ESLA 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Estrella’s Operating History and Financial Condition We are a clinical stage biotechnology company with a history of losses. We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability.

We are a clinical-stage biotechnology company with a history of losses. Since our inception, we have devoted substantially all of our resources to preparingorganizing forand thestaffing Businessour company, business planning, raising Combination, drafting regulatory filings (including the INDs), planningcapital, and conducting preclinicaldiscovery, research and clinicaldevelopment studies,activities andfor building our managementproduct team,candidates, and we have incurred significant operating losses. Our net losses were approximately $7.3$13.1 million and $11.1$8.8 million for the yearsyear ended JuneDecember 30,31, 20242025, and 2023,the unaudited twelve months ended December 31, 2024, respectively. As of JuneDecember 30,31, 2024,2025, and JuneDecember 30,31, 2023,2024, we had an accumulated deficit of approximately $19.5$37.0 million and $12.2$23.9 million, respectively. Substantially all of our losses have resulted from expenses incurred in connection with preparing for the Business Combination, regulatory filings, research and development, and from general and administrative costs associated with our operations. To date, we have not generated any revenue from product sales, and we have not sought or obtained regulatory approval for any product candidate. Furthermore, we do not expect to generate any revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating losses for the foreseeable future due to the cost of research and development, preclinical studies, clinical trials, and the regulatory approval process for our current and potential future product candidates.

As of JuneDecember 30,31, 20242025, and June 30,December 2023,31, 2024, we had approximately $4.2 $1.4 million and $2.5$0.9 million, respectively, in cash and cash equivalents. Our future capital requirements and the period for which our existing resources will support our operations may vary significantly from what we expect. Because the length of time and activities associated with successful research and development of platform technologies and product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities. The timing and amount of our operating expenditures will depend largely on:

Our consolidated financial statements expressing substantial doubt about our ability to continue as a going concern due to our history of recurring losses and our expectation that negative cash flows from operations will continue until we can generate sufficient revenue. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations.

In addition, we cannot guarantee that future financing will be available on a timely basis, in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities by us, whether equity or debt, or the market perception that such issuances are likely to occur, could cause the market price of Common Stock to decline. If we are unable to raise sufficient capital when needed, our business, financial condition and results of operations will be harmed, and we will need to significantly modify our operational plans to continue as a going concern. If we are unable to continue as a going concern, we might have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our consolidated financial statements. We were required to make significant payments to Eureka in connection with the Closing of the Business Combination, which could adversely affect our liquidity and financial condition.

Risks Related to the Development and Clinical Testing of Our Product Candidates Our current product candidates are in either preclinical or clinical development. One or all of our current product candidates may fail in clinical development or suffer delays that materially and adversely affect their commercial viability.

We have no products on the market or that have gained regulatory approval or that have entered clinical trials. Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for and successfully commercializing product candidates, either with Eureka pursuant to the Services Agreement or with other collaborators.

Before obtaining regulatory regulatory approval for the commercial distribution of our product candidates, we or a collaborator must conduct extensive preclinical studies,studies followed byand clinical trials to demonstrate the safety, puritypurity, and potency, or efficacy of our product candidates in humans. There is no guaranteeWe that the U.S. Food and Drug Administration (the “FDA”) will permit us to conduct clinical trials. Further, we cannot be certain of the timely completion or outcome of our preclinical studies and cannot predict if the FDA or other regulatory authorities will accept our proposed clinical programs, our clinical protocols or if the outcome of our preclinical studies will ultimately support the further development of our preclinical programs or testing in humans.protocols. As a result, we cannot be sure that we will be able to submit additional investigational new drug applications (“INDs”) or similar applications for our proposed clinical programs on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similarsuch applications will result in the FDA or other regulatory authorities allowing clinical trials for any of our product candidates to begin.

