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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes thereto appearing elsewhere in this Annual Report. This Annual Report contains forward-looking statements that involve risks and uncertainties, such as our plans, objectives, expectations, intentions, and beliefs. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those discussed in these forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” under Part I, Item 1A of this Annual Report and those discussed in our other disclosures and filings. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. All historical common share data and per-share amounts prior to the Merger (as defined below) have been retrospectively adjusted to reflect the exchange ratio of 0.2016 per one share, which was determined in accordance with the Merger Agreement (as defined below).

Overview

We are a clinical stage biopharmaceutical company dedicated to the development and commercialization of treatments for prevalent retinal diseases with major unmet medical needs.

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.

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. 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”).

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 $43.4 million and $69.2 million for the years ended December 31, 2025 and 2024, respectively. Our negative cash flows from operations were $38.4 million and $20.7 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $160.0 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”), 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).

From inception through December 31, 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, we received cash and cash equivalents of AlloVir of approximately $102.1 million in the Merger, and we received aggregate gross proceeds of $50.0 million from the 2025 Private Placement.

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As of December 31, 2025, we had $118.0 million in cash, cash equivalents and short-term marketable securities. Based on our current operating plans, our management expects that our cash, cash equivalents and short-term 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.

We expect to continue to incur substantial losses for the foreseeable future, including costs associated with operating as a public company. We do not expect to generate any revenue from commercial product sales unless and until we successfully complete development and obtain regulatory approval for our product candidate. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidate, which may never occur. We may never achieve or maintain profitability. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

We anticipate that our expenses will increase substantially if and as we:

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conduct our ongoing Phase 1a and Phase 1b/2 clinical trials of TH103 in patients with nAMD;

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continue to progress the development of TH103 in future preclinical studies and clinical trials;

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advance any future product candidate that we may develop into preclinical and clinical development;

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maintain, expand, enforce and protect our intellectual property portfolio;

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seek regulatory and marketing approvals for TH103 and any other product candidate that successfully completes clinical trials;

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seek to identify and maintain additional collaborations and license agreements, and the success of those collaborations and license agreements;

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make any payments under our existing or future strategic collaboration agreements, licensing agreements or sponsored research agreements, including with the University of California, San Diego (“UCSD”);

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ultimately establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval;

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

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hire additional clinical, regulatory, manufacturing, quality control, development and scientific personnel;

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in-license or acquire additional technologies or product candidates;

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establish a commercial manufacturing source and secure supply chain capacity sufficient to provide commercial quantities of any product candidates we may develop for which we obtain regulatory approval; and

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add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and our operations as a public company.

We do not currently own or operate any drug development or manufacturing facilities. We rely on Contract Development and Manufacturing Organizations (“CDMOs”) to help develop and produce TH103 in accordance with the U.S. Food and Drug Administration’s (“FDA”) current Good Manufacturing Practices regulations for use in our clinical trials. We use external contract research organizations (“CROs”) to conduct our preclinical studies and clinical trials.

Given our stage of development, we do not yet have a marketing or sales organization or commercial infrastructure. Accordingly, if we obtain regulatory approval for our product candidate, we also expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

Because of the numerous risks and uncertainties associated with product development, our management is unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability, if at all. Even if we are able to generate revenue from the sale of our product candidate, we may not achieve or maintain profitability. If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and may be forced to reduce our operations.

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Macroeconomic Trends

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.

Additionally, in April 2025, the U.S. administration 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. has reached agreements with a number of trading partners, and negotiations with others remain ongoing. 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.

Legacy Kalaris Financing

In October 2024, Kalaris Tx, Inc. (formerly, Kalaris Therapeutics, Inc.), a Delaware corporation (“Legacy Kalaris”) entered into a convertible note purchase agreement with Samsara BioCapital L.P. (“Samsara”) to issue to Samsara and other investors who subsequently joined the agreement up to $25.0 million of convertible promissory notes with a maturity date of May 31, 2025 (the “Convertible Note Financing”). In October and November 2024, Legacy Kalaris received $10.0 million from the initial closings of the Convertible Note Financing. Under the Merger Agreement (as defined below), Legacy Kalaris was permitted to issue additional convertible promissory notes pursuant to the Convertible Note Financing or otherwise to fund its operations prior to the closing of the Merger (as defined below) in an amount not to exceed $15.0 million in the aggregate on a to be converted post-money basis, with up to $7.5 million to be provided by AlloVir and up to $7.5 million to be provided by existing Legacy Kalaris stockholders (the “Additional Permitted Bridge Financing”). In January 2025, as part of the first tranche of the Additional Permitted Bridge Financing, Legacy Kalaris issued a convertible promissory note in an aggregate principal amount of up to $7.5 million to AlloVir (the “AlloVir Note”) under which AlloVir funded a principal amount of $3.75 million, and Legacy Kalaris issued convertible promissory notes in an aggregate principal amount of $3.75 million to existing Legacy Kalaris stockholders. No additional tranches of the convertible notes financing closed prior to the closing of the Merger. Immediately prior to the closing of the Merger, Legacy Kalaris’ outstanding convertible promissory notes held by its existing stockholders were converted into shares of Legacy Kalaris’ common stock or shares of Legacy Kalaris’ Series B-2 redeemable convertible preferred stock (“Series B-2 Preferred Stock”) that were then converted into shares of Legacy Kalaris’ common stock, which, at the effective time of the Merger, were converted into the right to receive shares of AlloVir’s common stock calculated in accordance with the Exchange Ratio (as defined below). Immediately prior to the closing of the Merger, Legacy Kalaris’ outstanding convertible promissory note issued to AlloVir was cancelled.

Merger with AlloVir

On March 18, 2025 (the “Closing Date”), AlloVir consummated the previously announced merger (the “Merger”) pursuant to the terms of the Agreement and Plan of Merger, dated as of November 7, 2024 (the “Merger Agreement”), by and among AlloVir, Aurora Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of AlloVir (“Merger Sub”) and Legacy Kalaris.

In connection with the Merger, at the effective time of the Merger (the “Effective Time”), Merger Sub merged with and into Legacy Kalaris, with Legacy Kalaris continuing as a wholly-owned subsidiary of AlloVir and the surviving corporation of the Merger and, after giving effect to the Merger, Legacy Kalaris became a wholly-owned subsidiary of AlloVir, and immediately following the Effective Time, AlloVir changed its name to “Kalaris Therapeutics, Inc.” At the Effective Time, our business became primarily the business conducted by Legacy Kalaris.

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

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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.

2025 Private Placement

On December 17, 2025, we entered into a securities purchase agreement (the “2025 Securities Purchase Agreement”) with certain institutional investors named therein, pursuant to which, we issued and sold in a private placement (the “2025 Private Placement”), an aggregate of (i) 4,200,000 shares of our common stock at a purchase price of $10.00 per share, and (ii) pre-funded warrants (“Pre-Funded Warrants”) to purchase up to an aggregate of 800,000 shares of our common stock at a purchase price of $9.9999 per Pre-Funded Warrant, which represents the per share purchase price of our common stock less the $0.0001 per share exercise price for each Pre-Funded Warrant. The Pre-Funded Warrants are exercisable at any time after the date of issuance and will be exercisable until the Pre-Funded Warrant is exercised in full. In connection with the closing of the 2025 Private Placement, we received aggregate gross proceeds from the 2025 Private Placement of $50.0 million, before deducting placement agent fees and offering expenses.

License Agreement with the University of California, San Diego

In April 2021, we entered into a license agreement with UCSD (as amended, the “UCSD Agreement”) pursuant to which we obtained (i) an exclusive license under the patent rights to make, use, sell, offer for sale, and import licensed products and (ii) a non-exclusive license to use the technology with a right to sublicense, each (i) and (ii) related to new anti-VEGF agents and novel long-acting VEGF inhibitors for intraocular neovascularization for the treatment of patients with retinal pathologies. As partial consideration for the license, we agreed to pay UCSD $0.2 million and were obligated to issue shares of our common stock to UCSD equal to 5% of our fully diluted issued and outstanding securities until such time as an aggregate of $5.0 million in gross proceeds from the sale of equity securities had been raised by us. In June 2022, after the closing of the Series A financing, we issued 137,234 shares of our common stock to UCSD. We were also obligated to pay $0.1 million of patent costs incurred prior to the effective date and are required to reimburse future patent expenses incurred by UCSD during the term of the UCSD Agreement. Under the UCSD Agreement, we are required to make annual license maintenance payments of $10,000 during the first four anniversaries and $15,000 on the fifth and every subsequent anniversary of the effective date. We are obligated to pay an aggregate of up to $4.6 million upon the achievement of various development and regulatory milestones and low single-digit royalties on net sales of licensed products. The royalty is payable, on a licensed product-by-licensed product and country-by country basis, until expiration of the last-to-expire issued patent of the applicable licensed product in the country of sale or the manufacture. If we enter into a sublicensing agreement, we are required to pay UCSD a sublicense fee as a percentage of the fair market value of any sublicense fee received that is not earned royalties for each sublicense granted. The sublicense fee percentage ranges from 50% if the applicable sublicense agreement is entered into within one year from the UCSD Agreement effective date and decreases to 10% if the applicable sublicense agreement is entered into after the first dosing of a patient for a phase 2 clinical trial.

