What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-14 · 124 added, 71 removed, 330 unchanged (37% of the section changed)

37 unchanged sentences

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 ® 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 initiated and three patients have been dosed as of March 31, 2025, and we have

accrued approximately $4.13 million in accrued liabilities – related party, for the corresponding dosing milestones.

31, 2025, Estrella has paid $3.5 million to Eureka for covering the fees associated with the study initiation milestones that have been

On March 4, 2024, Estrella and Eureka entered into Statement of Work

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 ® 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.

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

6 unchanged sentences

for sale and have not generated any revenue from product sales.

As of March 31, 2025, we had

As of June 30, 2025, we had

an accumulated deficit of approximately $31.6 million.

2 unchanged sentences

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 unused

portion of this deposit to be refunded once all expenses are fully settled.

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

5 unchanged sentences

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;

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

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

68 unchanged sentences

Results of Operations for the three months

ended March 31, 2025 and 2024 (unaudited)

There are two major expenses incurred for the

ended June 30, 2025 and 2024 (unaudited)

There are two major expenses

incurred for the operation:

Research and Development Expenses

2 unchanged sentences

which were mainly performed by Eureka.

For the three months ended March 31, 2025 and 2024, we incurred approximately $1.4 million and

$25,000 of research and development expenses, respectively.

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

1 unchanged sentence

The increase in research and development

expenses was mainly due to Estrella incurring higher service fees during the clinical phase and the completion of one patient dosing under

the SOW for the three months ended March 31, 2025 compared to the same period in 2024.

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 March 31, 2025 and 2024 are summarized below:

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

Consulting and laboratory related fee

3 unchanged sentences

For the three months ended

March 31, 2025, and 2024, we incurred approximately $0.7 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 March 31, 2025 for

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”).

We incurred a net loss of

approximately $2.1 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively.

approximately $5.5 million and $4.0 million for the three months ended June 30, 2025 and 2024, respectively.

We expect our research and

5 unchanged sentences

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 ®

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:

Consulting and laboratory related fee

Stock based compensation

Total research and development

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.

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”).

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 March 31, 2025, we had

As of June 30, 2025, we had

cash of approximately $1.3 million and working capital deficit of approximately $7.6 million.

34 unchanged sentences

provided that Eureka shall make commercially reasonable efforts to cancel or reduce any such amounts.

As of March 31, 2025, the Company had expensed approximately $7.6 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.

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

7 unchanged sentences

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 May 8, 2025, the closing price of our

common stock was $1.10 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.

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

The cash proceeds associated with the exercise of the Warrants are dependent on the stock price and the number of Warrants being

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

6 unchanged sentences

On December 28, 2023, the Company’s registration statement on Form S-1 related to the Equity Line Shares was declared

As of March 31, 2025, 70,000 Equity Line Shares have been issued to White Lion under the Equity Line Agreement for an aggregate

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

7 unchanged sentences

Net cash used in operating

activities was approximately $0.5 million for the three months ended March 31, 2025, and was primarily attributable to (a) a net loss

of approximately $2.1 million, and (b) approximately $84,000 decrease in other payables and accrued liabilities primarily due to the settlement

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 one patients dosing milestone, (ii) approximately $0.2

million increase in non-cash item of stock-based Compensation under the 2023 Plan , and (iii)

approximately $0.2 million decrease in prepaid expenses and other receivable primarily due to the utilization of previously recorded prepaid

expenses during the three months ended March 31, 2025.

cash used in operating activities was approximately $4.2 million for the three months ended March 31, 2024, and was primarily attributable

to (a) a net loss of approximately $0.5 million, (b) approximately $3.5 million increase in prepaid expense, related party as the Company

made prepayment to Eureka related to the SOW for covering the fees associated with the initiation of the study, the preparation and activation

of the first study site, and FPFV milestones, and (c) approximately $0.2 million decrease in other payables and accrued liabilities as

we paid off accrued professional fee over the previous period.

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 $29,000 and $84,000 for the three months ended March 31, 2025 and 2024 respectively, and were primarily

attributable to stock repurchase.

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 March 31, 2025 and December

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

13 unchanged sentences

upon FDA approval, and (iii) royalty payments of a single digit percentage on net sales during any consecutive 12-month period.

As of March 31, 2025, we have

As of June 30, 2025, we have

fully paid the $1.0 million license fee to Eureka.

As of March 31, 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.

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.

19 unchanged sentences

at a flat rate, by time or materials or as mutually agreed upon the parties in writing.

For the three months ended March 31, 2025, there

For the three months ended June 30, 2025, there

was $0 in pass-through cost for services provided pursuant to the Services Agreement.

3 unchanged sentences

EB103, a T-cell therapy targeting CD19 using ARTEMIS ® T cell technology licensed by Estrella from Eureka.

As of March 31,

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.

Three patients’ dosing

milestones have been completed as of March 31, 2025, and the Company has accrued approximately $4.1 million in accrued liabilities - related

party, for the corresponding dosing milestones as of March 31, 2025.

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

12 unchanged sentences

statement on Form S-1 related to the Equity Line Shares was declared effective by the SEC.

As of March 31, 2025, 70,000 Equity Line Shares

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.

15 unchanged sentences

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

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

37 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis