What changed in this filing

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Item 1A. Risk Factors

2026-03-18 compared with 2024-09-27 · 2592 added, 2655 removed, 993 unchanged (84% of the section changed)

Risk Factors.

You should consider

carefully the risks and uncertainties described below, together with all of the other information contained in this Annual Report.

any of the following events occur, our business, financial condition and operating results may be materially adversely affected.

event, the trading price of our securities could decline, and you could lose all or part of your investment.

The risks and uncertainties

described below are not the only ones we face.

Additional risks and uncertainties that we are unaware of, or that we currently believe

are not material, may also become important factors that adversely affect our business or results of operations.

For a summary of these

Risk Factors, see “Summary Risk Factors.”

Risks Related to the Equity

Subscription Line and Shares Sold by the Selling Stockholders

It is not possible

to predict the actual number of shares of Common Stock, if any, we will sell under the Common Stock Purchase Agreement to White Lion or

the actual gross proceeds resulting from those sales.

On April 14, 2023, we entered

into the Common Stock Purchase Agreement, pursuant to which White Lion has committed to purchase up to the lesser of (i) $50,000,000 in

aggregate gross purchase price of newly issued shares of Common Stock and (ii) the Exchange Cap, in each case, subject to certain limitations

and conditions set forth in the Common Stock Purchase Agreement.

Subject to the satisfaction

of certain customary conditions including, Estrella’s right to sell shares to White Lion commenced on July 11, 2023 and extend until

December 31, 2024.

During such term, subject to the terms and conditions of the Common Stock Purchase Agreement, Estrella shall notify

White Lion when Estrella exercises its right, in its sole discretion, to sell shares.

We generally have the right

to control the timing and amount of any sales of our shares of Common Stock to White Lion under the Common Stock Purchase Agreement.

of our shares of Common Stock, if any, to White Lion under the Common Stock Purchase Agreement will depend upon market conditions and

other factors to be determined by us.

We may ultimately decide to sell to White Lion all, some or none of the shares of Common Stock that

may be available for us to sell to White Lion pursuant to the Common Stock Purchase Agreement.

Because the purchase price

per share of Common Stock to be paid by White Lion for the shares of Common Stock that we may elect to sell to White Lion under the Common

Stock Purchase Agreement, if any, will fluctuate based on the market prices of the Common Stock at the time we elect to sell shares of

Common Stock to White Lion pursuant to the Common Stock Purchase Agreement, if any, it is not possible for us to predict, prior to any

such sales, the number of shares of Common Stock that we will sell to White Lion under the Common Stock Purchase Agreement, the purchase

price per share that White Lion will pay for shares of Common Stock purchased from us under the Common Stock Purchase Agreement, or the

aggregate gross proceeds that we will receive from those purchases by White Lion under the Common Stock Purchase Agreement.

The number of shares of Common

Stock ultimately offered for sale by White Lion is dependent upon the number of shares of Common Stock, if any, we ultimately elect to

sell to White Lion under the Common Stock Purchase Agreement.

However, even if we elect to sell shares of Common Stock to White Lion pursuant

to the Common Stock Purchase Agreement, White Lion may resell all, some or none of such shares at any time or from time to time in its

sole discretion and at different prices.

Because the market price of

our shares of Common Stock may fluctuate from time to time, the actual purchase price to be paid by White Lion for our shares of Common

Stock that we elect to sell to White Lion under the Common Stock Purchase Agreement, if any, also may fluctuate because they will be based

on such fluctuating market price of our shares of Common Stock, it is possible that we would need to issue and sell more than the number

of shares of Common Stock that were registered for resale by White Lion in order to receive aggregate gross proceeds of $50.0 million

under the Common Stock Purchase Agreement.

Accordingly, if it becomes

necessary for us to issue and sell to White Lion under the Common Stock Purchase Agreement more than the 7,036,726 shares of Common Stock

that were registered for resale, in addition to obtaining stockholder approval to exceed the Exchange Cap in accordance with Nasdaq listing

rules, we must file with the SEC one or more additional registration statements to register under the Securities Act the resale by White

Lion of any such additional shares of Common Stock we wish to sell from time to time under the Common Stock Purchase Agreement, which

the SEC must declare effective, in each case before we may elect to sell any additional shares of Common Stock to White Lion under the

Common Stock Purchase Agreement.

Any issuance and sale by us under the Common Stock Purchase Agreement of a substantial amount of shares

of Common Stock in addition to the 7,036,726 shares of Common Stock being registered for resale by White Lion could cause additional substantial

dilution to our stockholders.

The sale and issuance

of shares of Common Stock to White Lion will cause dilution to our existing securityholders, and the resale of the shares of Common Stock

by White Lion, or the perception that such resales may occur, could cause the price of our securities to fall.

The purchase price per share

of Common Stock to be paid by White Lion for the shares of Common Stock that we may elect to sell to White Lion under the Common Stock

Purchase Agreement, if any, will fluctuate based on the market prices of our shares of Common Stock at the time we elect to sell shares

of Common Stock to White Lion pursuant to the Common Stock Purchase Agreement.

Depending on market liquidity at the time, resales of such

shares of Common Stock by White Lion may cause the trading price of our shares of Common Stock to fall.

If and when we elect to sell

shares of Common Stock to White Lion, sales of newly issued shares of Common Stock by us to White Lion could result in substantial dilution

to the interests of existing holders of our shares of Common Stock.

If all of the 7,036,726 shares of Common Stock offered for resale

by White Lion (without regard to the $50.0 million aggregate purchase price limit pursuant to the Common Stock Purchase Agreement) were

issued and outstanding as of the Closing, such shares of Common Stock would represent approximately 19.99% of the total number of our

shares of Common Stock outstanding as of the Closing Date.

Additionally, the sale of a substantial number of shares of Common Stock to

White Lion, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the

future at a time and at a price that we might otherwise wish to effect sales.

Investors who buy

shares of Common Stock from White Lion at different times will likely pay different prices.

Pursuant to the Common Stock

Purchase Agreement, we will have discretion to vary the timing, price and number of shares sold to White Lion, if any.

If and when we

elect to sell shares of Common Stock to White Lion pursuant to the Common Stock Purchase Agreement, after White Lion has acquired such

shares of Common Stock, White Lion may resell all, some or none of such shares at any time or from time to time in its sole discretion

and at different prices.

As a result, investors who purchase shares from White Lion at different times will likely pay different prices

for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in

their investment results.

Investors may experience a decline in the value of the shares they purchase from White Lion in this offering

as a result of future sales made by us to White Lion at prices lower than the prices such investors paid for their shares in this offering.

In addition, if we sell a substantial number of shares to White Lion under the Common Stock Purchase Agreement, or if investors expect

that we will do so, the actual sales of shares or the mere existence of our arrangement with White Lion may make it more difficult for

us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

Sales of a substantial

number of our securities in the public market by the Selling Stockholders or by our other existing securityholders could cause the price

of our Common Stock and Warrants to fall.

The shares that were registered

for resale represent approximately 37.2% of our total outstanding shares as of the Closing Date.

The sale or availability for sale of

these shares could adversely affect the prevailing market price of our Common Stock and could impair our ability to raise capital through

future sales of our securities.

In addition, the PIPE investors who acquired the shares being registered pursuant to the Subscription

Agreements purchased their shares at a price of $4.15 per share, the Selling Stockholders who hold an aggregate of 240,000 Founder Shares

acquired at a purchase price of $0.001 per share, and the Selling Stockholders who hold an aggregate of 867,500 Founder Shares acquired

at a purchase price of $0.022 per share, each of which is significantly lower than the initial public offering price of $10.00 per share

of our Common Stock.

Therefore, these Selling Stockholders may have an incentive to sell their shares before our public stockholders who

purchased shares in the initial public offering, because they could still realize a profit even if the market price of our Common Stock

is below the initial public offering price of our Common Stock.

For example, on December 14, 2023, our Common Stock closed at $1.25 per

share on the Nasdaq Capital Market.

If the Selling Stockholders who hold an aggregate of 240,000 Founder Shares acquired for $0.001 per

share sold any of their Founder Shares at this price, they would realize a profit of $1.249 per share and an aggregate profit of $299,760

if they each sold all of their Founder Shares.

If the Selling Stockholders who hold an aggregate of 867,500 Founder Shares acquired for

$0.022 per share sold any of their Founder Shares at this price, they would realize a profit of $1.228 per share and an aggregate profit

of $1,065,290 if they each sold all of their Founder Shares.

Such sales could create additional downward pressure on the market price

of our Common Stock and could cause our stock price to decline.

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 preparing for the Business

Combination, drafting regulatory filings (including the INDs), planning and conducting preclinical and clinical studies, and building

our management team, and we have incurred significant operating losses.

Our net losses were approximately $7.3 million and $11.1 million

for the years ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, and June 30, 2023, we had an accumulated deficit of approximately

You should consider carefully the risks and uncertainties described

below, together with all of the other information contained in this Annual Report.

If any of the following events occur, our business,

financial condition and operating results may be materially adversely affected.

In that event, the trading price of our securities could

decline, and you could lose all or part of your investment.

The risks and uncertainties described below are not the only ones we face.

Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors

that adversely affect our business or results of operations.

For a summary of these Risk Factors, see “Summary Risk Factors.”

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 organizing and staffing our company, business planning, raising

capital, and conducting discovery, research and development activities for our product candidates, and we have incurred significant operating

Our net losses were approximately $13.1 million and $8.8 million for the year ended December 31, 2025, and the unaudited twelve

months ended December 31, 2024, respectively.

As of December 31, 2025, and December 31, 2024, we had an accumulated deficit of approximately

$37.0 million and $23.9 million, respectively.

Substantially all of our losses have resulted from expenses incurred in connection with

preparing for the Business Combination, regulatory filings, 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

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.

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.

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.

We expect our net losses to

increase substantially as we:

● commence clinical trials of EB103;

● continue preclinical development of EB104;

● acquire and license technologies, if any are discovered, that are aligned with our product candidates;

● seek regulatory approval of current EB103 and EB104;

● incur expenses related to the discovery and development of any potential future product candidates;

● expand our operational, financial, and management systems and increase personnel, including personnel

to support our preclinical and clinical development and commercialization efforts;

● continue to develop, perfect, and defend our intellectual property portfolio;

● incur additional legal, accounting, or other expenses in operating our business, including the additional

costs associated with operating as a public company.

● continue our ongoing clinical trial of EB103;

● continue the development of our preclinical programs;

● acquire and license technologies, if any are discovered, that

are aligned with our product candidates;

● seek regulatory approval of EB103;

● incur expenses related to the discovery and development of

any potential future product candidates;

● expand our operational, financial, and management systems

and increase personnel, including personnel to support our preclinical and clinical development and commercialization efforts;

● continue to develop, perfect, and defend our intellectual

property portfolio;

● incur additional legal, accounting, or other expenses in operating

our business, including the additional costs associated with operating as a public company.

However, the amount of our

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on our business, financial condition, results of operations, and prospects.

We will need substantial

additional funds to advance development of product candidates, and we cannot guarantee that we will have sufficient funds available in

the future to develop and commercialize our current or potential future product candidates and technologies.

We will need substantial additional funds

to advance development of product candidates, and we cannot guarantee that we will have sufficient funds available in the future to develop

and commercialize our current or potential future product candidates and technologies.

The development of biotechnology

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with operating as a public company.

As of June 30, 2024 and June

30, 2023, we had approximately $4.2 million and $2.5 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:

● the timing and progress of preclinical and clinical development of our current and potential future product

● the timing and progress of our research of the use of EB103 in conjunction with CF33-CD19t;

● the number and scope of preclinical and clinical programs we decide to pursue;

● the terms of any third-party manufacturing contract or biomanufacturing partnership we may enter into;

● our ability to maintain our current licenses and collaborations, conduct our research and development

programs and establish new strategic partnerships and collaborations;

● the progress of the development efforts of our existing strategic partners and third parties with whom

we may in the future enter into collaboration and research and development agreements;

● the costs involved in obtaining, maintaining, enforcing, and defending patents and other intellectual

property rights;

● the impact of the COVID-19 pandemic on our business;

As of December 31, 2025, and December 31, 2024, we had approximately

$1.4 million and $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:

● the timing and progress of preclinical and clinical development

of our current and potential future product candidates;

● the number and scope of preclinical and clinical programs

we decide to pursue;

● the terms of any third-party manufacturing contract or biomanufacturing

partnership we may enter into;

● our ability to maintain our current licenses, conduct our research

and development programs and establish new strategic partnerships and collaborations;

● the progress of the development efforts of our existing strategic

partners and third parties with whom we may in the future enter into collaboration and research and development agreements;

● the costs involved in obtaining, maintaining, enforcing, and

defending patents and other intellectual property rights;

● the cost and timing of regulatory approvals;

● our efforts to enhance operational systems and hire additional personnel, including personnel to support

development of our product candidates and satisfy our obligations as a public company.

To date, we have primarily

financed our operations through the sale of equity securities.

We may seek to raise any necessary additional capital through a combination

of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, grants, and other

marketing and distribution arrangements.

We cannot assure you that we will be successful in acquiring additional funding at levels sufficient

to fund our operations or on terms favorable to us.

If we are unable to obtain adequate financing when needed, we may have to delay, reduce

the scope of or suspend one or more of our preclinical studies, clinical trials, research and development programs or commercialization

Because of the numerous risks and uncertainties associated with the development and commercialization of our current and potential

future product candidates and the extent to which we may enter into collaborations with third parties to participate in their development

and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our

current and anticipated preclinical studies and clinical trials, including related manufacturing costs.

To the extent that we raise additional

capital through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable

rights to our current and potential future product candidates, future revenue streams or research programs or grant licenses on terms

that may not be favorable to us.

If we do raise additional capital through public or private equity or convertible debt offerings, the

ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences

that adversely affect our stockholders’ rights.

If we raise additional capital through debt financing, we may be subject to covenants

limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring

● our efforts to enhance operational systems and hire additional

personnel, including personnel to support development of our product candidates and satisfy our obligations as a public company.

To date, we have

primarily financed our operations through the sale of equity securities.

We may seek to raise any necessary additional capital

through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing

arrangements, grants, and other marketing and distribution arrangements.

We cannot assure you that we will be successful in

acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us.

If we are unable to obtain

adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our preclinical studies,

clinical trials, research and development programs or commercialization efforts.

Because of the numerous risks and uncertainties

associated with the development and commercialization of our current and potential future product candidates and the extent to which

we may enter into collaborations with third parties to participate in their development and commercialization, we are unable to

estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated preclinical

studies and clinical trials, including related manufacturing costs.

To the extent that we raise additional capital through

collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our

current and potential future product candidates, future revenue streams or research programs or grant licenses on terms that may not

be favorable to us.

If we do raise additional capital through public or private equity or convertible debt offerings, the ownership

interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other

preferences that adversely affect our stockholders’ rights.

If we raise additional capital through debt financing, we may be

subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital

expenditures, or declaring dividends.

We do not expect to realize

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and potential future product candidates are clinically tested, approved for commercialization, and successfully marketed.

Members of our management

team have limited experience in managing the day-to-day operations of a public company and, as a result, we may incur additional expenses

associated with the management of our company.

Members of our management

team have limited experience in managing the day-to-day operations of a public company.

Members of our management team have limited

experience in managing the day-to-day operations of a public company and, as a result, we may incur additional expenses associated

with the management of our company.

Members of our management team

have limited experience in managing the day-to-day operations of a public company.

As a result, we may need to obtain outside assistance

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and financial condition.

Our 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.

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.

We have incurred significant

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uncertainties related to our ability to operate on a going concern basis.

We have concluded that our

recurring losses from operations and need for additional financing to fund future operations raise substantial doubt about our ability

to continue as a going concern.

Similarly, our independent registered public accounting firm has included an explanatory paragraph in

its report on our financial statements expressing substantial doubt about our ability to continue as a going concern.

We believe that

the financing proceeds raised at Closing will eliminate this doubt and enable us to continue as a going concern;

however, we may need

to obtain alternative financing or significantly modify our operational plans for us to continue as a going concern.

Based upon our current

operating plan and assumptions, we believe that our existing cash and cash equivalents will be sufficient to fund our operations for at

least the next 12 months.

This estimate is based on assumptions that may prove to be wrong, and we could use our available capital resources

sooner than we expect.

Changes may occur beyond our control that would cause us to consume our available capital before that time, including

changes in and progress of our development activities and changes in regulation.

Our future capital requirements will depend on many factors,

● the scope, rate of progress, results, and costs of preclinical studies, laboratory testing, and clinical

trials for our product candidates;

● the number and development requirements of product candidates that we may pursue, and other indications

for our current product candidates that we may pursue;

● the costs, timing and outcome of regulatory review of our product candidates;

In assessing our liquidity and the significant doubt about our ability to continue as a going concern, we monitor

and analyze cash on hand and operating expenditure commitments.

We have concluded that our recurring losses from operations of approximately

$13.1 million for the year ended December 31, 2025;

accumulated deficit of approximately $37.0 million as of December 31, 2025;

operating cash outflow of approximately $1.8 million for the year ended December 31, 2025, and need for additional financing to fund future

operations raise substantial doubt about our ability to continue as a going concern.

Similarly, our independent registered public accounting

firm has included an explanatory paragraph in its report on our consolidated financial statements expressing substantial doubt about our

ability to continue as a going concern.

However, our management is of the opinion that we will not have sufficient funds to meet our working

capital requirements and debt obligations as they become due starting from one year from the date of this report due to the recurring

Changes may occur beyond our control that would cause us to consume our available capital before that time, including changes in

and progress of our development activities and changes in regulation.

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;

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.

Our future capital requirements will depend on many

factors, including:

● the scope, rate of progress, results, and costs of preclinical

studies, laboratory testing, and clinical trials for our product candidates;

● the number and development requirements of product candidates

that we may pursue, and other indications for our current product candidates that we may pursue;

● the costs, timing and outcome of regulatory review of our

product candidates;

● the scope and costs of manufacturing arrangements;

● the cost associated with commercializing any approved product candidates;

● the cost and timing of developing our ability to establish sales and marketing capabilities, if any;

● the costs of preparing, filing and prosecuting patent applications, maintaining, enforcing, and protecting

our intellectual property rights, defending intellectual property-related claims, and obtaining licenses to third-party intellectual property;

● the timing and amount of any milestone and royalty payments we are required to make under our present

or future license agreements;

● our ability to establish and maintain strategic partnerships and collaborations, including any biomanufacturing

partnerships or collaborations involving the use of our products, on favorable terms, if at all;

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

intellectual property.

● the cost associated with commercializing any approved product

● the cost and timing of developing our ability to establish

sales and marketing capabilities, if any;

● the costs of preparing, filing and prosecuting patent applications,

maintaining, enforcing, and protecting our intellectual property rights, defending intellectual property-related claims, and obtaining

licenses to third-party intellectual property;

● the timing and amount of any milestone and royalty payments

we are required to make under our present or future license agreements;

● our ability to establish and maintain strategic partnerships

and collaborations, including any biomanufacturing partnerships or collaborations involving the use of our products, on favorable terms,

● the extent to which we acquire or in-license other product

candidates and technologies and associated intellectual property.

We will require additional

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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.

Under the terms of our agreements

with Eureka, following closing of the Business Combination, significant payments to Eureka became due and payable under our agreements

Accordingly, on October 9, 2023, we used a portion of the $19.6 million net proceeds from the Business Combination to pay

approximately $8.3 million due to Eureka under the Services Agreement and approximately $0.9 million aggregate amount due to Eureka under

the License Agreement, comprised of the remainder of the upfront fee as well as a milestone payment in connection with the submission

of the IND application for EB103, which reduced our available capital resources.

Furthermore, as the majority shareholder of Estrella,

Eureka may have significant control over our management and operations, which could affect our ability to negotiate or modify future payment

terms in our favor.

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

approval for the commercial distribution of our product candidates, we or a collaborator must conduct extensive preclinical studies, followed

by clinical trials to demonstrate the safety, purity and potency, or efficacy of our product candidates in humans.

There is no guarantee

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.

As a result, we cannot be sure that we will be able to submit 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 similar applications will result in the FDA or other regulatory authorities allowing

clinical trials for any of our product candidates to begin.

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.

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 approval for the commercial distribution of our product candidates, we or a collaborator must conduct extensive

preclinical studies and clinical trials to demonstrate the safety, purity, and efficacy of our product candidates in humans.

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 or 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 such applications will result in the FDA or other

regulatory authorities allowing clinical trials to begin.

Our current product candidates

are in either preclinical or clinical development, and we are subject to the risks of failure inherent in the development of product candidates

based on novel approaches, targets, and mechanisms of action.

Although we have initiated a clinical trial for EB103 and anticipate initiating

clinical trials for our other product candidates, there is no guarantee that we will be able to proceed with clinical development of any

of these product candidates or that any product candidate will demonstrate a clinical benefit once we advance these candidates to testing

Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered

by clinical stage biotechnology companies such as ours.

based on novel approaches.

We have completed the second dose cohort in the Phase I dose-escalation portion of our STARLIGHT-1 Phase I/II

clinical trial of EB103, 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

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 currently

available commercial CD19 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 successfully complete the clinical development of EB103 or any of our other product candidates or that any product candidate will ultimately

demonstrate a clinical benefit.

Accordingly, you should consider our prospects in light of the costs, uncertainties, delays, and difficulties

frequently encountered by clinical-stage biotechnology companies such as ours.

We may not be able to access

the financial resources to continue development of, or to enter into any collaborations for, any of our current or potential future product

This may be exacerbated if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize,

a product candidate, such as:

● negative or inconclusive results from our preclinical studies or clinical trials or the clinical trials

of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical studies or clinical

trials or abandon any or all of our programs;

● product-related side effects experienced by participants in our clinical trials or by individuals using

therapeutics similar to our product candidates;

● delays in submitting INDs (other than the IND for EB103, which was cleared by the FDA on March 2, 2023)

or comparable foreign applications, or delays or failures to obtain the necessary approvals from regulatory authorities to commence a

clinical trial, or a suspension or termination of a clinical trial once commenced;

● conditions imposed by the FDA or other regulatory authorities regarding the scope or design of our clinical

the financial resources to continue the development of our current or potential future product candidates.

This may be exacerbated if

we experience any issues that delay or prevent regulatory approval or commercialization, such as:

● negative or inconclusive results from our preclinical studies

or clinical trials, leading to a decision or requirement to conduct additional studies or abandon programs;

● product-related side effects experienced by participants in

our clinical trials;

● delays in submitting INDs for future candidates, or a suspension

or termination of a clinical trial once commenced;

● conditions imposed by the FDA or other regulatory authorities

regarding the scope or design of our clinical trials;

● delays in enrolling research subjects in clinical trials;

● high drop-out rates of research subjects;

● inadequate supply or quality of product candidate components or materials or other supplies necessary

for the conduct of our clinical trials;

● chemistry, manufacturing, and control (“CMC”) challenges associated with the manufacturing

and scaling up product candidates to ensure consistent quality, stability, purity, and potency among different batches used in clinical

● inadequate supply or quality of product candidate materials

for our clinical trials;

● chemistry, manufacturing, and control (“CMC”)

challenges associated with scaling up manufacturing;

● greater-than-anticipated clinical trial costs;

● poor effectiveness of our product candidates during clinical trials;

● unfavorable FDA or other regulatory authority inspection and review of a clinical trial or manufacturing

● delays as a result of the COVID-19 pandemic or events associated with the pandemic;

● failure of Eureka or our third-party contractors or investigators to comply with regulatory requirements

or otherwise meet their contractual obligations in a timely manner, or at all;

● delays and changes in regulatory requirements, policies and guidelines;

● the FDA or other regulatory authorities interpreting our data differently than we do.

