KALA BIO, Inc. completed a $10 million registered direct offering of 10 million shares of common stock at $1.00 per share, priced at‑market under Nasdaq rules and expected to close on or about December 5, 2025. The proceeds will be used to repay a portion of the company’s outstanding debt and to fund general corporate purposes, extending the firm’s cash runway in the face of ongoing clinical development and a “going concern” warning.
The company’s financial position has deteriorated sharply. Cash and cash equivalents fell from $51.2 million at the end of 2024 to $21.1 million by September 30, 2025, while stockholders’ equity turned negative at $(8.7) million. A $29.1 million loan from Oxford Finance LLC was declared in default, and the company received a Nasdaq deficiency notice for failing to meet the minimum market value of listed securities. The direct offering is therefore a critical lifeline to shore up liquidity and avoid potential asset seizure or delisting.
KALA BIO’s clinical pipeline suffered a major setback when the CHASE Phase 2b trial of its lead candidate KPI‑012 failed to meet its primary endpoint in September 2025. The failure led to the discontinuation of KPI‑012 and the broader MSC‑S platform, erasing a key revenue driver and further weakening investor confidence. The trial’s collapse contributed to the company’s “going concern” warning and intensified the urgency of the capital raise.
In the wake of the trial failure and financial distress, the board appointed David E. Lazar as CEO and Chairman. Lazar emphasized that the company will continue to evaluate and redevelop product candidates while actively exploring strategic options to create value for shareholders. His appointment signals a shift toward a more conservative, survival‑focused strategy.
The market reacted positively to the capital raise, with the stock rising 14.59% in pre‑market trading to $1.06. This short‑term lift follows a dramatic 90% plunge in pre‑market trading on September 29, 2025, after the trial failure announcement. The temporary rally reflects investors’ relief at the infusion of cash, but the underlying fundamentals remain weak.
The offering will dilute existing shareholders, as 10 million new shares are issued at a price below the current trading level. While the $10 million raise provides immediate liquidity, it does not address the core issues of a failed pipeline and high debt. The company’s future prospects hinge on securing new clinical successes or a strategic transaction, and the direct offering is a stopgap measure rather than a long‑term solution.
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