Kalaris Therapeutics, Inc.

Previous wording

We are developing TH103, a novel, clinical stage anti-vascular endothelial growth factor (“VEGF”) drug, engineered to potentially provide longer lasting and increased anti-VEGF activity in patients with exudative and neovascular retinal diseases. TH103 is a fully humanized recombinant fusion protein, functioning as a “decoy receptor” (a VEGF trap), leveraging salient molecular properties of the human body’s native, highest affinity VEGF receptor 1. In head-to-head preclinical studies, TH103 showed more anti-VEGF activity and longer duration of activity compared to aflibercept, the current global market-leading anti-VEGF agent, which also functions as a decoy receptor VEGF trap but differs from TH103 in key molecular elements.

Current wording

We are 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. TH103 is a fully humanized recombinant fusion protein, functioning as a “decoy receptor” (a VEGF trap), leveraging salient molecular properties of the human body’s native, highest affinity VEGF receptor 1. In head-to-head preclinical studies, TH103 showed more anti-VEGF activity and longer duration of activity compared to aflibercept, the current global market-leading anti-VEGF agent, which also functions as a decoy receptor VEGF trap but differs from TH103 in key molecular elements. Initial data from our Phase 1a single ascending dose (“SAD”) trial of TH103 in treatment-naïve neovascular Age-related Macular Degeneration (“nAMD”) patients showed that TH103 was generally well tolerated and exhibited improvements on functional and anatomical outcomes at 1-month post-dosing. Preliminary single dose pharmacokinetic data and retreatment results provide evidence that TH103 may offer extended treatment durability after a standard four-dose loading regimen.

Previous wording

We are enrolling an open label Phase 1a single ascending dose clinical trial of TH103 in patients with neovascular Age-related Macular Degeneration (“nAMD”), a leading cause of blindness in the United States and Europe that affected an estimated 1.6 million adults in the United States in 2023, and we expect to report initial clinical data, including safety, preliminary efficacy (e.g., visual acuity and lesion morphology), and pharmacokinetics, from the Phase 1a clinical trial by year end 2025. We are also enrolling a Phase 1b/2 multiple ascending dose clinical trial of TH103 in patients with nAMD, which is intended to build upon our ongoing Phase 1a clinical trial. The Phase 1b/2 dose-finding trial is designed to evaluate multiple dose levels of TH103 in up to 80 nAMD patients. In the trial, patients are expected to receive four initial monthly intravitreal injections of TH103 and assessments are expected to include safety and preliminary efficacy with a primary time point for analysis at one month following the last injection. Patients will then be followed in an extension phase of the study. The Phase 1b/2 clinical trial replaces a smaller Part 2 design originally planned to follow the ongoing Phase 1a clinical trial, and we expect to report initial clinical data from the Phase 1b/2 clinical trial in the second half of 2026. We also plan to expand the development of TH103 beyond nAMD into other prevalent VEGF-mediated retinal diseases, such as Diabetic Macular Edema (“DME”), diabetic retinopathy (“DR”), and Retinal Vein Occlusion (“RVO”).

Current wording

We are investigating TH103 as a treatment for patients with nAMD, a leading cause of blindness in the United States and Europe that affect an estimated 1.6 million adults in the United States. We are currently conducting a Phase 1b/2 multiple ascending dose clinical trial of TH103 in patients with nAMD, which is intended to build upon our ongoing Phase 1a single ascending dose clinical trial. The Phase 1b/2 dose-finding trial is designed to evaluate multiple dose levels of TH103 in approximately 60 to 80 nAMD patients. In the trial, patients are expected to receive four initial monthly intravitreal injections of TH103 and assessments are expected to include safety and preliminary efficacy with a primary time point for analysis at one month following the last injection. Patients will then be followed in an extension phase of the study. Following the implementation of additional manufacturing process refinements, new batches of clinical trial material were manufactured and scheduled to be delivered to trial sites in mid-May 2026 for our ongoing Phase 1b/2 multiple ascending dose study, and we are actively screening patients in anticipation of receiving the new batches and resuming dosing. Enrolled patients will receive four monthly loading doses of TH103 at a dose of 1.0 mg followed by dose escalation in subsequent cohorts per protocol. We expect to report preliminary data from the Phase 1b/2 clinical trial in the first half of 2027. Assuming successful completion of the ongoing Phase 1b/2 clinical trial of TH103, and subject to the favorable results from such trial and discussions with regulators, we intend to initiate Phase 3 clinical trials of TH103 for nAMD by year-end 2027. We also plan to expand the development of TH103 beyond nAMD into other prevalent VEGF-mediated retinal diseases, such as Diabetic Macular Edema (“DME”), diabetic retinopathy (“DR”), and Retinal Vein Occlusion (“RVO”).

Previous wording

Since our inception in September 2019, we have devoted substantially all of our resources to organizing and staffing, business planning, raising capital, acquiring technology, establishing our intellectual property portfolio and performing research and development of our product candidate. We do not have any products approved for sale and have not generated any revenue from product sales or otherwise. We have incurred significant losses and negative cash flows from operations since our inception. Our net losses were $33.4 million and $47.1 million for the nine months ended September 30, 2025 and 2024, respectively. Our negative cash flows from operations were $31.3 million and $12.8 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $150.0 million. To date, we have funded our operations primarily from sales of our redeemable convertible preferred stock, issuances of convertible promissory notes and a simple agreement for future equity (“SAFE”), and from cash and cash equivalents of AlloVir, Inc. (“AlloVir”) received in the Merger (as defined below). From inception through September 30, 2025, we have received gross proceeds of $67.5 million from sales of redeemable convertible preferred stock, issuances of convertible promissory notes and a SAFE, and we received cash and cash equivalents of AlloVir of approximately $102.1 million in the Merger.

Current wording

Since our inception in September 2019, we have devoted substantially all of our resources to organizing and staffing, business planning, raising capital, acquiring technology, establishing our intellectual property portfolio and performing research and development of our product candidate. We do not have any products approved for sale and have not generated any revenue from product sales or otherwise. We have incurred significant losses and negative cash flows from operations since our inception. Our net losses were $10.9 million and $10.2 million for the three months ended March 31, 2026 and 2025, respectively. Our negative cash flows from operations were $11.6 million and $7.4 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $170.9 million. To date, we have funded our operations primarily from sales of our redeemable convertible preferred stock, issuances of convertible promissory notes and a simple agreement for future equity (“SAFE”), from cash and cash equivalents of AlloVir, Inc. (“AlloVir”) received in the Merger (as defined below), and from proceeds from the 2025 Private Placement (as defined below).

Previous wording

As of September 30, 2025, we had $77.0 million in cash, cash equivalents and short-term investments. Based on our current operating plans, our management expects that our cash, cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements into 2027. However, management has based these estimates on assumptions that may prove to be wrong, and our operating plans may change as a result of many factors currently unknown to us. In addition, changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect.

Current wording

As of March 31, 2026, we had $104.9 million in cash, cash equivalents and marketable securities. Based on our current operating plans, our management expects that our cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2027. However, management has based these estimates on assumptions that may prove to be wrong, and our operating plans may change as a result of many factors currently unknown to us. In addition, changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect.

Previous wording

generate revenue from commercial sales of product candidates that we may receive marketing approval;

Current wording

generate revenue from commercial sales of product candidates that may receive marketing approval;

Previous wording

The disruption and volatility in the global and domestic capital markets resulting from heightened inflation, current and potential tariffs and other trade restrictions, interest rate and currency rate fluctuations, disruptions at government agencies under the new U.S. administration (such as workforce reductions or funding cuts), any potential economic slowdown or recession, including trade wars or civil or political unrest (such as the ongoing war between Ukraine and Russia, conflict in the Middle East, and tension between China and Taiwan) may increase the cost of capital and limit our ability to access capital. These and similar adverse market conditions may negatively impact our business, financial position and results of operations.

Current wording

The disruption and volatility in the global and domestic capital markets resulting from heightened inflation, current and potential tariffs and other trade restrictions, interest rate and currency rate fluctuations, disruptions at government agencies under the U.S. administration (such as workforce reductions or funding cuts), any potential economic slowdown or recession, including trade wars or civil or political unrest (such as the ongoing war between Ukraine and Russia, conflicts in the Middle East, and tension between China and Taiwan) may increase the cost of capital and limit our ability to access capital. These and similar adverse market conditions may negatively impact our business, financial position and results of operations.

