. In addition, we are exploring a range of opportunities involving companies operating at the intersection of space technology and biotechnology, blockchain-based data and asset management, and the tokenization of assets, with potential applications in biotechnology, intellectual property and other sectors. We have not entered into any definitive agreement, and are not currently a party to any binding commitment, with respect to any such transaction, and there can be no assurance that any of these evaluations or discussions will result in a completed transaction or that any completed transaction will achieve its anticipated benefits. Any such transaction, if pursued, may be funded in whole or in part with net proceeds from this offering, cash on hand, the issuance of equity, equity-linked or debt securities, or a combination of the foregoing.
Current report
Recent Developments
Current report
Reverse Stock Split
Current report
On May 7, 2026, we effected a 1-for-50 reverse stock split of its Common Stock, pursuant to which each fifty (50) shares of Common Stock were converted into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split, and stockholders who otherwise would have been entitled to receive fractional shares are entitled to receive a cash payment in lieu of such fractional shares. All share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented.
Current report
ATM
Current report
On July 22, 2026, we filed an additional prospectus supplement to our Shelf Registration Statement. See “Note 17 - Subsequent Events” for additional information.
Current report
Comparison of the Six Months Ended June 30, 2026 and 2025
Current report
General and administrative expenses
Current report
Research and development expenses
Current report
Interest income
Current report
Interest income was $0.2 million for the six months ended June 30, 2026 and was $0.9 million for the six months ended June 30, 2025. Interest income consists of interest earned on our cash, cash equivalents and short-term investments.
Current report
Interest expense
Current report
We incurred interest expense of $0 for the six months ended June 30, 2026 and $2.2 million for the six months ended June 30, 2025. Interest expense for the six months ended June 30, 2025 was comprised of the contractual coupon interest expense, the amortization of the debt discount and the accretion of the final payment fee associated with our Loan Agreement with Oxford Finance. During the six months ended June 30, 2025, $29.3 million of indebtedness was outstanding under our Loan Agreement until $2.3 million was repaid on June 26, 2025 resulting in an outstanding indebtedness of $26.9 million as of June 30, 2025.
Current report
Grant income
Current report
Other expense, net
Current report
Other expense, net for the six months ended June 30, 2026 was a $0.1 million as compared to $0 for the six months ended June 30, 2025. Other expense, net for the six months ended June 30, 2026 was related to a write-off of receivables we determined to be uncollectible.
Current report
As of the date of this quarterly report, we had cash and cash equivalents of less than $0.1 million. In addition, the outstanding principal amount of the Note with Minglemint Solutions LLC (“Minglemint” or “Borrower”)was $7.0
Current report
million, and accrued and unpaid interest thereon was approximately $0.2 million, for an aggregate outstanding balance of approximately $7.2 million. On July 21, 2026, the Borrower repaid $44,000 under the Note. Pursuant to the Note amendment, we are entitled, at any time and from time to time, to demand repayment of all or any portion of the outstanding principal amount of the Note, together with accrued and unpaid interest thereon, upon no less than 45 days’ notice. We view our cash and cash equivalents, together with amounts collectible under the Note, as our principal sources of near-term liquidity.
Current report
We manage our capital resources first to fund the continued operation and development of our business, as described under “Business and Operations Update” above, within a disciplined operating budget. Secondarily, we seek to preserve financial flexibility to pursue attractive growth opportunities, including potential acquisitions. Over the past several months, we have evaluated and discussed several such opportunities, and the most attractive of them typically require cash availability at or after closing to fund the operations and growth of the acquired or combined business, a consideration we take into account in our spending decisions, including capacity to provide interim or bridge financing if a transaction is pursued. We have not entered into any definitive agreement with respect to any such transaction, and there can be no assurance that we will pursue or consummate any transaction. Consistent with these objectives, during the second quarter of 2026 and through the date of this Quarterly Report on Form 10-Q, we have taken the following measures:
Current report
On May 7, 2026, we filed a new registration statement on Form S-3 (File No. 333-295667), as amended, which was declared effective on June 25, 2026. Subsequent to quarter end, on July 22, 2026, we filed an additional prospectus supplement in connection with the ATM Program. See “Note 11 – Registered Offerings” and “Note 17 - Subsequent Events” above for additional information
Current report
We are working with Younet and our scientific advisors on a commercial plan for the Researgency Platform, and we continue to assess the scope and pace of further development as part of its commercialization strategy. We retain the exclusive license to the Researgency Platform under the Younet License Agreement. However, there can be no assurance that these efforts will be successful.