In case of a closing of a merger, or sale of at least 50% of our voting stock or the sale by us of all or substantially all of our assets (collectively referred to as “Liquidity Event”), we are obligated to make a one-time cash milestone payment to UCSD ranging from $0.1 million to $1.0 million based on the valuation of our outstanding shares at the Liquidity Event closing date. The Merger did not meet the definition of the Liquidity Event.

The UCSD Agreement is effective until the expiration date of the longest-lived patent rights or last to be abandoned patent or future patent of the licensed products, whichever is later. We can terminate the agreement upon 60 days written notice. UCSD can terminate the agreement in the event of an uncured material breach, such as a failure to make payments due, or to perform or a violation of any other material term of the UCSD Agreement, is not cured by us within 60 days after a breach written notice provided by UCSD.

The acquisition of the license under the UCSD Agreement, including patent rights and know-how, was accounted for as an asset acquisition. As the acquired technology did not have an alternative future use, we recognized the $0.2 million initial cash consideration, $0.1 million patent reimbursement costs incurred prior to the effective date and $0.2 million related to the obligation to issue shares of our common stock as research and development expenses. The obligation to issue shares of common stock included two components, the initial shares obligation and the additional shares obligation. The fair value of the initial shares obligation was estimated as $0.1 million based on the fair value of 55,440 shares of common stock, which represented 5% of the outstanding fully diluted equity at the effective date. As the initial share obligation was indexed to our own stock, it was recorded as additional paid-in capital. The additional shares obligation was accounted for when the next round of financing closed in March 2022. We estimated the fair value of an additional 81,794 shares of common stock as $0.2 million and recognized it as research and development expenses and additional paid-in capital in March 2022.

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We recognized $0.2 million and $0.1 million in patent reimbursement costs for the years ended December 31, 2025 and 2024, 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, which was recorded as research and development expense in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024. No other milestones were achieved or probable through December 31, 2025. No milestone expense was recorded for the year ended December 31, 2025.

Royalty Agreement with Samsara – Related Party

In July 2024, we entered into a royalty agreement (the “Royalty Agreement”) with Samsara. Under the Royalty Agreement, we redeemed 10,080 shares of our common stock issued to Samsara under a founder’s restricted stock purchase agreement in exchange for our agreement to pay Samsara a low single digit percentage tiered royalty on net sales, if any, of our products developed using the technology licensed under the UCSD Agreement. Such royalties are payable on a product-by-product and country-by-country basis until the later of (i) ten years after the first commercial sale of such product in such country and (ii) the expiration of the last-to-expire issued claim of our patents for such product in such country.

We identified two elements in the Royalty Agreement: repurchased shares, and future royalty payments to Samsara. The repurchase of shares was accounted at an estimated fair value of $32,000 as a reduction of common stock and additional paid-in-capital in the consolidated balance sheet and the consolidated statement of redeemable convertible preferred stock and shareholders’ deficit. We recorded $32.1 million as a long-term liability related to the obligation to make royalty payments to Samsara. The fair value of the royalty obligation was estimated using a risk-adjusted net present value model, based on the contractual royalty rates applied to the future net sales forecast, adjusted by the probability of success of product development and discounted to the effective date of the Royalty Agreement. The excess of the royalty liability over the fair value of the redeemed shares of $32.0 million was recorded as a research and development expense.

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 December 31, 2025, royalty payments were not probable and estimable and, therefore, for the year ended December 31, 2025, no interest expense was recognized for the royalty liability.

Financial Operations Overview

Operating Expenses

Our operating expenses consist of research and development expenses and general and administrative expenses.

Research and Development Expenses

The largest component of our total operating expenses since inception has been research and development activities, including preclinical development of our product candidate. Research and development costs are expensed as incurred.

External research and development costs include:

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costs associated with acquiring technology and intellectual property licenses that have no alternative future uses, milestone payments and annual license maintenance fees under its licensing agreements;

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costs incurred under agreements with third-party CDMOs, CROs and other third parties that conduct preclinical and clinical activities on our behalf and manufacture our product candidate;

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consulting fees associated with our research and development activities;

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costs related to compliance with regulatory requirements; and

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other costs associated with our research and development programs.

Internal research and development costs include:

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employee-related costs, including salaries, benefits, travel and meals expenses, and stock-based compensation expense for our research and development personnel; and

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allocated overhead costs, including software and other miscellaneous expenses incurred in connection with our research and development programs.

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Costs for certain development activities are recognized based on our management’s evaluation of the progress to completion of specific tasks using information and data provided by our vendors and third-party service providers. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense when the goods have been delivered or the services have been performed, or when it is no longer expected that the goods will be delivered or the services rendered. Upfront payments under license agreements are expensed upon receipt of the license, and annual maintenance fees under license agreements are expensed in the period in which they are incurred. Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable. Research and development expenses incurred from inception relate to the development of our lead product candidate, TH103.

We expect our research and development expenses to increase substantially for the foreseeable future as we advance our product candidate through clinical trials, pursue regulatory approval of our product candidate and expand the indications for our product candidate. The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidate may be affected by a variety of factors, including the timing and progress of clinical development activities, our ability to successfully complete clinical trials with safety, potency and purity profiles that are satisfactory to the FDA or any comparable foreign regulatory authority, our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidate; our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidate is approved; the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder; our ability to obtain and maintain patent, trade secret and other intellectual property protection and our ability to commercialize products, if and when approved, whether alone or in collaboration with others. We may never receive regulatory approval for our product candidate. As a result of the uncertainties discussed above, our management is unable to determine the duration and completion costs of our research and development activities or if, when and to what extent we will generate revenue from the commercialization and sale of our product candidate, if approved.

General and Administrative Expenses

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.

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.

Change in fair value of tranche liability

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.

Change in fair value of derivative liabilities

Change in fair value of derivative liabilities represents gains or losses from the remeasurement of the derivative liabilities embedded in the convertible promissory notes issued to Samsara and other investors at the end of each reporting period until settlement or extinguishment. The derivative liabilities expired in connection with the closing of the Merger on the Closing Date.

Interest expense

Interest expense represents non-cash interest expense accrued on issued and previously outstanding convertible promissory notes and amortization of a debt discount on the advances under the convertible promissory note issued to Samsara in March 2024.

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Loss on extinguishment and on issuanceof convertible promissory notes

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.

Other income, net

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).

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table summarizes our results of operations (in thousands):

Year EndedDecember 31,

Operating expenses:

Other income (expense), net:

Change in fair value of derivative liabilities 1,229 2,084 (855 )

Research and Development Expenses

The following table summarizes our research and development expenses (in thousands):

Year EndedDecember 31,

Personnel related costs (including stock-based compensation) 5,244 2,490 2,754

Research and development expenses decreased by $14.2 million, from $45.0 million for the year ended December 31, 2024, to $30.8 million for the year ended December 31, 2025.

License fees, milestone payments and annual maintenance fees related to acquired technologies decreased by $32.1 million due to royalty obligation expense incurred in connection with the Royalty Agreement entered into with Samsara that was recorded as research and development expense during the year ended December 31, 2024.

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CDMO, CRO and other third-party preclinical studies, clinical trials and consulting costs increased by $14.8 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 $3.1 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 $11.7 million due to the additional manufacturing process development activities and manufacturing of our clinical supplies to support our clinical trials.

Personnel related costs (including stock-based compensation) increased by $2.8 million due to hiring in our research and development organization.

General and Administrative Expenses

General and administrative expenses increased by $8.7 million, from $6.7 million for the year ended December 31, 2024 to $15.4 million for the year ended December 31, 2025. The increase in general and administrative expenses was primarily attributable to an increase of $3.9 million in legal, accounting and other professional and outside services, an increase of $2.1 million related to directors’ and officers’ insurance recognized following the closing of the Merger, and an increase of $2.5 million in personnel related costs (including stock-based compensation). General and administrative expenses increased as we invested in our corporate infrastructure and in connection with the closing of the Merger.

Change in fair value of tranche liability

We recognized a $0.4 million gain for the year ended December 31, 2025, related to the changes in the fair value of tranche liability. We recognized a $21.0 million gain for the year ended December 31, 2024 related to the changes in fair value of the 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. 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 consolidated financial statements included elsewhere in this Annual 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.

Change in fair value of derivative liabilities

We recognized $1.2 million and $2.1 million gain for the years ended December 31, 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 consolidated financial statements included elsewhere in this Annual 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.

Interest expense

We recognized $1.4 million and $2.7 million for the years ended December 31, 2025 and 2024, respectively, 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 consolidated financial statements included elsewhere in this Annual Report for additional details.

