# EDGAR Filing Document

**Accession Number:** 0001844417
**File Stem:** 0001213900-25-074567
**Filing Date:** 2025-8
**Character Count:** 165419
**Document Hash:** d8c3277a694e8f022724f5dd584ed36c
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-074567.hdr.sgml**: 20250812

**ACCESSION NUMBER**: 0001213900-25-074567

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 56

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250812

**DATE AS OF CHANGE**: 20250811

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Estrella Immunopharma, Inc.
- **CENTRAL INDEX KEY:** 0001844417
- **STANDARD INDUSTRIAL CLASSIFICATION:** BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 861314502
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40608
- **FILM NUMBER:** 251203799

**BUSINESS ADDRESS:**
- **STREET 1:** 5858 HORTON STREET, SUITE 370
- **CITY:** EMERYVILLE
- **STATE:** CA
- **ZIP:** 94608
- **BUSINESS PHONE:** (510) 318-9098

**MAIL ADDRESS:**
- **STREET 1:** 5858 HORTON STREET, SUITE 370
- **CITY:** EMERYVILLE
- **STATE:** CA
- **ZIP:** 94608

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TradeUP Acquisition Corp.
- **DATE OF NAME CHANGE:** 20210204

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**(Mark One)**

☒ **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended June 30, 2025**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from ______________ to ______________**

**Commission File Number 001-40608**

**ESTRELLA IMMUNOPHARMA, INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **86-1314502** |
| (State or other jurisdiction of<br> incorporation or organization) | (IRS Employer<br> Identification No.) |

---

**5858 Horton Street, Suite 370 Emeryville, California, 95608**

(Address of principal executive offices and zip code)

**(510) 318-9098** 

(Registrant's telephone number, including area code)

**N/A**

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered |
| Common Stock, par value $0.0001 per share | ESLA | The Nasdaq Stock Market LLC |
| Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 | ESLAW | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 6, 2025, there were 37,065,589 shares of the issuer's Common Stock, par value $0.0001 per share, outstanding.

**ESTRELLA IMMUNOPHARMA, INC.**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| [**Cautionary Note Regarding Forward-Looking Statements**](#a_001) | [**Cautionary Note Regarding Forward-Looking Statements**](#a_001) | ii |
| [**PART I. FINANCIAL INFORMATION**](#a_002) | [**PART I. FINANCIAL INFORMATION**](#a_002) | 1 |
| Item 1. | [Financial Statements](#a_003) | 1 |
|  | [Unaudited Condensed Consolidated Balance Sheets](#a_004) | 1 |
|  | [Unaudited Condensed Consolidated Statements of Operations](#a_005) | 2 |
|  | [Unaudited Condensed Consolidated Statements of Changes in Preferred Stock and Stockholders' (Deficit) Equity](#a_006) | 3 |
|  | [Unaudited Condensed Consolidated Statements of Cash Flows](#a_007) | 4 |
|  | [Notes to Unaudited Condensed Consolidated Financial Statements](#a_008) | 5 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_009) | 26 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#a_010) | 34 |
| Item 4. | [Controls and Procedures](#a_011) | 35 |
| [**PART II. OTHER INFORMATION**](#a_012) | [**PART II. OTHER INFORMATION**](#a_012) | 36 |
| Item 1. | [Legal Proceedings](#a_013) | 36 |
| Item 1A. | [Risk Factors](#a_014) | 36 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities](#a_015) | 37 |
| Item 3. | [Defaults Upon Senior Securities](#a_016) | 37 |
| Item 4. | [Mine Safety Disclosures](#a_017) | 37 |
| Item 5. | [Other Information](#a_018) | 37 |
| Item 6. | [Exhibits](#a_019) | 37 |

---

i

**Cautionary Note Regarding Forward-Looking Statements**

This Quarterly Report on Form 10-Q ("Form 10-Q") contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as "plan," "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "continue," "could," "may," "might," "possible," "potential," "predict," "should," "would" and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of our management and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date such statements are made. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those described in "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-KT filed with the SEC on March 25, 2025.

These and other factors could cause actual results to differ from those implied by the forward-looking statements. Forward-looking statements are not guarantees of performance and speak only as of the date hereof. There can be no assurance that future developments will be those that have been anticipated or that we will achieve or realize these plans, intentions, or expectations.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

In addition, statements of belief and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date they are made, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

ii

**PART I - FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS.**

**ESTRELLA IMMUNOPHARMA, INC.**

**UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31,<br> 2024** |
|  | **(Unaudited)** | |
| **Current Assets** | | |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalent | $1316594 | $916916 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other receivable | 163933 | 723861 |
| Total current assets | 1480527 | 1640777 |
| **Other Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses, related party , non-current | 1500000 | 1500000 |
| **Total Assets** | $2980527 | $3140777 |
| **Liabilities and Stockholders' (Deficit) Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable - related party | $8154 | $4435 |
| &nbsp;&nbsp;&nbsp;Other payables and accrued liabilities | 110767 | 201760 |
| &nbsp;&nbsp;&nbsp;Accrued liability - related party | 8768333 | 2786667 |
| &nbsp;&nbsp;&nbsp;Derivative liabilities | 187941 | - |
| &nbsp;&nbsp;&nbsp;Franchise tax payable | - | 4134 |
| &nbsp;&nbsp;&nbsp;Income tax payables | - | 50 |
| Total current liabilities | 9075195 | 2997046 |
| **Total Liabilities** | 9075195 | 2997046 |
| **Commitments and Contingencies (Note 4)** |  |  |
| Preferred Stock |  |  |
| &nbsp;&nbsp;&nbsp;Series A Preferred Stock, $0.0001 par value, 15,000,000 shares authorized; | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively; |  |  |
| &nbsp;&nbsp;&nbsp;Series AA Preferred Stock, $0.0001 par value, 105,000,000 shares authorized; | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively; |  |  |
| **Stockholders' (Deficit) Equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value; 250,000,000 shares authorized; |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37,580,870 and 36,680,870 shares issued as of June 30, 2025 and December 31, 2024, respectively | 3758 | 3668 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 26076445 | 24636283 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (31576492) | (23927303) |
| &nbsp;&nbsp;&nbsp;Treasury stock, at cost 515,281 and 486,979 shares as of June 30, 2025 and December 31, 2024, respectively | (598379) | (568917) |
| **Total Stockholders' (Deficit) Equity** | (6094668) | 143731 |
| **Total Liabilities and Stockholders' (Deficit) Equity** | $2980527 | $3140777 |

---

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

**ESTRELLA IMMUNOPHARMA, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months ended** | **For the Three Months ended** | **For the Six Months ended** | **For the Six Months ended** |
|  | **June 30,**<br>**2025** | **June 30,**<br>**2024** | **June 30,**<br>**2025** | **June 30,**<br>**2024** |
| Operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $4660301 | $3525000 | $6070489 | $3550000 |
| &nbsp;&nbsp;&nbsp;General and administrative | 883727 | 424447 | 1577837 | 868977 |
| Total operating expenses | 5544028 | 3949447 | 7648326 | 4418977 |
| **Loss from Operations** | (5544028) | (3949447) | (7648326) | (4418977) |
| Loss before income taxes | (5544028) | (3949447) | (7648326) | (4418977) |
| Income taxes provision | (850) | (1625) | (863) | (1625) |
| **Net loss** | $(5544878) | $(3951072) | $(7649189) | $(4420602) |
| Net loss applicable to common stock per share, basic and diluted | $(0.15) | $(0.11) | $(0.21) | $(0.12) |
| Weighted average common stock outstanding, basic and diluted | 36165589 | 36376738 | 36176878 | 36179632 |

---

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

**ESTRELLA IMMUNOPHARMA, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** |<br>**Treasury**<br>**Stock** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Stockholders'**<br>**(Deficit) Equity** |
| **Balance, December 31, 2023** | 35201232 | $3520 | $- | $24124684 | $(15079674) | $9048530 |
| &nbsp;&nbsp;&nbsp;Net loss |  | - | - | - | (469530) | (469530) |
| &nbsp;&nbsp;&nbsp;Issuance of common stock for PIPE investment | 1409638 | 141 | - | (141) | - | - |
| &nbsp;&nbsp;&nbsp;Purchase of treasury stock | - | - | (84091) | - | - | (84091) |
| **Balance, March 31, 2024 (Unaudited)** | 36610870 | 3661 | (84091) | 24124543 | (15549204) | 8494909 |
| &nbsp;&nbsp;&nbsp;Net loss |  | - | - | - | (3951072) | (3951072) |
| &nbsp;&nbsp;&nbsp;Purchase of treasury stock | - | - | (270349) | - | - | (270349) |
| **Balance, June 30, 2024 (Unaudited)** | 36610870 | $3661 | $(354440) | $24124543 | $(19500276) | $4273488 |
| **Balance, December 31, 2024** | 36680870 | $3668 | $(568917) | $24636283 | $(23927303) | $143731 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  | - | - | 159095 | - | 159095 |
| &nbsp;&nbsp;&nbsp;Purchase of treasury stock |  | - | (29462) | - | - | (29462) |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | (2104311) | (2104311) |
| **Balance, March 31, 2025 (Unaudited)** | 36680870 | 3668 | (598379) | 24795378 | (26031614) | (1830947) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  | - | - | 159098 | - | 159098 |
| &nbsp;&nbsp;&nbsp;Issuance of common stock for PIPE investment | 900000 | 90 | - | 1121969 | - | 1122059 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | (5544878) | (5544878) |
| **Balance, June 30, 2025 (Unaudited)** | 37580870 | $3758 | $(598379) | $26076445 | $(31576492) | $(6094668) |

---

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

**ESTRELLA IMMUNOPHARMA, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **June 30,**<br>**2025** | **June 30,**<br>**2024** |
| **Cash Flows from Operating Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(7649189) | $(4420602) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 318193 | - |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other receivable | 559928 | 112487 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable - related party | 3719 | (77076) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables and accrued liabilities | (90993) | (138756) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liability - related party | 5981666 | (2000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Franchise tax payable | (4134) | (200) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax payables | (50) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | (880860) | (4526147) |
| **Cash Flows from Financing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Payments of transactions cost | (40000) | - |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock for PIPE investment | 1350000 | - |
| &nbsp;&nbsp;&nbsp;Purchase of treasury stock | (29462) | (354440) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by (used in) financing activities** | 1280538 | (354440) |
| **Net Change in Cash** | 399678 | (4880587) |
| **Cash at beginning of the period** | 916916 | 9046015 |
| **Cash at end of the period** | $1316594 | $4165428 |
| **Supplemental Cash Flow Information** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for income tax | $913 | $1600 |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $- |
| **Supplemental Disclosure of Non-cash Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Recognition of derivative liabilities upon closing of the PIPE investment | $187941 | $- |

---

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

**ESTRELLA IMMUNOPHARMA, INC**

**Notes to Unaudited Condensed Consolidated Financial Statements**

**Note 1 — Organization and Business Operation**

*Description of business*

Estrella Immunopharma, Inc. ("Estrella"), a Delaware corporation, is a clinical-stage biopharmaceutical company developing T-cell therapies with the capacity to cure patients with blood cancers and solid tumors.

Estrella was incorporated in the State of Delaware on March 30, 2022 by Eureka Therapeutics, Inc. ("Eureka"), which was incorporated in California in February 2006 and reincorporated in Delaware in March 2018 and is the predecessor of Estrella.

On June 28, 2022, pursuant to a Contribution Agreement between Estrella and Eureka (the "Contribution Agreement"), Eureka contributed certain assets (the "Assets") related to T-cell therapies targeting CD19 and CD22, proteins expressed on the surface of almost all B-cell leukemias and lymphomas, in exchange for 105,000,000 shares of Estrella's Series AA Preferred Stock (the "Separation").

 

As part of the Separation, Estrella entered into a License Agreement (the "License Agreement") with Eureka and Eureka Therapeutics (Cayman) Ltd. ("Eureka Cayman"), an affiliate of Eureka, and a Services Agreement (the "Services Agreement") with Eureka, and Eureka contributed and assigned the Collaboration Agreement between Eureka and Imugene Limited ("Imugene") (the "Collaboration Agreement") to Estrella. The License Agreement grants the Company an exclusive license to develop CD19 and CD22 targeted T-cell therapies using Eureka's ARTEMIS<sup>®</sup> platform. Under the Services Agreement, Eureka has agreed to perform certain services for the Company in connection with the development of the Company's product candidates, EB103 and EB104. EB103, which is a T-cell therapy also called "CD19-Redirected ARTEMIS<sup>®</sup> T-Cell Therapy," utilizes Eureka's ARTEMIS<sup>®</sup> technology to target CD19. The Company is also developing EB104, a T-cell therapy also called "CD19/22 Dual-Targeting ARTEMIS<sup>®</sup> T-Cell Therapy." Like EB103, EB104 utilizes Eureka's ARTEMIS<sup>®</sup> technology to target not only CD19, but also CD22. The Collaboration Agreement establishes the partnership between the Company and Imugene related to development of solid tumor treatments using Imugene's product candidate ("CF33-CD19t") in conjunction with EB103.