Current report
Funding Requirements and Going Concern
Current report
We expect to continue to fund our operating expenses, lease obligations and capital expenditure requirements through a combination of our existing cash and cash equivalents and collections under the Note, within the operating budget described above under “Liquidity and Capital Resources,” supplemented as appropriate by potential sales under our ATM program and other financing alternatives. In addition, we are evaluating potential acquisition and growth opportunities that, if pursued, may require additional cash availability, including potential interim or bridge financing, a consideration we take into account in managing our resources, subject at all times to maintaining sufficient liquidity for our operations.
Current report
The Note is payable at our demand on no less than 45 days’ notice, bears interest at 8.0% per annum and is secured by a continuing first priority lien on and security interest of the Borrower. Through the date of this Quarterly Report, the Borrower has made repayments under the Note, including $44,000 on July 21, 2026. After consideration of our current operating plan and operating budget, including the measures described above and expected collections under the Note, including the approximately $1.0 million demanded pursuant to the Call Notice delivered on August 14, 2026, management has concluded that our existing cash and cash equivalents, together with such collections, will be sufficient to fund our operating expenses, lease obligations and capital expenditure requirements for the continued operation and
Current report
development of the Researgency platform, for at least twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Current report
As of the date of this quarterly report, we maintained a positive working capital ratio (current assets divided by current liabilities), indicating that we can cover our short-term operations and mitigate immediate going-concern risk.
Removed paragraphs (2)
Previous report
Other income (expense), net
Previous report
Other income, net for the three months ended March 31, 2026 was $0.1 million as compared to $0 for the three months ended March 31, 2025. The increase was primarily related to gains associated with settlements*.*
Reworded paragraphs (26)
Previous wording
Thefollowing discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”), which was filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2026. This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. The words “anticipate,” “believe,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. Unless otherwise indicated, references to “we,” “us,” “our,” or the “Company” refer to KALA BIO, Inc. (the “Company”).
Current wording
Thefollowing discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission on April 15, 2026. This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. The words “anticipate,” “believe,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.
Previous wording
We are a biopharmaceutical company in transition, evaluating the development of a dedicated, on-premises artificial intelligence (AI) infrastructure platform for the biotechnology industry. Our current focus is leveraging our mesenchymal stem cell secretome platform (the “MSC-S platform”) to test development of a scalable AI platform-as-a-service business to deploy secure, purpose-built AI systems directly within biotechnology and pharmaceutical client environments. We have historically been engaged in the research, development and commercialization of innovative therapies for rare and severe diseases of the front and back of the eye. Our lead product candidate was KPI-012 (“KPI-012”), an MSC-S, which we acquired from Combangio on November 15, 2021. KPI-012 was in clinical development for the treatment of persistent corneal epithelial defects (“PCED”), a rare disease of impaired corneal healing. Based on the results of a Phase 1b clinical safety and efficacy trial of KPI-012 in patients with PCED, we submitted an investigational new drug application to the U.S. Food and Drug Administration (the “FDA”), which was accepted in December 2022. In February 2023, we dosed our first patient in the United States in our CHASE trial (the “CHASE trial”). By September 2025, the CHASE trial did not meet its primary endpoints, and we determined to discontinue our development of KPI-012 and the MSC-S platform. We have since expanded upon our business to evaluate strategic alternatives for our legacy MSC-S assets and capitalize on the substantial intellectual property (IP), proprietary biological datasets, and research experience generated during the clinical trials by starting development of an AI platform.
Current wording
We are a biopharmaceutical company in transition, evaluating the development of a dedicated, on-premises artificial intelligence (AI) infrastructure platform for the biotechnology industry. Our current focus is leveraging our mesenchymal stem cell secretome (“MSC-S”) platform to test the development of a scalable AI platform-as-a-service business to deploy secure, purpose-built AI systems directly within biotech and pharmaceutical client environments. We have historically been engaged in the research, development and commercialization of innovative therapies for rare and severe diseases of the front and back of the eye. Our lead product candidate was KPI-012, MSC-S, which we acquired from Combangio, Inc. (“Combangio”) on November 15, 2021. KPI-012 was in clinical development for the treatment of persistent corneal epithelial defects (“PCED”), a rare disease of impaired corneal healing. Based on the results of a Phase 1b clinical safety and efficacy trial of KPI-012 in patients with PCED, we submitted an investigational new drug application to the U.S. Food and Drug Administration (“FDA”), which was accepted in December 2022. In February 2023, we dosed our first patient in the United States in our CHASE (Corneal Healing After SEcretome therapy) Phase 2b clinical trial of KPI-012 for PCED (the “CHASE trial”). By September 2025, the CHASE trial had not met its primary endpoints, and was decided to discontinue development of KPI-012 and the MSC-S platform. We have since expanded upon our business to evaluate strategic alternatives for our legacy MSC-S assets and capitalize on the substantial intellectual property (IP), proprietary biological datasets, and research experience generated during the clinical trials by starting development of an AI platform.