Loss on extinguishment and on issuance of convertible promissory notes

We recognized $0.2 million and $38.0 million of loss on extinguishment and on issuance of convertible promissory notes to Samsara and other investors for the years ended December 31, 2025 and 2024, respectively. The decrease of $37.8 million in loss on extinguishment and on issuance of convertible promissory notes was related to the lower amount of premium recognized at the issuance of the notes in January 2025 compared to the premium on the notes issued in March 2024 and May 2024. Refer to Note 8, Convertible Promissory Notes, in our consolidated financial statements included elsewhere in this Annual Report, for additional details.

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Other income, net

Other income, net increased by $2.6 million from $0.2 million for the year ended December 31, 2024 to $2.7 million for the year ended December 31, 2025. This increase was primarily attributable to interest income received from money market marketable securities and U.S. government treasury securities as a result of our increased cash position following the Merger.

Liquidity and Capital Resources

Sources of Liquidity

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.

Funding Requirements

Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to the development of our lead product candidate, TH103, and, to a lesser extent, general and administrative expenditures. We expect to continue to incur significant and increasing expenses for the foreseeable future as we continue to advance TH103, expand our corporate infrastructure, further our research and development initiatives and incur costs associated with the potential commercialization activities. Conducting preclinical testing and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, TH103, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of a product that we do not expect to be commercially available for several years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.

We have incurred significant losses and negative cash flows from operations since our inception. As of December 31, 2025, we had an accumulated deficit of $160.0 million. Based on our current operating plans, we believe that our existing cash, cash equivalents and short-term 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.

This forecast of cash resources and planned operations involves risks and uncertainties, and the actual amount of expenses could vary materially as a result of a number of factors. Because of the numerous risks and uncertainties associated with product development, and because the extent to which we may enter into collaborations with third parties for the development of TH103 is unknown, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of TH103. Our future funding requirements will depend on many factors, including, but not limited to, the following:

•

the timing, scope, progress and results of our preclinical studies and clinical trials for our current and future product candidates;

•

the number, scope and duration of clinical trials required for regulatory approval of our current and future product candidates;

•

the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities for our product candidates, including any requirement to conduct more studies or generate additional data;

•

the cost of manufacturing clinical and commercial supplies, as well as scale-up of our current and future product candidates;

•

the potential increase in the number of our employees and the acquisition and expansion of physical facilities to support growth initiatives;

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•

our ability to maintain existing, and establish new, strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;

•

the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights;

•

the extent to which we acquire or in-license other product candidates and technologies;

•

the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against our product candidates;

•

the effect of competing technological and market developments;

•

the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our ’ product candidates for which we receive marketing approval;

•

the amount of revenue, if any, received from commercial sales of TH103 or any future product candidates, should any product candidates receive marketing approval;

•

our implementation of various computerized informational systems and efforts to enhance operational systems;

•

the costs associated with being a public company; and

•

the impact of inflation, tariffs and other trade restrictions, as well as other factors, including economic uncertainty and geopolitical tensions, which may exacerbate the magnitude of the factors discussed above.

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings or debt financings, or potentially other capital sources, such as collaboration or licensing arrangements with third parties or other strategic transactions. There are no assurances that we will be successful in obtaining an adequate level of financing to support our business plans when needed on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates, or we may have to grant licenses on terms that may not be favorable to us. If we are unable to raise capital as and when needed or on attractive terms, or at all, we may have to significantly delay, reduce or discontinue the development or future commercialization of TH103 or any future product candidate.

Cash Flows

The following table summarizes primary sources and uses of cash for the periods presented (in thousands):

Year EndedDecember 31,

Net cash used in operating activities $ (38,370 ) $ (20,670 )

Net cash used in investing activities (19,723 ) —

Net cash provided by financing activities 155,007 19,140

Operating Activities

Net cash used in operating activities was $38.4 million and $20.7 million for the years ended December 31, 2025 and 2024, respectively.

Cash used in operating activities for the year ended December 31, 2025, was primarily due to a net loss of $43.4 million, offset by non-cash charges of $1.6 million and further offset by net changes of $3.4 million in net operating assets and liabilities. Non-cash charges primarily consist of $1.9 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

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value of tranche liability. The favorable net change in net operating assets and liabilities was primarily due to a decrease in prepaid expenses and other current assets of $1.8 million, of which $1.7 million relates to the Merger, and an increase in accrued expenses and other current liabilities of $2.1 million, net of $2.6 million relating to the Merger and $1.7 million relating to unpaid issuance costs for the 2025 Private Placement.

Cash used in operating activities for the year ended December 31, 2024, was primarily due to a net loss of $69.2 million, offset by non-cash charges of $50.6 million and increased by net changes of $2.1 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 $38.0 million, a $21.0 million change in fair value of the tranche liability, a non-cash interest expense of $2.7 million, stock-based compensation expense of $0.9 million, and offset by $2.1 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 $1.0 million, an increase in prepaid expenses and other current assets of $0.8 million, an increase in other non-current assets of $0.4 million, and an increase in accrued expenses and other current liabilities of $0.1 million.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2025 was $19.7 million, which primarily consisted of $34.5 million in purchases of short-term marketable securities offset by $15.0 million in proceeds from maturities of marketable securities. There was no cash used in investing activities for the year ended December 31, 2024.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025 was $155.0 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, and aggregate gross proceeds from the 2025 Private Placement of $50.0 million, partially offset by payments of deferred transaction costs related to the Merger of $2.9 million and payments of issuance costs related to the 2025 Private Placement of $1.7 million.

Net cash provided by financing activities for the year ended December 31, 2024 was $19.1 million, which consisted of $20.0 million net cash proceeds from the issuance of convertible promissory notes and $1.6 million from the issuance of redeemable convertible preferred stock to existing and new investors, offset by payment of deferred transaction costs of $2.4 million in connection with the Merger.

Contractual and Other Obligations

We enter into contracts in the normal course of business with CDMOs for clinical supply manufacturing, with CROs for clinical trials and with other vendors for preclinical studies, supplies and other products and services for operating purposes. These agreements generally provide for termination at the request of either party generally with less than one-year notice and, therefore, our management believes that non-cancellable obligations under these agreements are not material. We do not currently expect any of these agreements to be terminated and did not have any non-cancellable obligations under these agreements as of December 31, 2025 and 2024.

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 consolidated financial statements included elsewhere in this Annual Report for additional details. As of December 31, 2025 and 2024, we recognized $0.03 million and $0.2 million related to the UCSD Agreement in accrued expenses and other current liabilities in the consolidated balance sheets, respectively. Over the life of the agreement through December 31, 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 year ended December 31, 2025. We are required to pay royalties on sales of products developed under the UCSD Agreement. Our product candidate was in development as of December 31, 2025 and 2024, and no such royalties were due.

We are obligated to pay royalties to Samsara under the Royalty Agreement. Refer to Note 7, Significant Agreements, in our consolidated financial statements included elsewhere in this Annual 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 December 31, 2025 these royalties were not probable and estimable.

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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 $2.1 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 year ended December 31, 2025.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact the financial position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements included elsewhere in this Annual Report.

Critical Accounting Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. On an ongoing basis, management evaluates these estimates and judgments, including, but not limited to, those related to the accrual of research and development expenses, the fair value of royalty obligation, the fair value of convertible promissory notes, the fair value of tranche liability, the fair value of derivative liabilities, the fair value of common stock and preferred stock, and stock-based compensation. These estimates and assumptions are monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates and assumptions could occur in the future. Our management's estimates are based on our historical experience and on various other factors that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from these estimates under different assumptions or conditions.

Although significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting estimates are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Research and Development Expenses

Research and development expenses are charged to expense as incurred. Research and development expenses include certain payroll and personnel expenses, license fees, laboratory supplies, consulting costs, external contract research and development expenses and allocated overhead costs, including software and other miscellaneous expenses incurred in connection with its research and development programs.

We estimate manufacturing and product development costs, preclinical study and clinical trial and other research and development expenses based on the services performed. We have entered into various agreements with outsourced vendors, contract development and manufacturing organizations and clinical research organizations. The financial terms of these contracts are subject to negotiation, which vary by contract and may result in payments that do not match the periods over which materials or services are provided. Generally, these agreements set forth the scope of work to be performed at a fixed fee, unit price or on a time and materials basis. We record the estimated costs of research and development activities based on the level of services performed, the progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development services provided, but not yet invoiced, are included in accrued expenses on the balance sheets. Advance payments for goods or services for future research and development activities are deferred as prepaid expenses and are expensed as the goods are delivered or the related services are performed. We make these estimates based on facts and circumstances known at that time. If the actual timing of the performance of services or the level of effort varies from the original estimates, we will adjust the accrual accordingly. Amounts ultimately incurred in relation to amounts accrued for these services at a reporting date may be substantially higher or lower than our estimates. To date, there have been no material differences between estimates of such expenses and the amounts actually incurred.