On March 2, 2023, the FDA cleared Estrella's IND application for EB103, allowing Estrella to proceed with the Phase I/II STARLIGHT-1 Clinical Trial "STARLIGHT-1". On March 4, 2024, the Company, Estrella and Eureka executed Statement of Work #001 relating to clinical trial services to be performed by Eureka in connection with the STARLIGHT-1 clinical trial (see Note 5). On May 13, 2024, the Company and Eureka entered into Amendment No. 1 to the Statement of Work, effective as of March 4, 2024 (see Note 5). As of June 30, 2025, the Company is continuing to enroll patients into the STARLIGHT-1 clinical trial in the U.S.

On September 29, 2023 (the "<u>Closing Date</u>"), Estrella and TradeUP Acquisition Corp. ("UPTD") consummated the business combination (the "Business Combination") pursuant to the terms of the Agreement and Plan of Merger, dated as of September 30, 2022 (the "Merger Agreement"), by and among UPTD, Tradeup Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of UPTD ("Merger Sub"), and the Company. Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Estrella, with Estrella surviving as a wholly-owned subsidiary of UPTD. Upon closing of the Business Combination (the "Closing"), UPTD changed its corporate name to Estrella Immunopharma, Inc. ("New Estrella" or the "Company"). Estrella's fiscal year end was June 30, and the Company's fiscal year end changed from December 31 to June 30 effective as of the Closing Date.

On June 26, 2024, the Company filed a Certificate of Ownership and Merger with the Delaware Secretary of State to effect a merger (the "Merger 1") with its wholly-owned subsidiary, Estrella BioPharma Inc, pursuant to Section 253 of the Delaware General Corporation Law. The Merger 1 was approved by resolutions duly adopted by the unanimous written consent of the Company's board of directors. The Merger 1 became effective at 11:59 PM Eastern Time on June 30, 2024, at which time the separate existence of Estrella ceased, and the Company became the surviving corporation.

In November 2024, the Company established Estrella Immunopharma (Hong Kong) Co. Ltd ("Estrella HK") as a wholly-owned subsidiary in Hong Kong. This subsidiary was created to facilitate strategic collaborations and provide a local presence to support the Company's operations and initiatives in Asia. As of June 30, 2025, Estrella HK had not commenced any operations.

On November 25, 2024, the Board of Directors of the Company (the "Board") approved a change in the fiscal year end of the Company from June 30 to December 31.

<u>Liquidity and Going Concern</u> 

The accompanying unaudited condensed consolidated financial statements have been prepared on a basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of June 30, 2025, the Company had cash of approximately $1.3 million, and accumulated deficit of approximately $31.6 million. For the six months ended June 30, 2025, loss from operations was approximately $7.6 million. The Company's ability to fund its operations is dependent on the amount of cash on hand and its ability to raise debt or additional equity financing. The Company has expended substantial funds on its research and development business, has experienced losses and negative cash flows from operations since its inception and expects losses and negative cash flows from operations to continue until its technology receives regulatory approval and the Company generates sufficient revenue and positive cash flow from operations, if ever.

On April 20, 2023, UPTD entered into the Common Stock Purchase Agreement and the White Lion RRA with White Lion. Subsequently, on April 26, 2023, UPTD and White Lion entered into an amendment to the Common Stock Purchase Agreement. Pursuant to the Common Stock Purchase Agreement, following the Closing, New Estrella will have the right, but not the obligation, to require White Lion to purchase, from time to time up to $50,000,000 in aggregate gross purchase price of newly issued shares of Common Stock (the "Equity Line Shares"), subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement as further described in Note 4.

On March 4, 2024, Estrella and Eureka entered into Statement of Work No. 001 ("SOW") relating to the clinical trial services to be performed by Eureka in connection with STARLIGHT-1, the Phase I/II clinical trial of Estrella's product candidate, EB103, a T-cell therapy targeting CD19 using ARTEMIS<sup>®</sup> T cell technology licensed by Estrella from Eureka. Pursuant to the SOW, Estrella agrees to pay Eureka non-refundable net fees in connection with the achievement of certain milestones set forth in the SOW, with total fees of $33.0 million for achievement of all milestones. As of June 30, 2025, Estrella has paid approximately $3.5 million to Eureka for covering the fees associated with the milestones that have been achieved. In addition, the Company has made a deposit of $1.5 million towards patient treatment expenses, which will be applied to the final invoice, with the unused portion of this deposit to be refunded once all expenses are fully settled.

On May 13, 2024, the Company and Eureka entered into Amendment No. 1 to the Statement of Work, effective as of March 4, 2024, to clarify that in the event that Estrella exercises its right to terminate or suspend the engagement with Eureka by providing written notice to Eureka in accordance with the SOW, Estrella will only be obligated to compensate Eureka for (i) services provided by Eureka pursuant to the SOW ("Services") in connection with milestones that were achieved prior to the date and time of such written notice, (ii) reasonable and documented pass-through costs incurred by Eureka on behalf of Estrella prior to the date and time of such written notice in connection with providing the Services and (iii) amounts payable to third parties pursuant to commitments reasonably entered into by Eureka on behalf of Estrella prior to the date and time of such written notice in connection with providing the Services, provided that Eureka shall make commercially reasonable efforts to cancel or reduce any such amounts.

On May 30, 2025, the Company entered into securities purchase agreements (the "Securities Purchase Agreement") with certain investors (the "Purchasers"), pursuant to which the Company agreed to issue and sell in a private placement offering (the "Private Placement") an aggregate total of 2,233,334 shares of common stock of the Company at a purchase price of $1.50 per share for gross proceeds of approximately $3.35 million, before the deduction of offering expenses. As of June 30, 2025, the Company has received gross proceeds of approximately $1.35 million.

The Company's future operations are highly dependent on a combination of factors, including but not necessarily limited to (1) the success of our research and development programs; (2) the timely and successful completion of any additional financing; (3) the development of competitive therapies by other biotechnology and pharmaceutical companies; (4) our ability to manage growth of the organization; (5) our ability to protect our technology and products; and, ultimately (6) regulatory approval and successful commercialization and market acceptance of our product candidates.

However, management believes that the Company has sufficient funds on hand and ability to raise funds in the future through the issuance and sale of Equity Line Shares to White Lion in order to meet its working capital requirements and debt obligations, for at least the next 12 months from the filing date of these unaudited condensed consolidated financial statements.

**Note 2 — Significant accounting policies**

***Basis of Presentation***

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X under the Securities Act. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and accompanying notes, included in the Company's Transition Report Form 10-KT, filed with the SEC on March 25, 2025. The condensed consolidated Balance Sheet as of December 31, 2024 presented in this Form 10-Q has been derived from the audited Balance Sheet filed in the aforementioned Form 10-KT. The interim results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2025 or for any future interim periods.

***Principles of Consolidation***

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. Any intercompany transactions and balances have been eliminated in consolidation.

**Emerging Growth Company Status**

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, (the "Securities Act"), as modified by the Jumpstart The Company's Business Startups Act of 2012, (the "JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's unaudited condensed consolidated financial statements with another public company difficult because of the potential differences in accounting standards used.

The Company became an emerging growth company upon the consummation of its initial public offering on July 19, 2021. Accordingly, the Company will remain an emerging growth company until the last day of the fiscal year in which the fifth anniversary of its initial public offering occurs, December 31, 2026, unless other criteria are met sooner.

**Use of Estimates**

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Significant items subject to such estimates and assumptions include stock-based compensation, derivative liability, and deferred income tax asset valuation and allowances.

**Cash and cash equivalent**

The Company maintains its operating accounts in a single financial institution. The balance is insured by the United States Federal Deposit Insurance Corporation ("FDIC") but only up to specified limits. The Company's cash is maintained in a checking account. Cash equivalents consist of funds held at the third-party broker's account for stock repurchase purpose, and the funds are unrestricted and immediately available for withdrawal and use. The balance held at the third-party broker's account is insured by the United States Securities Investor Protection Corporation ("SIPC") but only up to specified limits.

**Prepaid expenses and other receivable**

Prepaid expenses and other receivable primarily include prepayments for third party services, such as professional fees, insurance premium, and others.

**Basic and Diluted Loss per Common Stock**

Basic net loss per Common Stock is calculated by dividing the net loss by the weighted–average number of Common Stock outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted–average number of Common Stock and dilutive share equivalents outstanding for the period, determined using the treasury stock and if–converted methods. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti–dilutive.

As of June 30, 2025 and December 31, 2024, the Company had the following potential Common Stock outstanding which were not included in the calculation of diluted net loss per Common Stock because inclusion thereof would be anti-dilutive:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of** | **As of** | **As of** | **As of** |
|  | **June 30,** | **June 30,** | **December 31,** | **December 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
| Public warrant |  | 2214993 |  | 2214993 |

---

**Stock-Based Compensation**

The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense in the statements of operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of each option granted is estimated as of the date of grant using the Black-Scholes-Merton option-pricing model, net of actual forfeitures. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of the Common Stock of the Company, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others. These assumptions reflect the Company's best estimates, but they involve inherent uncertainties based on market conditions generally outside the control of the Company.

As a result, if other assumptions had been used, stock-based compensation expense, as determined in accordance with authoritative guidance, could have been materially impacted. Furthermore, if the Company uses different assumptions on future grants, stock-based compensation expense could be materially affected in future periods.

**Warrants**

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in Financial Accounting Standards Board ("FASB") ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. The Company determined that upon further review of the warrant agreements, the Company concluded that its warrants qualify for equity accounting treatment.

Upon completion of the business combination, all of UPTD's public warrants that remained outstanding were replaced by the Company's public warrants. The Company treated such warrants replacement as a warrant modification and no incremental fair value was recognized.

**Concentration of Credit Risk**

Financial instruments that potentially subject the Company to concentration of credit risk consist of one cash account in a financial institution located in the United States. The Company has not experienced losses on these accounts, and management believes the Company is not exposed to significant risks. The Federal Deposit Insurance Corporation (FDIC) provides standard insurance coverage of $250,000 per insured bank for each account ownership category. As of June 30, 2025 the Company had not experienced losses on these accounts. As of June 30, 2025, and December 31, 2024, the Company had deposited approximately $1.3 million and $0.9 million, respectively, with a financial institution in the United States. Of these balances, approximately $1.1 million and $0.6 million, respectively, were not covered by deposit insurance. While management believes that the financial institution is of high credit quality, it also continually monitors their credit-worthiness.

The Securities Investor Protection Corporation (SIPC) provides standard insurance coverage of $500,000 per brokerage account, which includes $250,000 for cash balances. As of June 30, 2025 and December 31, 2024, the Company maintained approximately $500 and $30,000, respectively, in its brokerage account, with the entire balance covered by SIPC insurance.

**Risks and Uncertainties**

Management continues to evaluate the impact of inflation rates, the continuing military action in Ukraine, and Israel's war against Hamas on the industry and has concluded that these factors could have a negative effect on the Company's financial position and/or results of its operations. The specific impact of these factors is not readily determinable as of the date of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company's future success depends on the Company and Eureka's ability to retain key employees, directors, and advisors and to attract, retain and motivate qualified personnel. The Company relies on Eureka to provide certain technical assistance to facilitate the Company's exploitation of the intellectual property licensed by Eureka, and Eureka will be solely responsible for the manufacture and supply of clinical quantities of the licensed products and final filled and finished (including packaged) drug product form of the licensed products. Pursuant to the Services Agreement, Eureka currently performs or supports the Company's important research and development activities. The Statement of Work (see Note 5) may be terminated by mutual agreement at any time. Following the termination of, or the expiration of the term of, the Statement of Work, the Company may not be able to replace the research and development-related services that Eureka provides or enter into appropriate third-party arrangements on terms and conditions, including cost, comparable to those that the Company will receive from Eureka. Additionally, after the Statement of Work terminates, the Company may be unable to sustain the research and development-related services at the same levels or obtain the same benefits as when the Company was receiving such services and benefits from Eureka. If the Company is required to operate these research and development functions separately in the future, or are unable to obtain them from other providers, the Company may not be able to operate the Company's business effectively and could result in a material adverse effect.