Previous wording
We are in the process of evaluating and transitioning from historical biologics research and development (R&D) activities to an “AI platform-as-a-service” model intended to provide dedicated, on-premises artificial intelligence infrastructure solutions to biotechnology and pharmaceutical customers. Following the discontinuation of the CHASE Phase 2b clinical trial of KPI-012 in September 2025 and the subsequent resolution of our obligations to Oxford Finance, our current operating focus is (i) the monetization or out-licensing of remaining biologics-related assets and (ii) development and commercialization planning for our licensed Researgency agentic AI platform (the “Researgency Platform”). This transition is expected to impact our operating expenses, capital requirements, and sources and uses of cash as described further below.
Current wording
We are in the process of transitioning from historical biologics research and development (R&D) activities to an “AI platform-as-a-service” model that provides dedicated, on-premises artificial intelligence infrastructure solutions to biotechnology and pharmaceutical customers. Following the discontinuation of the CHASE Phase 2b clinical trial of KPI-012 in September 2025 and the subsequent resolution of our obligations to Oxford Finance, our current operating focus is (i) the monetization or out-licensing of remaining biologics-related assets and (ii) development and commercialization planning for our licensed Researgency agentic AI platform (the “Researgency Platform”). This transition is expected to impact our operating expenses, capital requirements, and sources and uses of cash as described further below.
Previous wording
We have refocused our business on two complementary strategic priorities. First, we are preserving and seeking to maximize the value of our MSC-S biologics asset portfolio, including the KPI-012 and KPI-014 product candidates and related intellectual property, through potential licensing, collaboration, and other strategic arrangements with third parties, as well as through evaluation of opportunities to resume preclinical development activities subject to the availability of additional capital. Second, we are building our Researgency business through our exclusive license for Researgency Platform, which we intend to deploy as a dedicated, on-premises AI infrastructure solution for biotechnology and pharmaceutical companies. We believe this dual-track strategy preserves and creates optionality with respect to our biologics assets while simultaneously pursuing a potential business opportunity in the rapidly growing
Current wording
We have refocused our business on two complementary strategic priorities. First, we are preserving and seeking to maximize the value of our MSC-S biologics asset portfolio, including the KPI-012 and KPI-014 product candidates and related intellectual property, through potential licensing, collaboration, and other strategic arrangements with third parties, as well as through evaluation of opportunities to resume preclinical development activities subject to the availability of additional capital. Second, we are building our Researgency business through our exclusive license for the Researgency Platform, which we intend to deploy as a dedicated, on-premises AI infrastructure solution for biotechnology and pharmaceutical companies. We believe this dual-track strategy preserves and creates optionality around our biologics assets while simultaneously pursuing a potential business opportunity in the rapidly growing AI platform market for the biotechnology industry.
Previous wording
Since inception, we have incurred significant losses from operations and negative cash flows from operations. Our net losses were $1.6 million and $27.0 million for the three months ended March 31, 2026 and year ended December 31, 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $696.5 million. We have historically financed our operations primarily through proceeds from the sale of our Commercial Business to Alcon, our initial public offering (the “IPO”), follow-on public Common Stock offerings and sales of our Common Stock under our sales agreement with H.C. Wainwright & Co., LLC (“Wainwright”) in at-the-market offerings, private placements of Common Stock and/or preferred stock (including our most recent private placements resulting in gross proceeds of approximately $4.2 million in January 2026).
Current wording
Since inception, we have incurred significant losses from operations and negative cash flows from operations. Our net losses were $3.2 million and $27.0 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $698.1 million. We have historically financed our operations primarily through proceeds from the sale of our Commercial Business to Alcon, our initial public offering (the “IPO”), follow-on public Common Stock offerings and sales of our Common Stock under our sales agreement with H.C. Wainwright & Co., LLC (“Wainwright”) in at-the-market offerings, private placements of Common Stock and/or preferred stock (including our most recent private placements resulting in gross proceeds of approximately $4.2 million in January 2026).
