Mark S. Blumenkranz - Nov 15, 2021 Form 4 Insider Report for Kala Pharmaceuticals, Inc. (KALA)

Role: Director
Signature: /s/ Eric Trachtenberg, Attorney-in-Fact
Stock symbol: KALA
Transactions as of: Nov 15, 2021
Transactions value $: $0
Form type: 4
Date filed: 11/17/2021, 07:01 PM
Previous filing: Jul 19, 2021
Next filing: May 13, 2022

Transactions Table

Type	Sym	Class	Transaction	Value $	Shares	Change %	* Price $	Shares After	Date	Ownership	Footnotes
transaction	KALA	Common Stock	Award		+158K			158K	Nov 15, 2021	Direct	F1
transaction	KALA	Common Stock	Award		+5.14M			5.14M	Nov 15, 2021	See footnote	F2, F3
transaction	KALA	Common Stock	Award		+39K			39K	Nov 15, 2021	See footnote	F4, F5

Derivative Securities (e.g., puts, calls, warrants, options, convertible securities)

Type	Sym	Class	Transaction	Value $	Shares	Change %	* Price $	Shares After	Date	Underlying Class	Amount	Exercise Price	Ownership	Footnotes
transaction	KALA	Stock Option (right to buy)	Award	$0	+42K		$0.00	42K	Nov 15, 2021	Common Stock	42K	$2.10	Direct	F6

* An asterisk sign (*) next to the price indicates that the price is likely invalid.

Explanation of Responses:

Id	Content
F1	On November 15, 2021, the Issuer acquired Combangio, Inc. (the "Acquisition"). On November 15, 2021, in connection with the Acquisition, the reporting person acquired the right to receive an aggregate of 157,765 shares of the Issuer's common stock (the "Shares") in exchange for 2,618,875 shares of Combangio's common stock. On November 12, 2021, the last trading day prior to the closing of the Acquisition, the closing price of the Issuer's common stock on the Nasdaq Global Select Market was $2.07 per share. Of the 157,765 Shares, (i) 139,109 Shares are to be issued by the Issuer to the reporting person on January 3, 2022 and (ii) 18,656 Shares are being held back by the Issuer and will be issuable fifteen months after the closing of the Acquisition and will serve as partial security for the satisfaction of indemnification obligations and other payment obligations of the former Combangio equityholders.
F2	In connection with the Acquisition, Lagunita Biosciences, LLC ("Lagunita") acquired the right to receive an aggregate of 5,144,390 shares of the Issuer's common stock (the "Lagunita Shares") in exchange for 85,395,439 shares of Combangio's common stock. On November 12, 2021, the last trading day prior to the closing of the Acquisition, the closing price of the Issuer's common stock on the Nasdaq Global Select Market was $2.07 per share. Of the 5,144,390 Lagunita Shares, (i) 4,536,045 Lagunita Shares are to be issued by the Issuer to Lagunita on January 3, 2022 and (ii) 608,345 Lagunita Shares are being held back by the Issuer and will be issuable fifteen months after the closing of the Acquisition and will serve as partial security for the satisfaction of indemnification obligations and other payment obligations of the former Combangio equityholders.
F3	These securities will be held directly by Lagunita. The reporting person is a managing partner of Lagunita and may be deemed to have beneficial ownership over the Lagunita Shares. The reporting person disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all of the reported shares for purposes of Section 16 or for any other purpose.
F4	In connection with the Acquisition, Garland Investments, L.P. ("Garland") acquired the right to receive an aggregate of 38,965 shares of the Issuer's common stock (the "Garland Shares") in exchange for 646,830 shares of Combangio's common stock. On November 12, 2021, the last trading day prior to the closing of the Acquisition, the closing price of the Issuer's common stock on the Nasdaq Global Select Market was $2.07 per share. Of the 38,965 Garland Shares, (i) 34,358 Garland Shares are to be issued by the Issuer to Garland on January 3, 2022 and (ii) 4,607 Garland Shares are being held back by the Issuer and will be issuable fifteen months after the closing of the Acquisition and will serve as partial security for the satisfaction of indemnification obligations and other payment obligations of the former Combangio equityholders.
F5	These securities will be held directly by Garland. The reporting person is a managing partner of Garland and may be deemed to have beneficial ownership over the Garland Shares. The reporting person disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all of the reported shares for purposes of Section 16 or for any other purpose.
F6	This option was granted on November 15, 2021 and vests with respect to 1/3rd of the shares underlying the option on November 15, 2022 and as to an additional 1/36th of the shares underlying the option at the end of each successive one-month period thereafter until November 15, 2024.