**Fair Value of Financial Instruments**

The fair value of the Company's assets and liabilities, which qualify as financial instruments under ASC Topic 820, "Fair Value Measurements and Disclosures," approximates the carrying amounts represented in the accompanying unaudited condensed consolidated balance sheet, primarily due to their short-term nature. The Company measures the fair value of certain of its financial assets and liabilities on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the 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.

The following table sets forth by level within the fair value hierarchy our financial asset and liability that were accounted for at fair value on a recurring basis as of June 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Fair Value Measurement at <br> June 30, 2025** | **Fair Value Measurement at <br> June 30, 2025** | **Fair Value Measurement at <br> June 30, 2025** |
|  | **Carrying Value at <br> June 30,**<br>**2025** | **Level 1** | **Level 2** | **Level 3** |
| Derivative liabilities (True-Up Shares) | $187941 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $187941 |

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The following is a reconciliation of the beginning and ending balance of the financial liability measured at fair value on a recurring basis for the six months ended June 30, 2025:

---

| | |
|:---|:---|
|  | **Derivative <br> Liabilities** |
| Initial fair value of derivative liabilities attributable to True-Up shares feature embedded in the Private Placement | $187941 |
| Change in fair value of derivative liabilities | - |
| Ending balance as of June 30, 2025 | $187941 |

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***Derivative Liabilities***

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including the True Up Shares in connection with the Securities Purchase Agreement (refer to Note 7), to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC 815, *Derivatives and Hedging* ("ASC 815"). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

The True Up Shares embedded within Securities Purchase Agreement do not qualify as equity under ASC 815; therefore, the True Up Shares are required to be bifurcated and classified as a liability and measured at fair value with subsequent changes in fair value recorded in the consolidated statements of operations.

**Income Taxes**

The Company recognizes deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.

Accounting for uncertainty in income taxes is recognized based on a recognition threshold and measurement process for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2025 and December 31, 2024. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

On July 4, 2025, H.R.1, also referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law in the U.S. The OBBBA includes changes to U.S. federal tax law, including extending and modifying certain key Tax Cuts and Jobs Act of 2017 provision, and provisions allowing accelerated tax deductions for qualified property and research expenditures. As the legislation was signed into law after June 30, 2025, any impact of the OBBA is not reflected in our condensed consolidated financial statements. The Company is currently evaluating the impact on its consolidated financial statements.

The Company is incorporated in the State of Delaware and is required to pay franchise taxes to the State of Delaware on an annual basis.

**Research and Development Expenses**

The Company charges research and development costs to operations as incurred. The Company accrues costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by third parties, patient enrollment in clinical trials when applicable, administrative costs incurred by third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, the Company may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. Research and development expenses for the six months ended June 30, 2025 and 2024 primarily consisted of personnel costs for the design and development of clinical trials, legal and professional fees, and facilities related fees. Refer to Note 5 for the terms of the License Agreement, the Service Agreement, and the Statement of Work.

**Lease**

Effective July 1, 2022, the Company adopted ASU 2016-02, "Leases" (Topic 842), and elected the practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities.

If any of the following criteria are met, the Company classifies the lease as a finance lease:

● The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;

● The lease grants the lessee an option to purchase the underlying asset that the Company is reasonably certain to exercise;

● The lease term is for a major part of the remaining economic life of the underlying asset;

● The present value of the sum of the lease payments and any residual value guaranteed by the lessee, that is not otherwise included in the lease payments substantially exceeds all of the fair value of the underlying asset; or

● The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.

Leases that do not meet any of the above criteria are accounted for as operating leases.

The Company combines lease and non-lease components in its contracts under Topic 842, when permissible.

Operating lease right-of-use ("ROU") asset and lease liability were recognized based on the present value of lease payments over the lease term. Since the implicit rate for the Company's leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.

In the event of lease modification, the Company followed ASC 842-10-25 through 25-12, "lessee accounting for a modification that is not accounted for as a separate contract," to remeasure and reallocate the remaining consideration in the lease agreement and reassess the classification of the lease at the effective date of the modification.

The Company reviews the impairment of its ROU asset consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liability in any tested asset group and includes the associated operating lease payments in the undiscounted future pre-tax cash flows.

**Segment reporting**

The chief executive officer is identified as the Company's chief operating decision-maker who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by different revenues streams for purposes of allocating resources and evaluating financial performance. Based on qualitative and quantitative criteria established by Accounting Standards Codification ("ASC") 280, "Segment Reporting", the Company considers itself to be operating within one operating and reportable segment.

**Recent Accounting Pronouncements**

The Company considers the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the "JOBS Act"), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC's disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the SEC's requirements. Also, the amendments align the requirements in the Codification with the SEC's regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC's removal. The Company is currently evaluating the impact of the update on the Company's unaudited condensed consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendment in this update enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact the adoption of ASU 2023-09 will have on its annual and interim disclosures.

The Company does not believe recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's unaudited condensed consolidated financial statements.

**Note 3 — Other payables and accrued liabilities**

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| | | |
|:---|:---|:---|
|  | **As of <br> June 30, <br> 2025** | **As of <br> December 31, <br> 2024** |
|  | **(Unaudited)** | |
| Accrued professional fees (i) | $98660 | $177029 |
| Salary and payroll taxes payable | 12107 | 14100 |
| Others | - | 10631 |
| Total other payables and accrued liabilities | $110767 | $201760 |

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(i) The balance of accrued professional fees represented amount due to third party service providers which include, legal and consulting fee related to research and development, and others.

**Note 4 — Commitments and contingencies**

**Manufacturing Commitment**

On June 28, 2022, Eureka and the Company entered into the License Agreement under which Eureka granted to the Company a license under certain intellectual property controlled by Eureka for exploitation by the Company in the Company's territory under the License Agreement (the "Licensed Territory"). Eureka will be solely responsible for the manufacture and supply of clinical quantities of the licensed products and final filled and finished (including packaged) drug product form of the licensed products for development and commercialization purposes in the field both in the Licensed Territory and elsewhere. Refer to Note 5.

**Equity Financing Commitment**

On April 20, 2023, UPTD entered into a Common Stock purchase agreement (as amended on April 26, 2023 and from time to time, the "Common Stock Purchase Agreement") and a related registration rights agreement (the "White Lion RRA") with White Lion. Pursuant to the Common Stock Purchase Agreement, following the Closing, the Company has the right, but not the obligation to require White Lion to purchase, from time to time, up to $50 million in aggregate gross purchase price of newly issued shares of Common Stock of the Company, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement, including, among others, the initial and any subsequent registration statement for the Equity Line Shares being declared effective by the SEC and remaining effective during the term of the Common Stock Purchase Agreement. In addition, under Nasdaq listing rules, the Company is not permitted to issue any Equity Line Shares under the Common Stock Purchase Agreement if such issuance would equal 20% or more of the Company's outstanding common stock without obtaining majority approval by our stockholders, which had not been obtained as of the date hereof. On December 28, 2023, the Company's registration statement on Form S-1 related to the Equity Line Shares was declared effective by the SEC. As of June 30, 2025, 70,000 Equity Line Shares have been issued to White Lion pursuant to the Common Stock Purchase Agreement for an aggregate consideration of $79,491.

On December 5, 2024, the Company entered into Amendment No. 2 (the "Amendment") to the Common Stock Purchase Agreement dated April 20, 2023, as previously amended on April 26, 2023 (the "Purchase Agreement"), with White Lion. pursuant to which the Company may sell and issue up to $50 million of its common stock to White Lion from time to time, subject to certain terms and conditions.

The Amendment extends the term of the Purchase Agreement from December 30, 2024 to December 30, 2025. Additionally, the Amendment adds a new "Rapid Purchase" mechanism allowing for expedited settlement of share purchases compared to the standard purchase process under the original agreement. Under this new mechanism, the Company may deliver Rapid Purchase Notices to White Lion by 11:00 a.m. New York time on any business day when the Company's common stock is not trading on an over-the-counter market, with concurrent delivery of the subject shares via DWAC to White Lion's brokerage account. The purchase price for Rapid Purchases will be the lowest traded price of the Company's common stock on the Rapid Purchase Notice date, with White Lion required to wire payment by 5:00 p.m. New York time on the following business day.

For Rapid Purchases, the maximum number of shares the Company can require White Lion to purchase is limited to the lesser of (i) 20% of the average daily trading volume or (ii) the investment limit divided by the highest closing price over the previous five business days, though White Lion may waive these limitations. Each Rapid Purchase remains subject to the $1,000,000 maximum purchase amount applicable to regular purchases under the Purchase Agreement.

**Registration Rights**

The holders of 312,200 shares of Common Stock that were issued to the initial stockholders of UPTD (the "Founder Shares") and of 1,107,500 shares of Common Stock issued to certain investors in a private placement in connection with UPTD's initial public offering (the "Private Shares") are entitled to registration rights pursuant to a Registration Rights Agreement, dated July 14, 2021, among UPTD, TradeUP Acquisition Sponsor LLC and certain security holders named therein. The Company assumed the obligations of UPTD under such agreement upon consummation of the Business Combination. The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company is also obligated to file a registration statement for the (i) Equity Line Shares that we may issue to White Lion pursuant to the Common Stock Purchase Agreement and White Lion RRA, (ii) up to 2,225,000 shares of Common Stock issuable upon exercise of the Warrants and (iii) the shares issued or that will be issued pursuant to the Subscription Agreements. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

**Contingencies**

From time to time, the Company is or may be party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the Company's unaudited condensed consolidated financial statements.

In some instances, the Company may be required to indemnify its licensors for the costs associated with any such adversarial proceedings or litigation. Third parties may assert infringement claims against the Company, its licensors or its strategic collaborators based on existing patents or patents that may be granted in the future, regardless of their merit. There is a risk that third parties may choose to engage in litigation or other adversarial proceedings with the Company, its licensors or its strategic collaborators to enforce or otherwise assert their patent rights.

**Collaboration Agreement**

On October 29, 2021, Eureka, entered into a Collaboration Agreement with Imugene Ltd, a clinical stage immune-oncology company to evaluate Imugene's CF33-CD19t, its oncolytic virus onCARlytics technology in combination with Eureka's CD19 ARTEMIS<sup>®</sup> T-cell therapy for the treatment of solid tumors.

On June 28, 2022, as part of the Separation, Eureka contributed and assigned the Collaboration Agreement to Estrella. Pursuant to the Collaboration Agreement, Estrella and Imugene have each granted to the other a royalty free, non-exclusive, worldwide license, with the right to grant and authorize sublicenses, to their respective technologies to conduct the research activities each is responsible for performing under the research plan set forth in the Collaboration Agreement. The research plan is required to be reviewed no less frequently than every six to eight months by a joint steering committee comprised of participants from each of Estrella and Imugene.

Allocation of Costs, unless otherwise agreed by the Parties in connection with a given Research Plan and associated Research Budget:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Eureka Costs: Eureka will be responsible for all FTE and other internal costs incurred in the performance of all Eureka Research Activities, as defined in the Collaboration Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Imugene Costs: Imugene will be responsible for all FTE and other internal costs incurred in the performance of all Imugene Research Activities, as defined in the Collaboration Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Joint Costs: Eureka and Imugene will share equally (50:50) the out-of-pocket costs set forth in the applicable Research Budget plus Allowable Overruns, as defined in the Collaboration Agreement. If either Party incurs out-of-pocket costs in excess of the amount budgeted therefor in the applicable Research Budget plus Allowable Overruns, then the other Party will not be responsible for its 50% share to the extent in excess of such budgeted amount plus Allowable Overruns, unless the joint steering committee ("JSC") approves such excess costs (either before or after such costs have been incurred).

The research plan under the Collaboration Agreement was completed as of August 30, 2023. The Company and Eureka did not incur any research and development expenses associated with the Collaboration Agreement in the six months ended June 30, 2025 and 2024.

On May 15, 2023, Estrella assigned a cost reimbursement receivable of $27,169 from Imugene under the Collaboration Agreement to Eureka. There was no impact on Estrella's statements of operations.

**Note 5 — Related Party Transactions**

<u>License Agreement</u>

On June 28, 2022, in connection with the Contribution Agreement, Eureka, Eureka Cayman and Estrella entered a License Agreement under which Eureka and Eureka Cayman granted to Estrella a license under certain intellectual property controlled by Eureka for exploitation by Estrella in the Licensed Territory, which primarily includes the United States and the rest of the world, excluding China and the Association of Southeast Asian Nations.