Previous wording
General and administrative expenses were $1.7 million for the three months ended March 31, 2026, compared to $4.6 million for the three months ended March 31, 2025, which was a decrease of $2.9 million. The decrease in general and administrative expenses for the three months ended March 31, 2026 was due to a decrease of approximately $3.0 million in employee-related costs and stock-based compensation, primarily a result of our decision to cease development of KPI-012 and our MSC-S platform, including costs related to restructuring and wind-down activities, partially offset by $0.1 million increased legal and professional services support in connection with those activities.
Current wording
General and administrative expenses were $1.7 million for the three months ended June 30, 2026, compared to $4.6 million for the three months ended June 30, 2025, which was a decrease of $3.0 million. The decrease in general and administrative expenses for the three months ended June 30, 2026 was primarily due to a decrease of approximately $3.2 million in employee-related costs and stock-based compensation, primarily a result of our decision to cease development of KPI-012 and our MSC-S platform, including costs related to restructuring and wind-down activities, partially offset by $0.2 million increased legal and professional services support in connection with those activities..
Previous wording
We expense research and development costs as they are incurred. We expense costs relating to the production of inventory for our product candidates, as research and development expenses within our consolidated statements of operations and comprehensive loss in the period incurred, unless we believe regulatory approval and subsequent commercialization of the product candidate is probable and we expect the future economic benefit from sales of the drug to be realized. Research and development costs that are paid in advance of performance are capitalized as a prepaid expense until incurred. We track outsourced development costs by development program but do not allocate personnel costs, payments made under license agreements or other costs to specific product candidates or development programs. These costs are included in employee related costs and other research and development costs in the line items in the above table.
Current wording
We expense research and development costs as they are incurred. We expense costs relating to the production of inventory for our product candidates, as research and development expenses within our consolidated statements of operations and comprehensive loss in the period incurred, unless we believe regulatory approval and subsequent commercialization of the product candidate is probable and we expect the future economic benefit from sales of the drug to be realized. Research and development costs that are paid in advance of performance are capitalized as a prepaid expense until incurred. We track outsourced development costs by development program but do not allocate personnel
Previous wording
Research and development expenses were less than $0.1 million for the three months ended March 31, 2026, compared to $6.1 million for the three months ended March 31, 2025, a decrease of $6.0 million. The decrease was primarily driven by a decrease in KPI-012 clinical development costs following our discontinuation of our MSC-S platform and the decrease in personnel and facilities expenses after workforce reductions.
Current wording
Research and development expenses were $0.1 million for the three months ended June 30, 2026, compared to $6.2 million for the three months ended June 30, 2025, a decrease of $6.2 million. The decrease was primarily driven by a decrease in KPI-012 clinical development costs following our discontinuation of our MSC-S platform and the decrease in personnel and facilities expenses after workforce reductions.
Previous wording
Loss on fair value remeasurement of contingent consideration for the three months ended March 31, 2026 and 2025 was $0 and less than $0.1 million, respectively. The decrease was primarilydue to our decision to cease development of KPI-012 and our MSC-S platform.
Current wording
Loss on fair value remeasurement of contingent consideration for the three months ended June 30, 2026 and 2025 was $0 and less than $0.2 million, respectively. The decrease was primarilydue to our decision to cease development of KPI-012 and our MSC-S platform.
Previous wording
Interest income was $0.1 million and $0.5 million for the three months ended March 31, 2026 and 2025. Interest income consists of interest earned on our cash, cash equivalents and short-term investments.
Current wording
Interest income was $0.1 million for the three months ended June 30, 2026 and was $0.4 million for the three months ended June 30, 2025. Interest income consists of interest earned on our cash, cash equivalents and short-term investments.
Previous wording
We incurred interest expense of $0 and $1.1 million for the three months ended March 31, 2026 and 2025, respectively. Interest expense for the three months ended March 31, 2025 was comprised of the contractual coupon interest expense, the amortization of the debt discount and the accretion of the final payment fee associated with Loan and Security Agreement, dated as of May 4, 2021, by and among us, Combangio, Inc. and Oxford Finance LLC, as lender and collateral agent (as amended, the “Loan Agreement”). During the three months ended March 31, 2026 and 2025, $0 and $29.3 million, respectively, of indebtedness was outstanding under our Loan Agreement.
Current wording
We incurred interest expense of $0 million for the three months ended June 30, 2026 and $1.1 million for the three months ended June 30, 2025. Interest expense for the three months ended June 30, 2025 was comprised of the contractual coupon interest expense, the amortization of the debt discount and the accretion of the final payment fee associated with Loan and Security Agreement, dated as of May 4, 2021, by and among us, Combangio, Inc. and Oxford Finance LLC, as lender and collateral agent (as amended, the “Loan Agreement”). During the three months ended June 30, 2026 and 2025, $0 and $26.9 million of indebtedness was outstanding under our Loan Agreement.