Our current product candidates are in either preclinical or clinical developmentdevelopment, and we are subject to the risks of failure inherent in the development of product candidates based on novel approaches,approaches. targets,We andhave mechanismscompleted the second dose cohort in the Phase I dose-escalation portion of action.our AlthoughSTARLIGHT-1 wePhase have initiated a I/II clinical trial forof EB103EB103, and anticipatean initiatingindependent Data Safety Monitoring Board (DSMB) has completed its review of safety data from the Phase I clinicaldose-escalation trialsphase (n=9) and recommended advancing the trial into the Phase II expansion phase at the recommended Phase II dose. In the Phase I dose-escalation phase, no treatment-related serious adverse events were reported, and the high-dose cohort achieved a 100% complete response rate at Month 1 in all evaluable patients, many of whom were considered high-risk and ineligible for ourcurrently available othercommercial productCD19 candidates,products. However, these results are based on a small number of patients and limited follow-up and may not be predictive of results in larger populations, additional cohorts, or later-stage trials, and there is no guarantee that we will be able to proceedsuccessfully withcomplete the clinical development of EB103 or any of theseour other product candidates or that any product candidate will ultimately demonstrate a clinical benefit once we advance these candidates to testing in patients.benefit. Accordingly, you should consider our prospects in light of the costs, uncertainties, delaysdelays, and difficulties frequently encountered by clinical stageclinical-stage biotechnology companies such as ours.

We may not be able to access the financial resources to continue the development of, or to enter into any collaborations for, any of our current or potential future product candidates. This may be exacerbated if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, a product candidate,commercialization, such as:

Further, we, Eureka, and any any existing or potential future collaborator may never receive approval to market and commercialize any product candidate. Even if we, Eureka, or any existing or potential future collaborator obtains regulatory approval,approval theis approvalobtained, it may be for targets, disease indications or patient populations that are not as broad as we intended or desired or may require labeling that includes significant use or distribution restrictions or safety warnings. We, Eureka, or an existing or potential future collaborator may also be subject to post-marketing testing requirements to maintain regulatory approval.

A key element of our strategy is to use and advance our use of the ARTEMIS® platform to design, test, and build our portfolio of product candidates focused on the treatment of cancer. Our and Eureka’s research and development efforts to date have resulted in our discovery and preclinical development development of EB103 and other potential product candidates. We received IND clearance from the FDA for EB103 on March 2, 2023, and have dosedactivated ourmultiple firstclinical sites, including UC Davis Comprehensive Cancer Center and Baylor Scott & White Research Institute, patient infor the ongoing STARLIGHT-1 clinical trial (NCT06343311). forAn independent Data Safety Monitoring Board has completed its review of safety data from the Phase I dose escalation portion of STARLIGHT-1 (n=9) and, based on the favorable safety profile observed, including the absence of treatment-related serious adverse events and a 100% complete response rate at Month 1 in the high-dose cohort, has recommended advancing the trial to the Phase II expansion phase at the recommended Phase II dose. The expansion phase is a multi-center, open-label study designed to further evaluate the safety and preliminary efficacy of EB103 in Julypatients 2024.with relapsed or refractory B-cell non-Hodgkin’s lymphoma, and data from this expansion phase are expected to inform our pivotal trial strategy for EB103. However, we cannot assure you that EB103 or any of our other existing or future product candidates will successfully complete clinical trials or demonstrate these product candidates to be safe or effective therapeutics, and we may not be able to successfully develop any product candidates. Even if we are successful in expanding our pipeline of product candidates, any additional product candidates that we identify may not be suitable for clinical development or generate acceptable clinical data, including as a result of being shown to have unacceptable effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval from the FDA or other regulatory authorities or achieve market acceptance. If we do not successfully develop and commercialize product candidates, we will not be able to generate product revenue in the future. Moreover, our ability to complete the clinical trial for EB103 or commence and complete a clinical trial for any other product candidate may depend on our ability to obtain sufficient funding from various sources. If we fail to obtain adequate funding we may have to delay, reduce, or terminate our clinical development programs.

Undesirable side effects caused by any of our current or potential future product candidates could cause regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities. While we have not yet initiated clinical trials for our product candidates, itIt is likely that there will be side effects associated with their use. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these side effects. It is possible that safety events or concerns such as these or others could negatively affect the development of our product candidates, including adversely affecting patient enrollment among the patient populations that we intend to treat. In such an event, our trials could be suspended or terminated, and the FDA or other regulatory authorities could order us to cease further development of or deny approval of a product candidate for any or all targeted indications. Such side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. There can be no guarantee that our current or future product candidates will not cause such effects in clinical trials. Any of these occurrences may materially and adversely affect our business and financial condition and impair our ability to generate revenues.