Further, we, Eureka, and 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, the approval 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.

We may not be successful

in our efforts to use and expand our use of the ARTEMIS ® platform to expand our pipeline of product candidates.

● poor effectiveness of our product candidates during clinical

● unfavorable FDA or other regulatory authority inspection of

a clinical trial or manufacturing site;

● failure of Eureka or our third-party contractors to comply

with regulatory requirements or meet their contractual obligations;

● delays and changes in regulatory requirements, policies, and

● the FDA or other regulatory authorities interpreting our data

differently than we do.

Further, we, Eureka, and

any existing or potential future collaborator may never receive approval to market and commercialize any product candidate.

regulatory approval is obtained, it may be for indications or patient populations that are not as broad as we intended or may

require labeling that includes significant use restrictions or safety warnings.

We may not be successful in our efforts

to use and expand our use of the ARTEMIS ® platform to expand our pipeline of product candidates.

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

of EB103 and other potential product candidates.

We received IND clearance from the FDA for EB103 on March 2, 2023, and dosed our first

patient in the STARLIGHT-1 clinical trial (NCT06343311) for EB103 in July 2024.

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

If we do not successfully develop and commercialize product candidates, we will not be able to generate product revenue in

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.

Although we intend

to explore other therapeutic opportunities in addition to the product candidates that we are currently developing, we may fail to identify

viable new product candidates for clinical development for a number of reasons.

If we fail to identify additional potential product candidates,

our business could be materially harmed.

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 of EB103 and other potential product candidates.

We received IND clearance from the FDA for EB103 on March 2, 2023, and

have activated multiple clinical sites, including UC Davis Comprehensive Cancer Center and Baylor Scott & White Research Institute,

for the ongoing STARLIGHT-1 clinical trial (NCT06343311).

An 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 patients 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.

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

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.

Although we intend to explore other therapeutic

opportunities in addition to the product candidates that we are currently developing, we may fail to identify viable new product candidates

for clinical development for a number of reasons.

If we fail to identify additional potential product candidates, our business could be

materially harmed.

Although a substantial amount

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initially show promise, we may fail to successfully develop and commercialize such products for many reasons, including the following:

● the research methodology used may not be successful in identifying potential investigational therapies;

● competitors may develop alternatives that render our investigational therapies obsolete;

● investigational therapies we develop may nevertheless be covered by third parties’ patents or other

exclusive rights;

● an investigational therapy may, on further study, be shown to have harmful side effects or other characteristics

that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

● it may take greater human and financial resources than we will possess to identify additional therapeutic

opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby

limiting our ability to develop, diversify and expand our product portfolio;

● an investigational therapy may not be capable of being produced in clinical or commercial quantities at

an acceptable cost, or at all;

● an approved product may not be accepted as safe and effective by trial participants, the medical community

or third-party payors.

● the research methodology used may not be successful in identifying

potential investigational therapies;

● competitors may develop alternatives that render our investigational

therapies obsolete;

● investigational therapies we develop may nevertheless be covered

by third parties’ patents or other exclusive rights;

● an investigational therapy may, on further study, be shown

to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable

regulatory criteria;

● it may take greater human and financial resources than we

will possess to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates

through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio;

● an investigational therapy may not be capable of being produced

in clinical or commercial quantities at an acceptable cost, or at all;

● an approved product may not be accepted as safe and effective

by trial participants, the medical community or third-party payors.

Identifying new investigational

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been more advantageous for us to retain sole development and commercialization rights to such product candidate or technology.

Accordingly, there can be

no assurance that we will ever be able to identify additional therapeutic opportunities for our product candidates or to develop suitable

Accordingly, there can be no

assurance that we will ever be able to identify additional therapeutic opportunities for our product candidates or to develop suitable

potential product candidates through internal research programs, which could materially adversely affect our future growth and prospects.

We may focus our efforts and resources on potential product candidates or other potential programs that ultimately prove to be unsuccessful.

The occurrence of

serious complications or side effects in connection with use of our product candidates, either in clinical trials or post-approval, could

lead to discontinuation of our clinical development programs, refusal of regulatory authorities to approve our product candidates or,

post-approval, revocation of marketing authorizations or refusal to approve applications for new indications, which could severely harm

our business, prospects, operating results and financial condition.

The occurrence of serious complications

or side effects in connection with use of our product candidates, either in clinical trials or post-approval, could lead to discontinuation

of our clinical development programs, refusal of regulatory authorities to approve our product candidates or, post-approval, revocation

of marketing authorizations or refusal to approve applications for new indications, which could severely harm our business, prospects,

operating results and financial condition.

Undesirable side effects caused

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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, it is likely that there will be side effects associated with

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.

It 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.

Further, clinical trials by

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and adversely affect our results of operations and business:

● regulatory authorities may withdraw their approval of the product or seize the product;

● we may be required to recall the product or change the way the product is administered to patients;

● additional restrictions may be imposed on the marketing of the particular product or the manufacturing

processes for the product or any component thereof;

● we may be subject to fines, injunctions, or the imposition of civil or criminal penalties;

● regulatory authorities may require the addition of labeling statements, such as a “black box”

warning or a contraindication;

● we may be required to create a medication guide outlining the risks of such side effects for distribution

● regulatory authorities may withdraw their approval of the

product or seize the product;

● we may be required to recall the product or change the way

the product is administered to patients;

● additional restrictions may be imposed on the marketing of

the particular product or the manufacturing processes for the product or any component thereof;

● we may be subject to fines, injunctions, or the imposition

of civil or criminal penalties;

● regulatory authorities may require the addition of labeling

statements, such as a “black box” warning or a contraindication;

● we may be required to create a medication guide outlining

the risks of such side effects for distribution to patients;

● we could be sued and held liable for harm caused to patients;

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● our reputation may suffer.

Any of these events could

prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm

our business, results of operations and prospects.

While our IND for

EB103 was cleared by the FDA on March 2, 2023 and we believe our pipeline will yield additional INDs, we may not be able to file additional

INDs to commence clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed.

Any of these events could prevent

us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our

business, results of operations and prospects.

While our IND for EB103 was cleared by the

FDA on March 2, 2023 and we believe our pipeline will yield additional INDs, we may not be able to file additional INDs to commence

clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed.

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 EB103 or other

product candidates begin, issues will not arise that suspend or terminate such clinical trials.

The manufacturing of our product candidates,

including EB104, remain an emerging and evolving field.

Accordingly, we expect CMC-related topics, including product specifications, will

be a focus of IND reviews, which may delay the clearance of INDs.

Additionally, even if such

regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or clinical trial application,

we cannot guarantee that such regulatory authorities will not change their requirements in the future.

In addition to the 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 of institutional biosafety committees (“IBCs”), as set forth in

the National Institutes of Health (“NIH”) Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules

(“NIH Guidelines”).

Under the NIH Guidelines, recombinant and synthetic nucleic acids are defined as:

(i) molecules that are

constructed by joining nucleic acid molecules and that can replicate in a living cell (i.e., recombinant nucleic acids);

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 of human gene transfer trials includes

evaluation and assessment by an IBC, a local institutional committee that reviews and oversees research utilizing recombinant or synthetic

nucleic acid molecules at that institution.

The IBC assesses the safety of the research and identifies any potential risk to public health

or the environment, and such review may result in some delay before initiation of a clinical trial.

While the NIH Guidelines are not mandatory

unless the research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic

acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them.

Interim, topline

and preliminary data that we announce or publish from time to time for any clinical trials that we initiate may change as more patient

data become available or as additional analyses are conducted, and as the data are subject to audit and verification procedures that could

result in material changes in the final data.

From time to time, we may

publicly disclose interim, preliminary, or topline data from our preclinical studies and clinical trials, which is based on a preliminary

analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive

review of the data related to the particular trial.

We also make assumptions, estimations, calculations, and conclusions as part of our

analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

As a result, the interim,

preliminary, or topline results that we report may differ from future results of the same trials, or different conclusions or considerations

may qualify such results, once additional data have been received and fully evaluated.

of future INDs will result in the FDA allowing testing and clinical trials to begin, or that, once clinical trials for our product candidates

begin, issues will not arise that suspend or terminate such clinical trials.

For 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 remains

an emerging and evolving field.

Accordingly, we expect chemistry, manufacturing and controls (CMC) topics, including product specifications,

release criteria and comparability, to be a focus of IND reviews and ongoing regulatory interactions, which may delay the clearance of

future INDs or restrict or delay the conduct of our clinical trials.

Additionally, even if regulatory

authorities initially agree with the design and implementation of clinical trials described in an IND or clinical trial application, we

cannot guarantee that such regulatory authorities will not change their requirements in the future, require us to modify trial design,

add new endpoints or safety monitoring, or impose additional pauses or holds.

In addition to the

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 by institutional biosafety committees

(“IBCs”) under 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 or synthetic nucleic acid 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 generated using lentiviral vectors and therefore involve the introduction of

recombinant or synthetic nucleic acid molecules into human subjects, which is considered human gene transfer under these guidelines.

As a result, our clinical trials may be subject to IBC review and approval at each participating institution, in addition to

institutional review board (IRB) and FDA requirements.

The IBC assesses the safety of the research and identifies any potential risk

to public health or the environment, and its review and any associated biosafety requirements may result in additional time, cost

and complexity before sites can be activated or patients can be enrolled, and may delay the initiation or conduct of our clinical

While the NIH Guidelines are only mandatory for institutions that receive certain types of NIH funding, many institutions,

sponsors and CROs voluntarily follow them, and we expect that our gene-transfer studies will generally be required to comply with

IBC oversight.

Interim, topline and preliminary data that

we announce or publish from time to time for any clinical trials that we initiate may change as more patient data become available or

as additional analyses are conducted, and as the data are subject to audit and verification procedures that could result in material changes

in the final data.

From time to time, we may publicly

disclose interim, preliminary, or topline data from our preclinical studies and clinical trials, which is based on a preliminary analysis

of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review

of the data related to the particular trial.

We also make assumptions, estimations, calculations, and conclusions as part of our analyses

of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

As a result, the interim, preliminary,

or topline results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify

such results, once additional data have been received and fully evaluated.

Topline data also remain subject to audit and verification

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our product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition.

We and our collaborators

may not achieve projected discovery and development milestones and other anticipated key events in the time frames that we or they announce,

which could have an adverse impact on our business and could cause our stock price to decline.

We and our collaborators may not achieve

projected discovery and development milestones and other anticipated key events in the time frames that we or they announce, which could

have an adverse impact on our business and could cause our stock price to decline.

From time to time, we expect

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could decline.

Clinical trials

are expensive, time-consuming, and difficult to design and implement.

Human clinical trials are

expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.

Because our current

and potential future product candidates are based on new technologies and discovery approaches, we expect that they will require extensive

research and development and have substantial manufacturing and processing costs.

In addition, the FDA or other regulatory authorities

may require us to perform additional testing before commencing clinical trials and be hesitant to allow us to enroll patients impacted

with our targeted disease indications in our future clinical trials.

If we are unable to enroll patients impacted by our targeted disease

indications in our future clinical trials, we would be delayed in obtaining potential proof-of-concept data in humans, which could extend

our development timelines.

In addition, costs to treat patients and to treat potential side effects that may result from our product candidates

may be significant.

Accordingly, our clinical trial costs are likely to be high and could have a material adverse effect on our business,

financial condition, results of operations and prospects.

If we encounter

difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

Clinical trials are expensive, time-consuming,

and difficult to design and implement.

Human clinical trials

are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.

our current and potential future product candidates are based on new technologies and discovery approaches, we expect that they will

require extensive research and development and have substantial manufacturing and processing costs.

In addition, the FDA or other

regulatory authorities may require us to perform additional testing before commencing clinical trials and be hesitant to allow us to

enroll patients impacted with our targeted disease indications in our future clinical trials.

If we are unable to enroll patients

impacted by our targeted disease indications in our future clinical trials, we would be delayed in obtaining potential

proof-of-concept data in humans, which could extend our development timelines.

In addition, costs to treat patients and to treat

potential side effects that may result from our product candidates may be significant.

Accordingly, our clinical trial costs are

likely to be high and could have a material adverse effect on our business, financial condition, results of operations and

If we encounter difficulties enrolling patients

in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may not be able to initiate

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● the severity of the disease under investigation;

● patient eligibility criteria defined in the clinical trial protocol;

● the size of the patient population required for analysis of the trial’s primary endpoints;

● the proximity and availability of clinical trial sites for prospective patients;

● willingness of physicians to refer their patients to our clinical trials;

● our ability to recruit clinical trial investigators with the appropriate competencies and experience;

● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate

being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating;

● patient eligibility criteria defined in the clinical trial

● the size of the patient population required for analysis of

the trial’s primary endpoints;

● the proximity and availability of clinical trial sites for

prospective patients;

● willingness of physicians to refer their patients to our clinical

● our ability to recruit clinical trial investigators with the

appropriate competencies and experience;

● clinicians’ and patients’ perceptions as to the

potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may

be approved for the indications we are investigating;

● our ability to obtain and maintain patient consents;

● the risk that patients enrolled in clinical trials will drop out of the trials before completion;

● factors we may not be able to control, such as current or potential pandemics, including the COVID-19

pandemic, that may limit the availability of patients, principal investigators or staff or clinical sites to participate in our clinical

In addition, our future clinical

trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates,

and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll

in our trials may instead opt to enroll in a trial being conducted by one of our competitors.

Since the number of qualified clinical investigators

is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which

will reduce the number of patients who are available for our clinical trials at such clinical trial sites.

Additionally, because some

of our clinical trials will be in patients with advanced disease who may experience disease progression or adverse events independent

from our product candidates, such patients may be unevaluable for purposes of the trial and, as a result, we may require additional enrollment.

Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could

prevent completion of these trials and adversely affect our ability to advance the development of our product candidates.

If clinical trials

for our product candidates are prolonged, delayed, or stopped, we may be unable to seek or obtain regulatory approval and commercialize

our product candidates on a timely basis, or at all, which would require us to incur additional costs and delay our receipt of any product

● the risk that patients enrolled in clinical trials will drop

out of the trials before completion;

● factors we may not be able to control, such as current or

potential pandemics, that may limit the availability of patients, principal investigators or staff or clinical sites to participate in

our clinical trials.

In addition, our future

clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product

candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have

opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.

Since the number of

qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that

some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical

Additionally, because some of our clinical trials will be in patients with advanced disease who may experience disease

progression or adverse events independent from our product candidates, such patients may be unevaluable for purposes of the trial

and, as a result, we may require additional enrollment.

Delays in patient enrollment may result in increased costs or may affect the

timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to

advance the development of our product candidates.

If clinical trials for our product candidates

are prolonged, delayed, or stopped, we may be unable to seek or obtain regulatory approval and commercialize our product candidates on

a timely basis, or at all, which would require us to incur additional costs and delay our receipt of any product revenue.

We may experience delays in

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commencement or completion of these clinical trials could be substantially delayed or prevented by many factors, including:

● further discussions with the FDA or comparable foreign regulatory authorities regarding the scope or design

of our clinical trials, including the endpoint measures required for regulatory approval and our statistical plan;

● the limited number of, and competition for, suitable study sites and investigators to conduct our clinical

trials, many of which may already be engaged in other clinical trial programs with similar patients, including some that may be for the

same indications as our product candidates;

● any delay or failure to obtain timely approval or agreement to commence a clinical trial in any of the

countries where enrollment is planned;

● inability to obtain sufficient funds required for a clinical trial;

● clinical holds on, or other regulatory objections to, a new or ongoing clinical trial;

● delay or failure to manufacture sufficient quantities or inability to produce quantities of consistent

quality, purity and potency of the product candidate for our clinical trials;

● delay or failure to reach agreement on acceptable clinical trial agreement terms or clinical trial protocols

with prospective sites or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different

sites or CROs;

● delay or failure to obtain institutional review board (“IRB”) or ethics committee approval

to conduct a clinical trial at a prospective site;

● the FDA or other comparable foreign regulatory authorities may require us to submit additional data or

impose other requirements before permitting us to initiate a clinical trial;

● further discussions with the FDA or comparable foreign regulatory

authorities regarding the scope or design of our clinical trials, including the endpoint measures required for regulatory approval and

our statistical plan;

● the limited number of, and competition for, suitable study

sites and investigators to conduct our clinical trials, many of which may already be engaged in other clinical trial programs with similar

patients, including some that may be for the same indications as our product candidates;

● any delay or failure to obtain timely approval or agreement

to commence a clinical trial in any of the countries where enrollment is planned;

● inability to obtain sufficient funds required for a clinical

● clinical holds on, or other regulatory objections to, a new

or ongoing clinical trial;

● delay or failure to manufacture sufficient quantities or inability

to produce quantities of consistent quality, purity and potency of the product candidate for our clinical trials;

● delay or failure to reach agreement on acceptable clinical

trial agreement terms or clinical trial protocols with prospective sites or CROs, the terms of which can be subject to extensive negotiation

and may vary significantly among different sites or CROs;

● delay or failure to obtain institutional review board (“IRB”)

or ethics committee approval to conduct a clinical trial at a prospective site;

● the FDA or other comparable foreign regulatory authorities

may require us to submit additional data or impose other requirements before permitting us to initiate a clinical trial;

● slower than expected rates of patient recruitment and enrollment;

● failure of patients to complete the clinical trial;

● the inability to enroll a sufficient number of patients in studies to ensure adequate statistical power

to detect statistically significant treatment effects;

● unforeseen safety issues, including severe or unexpected drug-related adverse effects experienced by patients,

including possible deaths;

● lack of efficacy or failure to measure a statistically significant clinical benefit within the dose range

with an acceptable safety margin during clinical trials;

● termination of our clinical trials by one or more clinical trial sites;

● inability or unwillingness of patients or clinical investigators to follow our clinical trial protocols;

● inability to monitor patients adequately during or after treatment by us or our CROs;

● our CROs or clinical study sites failing to comply with regulatory requirements or meet their contractual

obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of a study;

● inability to address any noncompliance with regulatory requirements or safety concerns that arise during

the course of a clinical trial;

● the impact of, and delays related to, health epidemics such as the COVID-19 pandemic;

● the need to suspend, repeat or terminate clinical trials as a result of non-compliance with regulatory

requirements, inconclusive or negative results or unforeseen complications in testing;

● the suspension or termination of our clinical trials upon a breach or pursuant to the terms of any agreement

with, or for any other reason by, any future strategic collaborator that has responsibility for the clinical development of any of our

product candidates.

● the inability to enroll a sufficient number of patients in

studies to ensure adequate statistical power to detect statistically significant treatment effects;

● unforeseen safety issues, including severe or unexpected drug-related

adverse effects experienced by patients, including possible deaths;

● lack of efficacy or failure to measure a statistically significant

clinical benefit within the dose range with an acceptable safety margin during clinical trials;

● termination of our clinical trials by one or more clinical

● inability or unwillingness of patients or clinical investigators

to follow our clinical trial protocols;

● inability to monitor patients adequately during or after treatment

by us or our CROs;

● our CROs or clinical study sites failing to comply with regulatory

requirements or meet their contractual obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of

● inability to address any noncompliance with regulatory requirements

or safety concerns that arise during the course of a clinical trial;

● the need to suspend, repeat or terminate clinical trials as

a result of non-compliance with regulatory requirements, inconclusive or negative results or unforeseen complications in testing;

● the suspension or termination of our clinical trials upon

a breach or pursuant to the terms of any agreement with, or for any other reason by, any future strategic collaborator that has responsibility

for the clinical development of any of our product candidates.

Changes in regulatory requirements,

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commercial prospects and ability to generate product revenue will be diminished.

If we decide to

seek orphan drug designation for one or more of our product candidates, we may be unsuccessful or may be unable to maintain the benefits

associated with orphan drug designation for our current or future product candidates that we may develop.

If we decide to seek orphan drug designation

for one or more of our product candidates, we may be unsuccessful or may be unable to maintain the benefits associated with orphan drug

designation for our current or future product candidates that we may develop.

Under the Orphan Drug Act,

the FDA may designate a product candidate as an orphan drug if it is a drug or biologic product intended to treat a rare disease or condition,

which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or where there is

no reasonable expectation that the cost of developing the product will be recovered from sales in the United States.

We may seek orphan

drug designation for certain indications for our product candidates in the future.

Orphan drug designation neither shortens the development

time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

Orphan drug designation

can entitle a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee

In addition, if a product

candidate with an orphan drug designation receives the first marketing approval for the indication for which it has such designation,

the product is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for

the same drug for the same indication for seven years.

The FDA may reduce the seven-year exclusivity if the same drug from a competitor

demonstrates clinical superiority to the product with orphan exclusivity or if the FDA finds that the holder of the orphan exclusivity

has not shown that it can assure the availability of sufficient quantities of the orphan product to meet the needs of patients with the

disease or condition for which the drug was designated.

Even if one of our product candidates receives orphan exclusivity, the FDA can

still approve other drugs that have a different active ingredient for use in treating the same indication or disease.

In addition, exclusive marketing

rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may

be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure

sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

Further, even if we obtain orphan

drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with

different active moieties can be approved for the same condition, and while we may seek orphan drug designation for our product candidates,

we may never receive such designations.

In addition, the FDA may reevaluate the Orphan Drug Act and its regulations and policies.

not know if, when, or how the FDA may change the orphan drug regulations and policies in the future, and it is uncertain how any changes

might affect our business.

Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could

be adversely impacted.

We may not be able

to conduct, or contract with others to conduct, animal testing in the future, which could harm our research and development activities.

which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or where there

is no reasonable expectation that the cost of developing the product will be recovered from sales in the United States.

orphan drug designation for certain indications for our product candidates in the future.

Orphan drug designation neither shortens the

development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

drug designation can entitle a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax

advantages and user-fee waivers.

In addition, if a product candidate

with an orphan drug designation receives the first marketing approval for the indication for which it has such designation, the product

is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for the same drug

for the same indication for seven years.

The FDA may reduce the seven-year exclusivity if the same drug from a competitor demonstrates

clinical superiority to the product with orphan exclusivity or if the FDA finds that the holder of the orphan exclusivity has not shown

that it can assure the availability of sufficient quantities of the orphan product to meet the needs of patients with the disease or condition

for which the drug was designated.

Even if one of our product candidates receives orphan exclusivity, the FDA can still approve other

drugs that have a different active ingredient for use in treating the same indication or disease.

In addition, exclusive

marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated

indication or may be lost if the FDA later determines that the request for designation was materially defective or if the

manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or

Further, even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the

product from competition because different drugs with different active moieties can be approved for the same condition, and while we

may seek orphan drug designation for our product candidates, we may never receive such designations.

In addition, the FDA may

reevaluate the Orphan Drug Act and its regulations and policies.