Convertible Promissory Notes

Tranche Liability

Under the Convertible Note Financing’s amended note purchase agreement, Legacy Kalaris was eligible to receive additional proceeds in the Convertible Note Financing to fund Legacy Kalaris’s operations prior to the closing of the Merger at three subsequent closings upon Legacy Kalaris’s written notice to investors and subject to Samsara’s consent. The investors’ right to receive additional

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convertible promissory notes in subsequent tranches of the Convertible Note Financing with a predetermined conversion price was concluded to be a freestanding financial instrument that is required to be accounted for separately as a liability at fair value. We estimated the fair value of the tranche liability at inception and remeasures it at the end of each reporting period until the tranche liability expires or is settled. The changes in the fair value are recorded as a change in fair value of tranche liability in the statements of operations and comprehensive loss. We estimate the fair value of the tranche liability using a probability weighted model, which considers as inputs the timing of issuing convertible notes and notes conversion, probabilities of conversion scenarios, the estimated fair value of our shares into which the note is convertible and a discount rate. A significant change in probabilities of conversion scenarios and changes in the estimated conversion price will significantly change the estimated fair value of the tranche liability. We recognized $21.3 million as a tranche liability at the issuance dates in October and November 2024 and recognized a gain of $21.0 million as the change in fair value of the tranche liability for the year ended December 31, 2024. The decrease in fair value was a result of the modification of the subsequent tranche amounts in January 2025 and the parties agreeing to convert tranches at a price per share equal to the Company Value Per Share, as defined in the Merger Agreement. At the closing of the Merger, in March 2025, all subsequent tranches of the Convertible Notes Financing that were not funded prior to the closing were cancelled.

Derivative Liabilities

The redemption features of the convertible promissory notes met the requirements for separate accounting and were accounted for as compound derivative instruments recorded as a liability at fair value at inception and were subject to remeasurement to fair value at each balance sheet date, with any changes in fair value recorded as a change in fair value of derivative liabilities in the consolidated statements of operations and other comprehensive loss. Derivative liabilities were classified in the consolidated balance sheets as current or non-current consistent with the classification of the respective convertible promissory notes they were related to. We estimate the fair value of the derivative liabilities embedded in the convertible promissory notes using a with-and-without scenario analysis, which involves valuing the whole instrument on an as-is basis and then valuing the instrument without the embedded derivative. The difference between the entire instrument with the embedded derivatives compared to the instrument without the embedded derivatives is the fair value of the derivative liabilities. A significant increase in probabilities of a qualified financing or redemption scenario, a change of control scenario and a decrease in a discount rate would significantly increase the estimated fair value of derivative liabilities.

Royalty Obligation - Related Party

In July 2024, we entered into the Royalty Agreement with Samsara. Under the Royalty Agreement, we redeemed 10,080 shares of our common stock with a fair value of $32,000 issued to Samsara. In return, we are obligated to pay Samsara royalties on a product-by-product and country-by-country basis at low single-digit royalty rates on future net product sales. At the effective date of the Royalty Agreement, we recognized our obligation to make future royalty payments to Samsara at estimated fair value as a liability on the consolidated balance sheets and as a research and development expense in the consolidated statements of operations and comprehensive loss. Once royalty payments to Samsara are deemed probable and estimable, and if such amounts exceed the royalty liability balance recognized at the effective date of the agreement, we will impute interest to accrete the royalty liability on a prospective basis based on such estimates. The fair value of the royalty obligation at the effective date of the Royalty Agreement was estimated using a risk-adjusted net present value model, based on the contractual royalty rates applied to the future net sales forecast, adjusted by the probability of success of product development and discounted to the effective date of the Royalty Agreement. Significant changes to any of the following assumptions would significantly impact the estimated liability amount: future timing and amounts of net product revenues, estimated probabilities of success based on a stage of product development and the discount rate.

Stock-Based Compensation Expense

We measure stock-based awards made to employees and non-employees based on the estimated fair value of the awards as of the grant date using the Black-Scholes option-pricing model. The model requires management to make a number of assumptions including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield.

Fair Value of Common Stock - Prior to the Merger, the fair market value of our common stock was determined by the board of directors with assistance from management and external valuation experts. The approach to estimating the fair market value of common stock is consistent with the methods outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately- Held-Company Equity Securities Issued as Compensation (the “Practice Aid”). After the closing of the Merger, the fair value of common stock is our closing price per share on The Nasdaq Global Market on the grant date.

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Expected Volatility - Expected volatility is estimated by studying the volatility of the prices of shares of common stock of comparable public companies for similar terms. We will continue to apply this process until enough historical information regarding the volatility of our stock price becomes available.

Expected Term - Expected term represents the period that our stock-based awards are expected to be outstanding and is determined by calculating the midpoint of the contractual term of the options and the weighted-average vesting period.

Risk-Free Interest Rate - The risk-free interest rate is based on the U.S. Treasury zero-coupon bonds issued in effect at the time of grant for periods corresponding with the expected term of the option.

Expected Dividend - The Black-Scholes valuation model calls for a single expected dividend yield as an input. To date, we have not declared or paid any dividends and we do not expect to declare or pay any dividends in the future.

Significant changes in estimated fair value of common stock, expected volatility and expected term would significantly impact recognized stock-based compensation expense amounts.

Smaller Reporting Company Status

We are a “smaller reporting company” because the market value of our common stock held by non-affiliates was less than $700.0 million and our annual revenue was less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of its stock held by non-affiliates is less than $250.0 million or (ii) its annual revenue was less than $100.0 million during the most recently completed fiscal year and the market value of its stock held by non-affiliates is less than $700.0 million.

As a non-accelerated filer and a “smaller reporting company”, as defined in Rule 12-b-2 under the Exchange Act, our independent registered public accounting firm is not required to issue an attestation report on the internal control over financial reporting. Specifically, as a smaller reporting company we have chosen to present only the two most recent fiscal years of audited financial statements in this Annual Report on Form 10-K and we have reduced disclosure obligations regarding executive compensation.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information required by this item.

Item 8. Financial Statements and Supplementary Data.

Our consolidated financial statements, together with the independent registered public accounting firm report thereon, are presented beginning on page F-1 of this Annual Report.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”), and Chief Financial Officer (“CFO”) (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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Based on their evaluation, the CEO and the CFO have concluded that our disclosure controls and procedures were not effective as of December 31, 2025, because of the material weaknesses in our internal control over financial reporting described below.

We have identified material weaknesses in our internal control over financial reporting as of December 31, 2024. These material weaknesses have not been fully remediated as of December 31, 2025. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely basis.

We did not fully maintain components of the Committee of Sponsoring Organizations of the Treadway Commission framework, including elements of the control environment, risk assessment, monitoring activities, information and communication, and control activities components, relating to: (i) our commitment to attract, develop, and retain competent individuals; (ii) identifying, assessing, and communicating appropriate internal control objectives, (iii) identifying and analyzing risks to achieve these objectives; (iv) selecting, developing, and performing ongoing evaluations to ascertain whether the components of internal controls are present and functioning; (v) communicating accurate information internally and externally, including providing information pursuant to objectives, responsibilities, and functions of internal control; (vi) selecting and developing control activities that contribute to the mitigation of risks and support achievement of objectives and (vii) deploying control activities through policies that establish what is expected and procedures that put policies into action.

These material weaknesses could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement of our annual or interim financial statements that would not be prevented or detected.

Remediation Efforts and Plans

Management has taken actions to remediate the deficiencies in our internal controls over financial reporting, including implementing additional processes and controls designed to address the underlying causes of the above-mentioned material weaknesses.

Management’s internal control remediation efforts include the following:

•

We completed the implementation of multiple financial systems, including a new company-wide enterprise resource planning (ERP) system, which provides additional systematic controls and segregation of duties for our business processes.

•

We recruited additional accounting personnel with appropriate experience, certification, education and training. For example, following the closing of the Merger, AlloVir’s Chief Accounting Officer serves as our Chief Accounting Officer, and AlloVir’s Controller serves as our Controller. In addition, in April 2025, we appointed a new member to our board of directors, who was also appointed as chair of the audit committee of the board of directors and was deemed to be an audit committee financial expert by our board of directors. Additionally, in August 2025, we hired a Director of Accounting and, in November 2025, we hired a Chief Financial Officer.

•

We engaged a third-party to assist us with the implementation of internal controls over financial reporting. Specifically, with their assistance, we have begun to design and implement policies, procedures and controls around key business reporting processes and general information technology controls.

•

We have identified, assessed, and communicated appropriate internal control objectives to key stakeholders across the organization and implemented a risk assessment over financial reporting which is updated and reassessed on a periodic basis.

•

We have begun to perform manual procedures to validate the completeness and accuracy of certain reports generated from various financial systems that are relevant to the preparation of the financial statements.

•

We regularly report on the progress of our material weaknesses remediation efforts to key stakeholders across our organization, including our Audit Committee.