While we expect our pipeline to yield multiple INDs in addition to the IND for EB103, which was cleared by the FDA on March 2, 2023, we cannot be sure that submission of future INDs will result in the FDA allowing testing and clinical trials to begin, or that, once clinical trials for EB103our or other product candidates begin, issues will not arise that suspend or terminate such clinical trials. TheFor our ongoing STARLIGHT-1 trial of EB103, we have completed the second dose cohort in the Phase I dose-escalation portion of the study, and an independent Data Safety Monitoring Board (DSMB) has completed its review of safety data from the Phase I dose-escalation phase (n=9) and recommended advancing the trial into the Phase II expansion phase at the recommended Phase II dose. In the Phase I portion of STARLIGHT-1, no treatment-related serious adverse events were reported, and the high-dose cohort achieved a 100% complete response rate at Month 1 in all evaluable patients, including high-risk patients who were not eligible for currently available commercial CD19 products, such as a patient with CNS lymphoma. However, these data are based on a small number of patients and early-stage observations, and they may not be predictive of results in larger patient populations or later-stage trials. In addition, the manufacturing of our additional product candidates,candidates remains including EB104, remain an emerging and evolving field. Accordingly, we expect CMC-relatedchemistry, manufacturing and controls (CMC) topics, including product specifications, release will criteria and comparability, to be a focus of IND reviews,reviews and ongoing regulatory interactions, which may delay the clearance of future INDs.INDs or restrict or delay the conduct of our clinical trials.

Additionally, even if suchregulatory regulatoryauthorities authoritiesinitially agree with the design and implementation of the clinical trials set forthdescribed in an IND or clinical trial application, we we cannot guarantee that such regulatory authorities will not change their requirements in the future.future, require us to modify trial design, add new endpoints or safety monitoring, or impose additional pauses or holds.

In addition to the submission submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving recombinant or synthetic nucleic acid molecules are subject to oversight ofby institutional biosafety committees (“IBCs”), asunder set forth in the National Institutes of Health (“NIH”) Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules (the “NIH Guidelines”). Under the NIH Guidelines, research involving the deliberate transfer of recombinant andor synthetic nucleic acidsacid molecules, or DNA or RNA derived from such molecules, into human subjects (human gene transfer) requires IBC approval and other applicable regulatory authorizations before initiation. Our EB103 and other ARTEMIS® T-cell product candidates are definedgenerated as:using (i)lentiviral moleculesvectors thatand aretherefore involve the introduction of constructedrecombinant byor joiningsynthetic nucleic acid molecules andinto thathuman cansubjects, replicatewhich inis a living cell (i.e., recombinant nucleic acids); (ii) nucleic acid molecules that are chemically or by other means synthesized or amplified, including those that are chemically or otherwise modified but can base pair with naturally occurring nucleic acid molecules (i.e., synthetic nucleic acids); or (iii) molecules that result from the replication of those described in (i) or (ii). Specifically, under the NIH Guidelines, supervision ofconsidered human gene transfer under these guidelines. As a result, our clinical trials includes evaluationmay be subject to IBC review and assessmentapproval byat aneach IBC,participating ainstitution, localin addition to institutional committeereview thatboard reviews(IRB) and overseesFDA research utilizing recombinant or synthetic nucleic acid molecules at that institution.requirements. The IBC assesses the safety of the research and identifies any potential risk to public health or the environment, and suchits review and any associated biosafety requirements may result in someadditional time, cost and complexity before sites can be activated or patients can be enrolled, and may delay beforethe initiation or conduct of aour clinical trial. trials. While the NIH Guidelines are notonly mandatory unless the research in question is being conducted at or sponsored byfor institutions receivingthat receive certain types of NIH funding of recombinant or synthetic nucleic acid molecule research,funding, many companiesinstitutions, sponsors and other institutions not otherwise subject to the NIH GuidelinesCROs voluntarily follow them.them, and we expect that our gene-transfer studies will generally be required to comply with IBC oversight.

We depend on strategic partnerships and collaboration arrangements,partnerships, such as the Collaboration Agreement with Imugene and the Licensing Agreement with Eureka,Eureka and may in the future depend on collaborations, such as our prior Collaboration Agreement with Imugene, for the development and commercialization of EB103, EB104, and future product candidates in certain indications, and if these arrangements are unsuccessful, this could impair our ability to generate revenues and materially harm our results of operations.