We do not know if, when, or how the FDA may change the orphan drug

regulations and policies in the future, and it is uncertain how any changes might affect our business.

Depending on what changes the

FDA may make to its orphan drug regulations and policies, our business could be adversely impacted.

We may not be able to conduct, or contract

with others to conduct, animal testing in the future, which could harm our research and development activities.

Certain laws and regulations

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activities may be interrupted or delayed.

Risks Related to Third

We rely on third

parties to conduct our preclinical studies and our clinical trial for EB103, and plan to rely on third parties to conduct any clinical

trials for our other product candidates, and those third parties may not perform satisfactorily.

Risks Related to Third Parties

We rely on third parties to conduct our

preclinical studies and our clinical trial for EB103, and plan to rely on third parties to conduct any clinical trials for our other product

candidates, and those third parties may not perform satisfactorily.

We expect to rely on third-party

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clinical trials being delayed or unsuccessful.

Our reliance on these third

parties for such drug development activities will reduce our control over these activities.

As a result, we will have less direct control

over the conduct, timing, and completion of preclinical studies and clinical trials and the management of data developed through preclinical

studies and clinical trials than would be the case if we were relying entirely upon our own staff.

Nevertheless, we will be responsible

for ensuring that each of our studies and trials is conducted in accordance with applicable protocol, legal, and regulatory requirements

and scientific standards, including good laboratory practice (“GLP”), good clinical practice (“GCP”), Current

Good Manufacturing Practice (“cGMP”), and Current Good Tissue Practice (“cGTP”), and our reliance on third parties

does not relieve us of our regulatory responsibilities.

For example, we will remain responsible for ensuring that each of our clinical

trials is conducted in accordance with the general investigational plan and protocols for the trial.

Moreover, the FDA and other regulatory

authorities require us to comply with GCP standards, regulations for conducting, recording, and reporting the results of clinical trials

to assure that data and reported results are reliable and accurate and that the rights, integrity, and confidentiality of trial participants

are protected.

Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators,

and trial sites.

If we or any of our CROs, clinical sites and investigators fail to comply with applicable GCP requirements, the clinical

data generated in our clinical trials may be deemed unreliable and the FDA, European Medicines Agency (“EMA”), or other regulatory

authorities may require us to perform additional clinical trials before approving our marketing applications.

There can be no assurance

that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials substantially

Our reliance on these

third parties for such drug development activities will reduce our control over these activities.

As a result, we will have less

direct control over the conduct, timing, and completion of preclinical studies and clinical trials and the management of data

developed through preclinical studies and clinical trials than would be the case if we were relying entirely upon our own staff.

Nevertheless, we will be responsible for ensuring that each of our studies and trials is conducted in accordance with applicable

protocol, legal, and regulatory requirements and scientific standards, including good laboratory practice (“GLP”), good

clinical practice (“GCP”), Current Good Manufacturing Practice (“cGMP”), and Current Good Tissue Practice

(“cGTP”), and our reliance on third parties does not relieve us of our regulatory responsibilities.

For example, we will

remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan

and protocols for the trial.

Moreover, the FDA and other regulatory authorities require us to comply with GCP standards, regulations

for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are reliable and

accurate and that the rights, integrity, and confidentiality of trial participants are protected.

Regulatory authorities enforce

these GCP requirements through periodic inspections of trial sponsors, principal investigators, and trial sites.

If we or any of our

CROs, clinical sites and investigators fail to comply with applicable GCP requirements, the clinical data generated in our clinical

trials may be deemed unreliable and the FDA, European Medicines Agency (“EMA”), or other regulatory authorities may

require us to perform additional clinical trials before approving our marketing applications.

There can be no assurance that upon

inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials substantially

comply with GCP regulations.

In addition, our clinical trials must be conducted with product candidates produced under cGMP regulations

and will require a large number of test patients.

Our failure or any failure by these third parties to comply with these regulations or

to recruit a sufficient number of patients, may require us to repeat clinical trials, which would delay the regulatory approval process.

Moreover, our business may be implicated if any of these third parties violates FDA regulatory requirements as well as federal or state

healthcare laws and regulations or healthcare privacy and security laws.

If these third parties do

not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory

In addition, our clinical trials must be conducted with product candidates produced under cGMP

regulations and will require a large number of test patients.

Our failure or any failure by these third parties to comply with these

regulations or to recruit a sufficient number of patients, may require us to repeat clinical trials, which would delay the

regulatory approval process.

Moreover, our business may be implicated if any of these third parties violates FDA regulatory

requirements as well as federal or state healthcare laws and regulations or healthcare privacy and security laws.

If these third parties do not

successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory

requirements or our stated protocols, or if these third parties need to be replaced, we will not be able to obtain, or may be delayed

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be harmed, our costs could increase and our ability to generate revenue could be delayed.

We depend on strategic

partnerships and collaboration arrangements, such as the Collaboration Agreement with Imugene and the Licensing Agreement with Eureka,

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 is dependent upon maintaining our current arrangements and potentially

establishing new arrangements with strategic partners, research collaborators, and other third parties.

The Collaboration Agreement with

Imugene allows us to investigate 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 Eureka 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, which may negatively impact our business

Additionally, the development

and commercialization of potential product candidates under our collaboration agreements could be substantially delayed, and our ability

to receive future funding could be substantially impaired if one or more of our collaborators:

● shifts its priorities and resources away from our collaborations due to a change in business strategies,

or a merger, acquisition, sale, or downsizing of its company or business unit;

● ceases development in therapeutic areas which are the subject of our collaboration;

● fails to select a product candidate for advancement into preclinical development, clinical development,

or subsequent clinical development into a marketed product;

● changes the success criteria for a particular product candidate, thereby delaying or ceasing development

of such product candidate;

● significantly delays the initiation or conduct of certain activities which could delay our receipt of

milestone payments tied to such activities, thereby impacting our ability to fund our own activities;

● develops a product candidate that competes, either directly or indirectly, with our product candidates;

● does not obtain the requisite regulatory approval of a product candidate;

We depend on strategic partnerships, such as the Licensing Agreement with 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 was previously dependent

upon maintaining our arrangement with Imugene under the Collaboration Agreement, which concluded its research plan on August 30, 2023.

Our ongoing strategy relies on arrangements with strategic partners, research collaborators, and others, such as the Licensing Agreement

with Eureka, 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 previously

contemplated, which may negatively impact our business operations.

Additionally, the development and commercialization of potential product candidates under our collaboration agreements

could be substantially delayed, and our ability to receive future funding could be substantially impaired if one or more of our collaborators:

● shifts its priorities and resources away from our collaborations

due to a change in business strategies, or a merger, acquisition, sale, or downsizing of its company or business unit;

● ceases development in therapeutic areas which are the subject

of our collaboration;

● fails to select a product candidate for advancement into preclinical

development, clinical development, or subsequent clinical development into a marketed product;

● changes the success criteria for a particular product candidate,

thereby delaying or ceasing development of such product candidate;

● significantly delays the initiation or conduct of certain

activities which could delay our receipt of milestone payments tied to such activities, thereby impacting our ability to fund our own

● develops a product candidate that competes, either directly

or indirectly, with our product candidates;

● does not obtain the requisite regulatory approval of a product

● does not successfully commercialize a product candidate;

● encounters regulatory, resource or quality issues and is unable to meet demand requirements;

● exercises its rights under the agreement to terminate the collaboration, or otherwise withdraws support

for, or otherwise impairs development under the collaboration;

● disagrees on the research, development or commercialization of a product candidate resulting in a delay

in milestones, royalty payments, or termination of research and development activities for such product candidate;

● uses our proprietary information or intellectual property in such a way as to jeopardize our rights in

such property.

● encounters regulatory, resource or quality issues and is unable

to meet demand requirements;

● exercises its rights under the agreement to terminate the

collaboration, or otherwise withdraws support for, or otherwise impairs development under the collaboration;

● disagrees on the research, development or commercialization

of a product candidate resulting in a delay in milestones, royalty payments, or termination of research and development activities for

such product candidate;

● uses our proprietary information or intellectual property

in such a way as to jeopardize our rights in such property.

In addition, the termination

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business, prospects, financial condition, and results of operations.

We may not realize

the anticipated benefits of our collaboration agreement with Imugene.

Our collaboration with Imugene

will explore therapeutic potential of a combination of Imugene’s CF33-CD19t in conjunction with EB103 for the treatment of solid

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.

We may not be able

to enter into additional strategic transactions on acceptable terms, if at all, which could adversely affect our ability to develop and

commercialize current and potential future product candidates and technologies, impact our cash position, increase our expenses and present

significant distractions to our management.

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

Our prior collaboration with Imugene, which 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.

We may not be able to enter into additional

strategic transactions on acceptable terms, if at all, which could adversely affect our ability to develop and commercialize current and

potential future product candidates and technologies, impact our cash position, increase our expenses and present significant distractions

to our management.

From time to time, we consider

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● exposure to unknown liabilities;

● disruption of our business and diversion of our management’s time and attention in order to negotiate

and manage a collaboration or develop acquired products, product candidates, or technologies;

● incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration

● higher-than-expected collaboration, acquisition or integration costs, write-downs of assets or goodwill

or impairment charges, or increased amortization expenses;

● difficulty and cost in facilitating the collaboration or combining the operations and personnel of any

acquired business;

● impairment of relationships with key suppliers, manufacturers, or customers of any acquired business due

to changes in management and ownership;

● disruption of our business and diversion of our management’s

time and attention in order to negotiate and manage a collaboration or develop acquired products, product candidates, or technologies;

● incurrence of substantial debt or dilutive issuances of equity

securities to pay transaction consideration or costs;

● higher-than-expected collaboration, acquisition or integration

costs, write-downs of assets or goodwill or impairment charges, or increased amortization expenses;

● difficulty and cost in facilitating the collaboration or combining

the operations and personnel of any acquired business;

● impairment of relationships with key suppliers, manufacturers,

or customers of any acquired business due to changes in management and ownership;

● the inability to retain key employees of any acquired business.

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of operations and prospects.

The manufacturing

of our product candidates is complex.

We may encounter difficulties in production.

If we encounter any such difficulties, our ability

to supply our product candidates for clinical trials or, if approved, for commercial sale, could be delayed or halted entirely.

The manufacturing of our product candidates

We may encounter difficulties in production, and because we currently rely on Eureka as our sole supplier of clinical drug

product, any such difficulties or any disruption in our relationship with Eureka could delay or halt our clinical programs and, if approved,

commercial supply.

The manufacture of biopharmaceutical

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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 the 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.

or improper installation or operation of equipment, operator error, 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 these 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.

We currently do not own

or operate any manufacturing facilities and have limited personnel with manufacturing experience.

We rely entirely on Eureka

Therapeutics, Inc., our parent and controlling stockholder, to manufacture EB103 and our other ARTEMIS ® T-cell

product candidates for our preclinical studies and clinical trials under our license and services arrangements, and Eureka is

currently our sole supplier of clinical drug product.

Eureka manufactures our product candidates at a limited number of

If Eureka experiences any manufacturing, quality, safety, regulatory or other operational problems, if it fails to

perform its obligations in accordance with applicable specifications, cGMP requirements or other regulatory requirements, if it is

unable or unwilling to supply us with sufficient quantities of our product candidates on a timely basis and at acceptable costs, or

if our arrangements with Eureka are terminated or materially disrupted, we would not have an immediately available alternative

source of supply.

Identifying, qualifying and transferring our manufacturing processes to one or more replacement manufacturers

would be time-consuming and costly, would require additional regulatory filings and approvals, and could involve unforeseen

technical challenges.

Any such transition could result in substantial delays in our ongoing or planned clinical trials, increased

development and manufacturing costs, and, if our product candidates are approved, interruptions or delays in commercial supply.

Any adverse developments affecting

manufacturing operations for our product candidates, if any are approved, 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.

manufacturing operations for our product candidates, whether at Eureka or any future 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.

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.

Changes in methods

of product candidate manufacturing or formulation may result in the need to perform new clinical trials, which would require additional

costs and cause delay.

As product candidates are

developed through preclinical to late-stage clinical trials towards approval and commercialization, it is common that various aspects

of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize yield and

manufacturing batch size, minimize costs and achieve consistent quality and results.

Such changes carry the risk that they will not achieve

these intended objectives.

Any of these changes could cause our product candidates to perform differently and affect the results of ongoing,

planned, or future clinical trials conducted with the altered materials.

This could delay completion of clinical trials, require the conduct

of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product

The actual cost to manufacture our product candidates could be greater than we expect because we are early in our development efforts.

Changes in methods of product candidate

manufacturing or formulation may result in the need to perform new clinical trials, which would require additional costs and cause delay.

As product candidates are developed

through preclinical to late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development

program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize yield and manufacturing batch

size, minimize costs and achieve consistent quality and results.

Such changes carry the risk that they will not achieve these intended

Any of these changes could cause our product candidates to perform differently and affect the results of ongoing, planned,

or future clinical trials conducted with the altered materials.

This could delay completion of clinical trials, require the conduct of

bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product

candidates and jeopardize our ability to commence product sales and generate revenue.

Risks Related to Our Business

and Operations

If the market opportunities

for our current and potential future product candidates, are smaller than we believe they are, our future product revenues may be adversely

affected, and our business may suffer.

Risks Related to Our Business and Operations

If the market opportunities for our current

and potential future product candidates, are smaller than we believe they are, our future product revenues may be adversely affected,

and our business may suffer.

Our understanding of the number

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The number of patients in the

United States or elsewhere may turn out to be lower than expected, may not be otherwise amenable to treatment with our current or potential

future product candidates or patients may become increasingly difficult to identify and access, all of which would adversely affect our

business prospects and financial condition.

In particular, the treatable population for our candidates may further be reduced if our estimates

of addressable populations are erroneous or sub-populations of patients do not derive benefit from our product candidates.

United States or elsewhere may turn out to be lower than expected, may not be otherwise amenable to treatment with our current or

potential future product candidates or patients may become increasingly difficult to identify and access, all of which would adversely

affect our business prospects and financial condition.

In particular, the treatable population for our candidates may further be reduced

if our estimates of addressable populations are erroneous or sub-populations of patients do not derive benefit from our product candidates.

Further, there are several

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in many underdeveloped markets.

We face competition

from companies that have developed or may develop product candidates for the treatment of the diseases that we may target, including companies

developing novel therapies and platform technologies.

If these companies develop therapies or platform technologies more rapidly than

we do, or if their therapies or platform technologies are more effective or have fewer side effects, our ability to develop and successfully

commercialize therapies may be adversely affected.

Our management has a limited understanding

of artificial intelligence (“AI”), and may not be able to fully assess potential risks posed to our business by AI or to capture

any potential benefits to our business AI could provide.

In the event AI is used to better effect by our competitors it could lead to

countervailing discoveries that may undermine our current pipeline.

Our limited understanding of AI could also lead to potential security

risks and breaches.

The potential adoption and

integration of Artificial Intelligence (AI) in our operations present a range of risks that could adversely affect our business.

AI technologies

are evolving rapidly, and our management has limited ability to fully assess or predict the potential long-term risks and disruptions

they may bring.

As AI technologies continue to develop, we may face significant challenges in adapting to new market conditions or operational

realities, as competitors may leverage AI to gain competitive advantages or disrupt established business models.

Moreover, AI systems have the

potential to make unforeseen or unintended discoveries that may disrupt existing products, services, or business strategies.

These countervailing

discoveries could render our current operations or offerings obsolete, or cause unforeseen consequences that are difficult to mitigate.

As AI-driven developments evolve, the risk of encountering these unintended outcomes increases, and our ability to anticipate or control

them may be limited.

Additionally, the rapid deployment

of AI by competitors could create significant competitive risks.

Competitors may be able to develop or adopt AI technologies faster than

we can, potentially outpacing our innovation or efficiency improvements.

This could result in a loss of market share, reduced profitability,

and increased difficulty in maintaining a competitive position within our industry.

AI systems, if not adequately

secured, could expose our company to cybersecurity threats, including data breaches, intellectual property theft, and system compromises.

The exploitation of such vulnerabilities could lead to reputational damage, legal liabilities, and regulatory penalties.

Given these risks, our management

may not be able to fully identify, assess, or address all the potential negative consequences associated with AI.

As such, AI-related

risks, including those from competitors’ advancements, security breaches, and unforeseen discoveries, could materially disrupt our

operations and adversely affect our financial performance.

We face competition from companies that

have developed or may develop product candidates for the treatment of the diseases that we may target, including companies developing

novel therapies and platform technologies.

If these companies develop therapies or platform technologies more rapidly than we do, or if

their therapies or platform technologies are more effective or have fewer side effects, our ability to develop and successfully commercialize

therapies may be adversely affected.

The development and commercialization

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evolving competition in the biotechnology and biopharmaceutical fields.

We believe that while EB103, EB104, and research relating to the

use of EB103 in conjunction with CF33-CD19t, their associated intellectual property, the characteristics of our current and potential

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

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to execute our business plan.

Any inability to

attract and retain qualified key management, technical personnel and employees would impair our ability to implement our business plan.

Any inability to attract and retain qualified

key management, technical personnel and employees would impair our ability to implement our business plan.

Our success largely depends

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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.

We may experience difficulties in managing

our growth and expanding our operations.

As our current and potential

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regulatory, and manufacturing capabilities or contract with other organizations to provide these capabilities for us.

To manage our anticipated

future growth, we will continue to implement and improve our managerial, operational, and financial systems and continue to recruit and

train additional qualified personnel.

To manage our anticipated future

growth, we will continue to implement and improve our managerial, operational, and financial systems and continue to recruit and train

additional qualified personnel.

Due to our limited financial resources and the complexity in managing a company with such anticipated

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to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and

If any of our product

candidates is approved for marketing and commercialization in the future and we are unable to develop sales, marketing, and distribution

capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable

to successfully commercialize any such future products.

If any of our product candidates is approved

for marketing and commercialization in the future and we are unable to develop sales, marketing, and distribution capabilities on our

own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable to successfully commercialize

any such future products.

We will need to develop internal

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business and results of operations could be materially and adversely affected.

Public opinion and

scrutiny of immunotherapy approaches may impact public perception of Estrella and product candidates, or may adversely affect our ability

to conduct our business and our business plans.

Public opinion and scrutiny of immunotherapy

approaches may impact public perception of Estrella and product candidates, or may adversely affect our ability to conduct our business

and our business plans.

Public perception may be influenced

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requirements for those product candidates that are approved and a decrease in demand for any such product candidates.

Our potential future

international operations may expose us to business, political, operational, and financial risks associated with doing business outside

of the United States.

Our potential future international operations

may expose us to business, political, operational, and financial risks associated with doing business outside of the United States.

Our business is subject to

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and we may enter into key supply arrangements or do other business with persons outside of the United States.

Furthermore, if we or any

future collaborator succeeds in developing any products, we anticipate marketing them in the European Union and other jurisdictions in

addition to the United States.

If approved, we or any future collaborator may hire sales representatives and conduct physician and patient

association outreach activities outside of the United States.

Doing business internationally involves a number of risks, including but

not limited to:

● multiple, conflicting, and changing laws and regulations such as those relating to privacy, data protection

and cybersecurity, tax laws, export and import restrictions, employment laws, regulatory requirements, and other governmental approvals,

permits and licenses;

● failure by us to obtain and maintain regulatory approvals for the commercialization of our product candidates

in various countries;

● rejection or qualification of foreign clinical trial data by the competent authorities of other countries;

Furthermore, if we

or any future collaborator succeeds in developing any products, we anticipate marketing them in the European Union and other jurisdictions

in addition to the United States.

If approved, we or any future collaborator may hire sales representatives and conduct physician

and patient association outreach activities outside of the United States.

Doing business internationally involves a number of risks,

including but not limited to:

● multiple, conflicting, and changing laws and regulations such

as those relating to privacy, data protection and cybersecurity, tax laws, export and import restrictions, employment laws, regulatory

requirements, and other governmental approvals, permits and licenses;

● failure by us to obtain and maintain regulatory approvals

for the commercialization of our product candidates in various countries;

● rejection or qualification of foreign clinical trial data

by the competent authorities of other countries;

● additional potentially relevant third-party patent rights;

● complexities and difficulties in obtaining, maintaining, protecting and enforcing our intellectual property

● complexities and difficulties in obtaining, maintaining, protecting

and enforcing our intellectual property rights;

● difficulties in staffing and managing foreign operations;

● complexities associated with managing multiple payor reimbursement regimes, government payors or patient

self-pay systems;

● complexities associated with managing multiple payor reimbursement

regimes, government payors or patient self-pay systems;

● limits in our ability to penetrate international markets;

● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact

of local and regional financial crises on demand, and payment for our products and exposure to foreign currency exchange rate fluctuations;

● natural disasters, political and economic instability, including wars, terrorism and political unrest,

outbreak of disease (including the COVID-19 pandemic), boycotts, curtailment of trade, and other business restrictions;

● certain expenses including, among others, expenses for travel, translation, and insurance;

● regulatory and compliance risks that relate to anti-corruption compliance and record-keeping that may

fall within the purview of the U.S.

Foreign Corrupt Practices Act, its accounting provisions or its anti-bribery provisions or provisions

of anti-corruption or anti-bribery laws in other countries.

● financial risks, such as longer payment cycles, difficulty

collecting accounts receivable, the impact of local and regional financial crises on demand, and payment for our products and exposure

to foreign currency exchange rate fluctuations;

● natural disasters, political and economic instability, including

wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade, and other business restrictions;

● certain expenses including, among others, expenses for travel,

translation, and insurance;

● regulatory and compliance risks that relate to anti-corruption

compliance and record-keeping that may fall within the purview of the U.S.

Foreign Corrupt Practices Act, its accounting provisions

or its anti-bribery provisions or provisions of anti-corruption or anti-bribery laws in other countries.

Any of these factors could

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our business, financial condition, prospects and results of operations.

Our business entails

a significant risk of product liability, and our inability to obtain sufficient insurance coverage could have a material adverse effect

on our business, financial condition, results of operations and prospects.

As we conduct preclinical

studies and future clinical trials of our current and potential future product candidates, we will be exposed to significant product liability

Our business entails a significant risk

of product liability, and our inability to obtain sufficient insurance coverage could have a material adverse effect on our business,

financial condition, results of operations and prospects.

As we conduct preclinical studies

and future clinical trials of our current and potential future product candidates, we will be exposed to significant product liability

risks inherent in the development, testing, manufacturing, and marketing of these product candidates.

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results of operations and prospects.

Our employees, principal

investigators, consultants, and commercial collaborators may engage in misconduct or other improper activities, including noncompliance

with regulatory standards and requirements.

We are exposed to the risk

of fraud or other misconduct by our employees, principal investigators, consultants, and commercial collaborators.

Misconduct by employees

could include intentional failures to comply with FDA regulations, provide accurate information to the FDA, comply with manufacturing

standards we may establish, comply with federal and state healthcare fraud and abuse laws and regulations, report financial information

or data accurately or disclose unauthorized activities to us.

In particular, sales, marketing, and business arrangements in the healthcare

industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer

incentive programs and other business arrangements.

Such misconduct could also involve the improper use of information obtained in the

course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.