Previous wording
Grant income for the three months ended March 31, 2026 and 2025 was $0 and $2.4 million, respectively, related to an award agreement with the California Institute for Regenerative Medicine for a $15,000 grant (as amended from time to time, the “CIRM Award”). On September 29, 2025, we announced that the CHASE trial of KPI-012 for the treatment of PCED did not meet the primary endpoint of complete healing of PCED as measured by corneal fluorescein staining. The CHASE trial also failed to achieve statistical significance for key secondary efficacy endpoints and did not show any meaningful difference between either KPI-012 treatment arm and the placebo arm. Based on the CHASE trial results, we determined to cease development of KPI-012 and our MSC-S platform, and as such, we do not expect to receive grant income relating to the CIRM Award in the near future.
Current wording
Grant income for the three months ended June 30, 2026 and 2025 was $0 and $0.5 million, respectively, related to an award agreement with the California Institute for Regenerative Medicine for a $15.0 million grant (as amended from time to time, the “CIRM Award”). On September 29, 2025, we announced that the CHASE trial of KPI-012 for the treatment of PCED did not meet the primary endpoint of complete healing of PCED as measured by corneal fluorescein staining. The CHASE trial also failed to achieve statistical significance for key secondary efficacy endpoints and did not show any meaningful difference between either KPI-012 treatment arm and the placebo arm. Based on the CHASE trial results, we determined to cease development of KPI-012 and our MSC-S platform, and as such, we do not expect to receive grant income relating to the CIRM Award in the near future.
Previous wording
Based on our current operating plan, including anticipated expenses related to our Researgency initiative and routine corporate costs, we believe our existing cash and cash equivalents will fund operations into the second quarter of 2027. We are evaluating additional financing alternatives, including potential sales under our ATM program (as defined below) and private placements, and pursuing asset monetization opportunities. If these actions are not successful or timely, we will need to further reduce or defer planned expenditures, which could materially affect our strategy. Our ability to raise additional capital may be constrained by market conditions, our The Nasdaq Capital Market (“Nasdaq”) continued listing compliance efforts, and investor perceptions regarding our liquidity position and historical operating losses. Our efforts to regain compliance with Nasdaq’s market value of listed securities and minimum bid price requirements as discussed below, and any actions we may take to address compliance, including the reverse stock split effected on May 8, 2026, subsequent to March 31, 2026 (the “Reverse Stock Split”), could affect our access to and cost of capital. In addition, the timing and availability of sales under our ATM program depend on market conditions and trading windows. If we are unable to raise additional capital as contemplated, we may need to implement additional cost reductions or delay elements of our Researgency platform strategy.
Current wording
Based on our current operating plan and the operating budget described above, we believe our existing cash and cash equivalents, together with amounts demanded under the Call Notice and additional expected collections under the Note, will be sufficient to fund our operating expenses and capital expenditure requirements through the third quarter of 2027. We are also evaluating additional financing alternatives, including potential sales under our ATM program (as defined below), private placements, and asset monetization opportunities. If these actions are unsuccessful or not timely, we will need to further reduce or defer planned expenditures, which could materially affect our strategy.
Previous wording
In addition, on January 20, 2026, we received a letter from the Staff indicating that, based upon the closing bid price of the Company’s Common Stock for the 30 consecutive business days between December 3, 2025, to January 16, 2026, the Company did not meet the minimum bid price of $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”). The letter also indicated that we will be provided with a compliance period of 180 calendar days, or until July 20, 2026 (the “Minimum Bid Price Compliance Period”), in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A). On May 8, 2026, we effected the Reverse Stock Split to seek to regain compliance with the Minimum Bid Price Rule.
Current wording
In addition, on January 20, 2026, we received a letter from the Staff indicating that, based upon the closing bid price of the Company’s Common Stock for the 30 consecutive business days between December 3, 2025, to January 16, 2026, the Company did not meet the minimum bid price of $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”). The letter also indicated that we will be provided with a compliance period of 180 calendar days, or until July 20, 2026 (the “Minimum Bid Price Compliance Period”), in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A). On May 8, 2026, we effected the Reverse Stock Split to seek to regain compliance with the Minimum Bid Price Rule. On June 11, 2026, Nasdaq notified us that we had regained compliance with the Minimum Bid Price Rule after the closing bid price of our Common Stock had been at or greater than $1.00 per share for the last 10 consecutive business days, from May 28, 2026, to June 10, 2026.