Our business strategy for the research of EB103’s use in conjunction with CF33-CD19t iswas previously dependent upon maintaining our currentarrangement arrangementswith andImugene potentiallyunder the Collaboration Agreement, which concluded its research plan on August 30, 2023. establishingOur newongoing strategy relies on arrangements with strategic partners, research collaborators, and otherothers, thirdsuch parties. The Collaboration Agreement with Imugene allows us to investigateas the use of EB103 in conjunction with CF33-CD19t in the treatment of solid tumors and to discuss the development and commercialization of collaboration results. The Licensing Agreement with EurekaEureka, which grants us an exclusive license to use ARTEMIS® technology in connection with CD19 and CD22 in the Licensed Territory. These agreements provide for, among other things, intellectual property rights and significant future payments should certain development, regulatory, and commercial milestones be achieved.

As a result, we may not be able to conduct these collaborations in the manner or on the time schedule we currently contemplate,previously contemplated, which may negatively impact our business operations.

We may not realize the anticipated benefits of our prior collaboration agreement with Imugene.

Our prior collaboration with Imugene willImugene, explorewhich concluded its research plan on August 30, 2023, explored the therapeutic potential of a combination of Imugene’s CF33-CD19t in conjunction with EB103 for the treatment of solid tumors. However, Imugene could develop therapies outside of our collaboration that do not utilize EB103. For example, Imugene could develop an oncolytic virus that forces tumors to express a protein other than CD19 for a “mark and kill” approach to treating solid tumors, which would require a combination with a T-cell therapy other than EB103.

From time to time, we consider strategic transactions, such as collaborations, geographic partnerships for the co-development and/or co-commercialization of our product candidates in selected territories, acquisitions of companies, asset purchases, joint ventures, out- orout-or in-licensing of product candidates or technologies and biomanufacturing partnerships. For example, we will evaluate and, if strategically attractive, seek to enter into collaborations, including with biotechnology or biopharmaceutical companies, contract development manufacturing organizations, or hospitals. The competition for collaborators is intense, and the negotiation process is time-consuming and complex. If we are not able to enter into strategic transactions, we may not have access to required liquidity or expertise to further develop our current or potential future product candidates. Any such collaboration, or other strategic transaction, may require us to incur non-recurring or other charges, increase our near- andnear-and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business.

The manufacturing of our product candidates is complex. We may encounter difficulties in production.production, Ifand because we encountercurrently rely on Eureka as our sole supplier of clinical drug product, any such difficulties,difficulties or any disruption in our ability torelationship supplywith Eureka could delay or halt our product candidates for clinical trialsprograms or,and, if approved, for commercial sale, could be delayed or halted entirely.supply.

The manufacture of biopharmaceutical products is complex and requires significant expertise, including the development of advanced manufacturing techniques and process controls. The process of manufacturing our product candidates is also extremely susceptible to product loss due to contamination, equipment failure or improper installation or operation of equipment, operator error, contamination and inconsistency in yields, variability in product characteristics and difficulties in scaling the production process. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our product candidates or the manufacturing facilities in which they are made, the facilities may need to be closed for an extended period of time to investigate and remedy the contamination. As a result of thethese complexities, the cost to manufacture biologics in general, and our cell-based product candidates in particular, is generally higher than traditional small molecule chemical compounds, and the manufacturing process is less reliable and is more difficult to reproduce.

Any adverse developments affecting manufacturing operations for our product candidates, ifwhether at Eureka or any arefuture approved,third-party manufacturer, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our products. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives. Furthermore, it is too early to estimate our cost of goods sold. The actual cost to manufacture our product candidates could be greater than we expect because we are early in our development efforts.

The development and commercialization of T-cell therapies is highly competitive. We compete with a variety of large pharmaceutical companies, multinational biopharmaceutical companies, other biopharmaceutical companies, and specialized biotechnology companies, as well as technology and therapeutics being developed at universities and other research institutions. Our competitors are often larger and better funded than we are. Our competitors have developed, are developing, or will develop product candidates and processes competitive with ours. Competitive therapeutic treatments include those that have already been approved and accepted by the medical community and any new treatments that are currently in development or that enter the market. We believe that a significant number of product candidates are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may try to develop product candidates. There is intense and rapidly evolving competition in the biotechnology and biopharmaceutical fields. We believe that while EB103, EB104, EB201 and research relating to the use of EB103 in conjunction with CF33-CD19t, their associated intellectual property, the characteristics of our current and potential future product candidates, and our scientific and technical know-how together give us a competitive advantage in this space, competition from many sources remains.

In addition, through the Services Agreement with Eureka, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Such consultants and advisors are also consultants and advisors to Eureka, and may have additional commitments under consulting or advisory contracts with other entities, that may limit their availability to us and adversely impact the benefits we realize from the Services Agreement and our research and development and commercialization strategy We may experience difficulties in managing our growth and expanding our operations.strategy.