It is not always possible to

identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown

or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure

to be in compliance with such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending

ourselves or asserting our rights, those actions could have a material adverse effect on our business and financial condition, including

the imposition of significant criminal, civil and administrative fines or other sanctions, such as monetary penalties, damages, fines,

disgorgement, imprisonment, exclusion from participation in government-funded healthcare programs, such as Medicare and Medicaid, integrity

obligations, reputational harm and the curtailment or restructuring of our operations.

sophisticated information technology systems and data processing to operate our business.

If we experience security or data privacy

breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data

or personal data, we may face costs, significant liabilities, harm to our brand, and business disruption.

Our employees, principal investigators,

consultants, and commercial collaborators may engage in misconduct or other improper activities, including noncompliance with regulatory

standards and requirements.

We are exposed to the

risk of fraud or other misconduct by our employees, principal investigators, consultants, and commercial collaborators.

by employees could include intentional failures to comply with FDA regulations, provide accurate information to the FDA, comply with

manufacturing standards we may establish, comply with federal and state healthcare fraud and abuse laws and regulations, report

financial information or data accurately or disclose unauthorized activities to us.

In particular, sales, marketing, and business

arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks,

self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting,

marketing and promotion, sales commission, customer incentive programs and other business arrangements.

Such misconduct could also

involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and

serious harm to our reputation.

It is not always possible to identify and deter misconduct, and the precautions we take to detect

and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from

governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those

actions could have a material adverse effect on our business and financial condition, including the imposition of significant

criminal, civil and administrative fines or other sanctions, such as monetary penalties, damages, fines, disgorgement, imprisonment,

exclusion from participation in government-funded healthcare programs, such as Medicare and Medicaid, integrity obligations,

reputational harm and the curtailment or restructuring of our operations.

We depend on sophisticated information technology

systems and data processing to operate our business.

If we experience security or data privacy breaches or other unauthorized or improper

access to, use of, or destruction of our proprietary or confidential data, employee data or personal data, we may face costs, significant

liabilities, harm to our brand, and business disruption.

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

address, email addresses, phone number and potentially clinical trial information.

Additionally, we, and our service providers, collaborators,

consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make accessible,

protect, and share personal information, health information, and other information to host or otherwise process some of our 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

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.

To date, we have only implemented

limited privacy, data protection or cybersecurity policies, have not implemented any physical, technical, organizational, and administrative

security measures and policies, and have not been, to our knowledge, in compliance in all material respects with all Privacy and Security

Requirements (as that term is defined in the Merger Agreement) relating to data loss, theft, and breach of security notification obligations.

process, transmit and store electronic information in our day-to-day operations, including a variety of personal data, such as name,

mailing address, email addresses, phone number and potentially clinical trial information.

Additionally, we, and our service providers,

collaborators, consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make

accessible, protect, and share personal information, health information, and other information to host or otherwise process some of our

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.

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).

Furthermore, because the techniques used to

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.

Our IT infrastructure is

limited given the size and scope of our operations, and we have not conducted a formal standalone IT or cybersecurity risk

assessment, nor do we have a dedicated cybersecurity officer.

Our process for assessing, identifying and managing cybersecurity

risks is not fully integrated into an enterprise-wide risk management program, and we do not have a formal internal process to

oversee and identify cybersecurity threats and risks associated with our reliance on Eureka’s third-party IT support provider.

Instead, we have adopted cybersecurity principles modeled on those used by Eureka, and our IT support is outsourced to

Eureka’s third-party provider.

While we have implemented certain technical and organizational

measures — including reliance on cloud-based storage (rather than on-premises servers) with daily backups and

periodic restore testing, multi-factor authentication for access to our Office 365 environment, role-based access controls for

financial data stored on SharePoint, and email protections such as spam/malware filtering, data loss prevention and basic

encryption — these measures are limited and evolving and may prove inadequate to prevent or detect all cybersecurity

Cybersecurity oversight for Estrella is integrated into Eureka’s IT governance framework and the third-party IT

provider, and although our CEO and board receive updates and are responsible for ensuring that cybersecurity measures relevant to

Estrella are in place, our dependence on Eureka’s IT Governance Committee and its external IT provider may reduce our direct

visibility into, and control over, certain cybersecurity risks.

There can be no assurance

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other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition,

prospects and cashflow.

prospects and cash flow.

For example, the loss or alteration of clinical trial data from future clinical trials could result in delays

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laws, privacy policies or other data protection obligations related to information security or security breaches.

If we do not comply

with laws regulating the protection of the environment and health and human safety, our business could be adversely affected.

If we do not comply with laws regulating

the protection of the environment and health and human safety, our business could be adversely affected.

We are subject to numerous

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Although we maintain insurance

to cover us for costs and expenses, we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance

may not provide adequate coverage against potential liabilities.

We do not maintain insurance for environmental liability or toxic tort

claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.

In addition, we

may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

These current

or future laws and regulations may impair our research, development, or production efforts.

Our failure to comply with these laws and

regulations also may result in substantial fines, penalties, or other sanctions.

Our business, operations

and clinical development plans and timelines could be adversely affected by the effects of health epidemics, including the ongoing COVID-19

pandemic, on the manufacturing, clinical trial, and other business activities performed by us or by third parties with whom we may conduct

business, including our anticipated contract manufacturers, CROs, shippers, and others.

Health epidemics could cause

significant disruption in our operations and the operations of third-party manufacturers, CROs and other third parties upon whom we rely.

For example, in March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

Since then, COVID-19 has spread to

most countries and all 50 states within the United States, and the U.S.

government has, at various times, ordered the closure of all non-essential

businesses, and imposed social distancing measures, “shelter-in-place” orders and restrictions on travel between the United

States, Europe, and certain other countries.

The global pandemic and government measures taken in response have also had a significant

impact on businesses and commerce worldwide, as worker shortages have occurred, supply chains have been disrupted, facilities and production

have been suspended across a variety of industries, and demand for certain goods and services, such as medical services and supplies,

has spiked, while demand for other goods and services, such as travel, has fallen.

The effects of government orders may negatively impact

productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the

length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

If our relationships with

our suppliers or other vendors are terminated or scaled back as a result of the COVID-19 pandemic or other health epidemics, we may not

be able to enter into arrangements with alternative suppliers or vendors or do so on commercially reasonable terms or in a timely manner.

Switching or adding additional suppliers or vendors involves substantial cost and requires management time and focus.

In addition, there

is a natural transition period when a new supplier or vendor commences work.

As a result, delays may occur, which could adversely impact

our ability to meet our desired clinical development and any future commercialization timelines.

Although we carefully manage our relationships

with our suppliers and vendors, there can be no assurance that we will not encounter challenges or delays in the future or that these

delays or challenges will not harm our business.

In addition, our preclinical

studies and future clinical trials may be affected by the COVID-19 pandemic or other health epidemics.

Clinical site initiation, patient

enrollment and activities that require visits to clinical sites, including data monitoring, may be delayed due to prioritization of hospital

resources towards the COVID-19 pandemic or concerns among patients about participating in clinical trials during a pandemic.

Some patients

may have difficulty following certain aspects of clinical trial protocols if quarantines impede patient movement or interrupt healthcare

These challenges may also increase the costs of completing our clinical trials.

Similarly, if we are unable to successfully

recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19

or experience additional restrictions by their institutions, city or state, our preclinical studies and future clinical trial operations

could be adversely impacted.

The spread of COVID-19, which

has caused a broad impact globally, may materially affect us economically.

While the potential economic impact brought by, and the duration

of, COVID-19 may be difficult to assess or predict, a widespread pandemic has resulted in significant volatility for global financial

markets, resulting in economic uncertainty that could continue to significantly impact our business and operations and may reduce our

ability to access capital, which could in the future negatively affect our liquidity.

In addition, a recession or market correction resulting

from the spread of COVID-19 could materially affect our business and the value of our Common Stock.

In addition, any recurrence or new

increases in the rates and severity of COVID-19 infection could cause other widespread or more severe impacts depending on where infection

rates are highest.

Our business, operations,

financial position and clinical development plans and timelines, could be materially adversely affected by the continuing military action

in Ukraine and the war between Israel and Hamas.

As a result of the military

action commenced in February 2022 by the Russian Federation and Belarus in Ukraine and the war between Israel and Hamas commenced in October

2023, and related economic sanctions imposed or that may in the future be imposed by certain governments, our financial position and operations

may be materially and adversely affected.

As our ability to continue to operate will be dependent on raising debt and equity finance,

any adverse impact to those markets as a result of these conflicts, including due to increased market volatility, decreased availability

to cover us for costs and expenses, we may incur due to injuries to our employees resulting from the use of hazardous materials, this

insurance may not provide adequate coverage against potential liabilities.

We do not maintain insurance for environmental liability or

toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.

addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

These current or future laws and regulations may impair our research, development, or production efforts.

Our failure to comply with these

laws and regulations also may result in substantial fines, penalties, or other sanctions.

Our business, operations, financial position and clinical development plans and timelines could be materially

adversely affected by the continuing military action in Ukraine, the war between Israel and Hamas, and the armed conflict between the

United States/Israel and Iran.

As a result of the military action commenced in February 2022 by the Russian Federation and Belarus in Ukraine,

the war between Israel and Hamas commenced in October 2023, and the armed conflict commenced on February 28, 2026 by the United States

and Israel against Iran (including joint airstrikes targeting Iranian leadership, nuclear facilities, ballistic missile programs, and

military sites, with Iranian retaliatory missile and drone strikes on US bases, Israel, and Gulf states), and related economic sanctions

imposed or that may in the future be imposed by certain governments, our financial position and operations may be materially and adversely

As our ability to continue to operate will be dependent on raising debt and equity finance, any adverse impact to those markets

as a result of these conflicts, including due to increased market volatility (such as surges in energy prices), decreased availability

in third-party financing and/or a deterioration in the terms on which it is available (if at all), could negatively impact our business,

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The extent of any potential impact is not yet determinable,

Recent volatility

in capital markets and lower market prices for our securities may affect our ability to access new capital through sales of shares of

our Common Stock or issuance of indebtedness, which may harm our liquidity, limit our ability to grow our business, pursue acquisitions

or improve our operating infrastructure and restrict our ability to compete in our markets.

Recent volatility in capital markets and

lower market prices for our securities may affect our ability to access new capital through sales of shares of our Common Stock or issuance

of indebtedness, which may harm our liquidity, limit our ability to grow our business, pursue acquisitions or improve our operating infrastructure

and restrict our ability to compete in our markets.

Our operations consume substantial

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● finance unanticipated working capital requirements;

● develop or enhance our technological infrastructure and our existing solutions;

● develop or enhance our technological infrastructure and our

existing solutions;

● pursue acquisitions or other strategic relationships;

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to invest in our operations and otherwise suffer harm to our business.

Rising inflation

rates could negatively impact our revenues and profitability if increases in the prices of our products or a decrease in consumer spending

results in lower sales.

In addition, if our costs increase and we are not able to pass along these price increases to our customers, our

net income would be adversely affected, and the adverse impact may be material.

Inflation rates, particularly

in the United States, have increased recently to levels not seen in years.

Increased inflation may result in decreased demand for our

products and services, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to access

credit or otherwise raise debt and equity capital.

In addition, the United States Federal Reserve has raised, and may again raise, interest

rates in response to concerns about inflation.

Increases in interest rates, especially if coupled with reduced government spending and

volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks.

Risks Related to the Separation

and Our Relationship with Eureka

We incurred significant

costs in connection with the Business Combination and will incur incremental costs as a standalone public company.

We incurred approximately

$1.6 million in transaction costs in connection with the Business Combination, including accounting, legal, underwriting, financial and

capital markets advisory, and other fees and expenses.

For operational matters outside of the scope of the Services Agreement, we may

hire additional employees, or out-source certain functions, systems, and infrastructure through contracts with third parties.

These initiatives

may be costly to implement.

To the extent we implement any of these initiatives, we may incur additional operating costs, and the amount

and timing of such costs is uncertain.

Inflation and higher interest rates could

increase our operating costs and adversely affect our liquidity and ability to raise capital.

While inflation in the United States

has moderated since its recent peak in June 2022, it remains above the Federal Reserve’s long-term 2.0% target, and interest

rates remain elevated compared to the decade prior to the COVID-19 pandemic.

Higher inflation and a sustained higher-rate environment

may result in increased operating costs, reduced liquidity, lower valuations, and limitations on our ability to access credit or otherwise

raise debt and equity capital on acceptable terms.

In addition, continued volatility in financial markets, uncertainty around future monetary

policy, and any renewed increase in inflationary pressures may further heighten these risks.

Risks Related to the Separation and Our Relationship

We will incur incremental costs as a standalone

public company.

For operational matters outside

of the scope of the Services Agreement we entered with Eureka, we may hire additional employees, or out-source certain functions, systems,

and infrastructure through contracts with third parties.

These initiatives may be costly to implement.

To the extent we implement any

of these initiatives, we may incur additional operating costs, and the amount and timing of such costs is uncertain.

Eureka currently performs

or supports many important corporate functions for us pursuant to the Services Agreement.

The Services Agreement may be terminated by

mutual agreement at any time.

Following the termination of, or the expiration of the term of, the Services Agreement, we may not be able

to replace the services or enter into appropriate third-party arrangements on terms and conditions, including cost, comparable to those

that we will receive from Eureka under our Services Agreement.

Additionally, after the Services Agreement terminates, we may be unable

to sustain the services at the same levels or obtain the same benefits as when we were receiving such services and benefits from Eureka.

If we are required to operate these functions separately in the future, and we do not have our own adequate systems and business functions

in place at that time, or are unable to obtain them from other providers, we may not be able to operate our business effectively or at

comparable costs, and our profitability may decline.

The Services Agreement may be terminated

by mutual agreement at any time.

Following the termination of, or the expiration of the term of, the Services Agreement, we may not

be able to replace the services or enter into appropriate third-party arrangements on terms and conditions, including cost,

comparable to those that we will receive from Eureka under our Services Agreement.

Additionally, after the Services Agreement

terminates, we may be unable to sustain the services at the same levels or obtain the same benefits as when we were receiving such

services and benefits from Eureka.

If we are required to operate these functions separately in the future, and we do not have our

own adequate systems and business functions in place at that time, or are unable to obtain them from other providers, we may not be

able to operate our business effectively or at comparable costs, and our profitability may decline.

We also share office space

with Eureka pursuant to an office sharing agreement that commenced in August 2022.

If Eureka were to leave or lose its office space, we

may not have adequate facilities to operate our business effectively and as required by the Collaboration Agreement or the costs of our

office space could increase.

Certain of our officers

or directors may have actual or potential conflicts of interest because of their equity interests in or positions with Eureka.

Our CEO, President, and director,

Liu, currently serves as the CEO and President of Eureka.

As a result, Dr.

Liu devotes less than full time to the operation of our

If Eureka were to leave or lose its office space,

we may not have adequate facilities to operate our business effectively and as required by the Collaboration Agreement or the costs of

our office space could increase.

Certain of our officers or directors may

have actual or potential conflicts of interest because of their equity interests in or positions with Eureka.

Our CEO, President, and director, Dr.

Liu, currently

serves as the CEO and President of Eureka and is also a beneficial owner of more than 10% of Eureka’s outstanding equity.

Liu devotes less than full time to the operation of our business.

Pursuant to his employment agreement, Dr.

Liu is expected to fulfill his duties as our CEO, but is not required to provide a

specific number of hours to our business per week or per month.

Liu’s position at

Eureka and the ownership by our officers and directors of any Eureka equity or equity awards, or Estrella equity awards the vesting for

which is based in part on the total stockholder return of Eureka, creates, or may create the appearance of, conflicts of interest when

these officers or directors are faced with decisions that could have different implications for Eureka than for us.

These potential conflicts

could arise, for example, over matters such as the desirability of changes in our business and operations, funding and capital matters,

regulatory matters, intellectual property-related conflicts, including those relating to potential improvements to the ARTEMIS ®

Liu is expected

to fulfill his duties as our CEO, but is not required to provide a specific number of hours to our business per week or per month.

Liu’s position

at Eureka and the ownership by our officers and directors of any Eureka equity or equity awards, or Estrella equity awards the vesting

for which is based in part on the total stockholder return of Eureka, creates, or may create the appearance of, conflicts of interest

when these officers or directors are faced with decisions that could have different implications for Eureka than for us.

These potential

conflicts could arise, for example, over matters such as the desirability of changes in our business and operations, funding and capital

matters, regulatory matters, intellectual property-related conflicts, including those relating to potential improvements to the ARTEMIS ®

platform, possible acquisitions or other corporate opportunities, and agreements with Eureka relating to the Separation or otherwise,

allocation of resources and personnel pursuant to the Services Agreement, employee retention or recruiting, or our dividend policy.

In addition, our officers

or directors may own Eureka common stock or equity awards.

In addition, our officers or

directors may own Eureka common stock or equity awards.

Certain of our officers, including Dr.

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holdings of Eureka common stock or equity awards that have a material monetary value.

We rely on Eureka

for our research and development efforts.

We rely on Eureka for our research and development

Pursuant to the Services Agreement,

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we may not be able to operate our business effectively.

Additionally, our CEO and

President, Dr.

Additionally, our CEO and President,

Liu, currently serves as the CEO and President of Eureka.

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from the Services Agreement and our research and development and commercialization strategy.

Risks Related to Our Intellectual

If we are unable

to obtain or protect intellectual property rights related to our in-licensed technology, future technologies and current or future product

candidates, or if our intellectual property rights are inadequate, our competitors could develop and commercialize products and technology

similar or identical to ours, and we may not be able to compete effectively in our market or successfully commercialize any product candidates

Risks Related to Our Intellectual Property

If we are unable to obtain

or protect intellectual property rights related to our in-licensed technology, future technologies and current or future product candidates,

or if our intellectual property rights are inadequate, our competitors could develop and commercialize products and technology similar

or identical to ours, and we may not be able to compete effectively in our market or successfully commercialize any product candidates

we may develop.

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current or future product candidates and methods for treating patients using our current or future product candidates.

We in-license patents and

patent applications relating to our product candidates.

There is no guarantee that any patents covering our product candidates will issue

from the patent applications we in-license, or from any patent applications that we may file in the future, or, if they do, that the issued

We in-license patents and patent

applications relating to our product candidates.

There is no guarantee that any patents covering our product candidates will issue from

the patent applications we in-license, or from any patent applications that we may file in the future, or, if they do, that the issued

claims will provide adequate protection for our product candidates, or any meaningful competitive advantage.

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a non-infringing manner.

Further, although we make

reasonable efforts to ensure patentability of our in-licensed inventions and our future inventions, we cannot guarantee that all of the

potentially relevant prior art relating to our in-licensed patents and any patent applications that we may file in the future has been

or will be found.

For example, publications of discoveries in scientific literature often lag behind the actual discoveries, and patent

applications in the United States and other jurisdictions are typically not published until 18 months after filing, and in some cases

Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in

a manner that could cover our licensed platform technologies, our product candidates, or the use of our technologies.

Further, although we make reasonable

efforts to ensure patentability of our in-licensed inventions and our future inventions, we cannot guarantee that all of the potentially

relevant prior art relating to our in-licensed patents and any patent applications that we may file in the future has been or will be

For example, publications of discoveries in scientific literature often lag behind the actual discoveries, and patent applications

in the United States and other jurisdictions are typically not published until 18 months after filing, and in some cases not

Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a

manner that could cover our licensed platform technologies, our product candidates, or the use of our technologies.

We thus cannot know

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Invalidation of any patent rights with respect to our in-licensed patents could materially harm our business.

Moreover, the patent positions

of biotechnology companies like ours are generally uncertain because they may involve complex legal and factual considerations that have,

in recent years, been the subject of legal development and change.

The relevant patent laws and their interpretation, both inside and

outside of the United States, is also uncertain.

Changes in either the patent laws or their interpretation in the United States and other

jurisdictions may diminish our ability to protect our platform technology or product candidates and could affect the value of such intellectual

In particular, our ability to stop third parties from making, using, selling, offering to sell or importing products that infringe,

misappropriate or otherwise violate our intellectual property will depend in part on our success in obtaining and enforcing patent claims

that cover our in-licensed platform technology and inventions, our product candidates, future inventions and improvements.

We cannot guarantee

that patents will be granted with respect to any patent applications we may file or in license in the future, nor can we be sure that

any patents that may be granted to us or our licensors in the future will be commercially useful in protecting our products, or the methods

of use or manufacture of those products.

Additionally, third parties, including our former employees and collaborators, may challenge

the ownership or inventorship of our licensed or future patent rights to claim that they are entitled to ownership and inventorship interest,

and we may not be successful in defending against such claims.

Moreover, the patent

positions of biotechnology companies like ours are generally uncertain because they may involve complex legal and factual

considerations that have, in recent years, been the subject of legal development and change.

The relevant patent laws and their

interpretation, both inside and outside of the United States, is also uncertain.

Changes in either the patent laws or their

interpretation in the United States and other jurisdictions may diminish our ability to protect our platform technology or

product candidates and could affect the value of such intellectual property.

In particular, our ability to stop third parties from

making, using, selling, offering to sell or importing products that infringe, misappropriate or otherwise violate our intellectual

property will depend in part on our success in obtaining and enforcing patent claims that cover our in-licensed platform technology

and inventions, our product candidates, future inventions and improvements.

We cannot guarantee that patents will be granted with

respect to any patent applications we may file or in license in the future, nor can we be sure that any patents that may be granted

to us or our licensors in the future will be commercially useful in protecting our products, or the methods of use or manufacture of

those products.

Additionally, third parties, including our former employees and collaborators, may challenge the ownership or

inventorship of our licensed or future patent rights to claim that they are entitled to ownership and inventorship interest, and we

may not be successful in defending against such claims.

However, we are not currently facing any such challenges.

Moreover, issued

patents do not guarantee the right to practice our in-licensed or owned technology or inventions in relation to the commercialization

of our products.

Issued patents only allow us to block — in some cases — potential competitors from practicing the claimed

inventions of the issued patents.

patents do not guarantee the right to practice our in-licensed or owned technology or inventions in relation to the

commercialization of our products.

Issued patents only allow us to block — in some cases — potential

competitors from practicing the claimed inventions of the issued patents.

The standards applied by the

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in-licensed patents and patent applications, and our potential future patent applications, if any, may not result in patents being issued

in the United States or in other jurisdictions which protect our technology or products or which effectively prevent others from commercializing

competitive technologies and products.

Changes in either the patent laws or interpretation of the patent laws in the United States and

other countries may diminish the value of any patent applications we may file in the future or narrow the scope of any patent protection

in the United States or in other jurisdictions which protect our technology or products or which effectively prevent others from

commercializing competitive technologies and products.

Changes in either the patent laws or interpretation of the patent laws in the United States

and other countries may diminish the value of any patent applications we may file in the future or narrow the scope of any patent protection

we may obtain from any such patent applications.

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financial condition, results of operations and prospects.

Moreover, the Collaboration

Agreement allows us to co-own with Imugene patent applications relating to inventions jointly developed under the Collaboration Agreement,

and we may in the future co-own additional patents and patent applications with third parties pursuant to agreements that we may enter

Moreover, we may in the future co-own additional patents and patent applications with third parties pursuant to agreements that we may enter

If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent application,

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may be subject to a reservation of rights by one or more third parties, such as the U.S.