Previous wording

Additionally, this past spring, the U.S. administration initiated a series of tariff-related actions against U.S. trading partners. In response, several countries have threatened or imposed retaliatory measures. The U.S. has reached agreements with certain of these countries. On July 31, 2025, President Trump issued an Executive Order detailing new reciprocal tariff rates for individual countries that took effect on August 7, 2025. The new reciprocal rates, which are consistent with the rates reflected in the trade deals already announced, range from 10% to 41%. The new rates do not apply to Canada, China, Mexico and a few other countries. While we have not experienced, and do not currently expect to experience, any direct impact from these tariffs and retaliatory measures, the full extent of the future impact of these and other threatened measures remains uncertain. We continue to monitor these tariffs and retaliatory measures and their possible effects on our business.

Current wording

Additionally, in the spring of 2025, the U.S. government initiated a series of tariff-related actions against U.S. trading partners. Although several countries have threatened or imposed retaliatory measures in response, the U.S. reached agreements with a number of trading partners. The reciprocal tariffs and the fentanyl tariffs were imposed pursuant to the International Emergency Economic Powers Act, or the IEEPA. These tariffs were found to be unconstitutional by multiple federal courts in the spring and summer of 2025. However, the Trump Administration imposed a new 10% global tariff under Section 122 of the Trade Act of 1974, effective February 24, 2026. Tariff-related actions are likely to remain a prominent part of U.S. economic policy for the foreseeable future, which may introduce uncertainty in international trade, including impacts to the costs of materials and production processes, supply chain stability, and other factors. While we have not experienced, and do not currently expect to experience, any direct impact from these tariffs and retaliatory measures, the full extent of the future impact of these and other threatened measures remains uncertain. We continue to monitor these tariffs and retaliatory measures and their possible effects on our business.

Previous wording

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 following the Merger, stockholders of Legacy Kalaris owned approximately 74.47% of the outstanding common stock of the combined company on a fully diluted basis. The Merger was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States (“GAAP”). Under this method of accounting, Legacy Kalaris was deemed to be the accounting acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Merger was treated as the equivalent of Legacy Kalaris issuing stock to acquire the net assets of AlloVir. As a result of the Merger, the net assets of AlloVir were recorded at their carrying value and our financial statements are consolidated after the Effective Time.

Current wording

Subject to the terms and conditions of the Merger Agreement, at the Effective Time, all issued and outstanding shares of Legacy Kalaris’ common stock (including common stock issued upon conversion of Legacy Kalaris’ preferred stock and outstanding convertible promissory notes) 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 Legacy Kalaris’ 2019 Equity Incentive Plan, whether or not vested, 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 following the Merger, stockholders of Legacy Kalaris owned approximately 74.47% of the outstanding common stock of the combined company on a fully diluted basis. The Merger was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States (“GAAP”). Under this method of accounting, Legacy Kalaris was deemed to be the accounting acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Merger was treated as the equivalent of Legacy Kalaris issuing stock to acquire the net assets of AlloVir. As a result of the Merger, the net assets of AlloVir were recorded at their carrying value and our financial statements are consolidated after the Effective Time.

Previous wording

We recognized $0.1 million and $0.2 million in patent reimbursement costs for the three and nine months ended September 30, 2025, respectively. We recognized immaterial amounts in patent reimbursement costs for the three and nine months ended September 30, 2024. We made a payment of $0.1 million in connection with our achievement of the first development milestone related to the dosing of the first patient in our Phase 1a clinical trial in August 2024, which was recorded as research and development expense in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2024. No other milestones were achieved or probable through September 30, 2025. No milestone expense was recorded for the three and nine months ended September 30, 2025.

Current wording

We recognized $0.03 million and $0.1 million in patent reimbursement costs for the three months ended March 31, 2026 and 2025, respectively. We made a payment of $0.1 million in connection with our achievement of the first development milestone related to the dosing of the first patient in our Phase 1a clinical trial in August 2024. No other milestones were achieved or probable through March 31, 2026 and, therefore, for the three months ended March 31, 2026, no milestone expense was recognized.

Previous wording

Once royalty payments to Samsara are deemed probable and estimable, and if such amounts exceed the initially recorded royalty obligation balance, we will impute interest to accrete the liability on a prospective basis based on such estimates. If and when we make royalty payments under the Royalty Agreement, the royalty obligation balance will be reduced. As of September 30, 2025, royalty payments were not probable and estimable and, therefore, for the three and nine months ended September 30, 2025, no interest expense was recognized for the royalty liability.