To the extent that we are not able to retain key individuals or are unable to successfully design and implement required controls, the material weaknesses identified may not be remediated and we may be required to record additional adjustments to our financial statements in the future or otherwise not be able to produce timely or accurate financial statements. The material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above, the controls operate for a sufficient period of time, and management has concluded, through testing, that these controls are effective. These remediation measures will be time-consuming and require financial and operational resources. Our failure to implement and maintain

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effective internal control over financial reporting could result in errors in our financial statements that may lead to a restatement of our financial statements or cause us to fail to meet our reporting obligations.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision of our management, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth in the Committee of Sponsoring Organizations of the Treadway Commission framework. Our management identified control deficiencies, as previously disclosed, that, individually or in the aggregate, constitute a material weakness in our internal control over financial reporting. While our management, with the oversight of the audit committee of our board of directors, has made progress toward remediating the material weakness, our management has determined that the material weakness has not yet been fully remediated. Consequently, our management has concluded our internal control over financial reporting was not effective as ofDecember 31, 2025.

Changes in Internal Control Over Financial Reporting

Except as discussed above under “Remediation Efforts and Plans”, there were no changes in our internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

Item 9B. Other Information.

(b) Director and Officer Trading Arrangements

None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarter ended December 31, 2025.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 11. Executive Compensation.

The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(1) Consolidated Financial Statements

The following documents are included this Annual Report:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

(2) Financial Statement Schedules

All financial statement schedules have been omitted because they are not applicable, not required, or the information required is shown in the consolidated financial statements or the notes thereto.

(3) Exhibits

The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this Annual Report are listed in the Exhibit Index below. The exhibits listed in the Exhibit Index are incorporated by reference herein.

Exhibit Index

Exhibit Number Description

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19.1* Insider Trading Policy

21.1* Subsidiaries of the Registrant

97.1*# Dodd-Frank Compensation Recovery Policy

101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

# Indicates management contract or compensatory plan.

+ The annexes, schedules, and certain exhibits to the merger agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.

Item 16. Form 10-K Summary.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Kalaris Therapeutics, Inc.

Date: March 17, 2026 By: /s/ Andrew Oxtoby

Andrew Oxtoby

President and Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Andrew Oxtoby President, Chief Executive Officer and Director March 17, 2026

Andrew Oxtoby (Principal Executive Officer)

/s/ Matthew Gall Chief Financial Officer March 17, 2026

Matthew Gall (Principal Financial Officer)

/s/ Brett Hagen Chief Accounting Officer March 17, 2026

Brett Hagen (Principal Accounting Officer)

/s/ David Hallal Chairman March 17, 2026

David Hallal

/s/ Anthony Adamis Director March 17, 2026

Anthony Adamis, M.D

/s/ Srinivas Akkaraju Director March 17, 2026

Srinivas Akkaraju, M.D., Ph.D.

/s/ Michael Dybbs Director March 17, 2026

Michael Dybbs, Ph.D.

/s/ Napoleone Ferrara Director March 17, 2026

Napoleone Ferrara, M.D.

/s/ Morana Jovan-Embiricos Director March 17, 2026

Morana Jovan-Embiricos, Ph.D.

/s/ Leone Patterson Director March 17, 2026

Leone Patterson

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) F-2

Consolidated Balance Sheets F-4

Consolidated Statements of Operations and Comprehensive Loss F-5

Consolidated Statements of Cash Flows F-7

Notes to the Consolidated Financial Statements F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Kalaris Therapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Kalaris Therapeutics, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued research and development expenses and research and development expenses — Refer to Notes 2 and 6 to the financial statements

Critical Audit Matter Description

F-2

We identified the recording of certain third-party research and development costs as a critical audit matter because of the judgments necessary for management to estimate the cost of services provided but not yet invoiced, the significant volume of transactions and the varied nature of audit evidence obtained from vendor to vendor. This required extensive audit effort due to the volume and variability in the arrangements and available information from the vendors and required a high degree of auditor judgment when performing audit procedures to audit management’s estimates of total expenses, accrued research and development expense and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the estimate of research and development expenses and the accrued research and development expense balances included the following, among others:

•

We met with the Company’s research and development personnel and inspected Board of Directors materials to understand the status of clinical trial activities. We compared this information to the inputs in management’s estimate of the recorded expenses and accrued research and development expenses.

•

For a sample of contracts, we evaluated the third-party research and development expenses and the accrued research and development expense balances by:

Sending written confirmations directly to contract research organizations or contract development and manufacturing organizations to confirm completeness of agreements and the total budgeted amount and percentage of completion for services provided as of year-end.

Inspecting the development and manufacturing services agreement and related amendments, change orders, statements of work, and agreeing key provisions of the agreements including timeline, budget, and relevant rates, to the Company’s analysis of estimated expenses incurred to date.

Performing substantive testing over the operating expense arising from contract research organizations or contract development and manufacturing organizations activity during the year by obtaining invoices, contracts and other underlying support and comparing to information recorded within the Company’s general ledger to test the occurrence, accuracy, completeness and cutoff of such operating expense.

Testing cash disbursements after period end to test the completeness of the accrual.

/s/ Deloitte & Touche LLP

San Francisco, California

March 17, 2026

We have served as the Company's auditor since 2024.

F-3

Kalaris Therapeutics, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share data)

December 31, December 31,

Assets

Current assets:

Short-term marketable securities 19,928 —

Prepaid expenses and other current assets 827 967

Deferred transaction costs — 3,146

Operating lease right-of-use assets 1,475 —

Restricted cash 499 —

Other non-current assets 953 410

Current liabilities:

Derivative liabilities (including $0 and $995 due to a related party) — 1,042

Tranche liability (including $0 and $331 due to a related party) — 365

Operating lease liabilities, current 316 —

Operating lease liabilities, long-term 1,132 —

Commitments and contingencies (Note 10)

Stockholders’ equity (deficit):

Accumulated other comprehensive income 6 —

Total stockholders’ equity (deficit) 78,814 (96,616 )

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Kalaris Therapeutics, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

Year Ended December 31,

Operating expenses:

Other income (expense), net:

Total other income (expense), net 2,714 (17,435 )

Comprehensive loss:

Other comprehensive income:

Unrealized gain on marketable securities, net of tax 6 —

Total other comprehensive income 6 —

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Kalaris Therapeutics, Inc.

Consolidated Statements of Redeemable Convertible Preferred Stock

and Stockholders’ Equity (Deficit)

(In thousands, except share data)

Capital contributions – in-kind services – related party — — — — 60 — — 60

Premium on issuance of convertible promissory notes — — — — 16,641 — — 16,641

Issuance of common stock upon stock option exercises — — 4,030 — 3 — — 3

Stock-based compensation expense — — — — 895 — — 895

Vesting of restricted stock awards — — — — 1 — — 1

Premium on issuance of convertible promissory notes — — — — 186 — — 186

Transaction costs related to the Merger — — — — (5,357 ) — — (5,357 )

Stock-based compensation expense — — — — 1,936 — — 1,936

Unrealized gain on available-for-sale securities, net of tax — — — — — 6 — 6

The shares of common stock have been retroactively recast in connection with the Merger to reflect the exchange ratio of 0.2016 (Note 3).

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Kalaris Therapeutics, Inc.

Consolidated Statements of Cash Flows

(In thousands)

Year Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operations:

Royalty obligation expense – related party — 32,044

Depreciation expense 13 —

Stock-based compensation expense 1,936 895

Capital contributions – in-kind services – related party — 60

Non-cash operating lease expense 53 —

Changes in assets and liabilities:

Prepaid expense and other current assets 1,810 (803 )

Other non-current assets (355 ) (410 )

Accounts payable (88 ) (1,027 )

Operating lease liabilities (81 ) —

Net cash used in operating activities (38,370 ) (20,670 )

Cash flows from investing activities:

Purchases of short-term marketable securities (34,523 ) —

Maturities of short-term marketable securities 15,000

Purchase of property and equipment (200 ) —

Net cash used in investing activities (19,723 ) —

Cash flows from financing activities:

Proceeds from issuance of common stock in private placement 42,000 —

Proceeds from issuance of pre-funded warrants in private placement 8,000 —

Payment of issuance costs (1,669 )

Cash acquired in connection with the Merger 102,113 —

Payment of deferred transaction costs and issuance costs (2,937 ) (2,420 )

Proceeds from the exercise of stock options — 3

Net cash provided by financing activities 155,007 19,140

Reconciliation of cash, cash equivalents and restricted cash:

Restricted cash 499 —

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Kalaris Therapeutics, Inc.

Consolidated Statements of Cash Flows

(In thousands)

Year EndedDecember 31,

Supplemental disclosure of cash flow information:

Merger transaction costs recognized in additional paid-in capital $ 5,357 $ —

Unrealized gain on available-for-sale securities $ 6 $ —

Capital contributions – in-kind services – related party $ — $ 60

Repurchase of common stock shares for royalty obligation $ — $ 32

Vesting of restricted stock awards $ — $ 1

The accompanying notes are an integral part of these consolidated financial statements.