In addition, our rights in such inventions

may be subject to certain requirements to manufacture product candidates embodying such inventions in the United States.

government of such rights could harm our competitive position, business, financial condition, results of operations and prospects.

Our in-licensed

patent rights may not cover our products or processes, including ARTEMIS ® , or any otherwise viable commercial products

or processes and/or may be invalid or unenforceable

In addition, our rights in such

inventions may be subject to certain requirements to manufacture product candidates embodying such inventions in the United States.

Any exercise by the U.S.

government of such rights could harm our competitive position, business, financial condition, results of

operations and prospects.

Our in-licensed patent rights may not cover

our products or processes, including ARTEMIS ® , or any otherwise viable commercial products or processes and/or may be invalid

or unenforceable

We have not specifically evaluated

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disclosure, lack of enablement, estoppel, laches, implied license, failure to mark, misuse, and/or inequitable conduct.

Our licenses and

other material contracts may be invalid, unenforceable, or limited as to intellectual property and/or may impede, limit, or eliminate

our ability to secure or protect our intellectual property, including in-licensed patent rights and any future developments.

Our licenses and other material contracts

may be invalid, unenforceable, or limited as to intellectual property and/or may impede, limit, or eliminate our ability to secure or

protect our intellectual property, including in-licensed patent rights and any future developments.

We have not specifically evaluated

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property and may materially limit or eliminate our ability to secure or protect our intellectual property, including in-licensed patent

The patent protection

and patent prosecution for some of our product candidates and technologies may be dependent on third parties.

While we normally seek to

obtain the right to control prosecution, maintenance and enforcement of the patents relating to our product candidates and technologies,

there may be times when the filing and prosecution activities for patents and patent applications relating to our product candidates and

technologies are controlled by our licensors or collaborators.

Our licensors may not successfully prosecute the patent applications to

which we are licensed.

Even if patents are issued in respect of these patent applications, our licensors may fail to maintain these patents,

may determine not to pursue litigation against other companies that are infringing these patents, or may pursue such litigation less aggressively

than we would.

The patent protection and patent prosecution

for some of our product candidates and technologies may be dependent on third parties.

While we normally seek to obtain

the right to control prosecution, maintenance and enforcement of the patents relating to our product candidates and technologies, there

may be times when the filing and prosecution activities for patents and patent applications relating to our product candidates and technologies

are controlled by our licensors or collaborators.

Our licensors may not successfully prosecute the patent applications to which we are

Even if patents are issued in respect of these patent applications, our licensors may fail to maintain these patents, may determine

not to pursue litigation against other companies that are infringing these patents, or may pursue such litigation less aggressively than

If any of our licensors or

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proceeding(s) or defense activities may be less vigorous than had we conducted them ourselves.

We may be unable

to acquire or in-license any relevant third-party intellectual property rights that we identify as necessary or important to our business

We may be unable to acquire or in-license

any relevant third-party intellectual property rights that we identify as necessary or important to our business operations.

Because our development programs

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In addition, the U.S.

government may have the right to require us or our licensors to grant exclusive, partially exclusive, or

non-exclusive licenses to any of these inventions to a third party if it determines that:

(i) adequate steps have not been taken to commercialize

the invention;

government may have the right to require us or our licensors to grant exclusive, partially exclusive,

or non-exclusive licenses to any of these inventions to a third party if it determines that:

(i) adequate steps have not been taken

to commercialize the invention;

(ii) government action is necessary to meet public health or safety needs;

or (iii) government action is necessary to meet

requirements for public use under federal regulations (also referred to as “march-in rights”).

government also has

the right to take title to these inventions made through government funded programs if we, or the applicable licensor, fail to disclose

the invention to the government and fail to file an application to register the intellectual property within specified time limits.

time limits have recently been changed by regulation, and may change in the future.

Intellectual property generated under a government-funded

program is also subject to certain reporting requirements, compliance with which may require us or the applicable licensor to expend substantial

or (iii) government

action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”).

government also has the right to take title to these inventions made through government funded programs if we, or the applicable

licensor, fail to disclose the invention to the government and fail to file an application to register the intellectual property within

specified time limits.

These time limits have recently been changed by regulation, and may change in the future.

Intellectual property

generated under a government-funded program is also subject to certain reporting requirements, compliance with which may require us or

the applicable licensor to expend substantial resources.

In addition, the U.S.

government requires that any products embodying the subject invention or produced through the use of

the subject invention be manufactured substantially in the United States.

The manufacturing preference requirement can be waived if the

owner of the intellectual property can show that reasonable but unsuccessful efforts have been made to grant licenses on similar terms

to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic

manufacture is not commercially feasible.

government requires that any products embodying the

subject invention or produced through the use of the subject invention be manufactured substantially in the United States.

The manufacturing

preference requirement can be waived if the owner of the intellectual property can show that reasonable but unsuccessful efforts have

been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States

or that under the circumstances domestic manufacture is not commercially feasible.

This preference for U.S.

manufacturers may limit our ability to contract with non-U.S.

manufacturers for products covered by such intellectual property.

To the extent any of our current or future intellectual property is

generated through the use of U.S.

government funding, the provisions of the Bayh-Dole Act may similarly apply.

We currently, and

in the future may continue to, enter into agreements involving licenses or collaborations that provide for access or sharing of intellectual

These intellectual property-related agreements may impose certain obligations and restrictions on our ability to develop and

commercialize our product candidates and technologies that are the subject of such licenses.

We license rights from third

parties to use certain intellectual property relevant to one or more of our current and future product candidates.

In the future, we may

need to obtain additional licenses from others to advance our research and development activities or allow the commercialization of our

current and future product candidates we may identify and pursue.

manufacturers may limit

our ability to contract with non-U.S.

product manufacturers for products covered by such intellectual property.

To the extent any

of our current or future intellectual property is generated through the use of U.S.

government funding, the provisions of the Bayh-Dole

Act may similarly apply.

We currently, and in the future may continue to, enter into agreements involving licenses or collaborations that

provide for access or sharing of intellectual property.

These intellectual property-related agreements may impose certain obligations

and restrictions on our ability to develop and commercialize our product candidates and technologies that are the subject of such licenses.

We license rights from licensors

to use certain intellectual property relevant to one or more of our current and future product candidates.

In the future, we may need

to obtain additional licenses from others to advance our research and development activities or allow the commercialization of our current

and future product candidates we may identify and pursue.

These existing license agreements impose, and any future license agreements

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Therapeutics (Cayman), Inc.

For a more detailed description of the License Agreement, see the section titled “ Business —

Intellectual Property .”

In addition, certain of our

future agreements with third parties may limit or delay our ability to consummate certain transactions, may impact the value of those

transactions, or may limit our ability to pursue certain activities.

For example, we may in the future enter into license agreements that

are not assignable or transferable, or that require the licensor’s express consent in order for an assignment or transfer to take

future agreements with licensors may limit or delay our ability to consummate certain transactions, may impact the value of those transactions,

or may limit our ability to pursue certain activities.

For example, we may in the future enter into license agreements that are not assignable

or transferable, or that require the licensor’s express consent in order for an assignment or transfer to take place.

Further, we or our licensors,

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patents, such patents may be invalid and/or unenforceable, and such applications may never result in valid, enforceable patents.

these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business, financial

these outcomes could impair our ability to prevent competition from others, which may have an adverse impact on our business, financial

conditions, results of operations and prospects.

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the right to control the preparation, filing, prosecution, maintenance, enforcement and defense of patents and patent applications that

we license from third parties.

we license from licensors.

In certain circumstances, our licensed patent rights are subject to our reimbursing our licensors for their

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Even where we have the right to control prosecution of patents and patent applications under license from

third parties, we may still be adversely affected or prejudiced by actions or inactions of our predecessors or licensors and their counsel

licensors, we may still be adversely affected or prejudiced by actions or inactions of our predecessors or licensors and their counsel

that took place prior to us assuming control over patent prosecution.

Our technology acquired or

licensed currently or in the future from various third parties is or may be subject to retained rights.

Our predecessors or licensors

do and may retain certain rights under their agreements with us, including the right to use the underlying technology for non-commercial

academic and research use, to publish general scientific findings from research related to the technology, and to make customary scientific

and scholarly disclosures of information relating to the technology.

It is difficult to monitor whether our predecessors or licensors

limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology

in the event of misuse.

licensed currently or in the future from various licensors is or may be subject to retained rights.

Our predecessors or licensors do and

may retain certain rights under their agreements with us, including the right to use the underlying technology for non-commercial academic

and research use, to publish general scientific findings from research related to the technology, and to make customary scientific and

scholarly disclosures of information relating to the technology.

It is difficult to monitor whether our predecessors or licensors limit

their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in

the event of misuse.

If we are limited in our ability

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any limitations on our ability to utilize these technologies may impair our ability to develop, out-license or market and sell our product

If we fail to comply

with our obligations under any existing or future license, collaboration or other intellectual property-related agreements, we may be

required to pay damages and could lose intellectual property rights that may be necessary for developing, commercializing and protecting

our current or future technologies or product candidates or we could lose certain rights to grant sublicenses.

If we fail to comply with our obligations under any existing or future license, collaboration or other intellectual

property-related agreements, we may be required to pay damages and could lose intellectual property rights that may be necessary for developing,

commercializing and protecting our current or future technologies or product candidates or we could lose certain rights to grant sublicenses.

We have certain obligations

to third-party licensors from whom we license certain patent rights that are relevant to one or more current and future product candidates.

In the future, we may need to obtain additional licenses from other third parties to advance our research and development activities or

allow the commercialization of our current and future product candidates.

Our existing license agreements impose, and any future license

agreements we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing,

insurance, patent prosecution and enforcement or other obligations on us.

For a more detailed description of our existing license agreements,

see the section titled “ Business — License Agreement .” If we breach any of these obligations, including diligence

obligations with respect to development and commercialization of product candidates covered by the intellectual property licensed to us,

or use the intellectual property licensed to us in an unauthorized manner or we are subject to bankruptcy-related proceedings, we may

be required to pay damages and the licensor may have the right to terminate the respective agreement or materially modify the terms of

the license, such as by rendering currently exclusive licenses non-exclusive.

License termination or modification could result in our

inability to develop, manufacture and sell products that are covered by the licensed intellectual property or could enable a competitor

to gain access to the licensed intellectual property.

to licensors from whom we license certain patent rights that are relevant to one or more current and future product candidates.

future, we may need to obtain additional licenses from others to advance our research and development activities or allow the commercialization

of our current and future product candidates.

Our existing license agreements impose, and any future license agreements we enter into

are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent

prosecution and enforcement or other obligations on us.

If we breach any of these obligations, including diligence obligations with respect

to development and commercialization of product candidates covered by the intellectual property licensed to us, or use the intellectual

property licensed to us in an unauthorized manner or we are subject to bankruptcy-related proceedings, we may be required to pay damages

and the licensor may have the right to terminate the respective agreement or materially modify the terms of the license, such as by rendering

currently exclusive licenses non-exclusive.

License termination or modification could result in our inability to develop, manufacture

and sell products that are covered by the licensed intellectual property or could enable a competitor to gain access to the licensed

intellectual property.

In certain circumstances,

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applications, our licensed rights may be reduced or eliminated.

In such circumstances, our right to develop and commercialize any of our

products or product candidates that are the subject of such licensed rights could be materially adversely affected.

In such circumstances, our right to develop and commercialize any of

our products or product candidates that are the subject of such licensed rights could be materially adversely affected.

Our current or future licensors

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their merit, that we are infringing, misappropriating or otherwise violating the licensor’s intellectual property rights.

while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products if infringement

or misappropriation were found, those amounts could be significant.

The amount of our future royalty obligations will depend on the technology

and intellectual property we use in products that we successfully develop and commercialize, if any.

while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products if

infringement or misappropriation were found, those amounts could be significant.

The amount of our future royalty obligations will depend

on the technology and intellectual property we use in products that we successfully develop and commercialize, if any.

Therefore, even if we successfully

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us and our present and future licensors regarding intellectual property subject to a licensing agreement, including:

● the scope of rights granted under the license agreement and other interpretation-related issues, including

but not limited to our right to transfer or assign the license;

● whether and the extent to which our product candidates, technology and processes infringe on intellectual

property of the licensor that is not subject to the licensing agreement;

● our right to sublicense patents and other rights to third parties, including the terms and conditions

● our diligence obligations with respect to the development and commercialization of our product candidates

that are covered by the license agreement, and what activities satisfy those diligence obligations;

● the scope of rights granted under the license agreement and

other interpretation-related issues, including but not limited to our right to transfer or assign the license;

● whether and the extent to which our product candidates, technology

and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

● our right to sublicense patents and other rights to others,

including the terms and conditions thereof;

● our diligence obligations with respect to the development

and commercialization of our product candidates that are covered by the license agreement, and what activities satisfy those diligence

● our right to transfer or assign the license;

● the inventorship and ownership of inventions and know-how resulting from the joint creation or use of

intellectual property by our licensors and us and our collaborators;

● the priority of invention of patented technology.

If disputes over intellectual

property that we license in the future prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may

not be able to successfully develop and commercialize the affected product candidates, which would have a material adverse effect on our

business, financial condition, results of operations and prospects.

● the inventorship and ownership of inventions and know-how

resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators;

priority of invention of patented technology.

If disputes over intellectual property that we license in the future prevent or impair our ability to maintain

our licensing arrangements on acceptable terms, we may not be able to successfully develop and commercialize the affected product candidates,

which would have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, the agreements

under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements

under which we currently license intellectual property or technology from licensors are complex, and certain provisions in such agreements

may be susceptible to multiple interpretations.

The resolution of any contract interpretation disagreement that may arise could narrow

what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our

financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial

condition, results of operations and prospects.

Moreover, if disputes over intellectual property that we have licensed prevent or impair

our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop

and commercialize the affected product candidates, which could have a material adverse effect on our business, financial condition, results

of operations and prospects.

what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be

our financial or other obligations under the relevant agreement, either of wh ich

could have a material adverse effect on our business, financial condition, results of operations and prospects.

Moreover, if disputes

over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially

acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material

adverse effect on our business, financial condition, results of operations and prospects.

In addition, while we currently

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If we do so, and we violate the terms of any such loan or credit agreement, our lenders or creditors may take possession of such intellectual

property, including the rights to receive proceeds derived from such intellectual property.

Patent terms may

not be able to protect our competitive position for an adequate period of time with respect to our current or future technologies or product

Patents have a limited lifespan.

The term of individual patents and applications in-licensed to us and in our portfolio in the future depends upon the legal term of patents

in the countries in which they are obtained.

In most countries in which we would file, including the United States, the patent term is

20 years from the earliest date of filing a non-provisional patent application.

Extensions of a patent term may be available, but there

is no guarantee that such patents may be eligible for extension, or that we would succeed in obtaining any particular extension, and no

guarantee any such extension would confer a patent term for a sufficient period of time to exclude others from commercializing product

candidates similar or identical to ours.

In the United States, the term of a patent may be eligible for patent term adjustment, which

permits patent term restoration as compensation for delays incurred at the USPTO during the patent prosecution process.

In addition, for

patents that cover an FDA-approved drug, the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”)

permits a patent term extension of up to five years beyond the expiration of the patent.

While the length of the patent term extension

is related to the length of time the drug is under regulatory review, patent term extension cannot extend the remaining term of a patent

beyond a total of 14 years from the date of product approval, and only one patent per approved drug — and only those claims covering

the approved drug, a method for using it or a method for manufacturing it — may be extended under the Hatch-Waxman Act.

provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug.

future, if and when our products receive FDA approval or applicable approval in other jurisdictions, we expect to apply for patent term

extensions on any issued patents covering those products in the United States and other jurisdictions where such extensions are available;

however, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment

of whether such extensions should be granted, and if granted, the length of such extensions.

An extension may not be granted because of,

for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable

deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.

term extension is not granted or the term of any such extension is less than requested, the period during which we can enforce such patent

rights for the applicable product candidate will be shortened and our competitors may obtain approval to market competing products sooner.

As a result, our revenue from applicable products could be reduced.

Further, if this occurs, our competitors may be able to launch their

products earlier by taking advantage of our investment in development and clinical trials along with our clinical and preclinical data.

This could have a material adverse effect on our business and ability to achieve profitability.

property, including the rights to receive proceeds derived from such

intellectual property.

Patent terms may not be able to protect

our competitive position for an adequate period of time with respect to our current or future technologies or product candidates.

Patents have a limited

The term of individual patents and applications in-licensed to us and in our portfolio in the future depends upon the

legal term of patents in the countries in which they are obtained.

In most countries in which we would file, including the

United States, the patent term is 20 years from the earliest date of filing a non-provisional patent application.

Extensions of a patent term may be available, but there is no guarantee that such patents may be eligible for extension, or that we

would succeed in obtaining any particular extension, and no guarantee any such extension would confer a patent term for a sufficient

period of time to exclude others from commercializing product candidates similar or identical to ours.

In the United States,

the term of a patent may be eligible for patent term adjustment, which permits patent term restoration as compensation for delays

incurred at the USPTO during the patent prosecution process.

In addition, for patents that cover an FDA-approved drug, the Drug

Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”) permits a patent term

extension of up to five years beyond the expiration of the patent.

While the length of the patent term extension is related to

the length of time the drug is under regulatory review, patent term extension cannot extend the remaining term of a patent beyond a

total of 14 years from the date of product approval, and only one patent per approved drug — and only those

claims covering the approved drug, a method for using it or a method for manufacturing it — may be extended under

the Hatch-Waxman Act.

Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that

covers an approved drug.

In the future, if and when our products receive FDA approval or applicable approval in other jurisdictions,

we expect to apply for patent term extensions on any issued patents covering those products in the United States and other

jurisdictions where such extensions are available;

however, there is no guarantee that the applicable authorities, including the FDA

in the United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length

of such extensions.

An extension may not be granted because of, for example, failing to exercise due diligence during the testing

phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant

patents or otherwise failing to satisfy applicable requirements.

If a patent term extension is not granted or the term of any such

extension is less than requested, the period during which we can enforce such patent rights for the applicable product candidate

will be shortened and our competitors may obtain approval to market competing products sooner.

As a result, our revenue from

applicable products could be reduced.

Further, if this occurs, our competitors may be able to launch their products earlier by

taking advantage of our investment in development and clinical trials along with our clinical and preclinical data.

This could have

a material adverse effect on our business and ability to achieve profitability.

The life of a patent and the

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Changes in U.S.

patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our

ability to protect our current or any future technologies or product candidates.

Changes in either the patent

laws or interpretation of the patent laws in the United States or elsewhere could increase the uncertainties and costs surrounding the

prosecution of patent applications and the enforcement or defense of issued patents.

The United States has enacted and implemented wide-ranging

patent reform legislation.

On September 16, 2011, the Leahy-Smith America Invents Act (the “Leahy-Smith Act”) was signed into

law, which could increase the uncertainties and costs surrounding the prosecution of any potential future owned patents and our in-licensed

patents and the enforcement or defense of any potential future owned patents or our in-licensed patents.

The Leahy-Smith Act includes

a number of significant changes to U.S.

These include provisions that affect the way patent applications are prosecuted, redefine

prior art, may affect patent litigation and switch the U.S.

patent system from a “first-to-invent” system to a “first-to-file”

Under a first-to-file system, assuming the other requirements for patentability are met, the first inventor to file a patent application

generally will be entitled to the patent on an invention regardless of whether another inventor had made the invention earlier.

party that files a patent application in the USPTO after March 16, 2013, but before us, could therefore be awarded a patent covering an

patent law or the patent

law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our current

or any future technologies or product candidates.

Changes in either the

patent laws or interpretation of the patent laws in the United States or elsewhere could increase the uncertainties and costs

surrounding the prosecution of patent applications and the enforcement or defense of issued patents.

The United States has

enacted and implemented wide-ranging patent reform legislation.

On September 16, 2011, the Leahy-Smith America Invents Act (the

“Leahy-Smith Act”) was signed into law, which could increase the uncertainties and costs surrounding the prosecution of

any potential future owned patents and our in-licensed patents and the enforcement or defense of any potential future owned patents

or our in-licensed patents.

The Leahy-Smith Act includes a number of significant changes to U.S.

These include

provisions that affect the way patent applications are prosecuted, redefine prior art, may affect patent litigation and switch the

patent system from a “first-to-invent” system to a “first-to-file” system.

Under a first-to-file

system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be

entitled to the patent on an invention regardless of whether another inventor had made the invention earlier.

A third party that

files a patent application in the USPTO after March 16, 2013, but before us, could therefore be awarded a patent covering an

invention of ours even if we had made the invention before it was made by such third party.

This will require us to be cognizant of the

time from invention to filing of a patent application.

Since patent applications in the United States and most other countries are confidential

for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any

patent application related to our product candidates or (ii) invent any of the inventions claimed in our or our licensor’s patents

or patent applications.

The Leahy-Smith Act also allows third-party submission of prior art to the USPTO during patent prosecution and

sets forth additional procedures to challenge the validity of a patent by USPTO-administered post-grant proceedings, including derivation,

reexamination, inter partes review, post-grant review and interference proceedings.

The USPTO developed additional regulations

and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the

Leahy-Smith Act, and, in particular, the first-to-file provisions, became effective on March 16, 2013.

Accordingly, it is not clear what,

if any, impact the Leahy-Smith Act will have on the operation of our business.

The Leahy-Smith Act and its implementation could increase

the uncertainties and costs surrounding the prosecution of our in-licensed patents and any patent applications we may file in the future

and the enforcement or defense of our in-licensed patents and any patents we may own in the future, all of which could have a material

adverse impact on our business prospects and financial condition.

This will require us to be cognizant of

the time from invention to filing of a patent application.

Since patent applications in the United States and most other

countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were

the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions

claimed in our or our licensor’s patents or patent applications.

The Leahy-Smith Act also allows third-party submission of

prior art to the USPTO during patent prosecution and sets forth additional procedures to challenge the validity of a patent by

USPTO-administered post-grant proceedings, including derivation, reexamination, inter partes review, post-grant review and

interference proceedings.

The USPTO developed additional regulations and procedures to govern administration of the Leahy-Smith Act,

and many of the substantive changes to patent law associated with the Leahy-Smith Act, and, in particular, the first-to-file

provisions, became effective on March 16, 2013.

Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have

on the operation of our business.

The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding

the prosecution of our in-licensed patents and any patent applications we may file in the future and the enforcement or defense of

our in-licensed patents and any patents we may own in the future, all of which could have a material adverse impact on our business

prospects and financial condition.

As referenced above, for example,

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In addition, the patent positions of companies in the development and commercialization of pharmaceuticals are particularly uncertain.

Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights

of patent owners in certain situations.

Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the

rights of patent owners in certain situations.

This combination of events has created uncertainty with respect to the validity and enforceability

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that we may obtain or in-license in the future.

We or our licensors

may be subject to lawsuits or litigation to protect or enforce our in-licensed patents or other intellectual property, which could result

in substantial costs and liability and prevent us from commercializing our potential products.

Third parties may attempt

to invalidate our or our licensors’ intellectual property rights via procedures including but not limited to patent infringement

lawsuits, declaratory judgment actions, interferences, oppositions and inter partes reexamination proceedings before the USPTO,

courts and foreign patent offices or foreign courts.

An adverse determination in any such submission or proceeding could reduce the

scope or enforceability of, or invalidate, our licensor’s patent rights, which could adversely affect our competitive position.

Because of a lower evidentiary standard necessary to invalidate a patent claim in USPTO proceedings compared to the evidentiary standard

in United States federal courts, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold

a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.

Accordingly, a third party may attempt to use the USPTO procedures to invalidate our licensors’ patent claims that would not have

been invalidated if first challenged by the third party in a district court action.

Even if such rights are not directly challenged, disputes

could lead to the weakening of our or our licensors’ intellectual property rights.

Our defense against any attempt by third parties

to circumvent or invalidate our intellectual property rights could be costly to us, could require significant time and attention of our

management, and could have a material and adverse impact on our profitability, financial condition and prospects or ability to successfully

We or our licensors may be subject to lawsuits

or litigation to protect or enforce our in-licensed patents or other intellectual property, which could result in substantial costs and

liability and prevent us from commercializing our potential products.

Third parties may attempt to

invalidate our or our licensors’ intellectual property rights via procedures including but not limited to patent infringement lawsuits,

declaratory judgment actions, interferences, oppositions and inter partes reexamination proceedings before the USPTO, U.S.

and foreign patent offices or foreign courts.

An adverse determination in any such submission or proceeding could reduce the scope or

enforceability of, or invalidate, our licensor’s patent rights, which could adversely affect our competitive position.

a lower evidentiary standard necessary to invalidate a patent claim in USPTO proceedings compared to the evidentiary standard in United States

federal courts, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid

even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.

a third party may attempt to use the USPTO procedures to invalidate our licensors’ patent claims that would not have been invalidated

if first challenged by the third party in a district court action.

Even if such rights are not directly challenged, disputes could lead

to the weakening of our or our licensors’ intellectual property rights.

Our defense against any attempt by third parties to circumvent

or invalidate our intellectual property rights could be costly to us, could require significant time and attention of our management,

and could have a material and adverse impact on our profitability, financial condition and prospects or ability to successfully compete.

We or our licensors may find

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intellectual property rights.

We may not be able

to protect our intellectual property rights throughout the world, which could negatively impact our business.

We may not be able to protect our intellectual

property rights throughout the world, which could negatively impact our business.

Filing, prosecuting and defending

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In addition, the laws of some countries do not protect intellectual property rights to the same extent as laws in the United States.

Consequently,

we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling

or importing products made using our inventions in and into the United States or other countries.

Competitors or other third parties may

use our licensed technologies to develop their own products in jurisdictions where our licensors or we have not obtained patent protection

and, further, may export infringing product candidates to territories where our licensors or we may in the future have patent protections,

but enforcement is not as strong as that in the United States.

These product candidates may compete with our products, and our in-licensed

patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States,

or from selling or importing products made using our inventions in and into the United States or other countries.

Competitors or

other third parties may use our licensed technologies to develop their own products in jurisdictions where our licensors or we have not

obtained patent protection and, further, may export infringing product candidates to territories where our licensors or we may in the

future have patent protections, but enforcement is not as strong as that in the United States.

These product candidates may compete

with our products, and our in-licensed patents or other intellectual property rights may not be effective or sufficient to prevent them

from competing.

Many companies have encountered

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and our business prospects may be materially adversely affected.

Third parties may

initiate legal proceedings alleging that we are infringing, misappropriating or violating their intellectual property rights, or seeking

to invalidate or avoid our in-licensed patent rights, the outcome of which would be uncertain and could have a material adverse impact

on the success of our business.

Third parties may initiate legal proceedings

alleging that we are infringing, misappropriating or violating their intellectual property rights, or seeking to invalidate or avoid our

in-licensed patent rights, the outcome of which would be uncertain and could have a material adverse impact on the success of our business.

Our commercial success depends,

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asserted by third parties would be time consuming and could:

● result in invalidation, unenforceability, scope limitation, or other adverse judgments against our in-licensed

● result in invalidation, unenforceability, scope limitation,

or other adverse judgments against our in-licensed patents;

● result in costly litigation that may cause negative publicity;

● divert the time and attention of our technical personnel and management;

● divert the time and attention of our technical personnel

and management;

● cause development delays;

● prevent us from commercializing any of our product candidates until the asserted patent expires or is

held finally invalid or not infringed in a court of law;

● require us to develop non-infringing technology, which may not be possible on a cost-effective basis;

● subject us to substantial damages for infringement, which we may have to pay if a court decides that the

product candidate or technology at issue infringes on or violates the third party’s rights, and, if the court finds that the infringement

was willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees;

● require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable

terms, or at all, or which might be non-exclusive, which could result in our competitors gaining access to the same technology.

● prevent us from commercializing any of our product candidates

until the asserted patent expires or is held finally invalid or not infringed in a court of law;

● require us to develop non-infringing technology, which may

not be possible on a cost-effective basis;

● subject us to substantial damages for infringement, which

we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third party’s

rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages and the patent owner’s

attorneys’ fees;

● require us to enter into royalty or licensing agreements,

which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which could result in our competitors

gaining access to the same technology.

Some of our competitors may

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Numerous U.S.

issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are pursuing development

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that we may be subject

to claims of infringement of the patent rights of third parties.

Because patent applications can take many years to issue, there may also

be currently pending patent applications that may later result in issued patents that our technology or product candidates may infringe.

Further, we cannot guarantee that we are aware of all patents and patent applications potentially relevant to our technology or products.

We may not be aware of potentially relevant third-party patents or applications for several reasons.

foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are

pursuing development candidates.

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk

increases that we may be subject to claims of infringement of the patent rights of third parties.

Because patent applications can

take many years to issue, there may also be currently pending patent applications that may later result in issued patents that

our technology or product candidates may infringe.

Further, we cannot guarantee that we are aware of all patents and patent

applications potentially relevant to our technology or products.

We may not be aware of potentially relevant third-party patents or

applications for several reasons.

For example, U.S.

applications filed

before November 29, 2000, and certain U.S.

applications filed before November 29, 2000, and certain

applications filed after that date that will not be filed outside the U.S.

remain confidential

until a patent issues.

remain confidential until a patent issues.

Patent applications filed in the United States (after November 29, 2000) and elsewhere are published approximately

18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority

Therefore, patent applications covering our product candidates or platform technologies could have been filed by others without

our knowledge.

Any such patent application may have priority over our in-licensed patent applications or patents or any patent applications

that we may file in the future and any patents issued therefrom, which could require us to obtain rights to issued patents covering such

18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as

the priority date.

Therefore, patent applications covering our product candidates or platform technologies could have been filed by

others without our knowledge.

Any such patent application may have priority over our in-licensed patent applications or patents or

any patent applications that we may file in the future and any patents issued therefrom, which could require us to obtain rights to

issued patents covering such technologies.

Additionally, claims pending in patent applications that have been published can, subject

to certain limitations, be later amended in a manner that could cover our platform, our product candidates or the use of our

technologies.

Additionally, claims pending in patent applications that have been published can, subject to certain limitations, be later

amended in a manner that could cover our platform, our product candidates or the use of our technologies.

Although no third party has

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the USPTO and similar proceedings in jurisdictions outside of the United States such as opposition proceedings.

In some instances, we

may be required to indemnify our licensors for the costs associated with any such adversarial proceedings or litigation.

In some instances,

we may be required to indemnify our licensors for the costs associated with any such adversarial proceedings or litigation.

Third parties

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revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations.

Thus, it is possible that

one or more third parties will hold patent rights to which we will need a license, which may not be available on reasonable terms or at

If such third parties refuse to grant us a license to such patent rights on reasonable terms or at all, we may be required to expend

significant time and resources to redesign our technology, product candidates or the methods for manufacturing our product candidates,

or to develop or license replacement technology, all of which may not be commercially or technically feasible.

In such case, we may not

be able to market such technology or product candidates and may not be able to perform research and development or other activities covered

by these patents.

This could have a material adverse effect on our ability to commercialize our product candidates and our business and

financial condition.

Lastly, if our in-licensed

technology or products are found to infringe the intellectual property rights of third parties, these third parties may assert infringement

claims against our licensees and other parties with whom we have business relationships, and we may be required to indemnify those parties

for any damages they suffer as a result of these claims.

The claims may require us to initiate or defend protracted and costly litigation

on behalf of licensees and other parties regardless of the merits of these claims.

If any of these claims succeed, we may be forced to

pay damages on behalf of those parties or may be required to obtain licenses for the products they use.

Intellectual property

litigation may lead to unfavorable publicity that harms our reputation and causes the market price of our Common Stock to decline.

Thus, it is possible that one

or more third parties will hold patent rights to which we will need a license, which may not be available on reasonable terms or at all.

If such third parties refuse to grant us a license to such patent rights on reasonable terms or at all, we may be required to expend significant

time and resources to redesign our technology, product candidates or the methods for manufacturing our product candidates, or to develop

or license replacement technology, all of which may not be commercially or technically feasible.

In such case, we may not be able to market

such technology or product candidates and may not be able to perform research and development or other activities covered by these patents.

This could have a material adverse effect on our ability to commercialize our product candidates and our business and financial condition.

Lastly, if our

in-licensed technology or products are found to infringe the intellectual property rights of third parties, these third parties may

assert infringement claims against our licensees and other parties with whom we have business relationships, and we may be required

to indemnify those parties for any damages they suffer as a result of these claims.

The claims may require us to initiate or defend

protracted and costly litigation on behalf of licensees and other parties regardless of the merits of these claims.

If any of these

claims succeed, we may be forced to pay damages on behalf of those parties or may be required to obtain licenses for the products

Intellectual property litigation may lead

to unfavorable publicity that harms our reputation and causes the market price of our Common Stock to decline.

During the course of any intellectual

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for our future products, which could have a material adverse effect on our business.

Intellectual property

rights of third parties could adversely affect our ability to commercialize our current in-licensed technologies or future technologies

or product candidates, and we might be required to litigate or obtain licenses from third parties to develop or market our current in-licensed

technologies or future technologies or product candidates, which may not be available on commercially reasonable terms or at all.

Because the immunotherapy

landscape is still evolving, it is difficult to conclusively assess our freedom to operate without infringing, misappropriating, or violating

third-party rights.

The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and

the patent’s prosecution history.

Intellectual property rights of third parties

could adversely affect our ability to commercialize our current in-licensed technologies or future technologies or product candidates,

and we might be required to litigate or obtain licenses from third parties to develop or market our current in-licensed technologies or

future technologies or product candidates, which may not be available on commercially reasonable terms or at all.

Because the immunotherapy landscape

is still evolving, it is difficult to conclusively assess our freedom to operate without infringing, misappropriating, or violating third-party

The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s

prosecution history.

Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect.

For example, we may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether

a third-party’s pending application will issue with claims of relevant scope.

Also, our determination of the expiration date of

any patent in the United States or abroad that we consider relevant may be incorrect.

we may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a third-party’s

pending application will issue with claims of relevant scope.

Also, our determination of the expiration date of any patent in the United States

or abroad that we consider relevant may be incorrect.

There are numerous companies

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No assurances can be given that a license will be available on commercially reasonable terms, if at all.

Third-party intellectual property

right holders may also actively bring infringement, misappropriation, or other claims alleging violations of intellectual property rights

Third-party intellectual

property right holders may also actively bring infringement, misappropriation, or other claims alleging violations of intellectual

property rights against us.

We cannot guarantee that we will be able to successfully settle or otherwise resolve such claims.

If we are unable to successfully

settle future claims on terms acceptable to us, we may be required to engage in or to continue costly, unpredictable, and time-consuming

litigation and may be prevented from or experience substantial delays in marketing our product candidates.

If we fail in any such dispute,

in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing any of our current in-licensed

technologies or future technologies or product candidates that are held to be infringing, misappropriating, or otherwise violating third-party

intellectual property rights.

We might, if possible, also be forced to redesign current or future technologies or product candidates so

that we no longer infringe, misappropriate, or violate the third-party intellectual property rights.

Any of these events, even if we were

ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote

to our business, which could have a material adverse effect on our financial condition and results of operations.

we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patent protection for certain aspects of our current in-licensed technologies or future technologies and product candidates, we rely on trade secrets, including confidential and unpatented know-how, technology and other proprietary information, to maintain our competitive position and to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Elements of our product candidates, including processes for their preparation and manufacture, may involve proprietary know-how, information, or technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual property.

secrets and know-how can be difficult to protect.

We seek to protect trade secrets and confidential and unpatented know-how, in part,

by entering into non-disclosure and confidentiality agreements with parties who have access to such knowledge, such as our employees,

corporate collaborators, outside scientific collaborators, contract research organizations, contract manufacturers, consultants, advisors

and other third parties.

We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants

under which they are obligated to maintain confidentiality and to assign their inventions to us.

However, we cannot be certain that such

agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary

information will not be disclosed or that competitors will not otherwise gain access (such as through a cybersecurity breach) to our

trade secrets or independently develop substantially equivalent information and techniques.

Moreover, individuals with whom we have such

agreements may not comply with their terms.

Any of these parties may breach such agreements and disclose our proprietary information,

including our trade secrets, and we may not be able to obtain adequate remedies for any such breaches.

In addition, we take other appropriate

precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary technology by

third parties.

may also become involved in inventorship disputes relating to inventions and patents developed by our employees or consultants under

such agreements.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret, or securing title to an employee-

or consultant-developed invention if a dispute arises, is difficult, expensive and time-consuming, and the outcome is unpredictable.

In addition, some courts in the United States and certain foreign jurisdictions disfavor or are unwilling to protect trade secrets.

may need to share our proprietary information, including trade secrets, with future business partners, collaborators, contractors and

others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign

actors, and those affiliated with or controlled by state actors.

Further, if any of our trade secrets were to be lawfully obtained or

independently developed by a competitor, we would have no right to prevent that competitor from using the technology or information to

compete with us.

If, in the future, any of our trade secrets were to be disclosed to or independently developed by a competitor, our

competitive position would be materially and adversely harmed.

may be subject to claims that we or our employees or consultants have wrongfully used or disclosed alleged trade secrets or other proprietary

information of third parties, including our employees’ or consultants’ former employers or their clients.

are party to various contracts under which we are obligated to maintain the confidentiality of trade secrets or other confidential and

proprietary information of third parties, including our licensors and strategic partners.

In addition, many of our employees or consultants

and our licensors’ employees or consultants were previously employed at universities or biotechnology or biopharmaceutical companies,

including our competitors or potential competitors.

We may be subject to claims that one or more of these employees or consultants or

we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of third parties, including former

employers of our employees and consultants.

Litigation or arbitration may be necessary to defend against these claims.

If we fail in

defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel or may

be enjoined from using such intellectual property.

Any such proceedings and possible aftermath would likely divert significant resources

from our core business, including distracting our technical and management personnel from their normal responsibilities.

A loss of key

research personnel or their work product could limit our ability to commercialize, or prevent us from commercializing, our current in-licensed

technologies or future technologies or product candidates, which could materially harm our business.

Even if we are successful in defending

against any such claims, litigation or arbitration could result in substantial costs and could be a distraction to management.

licensors or we may be subject to claims challenging the inventorship of our in-licensed patents and other intellectual property.

or our licensors may be subject to claims that former employees, collaborators or other third parties have an interest in our in-licensed

patents as an inventor or co-inventor, or in our trade secrets or other intellectual property as a contributor to its development.

failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable.

disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign

laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties

involved in developing our product candidates or as a result of questions regarding co-ownership of potential joint inventions.

we or our licensors may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved

in developing our product candidates.

Litigation may be necessary to defend against these and other claims challenging inventorship or

our licensors’ ownership of our in-licensed patents, our trade secrets or other intellectual property.

Alternatively, or additionally,

we may enter into agreements to clarify the scope of our rights in such intellectual property.

If we or our licensors fail in defending

any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership

of, or right to use, intellectual property that is important to our product candidates.

Even if we are successful in defending against

such claims, litigation could result in substantial costs and be a distraction to management and other employees.

our licensors may have relied on third-party consultants or collaborators or on funds from third parties, such as the U.S.

such that our licensors are not the sole and exclusive owners of the patents we in-licensed.

If other third parties have ownership rights

or other rights to our in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market

competing products and technology.

This could have a material adverse effect on our competitive position, business, financial condition,

results of operations and prospects.

while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual

property to execute agreements assigning such intellectual property to us, we may be unsuccessful in obtaining such executed agreements

with each party who, in fact, conceives or develops intellectual property that we regard as our own.

The assignment of intellectual property

rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties,

or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.

could have a material adverse effect on our business, financial condition, results of operations and prospects.

and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements

imposed by government patent agencies, and our licensors’ patent protection could be reduced or eliminated for non-compliance with

these requirements.

maintenance fees, renewal fees, annuity fees and various other government fees on patents or patent applications will be due to be paid

to the USPTO and various government patent agencies outside of the United States over the lifetime of our in-licensed patents and any

are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or to continue costly,

unpredictable, and time-consuming litigation and may be prevented from or experience substantial delays in marketing our product

If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently

prohibited from commercializing any of our current in-licensed technologies or future technologies or product candidates that are

held to be infringing, misappropriating, or otherwise violating third-party intellectual property rights.

We might, if possible,

also be forced to redesign current or future technologies or product candidates so that we no longer infringe, misappropriate, or

violate the third-party intellectual property rights.

Any of these events, even if we were ultimately to prevail, could require us

to divert substantial financial and management resources that we would otherwise be able to devote to our business, which could have

a material adverse effect on our financial condition and results of operations.

If we are unable to protect the confidentiality

of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patent

protection for certain aspects of our current in-licensed technologies or future technologies and product candidates, we rely on trade

secrets, including confidential and unpatented know-how, technology and other proprietary information, to maintain our competitive position

and to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

of our product candidates, including processes for their preparation and manufacture, may involve proprietary know-how, information, or

technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual

Trade secrets and know-how

can be difficult to protect.

We seek to protect trade secrets and confidential and unpatented know-how, in part, by entering into non-disclosure

and confidentiality agreements with parties who have access to such knowledge, such as our employees, corporate collaborators, outside

scientific collaborators, contract research organizations, contract manufacturers, consultants, advisors and other third parties.

enter into confidentiality and invention or patent assignment agreements with our employees and consultants under which they are obligated

to maintain confidentiality and to assign their inventions to us.

However, we cannot be certain that such agreements have been entered

into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not

be disclosed or that competitors will not otherwise gain access (such as through a cybersecurity breach) to our trade secrets or independently

develop substantially equivalent information and techniques.

Moreover, individuals with whom we have such agreements may not comply with

Any of these parties may breach such agreements and disclose our proprietary information, including our trade secrets, and

we may not be able to obtain adequate remedies for any such breaches.

In addition, we take other appropriate precautions, such as physical

and technological security measures, to guard against misappropriation of our proprietary technology by third parties.

We may also become involved

in inventorship disputes relating to inventions and patents developed by our employees or consultants under such agreements.

a claim that a party illegally disclosed or misappropriated a trade secret, or securing title to an employee- or consultant-developed

invention if a dispute arises, is difficult, expensive and time-consuming, and the outcome is unpredictable.

In addition, some courts

in the United States and certain foreign jurisdictions disfavor or are unwilling to protect trade secrets.

We may need to share our

proprietary information, including trade secrets, with future business partners, collaborators, contractors and others located in countries

at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated

with or controlled by state actors.

Further, if any of our trade secrets were to be lawfully obtained or independently developed by a

competitor, we would have no right to prevent that competitor from using the technology or information to compete with us.

future, any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be

materially and adversely harmed.

We may be subject to claims that we or our

employees or consultants have wrongfully used or disclosed alleged trade secrets or other proprietary information of third parties, including

our employees’ or consultants’ former employers or their clients.

We are party to various

contracts under which we are obligated to maintain the confidentiality of trade secrets or other confidential and proprietary

information of third parties, including our licensors and strategic partners.

In addition, many of our employees or consultants and

our licensors’ employees or consultants were previously employed at universities or biotechnology or biopharmaceutical

companies, including our competitors or potential competitors.

We may be subject to claims that one or more of these employees or

consultants or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of third parties,

including former employers of our employees and consultants.

Litigation or arbitration may be necessary to defend against these

If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property

rights or personnel or may be enjoined from using such intellectual property.

Any such proceedings and possible aftermath would

likely divert significant resources from our core business, including distracting our technical and management personnel from their

normal responsibilities.

A loss of key research personnel or their work product could limit our ability to commercialize, or prevent

us from commercializing, our current in-licensed technologies or future technologies or product candidates, which could materially

harm our business.

Even if we are successful in defending against any such claims, litigation or arbitration could result in

substantial costs and could be a distraction to management.

Our licensors or we may be subject to claims

challenging the inventorship of our in-licensed patents and other intellectual property.

We or our licensors may be

subject to claims that former employees, collaborators or other third parties have an interest in our in-licensed patents as an inventor

or co-inventor, or in our trade secrets or other intellectual property as a contributor to its development.

The failure to name the proper

inventors on a patent application can result in the patents issuing thereon being unenforceable.

Inventorship disputes may arise from

conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals

are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our

product candidates or as a result of questions regarding co-ownership of potential joint inventions.

For example, we or our licensors

may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved in developing our

product candidates.

Litigation may be necessary to defend against these and other claims challenging inventorship or our licensors’

ownership of our in-licensed patents, our trade secrets or other intellectual property.

Alternatively, or additionally, we may enter into

agreements to clarify the scope of our rights in such intellectual property.

If we or our licensors fail in defending any such claims,

in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to

use, intellectual property that is important to our product candidates.

Even if we are successful in defending against such claims, litigation

could result in substantial costs and be a distraction to management and other employees.

Also, our licensors may have

relied on third-party consultants or collaborators or on funds from third parties, such as the U.S.

government, such that our licensors

are not the sole and exclusive owners of the patents we in-licensed.

If other third parties have ownership rights or other rights to our

in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products

and technology.

This could have a material adverse effect on our competitive position, business, financial condition, results of operations

and prospects.

Further, while it is our policy

to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements

assigning such intellectual property to us, we may be unsuccessful in obtaining such executed agreements with each party who, in fact,

conceives or develops intellectual property that we regard as our own.

The assignment of intellectual property rights may not be self-executing,

or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may

bring against us, to determine the ownership of what we regard as our intellectual property.

Such claims could have a material adverse

effect on our business, financial condition, results of operations and prospects.

Obtaining and maintaining patent protection

depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies,

and our licensors’ patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance

fees, renewal fees, annuity fees and various other government fees on patents or patent applications will be due to be paid to the

USPTO and various government patent agencies outside of the United States over the lifetime of our in-licensed patents and any

patent rights we may own or in-license in the future.

The USPTO and various non-U.S.

patent offices require compliance with several procedural,

documentary, fee payment and other similar provisions during the patent application process.

We employ reputable law firms and other

professionals to help us comply with these requirements, and we are also dependent on our licensors to take the necessary action to comply

with these requirements with respect to our in-licensed intellectual property.

In many cases, an inadvertent lapse, including due to

the effect of the COVID-19 pandemic on us, our patent counsel or other applicable patent maintenance vendors, can be cured by payment

of a late fee or by other means in accordance with the applicable rules.