Current wording

Once royalty payments to Samsara are deemed probable and estimable, and if such amounts exceed the initially recorded royalty obligation balance, we will impute interest to accrete the liability on a prospective basis based on such estimates. If and when we make royalty payments under the Royalty Agreement, the royalty obligation balance will be reduced. As of March 31, 2026, royalty payments were not probable and estimable and, therefore, for the three months ended March 31, 2026, no interest expense was recognized for the royalty liability.

Previous wording

General and administrative expenses consist primarily of payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense. General and administrative expenses also include professional fees for legal, consulting, accounting and tax services, as well as allocated overheads, including information technology costs, and other general operating expenses not otherwise classified as research and development expenses.

Current wording

General and administrative expenses consist of payroll and personnel-related expenses, including salaries, bonuses, employee benefit costs and stock-based compensation expense. General and administrative expenses also include rent expense, insurance, professional fees for legal, consulting, accounting and tax services, as well as allocated overheads, including information technology costs, and other general operating expenses not otherwise classified as research and development expenses.

Previous wording

We anticipate that our general and administrative expenses will increase as a result of increased personnel costs, including salaries, benefits and stock-based compensation expense. Additionally, we expect to incur significant additional expenses associated with being a public company, including expanded infrastructure and higher consulting, legal and accounting services, investor relations costs and director and officer insurance premiums.

Current wording

We anticipate that our general and administrative expenses will increase as a result of increased personnel costs, including salaries, benefits and stock-based compensation expense. We also expect to continue to incur significant expenses associated with being a public company, including personnel costs, expanded infrastructure and higher consulting, legal and accounting services, investor relations costs and director and officer insurance premiums.

Previous wording

Change in fair value of tranche liability represents gains or losses from the remeasurement of tranche liability related to the investors’ rights to receive additional convertible promissory notes in subsequent tranches of the Convertible Note Financing with a predetermined conversion price. The tranche liability was remeasured at fair value at the end of each reporting period until the tranche liability is exercised or expires. The tranche liability was cancelled in March 2025.

Current wording

Change in fair value of tranche liability represents gains or losses from the remeasurement of tranche liability related to the investors’ rights to receive additional convertible promissory notes in subsequent tranches of the Convertible Note Financing with a predetermined conversion price. The tranche liability was remeasured at fair value at the end of each reporting period until the tranche liability was cancelled in March 2025.

Previous wording

Loss on issuance of convertible promissory notes

Current wording

Loss on issuance of convertible promissory notes represents the excess fair value of the convertible promissory over the cash proceeds received on the date of issuance. Loss on extinguishment of convertible promissory notes represents the excess fair value of redeemable convertible preferred stock issued over the net carrying value of the convertible promissory notes at the extinguishment date. All outstanding convertible promissory notes, other than the AlloVir Note, were converted into shares of redeemable convertible preferred stock or common stock of Legacy Kalaris immediately prior to the closing of the Merger on March 18, 2025.

Previous wording

Other income (expense), net includes primarily interest income received from money market investments, U.S. government treasury securities, and bank deposits, the amortization of premiums and accretion of discounts on U.S. government treasury securities, and realized and unrealized foreign currency gains (losses).

Current wording

Other income, net includes interest income received from money market marketable securities, U.S. government treasury securities, and bank deposits, the amortization of premiums and accretion of discounts on U.S. government treasury securities, and realized and unrealized foreign currency gains (losses).

Previous wording

CDMO, CRO and other third-party preclinical studies, clinical trials and consulting costs increased by $12.1 million as we initiated our Phase 1a clinical trial in TH103 in June 2024 and our Phase 1b/2 clinical trial in the third quarter of 2025. CRO and other clinical expenses increased by $1.7 million as we opened additional investigational sites and enrolled patients in our clinical program. CDMO and other third-party preclinical studies and consulting costs increased by $10.4 million due to the additional manufacturing process development activities and manufacturing of our clinical supplies to support our clinical trials.

Current wording

CDMO, CRO and other third-party preclinical studies, clinical trials and consulting costs increased by $1.4 million as we initiated our Phase 1a clinical trial in TH103 in June 2024 and our Phase 1b/2 clinical trial in the third quarter of 2025. This was primarily driven by an increase of $1.8 million in CRO and other clinical expenses as we opened additional investigational sites and enrolled patients in our clinical program.

Previous wording

Personnel related costs increased by $2.1 million due to hiring in our research and development organization. This increase in personnel related costs included a $0.2 million increase in stock-based compensation expense.