Previous wording
We filed a prospectus supplement, dated January 8, 2026, including an accompanying base prospectus, dated May 11, 2023, contained therein (the “ATM Prospectus Supplement”), which together form a part of the Company’s shelf registration statement on Form S-3, as amended (File No. 333-270263), initially filed with the SEC on March 3, 2023 and declared effective by the SEC on May 11, 2023 in connection with the offer and sale of shares of Common Stock pursuant to the ATM Agreement. The aggregate market value of the shares of Common Stock eligible for sale under the prospectus supplement is currently $15.0 million.
Current wording
We filed a prospectus supplement, dated January 8, 2026, including an accompanying base prospectus, dated May 11, 2023, contained therein (the “ATM Prospectus Supplement”), which together form a part of the Company’s shelf registration statement on Form S-3, as amended (File No. 333-270263), initially filed with the SEC on March 3, 2023 and declared effective by the SEC on May 11, 2023 in connection with the offer and sale of shares of Common Stock pursuant to the ATM Agreement.
Previous wording
for the sale of shares of Common Stock, including the number of shares to be issued, the time period during which sales are requested to be made, limitations on the number of shares that may be sold on any trading day and any minimum price below which sales may not be made. Subject to the terms and conditions of the ATM Agreement, Wainwright may sell the shares by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including without limitation, sales made directly on Nasdaq or on any other existing trading market for the Common Stock or to or through a market maker. In addition, with the Company’s prior written approval, Wainwright may also sell shares in privately negotiated transactions or block transactions. The gross sales price of the shares of Common Stock sold by Wainwright under the ATM Agreement as sales agent is the market price for the shares of Common Stock on Nasdaq at the time of sale.
Current wording
Pursuant to the terms of the ATM Agreement, Wainwright agreed to use its commercially reasonable efforts, consistent with applicable state and federal law, rules and regulations, and the rules of the Nasdaq Capital Market, to sell the shares of Common Stock from time to time. Under the ATM Agreement, the Company may designate the parameters for the sale of shares of Common Stock, including the number of shares to be issued, the time period during which sales are requested to be made, limitations on the number of shares that may be sold on any trading day and any minimum price below which sales may not be made. Subject to the terms and conditions of the ATM Agreement, Wainwright may sell the shares by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including without limitation, sales made directly on Nasdaq or on any other existing trading market for the Common Stock or to or through a market maker. In addition, with the Company’s prior written approval, Wainwright may also sell shares in privately negotiated transactions or block transactions. The gross sales price of the shares of Common Stock sold by Wainwright under the ATM Agreement as sales agent is the market price for the shares of Common Stock on Nasdaq at the time of sale.
Previous wording
On November 25, 2025, the Company entered into a Securities Purchase Agreement (the “November 2025 Purchase Agreement”), with a certain investor (the “Series AA Investor”), pursuant to which the Company agreed to issue and sell, in a private placement, shares of the Company’s Series AA Convertible Non-Redeemable Preferred Stock (“Series AA Preferred Stock”) and the Series AAA Convertible Non-Redeemable Preferred Stock (“Series AAA Preferred Stock”) of the Company in two closings for aggregate gross proceeds of up to $6.0 million.
Current wording
Purchase Agreement”), with a certain investor (the “Series AA Investor”), pursuant to which the Company agreed to issue and sell, in a private placement, shares of the Company’s Series AA Convertible Non-Redeemable Preferred Stock (“Series AA Preferred Stock”) and the Series AAA Convertible Non-Redeemable Preferred Stock (“Series AAA Preferred Stock”) of the Company in two closings for aggregate gross proceeds of up to $6.0 million.
Previous wording
On January 30, 2026, we entered into a Securities Purchase Agreement (the “January 2026 Purchase Agreement”), pursuant to which we issued and sold to the Series AAA Investors in a private placement (the “January 2026 Private Placement”), an aggregate of 2,100,000 shares of Series AAA Preferred Stock at a price per share equal to $2.00, for aggregate gross proceeds of $4.2 million. The closing of the January 2026 Private Placement occurred on January 30, 2026. Each share of Series AAA Preferred Stock was convertible into 8.4 shares of Common Stock for an aggregate total of 17,640,000 shares of Common Stock issuable upon conversion of the Series AAA Preferred Stock. As of March 31, 2026, all of the shares of Series AAA Preferred Stock have been converted into shares of Common Stock and there are no Series AAA Preferred Shares outstanding.