We rely on information technology systems and data processing that we or our service providers, collaborators, consultants, contractors, or partners operate to collect, process, transmit and store electronic information in our day-to-day operations, including a variety of personal data, such as name, mailing mailing address, email addresses, phone number and potentially clinical trial information. Additionally, we, and our service providers, collaborators, collaborators, consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make accessible, accessible, protect, and share personal information, health information, and other information to host or otherwise process some of our anticipated anticipated future clinical data and that of users, to develop our products, to operate our business, for clinical trial purposes, for legal and marketing purposes, and for other business-related purposes. Our internal computer systems and data processing and those of our third-party vendors, consultants, collaborators, contractors, or partners, including future CROs may be vulnerable to a cyber-attack (including supply chain cyber-attacks), malicious intrusion, breakdown, destruction, loss of data privacy, actions or inactions by our employees or contractors that expose security vulnerabilities, theft, or destruction of intellectual property or other confidential or proprietary information, business interruption or other significant security incidents. As the cyber-threat landscape evolves, these attacks are growing in frequency, level of persistence, sophistication, and intensity, and are becoming increasingly difficult to detect. In addition to traditional computer “hackers,” threat actors, software bugs, malicious code (such as viruses and worms), employee theft or misuse, denial-of-service attacks (such as credential stuffing), phishing and ransomware attacks, sophisticated nation-state and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions). These risks may be increased as a result of COVID-19, owing to an increase in personnel working remotely and higher reliance on internet technology. Furthermore, because the techniques used to obtain obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.

There can be no assurance that we, our service providers, collaborators, consultants, contractors, or partners will be successful in efforts to detect, prevent or fully recover systems or data from all breakdowns, service interruptions, attacks or breaches of systems that could adversely affect our business and operations and/or result in the loss of critical or sensitive data. Any failure by us or our service providers, collaborators, consultants, contractors or partners to detect, prevent, respond to or mitigate security breaches or improper access to, use of, or inappropriate disclosure of any of this information or other confidential or sensitive information, including patients’ personal data, or the perception that any such failure has occurred, could result in claims, litigation, regulatory investigations and other proceedings, significant liability under state, federal and international law, and other financial, legal or reputational harm to us. Further, such failures or perceived failures could result in liability and a material disruption of our development programs and our business operations, which could lead to significant delays or setbacks in our research, delays to commercialization of our product candidates, lost revenues, or other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition, prospects and cashflow.cash flow. For example, the loss or alteration of clinical trial data from future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

Unless the context otherwise requires, for purposes of this section, the terms “Company,” “we,” “us,” “our,” refer to 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 audited consolidated financial statements and the notes thereto, which are included elsewhere in this Report and our audited financial statements as exhibit 99.1 on Form 8-K filed with the SEC on October 5, 2023 and the section entitled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” included in the Company’s Registration Statement on Form S-1, filed with the SEC on October 11, 2023 and amended on November 13, 2023 and December 18, 2023.report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The resultsResults of operationsOperations for the year ended JuneDecember 31, 30,2025 2024 represented our results of operations to be comparableCompared with the sameunaudited twelve-month period in 2023.ended December 31, 2024

Research and development expenses consist primarily of costs related to conducting work related to IND-enabling,the IND-filingconduct andof the STARLIGHT-1 clinical trial preparation,trial, which werewas mainly performed by Eureka. For the yearsyear ended December 31, 2025 and for the twelve months ended JuneDecember 30,31, 2024 and 2023,2024, we incurred approximately $4.1$10.2 million and $10.5$6.4 million of research and development expenses, respectively. All research and development expenseexpenses incurred for the periods presented above were dedicated to the development of ARTEMIS® T-cell therapies targeting CD19 and CD22. The decreaseincrease in research and development expenses was mainly due to Estrella incurring lowerhigher service fees withduring Eurekathe dueclinical tophase and the dosing of seven patients, and a lowersecond volumesite activation of service rendered under the Services AgreementSOW for the year ended JuneDecember 30,31, 20242025 compared to two patients dosed during the same period in 2023.2024. In addition, for the yeartwelve months ended June 30,December 31, 2024, we have incurred $3.5 million R&D expense from Eureka for achieving the milestones associated relatedwith tothe initiation of the study, the preparation and activation of the first study site, and the First Patient First Visit (FPFV) under the SOW.