Current wording

Personnel related costs (including stock-based compensation) increased by $0.2 million due to hiring in our research and development organization to support our clinical trials and manufacturing.

Previous wording

We recognized a $0.4 million gain for the nine months ended September 30, 2025, related to the changes in the fair value of tranche liability. We did not issue tranche liability for the nine months ended September 30, 2024. The convertible promissory notes issued in the Convertible Note Financing in October and November 2024 and amended in November 2024 included three subsequent tranches for the issuance of convertible promissory notes at the predetermined conversion price that were concluded to be liabilities and are accounted for at fair value until the tranches’ expiration or settlement. The fair value of the tranche liability is estimated using a probability weighted scenario analysis discounted to the current period. Refer to Note 5, Fair Value Measurements, in our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details. In January 2025, as part of the first tranche of the Additional Permitted Bridge Financing, we issued additional convertible promissory notes for $3.75 million and one of three tranches was settled. In March 2025, we and other noteholders entered into an acknowledgment of conversion and termination agreement to cancel all unfunded tranches and the tranche liability expired unexercised.

Current wording

For the three months ended March 31, 2025, we recognized a $0.4 million gain related to the changes in the fair value of tranche liability. The convertible promissory notes issued in the Convertible Note Financing in October and November 2024 and amended in November 2024 included three subsequent tranches for the issuance of convertible promissory notes at the predetermined conversion price that were concluded to be liabilities and are accounted for at fair value until the tranches’ expiration or settlement. In January 2025, as part of the first tranche of the Additional Permitted Bridge Financing, we issued additional convertible promissory notes for $3.75 million and one of three tranches was settled. In March 2025, we and other noteholders entered into an acknowledgment of conversion and termination agreement to cancel all unfunded tranches and the tranche liability expired unexercised.

Previous wording

We recognized $1.2 million and $0.9 million gain for the nine months ended September 30, 2025 and 2024, respectively, related to the changes in the fair value of derivative liabilities embedded into convertible promissory notes issued to Samsara and other investors. We estimated the fair value of the derivative liabilities embedded in the convertible promissory notes using a with-and-without scenario analysis. Refer to Note 5, Fair Value Measurements, in our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details. All outstanding convertible promissory notes, other than the AlloVir Note, were converted into either shares of redeemable convertible preferred stock or common stock and the derivative liability expired in connection with the closing of the Merger on March 18, 2025.

Current wording

For the three months ended March 31, 2025, we recognized a $1.2 million gain related to the changes in the fair value of derivative liabilities embedded into convertible promissory notes issued to Samsara and other investors. All outstanding convertible promissory notes, other than the AlloVir Note, were converted into either shares of redeemable convertible preferred stock or common stock and the derivative liability expired in connection with the closing of the Merger on March 18, 2025.

Previous wording

We recognized $1.4 million for each of the nine months ended September 30, 2025 and 2024 of interest expense, which included the accrued interest and amortization of debt discount related to issued and outstanding convertible promissory notes issued to Samsara and other investors. Refer to Note 8, Convertible Promissory Notes, in our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details.

Current wording

For the three months ended March 31, 2025, we recognized $1.4 million of interest expense, which included the accrued interest and amortization of debt discount related to issued and outstanding convertible promissory notes issued to Samsara and other investors. All outstanding convertible promissory notes, other than the AlloVir Note, were converted into either shares of redeemable convertible preferred stock or common stock and the derivative liability expired in connection with the closing of the Merger on March 18, 2025.

Previous wording

Loss on issuance of convertible promissory notes represents loss upon the issuance of convertible promissory notes to Samsara and other investors accounted at fair value. All outstanding convertible promissory notes, other than the AlloVir Note, were converted into shares of redeemable convertible preferred stock or common stock of Legacy Kalaris immediately prior to the closing of the Merger on March 18, 2025.

Current wording

For the three months ended March 31, 2025, we recognized $0.2 million of loss on extinguishment and on issuance of convertible promissory notes to Samsara and other investors. All outstanding convertible promissory notes, other than the AlloVir Note, were converted into either shares of redeemable convertible preferred stock or common stock and the derivative liability expired in connection with the closing of the Merger on March 18, 2025.