Current wording
On January 30, 2026, we entered into a Securities Purchase Agreement (the “January 2026 Purchase Agreement”), pursuant to which we issued and sold to the Series AAA Investors in a private placement (the “January 2026 Private Placement”), an aggregate of 2,100,000 shares of Series AAA Preferred Stock at a price per share equal to $2.00, for aggregate gross proceeds of $4.2 million. The closing of the January 2026 Private Placement occurred on January 30, 2026. Each share of Series AAA Preferred Stock was convertible into 8.4 shares of Common Stock for an aggregate total of 17,640,000 shares of Common Stock issuable upon conversion of the Series AAA Preferred Stock. As of June 30, 2026, all of the shares of Series AA and AAA Preferred Stock have been converted into shares of Common Stock and there are no Preferred Shares outstanding.
Previous wording
repaid will accrue interest at the default interest rate of 13.0%.Additionally, the Note is secured by a continuing first priority lien and security interest in all fixtures and personal property of the Borrower (the “Collateral”), pursuant to the security agreement with the Borrower dated February 9, 2026 (the “Security Agreement”). The Collateral includes, but is not limited to, all accounts, goods, documents, instruments, securities and investment properties, money, accounts and rights to payment of the Borrower, and any proceeds, records and obligations relating to the foregoing, as more fully detailed in the Security Agreement.
Current wording
Additionally, the Note is secured by a continuing first priority lien and security interest in all fixtures and personal property of the Borrower (the “Collateral”), pursuant to the security agreement with the Borrower dated February 9, 2026 (the “Security Agreement”). The Collateral includes, but is not limited to, all accounts, goods, documents, instruments, securities and investment properties, money, accounts and rights to payment of the Borrower, and any proceeds, records and obligations relating to the foregoing, as more fully detailed in the Security Agreement.
Previous wording
On May 11, 2026, the Company and the Borrower entered into a Note Amending Agreement (the “Loan Amendment”) which added a provision that the Company has the right at any time and from time to time, on no less than 45 days’ notice to demand repayment of all or any portion of the outstanding principal amount of the Loan, including all accrued and unpaid interest thereon and any other amounts owing under the Note by delivering written notice to the Borrower (a “Call Notice”). The Borrower agrees to repay the amount in the Call Notice, and any amount not timely
Current wording
On May 11, 2026, the Company and the Borrower entered into a Note Amending Agreement (the “Loan Amendment”) which added a provision that the Company has the right at any time and from time to time, on no less than 45 days’ notice to demand repayment of all or any portion of the outstanding principal amount of the Loan, including all accrued and unpaid interest thereon and any other amounts owing under the Note by delivering written notice to the Borrower (a “Call Notice”). The Borrower agrees to repay the amount in the Call Notice, and any amount not timely repaid will accrue interest at the default interest rate of 13.0%.
Previous wording
On March 3, 2026, we entered into a Platform Development and Exclusive License Agreement (the “Younet License Agreement”) pursuant to which we obtained a worldwide exclusive license of Younet’s Researgency Platform, together with associated trademarks and intellectual property. The term of the Younet License Agreement is for 12 months following the Effective Date (the “Initial Term”), with the option to renew the agreement for successive 12 months terms (each, a “Renewal Term”), in each case by providing notice to Younet pursuant to the terms of the Agreement (the “Extension Notice”). Pursuant to the Agreement, Younet agreed to provide us certain deliverables and services related to the Researgency Platform, with certain additional deliverables to be provided by Younet in the event of a Renewal Term, in each case with all operating costs relating to the Researgency Platform to be paid by us.
Current wording
months following the Effective Date (the “Initial Term”), with the option to renew the agreement for successive 12 months terms (each, a “Renewal Term”), in each case by providing notice to Younet pursuant to the terms of the Agreement (the “Extension Notice”). Pursuant to the Agreement, Younet agreed to provide us certain deliverables and services related to the Researgency Platform, with certain additional deliverables to be provided by Younet in the event of a Renewal Term, in each case with all operating costs relating to the Researgency Platform to be paid by us.
Previous wording
As of March 31, 2026 and 2025, we had $1.8 million and $7.6 million in cash and cash equivalents, respectively.
Current wording
As of June 30, 2026 and December 31, 2025, we had $0.2 million and $7.6 million in cash and cash equivalents, respectively.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2026 was $2.9 million, compared to $8.8 million for the three months ended March 31,2025, a decrease of $6.0 million, primarily due to a decrease in net loss adjusted for non-cash charges of $1.4 million.