F-8

Kalaris Therapeutics, Inc.

Notes to the Consolidated Financial Statements

1. Nature of the Business

Description of the Business

Kalaris Therapeutics, Inc. (“Kalaris” or “the Company”) is a clinical stage biopharmaceutical company dedicated to the development and commercialization of treatments for prevalent retinal diseases with major unmet medical needs. The Company is 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.

On March 18, 2025 (the “Closing Date”), AlloVir, Inc., a Delaware corporation (“AlloVir”), consummated the previously announced merger (the “Merger”) pursuant to the terms of the Agreement and Plan of Merger, dated as of November 7, 2024 (the “Merger Agreement”), by and among AlloVir, Aurora Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of AlloVir (“Merger Sub”) and Kalaris Tx, Inc. (formerly Kalaris Therapeutics, Inc.), a Delaware corporation (“Legacy Kalaris”). At the effective time of the Merger (the “Effective Time”), Merger Sub merged with and into Legacy Kalaris, with Legacy Kalaris continuing as a wholly-owned subsidiary of AlloVir and the surviving corporation of the Merger and, after giving effect to the Merger, Legacy Kalaris became a wholly-owned subsidiary of AlloVir. Immediately following the Effective Time, AlloVir changed its name to “Kalaris Therapeutics, Inc.” At the Effective Time, the Company’s business became primarily the business conducted by Legacy Kalaris. The Company's common stock, which was previously listed on The Nasdaq Capital Market and traded under the ticker symbol “ALVR” through the close of business on the Closing Date, commenced trading on The Nasdaq Global Market under the ticker symbol “KLRS” on March 19, 2025. Refer to Note 3, “Merger with AlloVir”, for further details of the Merger.

Samsara BioCapital L.P. and its affiliates (collectively, “Samsara”), the Company's majority stockholder and a related party, have provided Legacy Kalaris with significant equity and debt financing since its inception, and management and operational support services to the Company. Refer to Note 16 for further details of the related party transactions with Samsara.

Liquidity

The Company has incurred significant losses and negative cash flows from operations since its inception. During the years ended December 31, 2025 and 2024, the Company incurred net losses of $43.4 million and $69.2 million, respectively. During the years ended December 31, 2025 and 2024, the Company had negative cash flows from operations of $38.4 million and $20.7 million, respectively. As of December 31, 2025 and December 31, 2024, the Company had an accumulated deficit of $160.0 million and $116.6 million, respectively. The Company expects to continue to incur substantial losses for the foreseeable future, and its ability to achieve and sustain profitability will depend on the successful development, approval, and commercialization of product candidates and on the achievement of sufficient revenues to support the Company’s operations.

Since its inception, the Company has funded its operations primarily with proceeds from sales of its redeemable convertible preferred stock, issuances of convertible promissory notes and a simple agreement for future equity (“SAFE”), from cash and cash equivalents of AlloVir received in the Merger, and with proceeds from the 2025 Private Placement (as defined below). Refer to Note 12 for further details of the 2025 Private Placement.

As of December 31, 2025, the Company had cash, cash equivalents and short-term marketable securities of $118.0 million. The Company expects that the existing cash, cash equivalents and short-term marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance date of these consolidated financial statements.

The Company will need to raise additional financing to continue its product's development for the foreseeable future until it becomes profitable. The Company plans to monitor expenses and raise additional capital through a combination of equity and debt financings, strategic alliances, and licensing arrangements. The Company’s ability to access capital when needed is not assured and, if capital is not available to the Company when, and in the amounts needed, the Company may be required to significantly curtail, delay or discontinue one or more of its research or development programs or the commercialization of any product candidate, or be unable to expand its operations or otherwise capitalize on the Company’s business opportunities, as desired, which could materially harm the Company’s business, financial condition and results of operations.

F-9

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchanges Commission (“SEC”) regarding financial reporting. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). AlloVir and its subsidiaries’ operating results are included in the Company’s consolidated financial statements from the Closing Date of the Merger. All other accompanying financial data as of and for the year ended December 31, 2024, include only the accounts and disclosures of Legacy Kalaris. All intercompany transactions and balances have been eliminated upon consolidation.

All historical common share data and per-share amounts prior to the Merger were retrospectively recast to reflect the effect of the exchange ratio of 0.2016 per one share, which was determined in accordance with the Merger Agreement. The number of authorized shares and par value per share were not recast. The conversion ratios for each series of redeemable convertible preferred stock, which were converted into shares of common stock in connection with the closing of the Merger, were proportionally recast.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the accrual of research and development expenses, the fair value of convertible promissory notes, the fair value of derivative liabilities, the fair value of tranche liability, the fair value of Legacy Kalaris' common stock and Legacy Kalaris' redeemable convertible preferred stock, stock-based compensation expense, and valuation of deferred tax assets.

Concentrations of Credit Risk and Other Risks and Uncertainties

Cash balances are held at financial institutions and account balances may exceed federally insured limits. The Company also had marketable securities in money market funds, which can be subject to certain credit risks. The Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer and monitoring the ongoing creditworthiness of the financial institutions and issuers. To date, the Company has not experienced any losses on its cash and cash equivalents balances and periodically evaluates the creditworthiness of its financial institutions.

The Company is subject to risks common to companies in the development stage, including, but not limited to, development and regulatory approval of product candidates, development of markets and distribution channels, dependence on key personnel, and the ability to obtain additional capital as needed to fund its product plans and business operations. To achieve profitable operations, the Company must successfully develop and obtain requisite regulatory approvals for, manufacture, and market its product candidate. There can be no assurance that such product candidate can be developed and approved or manufactured at an acceptable cost and with appropriate performance characteristics, or that such product will be successfully marketed. These factors could have a material adverse effect on the Company’s future financial results.

The product candidate being developed by the Company requires approval from the U.S. Food and Drug Administration or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s product candidate will receive the necessary regulatory approvals. If the Company is unable to complete clinical development, obtain regulatory approval for or commercialize its product candidate, or experiences significant delays in doing so, its business will be materially harmed.

Cash and Cash Equivalents

Cash and cash equivalents include cash in readily available checking accounts and money market funds. The Company considers all highly liquid marketable securities purchased with an original maturity of three months or less as of the purchase date to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value.

Restricted Cash

Cash accounts with any type of restriction are classified as restricted cash. The Company has restricted cash deposits with a bank, which serve as collateral for a letter of credit issued to the landlord of the Company’s leased facility for a security deposit. The Company classified this amount as restricted cash in the accompanying consolidated balance sheets.

F-10

Fair Value Measurement

ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements, as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The majority of our financial assets have been classified as Level 1. Our financial assets (which typically include cash equivalents and marketable equity securities) have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observation market inputs included reportable tables, benchmark yields, broker quotes, bids, offers, current spot rates and other industry and economic events.

Segment Information

Operating segments are defined as components of an enterprise for which separate and discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company operates and manages its business as one reportable and operating segment, which is the business of developing retinal therapies. The chief executive officer, who is the chief operating decision maker (the “CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

Acquisitions

The Company evaluates acquisitions of assets and other similar transactions to assess whether the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen test is met, the transaction is accounted for as an asset acquisition. If the screen test is not met, further determination is required as to whether the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets.

The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs. Goodwill is not recognized in an asset acquisition. In an asset acquisition, the cost allocated to the acquired in-process research and development assets with no alternative future use is charged to research and development expense at the acquisition date.

F-11

Deferred Transaction Costs

Deferred transaction costs capitalized were $3.1 million as of December 31, 2024. There were no deferred transaction costs capitalized as of December 31, 2025. Deferred transaction costs relate to legal, consulting, and accounting fees incurred in connection with the Merger. The Company capitalizes certain legal, consulting, and accounting fees that are directly associated with in-process equity financings as deferred transaction costs in the consolidated balance sheets until such financings are consummated. After consummation of an equity financing or upon the consummation of the Merger, these costs are recorded as a reduction of the proceeds from the offering in stockholders' equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering. Should the Company choose to not initiate such financing, the deferred transaction costs would be immediately expensed as operating expenses in the consolidated statements of operations and comprehensive loss. All deferred transaction costs were recognized to additional paid-in capital upon the consummation of the Merger.

Patent Costs

All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty of the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the statements of operations and comprehensive loss.

Tranche Liability

Under the convertible note financing’s amended note purchase agreement, Legacy Kalaris was eligible to receive additional proceeds in the Convertible Note Financing prior to the closing to the Merger to fund Legacy Kalaris’s operations prior to the closing of the Merger at three subsequent closings upon Legacy Kalaris’s written notice to investors and subject to Samsara’s consent. The investors’ right to receive additional convertible promissory notes in subsequent tranches of this convertible note financing with a predetermined conversion price was concluded to be a freestanding financial instrument that was required to be accounted for separately as a liability at fair value. The Company estimated fair value of the tranche liability at inception and remeasured it at the end of each reporting period until the tranche liability expired or was settled. The changes in the fair value were recorded as a change in fair value of tranche liability in the statements of operations and comprehensive loss. In connection with the closing of the Merger, the outstanding convertible promissory notes issued by the Company in October and November 2024 converted into shares of common stock and the tranche liability expired.