Previous wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. From inception, we have primarily funded our operations from sales of redeemable convertible preferred stock, issuances of convertible promissory notes and a SAFE, and from cash and cash equivalents of AlloVir received in the Merger. From inception through September 30, 2025, we have received gross proceeds of $67.5 million from sales of redeemable convertible preferred stock, issuances of convertible promissory notes and a SAFE, and we received cash and cash equivalents of AlloVir of approximately $102.1 million in the Merger. As of September 30, 2025, we had $77.0 million in cash, cash equivalents and short-term investments.

Current wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. From inception, we have primarily funded our operations from sales of redeemable convertible preferred stock, issuances of convertible promissory notes and a SAFE, from cash and cash equivalents of AlloVir received in the Merger, and from proceeds from the 2025 Private Placement.

Previous wording

We have incurred significant losses and negative cash flows from operations since our inception. As of September 30, 2025, we had an accumulated deficit of $150.0 million. Based on our current operating plans, we believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements into 2027. However, we have based these estimates on assumptions that may prove to be wrong, and our operating plans may change as a result of many factors currently unknown to us. In addition, changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect.

Current wording

We have incurred significant losses and negative cash flows from operations since our inception. As of March 31, 2026, we had an accumulated deficit of $170.9 million. Based on our current operating plans, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2027. However, we have based these estimates on assumptions that may prove to be wrong, and our operating plans may change as a result of many factors currently unknown to us. In addition, changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect.

Previous wording

Cash used in operating activities for the nine months ended September 30, 2025, was primarily due to a net loss of $33.4 million, offset by non-cash charges of $1.6 million and further offset by net changes of $0.6 million in net operating assets and liabilities. Non-cash charges primarily consist of $1.6 million in stock-based compensation expense and 1.4 million in non-cash interest expense, offset by a gain of $1.2 million related to the change in fair value of derivative liabilities and a gain of $0.4 million related to the change in fair value of tranche liability. The change in net operating assets and liabilities was primarily due to a decrease in prepaid expenses and other current assets of $1.5 million, offset by a decrease in accounts payable of $1.0 million.

Current wording

Cash used in operating activities for the three months ended March 31, 2026, was primarily due to a net loss of $10.9 million, offset by non-cash charges of $0.4 million and further offset by net changes in net operating assets and liabilities of $1.1 million. Non-cash charges primarily consist of $0.6 million in stock-based compensation expense and $0.2 million in accretion of discounts on marketable securities. The unfavorable net change in net operating assets and liabilities was primarily due to an increase in other non-current assets of $0.8 million and a decrease in accounts payable of $0.4 million.

Previous wording

Cash used in operating activities for the nine months ended September 30, 2024, was primarily due to a net loss of $47.1 million, offset by non-cash charges of $35.4 million and increased by net changes of $1.1 million in the net operating assets and liabilities. Non-cash changes primarily consist of a $32.0 million royalty obligation expense incurred in connection with the Royalty Agreement, a loss on issuance of convertible promissory notes of $2.1 million, a non-cash interest expense of $1.4 million, stock-based compensation expense of $0.6 million, and offset by $0.9 million gain related to the change in fair value of derivative liabilities. The change in net operating assets and liabilities was primarily due to a decrease in accounts payable of $0.1 million, an increase in prepaid expenses and other current assets of $0.1 million, an increase in other non-current assets of $0.3 million, and a decrease in accrued expenses and other current liabilities of $0.6 million.

Current wording

Cash used in operating activities for the three months ended March 31, 2025, was primarily due to a net loss of $10.2 million, reduced by non-cash charges of $0.4 million and further reduced by net changes of $2.3 million in the net operating assets and liabilities. Non-cash changes primarily consist of a $0.4 million stock-based compensation expense, a gain of $1.2 million related to the change in fair value of derivative liabilities, a gain of $0.4 million related to the change in fair value of tranche liability, non-cash interest expense of $1.4 million and loss on issuance of convertible promissory notes of $0.2 million. The change in net operating assets and liabilities was primarily due to a decrease in prepaid expenses and other current assets of $1.4 million, an increase in accounts payable of $0.9 million, an increase in accrued research and development expenses of $1.2 million due to the timing of receipt of invoices from vendors, an increase in accrued expenses and other current liabilities of $0.2 million, partially offset by a decrease of $1.4 million in accrued compensation.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2025 was $34.7 million, which consisted of $34.5 million from purchases of short-term investments and investments classified as cash equivalents and $0.2 million from purchases of property and equipment. There was no cash used in investing activities for the nine months ended September 30, 2024.