Current wording
Net cash used in operating activities for the six months ended June 30, 2026 was $4.4 million, compared to $16.6 million for the six months ended June 30, 2025, a decrease of $12.1 million, primarily due to a decrease in net loss adjusted for non-cash charges of $12.6 million, partially offset by $0.5 million increase inworking capital.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2026 was related to the short-term investment loan. There was no cash used in or provided by investing activities for the three months ended March 31, 2025.
Current wording
Net cash used in investing activities for the six months ended June 30, 2026 and 2025 was $7.0 million and less than $0.1 million, respectively. Net cash used in investing activities for the six months ended June 30, 2026 was related to the Note.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2026 was $4.1 million, primarily due to the net proceeds from the sale of 2,100,000 shares of the Series AAA Preferred Stock at $2.00 per share.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2026 was $4.1 million, primarily due to the net proceeds from the sale of 2,100,000 shares of the Series AAA Preferred Stock at $2.00 per share.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2025 was $0.1 million, primarily due to payment of issuance costs related tothe sale of common stock and shares of our Series I Preferred Stock in our December 2024 private placement.
Current wording
Net cash used in financing activities for the six months ended June 30, 2025 was $2.7 million, primarily due to a $2.5 million repayment of principal and payment fee on our Loan Agreement and $0.1 million payment of issuance costs related tothe sale of common stock and shares of our Series I Preferred Stock in our December 2024 private placement.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
costs, payments made under license agreements or other costs to specific product candidates or development programs. These costs are included in employee related costs and other research and development costs in the line items in the above table.
Current report — wording carried from elsewhere
The following table summarizes the results of our operations for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
General and administrative expenses were $3.4 million for the six months ended June 30, 2026, comparable to $9.2 million for the six months ended June 30, 2025, which was a decrease of $5.8 million. The decrease in general and administrative expenses for the six months ended June 30, 2026 was primarily due to a $6.3 million decrease inemployee-related costs and stock-based compensation, primarily a result of our decision to cease development of KPI-012 and our MSC-S platform, including costs related to restructuring and wind-down activities, partially offset by a $0.4 million increase inlegal and professional services support in connection with those activities.
Current report — wording carried from elsewhere
The following table summarizes the research and development expenses incurred during the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Research and development expenses were $0.1 million for the six months ended June 30, 2026, compared to $12.3 million for the six months ended June 30, 2025, which was a decrease of $12.2 million. The decrease was primarily driven by a decrease in KPI-012 clinical development costs following our discontinuation of our MSC-S platform and the decrease in personnel and facilities expenses after workforce reductions.
Current report — wording carried from elsewhere
Loss on fair value remeasurement of contingent consideration
Current report — wording carried from elsewhere
Loss on fair value remeasurement of contingent consideration for the six months ended June 30, 2026 and 2025 was $0 and $0.2 million, respectively. The decrease was primarilydue to our decision to cease development of KPI-012 and our MSC-S platform.
Current report — wording carried from elsewhere
Grant income for the six months ended June 30, 2026 and 2025 was $0 and $2.9 million, respectively, related to an award agreement with the California Institute for Regenerative Medicine for a $15.0 million grant (as amended from time to time, the “CIRM Award”). On September 29, 2025, we announced that the CHASE trial of KPI-012 for the treatment of PCED did not meet the primary endpoint of complete healing of PCED as measured by corneal fluorescein staining. The CHASE trial also failed to achieve statistical significance for key secondary efficacy endpoints and did not show any meaningful difference between either KPI-012 treatment arm and the placebo arm. Based on the CHASE trial results, we determined to cease development of KPI-012 and our MSC-S platform, and as such, we do not expect to receive grant income relating to the CIRM Award in the near future.
Current report — wording carried from elsewhere
On November 25, 2025, the Company entered into a Securities Purchase Agreement (the “November 2025
Current report — wording carried from elsewhere
On March 3, 2026, we entered into a Platform Development and Exclusive License Agreement (the “Younet License Agreement”) pursuant to which we obtained a worldwide exclusive license of Younet’s Researgency Platform, together with associated trademarks and intellectual property. The term of the Younet License Agreement is for 12
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
AI platform market for the biotechnology industry.
Previous report — wording carried elsewhere
Pursuant to the terms of the ATM Agreement, Wainwright agreed to use its commercially reasonable efforts, consistent with applicable state and federal law, rules and regulations, and the rules of the Nasdaq Capital Market, to sell the shares of Common Stock from time to time. Under the ATM Agreement, the Company may designate the parameters