Pursuant to the License Agreement, (1) Eureka will be solely responsible for the manufacture and supply of clinical quantities of the licensed products and final filled and finished (including packaged) drug product form of the licensed products ("Drug Product") for development and commercialization purposes in the field both in the Licensed Territory and elsewhere, and (2) during the term of the License Agreement, Eureka will manufacture and supply, either itself or through an affiliate or a third party contract manufacturer, all of Estrella's and its related parties' clinical quantities requirements of Drug Product for Estrella's and its related parties' development activities with respect to the licensed products in the field in the Territory conducted in accordance with this agreement. Eureka and Estrella will use good faith efforts to negotiate and enter into a clinical supply agreement on reasonable and customary terms for the supply of Drug Product by Eureka to Estrella at a price equal to the fully burdened cost (the "Clinical Supply Agreement"), and a related quality agreement, which agreements will govern the terms and conditions of the manufacturing and clinical supply of Drug Product to Estrella. Furthermore, Eureka and Estrella's collaboration will be overseen by a JSC. Eureka and Estrella will initially appoint one representative to the JSC, with each representative having knowledge and expertise in the development and commercialization of products similar to the licensed products and having sufficient seniority within the applicable party to provide meaningful input and make decisions arising within the scope of the JSC's responsibility.

The License Agreement requires Estrella to make certain payments, including (a) an "upfront" payment of $1.0 million, payable in 12 equal monthly installments, (b) "milestone" payments upon the occurrence of certain events related to development and sales, with potential aggregate multi-million dollar payments upon FDA approval, and (c) royalty payments of a single digit percentage on net sales.

As of June 30, 2025 and December 31, 2024, Estrella had no remaining balance of accounts payable – related party, related to the upfront payment under the License Agreement. As of June 30, 2025, two development milestones related to the IND submission of EB103 to the FDA ("Milestone 1") and first patient dosed in the first clinical trial of a licensed product ("Milestone 2") was earned by Eureka under the Agreement. Milestone payment related to Milestone 1 was paid on October 10, 2023. Milestone payment of $50,000 related to Milestone 2 was paid on September 3, 2024.

<u>Services Agreement</u>

On June 28, 2022, Estrella entered a Services Agreement with Eureka. Pursuant to the Services Agreement, Eureka will perform certain services for Estrella related the transfer of certain technology and the provision of certain technical assistance to facilitate Estrella's exploitation of the intellectual property licensed by Eureka to Estrella under the License Agreement, and Eureka will perform such services for Estrella (the "Services"). Under the Services Agreement, Estrella shall pay Eureka (1) $10.0 million in connection with the Services payable in 12 equal monthly installments with the first payment to be made no later than five days after the Effective date and (2) reimburse Eureka on a monthly basis for reasonable pass-through costs incurred or paid to providers by Eureka in providing the Services. In addition, Estrella will be charged for other services performed by Eureka outside the scope of the Services per the Service Agreement, at a flat rate, by time or materials or as mutually agreed upon the parties in writing.

Eureka's services commenced on June 28, 2022. As of both June 30, 2025 and December 31, 2024, Estrella had no accounts payable balance – related party related to the Service Agreement with Eureka.

For the three and six months ended June 30, 2025 and 2024, Estrella did not incur any pass-through costs related to clinical trials under this Service Agreement.

After the closing of the business combination on September 29, 2023, on October 10, 2023 Estrella remitted approximately $9.3 million to Eureka.

<u>Statement of Work</u> 

On March 4, 2024, the Company, Estrella and Eureka entered into Statement of Work No. 001 ("SOW") relating to the clinical trial services to be performed by Eureka in connection with STARLIGHT-1, the Phase I/II clinical trial of Estrella's product candidate, EB103, a T-cell therapy targeting CD19 using ARTEMIS<sup>®</sup> T cell technology licensed by Estrella from Eureka. The trial is designed to assess the safety, tolerability, recommended Phase II dose, and preliminary anti-cancer activity of EB103 for the treatment of relapsed or refractory (R/R) B-cell non-Hodgkin lymphoma (NHL) patients.

The SOW is governed by the terms of the Services Agreement, dated June 28, 2022, between Estrella and Eureka (as amended by Amendment No. 1, effective as of October 1, 2022, and Amendment No. 2, effective as of March 1, 2023), and incorporates all the terms of the Services Agreement by reference. Notwithstanding the foregoing, the terms and conditions of the SOW govern in the event of any conflict with the terms and conditions of the Services Agreement.

The scope of work set forth in the SOW includes study start-up, patient dosings and related activities, study close-out, and reporting. Additionally, the SOW sets forth the various services Eureka will provide in connection with the clinical trial, including regulatory document development, site activation, patient enrollment and consent management, data collection, and pharmacovigilance.

Pursuant to the SOW, Estrella agrees to pay Eureka non-refundable net fees in connection with the achievement of certain milestones set forth in the SOW, with total fees of $33.0 million for achievement of all milestones, excluding additional pass-through costs and expenses incurred by Eureka and payable by Estrella as further described below. Such amount assumes 20 patients to be dosed and one clinical site is activated. An additional $500,000 will become payable to Eureka if a second site is activated following mutual agreement of Estrella and Eureka. In addition to the milestone payments, Eureka will invoice Estrella quarterly for additional pass-through costs and expenses incurred in connection with its services under the SOW. Estrella is required to settle invoices within 30 days, with Eureka reserving the right to impose monthly interest charges of 1.5% for undisputed amounts unpaid after 30 days. Estrella will also be responsible for payment of any taxes, fees, duties or charges imposed by any governmental authority in connection with the services provided by Eureka under the SOW, other than any taxes on Eureka's income.

The first invoice payable to Eureka issuable upon execution of the SOW is for $3.5 million, covering the fees associated with the initiation of the study, the preparation and activation of the first study site, and the First Patient First Visit (FPFV) milestones. Prior to the commencement of the patient dosing phase, a deposit of $1.5 million is required to be delivered to Eureka to ensure the readiness for patient treatment expenses and will be applied against the final invoice, and any unused portion will be returned to Estrella following collection of all outstanding fees and costs payable to Eureka under the SOW.

Additional invoices will be issued in connection with the patient dosing milestone, amounting to approximately $1.4 million per patient and a total cost of $27.5 million for 20 patients, excluding any pass-through costs and additional expenses. Lastly, a $2.0 million milestone fee will become due in connection with the study close-out phase, estimated to be completed by October 2026. Services provided in connection with this milestone include finalizing patient data, trial data cleaning, statistical analysis, and preparing and submitting the final study report.

As of June 30, 2025, the Company has paid $3.5 million to Eureka for covering the fees associated with milestones achieved, and deposited $1.5 million for patient treatment expenses, which will be applied to the final invoice, with any unused portion refunded once all fees are settled*.*

As of June 30, 2025 and December 31, 2024, six and two patients had been dosed, respectively. The second clinical trial site was activated as of June 30, 2025. The Company accrued approximately $8.8 million and $2.8 million in accrued liabilities – related party for those periods, which included amounts related to dosing milestone payments and site activation costs.

On May 13, 2024, the Company and Eureka entered into Amendment No. 1 to the SOW, effective as of March 4, 2024, to clarify that in the event that Estrella exercises its right to terminate or suspend the engagement with Eureka by providing written notice to Eureka in accordance with the SOW, Estrella will only be obligated to compensate Eureka for (i) services provided by Eureka pursuant to the SOW ("Services") in connection with milestones that were achieved prior to the date and time of such written notice, (ii) reasonable and documented pass-through costs incurred by Eureka on behalf of Estrella prior to the date and time of such written notice in connection with providing the Services and (iii) amounts payable to third parties pursuant to commitments reasonably entered into by Eureka on behalf of Estrella prior to the date and time of such written notice in connection with providing the Services, provided that Eureka shall make commercially reasonable efforts to cancel or reduce any such amounts.

*<u>Consulting Agreement</u>*

On November 1, 2024, the Company entered into a consulting agreement (the "Consulting Agreement") with CoFame Investment Holding LLC ("CoFame"), a related party, as CoFame's manager, Hong Zhang, is a director of the Company. Pursuant to the Consulting Agreement, CoFame provides advisory and consulting services to the Company regarding activities in Asia, including investor relations and potential business collaborations, as mutually agreed upon from time to time.

As of June 30, 2025, and December 31, 2024, the Company has accrued $18,333 and $36,667 under accrued liabilities – related parties, respectively, representing unpaid consulting fees due to CoFame. For the three months ended June 30, 2025 and 2024, the Company recorded a consulting expense of $54,997 and $0 related to CoFame, respectively. For the six months ended June 30, 2025 and 2024, the Company recorded a consulting expense of $109,997 and $0 related to CoFame, respectively.

<u>Series AA Preferred Stock</u>

On June 28, 2022, Estrella and Eureka entered into the Contribution Agreement pursuant to which Eureka agreed to contribute and assign to Estrella all rights, title and interest in and to the Assets in exchange for 105,000,000 shares of Estrella's Series AA Preferred Stock (refer to Note 6). As of June 30, 2025 and December 31, 2024, Eureka collectively owned 68.2% and 69.8% of the Company on a fully diluted basis, respectively.

<u>Lease</u>

On October 1, 2023, Estrella entered into an office sublease agreement with Eureka, to lease 180 square feet of office space with $2,000 monthly lease payments for nine months until June 30, 2024, without any renewal option.

On July 1, 2024, the Company entered into a new office sublease agreement with Eureka. Pursuant to the Sublease Agreement, the sublease commenced on July 1, 2024 and expires on December 31, 2024 with $2,000 sublease fee per month.

On January 1, 2025, the Company entered into another sublease agreement with Eureka for the same location. Under the new sublease agreement, the sublease commenced on January 1, 2025, and will expire on June 30, 2025, with a monthly sublease fee of $2,000, without any renewal option.

Estrella elected not to apply the ROU and lease liability recognition requirements to above mentioned short-term lease as the modified lease term was less than twelve months. As a result of the lease amendment, Estrella then reduced the corresponding ROU and lease liability to $0 and continued to recognize the lease monthly payments in profit or loss on a straight-line basis over the remaining lease term period.

For the three months ended June 30, 2025 and 2024, the Company incurred $6,000 rent expense from Eureka. For the six months ended June 30, 2025 and 2024, the Company incurred $12,000 rent expense from Eureka. Refer to Note 9.

As of June 30, 2025 and December 31, 2024, the outstanding balance of lease payments of $4,000 was recorded as accounts payable – related party on the Company's consolidated balance sheets.

**Note 6 — Preferred Stock**

 ****

***Series AA Preferred Stock***

On June 28, 2022, Estrella and Eureka entered into the Contribution Agreement pursuant to which Eureka contributed and assigned to Estrella all right, title and interest in and to the Assets in exchange for 105,000,000 shares of Estrella's Series AA Preferred Stock. In accordance with ASC 805 "Common control transactions." The transfer of the Assets was accounted for by Estrella at historical carrying values.

***Series A Preferred Stock***

On June 28, 2022, Estrella entered into a Series A Preferred Stock Purchase Agreement with an accredited third-party investor to raise gross proceeds of $5,000,000 by issuing 5,000,000 shares of its Series A Preferred Stock. The shares of Series A Preferred Stock were sold for $1.00 per share.

On each of July 31, 2023 and September 18, 2023, an aggregate of six third party investors executed joinders to Estrella's Series A Preferred Stock Purchase Agreement. Pursuant to the joinders, such investors agreed to purchase an aggregate of 9,250,000 shares of Estrella's Series A Preferred Stock for $9,250,000 immediately prior to the effective time of Estrella's merger with UPTD. Subsequently and immediately prior to the effective time of the merger with UPTD, such shares of Estrella's Series A Preferred Stock converted into Estrella Common Stock and then into Merger Consideration Shares based on an exchange ratio of 0.2407 determined by the total number of shares of Estrella Common Stock outstanding immediately prior to the Effective Time in accordance with the Merger Agreement. In addition, immediately prior to the Effective Time, 500,000 shares of Estrella's Series A Preferred Stock were issued to White Lion for $500,000 and 250,000 shares of Estrella's Series A Preferred Stock were issued to White Lion in consideration for its commitments under the Common Stock Purchase Agreement pursuant to the Joinder to the Series A Preferred Stock Purchase Agreement between Estrella and White Lion, dated April 20, 2023, as further described in Note 4 above.

The significant terms of the Series A, Series AA Preferred Stocks issued by Estrella are as follows:

*<u>Dividend Rights</u>*

 

Each holder of Preferred Stock shall be entitled to receive only when, as and if declared by the board of directors, out of any funds and assets legally available therefor, dividends on a pari passu basis at the rate of 8% of the original issue price of $1.00 per share. The dividend shall be non-cumulative and non-compounding.