Current wording

Net cash used in investing activities for the three months ended March 31, 2026 was $50.4 million, which primarily consisted of $70.4 million in purchases of marketable securities offset by $20.0 million in proceeds from maturities of marketable securities. There was no cash used in investing activities for the three months ended March 31, 2025.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $107.3 million, which consisted of $102.1 million of cash and cash equivalents of AlloVir received in connection with the Merger, proceeds from the issuance of a convertible promissory note of $7.5 million, partially offset by payments of deferred transaction costs and issuance costs related to the Merger of $2.3 million.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $107.3 million, which consisted of $102.1 million of cash and cash equivalents of AlloVir received in the Merger, proceeds from the issuance of a convertible promissory note of $7.5 million, partially offset by payments of transaction costs related to the Merger of $2.3 million.

Previous wording

We are required to pay certain milestone payments contingent upon the achievement of specific development and regulatory events in accordance with the UCSD Agreement. Refer to Note 7, Significant Agreements, in our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details. As of September 30, 2025 and December 31, 2024, we recognized $0.1 million and $0.2 million related to the UCSD Agreement in accrued expenses and other current liabilities in the condensed consolidated balance sheets, respectively. Through the nine months ended September 30, 2025, development milestones totaling $0.1 million have been achieved and incurred as research and development expenses. We did not achieve any development milestones and did not incur any related milestone expense during the three and nine months ended September 30, 2025. We are required to pay royalties on sales of products developed under the UCSD Agreement. Our product candidate was in development as of September 30, 2025 and December 31, 2024 and no such royalties were due.

Current wording

We are required to pay certain milestone payments contingent upon the achievement of specific development and regulatory events in accordance with the UCSD Agreement. Refer to Note 7, Significant Agreements, in our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details. As of March 31, 2026 and December 31, 2025, we recognized $0.1 million and $0.03 million related to the UCSD Agreement in accrued expenses and other current liabilities in the condensed consolidated balance sheets, respectively. Over the life of the agreement through March 31, 2026, development milestones totaling $0.1 million have been achieved and incurred as research and development expenses. We did not achieve any development milestones and did not incur any related milestone expense during the three months ended March 31, 2026. We are required to pay royalties on sales of products developed under the UCSD Agreement. Our product candidate was in development as of March 31, 2026 and December 31, 2025, and no such royalties were due.

Previous wording

We are obligated to pay royalties to Samsara under the Royalty Agreement. Refer to Note 7, Significant Agreements, in our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details. We recognized an initial royalty 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, we will impute interest to accrete the royalty liability on a prospective basis based on such estimates. As of September 30, 2025 these royalties were not probable and estimable.

Current wording

We are obligated to pay royalties to Samsara under the Royalty Agreement. Refer to Note 7, Significant Agreements, in our condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details. We recognized an initial royalty liability in the amount of $32.1 million, which was based on its estimated fair value at the effective date of the Royalty

Previous wording

In February 2025, we entered into an operating lease agreement for office space in Berkeley Heights, New Jersey. The lease commenced in September 2025 and is expected to terminate in December 2031. We can extend the lease term twice for an additional three years and can terminate the lease after four years and four months after the lease commencement date with a termination penalty of $0.3 million. Total remaining undiscounted payments under this lease are approximately $2.2 million. In addition to the base rent, we will pay our share of operating expenses and taxes. The lessor provided a tenant improvement allowance of up to $0.4 million, which we fully utilized during the three months ended September 30, 2025.

Current wording

In February 2025, we entered into an operating lease agreement for office space in Berkeley Heights, New Jersey. The lease commenced in September 2025 and is expected to terminate in December 2031. We can extend the lease term twice for an additional three years and can terminate the lease after four years and four months after the lease commencement date with a termination penalty of $0.3 million. Total remaining undiscounted payments under this lease are approximately $2.0 million. In addition to the base rent, we will pay our share of operating expenses and taxes. The lessor provided a tenant improvement allowance of up to $0.4 million, which we fully utilized in 2025.

Previous wording

There have been no material changes to our critical accounting estimates from those described in “Kalaris' Management’s Discussion and Analysis of Financial Conditions and Results of Operations” filed as Exhibit 99.4 to our Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the "SEC") on March 18, 2025.

Current wording

There have been no material changes to our critical accounting estimates from those described in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on March 17, 2026.