Convertible Promissory Notes Derivative Liabilities

The convertible promissory notes contained embedded features that provided the noteholder with multiple settlement alternatives. Certain of these settlement features provided the noteholder the right to receive cash or a variable number of shares upon a change in control or the completion of a capital raising transaction by the Company (the “redemption features”). The redemption features of the convertible promissory notes met the requirements for separate accounting and were accounted for as compound derivative instruments recorded as a liability at fair value at inception and were subject to remeasurement to fair value at each reporting period when outstanding, with any changes in fair value recorded as a change in fair value of derivative liabilities in the statements of operations and other comprehensive loss (Note 4). Derivative liabilities were classified in the balance sheets as current consistent with the classification of the respective convertible promissory notes they were related to. The Company estimated the fair value of the derivative liabilities embedded in the convertible promissory notes using a with-and-without scenario analysis, which involved valuing the whole instrument on an as-is basis and then valuing the instrument without the embedded derivative. The difference between the entire instrument with the embedded derivatives compared to the instrument without the embedded derivatives was the fair value of the derivative liabilities. A significant increase in probabilities of qualified financing or redemption scenario, a change of control scenario and a decrease in a discount rate would significantly increase the estimated fair value of derivative liabilities. In connection with the closing of the Merger, all outstanding convertible promissory notes, other than the AlloVir Note (as defined below), converted into shares of either redeemable convertible preferred stock or common stock in accordance with the terms of the agreements and the derivatives expired.

Royalty Obligation – Related Party

In July 2024, the Company entered into a royalty agreement with Samsara (Note 6). In exchange for the shares of common stock the Company redeemed from Samsara, the Company is obligated to pay royalties on a product-by-product and country-by-country basis at low single-digit royalty rates on future net product sales. Given the significant related party relationships with Samsara, the Company concluded that the royalty agreement is a funded research and development agreement under ASC 730-20, Research and Development Arrangements. The Company recognized the royalty obligation at its estimated fair value at the effective date of the agreement. Once royalty payments are deemed probable and estimable, and if such amounts exceed the royalty obligation balance, the Company will impute interest to accrete the royalty obligation on a prospective basis based on such estimates. If and when the Company makes royalty payments under the royalty agreement, the royalty obligation balance will be reduced.

F-12

Redeemable Convertible Preferred Stock

The Company recorded redeemable convertible preferred stock at fair value on the date of issuance, net of issuance costs. The redeemable convertible preferred stock was recorded separately from stockholders’ equity (deficit) because the shares contained deemed liquidation features that were not solely within the Company’s control. The holders of the preferred stock controlled a majority of the votes of the board of directors of the Company. Accordingly, the preferred stock was classified as temporary equity in the Company’s consolidated balance sheets. The Company did not adjust the carrying values of the redeemable convertible preferred stock to the liquidation preferences of such stock because it was uncertain whether or when a deemed liquidation event would occur that would obligate the Company to pay the liquidation preferences to holders of redeemable convertible preferred stock. Subsequent adjustments to the carrying values to the liquidation preferences would be made only when it became probable that such a deemed liquidation event would occur. In connection with the closing of the Merger, all outstanding shares of redeemable convertible preferred stock were converted into shares of common stock.

Research and Development Expenses

Research and development expenses are charged to expenses as incurred. Research and development expenses include payroll and personnel related expenses, license fees, laboratory supplies, consulting costs, external contract research and development expenses and allocated overhead costs, including software and other miscellaneous expenses incurred in connection with its research and development programs.

The Company estimates manufacturing and product development costs, clinical trial and other research and development expenses based on the services performed. The Company has entered into various agreements with outsourced vendors, contract development and manufacturing organizations and clinical research organizations. The financial terms of these contracts are subject to negotiation, which vary by contract and may result in payments that do not match the periods over which materials or services are provided. Generally, these agreements set forth the scope of work to be performed at a fixed fee, unit price or on a time and materials basis. The Company records the estimated costs of research and development activities based on the level of services performed, the progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development services provided, but not yet invoiced, are included in accrued expenses on the consolidated balance sheets. Advance payments for goods or services for future research and development activities are deferred as prepaid expenses and are expensed as the goods are delivered or the related services are performed. The Company makes these estimates based on facts and circumstances known at that time. If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Amounts ultimately incurred in relation to amounts accrued for these services at a reporting date may be substantially higher or lower than the Company’s estimates. To date, there have been no material differences between estimates of such expenses and the amounts actually incurred.

Stock-Based Compensation Expense

The Company provides stock-based awards in the form of stock options and restricted stock awards to its employees, directors and consultants. The Company accounts for stock-based compensation expense by measuring and recognizing compensation expense for all stock-based awards based on estimated grant-date fair values. For awards with service-based vesting conditions, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service or vesting period. The vesting period generally approximates the expected service period of the awards. The Company accounts for forfeitures as they occur.

The Company estimates the fair value of stock options using the Black-Scholes option valuation model. The Black-Scholes model requires the input of subjective assumptions, including expected volatility, expected dividend yield, expected term, risk-free rate of return and the estimated fair value of the underlying common stock on the date of grant. Prior to the Merger, the fair value of the Company’s common stock on the date of grant was determined by the Board, taking into consideration its most recently available third-party valuations of common stock as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the grant date.

Foreign Currency Transactions

The functional currency for the Company and all of its subsidiaries is the U.S. Dollar. Transactions denominated in foreign currencies are initially measured in U.S. dollars using the exchange rate on the date of the transaction. Foreign currency denominated monetary assets and liabilities are subsequently remeasured at the end of each reporting period using the exchange rate at that date, with the corresponding foreign currency transaction gain or loss recorded in other income (expense), net in the consolidated statements of operations and comprehensive loss.

F-13

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. The Company's comprehensive loss includes unrealized gains (losses) on available-for-sale securities.

Pre-Funded Warrants

Warrants are accounted for based on the specific terms of the warrant agreements. The Company's pre-funded warrants are indexed to the Company's common stock and meet the criteria to be classified as equity. Proceeds from the issuance of pre-funded warrants are recorded within additional paid-in capital and are not subject to remeasurement. Refer to Note 12 and Note 14 for further information regarding the pre-funded warrants issued by the Company.

Net Loss Per Share Attributable to Common Stockholders

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. The Company’s potentially dilutive securities include convertible promissory notes, redeemable convertible preferred stock, common stock subject to repurchase, unvested restricted stock awards, and stock options. These potentially dilutive securities have been excluded from the computation of diluted net loss per share as their inclusion would be antidilutive.

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities as the redeemable convertible preferred stock and common stock subject to repurchase are considered participating securities. The redeemable convertible preferred stock does not have a contractual obligation to share in the Company’s losses, and common stock subject to repurchase and unvested restricted stock awards are considered contingently issuable shares for accounting purposes. As such, the net loss is attributed entirely to common stockholders. Because the Company has reported a net loss for the reporting periods presented, the diluted net loss per common share is the same as basic net loss per common share for those periods.

Issued and unexercised pre-funded warrants are classified as a component of equity in the Company's consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of shares of common stock upon exercise. All shares underlying pre-funded warrants are included in the weighted-average number of shares of common stock used to calculate basic and diluted net loss per common share because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date of the pre-funded warrants.

Commitments and Contingencies

The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range.

Income Taxes

The Company accounts for income taxes using the asset and liability method; under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, if all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to the provision of income taxes in the period when such determination is made.

F-14

As of December 31, 2025 and 2024, the Company maintained a valuation allowance against its deferred tax assets as the Company concluded it had not met the “more likely than not” to be realized threshold. Changes in the valuation allowance when they are recognized in the provision for income taxes may result in a change in the estimated annual effective tax rate.

Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Tax positions that meet the more-likely-than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with the taxing authority. Interest and penalties related to unrecognized tax benefits are included within the provision for income tax.

Short-Term Marketable Securities

The Company classifies all investments with an original maturity of less than one year upon purchase as short-term marketable securities. Short-term marketable securities consist of U.S. treasury securities classified as available-for-sale. The Company's short-term marketable securities are classified as available-for-sale as they are available to fund current operations, even if the Company intends to hold the marketable securities to maturity. Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in other comprehensive income (loss) until realized. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization or accretion is included in other income (expense), net in the consolidated statements of operations and comprehensive loss. Realized gains and losses are determined using the specific identification method and are included in other income (expense), net in the consolidated statements of operations and comprehensive loss. Interest on available-for-sale securities is included in other income (expense), net in the consolidated statements of operations and comprehensive loss.

