Business Description

Note 1: Nature of Business Nature of Business — KALA BIO, Inc. (the “Company”) was incorporated on July 7, 2009, and is a clinical-stage biopharmaceutical company dedicated to the research, development and commercialization of innovative therapies for rare and severe diseases of the front and back of the eye. On September 29, 2025, the Company 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, the Company determined to cease development of KPI-012 and our MSC-S platform. Following the discontinuation of KPI-012 development in September 2025 after the CHASE Phase 2b clinical trial failed to meet its primary endpoints, the Company strategically repositioned ourselves to capitalize on the substantial intellectual property and research data generated during its mesenchymal stem cell secretome (MSC-S) platform development. the Company identified a significant market opportunity to transform our proprietary biological research assets into a next-generation artificial intelligence or AI platform specifically designed for biotechnology research applications. This strategic pivot represents a fundamental transformation from a traditional clinical-stage biopharmaceutical company to an AI-powered biotechnology research intelligence platform provider, targeting the rapidly expanding artificial intelligence in the drug discovery market. Strategic Initiative - On March 3, 2026, the Company and 2624465 Ontario Inc. o/a Younet AI, an Ontario corporation (“Younet”) entered into a Platform Development and Exclusive License Agreement (the “Agreement”) pursuant to which the Company obtained a worldwide exclusive license (the “Exclusive License”) of Younet’s proprietary, custom biomedical artificial intelligence research platform (the “Researgency Platform”), together with associated trademarks and intellectual property. See Note 16-Subsequent events for more details. On November 15, 2021, the Company acquired Combangio, Inc. (“Combangio”), including its mesenchymal stem cell secretomes (“MSC-S”) platform and product candidate, which the Company refers to as KPI-012, for the treatment of persistent corneal epithelial defects (“PCED”)(collectively, the “Combangio Acquisition”). For accounting purposes, the transaction was accounted for as an asset acquisition , as substantially all of the fair value of the gross assets acquired was concentrated in a single asset, KPI-012. LifeSci and Baker Settlement Agreements - On December 30, 2025, the Company entered into the Baker Settlement Agreement with Baker Bros. Advisors LP, pursuant to which the Company agreed to issue the Baker Shares to resolve certain claims relating to participation rights under prior financing arrangements (the “Baker Settlement”). In connection with the Baker Settlement, the Company and Baker Bros. Advisors LP also entered into a voting agreement pursuant to which Baker Bros. Advisors LP granted an irrevocable proxy in favor of us to vote the settlement shares and other specified shares in line with our Board of Directors’ recommendations for a period of six months. On December 30, 2025, the Company also entered into the LifeSci Settlement Agreement pursuant to which we agreed to issue the LifeSci Shares to settle certain payment obligations for financial advisory services. Recent Equity Financings - Private Placements — On March 25, 2024, the Company entered into a Securities Purchase Agreement (the “March 2024 Securities Purchase Agreement”) with certain institutional investors named therein, pursuant to which the Company agreed to issue and sell, in a private placement priced at-the-market under Nasdaq rules, shares of Series G Convertible Non-Redeemable Preferred Stock, par value $0.001 per share, of the Company (the “Series G Preferred Stock”), for aggregate gross proceeds of approximately $8,600 (the “March 2024 Private Placement”). Pursuant to the March 2024 Securities Purchase Agreement, the Company issued and sold to the purchasers at the closing of the March 2024 Private Placement, 10,901 shares of Series G Preferred Stock, at a price per preferred share equal to $788.90.…