*<u>Liquidation Rights</u>*

 

*Series A Preferred Stock* – In the event of any voluntary or involuntary liquidation, dissolution or winding up of Estrella, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of Estrella available for distribution to its stockholders or, in the case of a Deemed Liquidation Event (as defined below), out of the consideration payable to stockholders in such Deemed Liquidation Event or the Available Proceeds, before any payment shall be made to the holders of Series AA Preferred Stock or Common Stock by reason of their ownership thereof, and amount per share equal to the applicable Original Issue Price, plus any dividends declared but unpaid thereon.

*Series AA Preferred Stock –* After payment of the full liquidation preference of the Series A Preferred Stock, then in the event of any voluntary or involuntary liquidation, dissolution or winding up of Estrella, the holders of shares of Series AA Preferred Stock then outstanding shall be entitled to be paid out of the assets of Estrella available for distribution to its stockholders or, in the case of a Deemed Liquidation Event, out of the consideration payable to stockholders in such Deemed Liquidation Event or the Available Proceeds. Before any payment shall be made to the holders of Common Stock by reason of their ownership, an amount per share equal to the applicable Original Issue Price, plus any dividends declare but unpaid thereon.

*Distribution of Remaining Assets –* If there are any remaining assets of the Estrella, such assets shall be distributed among the holders of the shares of Series A Preferred Stock and Common Stock, prorated based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock.

*<u>Voting Rights</u>*

 

Each holder of outstanding shares of Series A Preferred Stock shall be entitled to cast two (2) votes for each share of Series A Preferred Stock held by such holder and each holder of outstanding shares of Series AA Preferred Stock shall be entitled to cast one (1) vote for each share of Series AA Preferred Stock held by such holder. Except as provided by law or by the other provisions of the amended and restated certificate of incorporation, holders of Preferred Stock shall vote together with holders of Common Stock as a single class.

*<u>Conversion Rights</u>*

 

Each share of Preferred Stock shall be convertible, at the option of the holder at any time and from time to time, and without the payment of additional consideration by the holder into such number of fully paid and non – assessable shares of Common Stock as is determined by dividing the Original Issue Price by the Conversion Price in effect at the time of conversion. The Series A Conversion Price applicable to the Series A Preferred Stock shall initially be equal to $1.00. The Series AA Conversion Price applicable to the Series AA Preferred Stock shall initially be equal to $1.00. The Series A Conversion Price and the Series AA Conversion Price are referred to as "Conversion Price." The initial Conversion Prices and the rate at which shares of applicable Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment in connection with certain dilutive issuances, share split, combinations, dividends, distributions, recapitalizations, mergers, consolidations, reclassifications, exchanges, and substitutions.

Pursuant to the Estrella's amended and restated certificate of incorporation, holders of the Estrella's Preferred Stock have the following methods of conversion: Automatic conversion upon either (a) the closing of the sale of shares of Common Stock to the public at a price of at least $1.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock splits, combination or other similar recapitalization with respect to the Common Stock), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $50,000,000 of gross proceeds to Estrella and in connection with such offering the Common Stock is listed for trading on the Nasdaq Stock Market's National Market, the New York Stock Exchange or another exchange or marketplace approved by the board of directors or (b) the date and time, or the occurrence of an event, specified by vote or written consent of (i) the holders of at least a majority of the outstanding shares of Series A Preferred Stock and (ii) the holders of at least a majority of the outstanding shares of Series AA Preferred Stock, voting separately, then (x) all outstanding shares of Preferred Stock shall automatically be converted into shares of Common Stock, at the then effective conversion rate (y) such shares may not be reissued by Estrella.

 

*<u>Redemption Rights</u>*

 

Both Series A Preferred Stock and Series AA Preferred Stock were mandatorily redeemable upon the occurrence of a "Deemed Liquidation Event" which includes the following: (1) a merger or consolidation in which (a) Estrella is a constituent party or (b) a subsidiary of Estrella is a constituent party and Estrella issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of Estrella outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (i) the surviving or resulting corporation; or (ii) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (2) (a) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by Estrella or any subsidiary of Estrella of all or substantially all the assets of Estrella and its subsidiaries taken as a whole, or (b) the sale or disposition (whether by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions) of one or more subsidiaries of Estrella if substantially all of the assets of Estrella and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of Estrella.

Estrella shall use the consideration received by Estrella for such Deemed Liquidation Events mentioned above (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the board of directors of Estrella)**,** together with any other assets of Estrella available for distribution to its stockholders, all to the extent permitted by Delaware law governing distributions to stockholders (the "Available Proceeds"), to redeem all outstanding shares of Preferred Stock at a price per share equal to the applicable liquidation amount, which is equal to the original issue price of the Preferred Stock plus any declared but unpaid dividends. The Series A Preferred Stock must receive its liquidation amount prior to the Series AA Preferred Stock receives any payment.

The Series A Preferred Stock and the Series AA Preferred Stock were accounted for under Section 480-10-S99 — Distinguishing Liabilities from Equity (FASB Accounting Standards Codification 480) as amended by ASU 2009-04 — for Redeemable Equity Instruments ("ASU 2009-04"). Under ASU 2009-04, a redeemable equity security is to be classified as temporary equity if it is conditionally redeemable upon the occurrence of an event that is not solely within the control of the issuer.

Immediately prior to the consummation of the business combination on September 29, 2023, all shares of Estrella Series A and Series AA Preferred Stock were converted into Estrella Common Stock and each share of Estrella Common Stock was exchanged for shares of Common Stock at an exchange ratio of 0.2407.

**Note 7 — Stockholders' Equity (Deficit)**

The Company's authorized shares of Common Stock is 250,000,000 with a par value of $0.0001 per share (the "Common Stock"). As of June 30, 2025 and December 31, 2024, there were 37,580,870 and 36,680,870 shares of Common Stock issued, respectively. As of June 30, 2025 and December 31, 2024, there were 37,065,589 and 36,165,589 shares of Common Stock outstanding, respectively.

***PIPE investment shares***

 ****

In connection with the Merger, on September 14, 2023, UPTD entered into subscription agreements (the "Subscription Agreements") with each of Plentiful Limited, a Samoan limited company ("Plentiful Limited") and Lianhe World Limited ("Lianhe World," together with Plentiful Limited, collectively, the "PIPE Investors"). Concurrently with the closing of the Business Combination, the Company issued 500,000 shares of Common Stock to each of Plentiful Limited and Lianhe World, respectively, for aggregate proceeds of $10,000,000.

Within thirty days following the date of the Closing, each PIPE Investor will also be entitled to receive 704,819 shares of Common Stock. Within five days following the date that is 24 months following the Closing (the "24-Month Date"), if the VWAP of Common Stock for the fifteen trading days prior to the 24-Month Date (the "24-Month Date VWAP") is less than $8.30, then each of them will be entitled to a number of shares of Common Stock equal to (i) (A) 8.30 minus (B) the 24-Month Date VWAP multiplied by (ii) (A) the number of Shares held by the Investor on the 24-Month Date minus (B) the number of Shares acquired by the Investor following the Closing divided by 10.00.

On January 22, 2024, the Company completed the issuance of an additional 704,819 shares of Common Stock to each of the two PIPE Investors. The shares were issued as part of the consideration that each PIPE Investor was entitled to receive thirty days following the date of the closing of the Business Combination.

**Stock purchase agreement shares**

On April 20, 2023, UPTD entered into the Common Stock Purchase Agreement and the White Lion RRA with White Lion. Subsequently, on April 26, 2023, UPTD and White Lion entered into an amendment to the Common Stock Purchase Agreement. Pursuant to the Common Stock Purchase Agreement, following the Closing, the Company will have the right, but not the obligation, to require White Lion to purchase, from time to time up to $50,000,000 in aggregate gross purchase price of newly issued shares of Common Stock (the "Equity Line Shares"), subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement as further described in Note 4. As of June 30, 2025, White Lion has purchased 70,000 shares of the Company's Common Stock for an aggregated consideration of $79,491.

Between May 31 and June 1, 2025, the Company entered into Securities Purchase Agreements with three accredited investors in connection with a private placement of 2,233,334 shares of its Common Stock for aggregate gross proceeds of $3,350,000. Each Securities Purchase Agreement includes a contingent value protection feature pursuant to which the Company may be required to issue additional shares of Common Stock (the "True-Up Shares") if the market price of the Company's stock on the 12-month anniversary of the agreement is below $1.50 per share. As of June 30, 2025, the Company had received gross proceeds of $1,350,000 in connection with the Securities Purchase Agreement and issued 900,000 shares of its Common Stock to the investors.

The True-Up feature was determined to require bifurcation from the host equity contract and is accounted for separately as a derivative liability under ASC 815. The derivative liability is initially measured at fair value on the issuance date and is remeasured at fair value at each subsequent reporting date, with changes in fair value recognized in the consolidated statements of operations.

As of June 30, 2025, the fair value of the derivative liability related to the True-Up Shares was independently valued at $187,941 using a Monte Carlo Simulation model. Key inputs included a one-year volatility of 110%, a risk-free rate of 4.0%, and a spot price of $0.96 per share. The model captured the path-dependent payoff structure of the True-Up obligation and incorporated the terms of the contingent settlement feature, including the $0.99 True-Up Price and the Contractual Floor Price of $0.20 per share.

 ****

***Warrants***

In connection with the reverse recapitalization, the Company has assumed 2,214,993 Public Warrants outstanding. Public Warrants met the criteria for equity classification.

Each whole Warrant entitles the registered holder to purchase one whole share of the Company's Common Stock at a price of $11.50 per share. Pursuant to the warrant agreement, a warrant holder may exercise its Warrants only for a whole number of shares of Common Stock. This means that only a whole Warrant may be exercised at any given time by a warrant holder. No fractional Warrants will be issued upon separation of the Units and only whole Warrants will trade. The Warrants will expire five years after the completion of the Company's initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company has agreed that as soon as practicable, but in no event later than 30 business days, after the closing of the initial Business Combination, it will use its reasonable commercially reasonable efforts to file, and within 60 business days following its initial Business Combination to have declared effective, a registration statement for the registration, under the Securities Act, of the shares of Common Stock issuable upon exercise of the Warrants. The Company will use its commercially reasonable efforts to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of the warrant agreement. No Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the Common Stock issuable upon exercise of the Warrants and a current prospectus relating to such shares of Common Stock. Notwithstanding the above, if the Company's Common Stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a "covered security" under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Warrants who exercise their Warrants to do so on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act and, in the event it so elect, it will not be required to file or maintain in effect a registration statement, but it will be required to use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

Once the Warrants become exercisable, the Company may call the Warrants for redemption:

● in whole and not in part;

● at a price of $0.01 per Warrant;

● upon not less than 30 days' prior written notice of redemption (the "30-day redemption period") to each warrant holder; and

● if, and only if, the reported last sale price of the Common Stock equals or exceeds $16.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on third business day before the Company send the notice of redemption to the warrant holders.

The Company accounted for the 2,214,993 public Warrants assumed from the merger as equity instruments in accordance with ASC 480, "Distinguishing Liabilities from Equity" and ASC 815-40, "Derivatives and Hedging: Contracts in Entity's Own Equity".

***Stock Repurchase Program***

 ****

On January 30, 2024, the Company issued a press release announcing that its board of directors has authorized share repurchases of up to $1.0 million of its common stock. The authorization does not constitute a formal or binding commitment to make any share repurchases and the timing, amount and method of any share repurchases made pursuant to the authorization will be determined at a future date depending on market conditions and other factors. As of June 30, 2025 and December 31, 2024, approximately $0.4 million remained available for repurchases.

As of June 30, 2025 and December 31, 2024, the Company has repurchased 515,281 and 486,979 shares of its common stock. For the six months ended June 30, 2025 and 2024, the Company repurchased 28,302 and 321,794 shares of its common stock in open market transactions for $29,462 and $354,440 at a weighted average price per share of $1.04, and $1.10, respectively.

**Note 8 — Stock Based Compensation**

At the special meeting of UPTD stockholders related to the Business Combination held on July 31, 2023, UPTD's shareholders approved the adoption of the Company's 2023 Omnibus Incentive Plan (the "2023 Plan"), which became effective on the Closing Date. Upon the closing of the Business Combination, 3,520,123 shares of Common Stock became authorized for issuance under the 2023 Plan. On October 30, 2024, the Company granted options under the 2023 Plan to purchase 3,600,000 shares of its Common Stock to its employees, board of directors, and other consultants. For the six months ended June 30, 2025, no additional stock options were granted.

The stock-based compensation expense recorded in the Company's results of operations. For the three months ended June 30, 2025 and 2024 were $159,098 and $0, respectively. For the six months ended June 30, 2025 and 2024 were $318,193 and $0, respectively.