Our breakdown of research and development expenses by categories for the yearsyear ended JuneDecember 30,31, 20242025 and 2023for the twelve months ended December 31, 2024 are summarized below:

General and administrativeAdministrative expenseExpenses

For the yearsyear ended JuneDecember 30,31, 20242025 and 2023,for the twelve months ended December 31, 2024, we incurred approximately $3.2$2.8 million and $0.7$2.4 million of general and administrative expenses, respectively. The increase in general and administrative expensesexpenses, forrespectively. theThe year ended June 30, 2024, increase was mainlyprimarily duedriven toby anhigher increase in professional fee,fees and recognition of the acceleration of the stock-based compensation uponexpense consummation of the Business Combination. The increase was also attributablerelated to approximatelystock $0.5 million of bonusoptions granted toin October 2024 under our executive2023 officersOmnibus inIncentive recognitionPlan, ofpartially theiroffset service.by lower other corporate expenses.

We incurred a net loss of approximately $7.3 $13.1 million and $11.1$8.8 million for the yearsyear ended JuneDecember 30,31, 20242025 and 2023,for the twelve months ended December 31, 2024, respectively. We expect 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 incorporate requirements applicable to marketed products, maintain, expand, and protect our intellectual property portfolio, add operational, financial, financial, and management information systems and personnel, including personnel to support our product development and planned future commercialization commercialization efforts, and incur additional legal, accounting, and other expenses in operating as a public company.

Net cash used in operating activities was approximately $1.3$1.8 million for the year ended JuneDecember 30,31, 2023,2025, and was primarily attributable to (a ) a net loss of approximately $11.1 $13.1 million, offset by (ai) approximately $8.4$9.6 million increase in accountaccrued payableliability - related party whichas related toadditional service feecharges were incurred from Eureka following the Servicescompletion Agreement,of seven patient dosings, (bii) approximately $0.4$0.6 million increase in non-cash item such as of stock-based compensation as we incurred amortization for year ended June 30, 2023 related to the stock options granted to our employees, board of directors, and other consultants under the Incentive2023 Plan, (c)and approximately $0.8$38,000 loss from change in fair value of derivative liabilities, (iii) approximately $0.4 million decrease in prepaid expenses –and relatedother partyreceivable asprimarily wedue utilized prior prepaid service fees fromto the Servicesutilization Agreementof inpreviously recorded prepaid expenses during the currentyear period,ended andDecember 31, 2025, (div) an approximately $0.1$0.6 million increase in accounts payable - related party primarily due to the receipt of billing from Eureka of $0.5 million related to the second site activation., and (v) approximately $37,000 increase in other payables and accrued liabilities asprimarily wedue to additional accrued various legal, consulting, and research and development expenses related to the Business Combination.expense.

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 Therapeutics, Inc. (“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. Pursuant to the SOW, Estrella agrees to pay Eureka non-refundable net fees in connection with the achievement of certain milestones, with total fees of $33.5 million for achievement of all milestones, including a $0.5 million fee for the activation of the second clinical site. As of MarchJune 31,30, 2026, teneleven patients have been dosed in the STARLIGHT-1 clinical trial, and we accrued approximately $8.3 million in accrued liabilities - related party for the outstanding dosing milestone payments. As of March 31,June 30, 2026, Estrella has paid approximately $3.5 million to Eureka for fees associated with the study initiation milestones that have been achieved, $5.5 approximately $6.9 million for patient dosing, and $0.5 million for second site activation.

As of MarchJune 31,30, 2026, we had an accumulated deficit of approximately $39.3 $41.6 million. We have remitted payment of approximately $11.2 million to Eureka under the License Agreement and Services Agreement, paid $9.5 approximately $10.9 million to Eureka for fees associated with milestones under SOW #001, and made a $1.5 million deposit for patient treatment expenses, which will be applied to the final invoice.

In November 2025, the Company announced the completion of Phase I dosing in the STARLIGHT-1 clinical trial of EB103, our lead product candidate. On January 9,In 2026, onetwo Phase II patient was have been dosed in the STARLIGHT-1 clinical trial, representing the tenth patient dosedone in total.January and one in June. All dosing milestones recognized as of MarchJune 30, 31, 2026 have been recorded as research and development expense under the SOW with Eureka. The Company continues to enroll patients and advance advance the STARLIGHT-1 clinical trial.

