Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38150 KALA BIO, Inc. (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or other jurisdict ...

Financial Performance - KALA reported a net loss of $11.8 million, or $4.20 per share, for Q1 2024, compared to a net loss of $14.5 million, or $6.99 per share, for the same period in 2023[11]. - General and administrative expenses for Q1 2024 were $5.4 million, a decrease from $6.0 million in Q1 2023, primarily due to lower administrative and professional service fees[11]. - Research and development expenses for Q1 2024 increased to $6.4 million from $4.0 million in Q1 2023, driven by higher development costs for KPI-012[11]. - KALA's total assets as of March 31, 2024, were $53.0 million, down from $55.9 million as of December 31, 2023[15]. - As of March 31, 2024, KALA had cash and cash equivalents of $48.5 million, down from $50.9 million as of December 31, 2023, reflecting cash used in operations[8]. Product Development and Market Opportunity - KALA is targeting topline data from the ongoing Phase 2b CHASE trial of KPI-012 for persistent corneal epithelial defect (PCED) by year-end 2024, which could support a Biologics License Application (BLA) submission[2]. - The estimated incidence of PCED in the U.S. is approximately 100,000 patients, representing a significant market opportunity as there are currently no FDA-approved products for all underlying etiologies of PCED[5]. - KALA is exploring the potential of KPI-012 for additional rare corneal diseases, including Limbal Stem Cell Deficiency (LSCD), which also has an estimated incidence of 100,000 patients in the U.S.[6]. - KPI-014, KALA's preclinical program, is being evaluated for inherited retinal degenerative diseases, with preclinical studies initiated for conditions such as Retinitis Pigmentosa and Stargardt Disease[7]. Future Outlook - The company anticipates that its cash resources will fund operations into the third quarter of 2025, supported by anticipated funding from the CIRM award[8].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38150 KALA BIO, Inc. (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or other jurisdiction o ...

ARLINGTON, Mass., March 29, 2024 – KALA BIO, Inc. (NASDAQ:KALA), a clinical-stage biopharmaceutical company dedicated to the research, development and commercialization of innovative therapies for rare and severe diseases of the eye, today reported financial results for the fourth quarter and full year ended December 31, 2023 and provided a corporate update. "In 2023, we focused on clinical execution, advancing our Phase 2b CHASE trial of KPI-012 for the treatment of PCED. In March 2023, we announced positi ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38150 KALA BIO, Inc. (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or other juris ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38150 KALA BIO, Inc. (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or other jurisdicti ...

Table of Contents SECURITIES AND EXCHANGE COMMISSION UNITED STATES Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38150 KALA PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or oth ...

NOT FOR PROMOTIONAL USE Disclaimers and Notices Corporate Overview March 2023 2 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. Any statements in this press release about Kala's future expectations, plans and prospects, including but not limited to about Kala's expectations with respect to potential advantages of KPI-012 and its MSC-S platform; anticipated timelines to report to ...

