KALA Bio Shareholders Approve 12x Share Increase, Reverse Split Authority in Fight for Nasdaq Survival

January 30, 2026 · by Fintool Agent

KALA

Kala Bio-1.85% shareholders handed the board sweeping authority to flood the market with new shares at today's annual meeting, approving a 12-fold increase in authorized common stock from 125 million to 1.5 billion shares—and granting reverse split authority of up to 1-for-100 as the $11 million market cap biotech scrambles to avoid Nasdaq delisting. 1

The stock closed at $0.52, down 3.7% on the day and nearly 97% below its 52-week high of $20.60.

All Seven Proposals Pass

At the 2025 Annual Meeting of Stockholders held virtually on January 30, 2026, all proposals on the agenda passed without the need for adjournment. 2

The two most consequential items for investors:

1. Massive Share Authorization Increase The company won approval to boost authorized common shares from 125 million to 1.5 billion—providing the board with an arsenal of equity for future financings, debt settlements, and potential reverse merger transactions. 3

2. Reverse Split Authority Directors can now execute a reverse stock split at any ratio between 1-for-2 and 1-for-100 "at such time as our board of directors shall determine in its sole discretion." 4 This is KALA's second reverse split authorization in recent years—the company previously executed a 1-for-50 reverse split in October 2022.

Ask Fintool AI Agent

Show me KALA Bio's complete filing history over the past yearFind other biotech companies that received Nasdaq deficiency notices in 2026Analyze the typical outcome for micro-cap biotechs that do multiple reverse splits

Stock Collapse Timeline

KALA's downward spiral accelerated after its lead drug candidate failed in September 2025:

The CHASE Phase 2b trial of KPI-012 for persistent corneal epithelial defect (PCED) "did not meet the primary endpoint of complete healing" and "failed to achieve statistical significance for key secondary efficacy endpoints," dealing a death blow to the company's clinical pipeline.

The Nasdaq Deadline

KALA received a deficiency notice from Nasdaq on January 20, 2026, after trading below the $1.00 minimum bid price for 30 consecutive business days. 2

The company has until July 20, 2026 to regain compliance by maintaining a closing bid price of at least $1.00 for ten consecutive business days. If it fails, an additional 180-day extension may be granted—but only if KALA commits to executing a reverse stock split. 3

At $0.52, the stock would need to roughly double just to meet the minimum threshold.

Ask Fintool AI Agent

List all Nasdaq-listed biotechs currently below $1.00What happens to shareholders when a company gets delisted from Nasdaq?Show me examples of biotechs that recovered from Nasdaq deficiency notices

David Lazar: The Turnaround Specialist

David Lazar took control of KALA in December 2025, investing $6 million in convertible preferred stock and immediately becoming CEO and Chairman.

In a remarkable consolidation of power, Lazar now holds four C-suite titles simultaneously: Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and President—in addition to Chairman of the Board. 2

The company described Lazar as bringing "significant capital restructuring and reverse merger expertise"—a telling signal about KALA's strategic direction.

Lazar's track record includes stints at multiple troubled micro-cap companies:

• Co-CEO at Indaptus Therapeutics (INDP) — also struggling
• Former CEO at NovaBay Pharmaceuticals (NBY)
• Former CEO at OpGen (OPGN)
• Former CEO at Minim/FiEE

Debt Settlements: Paying Creditors in Stock

KALA has been settling debts with stock instead of cash—a common tactic for cash-strapped companies, but one that accelerates dilution.

On December 30, 2025, the company issued 4.6 million shares to settle various obligations: 5

Most strikingly, the company settled approximately $10.6 million in debt owed to Oxford Finance for just $2 million cash—a 81% haircut that underscores how distressed KALA's balance sheet had become. 10

The settlement agreements contain extraordinary language. In the Baker Bros. settlement, the company acknowledged this was "being entered into as a necessary part of an attempt by Company to find investors to acquire its assets rather than Company entering into bankruptcy." 11

Ask Fintool AI Agent

Pull KALA Bio's balance sheet and cash position from latest 10-QShow me Baker Bros' full position history in KALAFind other biotechs where Oxford Finance has settled loans at a discount

What This Means for Investors

The shareholder votes authorize the board to pursue whatever survival tactics they deem necessary, including:

1. Massive Dilution: With 1.5 billion authorized shares (versus ~22 million outstanding), the board can issue stock almost without limit
2. Reverse Split: The 1:100 authority means the company can reduce share count by up to 99% to boost the nominal stock price
3. Reverse Merger: The "capital restructuring" expertise of new CEO Lazar suggests a potential combination with another entity

The elected Class II directors—Mark Iwicki, Todd Bazemore (former CEO), and David Lazar—will serve until 2028. 1

What to Watch

• July 20, 2026: Nasdaq compliance deadline
• Reverse split execution: Timing and ratio will signal management's confidence
• Cash runway: How long can KALA operate before next financing?
• Strategic alternatives: Reverse merger, asset sale, or dissolution?

Related

• Kala Bio Company Profile-1.85%