The breakdown of stock-based compensation by categories for the three and six months ended June 30, 2025 and 2024 are summarized below:

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three months<br> ended<br> June 30,<br> 2025** | **For the<br> Three months<br> ended**<br> **June 30,<br> 2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Research and development | $10301 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - |
| General and administrative | 148797 | - |
| Total stock-based compensation | $159098 | $- |

---

---

| | | |
|:---|:---|:---|
|  | **For the<br> Six months<br> ended<br> June 30,<br> 2025** | **For the<br> Six months<br> ended**<br> **June 30,<br> 2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Research and development | $20489 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - |
| General and administrative | 297704 | - |
| Total stock-based compensation | $318193 | $- |

---

The fair value of the granted options under 2023 plan was $2,350,018. As of June 30, 2025 and December 31, 2024, there were $1,599,569 and $1,917,762 unvested compensation costs, which is expected to be recognized over the weighted average remaining 2.78 and 3.27 years of employment service period respectively.

A summary of information related to stock option activities during the six-month transition period ended December 31, 2024 and for the six months ended June 30, 2025 is as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of<br> Shares** | **Weighted-<br> Average<br> Grant Date<br> Fair Value<br> per share** |
| Balance of unvested early-exercised stock options at June 30, 2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - |
| Granted- 2023 Plan stock option | 3600000 | $0.65 |
| Vested 2023 Plan stock option | (583332) | $0.65 |
| Balance of unvested stock options at December 31, 2024 | 3016668 | $- |
| Vested 2023 Plan stock option | (250000) | $0.65 |
| Balance of unvested stock options at June 30, 2025 | **2766668** | $0.65 |

---

**Note 9 — Leases**

On October 1, 2023 Estrella entered into an office lease contract with Eureka, a related party ("Lease 1") for nine months without any renewal option.

On July 1, 2024, the Company entered into an office sublease agreement with Eureka ("Lease 2") for six months without any renewal option.

On January 1, 2025, the Company entered into an office sublease agreement with Eureka ("Lease 3") for six months without any renewal option.

The Company's office lease was classified as an operating lease. The Company's lease agreement does not contain any material residual value guarantees or material restrictive covenants.

The Company elected not to apply the ROU and lease liability recognition requirements to above mentioned short-term lease in accordance with ASC 842-20-25-2, and continued to recognize the lease monthly payments in profit or loss on a straight–line basis over the remaining lease term period.

Rent expense for the three months ended June 30, 2025 and 2024 was $6,000. Rent expense for the six months ended June 30, 2025 and 2024 was $12,000.

**Note 10 — Segment Information**

 

The Company conducts business as a single operating segment which is based upon the Company's organizational and management structure, as well as information used by the Chief Operating Decision Maker ("CODM") to allocate resources and other factors. The accounting policies of the segment are the same as those described in Note 2. The key measure of segment profitability that the CODM uses to allocate resources and assess performance is consolidated net income (loss), as reported on the unaudited condensed consolidated statements of operations. The following table presents the significant revenue and expense categories of the Company's single operating segment.

---

| | | |
|:---|:---|:---|
|  | **For the three months ended June 30,** | **For the three months ended June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Operating expenses: |  |  |
| Clinical trial related service fee | $4625000 | $3500000 |
| Consulting fee | 25000 | 25000 |
| Stock-based compensation | 159098 | - |
| Salary expense | 131096 | 131063 |
| Professional fee | 475437 | 152148 |
| Insurance expense | 83636 | 87494 |
| Other general and administrative fee | 44761 | 53742 |
| Loss before income tax | 5544028 | 3949447 |
| Income tax expense | 850 | 1625 |
| Net loss | $5544878 | $3951072 |

---

---

| | | |
|:---|:---|:---|
|  | **For the six months ended<br> June 30,** | **For the six months ended<br> June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Operating expenses: |  |  |
| Clinical trial related service fee | $6000000 | $3500000 |
| Consulting fee | 50000 | 50000 |
| Stock-based compensation | 318193 | - |
| Salary expense | 260807 | 251549 |
| Professional fee | 760527 | 351304 |
| Insurance expense | 164693 | 174987 |
| Other general and administrative fee | 94106 | 91137 |
| Loss before income tax | 7648326 | 4418977 |
| Income tax expense | 863 | 1625 |
| Net loss | $7649189 | $4420602 |

---

**Note 11 — Subsequent Events**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the issuance date. Except as described below, there were no material subsequent events that required recognition or disclosure in the Company's unaudited condensed consolidated financial statements.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

 

*Unless the context otherwise requires, for purposes of this section, the terms "Company," "we," "us," "our," refer to Estrella Immunopharma, Inc. collectively with its subsidiary Estrella Biopharma, Inc., while the term "Estrella" refers to Estrella Biopharma, Inc. prior to closing of the business combination (the "Business Combination") with TradeUP Acquisition Corp. ("UPTD") on September 29, 2023. The following discussion and analysis of our results of operations and financial condition should be read together with our unaudited condensed consolidated financial statements and the notes thereto, which are included elsewhere in this Report and our Transition Report on Form 10-KT for the six months ended December 31, 2024 filed with the SEC on March 25, 2025. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").*

**Overview**

The Company is a clinical-stage biopharmaceutical company developing T-cell therapies with the capacity to address treatment challenges for patients with blood cancers and solid tumors. We believe T-cell therapy continues to represent a revolutionary step towards providing a potential solution for many forms of cancer, including cancers poorly addressed by current approaches.

On June 28, 2022, pursuant to the Contribution Agreement, Eureka contributed certain assets related to T-cell therapies targeting CD19 and/or CD22 to Estrella in exchange for 105,000,000 shares of Series AA Preferred Stock of Estrella (the "Separation"). Eureka determined that the Separation would allow for the flexibility to create a capital structure tailored to Estrella's strategic goals, provide increased access to capital markets, allow for greater focus on the product candidates contributed to Estrella, and result in a dedicated management team.

As part of the Separation, Estrella entered into a License Agreement with Eureka and Eureka Therapeutics (Cayman) Ltd., an affiliate of Eureka, and a Services Agreement with Eureka, and Eureka contributed and assigned the Collaboration Agreement between Eureka and Imugene to Estrella. The License Agreement grants Estrella an exclusive license to develop CD19 and CD22-targeted T-cell therapies using Eureka's ARTEMIS<sup>®</sup> platform. Under the Services Agreement, Eureka has agreed to perform certain services for us in connection with the development of our product candidates, EB103 and EB104, and researching the use of EB103 in conjunction with CF33-CD19t. The Collaboration Agreement establishes our collaboration with Imugene related to the development of solid tumor treatments using CF33-CD19t in conjunction with EB103.

On March 2, 2023, the FDA cleared the IND application for EB103, allowing Estrella to proceed with the Phase I/II STARLIGHT-1 Clinical Trial.

On March 4, 2024, Estrella and Eureka entered into Statement of Work No. 001 ("SOW") relating to the clinical trial services to be performed by Eureka in connection with STARLIGHT-1, the Phase I/II clinical trial of Estrella's product candidate, EB103, a T-cell therapy targeting CD19 using ARTEMIS<sup>®</sup> T cell technology licensed by Estrella from Eureka. Pursuant to the SOW, Estrella agrees to pay Eureka non-refundable net fees in connection with the achievement of certain milestones set forth in the SOW, with total fees of $33.0 million for achievement of all milestones. The clinical trial has been initiated and six patients have been dosed as of June 30, 2025, and we have accrued approximately $8.8 million in accrued liabilities – related party, for the corresponding dosing milestones. As of June 30, 2025, Estrella has paid $3.5 million to Eureka for covering the fees associated with the study initiation milestones that have been achieved.

To date, Estrella has funded its operations primarily from the June 28, 2022 issuance of $5.0 million of our Series A Preferred Stock, and net proceeds of approximately $20.1 million raised from completion of the Business Combination on September 29, 2023. We have a limited operating history. Since our inception, our operations have focused on preparing for the Business Combination, regulatory filings (including the INDs), planning preclinical and clinical studies, conducting the clinical trial, and building our management team. We do not have any product candidates approved for sale and have not generated any revenue from product sales.

As of June 30, 2025, we had an accumulated deficit of approximately $31.6 million. We have remitted payment of approximately $11.2 million to Eureka, for the upfront payment incurred under the License Agreement and for services provided by Eureka under the Services Agreement on October 10, 2023. In addition, in March 2024, we have paid $3.5 million to Eureka for covering the fees associated with the milestones achieved under SOW#001. In June 2024, we made a deposit of $1.5 million towards patient treatment expenses, which will be applied to the final invoice, with the unused portion of this deposit to be refunded once all expenses are fully settled.

We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we:

● continue to advance preclinical and clinical development of our product candidates and preclinical programs;

● seek regulatory approval for any product candidates that successfully complete clinical trials;

● scale up our clinical and regulatory capabilities;

● adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;

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

● add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and

● incur additional legal, accounting and other expenses in operating as a public company.

**Recent Developments**

 

*The Business Combination and Public Company Costs*

On September 29, 2023, we consummated the previously announced Business Combination with UPTD pursuant to the terms of the Merger Agreement by and among UPTD, Merger Sub and Estrella. No closing conditions set forth in the Merger Agreement were waived by either UPTD or Estrella. Moreover, concurrently with closing of the Merger, Estrella consummated the following transactions: (i) sales of 9.25 million shares of Estrella Series A Preferred Stock for $9.25 million ($730,000 of which was comprised of funds in the trust account delivered to the Company at the closing of the Business Combination that would have otherwise been paid to US Tiger Securities, Inc as a deferred underwriting fee in connection with UPTD's initial public offering), which shares were converted to shares of Estrella Common Stock and subsequently exchanged for Merger Consideration Shares of UPTD immediately prior to the effective time of the merger at an exchange ratio of 0.2407, with such shares becoming shares of New Estrella Common Stock from and after the effective time of the Merger; (ii) issuance of 500,000 shares of Estrella's Series A Preferred Stock to White Lion for $500,000 and 250,000 shares of Estrella Series A Preferred Stock to White Lion in consideration for its commitments under the Common Stock Purchase Agreement, dated April 20, 2023, between UPTD and White Lion and in accordance with the Joinder to the Series A Preferred Stock Purchase Agreement between Estrella and White Lion, dated April 20, 2023, which shares were subsequently converted to shares of Estrella Common Stock and exchanged for Merger Consideration Shares of UPTD at an exchange ratio of 0.2407, with such Merger Consideration Shares becoming shares of New Estrella Common Stock from and after the effective time of the Merger and (iii) issued an unsecured promissory note to a third party for $300,000 at 12% interest per annum, which will be payable 30 days after the closing date of the Merger of September 29, 2023 and subsequently settled on October 26, 2023.

While the legal acquirer in the Business Combination was UPTD, for financial accounting and reporting purposes under U.S. GAAP, Estrella was the accounting acquirer, and the Business Combination was accounted for as a "reverse recapitalization." A reverse recapitalization (i.e., a capital transaction involving the issuance of stock by UPTD for the stock of Estrella) does not result in a new basis of accounting, and the consolidated financial statements of the combined company represent the continuation of the consolidated financial statements of Estrella in many respects. Accordingly, the consolidated assets, liabilities and results of operations of Estrella became the historical consolidated financial statements of the combined company, and UPTD's assets, liabilities, and results of operations were consolidated with Estrella beginning on the Closing Date. Operations prior to the Business Combination are presented as those of Estrella. The net assets of UPTD are recognized at historical cost (which is expected to be consistent with carrying value), with no goodwill or other intangible assets recorded upon execution of the Business Combination.

As a consequence of the Merger, Estrella became the successor to an SEC-registered and Nasdaq-listed company which will require Estrella to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Estrella expects to incur additional annual expenses as a public company for, among other things, directors' and officers' liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees.

Estrella's future results of consolidated operations and financial position may not be comparable to historical results as a result of the Business Combination.

On June 26 2024, the Company filed a Certificate of Ownership and Merger with the Delaware Secretary of State to effect a merger (the "Merger 1") with its wholly-owned subsidiary, Estrella, pursuant to Section 253 of the Delaware General Corporation Law. The Merger 1 was approved by resolutions duly adopted by the unanimous written consent of the Company's board of directors. The Merger 1 became effective at 11:59 PM Eastern Time on June 30, 2024, at which time the separate existence of Estrella ceased, and the Company became the surviving corporation.

On November 25, 2024, our Board of Directors approved a change to our fiscal year end from June 30 to December 31.

On November 27, 2024, the Company established a wholly owned subsidiary in Hong Kong.