Financial Performance - The company reported a net loss of $44.8 million for the year ended December 31, 2022, compared to a net loss of $142.6 million for the year ended December 31, 2021[530]. - As of December 31, 2022, the company had an accumulated deficit of $587.2 million[530]. - The net loss for the year ended December 31, 2022, was $44.8 million, a significant improvement of $97.8 million compared to a net loss of $142.6 million in 2021[576]. - Product revenues, net for the year ended December 31, 2022, were $3.9 million, a decrease of $7.3 million from $11.2 million in 2021, primarily due to the sale of the Commercial Business to Alcon in July 2022[577]. - Cost of product revenues decreased to $2.6 million in 2022 from $4.1 million in 2021, a reduction of $1.5 million attributed to the sale of the Commercial Business[578]. - Selling, general and administrative expenses were $65.0 million for 2022, down $40.1 million from $105.1 million in 2021, mainly due to workforce reduction and decreased external sales and marketing costs[579]. - Research and development expenses increased to $17.7 million in 2022 from $11.5 million in 2021, an increase of $6.2 million driven by $5.8 million in KPI-012 development costs[582]. - Interest income rose to $0.7 million in 2022 from $0.1 million in 2021, an increase of $0.6 million due to higher interest rates[586]. - Interest expense decreased to $7.3 million in 2022 from $8.4 million in 2021, a reduction of $1.1 million[587]. Business Operations - The company has no commercial products in its portfolio following the sale of its Commercial Business, including EYSUVIS and INVELTYS, to Alcon on July 8, 2022[535]. - The company has ceased development of preclinical pipeline programs unrelated to its MSC-S platform to focus on KPI-012[525]. - The company has initiated preclinical studies under the KPI-014 program for inherited retinal degenerative diseases[525]. - KPI-012 is currently in Phase 2b clinical development, while all other research and development programs are in preclinical development[544]. - The company expects to incur significant expenses and operating losses for the foreseeable future related to the development and commercialization of KPI-012[530]. - The company generated limited revenues from product sales prior to the sale of the Commercial Business to Alcon, with no revenue expected from KPI-012 or other candidates in the near term[536]. - The company is eligible to receive up to $325 million in milestone payments from Alcon based on specified commercial sales milestones for EYSUVIS and INVELTYS[530]. - The company recorded a gain on the sale of its Commercial Business amounting to $47.0 million for the year ended December 31, 2022, after receiving $65.0 million in cash consideration from Alcon[590]. Research and Development - Research and development expenses are anticipated to increase in 2023 as the company advances clinical development of KPI-012 and conducts necessary preclinical studies and clinical trials for other product candidates[542]. - The company expects significant increases in research and development expenses as it advances the clinical development of KPI-012 and other product candidates[614]. - The company expects to incur significant costs for research and development activities, which may not result in approved products due to various uncertainties[542]. - The total potential maximum payout for contingent consideration related to the Combangio acquisition is $105.0 million, with $2.5 million in cash and $2.4 million in stock due upon the first patient dosing in a Phase 2b trial[606]. - The company plans to seek regulatory approval for KPI-012 for PCED and additional indications, which will require substantial funding and resources[618]. Capital and Financing - The company may need to raise additional capital to advance its product candidates, including KPI-012, and may seek collaborations in the future[544]. - The company has incurred significant operating losses since inception, financing operations primarily through the sale of its Commercial Business and various stock offerings[593]. - The company raised approximately $31.0 million through a private placement, issuing 76,813 shares of common stock at $5.75 each and 53,144 shares of Series E Preferred Stock at $575 each[606]. - The company has a remaining $10.3 million of shares available for sale under the Amended and Restated Sales Agreement as of December 31, 2022[596]. - The Loan Agreement with Oxford Finance allows for a total term loan of up to $125.0 million, with specific tranches available based on revenue milestones[598]. - The company has agreed to make partial prepayments of $5.0 million on the term loan by June 30, 2023, and January 31, 2024, as part of the Third Loan Amendment[601]. - As of December 31, 2022, the company had $70.5 million in cash and cash equivalents, down from $92.1 million in 2021, and $43.3 million in indebtedness, reduced from $80.0 million[608]. - Net cash used in operating activities decreased to $78.9 million in 2022 from $108.2 million in 2021, primarily due to a $18.2 million decrease in net loss adjusted for non-cash charges[610]. - Net cash used in financing activities was $7.9 million in 2022, a significant decrease from $42.6 million provided in 2021, largely due to a $40.0 million repayment of principal on the Loan Agreement[613]. Governance and Management - The company assessed the effectiveness of its internal control over financial reporting as of December 31, 2022, concluding that it was effective[634]. - There were no changes in internal control over financial reporting during the fourth quarter ended December 31, 2022, that materially affected the company's controls[636]. - The company believes that the impact of any recently issued accounting pronouncements that are not yet effective will not have a material impact on its financial position or results of operation upon adoption[625]. - The company’s management evaluated the effectiveness of its disclosure controls and procedures as of December 31, 2022, and concluded they were effective at the reasonable assurance level[630]. - The company has no disagreements with accountants on accounting and financial disclosure[629]. - The company is classified as a non-accelerated filer and a "smaller reporting company," which affects the requirements for attestation reports on internal control over financial reporting[635]. Compensation and Benefits - In 2022, the total compensation for CEO Mark Iwicki was $1,868,299, which included a salary of $682,110 and a bonus of $409,266[674]. - Todd Bazemore, President and COO, received total compensation of $1,025,817 in 2022, with a salary of $515,000 and a bonus of $257,500[674]. - Kim Brazzell, Head of R&D and CMO, had total compensation of $993,689 in 2022, including a salary of $500,000 and a bonus of $225,000[674]. - The compensation committee awarded bonuses at 100% of target for 2022, with target bonus percentages of 60% for Iwicki, 50% for Bazemore, and 45% for Brazzell[680]. - In December 2022, the compensation committee increased the base salaries for Iwicki, Bazemore, and Brazzell to $709,394, $535,600, and $520,000, respectively, effective January 1, 2023[678]. - Performance-based stock options were granted to executives, with maximum vesting potential of 150% of target based on performance metrics[686]. - The company utilized independent compensation consultants Aon and Pearl Meyer to guide executive compensation decisions and ensure competitive benchmarking[667]. - The company has transitioned to the 2017 Equity Incentive Plan for stock options and other stock-based awards following its IPO[687]. - All performance-based restricted stock units granted to executives were fully vested as of December 31, 2022[688].

Table of Contents UNITED STATES (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For ...