There are situations, however, in which non-compliance can result

in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure

to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal

In such an event, potential competitors might be able to enter the market with similar or identical product candidates or

platforms, which could have a material adverse effect on our business prospects and financial condition.

our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest

and our business may be adversely affected.

use and will continue to use registered and/or unregistered trademarks or trade names to brand and market ourselves and our products.

Our trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks.

We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we use

for name recognition by potential collaborators or customers in our markets of interest.

At times, competitors may adopt trade names

or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion.

there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate

variations of our registered or unregistered trademarks or trade names.

Over the long term, if we are unable to establish name recognition

based on our trademarks and trade names, we may not be able to compete effectively, and our business may be materially adversely affected.

may also license our trademarks and trade names to third parties, such as distributors.

Though these license agreements may provide guidelines

for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and trade names by our licensees

may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.

property rights do not necessarily address all potential threats to our business.

degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations

and may not adequately protect our business.

patent offices require compliance with

several procedural, documentary, fee payment and other similar provisions during the patent application process.

We employ reputable

law firms and other professionals to help us comply with these requirements, and we are also dependent on our licensors to take the

necessary action to comply with these requirements with respect to our in-licensed intellectual property.

In many cases, an

inadvertent lapse, by our patent counsel or other applicable patent maintenance vendors, can be cured by payment of a late fee or by

other means in accordance with the applicable rules.

There are situations, however, in which non-compliance can result in

abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant

jurisdiction.

Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not

limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly

legalize and submit formal documents.

In such an event, potential competitors might be able to enter the market with similar or

identical product candidates or platforms, which could have a material adverse effect on our business prospects and financial

If our trademarks and trade names are not

adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

We use and will continue to

use registered and/or unregistered trademarks or trade names to brand and market ourselves and our products.

Our trademarks or trade names

may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks.

We may not be able to protect

our rights to these trademarks and trade names or may be forced to stop using these names, which we use for name recognition by potential

collaborators or customers in our markets of interest.

At times, competitors may adopt trade names or trademarks similar to ours, thereby

impeding our ability to build brand identity and possibly leading to market confusion.

In addition, there could be potential trade name

or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or

unregistered trademarks or trade names.

Over the long term, if we are unable to establish name recognition based on our trademarks and

trade names, we may not be able to compete effectively, and our business may be materially adversely affected.

We may also license our trademarks

and trade names to third parties, such as distributors.

Though these license agreements may provide guidelines for how our trademarks

and trade names may be used, a breach of these agreements or misuse of our trademarks and trade names by our licensees may jeopardize

our rights in or diminish the goodwill associated with our trademarks and trade names.

Intellectual property rights do not necessarily

address all potential threats to our business.

The degree of future protection

afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately

protect our business.

The following examples are illustrative:

may be able to create T-cell therapies that are similar to our product candidates, but that

are not covered by the claims of any patents that we own, license or control;

our licensors, or any strategic collaborators might not have been the first to make the inventions

covered by the issued patents or pending patent applications that we own, license or control

● others may be able to create T-cell therapies that are similar

to our product candidates, but that are not covered by the claims of any patents that we own, license or control;

● we, our licensors, or any strategic collaborators might not

have been the first to make the inventions covered by the issued patents or pending patent applications that we own, license or control

or may own, license or control in the future;

or our licensors might not have been the first to file patent applications covering certain

of our in-licensed inventions;

may independently develop the same, similar, or alternative technologies without infringing,

misappropriating, or violating our in-licensed intellectual property rights;

is possible that any patent applications we may file in the future will not lead to issued

patents that we in-license, control or may own in the future may not provide us with any

competitive advantages, or may be narrowed or held invalid or unenforceable, including as

a result of legal challenges;

competitors might conduct research and development activities in the United States and other

countries that provide a safe harbor from patent infringement claims for certain research

and development activities, as well as in countries where we do not have patent rights, and

may then use the information learned from such activities to develop competitive products

for sale in our major commercial markets;

may choose not to file a patent application in order to maintain certain trade secrets or

know-how, and a third party may subsequently file a patent application covering such trade

secrets or know-how;

patents of others may have an adverse effect on our business.

any of these events occur, they could have a material adverse impact on our business, financial condition, results of operations and

any negative data were to arise with respect to the use of our licensed technology in territories where such technology is licensed to

a third party, it could negatively affect our ability to develop our product candidates in territories where we license such technology.

to the Syracuse License Agreement, Eureka licensed to JW Therapeutics (Cayman) Co.

Ltd (“JW”) the rights to use ARTEMIS ®

technology in connection with CD19 and CD22 in Greater China and the ASEAN countries (the “JW Territory”).

The JW License

allows JW to conduct research and development (but not commercialize) in the U.S., and for Eureka and Estrella to conduct research and

development (but not commercialize) in the JW Territory.

● we or our licensors might not have been the first to file

patent applications covering certain of our in-licensed inventions;

● others may independently develop the same, similar, or alternative

technologies without infringing, misappropriating, or violating our in-licensed intellectual property rights;

● it is possible that any patent applications we may file in

the future will not lead to issued patents;

● issued patents that we in-license, control or may own in

the future may not provide us with any competitive advantages, or may be narrowed or held invalid or unenforceable, including as a result

of legal challenges;

● our competitors might conduct research and development activities

in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development

activities, as well as in countries where we do not have patent rights, and may then use the information learned from such activities

to develop competitive products for sale in our major commercial markets;

● we may choose not to file a patent application in order to

maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such trade secrets

● the patents of others may have an adverse effect on our business.

Should any of these events

occur, they could have a material adverse impact on our business, financial condition, results of operations and prospects.

If any negative data were to arise with

respect to the use of our licensed technology in territories where such technology is licensed to a third party, it could negatively affect

our ability to develop our product candidates in territories where we license such technology.

Pursuant to the Syracuse License

Agreement, Eureka licensed to JW Therapeutics (Cayman) Co.

Ltd (“JW”) the rights to use ARTEMIS ® technology

in connection with CD19 and CD22 in Greater China and the ASEAN countries (the “JW Territory”).

The JW License allows JW to

conduct research and development (but not commercialize) in the U.S., and for Eureka and Estrella to conduct research and development

(but not commercialize) in the JW Territory.

Accordingly, we may experience conflicts or have potential intellectual property-related

disputes with JW in connection with the development of our product candidates.

Additionally, if any negative data were to arise from

the JW Territory with respect to the use of ARTEMIS ® technology in the JW Territory, it could negatively affect our ability

Additionally, if any negative data were to arise from the

JW Territory with respect to the use of ARTEMIS ® technology in the JW Territory, it could negatively affect our ability

to develop our product candidates and adversely impact our success in the Licensed Territory.

Related to Government Regulation

development includes a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be

predictive of future trial results.

of our current product candidates are in preclinical or clinical development and their risk of failure is high.

It is impossible to predict

when or if our candidates or any potential future product candidates will prove effective in humans or will receive regulatory approval.

Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical studies

for our current product candidates and then conduct extensive clinical trials to demonstrate the safety, purity and potency, or efficacy

of that product candidate in humans.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently

Failure can occur at any time during the development process.

The results of preclinical studies and clinical trials of any

of our current or potential future product candidates may not be predictive of the results of later-stage clinical trials.

Product candidates

in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical

studies and initial clinical trials.

A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced

clinical trials due to lack of efficacy or safety profiles, notwithstanding promising results in earlier trials.

may experience delays in completing our preclinical studies and initiating or completing our clinical studies.

We do not know whether

planned preclinical studies and clinical trials will be completed on schedule or at all, or whether planned clinical trials will begin

on time, need to be redesigned, enroll patients on time or be completed on schedule, if at all.

Our development programs may be delayed

for a variety of reasons, including delays related to:

FDA or other regulatory authorities requiring us to submit additional data or imposing other

requirements before permitting us to initiate a clinical trial;

regulatory approval to commence a clinical trial;

agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of

which can be subject to extensive negotiation and may vary significantly among different

CROs and clinical trial sites;

IRB or ethics committee approval at each clinical trial site;

suitable patients to participate in a clinical trial;

patients complete a clinical trial or return for post-treatment follow-up;

trial sites deviating from trial protocol or dropping out of a trial;

FDA placing the clinical trial on hold;

failing to enroll or remain in our trial at the rate we expect;

choosing an alternative treatment for the indication for which we are developing or other

product candidates, or participating in competing clinical trials;

of adequate funding to continue the clinical trial;

experiencing severe or unexpected drug-related adverse events;

changes to our manufacturing process that may be necessary or desired;

new clinical trial sites;

● manufacturing

sufficient quantities of our product candidates for use in clinical trials.

we expect to rely on our CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we expect

to enter into agreements governing their committed activities, we have limited influence over their actual performance.

could encounter delays if prescribing physicians encounter unresolved ethical issues associated with enrolling patients in clinical trials

of our current or potential future product candidates in lieu of prescribing existing treatments that have established safety and efficacy

Further, a clinical trial may be suspended or terminated by us, our collaborators, the IRBs of the institutions in which such

trials are being conducted, the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities due to a number

of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection

of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold,

unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug or therapeutic biologic, changes

in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive cash

or equity compensation in connection with such services.

If these relationships and any related compensation result in perceived or actual

conflicts of interest, or a regulatory authority concludes that the financial relationship may have affected the interpretation of the

trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial

itself may be jeopardized, which could result in the delay or rejection of the marketing application we submit.

Any such delay or rejection

could prevent or delay us from commercializing our current or future product candidates.

we experience delays in the completion of, or termination of, any clinical trial of any of our current or potential future product candidates,

the commercial prospects of such product candidate will be harmed, and our ability to generate product revenue from such product candidates

will be delayed.

In addition, any delays in completing our clinical trials will increase our costs, slow our product development and

approval process and jeopardize our ability to commence product sales and generate revenue.

Any of these occurrences may have a material

adverse effect on our business, financial condition, results of operations and prospects.

In addition, many of the factors that cause,

or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval

of our current or potential future product candidates.

may be unable to obtain U.S.

or foreign regulatory approval and, as a result, be unable to commercialize our current or potential future

product candidates.

current and any potential future product candidates are subject to extensive governmental regulations relating to, among other things,

research, testing, development, manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising

and promotion, pricing, marketing, and distribution of therapeutic biologics.

Rigorous preclinical testing and clinical trials and an

extensive regulatory approval process are required to be successfully completed in the U.S.

and in many foreign jurisdictions before

a new drug or therapeutic biologic can be marketed in the U.S.

Risks Related to Government Regulation

Clinical development includes a lengthy

and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.

All of our current product

candidates are in preclinical or clinical development and their risk of failure is high.

It is impossible to predict when or if our candidates

or any potential future product candidates will prove effective in humans or will receive regulatory approval.

Before obtaining marketing

approval from regulatory authorities for the sale of any product candidate, we must complete preclinical studies for our current product

candidates and then conduct extensive clinical trials to demonstrate the safety, purity and potency, or efficacy of that product candidate

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.

occur at any time during the development process.

The results of preclinical studies and clinical trials of any of our current or potential

future product candidates may not be predictive of the results of later-stage clinical trials.

Product candidates in later stages of clinical

trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical

A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack

of efficacy or safety profiles, notwithstanding promising results in earlier trials.

We may experience delays in

completing our preclinical studies and initiating or completing our clinical studies.

We do not know whether planned preclinical studies

and clinical trials will be completed on schedule or at all, or whether planned clinical trials will begin on time, need to be redesigned,

enroll patients on time or be completed on schedule, if at all.

Our development programs may be delayed for a variety of reasons, including

delays related to:

● the FDA or other regulatory authorities requiring us to submit

additional data or imposing other requirements before permitting us to initiate a clinical trial;

● obtaining regulatory approval to commence a clinical trial;

● reaching agreement on acceptable terms with prospective CROs

and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs

and clinical trial sites;

● obtaining IRB or ethics committee approval at each clinical

● recruiting suitable patients to participate in a clinical

● having patients complete a clinical trial or return for post-treatment

● clinical trial sites deviating from trial protocol or dropping

out of a trial;

● the FDA placing the clinical trial on hold;

● subjects failing to enroll or remain in our trial at the

rate we expect;

● subjects choosing an alternative treatment for the indication

for which we are developing or other product candidates, or participating in competing clinical trials;

● lack of adequate funding to continue the clinical trial;

● subjects experiencing severe or unexpected drug-related adverse

● any changes to our manufacturing process that may be necessary

● adding new clinical trial sites;

● manufacturing sufficient quantities of our product candidates

for use in clinical trials.

Furthermore, we expect to rely

on our CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we expect to enter into

agreements governing their committed activities, we have limited influence over their actual performance.

We could encounter delays if

prescribing physicians encounter unresolved ethical issues associated with enrolling patients in clinical trials of our current or potential

future product candidates in lieu of prescribing existing treatments that have established safety and efficacy profiles.

Further, a clinical

trial may be suspended or terminated by us, our collaborators, the IRBs of the institutions in which such trials are being conducted,

the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities due to a number of factors, including failure

to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations

or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse

side effects, failure to demonstrate a benefit from using a drug or therapeutic biologic, changes in governmental regulations or administrative

actions or lack of adequate funding to continue the clinical trial.

Moreover, principal investigators

for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive cash or equity compensation

in connection with such services.

If these relationships and any related compensation result in perceived or actual conflicts of interest,

or a regulatory authority concludes that the financial relationship may have affected the interpretation of the trial, the integrity of

the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized,

which could result in the delay or rejection of the marketing application we submit.

Any such delay or rejection could prevent or delay

us from commercializing our current or future product candidates.

If we experience delays in

the completion of, or termination of, any clinical trial of any of our current or potential future product candidates, the commercial

prospects of such product candidate will be harmed, and our ability to generate product revenue from such product candidates will be delayed.

In addition, any delays in completing our clinical trials will increase our costs, slow our product development and approval process and

jeopardize our ability to commence product sales and generate revenue.

Any of these occurrences may have a material adverse effect on

our business, financial condition, results of operations and prospects.

In addition, many of the factors that cause, or lead to, a delay

in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our current or potential

future product candidates.

We may be unable to obtain U.S.

foreign regulatory approval and, as a result, be unable to commercialize our current or potential future product candidates.

Our current and any potential

future product candidates are subject to extensive governmental regulations relating to, among other things, research, testing, development,

manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing,

marketing, and distribution of therapeutic biologics.

Rigorous preclinical testing and clinical trials and an extensive regulatory approval

process are required to be successfully completed in the U.S.

and in many foreign jurisdictions before a new drug or therapeutic

biologic can be marketed in the U.S.

or foreign jurisdictions.

Satisfaction of these and other regulatory requirements

is costly, time-consuming, uncertain and subject to unanticipated delays.

It is possible that none of the product candidates we may develop

will obtain the regulatory approvals necessary for us or our potential future collaborators to begin selling them.

time required to obtain FDA and other approvals is unpredictable but typically takes many years following the commencement of clinical

trials, depending upon the type, complexity, and novelty of the product candidate.

The standards that the FDA and its foreign counterparts

use when regulating us require judgment and can change, which makes it difficult to predict with certainty how they will be applied.

Any analysis we perform of data from preclinical and clinical activities is subject to confirmation and interpretation by regulatory

authorities, which could delay, limit or prevent regulatory approval.

We may also encounter unexpected delays or increased costs due

to new government regulations, for example, from future legislation or administrative action, or from changes in regulatory policy during

the period of product development, clinical trials and regulatory review in the United States and other jurisdictions.

It is impossible

to predict whether legislative changes will be enacted, or whether FDA or foreign regulations, guidance or interpretations will be changed,

or what the impact of such changes, if any, may be.

delay or failure in obtaining required approvals could have a material adverse effect on our ability to generate revenue from the particular

product candidate for which we are seeking approval.

Further, we and our potential future collaborators may never receive approval to

market and commercialize any product candidate.

Even if we or a potential future collaborator obtains regulatory approval, the approval

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.

a product obtains regulatory approval, numerous post approval requirements apply, including periodic monitoring and reporting obligations,

review of promotional material, reports on ongoing clinical trials and adverse events and inspections of manufacturing facilities.

addition, material changes to approved products, including any changes to the manufacturing process or labeling, require further review

by the appropriate authorities before marketing.

Approvals may also be withdrawn or revoked due to safety, effectiveness, or potency

concerns, including as a result of adverse events reported in patients or ongoing clinical trials, or failure to comply with cGMP.

addition to revocation or withdrawal of approvals, we and our partners may be subject to warnings, fines, recalls, criminal prosecution

or other sanctions if we fail to comply with regulatory requirements.

If we or our partners are unable to obtain or maintain regulatory

approvals for our products and product candidates, our business, financial position, results of operations and future growth prospects

will be negatively impacted and we or our partners may be subject to sanctions.

If any of our product candidates prove to be ineffective,

unsafe, or commercially unviable, we may have to re-engineer our current or potential future product candidates, and our entire pipeline

could have little, if any, value, which could require us to change our focus and approach to product candidate discovery and therapeutic

development, which would have a material adverse effect on our business, financial condition, results of operations and prospects.

will also be subject to numerous foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing

and marketing authorization, pricing, and third-party reimbursement.

The foreign regulatory approval process varies among countries and

may include all of the risks associated with FDA approval described above as well as risks attributable to the satisfaction of local

regulations in foreign jurisdictions.

Moreover, the time required to obtain approval in a foreign jurisdiction may differ from that required

to obtain FDA approval.

and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining

regulatory approval of our product candidates in other jurisdictions.

we succeed in developing any products, we intend to market them in the United States, as well as the European Union and other foreign

jurisdictions.

In order to market and sell our products in other jurisdictions, we must obtain separate marketing approvals and comply

with numerous and varying regulatory requirements.

and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or

maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may

have a negative effect on the regulatory approval process in others.

For example, even if the FDA grants marketing approval of a product

candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of

the product candidate in those countries.

Approval procedures vary among jurisdictions and can involve requirements and administrative

review periods different from those in the United States, including additional preclinical studies or clinical trials as clinical trials

conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.

In many jurisdictions outside the

United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction.

cases, the price that we intend to charge for our products is also subject to approval.

foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and

costs for us and could delay or prevent the introduction of our products in certain countries.

If we or any partner we work with fails

to comply with the regulatory requirements in international markets or fails to receive applicable marketing approvals, our target market

will be reduced, and our ability to realize the full market potential of our product candidates will be harmed.

the past, Eureka has conducted proof-of-concept studies outside of the United States and collaborated with third parties on investigator-initiated

studies (“IIS”).

We may in the future conduct certain of our clinical trials for our product candidates outside of the United

States or use data from proof of concept or IIS studies from outside the United States to support our IND applications and design clinical

development programs.

However, the FDA and other foreign equivalents may not accept data from such trials, in which case our development

plans will be delayed, which could materially harm our business.

the past, Eureka has conducted proof-of-concept studies outside of the United States and collaborated with third parties on investigator-initiated

studies (“IIS”).

We may in the future conduct certain of our clinical trials for our product candidates outside of the United

States or use data from proof of concept or IIS studies from outside the United States to support our IND applications and design clinical

development programs.

Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data

is subject to certain conditions imposed by the FDA.

In cases where data from foreign clinical trials are intended to serve as the basis

for marketing approval in the United States, the FDA will not approve the application on the basis of foreign data alone unless (i) those

Satisfaction of these and other regulatory requirements is costly,

time-consuming, uncertain and subject to unanticipated delays.

It is possible that none of the product candidates we may develop will

obtain the regulatory approvals necessary for us or our potential future collaborators to begin selling them.

The time required to obtain

FDA and other approvals is unpredictable but typically takes many years following the commencement of clinical trials, depending

upon the type, complexity, and novelty of the product candidate.

The standards that the FDA and its foreign counterparts use when regulating

us require judgment and can change, which makes it difficult to predict with certainty how they will be applied.

Any analysis we perform

of data from preclinical and clinical activities is subject to confirmation and interpretation by regulatory authorities, which could

delay, limit or prevent regulatory approval.

We may also encounter unexpected delays or increased costs due to new government regulations,

for example, from future legislation or administrative action, or from changes in regulatory policy during the period of product development,

clinical trials and regulatory review in the United States and other jurisdictions.

It is impossible to predict whether legislative

changes will be enacted, or whether FDA or foreign regulations, guidance or interpretations will be changed, or what the impact of such

changes, if any, may be.

Any delay or failure in obtaining

required approvals could have a material adverse effect on our ability to generate revenue from the particular product candidate for which

we are seeking approval.

Further, we and our potential future collaborators may never receive approval to market and commercialize any

product candidate.

Even if we or a potential future collaborator obtains regulatory approval, the approval 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.

Once a product obtains regulatory

approval, numerous post approval requirements apply, including periodic monitoring and reporting obligations, review of promotional material,

reports on ongoing clinical trials and adverse events and inspections of manufacturing facilities.

In addition, material changes to approved

products, including any changes to the manufacturing process or labeling, require further review by the appropriate authorities before

Approvals may also be withdrawn or revoked due to safety, effectiveness, or potency concerns, including as a result of adverse

events reported in patients or ongoing clinical trials, or failure to comply with cGMP.

In addition to revocation or withdrawal of

approvals, we and our partners may be subject to warnings, fines, recalls, criminal prosecution or other sanctions if we fail to comply

with regulatory requirements.

If we or our partners are unable to obtain or maintain regulatory approvals for our products and product

candidates, our business, financial position, results of operations and future growth prospects will be negatively impacted and we or

our partners may be subject to sanctions.

If any of our product candidates prove to be ineffective, unsafe, or commercially unviable,

we may have to re-engineer our current or potential future product candidates, and our entire pipeline could have little, if any, value,

which could require us to change our focus and approach to product candidate discovery and therapeutic development, which would have a

material adverse effect on our business, financial condition, results of operations and prospects.

We will also be subject to

numerous foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing and marketing authorization,

pricing, and third-party reimbursement.

The foreign regulatory approval process varies among countries and may include all of the risks

associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions.

Moreover, the time required to obtain approval in a foreign jurisdiction may differ from that required to obtain FDA approval.

Obtaining and maintaining regulatory approval

of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product

candidates in other jurisdictions.

If we succeed in developing

any products, we intend to market them in the United States, as well as the European Union and other foreign jurisdictions.

to market and sell our products in other jurisdictions, we must obtain separate marketing approvals and comply with numerous and varying

regulatory requirements.

Obtaining and maintaining regulatory

approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval

in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the

regulatory approval process in others.

For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory

authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.

Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the

United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not

be accepted by regulatory authorities in other jurisdictions.

In many jurisdictions outside the United States, a product candidate

must be approved for reimbursement before it can be approved for sale in that jurisdiction.

In some cases, the price that we intend to

charge for our products is also subject to approval.

Obtaining foreign regulatory

approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could

delay or prevent the introduction of our products in certain countries.

If we or any partner we work with fails to comply with the regulatory

requirements in international markets or fails to receive applicable marketing approvals, our target market will be reduced, and our ability

to realize the full market potential of our product candidates will be harmed.

In the past, Eureka has conducted proof-of-concept

studies outside of the United States and collaborated with third parties on investigator-initiated studies (“IIS”).

may in the future conduct certain of our clinical trials for our product candidates outside of the United States or use data from

proof of concept or IIS studies from outside the United States to support our IND applications and design clinical development programs.