On April 30, 2025, the Company received a letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC therein stating that for the 30 consecutive business day period between March 14, 2025 through April 28, 2025, the common stock of the Company had not maintained a minimum closing bid price of $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial period of 180 calendar days, or until October 27, 2025 (the "Compliance Period"), to regain compliance with the Bid Price Rule.

**Results of Operations**

Estrella was formed on March 30, 2022, and has not commenced revenue-producing operations. To date, our operations have consisted of the development and early-stage testing of our initial product candidates, EB103 and EB104, preparation and submission of the IND Application for and researching the use of EB103 in conjunction with CF33-CD19t, and the conduct of the STARLIGHT-1 clinical trial.

**Results of Operations for the three months ended June 30, 2025 and 2024 (unaudited)**

There are two major expenses incurred for the operation:

*Research and Development Expenses*

Research and development expenses consist primarily of costs related to conducting work related to IND-enabling, IND-filing the preparation and conduct of clinical trial, which were mainly performed by Eureka. For the three months ended June 30, 2025 and 2024, we incurred approximately $4.7 million and $3.5 million of research and development expenses, respectively. All research and development expense incurred for the periods presented above were dedicated to the development of ARTEMIS<sup>®</sup> T-cell therapies targeting CD19 and CD22. The increase in research and development expenses was mainly due to Estrella incurring higher service fees during the clinical phase and the completion of three patient dosings, and one site activation under the SOW for the three months ended June 30, 2025 compared to the same period in 2024.

Our breakdown of research and development expenses by categories for the three months ended June 30, 2025 and 2024 are summarized below:

---

| | | |
|:---|:---|:---|
|  | **For the<br> three months<br> Ended** <br> **June 30,<br> 2025** | **For the<br> three months<br> Ended<br> June 30,<br> 2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Consulting and laboratory related fee | $4650000 | $3525000 |
| Stock based compensation | 10301 |  |
| Total research and development | $4660301 | $3525000 |

---

 

*General and administrative expense*

For the three months ended June 30, 2025, and 2024, we incurred approximately $0.9 million and $0.4 million in general and administrative expenses, respectively. The increase was mainly due to professional fees and stock-based compensation expenses during the three months ended June 30, 2025 for stock options granted in October 2024, under the 2023 Omnibus Incentive Plan (the "2023 Plan").

*Net Loss*

We incurred a net loss of approximately $5.5 million and $4.0 million for the three months ended June 30, 2025 and 2024, respectively. We expect our research and development expenses to continue to increase as we continue to work with Eureka to advance the IND filings, preclinical and clinical development of our product candidates and preclinical programs, seek regulatory approval for any product candidates that successfully complete clinical trials, scale up our clinical and regulatory capabilities, adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products, maintain, expand, and protect our intellectual property portfolio, add operational, financial, and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts, and incur additional legal, accounting, and other expenses in operating as a public company.

**Results of Operations for the six months ended June 30, 2025 and 2024 (unaudited)**

There are two major expenses incurred for the operation:

*Research and Development Expenses*

Research and development expenses consist primarily of costs related to conducting work related to IND-enabling, IND-filing the preparation and conduct of clinical trial, which were mainly performed by Eureka. For the six months ended June 30, 2025 and 2024, we incurred approximately $6.1 million and $3.6 million of research and development expenses, respectively. All research and development expense incurred for the periods presented above were dedicated to the development of ARTEMIS<sup>®</sup> T-cell therapies targeting CD19 and CD22. The increase in research and development expenses was mainly due to Estrella incurring higher service fees during the clinical phase and the completion of four patient dosings, and one site activation under the SOW for the six months ended June 30, 2025 compared to the same period in 2024.

Our breakdown of research and development expenses by categories for the six months ended June 30, 2025 and 2024 are summarized below:

---

| | | |
|:---|:---|:---|
|  | **For the<br> six months<br> Ended** <br> **June 30,<br> 2025** | **For the<br> six months<br> Ended<br> June 30,<br> 2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Consulting and laboratory related fee | $6050000 | $3550000 |
| Stock based compensation | 20489 | - |
| Total research and development | $6070489 | $3550000 |

---

 

*General and administrative expense*

For the six months ended June 30, 2025, and 2024, we incurred approximately $1.6 million and $0.9 million in general and administrative expenses, respectively. The increase was mainly due to professional fees and stock-based compensation expenses during the six months ended June 30, 2025 for stock options granted in October 2024, under the 2023 Omnibus Incentive Plan (the "2023 Plan").

*Net Loss*

We incurred a net loss of approximately $7.6 million and $4.4 million for the six months ended June 30, 2025 and 2024, respectively. We expect our research and development expenses to continue to increase as we continue to work with Eureka to advance the IND filings, preclinical and clinical development of our product candidates and preclinical programs, seek regulatory approval for any product candidates that successfully complete clinical trials, scale up our clinical and regulatory capabilities, adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products, maintain, expand, and protect our intellectual property portfolio, add operational, financial, and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts, and incur additional legal, accounting, and other expenses in operating as a public company.

**Liquidity and Capital Resources**

As of June 30, 2025, we had cash of approximately $1.3 million and working capital deficit of approximately $7.6 million. Our ability to fund our operations is dependent on the amount of cash on hand, our ability to raise debt or additional equity financing, and ultimately our ability to generate sufficient revenue. We have expended substantial funds on research and development, have experienced losses and negative cash flows from operations since our inception, and expect losses and negative cash flows from operations to continue until such time that our product candidates receive regulatory approval and we generate sufficient revenue and positive cash flow from operations, if ever.

To date, we have not generated any revenue from any source, and we do not expect to generate revenue for at least the next few years. If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval, our ability to generate future revenue will be adversely affected. We do not know when, or if, we will generate any revenue from our product candidates, and we do not expect to generate revenue unless and until we obtain regulatory approval of, and commercialize, our product candidates.

We expect our expenses to increase significantly in connection with our ongoing activities, particularly as we continue research and development, and seek marketing approval for our product candidates. In addition, if we obtain approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing, and distribution.

On March 4, 2024, the Company and Eureka entered into Statement of Work No. 001 ("Original SOW") relating to the clinical trial services to be performed by Eureka in connection with STARLIGHT-1, the Phase I/II clinical trial of Estrella's product candidate, EB103, a T-cell therapy targeting CD19 using ARTEMIS<sup>®</sup> T cell technology licensed by Estrella from Eureka. Pursuant to the SOW, Estrella agreed to pay Eureka non-refundable net fees in connection with the achievement of certain milestones set forth in the SOW, with total fees of $33.0 million for achievement of all milestones.

On May 13, 2024, the Company and Eureka entered into Amendment No. 1 to the SOW, effective as of March 4, 2024 (together with the Original SOW, the "SOW") to clarify that in the event that Estrella exercises its right to terminate or suspend the engagement with Eureka by providing written notice to Eureka in accordance with the SOW, Estrella will only be obligated to compensate Eureka for (i) services provided by Eureka pursuant to the SOW ("Services") in connection with milestones that were achieved prior to the date and time of such written notice, (ii) reasonable and documented pass-through costs incurred by Eureka on behalf of Estrella prior to the date and time of such written notice in connection with providing the Services and (iii) amounts payable to third parties pursuant to commitments reasonably entered into by Eureka on behalf of Estrella prior to the date and time of such written notice in connection with providing the Services, provided that Eureka shall make commercially reasonable efforts to cancel or reduce any such amounts.

As of June 30, 2025, the Company had expensed approximately $12.3 million to Eureka for covering the fees associated with the milestones achieved. In addition, we deposited $1.5 million with Eureka for patient treatment expenses, which will be applied to the final invoice, with any unused portion refunded once all fees are settled.

Our future operations are highly dependent on a combination of factors, including but not necessarily limited to (1) the success of our research and development programs; (2) the timely and successful completion of any additional financing; (3) the development of competitive therapies by other biotechnology and pharmaceutical companies; (4) our ability to manage growth of the organization; (5) our ability to protect our technology and products; and, ultimately (6) regulatory approval and successful commercialization and market acceptance of our product candidates.

In addition, even though we may obtain additional funds through the exercise of outstanding tradeable warrants, there is no assurance that any tradeable warrant holders will exercise their warrants, especially any warrants that are currently out of the money. As of August 6, 2025, the closing price of our common stock was $0.84 per share, which is significantly lower than the exercise price of the tradeable warrants of $11.50 per share. Therefore, it is unlikely that the tradeable warrant holders will exercise their warrants unless the market price of our Common Stock increases substantially above the exercise price. The cash proceeds associated with the exercise of the Warrants are dependent on the stock price and the number of Warrants being exercised. We cannot predict when or if any Warrants will be exercised, and it is possible that none or only a small number of Warrants will ever be exercised. Therefore, we may not be able to rely on the warrant exercise as a source of liquidity or capital resources.

Furthermore, although the Common Stock Purchase Agreement with White Lion ("Equity Line Agreement") provides that the Company may, in its discretion, from time to time, direct White Lion to purchase shares of up to $50.0 million of Common Stock ("Equity Line Shares") from the Company in one or more purchases in accordance with the Common Stock Purchase Agreement, the Company is not permitted to issue any Equity Line Shares under the Common Stock Purchase Agreement without obtaining majority stockholder approval if such issuance would equal 20% or more of the Company's outstanding common stock, which had not been obtained as of the date hereof and may not be obtained in the future. On December 28, 2023, the Company's registration statement on Form S-1 related to the Equity Line Shares was declared effective. As of June 30, 2025, 70,000 Equity Line Shares have been issued to White Lion under the Equity Line Agreement for an aggregate consideration of $79,491.

On May 30, 2025, we entered into securities purchase agreements (the "Securities Purchase Agreement") with certain investors (the "Purchasers"), pursuant to which we agreed to issue and sell in private placement offering (the "Private Placement") an aggregate total of 2,233,334 shares of common stock of the Company at a purchase price of $1.50 per share for gross proceeds of approximately $3.35 million, before the deduction of offering expenses. As of June 30, 2025, we had received gross proceeds of approximately $1.35 million.

We plan to raise additional capital in the future in order to continue our research and development programs and fund operations. However, our ability to raise additional capital in the equity or debt markets is dependent on various factors, and there is no assurance that such financing will be available on acceptable terms, or at all. The market demand of our equity is subject to a number of risks and uncertainties, including but not limited to, negative economic conditions, adverse market conditions, and adverse financial results.

**Cash Flows**

 

*Operating activities*

 

Net cash used in operating activities was approximately $0.9 million for the six months ended June 30, 2025, and was primarily attributable to (a) a net loss of approximately $7.6 million, and (b) approximately $91,000 decrease in other payables and accrued liabilities primarily due to the settlement of various previously accrued expenses, offset by (i) approximately $6.0 million increase in accrued liability – related party as additional service charges were incurred from Eureka following the completion of four patients dosing and a site activation milestone, (ii) approximately $0.3 million increase in non-cash item of stock-based Compensation under the 2023 Plan, and (iii) approximately $0.6 million decrease in prepaid expenses and other receivable primarily due to the utilization of previously recorded prepaid expenses during the six months ended June 30, 2025.

 

Net cash used in operating activities was approximately $4.5 million for the six months ended June 30, 2024, and was primarily attributable to (a) a net loss of approximately $4.4 million, and (b) approximately $0.1 million decrease in other payables and accrued liabilities as we paid off accrued professional fee over the previous period, offset by approximately $0.1 million decrease in prepaid expenses and other receivable primarily due to the utilization of previously recorded prepaid expenses during the six months ended June 30, 2024

*Financing activities*

 

Net cash provided by financing activities were approximately $1.3 million for the six months ended June 30, 2025, and was primarily attributable to approximately $1.4 million gross proceed received from Private Placement, payment of $40,000 transaction cost related to Private Placement, and approximately $29,000 payment in stock repurchase.

Net cash used in financing activities were approximately $0.4 million for the six months ended June 30, 2024, and was primarily attributable to stock repurchase.

**Off-Balance Sheet Arrangements**

As of June 30, 2025 and December 31, 2024, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules and regulations of the SEC.

**Commitments & Contingencies**

In the normal course of business, we are subject to loss contingencies, such as legal proceedings and claims arising out of our business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450-20, "Loss Contingencies", we will record accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

*License Agreement*

 

Pursuant to the License Agreement, we were obligated to make and may be required to make, as applicable, (i) a one-time, non-refundable, non-creditable payment of $1.0 million, payable in twelve equal monthly installments, (ii) certain one-time, non-refundable, non-creditable development "milestone" payments upon the occurrence of certain events related to development and sales, with potential aggregate multi-million dollar payments upon FDA approval, and (iii) royalty payments of a single digit percentage on net sales during any consecutive 12-month period.