During the threesix months ended June March 31,30, 2026, 631,000 1,000,000 Pre-Funded Warrants were exercised, resulting in the issuance of 631,0001,000,000 shares of Common Stock. TheAs remainingof 369,000June 30, 2026, no Pre-Funded Warrants wereremained subsequently exercised on April 8, 2026.unexercised.

On January 7, 2026, we received a written notice from Nasdaq indicating that we were not in compliance with Nasdaq Listing Rule 5620(a) due to our failure to hold an annual meeting of shareholders within twelve months of the end of our transition period ended December 31, 2024. On February 27, 2026, Nasdaq granted us an extension until June 29, 2026 to regain compliance. WeThe intendCompany toheld satisfyits this requirement by holding a jointCombined 2025/2026 annualAnnual meetingMeeting of shareholders.Stockholders on June 29, 2026, thereby regaining compliance with Nasdaq Listing Rule 5620(a).

Results of Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025 (Unaudited)

For the three months ended June March 31,30, 2026 and 2025, we incurred approximately $1.4 million and $4.7 million of research and development expenses.expenses, respectively. The decrease of approximately $3.3 million, or 69.9%, was primarily attributable to the timing of patient dosing milestones payable to Eureka under SOW #001. All research and development expenses incurred for the periods presented were dedicated to the development of ARTEMIS® T-cell therapies targeting CD19 and CD22.

The breakdown of research and development expenses by category for the three months ended MarchJune 31,30, 2026 and 2025 is summarized below:

We incurred a net loss of approximately $2.3 million and $2.1$5.5 million for the three months ended MarchJune 31,30, 2026 and 2025, 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 systems and personnel, including personnel to support our product development and planned future commercialization efforts, and incur additional additional legal, accounting, and other expenses in operating as a public company.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of approximately $1.9$0.1 million and a working capital deficit of approximately $6.8$7.4 million. Since our inception, we have expended substantial funds on research and development and have experienced significant losses and negative cash flows from operations. For the threesix months ended MarchJune 31,30, 2026, we reported a net loss of approximately $2.3$4.6 million and net cash used in operating activities of approximately $6.7 $8.5 million. As of MarchJune 31,30, 2026, we had an accumulated deficit of approximately $39.3$41.6 million.

Our primary use of cash is to fund operating expenses, primarily consisting of clinical trial activities and related research and development costs. Pursuant to the SOW with Eureka for the STARLIGHT-1 clinical trial, we agreed to pay total non-refundable net fees of $33.5 million for the achievement of all projected milestones, including a $0.5 million fee for the activation of the second clinical site. As of MarchJune 31,30, 2026, we have cumulatively incurred approximately $17.8 $19.1 million to Eureka for milestones achieved, and we hold an accrued liability to related parties of approximately $8.3 million for the outstanding milestone payments.

Our ability to fund our operations is dependent on our cash on hand, our ability to raise debt or additional equity financing, and ultimately our ability to generate sufficient revenue. We plan to raise additional capital in the future; however, there is no assurance that such financing will be available on acceptable terms, or at all. Furthermore, while we have tradeable warrants outstanding, it is unlikely that holders will exercise these warrants to provide additional liquidity in the near term, as the current market price of our Common Stock ($1.26$0.722 per share as of MayAugust 11,10, 2026) is significantly lower than the $11.50 per share exercise price. Additionally, our Common Stock Purchase Agreement with White Lion Capital LLC expired on December 30, 2025, and is no longer available as a source of liquidity.

Net cash used in operating activities was approximately $6.7$8.5 million for the threesix months ended MarchJune 31,30, 2026, and was primarily attributable to (a) a net loss of of approximately $2.3$4.6 million, (b) approximately $59,000 decrease in other payables and accrued liabilities primarily due to the settlement of various previously accrued expenses,million and (cb) a decrease of $4.7approximately $4.6 million in related party liabilities (accrued liabilities and accounts payable), resulting primarily from the settlement of milestone invoices previously due to Eureka, offset by (i) approximately $0.3$0.6 million (net) non-cash items, consisting of change in fair value of derivative liabilities and stock-based compensation under the 2023 Plan, and (ii) an increase of approximately $63,000$17,000 in other payables and accrued liabilities, and (iii) approximately $115,000 decrease in prepaid expenses and other receivables primarily due to the utilization of previously recorded prepaid expenses during the threesix months ended March 31,June 30, 2026.