Property and Equipment, net

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company's property and equipment is comprised of furniture and fixtures, and the estimated useful life is five years. Depreciation and amortization begin at the time the asset is placed in service. Repairs or maintenance costs are expensed as incurred. Upon the sale or retirement of property and equipment, the costs and related accumulated depreciation and amortization are eliminated and the resulting gain or loss is reflected in the consolidated statements of operations and comprehensive loss. The property and equipment, net balance is included within other non-current assets in the consolidated balance sheets. Depreciation expense and accumulated depreciation were immaterial as of December 31, 2025.

Leases

The Company accounts for leases in accordance with ASC 842, Leases (“ASC 842”). The Company determines whether an arrangement is or contains a lease at the inception of the arrangement and whether such a lease should be classified as a financing lease or operating lease at the commencement date of the lease. The Company does not have any leases classified as financing leases. Operating leases with a term greater than one year are recognized on the consolidated balance sheets as operating right-of-use asset (“ROU asset”) and operating lease liabilities. The Company elected not to recognize the ROU assets and lease liabilities for leases with lease terms of one year or less (short-term leases). Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the lease term. ROU assets are further adjusted for initial direct costs, prepaid rent, or incentives received, if any. The Company considers the lease term to be the noncancelable period that it has the right to use the underlying asset, together with any periods where it is reasonably certain it will exercise an option to extend (or not terminate) the lease. As the interest rate implicit in the Company’s lease contracts is not readily determinable, the Company utilizes its incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments.

Operating lease cost is recognized on a straight-line basis over the lease term. The Company has elected not to separate lease and non-lease components for its real estate leases and instead accounts for each separate lease component and the non-lease components associated with that lease component as a single lease component. Variable lease payments are not included in the measurement of ROU assets and lease liabilities, but rather are recognized as incurred. The Company is responsible for additional costs of improvements in excess of the tenant improvement allowance, and recorded excess costs as payments in the measurement of lease liabilities.

Capitalized Software Implementation Costs

The Company incurred costs to implement cloud computing arrangements hosted by third-party vendors. ASC 350-40, Internal-Use Software, requires hosting arrangements that are service contracts to follow the guidance of internal-use software to determine which implementation costs can be capitalized. Implementation costs incurred during the application development stage are capitalized until the software is ready for its intended use. The costs are then amortized on a straight-line basis over the term of the associated hosting arrangement and are recognized as an operating expense within the consolidated statement of operations and comprehensive loss. As of December 31, 2025, the Company capitalized $0.2 million in software implementation costs within other non-current assets on the consolidated balance sheets.

F-15

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

ASU 2023-09, Income Taxes (Topic 740)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for fiscal years beginning after December 15, 2024 for all public entities. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented. As of December 31, 2025, the Company adopted this ASU retrospectively, which only impacts the Company's income tax disclosures with no impact to its operations, cash flows, or financial condition.

Recently Issued Accounting Pronouncements Not Yet Adopted

ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this ASU do not change or remove current expense disclosure requirements; however, the amendments affect where such information appears in the notes to the financial statements because entities are required to include certain current disclosures in the same tabular format as the other disaggregation requirements in the amendments. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the updated standard will have on its consolidated financial statement disclosures and financial reporting processes.

ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software to modernize the accounting for software costs and increase the operability of the recognition guidance considering different methods of software development. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the updated standard will have on its consolidated financial statement disclosures.

3. Merger with AlloVir

On March 18, 2025, the Merger closed, and, pursuant to the Merger Agreement, Merger Sub merged with and into Legacy Kalaris with Legacy Kalaris continuing as a wholly owned subsidiary of AlloVir and the surviving corporation of the Merger. Upon completion of the Merger, AlloVir changed its name to “Kalaris Therapeutics, Inc.” and Legacy Kalaris was renamed to “Kalaris Tx, Inc.”

Subject to the terms and conditions of the Merger Agreement, at the Effective Time, all issued and outstanding shares of the Legacy Kalaris’ common stock (including common stock issued upon conversion of Legacy Kalaris’ redeemable convertible preferred stock and outstanding convertible promissory notes, other than the AlloVir Note (as defined below)) 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 the Legacy Kalaris’ 2019 Equity Incentive Plan (the “2019 Plan”), whether vested or unvested, 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 prior to the Effective Time, (i) the outstanding principal and accrued but unpaid interest on convertible promissory notes issued by Legacy Kalaris in January 2025 (other than the AlloVir Note) converted into 794,499 shares of Series B-2 redeemable convertible preferred stock (the “Series B-2 Stock”) at a price of $4.7851 per share, which then converted on a one-for-one basis into shares of Legacy Kalaris common stock, and (ii) the outstanding principal and accrued but unpaid interest on convertible notes issued by Legacy Kalaris in 2024 converted into shares of Legacy Kalaris’ common stock at a price of $6.20 per share.

F-16

In January 2025, Legacy Kalaris issued a convertible promissory note in an aggregate principal amount of up to $7.5 million to AlloVir (the “AlloVir Note”) under which AlloVir funded a principal amount of $3.75 million in January 2025. The AlloVir Note accrued interest on the initial advance commencing on the date of such advance, at an interest rate of 8.0% per annum. At the Effective Time, the AlloVir Note was cancelled.

Immediately prior to the Effective Time, each option to purchase shares of AlloVir’s common stock (each, an “AlloVir Option”) that was outstanding immediately prior to the Effective Time, whether vested or unvested, survived the Closing and remains outstanding in accordance with its terms, provided that (i) each unexercised and outstanding AlloVir Option with an exercise price per share equal to or greater than $92.00 was cancelled for no consideration, and (ii) each AlloVir Option that had an exercise price per share less than $92.00, was unvested and unexercised as of the Effective Time, was accelerated in full. Additionally, immediately prior to the Effective Time, each outstanding and unvested AlloVir restricted stock unit was accelerated in full and settled in shares of AlloVir’s common stock.

The aggregate number of shares that AlloVir issued to Legacy Kalaris’ securityholders (including all holders of outstanding convertible notes) at the closing of the Merger was 13,634,744 shares of AlloVir's common stock. Immediately following the Merger, Legacy Kalaris securityholders owned approximately 74.47% of the outstanding shares of the Company’ common stock on a fully-diluted basis and pre-closing AlloVir securityholders owned approximately 25.53% of the outstanding shares of the Company’s common stock on a fully-diluted basis. The number of shares of the Company's common stock issued and outstanding immediately following the closing of the Merger was as follows:

AlloVir’s common stock outstanding 5,043,652

AlloVir’s restricted stock units accelerated and settled in common stock 24,022

The Merger was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Legacy Kalaris was deemed to be the accounting acquirer for financial reporting purposes. This determination was primarily based on the fact that, immediately following the Merger: (1) Legacy Kalaris’ stockholders owned a substantial majority of the voting rights of the Company, inclusive of Samsara; (2) Legacy Kalaris designated a majority of the initial members of the board of directors of the Company; and (3) other than with respect to the Company’s chief financial officer, for which the Company had commenced a search for a qualified candidate, the Company's senior management (which are determined by the board of directors of the Company) held all key positions in senior management of the Company. For accounting purposes, the Merger is treated as the equivalent of Legacy Kalaris issuing stock to acquire the net assets of AlloVir. The reported operating results prior to the Merger are those of Legacy Kalaris. The net assets of AlloVir were recorded at their carrying value in the consolidated financial statements of the Company. Historical common stock share, restricted share awards, common stock options and exercise prices data of Legacy Kalaris have been retroactively recast based on the Exchange Ratio.

AlloVir’s net assets acquired included the following: $102.1 million of cash and cash equivalents, $1.7 million of prepaid expenses and other current assets, and $2.6 million of accounts payable and accrued expenses.

The Company recognized approximately $1.5 million related to AlloVir’s directors’ and officers’ insurance and $0.1 million of share-based compensation expense related to the acceleration of vesting of stock options and restricted stock units as general and administrative expenses at the Effective Time. The Company also incurred transaction costs related to the Merger of approximately $5.4 million, which were recorded as a reduction to additional paid-in capital in the consolidated statement of redeemable convertible preferred stock and stockholders’ equity (deficit) for the year ended December 31, 2025.

F-17

4. Short-Term Marketable Securities

The following table summarizes the amortized cost and estimated fair value of the Company’s U.S. government treasury securities, which are considered to be available-for-sale marketable securities and are included in short-term marketable securities on the consolidated balance sheet as of December 31, 2025 (in thousands):

Short-term marketable securities:

U.S. government treasury securities $ 19,922 $ 6 $ — $ 19,928

Total short-term marketable securities $ 19,922 $ 6 $ — $ 19,928

The Company did not have any short-term marketable securities as of December 31, 2024. Certain short-term debt securities with original maturities of less than three months are included in cash and cash equivalents on the consolidated balance sheets and are not included in the table above. As of December 31, 2025, all marketable securities had contractual maturities within one year.

KLRS US Equity

KLRS · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accounting Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

KLRS US Equity☆

KLRS · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accounting Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

KLRS US Equity