As of June 30, 2025, we have fully paid the $1.0 million license fee to Eureka.

As of June 30, 2025, two development milestones related to the IND submission of EB103 to the FDA ("Milestone 1") and first patient dosed in the first clinical trial of a licensed product ("Milestone 2") have been earned by Eureka under the Agreement. The $50,000 milestone payment related to Milestone 1 was paid on October 10, 2023. The $50,000 milestone payment related to Milestone 2 was paid on September 3, 2024.

No other development milestones, except those mentioned above, sales milestone, or royalty payment has been earned as we do not have any product candidates approved for sale and have not generated any revenue from product sales.

*Collaboration Agreement*

Pursuant to the Collaboration Agreement, we and Imugene will be separately responsible for all qualified full-time person ("FTE") and other internal costs incurred in the performance of its research, as well as the full cost of procurement of leukopaks and purification of T-cells from two donors, and of manufacturing and quality control of EB103 T-cells under the research plan. Any joint cost will be shared equally. If either we or Imugene incurs out-of-pocket costs in excess of the amount budgeted for such costs in the applicable research budget plus allowable overruns, then the other party will not be responsible for its 50% share of the excess of such budgeted amount plus allowable overruns, unless the joint steering committee approves such excess costs (either before or after such costs have been incurred). The research plan under the Collaboration Agreement was completed as of August 30, 2023.

 

*Services Agreement*

Pursuant to the Services Agreement, we agreed to (i) pay Eureka $10.0 million in connection with the services thereunder payable in 12 equal monthly installments and (ii) reimburse Eureka on a monthly basis for reasonable pass-through costs incurred or paid to providers by Eureka in providing the services. In addition, we will be charged for other services performed by Eureka outside the scope of the services set forth in the Services Agreement, at a flat rate, by time or materials or as mutually agreed upon the parties in writing. For the three months ended June 30, 2025, there was $0 in pass-through cost for services provided pursuant to the Services Agreement.

*Statement of Work*

Pursuant to the SOW, Estrella agreed to pay Eureka total fees of $33.0 million in connection with the Phase I/II clinical trial of Estrella's product candidate, EB103, a T-cell therapy targeting CD19 using ARTEMIS<sup>®</sup> T cell technology licensed by Estrella from Eureka. As of June 30, 2025, we had paid $3.5 million to Eureka for covering the fees associated with milestones achieved, and deposited $1.5 million for patient treatment expenses, which will be applied to the final invoice, with any unused portion refunded once all fees are settled.

Six patients' dosing and a site activation milestones have been completed as of June 30, 2025, and the Company has accrued approximately $8.8 million in accrued liabilities - related party, for the corresponding milestones as of June 30, 2025.

*Equity Financing Commitment*

On April 20, 2023, UPTD entered into a Common Stock purchase agreement (as amended on April 26, 2023 and from time to time, the "Common Stock Purchase Agreement") and a related registration rights agreement (the "White Lion RRA") with White Lion. Pursuant to the Common Stock Purchase Agreement, following the Closing, the Company has the right, but not the obligation to require White Lion to purchase, from time to time up to $50.0 million in aggregate gross purchase price of newly issued shares of Common Stock of the Company, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement, including, among others, the initial and any subsequent registration statement for the Equity Line Shares being declared effective by the SEC and remaining effective during the term of the Common Stock Purchase Agreement. In addition, under Nasdaq listing rules, the Company is not permitted to issue any Equity Line Shares under the Common Stock Purchase Agreement if such issuance would equal 20% or more of the Company's outstanding common stock without obtaining majority approval by our stockholders, which had not been obtained as of the date hereof. On December 28, 2023, the Company's registration statement on Form S-1 related to the Equity Line Shares was declared effective by the SEC. As of June 30, 2025, 70,000 Equity Line Shares have been issued to White Lion pursuant to the Common Stock Purchase Agreement for an aggregate consideration of $79,491.

**Critical Accounting Policies and Estimates**

Our financial statements accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We have identified certain accounting estimates that are significant to the preparation of our financial statements. These estimates are important for an understanding of our financial condition and results of operation. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe no critical accounting estimate was identified other than below listed significant estimate and accounting policies.

*Derivative Liabilities*

We evaluate all of its financial instruments, including the True Up Shares in connection with the Securities Purchase Agreement, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC 815, *Derivatives and Hedging* ("ASC 815"). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

As of June 30, 2025, the fair value of the derivative liability related to the True-Up Shares was independently valued at $187,941 using a Monte Carlo Simulation model. Key inputs included a one-year volatility of 110%, a risk-free rate of 4.0%, and a spot price of $0.96 per share. The model captured the path-dependent payoff structure of the True-Up obligation and incorporated the terms of the contingent settlement feature, including the $0.99 True-Up Price and the Contractual Floor Price of $0.20 per share.

 

*Stock-Based Compensation*

 

We recognize compensation costs resulting from the issuance of stock-based awards to employees, non-employees, and directors as an expense in the consolidated statements of operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of each option granted is estimated as of the date of grant using the Black-Scholes-Merton option-pricing model, net of actual forfeitures. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of Estrella Common Stock, expected life of stock options, the expected volatility, and the expected risk-free interest rate, among others. These assumptions reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside of our control.

As a result, if other assumptions had been used, stock-based compensation expense, as determined in accordance with authoritative guidance, could have been materially impacted. Furthermore, if we use different assumptions on future grants, stock-based compensation expense could be materially affected in future periods.

We account for the fair value of equity instruments issued to non-employees using either the fair value of the services received or the fair value of the equity instrument, whichever is considered more reliable*.* We utilize the Black-Scholes-Merton option-pricing model to measure the fair value of options issued to non-employees.

We record compensation expense for the awards with graded vesting using the straight-line method. We recognize compensation expense over the requisite service period applicable to each individual award, which generally equals the vesting term. Forfeitures are recognized when realized.

*Emerging Growth Company and Smaller Reporting Company Status*

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We previously elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Our disclosure controls and procedures are designed to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission ("SEC") rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were not, in design and operation, effective as of June 30, 2025 at a reasonable assurance level due to the material weakness in internal control over financial reporting described below:

*Material Weaknesses*

A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board Auditing Standard AS 2201, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We had the following material weakness:

● We did not have qualified full-time personnel with appropriate levels of accounting knowledge and experience to address complex U.S. GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S. GAAP.

In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. GAAP. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

**Changes in Internal Control over Financial Reporting**

The Company has implemented certain changes in its internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to remediate the material weaknesses identified in fiscal year ended June 30, 2023. The implementation of the material aspects of this plan took place during 2024. These remediation efforts included:

● Adding qualified personnel with appropriate levels of accounting knowledge and experience to address U.S. GAAP accounting issues and prepare and review financial statements and related disclosures

● Implementing processes whereby non-routine transactions are analyzed by in-house staff and third-party consultants to ensure proper accounting treatment

● Establishing narratives and policies for business processes that relate to financial statements to ensure proper segregation of duties and internal controls

While the Company has remediated certain previously identified material weaknesses, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level.

**Limitations on Effectiveness of Controls and Procedures**

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

**PART II - OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

None.

**ITEM 1A. RISK FACTORS**

Factors that could cause our actual results to differ materially from those included in this Quarterly Report are any of the risks described under "*Risk Factors*" in our Annual Report on Form 10-KT filed with the SEC on March 25, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-KT filed with the SEC on March 25, 2025, except as included below. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

***We are currently not in compliance with Nasdaq's continued listing requirements. If we are unable to comply with Nasdaq's continued listing requirements, our common stock could be delisted, which could affect the price of our common stock and liquidity and reduce our ability to raise capital.***

Our common stock is currently listed on The Nasdaq Capital Market. The Nasdaq Capital Market has established certain quantitative criteria and qualitative standards that companies must meet to remain listed for trading on this market.

On April 30, 2025, we received written notice (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") stating that we are not in compliance with Nasdaq Listing Rule 5550(a)(2) (the "Rule") because the Company has not maintained a minimum closing *bid price* of the Company's common stock of at least $1.00 per share for the 30 consecutive business day period between March 14, 2025 through April 28, 2025. The Notice has no immediate effect on the listing or trading of the Company's securities.

The Company has 180 calendar days from the date of the Notice, or until October 27, 2025, to regain compliance. If the Company is not deemed in compliance before the expiration of the 180 day compliance period, it will be afforded an additional 180 day compliance period, provided that the Company meet the applicable market value of publicly held shares requirement for continued listing and all other applicable standards for initial listing on The Nasdaq Capital Market (except for the Rule) based on the Company's most recent public filings and market information and provides written notice to Nasdaq of its intention to cure this deficiency during the second compliance period.

On August 1, 2025, we received an additional written notice from the Listing Qualifications Department of Nasdaq stating that the Company is not in compliance with Nasdaq Listing Rule 5550(b)(2) because it has not maintained a minimum Market Value of Listed Securities ("MVLS") of $35 million for the last 30 consecutive business days, specifically from June 13, 2025, to July 31, 2025. In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided a compliance period of 180 calendar days, or until January 28, 2026, to regain compliance. To regain compliance, the Company's MVLS must close at $35 million or more for a minimum of ten consecutive business days during this period.

The Company intends to monitor the *bid price* and Market Value of the Company's listed securities and may, if appropriate, consider available options to regain compliance with the Rule. There can be no assurance that the Company will be able to regain compliance with the Rule.

Any delisting of our common stock could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease. In addition, delisting of our common stock could result in the loss of confidence by investors and adversely affect our ability to raise capital on terms acceptable to us, or at all.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

None.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5. OTHER INFORMATION**

During the quarter ended June 30, 2025, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

**ITEM 6. EXHIBITS**

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

---

| | |
|:---|:---|
| **Exhibit<br> Number** | **Description of Exhibit** |
| 31.1\* | [Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ea025072801ex31-1_estrella.htm) |
| 31.2\* | [Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ea025072801ex31-2_estrella.htm) |
| 32.1\*\* | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea025072801ex32-1_estrella.htm) |
| 32.2\*\* | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea025072801ex32-2_estrella.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

\* Filed herewith.

\*\* These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| **ESTRELLA IMMUNOPHARMA, INC.** | **ESTRELLA IMMUNOPHARMA, INC.** |
| By: | /s/ Cheng Liu |
| Name: | Cheng Liu |
| Title: | Chief Executive Officer |

---

Pursuant to the requirements of the Securities Act of 1933, as amended, this Quarterly Report has been signed below by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Position** | **Date** |
| /s/ Cheng Liu | Principal Executive Officer and Chairman | August 11, 2025 |
| **Cheng Liu** | *(Principal Executive Officer)* |  |
| /s/ Peter Xu | Principal Financial Officer | August 11, 2025 |
| **Peter Xu** | *(Principal Financial Officer and Principal Accounting Officer)* |  |
| /s/ Hong Zhang | Chairperson and Director | August 11, 2025 |
| **Hong Zhang** |  |  |
| /s/ Marsha Roberts | Director | August 11, 2025 |
| **Marsha Roberts** |  |  |
| /s/ Fan Wu | Director | August 11, 2025 |
| **Fan Wu** |  |  |
| /s/ Janelle Wu | Director | August 11, 2025 |
| **Janelle Wu** |  |  |
| /s/ Pei Xu | Director | August 11, 2025 |
| **Pei Xu** |  |  |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULES 13a-14(a) AND 15d-14(a)<br> UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO <br> SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Cheng Liu, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Estrella Immunopharma, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: August 11, 2025 | By: | /s/ Cheng Liu |
|  |  | **Cheng Liu** |
|  |  | **Chief Executive Officer** |
|  |  | **(Principal Executive Officer)** |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULES 13a-14(a) AND 15d-14(a)<br> UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO <br> SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Peter Xu, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Estrella Immunopharma, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: August 11, 2025 | By: | /s/ Peter Xu |
|  |  | **Peter Xu** |
|  |  | **Chief Financial Officer** |
|  |  | **(Principal Financial Officer)** |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER** 

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Estrella Immunopharma, Inc. (the "Registrant") on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

---

| | | |
|:---|:---|:---|
| Date: August 11, 2025 | By: | /s/ Cheng Liu |
|  |  | **Cheng Liu** |
|  |  | **Chief Executive Officer** |
|  |  | **(Principal Executive Officer)** |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Estrella Immunopharma, Inc. (the "Registrant") on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

---

| | | |
|:---|:---|:---|
| Date: August 11, 2025 | By: | /s/ Peter Xu |
|  |  | **Peter Xu** |
|  |  | **Chief Financial Officer** |
|  |  | **(Principal Financial and Accounting Officer)** |

---