Net cash used in operating operating activities was approximately $0.5$0.9 million for the threesix months ended MarchJune 31,30, 2025, and was primarily attributable to (a) a net loss of approximately $2.1$7.6 million, and (b) approximately $84,000$91,000 decrease in other payables and accrued liabilities primarily due to the settlement of various previously accrued expenses, offset by (i) approximately $1.4$6.0 million increase in accrued liability – related party as additional service charges were incurred from Eureka following the completion of onefour patient’spatients dosing and a site activation milestone milestone (see Note 5 and Commitments and Contingencies section), (ii) approximately $0.2$0.3 million increase in non-cash item of stock-based compensation under the 2023 Plan, and (iii) approximately $0.2$0.6 million decrease in prepaid expenses and other receivables primarily due to the utilization of previously recorded prepaid expenses during the threesix months ended MarchJune 31,30, 2025.

Net cash provided by financing activities was approximately $7.2 million for the threesix months ended MarchJune 31,30, 2026, and was primarily attributable to net proceeds of approximately $7.2 million received from the Registered Direct Offering and concurrent Private Placement consummated on January 6, 2026, net of placement agent fees and offering expenses.

Net cash usedprovided inby financing activities was approximately $29,000 $1.3 million for the threesix months ended MarchJune 31,30, 2025, consisting entirelyof approximately $1.4 million of gross proceeds from the issuance of common stock in a private placement, partially offset by $40,000 of transaction costs and approximately $29,000 of open market repurchases of our common stock under our stock repurchase program.

As of MarchJune 31,30, 2026 and December 31, 2025, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules and regulations of the SEC.

As of MarchJune 31,30, 2026, we have fully paid the $1.0 million license fee to Eureka. Two development milestones - the IND submission of EB103 to the FDA (“Milestone 1”, $50,000, paid October 2023) and the first patient dosed in the first clinical trial of a licensed product (“Milestone 2”, $50,000, paid September 2024) have been earned by Eureka and paid in full. No other development milestones, sales milestones, or royalty payments have been earned or are payable, as we do not have any product candidates approved for sale and have not generated any revenue from product sales.

Pursuant to the Services Agreement, we agreed to pay Eureka $10.0 million in connection with the services thereunder, payable in twelve equal monthly installments, and to reimburse reimburse Eureka on a monthly basis for reasonable pass-through costs. 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 by the parties in writing. As of MarchJune 31,30, 2026, we have fully settled all amounts owed under the Services Agreement, and there are no outstanding accounts payable or related-party liabilities associated with this agreement.

Pursuant to the SOW (and Amendment No. 1), Estrella agreed to pay Eureka total fees of up to $33.5 million in connection with the Phase I/II clinical trial of EB103, including a $0.5 million fee for the activation of the second clinical site. As of MarchJune 31,30, 2026, teneleven patients have been dosed and two clinical sites are active.

Amounts related to the SOW are accrued as earned by Eureka and recorded as research and development expense. As of MarchJune 31,30, 2026, approximately $8.3 million in earned but not yet formally invoiced milestone payments were recorded as accrued liability - related party on our unaudited condensed consolidated balance sheet. The $1.5 million deposit for patient treatment expenses continues to be recorded as prepaid expenses - related party, non-current,current, and and will be applied against the final invoice.

From May 2025 to September 2025, we entered into Securities Purchase Agreements with three accredited investors. Each agreement includes a True-Up feature pursuant to which we may be required to issue additional shares of Common Stock (up to a maximum of 735,857 True-Up Shares in aggregate) if our Common Stock price is below $1.50 on the 12-month anniversary of each respective agreement.closing. This True-Up feature is recorded as a derivative liability, measured at fair value through earnings. As of MarchJune 31,30, 2026, the fair value of this derivative liability was $465,132.$687,224.

In connection with the January 6, 2026 RDO, we issued Common Stock Warrants exercisable for up to 7,594,935 shares of Common Stock at $1.39 per share, expiring January 6, 2031. The Common Stock Warrants are equity-classified. We also fulfilled our registration obligation related to the Common Stock Warrants through through a Form S-1 that became effective January 23, 2026. As of MarchJune 31,30, 2026, no Common Stock Warrants have been exercised.

As of MarchJune 31,30, 2026, the fair value of the derivative liability related to the True-Up Shares was valued at $465,132$687,224 using a Monte Carlo Simulation model. Key inputs of the model used included a volatility of 98%89.6%, to 129%, a risk-free rate of 3.7%,3.87%, and a spot price of $1.06$1.04 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 to $1.08 True-Up Price and the Contractual Floor Price of $0.20 per share.