However, the FDA and other foreign equivalents may not accept data from such trials, in which case our development plans will be delayed,

which could materially harm our business.

In the past, Eureka has conducted

proof-of-concept studies outside of the United States and collaborated with third parties on investigator-initiated studies (“IIS”).

We may in the future conduct certain of our clinical trials for our product candidates outside of the United States or use data from

proof of concept or IIS studies from outside the United States to support our IND applications and design clinical development programs.

Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to

certain conditions imposed by the FDA.

In cases where data from foreign clinical trials are intended to serve as the basis for marketing

approval in the United States, the FDA will not approve the application on the basis of foreign data alone unless (i) those

data are applicable to the U.S.

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medical practice;

(ii) the studies were performed by clinical investigators of recognized

and (iii) the data are considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such

an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.

that are conducted only at sites outside of the United States and not subject to an IND, the FDA requires the clinical trial to have

been conducted in accordance with GCPs, and the FDA must be able to validate the data from the clinical trial through an on-site inspection

if it deems such inspection necessary.

For such studies not subject to an IND, the FDA generally does not provide advance comment on

the clinical protocols for the studies, and therefore there is an additional potential risk that the FDA could determine that the study

design or protocol for a non-U.S.

clinical trial was inadequate, which could require us to conduct additional clinical trials.

can be no assurance the FDA will accept data from clinical trials conducted outside of the United States.

If the FDA does not accept

data from our clinical trials of our product candidates, it would likely result in the need for additional clinical trials, which would

be costly and time consuming and delay or permanently halt our development of our product candidates.

foreign regulatory bodies have similar approval requirements.

In addition, such foreign trials would be subject to the applicable local

laws of the foreign jurisdictions where the trials are conducted.

(ii) the studies were performed by clinical investigators

of recognized competence;

and (iii) the data are considered valid without the need for an on-site inspection by the FDA or, if the

FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate

For studies that are conducted only at sites outside of the United States and not subject to an IND, the FDA requires the

clinical trial to have been conducted in accordance with GCPs, and the FDA must be able to validate the data from the clinical trial through

an on-site inspection if it deems such inspection necessary.

For such studies not subject to an IND, the FDA generally does not provide

advance comment on the clinical protocols for the studies, and therefore there is an additional potential risk that the FDA could determine

that the study design or protocol for a non-U.S.

clinical trial was inadequate, which could require us to conduct additional clinical

There can be no assurance the FDA will accept data from clinical trials conducted outside of the United States.

does not accept data from our clinical trials of our product candidates, it would likely result in the need for additional clinical trials,

which would be costly and time consuming and delay or permanently halt our development of our product candidates.

Many foreign regulatory

bodies have similar approval requirements.

In addition, such foreign trials would be subject to the applicable local laws of the

foreign jurisdictions where the trials are conducted.

There can be no assurance that the FDA or any similar foreign regulatory

authority will accept data from trials conducted outside of the United States or the applicable jurisdiction.

If the FDA or any similar

foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and

time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval or clearance

for commercialization in the applicable jurisdiction.

clinical trials outside of the United States also exposes us to additional risks, including risks associated with:

foreign regulatory requirements;

exchange fluctuations;

with foreign manufacturing, customs, shipment and storage requirements;

differences in medical practice and clinical research;

protection of intellectual property in some countries.

if we receive regulatory approval for any of our current or potential future product candidates, we will be subject to ongoing regulatory

obligations and continued regulatory review, which may result in significant additional expense.

Additionally, our current or potential

future product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject

to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

regulatory approvals that we or potential future collaborators obtain for any of our current or potential future product candidates will

be subject to limitations on the approved indicated uses for which a product may be marketed or may be subject to the conditions of approval,

or contain requirements for potentially costly post-marketing testing, and surveillance to monitor the safety and efficacy of such product

In addition, if the FDA or any other regulatory authority approves any of our current or potential future product candidates,

the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, import, export, advertising, promotion

and recordkeeping for such product will be subject to extensive and ongoing regulatory requirements.

These requirements include submissions

of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP and good clinical

practices for any clinical trials that we conduct post-approval.

In addition, manufacturers and manufacturers’ facilities are required

to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing

procedures conform to cGMP and cGTP regulations and applicable product tracking and tracing requirements.

discovery of previously unknown problems with a product candidate, including adverse events of unanticipated severity or frequency, or

with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among

other things:

● restrictions

on the marketing or manufacturing of the product candidate, withdrawal of the product candidate

from the market or voluntary or mandatory product recalls;

warning letters, untitled letters or holds on clinical trials;

by the FDA to approve pending applications or supplements to approved applications filed

by us or our strategic collaborators;

or revocation of product approvals;

of any ongoing clinical trials;

seizure or detention or refusal to permit the import or export of products;

● injunctions

or the imposition of civil or criminal penalties or monetary fines.

occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue.

FDA has the authority to require a risk evaluation and mitigation strategy (“REMS”) as part of a biologics license application

(“BLA”) or after approval, which may impose further requirements or restrictions on the distribution or use of an approved

product, such as limiting prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment

to patients who meet certain safe-use criteria and requiring treated patients to enroll in a registry.

the FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.

Products may be

promoted only for the approved indications and in accordance with the provisions of the approved label.

While physicians may prescribe,

in their independent professional medical judgment, products for off-label uses as the FDA does not regulate the behavior of physicians

in their choice of drug treatments, the FDA does restrict a manufacturer’s communications on the subject of off-label use of their

Companies may only share truthful and not misleading information that is otherwise consistent with a product’s FDA approved

The FDA and other authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses and a company

that is found to have improperly promoted off-label uses may be subject to significant liability including, among other things, adverse

publicity, warning letters, corrective advertising and potential civil and criminal penalties.

The federal government has levied large

civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in

off-label promotion.

The FDA and other regulatory authorities have also required that companies enter into consent decrees or permanent

injunctions under which specified promotional conduct is changed or curtailed.

of any of the foregoing could have a material adverse effect on our business and results of operations.

The FDA’s and other regulatory

authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory

approval of our product candidates.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future

legislation or administrative action, either in the United States or abroad.

If we are slow or unable to adapt to changes in existing

requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any

marketing approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business.

product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated.

Affordable Care Act includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) which

created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference

biological product.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following

the date that the reference product was first licensed by the FDA.

In addition, the approval of a biosimilar product may not be made

effective by the FDA until twelve years from the date on which the reference product was first licensed.

During this twelve-year period

of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the

competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate

If the FDA or any

similar foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be

costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving

approval or clearance for commercialization in the applicable jurisdiction.

Conducting clinical trials

outside of the United States also exposes us to additional risks, including risks associated with:

● additional foreign regulatory requirements;

● foreign exchange fluctuations;

● compliance with foreign manufacturing, customs, shipment

and storage requirements;

● cultural differences in medical practice and clinical research;

● diminished protection of intellectual property in some countries.

Even if we receive regulatory approval for

any of our current or potential future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory

review, which may result in significant additional expense.

Additionally, our current or potential future product candidates, if approved,

could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with

regulatory requirements or experience unanticipated problems with our products.

Any regulatory approvals that

we or potential future collaborators obtain for any of our current or potential future product candidates will be subject to limitations

on the approved indicated uses for which a product may be marketed or may be subject to the conditions of approval, or contain requirements

for potentially costly post-marketing testing, and surveillance to monitor the safety and efficacy of such product candidate.

if the FDA or any other regulatory authority approves any of our current or potential future product candidates, the manufacturing processes,

labeling, packaging, distribution, adverse event reporting, storage, import, export, advertising, promotion and recordkeeping for such

product will be subject to extensive and ongoing regulatory requirements.

These requirements include submissions of safety and other post-marketing

information and reports, registration, as well as continued compliance with cGMP and good clinical practices for any clinical trials that

we conduct post-approval.

In addition, manufacturers and manufacturers’ facilities are required to comply with extensive FDA and

comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to

cGMP and cGTP regulations and applicable product tracking and tracing requirements.

Later discovery of previously

unknown problems with a product candidate, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers

or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

● restrictions on the marketing or manufacturing of the product

candidate, withdrawal of the product candidate from the market or voluntary or mandatory product recalls;

● fines, warning letters, untitled letters or holds on clinical

● refusal by the FDA to approve pending applications or supplements

to approved applications filed by us or our strategic collaborators;

● suspension or revocation of product approvals;

● suspension of any ongoing clinical trials;

● product seizure or detention or refusal to permit the import

or export of products;

● injunctions or the imposition of civil or criminal penalties

or monetary fines.

The occurrence of any event

or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue.

The FDA has the authority to

require a risk evaluation and mitigation strategy (“REMS”) as part of a biologics license application (“BLA”)

or after approval, which may impose further requirements or restrictions on the distribution or use of an approved product, such as limiting

prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet

certain safe-use criteria and requiring treated patients to enroll in a registry.

Furthermore, the FDA strictly

regulates marketing, labeling, advertising and promotion of products that are placed on the market.

Products may be promoted only for

the approved indications and in accordance with the provisions of the approved label.

While physicians may prescribe, in their independent

professional medical judgment, products for off-label uses as the FDA does not regulate the behavior of physicians in their choice of

drug treatments, the FDA does restrict a manufacturer’s communications on the subject of off-label use of their products.

may only share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling.

FDA and other authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses and a company that is

found to have improperly promoted off-label uses may be subject to significant liability including, among other things, adverse publicity,

warning letters, corrective advertising and potential civil and criminal penalties.

The federal government has levied large civil and

criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label

The FDA and other regulatory authorities have also required that companies enter into consent decrees or permanent injunctions

under which specified promotional conduct is changed or curtailed.

Occurrence of any of the foregoing

could have a material adverse effect on our business and results of operations.

The FDA’s and other regulatory authorities’

policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our

product candidates.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation

or administrative action, either in the United States or abroad.

If we are slow or unable to adapt to changes in existing requirements

or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval

that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business.

Any product candidates for which we intend

to seek approval as biologic products may face competition sooner than anticipated.

The Affordable Care Act includes

a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) which created an abbreviated

approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that

the reference product was first licensed by the FDA.

In addition, the approval of a biosimilar product may not be made effective

by the FDA until twelve years from the date on which the reference product was first licensed.

During this twelve-year period of

exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing

product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate

the safety, purity and potency of its product.

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prospects for our biological products.

believe that any of our future product candidates approved as a biological product under a BLA should qualify for the twelve-year period

of exclusivity.

However, there is a risk that this exclusivity could be shortened due to Congressional action or otherwise, or that the

FDA will not consider our product candidates to be reference products for competing products, potentially creating the opportunity for

generic competition sooner than anticipated.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have

also been the subject of recent litigation.

Moreover, the extent to which a biosimilar, once approved, could be substituted for any one

of our reference products in a way that is similar to traditional generic substitution for non-biological products will depend on a number

of marketplace and regulatory factors that are still developing.

legislative reform measures may have a material adverse effect on our business and results of operations.

the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs.

For example, in

March 2010, the Patient Protection and Affordable Care Act (the “ACA”) was enacted, which substantially changed the way healthcare

is financed by both governmental and private insurers, and significantly impacted the U.S.

We believe that any of our

future product candidates approved as a biological product under a BLA should qualify for the twelve-year period of exclusivity.

there is a risk that this exclusivity could be shortened due to Congressional action or otherwise, or that the FDA will not consider our

product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner

than anticipated.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of

recent litigation.

Moreover, the extent to which a biosimilar, once approved, could be substituted for any one of our reference products

in a way that is similar to traditional generic substitution for non-biological products will depend on a number of marketplace and regulatory

factors that are still developing.

Healthcare legislative reform measures may

have a material adverse effect on our business and results of operations.

In the United States and

some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding

the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities,

and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

Among policy makers and payors

in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals

of containing healthcare costs, improving quality and/or expanding access.

In the United States, the pharmaceutical industry has

been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

In March 2010, the

Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA,”)

was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and significantly

impacts the U.S.

pharmaceutical industry.

Among the provisions

of the ACA, of greatest importance to the pharmaceutical and biotechnology industry are the following:

annual, nondeductible fee on any entity that manufactures or imports certain specified branded

prescription drugs and biologic agents apportioned among these entities according to their

market share in some government healthcare programs;

increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug

Rebate Program to 23.1% and 13% of the average manufacturer price for most branded and generic

drugs, respectively, and a cap on the total rebate amount for innovator drugs at 100% of

the Average Manufacturer Price;

new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program

are calculated for certain drugs and biologics that are inhaled, infused, instilled, implanted

of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals

who are enrolled in Medicaid managed care organizations;

of eligibility criteria for Medicaid programs by, among other things, allowing states to

offer Medicaid coverage to additional individuals and by adding new mandatory eligibility

categories for individuals with income at or below 133% of the federal poverty level, thereby

potentially increasing manufacturers’ Medicaid rebate liability;

new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer

50% (and 70% as of January 1, 2019) point-of-sale discounts off negotiated prices of applicable

brand drugs to eligible beneficiaries during their coverage gap period, as a condition for

the manufacturer’s outpatient drugs to be covered under Medicare Part D;

of the entities eligible for discounts under the Public Health program;

new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and

conduct comparative clinical effectiveness research, along with funding for such research;

● establishment

of a Center for Medicare Innovation at the Centers for Medicare & Medicaid Services (“CMS”)

to test innovative payment and service delivery models to lower Medicare and Medicaid spending;

● implementation

of the federal physician payment transparency requirements, sometimes referred to as the

“Physician Payments Sunshine Act.”

its enactment, there have been judicial, congressional, and executive challenges to certain aspects of the ACA.

On June 17, 2021, the

Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the

constitutionality of the ACA.

Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special

enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA

The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules

that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include

work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or

It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal

or replace the ACA will impact our business.

In addition, other legislative changes have been proposed and adopted in the United States

since the ACA was enacted.

August 2, 2011, the Budget Control Act of 2011 among other things, included aggregate reductions

of Medicare payments to providers of 2% per fiscal year.

These reductions went into effect

on April 1, 2013 and will remain in effect through 2030.

January 2, 2013, the American Taxpayer Relief Act of 2012 among other things, reduced Medicare

payments to several providers, including hospitals and increased the statute of limitations

April 13, 2017, CMS published a final rule that gives states greater flexibility in setting

benchmarks for insurers in the individual and small group marketplaces, which may have the

effect of relaxing the essential health benefits required under the ACA for plans sold through

such marketplaces.

May 30, 2018, the Right to Try Act was signed into law.

The law, among other things, provides

a federal framework for certain patients to access certain investigational new drug products

that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA

Under certain circumstances, eligible patients can seek treatment without enrolling

in clinical trials and without obtaining FDA permission under the FDA expanded access program.

There is no obligation for a pharmaceutical manufacturer to make its drug products available

to eligible patients as a result of the Right to Try Act.

May 23, 2019, CMS published a final rule to allow Medicare Advantage Plans the option of

using step therapy for Part B drugs beginning January 1, 2020.

December 20, 2019, former President Trump signed into law the Further Consolidated Appropriations

1865), which repealed the Cadillac tax, the health insurance provider tax, and

the medical device excise tax.

It is impossible to determine whether similar taxes could

be instated in the future.

there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which

has resulted in several presidential executive orders, Congressional inquiries and proposed and enacted federal and state legislation

designed to, among other things, bring more transparency to product pricing, reduce the costs of drugs under Medicare, and reform government

program reimbursement methodologies for drug products.

For example, in July 2021, President Biden issued an executive order pertaining

to drug pricing, which expressed support for legislation allowing direct negotiation in Medicare Part D and inflationary rebates and

directed various executive branch agencies to take actions to lower drug prices and promote generic competition.

In response to Biden’s

executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for

drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative

actions HHS can take to advance these principles.

initiatives recently culminated in the enactment of the Inflation Reduction Act, or IRA, in August 2022, which, among other things, will

allow HHS to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D, although

this will only apply to high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics).

negotiated prices, which will first become effective in 2026, will be capped at a statutory ceiling price representing a significant

discount from average prices to wholesalers and direct purchasers.

The law will also, beginning in October 2023, penalize drug manufacturers

that increase prices of Medicare Part B and Part D drugs at a rate greater than the rate of inflation.

In addition, the law eliminates

the “donut hole” under Medicare Part D beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket

cost and requiring manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’

prescription costs for brand drugs below the out-of-pocket maximum, and 20% once the out-of-pocket maximum has been reached.

these discounts represent a lower percentage of enrollees’ costs than the current discounts required below the out-of-pocket maximum

(that is, in the “donut hole” phase of Part D coverage), the new manufacturer contribution required above the out-of-pocket

maximum could be considerable for very high-cost patients and the total contributions by manufacturers to a Part D enrollee’s drug

expenses may exceed those currently provided.

Further, the law incentivizes the manufacture of biosimilars and vaccine uptake, and limits

the Part B or Part D insulin copayment to $35 per month.

The IRA also extends enhanced subsidies for individuals purchasing health insurance

coverage in ACA marketplaces through plan year 2025.

These provisions will take effect progressively starting in 2023, although they

may be subject to legal challenges.

the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control

pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain

product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other

Since its enactment, there

have been judicial, congressional and executive branch challenges and amendments to certain aspects of the ACA.

For example, on August 16,

2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law, which among other things, extends enhanced

subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

The IRA also eliminates the

“donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of

pocket cost and through a newly established manufacturer discount program.

It is possible the ACA will be subject to judicial or congressional

challenges and amendments in the future.

On July 4, 2025, the annual

reconciliation bill, the OBBBA was signed into law which is expected to reduce Medicaid spending and enrollment by implementing work requirements

for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.

OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits,

set to expire in 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.

Also, there has been heightened

governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which have resulted

in several congressional inquiries, presidential executive orders, and proposed and enacted federal and state legislation designed to,

among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs,

and reform government program reimbursement methodologies for drug products.

For example, the IRA, among other things, (1) directs

Department of Health and Human Services (“HHS”) to negotiate the price of certain high-expenditure, single-source

drugs covered under Medicare that have been on the market for at least 7 years (the “Medicare Drug Price Negotiation Program”)

and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

provisions began to effect progressively in fiscal year 2023.

On August 15, 2024, HHS announced the agreed-upon reimbursement prices

of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject

to legal challenges.

On January 17, 2025, HHS elected up to fifteen additional products covered under Part D for price negotiation

Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.

On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework

for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use

when deciding to exercise march-in rights.

While march-in rights have not previously been exercised, it is uncertain if that will continue

under the new framework.

Individual states in the

United States have also become increasingly active in passing legislation and implementing regulations designed to control

pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product

access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other

countries and bulk purchasing.

In addition, regional health care authorities and individual hospitals are increasingly using bidding

procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health

care programs.

These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing,

which could negatively affect our business, financial conditions, results of operation and prospects.

expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts

that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our current

or future product candidates or additional pricing pressures.

Further, it is possible that additional governmental action is taken in

response to the COVID-19 pandemic.

Any denial in coverage or reduction in reimbursement from Medicare or other government-funded programs

may result in a similar denial or reduction in payments from private payors, which may prevent us from being able to generate sufficient

revenue, attain profitability or commercialize our products.

It is not clear how other future potential changes to the ACA will change

the reimbursement model and market outlook for our current and future product candidates.

to comply with health and data protection laws and regulations could lead to government enforcement actions (which could include civil

or criminal penalties), private litigation or adverse publicity and could negatively affect our operating results and business.

may collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect and share personal information, health

information and other sensitive information to develop our products, to operate our business, for clinical trial purposes, for legal

and marketing purposes, and for other business-related purposes.

date, we have only implemented limited privacy, data protection, or cybersecurity policies, have not implemented any commercially reasonable

physical, technical, organizational, and administrative security measures and policies, and have not been, to the Estrella’s knowledge,

in compliance in all material respects with all Privacy and Security Requirements relating to data loss, theft, and breach of security

notification obligations.

and any potential future collaborators, partners, or service providers may be subject to federal, state, and foreign data protection

laws, regulations, and regulatory guidance, the number and scope of which is changing, subject to differing applications and interpretations,

and which may be inconsistent among jurisdictions, or in conflict with other rules, laws, or contractual obligations.

In the United States,

numerous federal and state laws and regulations, including federal health information privacy laws, such as the Health Insurance Portability

and Accountability Act (“HIPAA”), state data breach notification laws, state health information privacy laws and federal

and state consumer protection laws, that govern the collection, use, disclosure and protection of health-related and other personal information

could apply to our operations or the operations of any future potential collaborators or service providers.

In addition, we may obtain

health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to

privacy and security requirements under HIPAA, or other privacy and data security laws.

Depending on the facts and circumstances, we

could be subject to civil or criminal penalties if we obtain, use, or disclose individually identifiable health information maintained

by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA, or if we otherwise violate applicable privacy and

data security laws.

International

data protection laws, including the EU’s General Data Protection Regulation (“GDPR”), may also apply to health-related

For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation

Program (“SIP”) proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear how

this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the

United States or Canada.

Other states have also submitted SIP proposals that are pending review by the FDA.

regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical

products and which suppliers will be included in their prescription drug and other healthcare programs.

We expect that additional

state and federal healthcare reform measures will be adopted in the future.

The current Trump administration

is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies.

actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that

create additional uncertainty for our business.

These actions and proposals include, for example, (1) directives to reduce agency

workforce and cut programs;

(2) rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation

to consider new payment and healthcare models to limit drug spending;

(3) eliminating the Biden administration’s executive

order that directed HHS to establish an AI task force and develop a strategic plan;

(4) directing HHS and other agencies to lower

prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and

establishing Most-Favored-Nation pricing for pharmaceutical products;

(5) imposing tariffs of imported pharmaceutical products;

(6) directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing

prices across hospitals and health plans.

Additionally, Congress may introduce and ultimately pass health care related legislation that

could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.

expect additional health reform measures may be implemented in the future, particularly given the recent change in administration.

We cannot predict what healthcare

reform initiatives may be adopted in the future, particularly in light of the recent U.S.

presidential and congressional elections.

We expect that these and other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria

and additional downward pressure on the price that we receive for any approved drug.

Any reduction in reimbursement from Medicare or other

government programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures

or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs.

Failure to comply with health and data protection

laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation

or adverse publicity and could negatively affect our operating results and business.

We may collect, receive, store,

process, generate, use, transfer, disclose, make accessible, protect and share personal information, health information and other sensitive

information to develop our products, to operate our business, for clinical trial purposes, for legal and marketing purposes, and for other

business-related purposes.

To date, our IT infrastructure remains limited in size and scope, and

our privacy, data protection, and cybersecurity policies are continually evolving.

Although we have implemented certain security measures

to protect our financial data and communications, we cannot guarantee that our current physical, technical, organizational, and administrative

safeguards will be sufficient to prevent data loss, theft, or security breaches, or that we will remain in compliance in all material

respects with all evolving Privacy and Security Requirements.

We and any potential

future collaborators, partners, or service providers may be subject to federal, state, and foreign data protection laws,

regulations, and regulatory guidance, the number and scope of which is changing, subject to differing applications and

interpretations, and which may be inconsistent among jurisdictions, or in conflict with other rules, laws, or contractual

In the United States, numerous federal and state laws and regulations, including federal health information

privacy laws, such as the Health Insurance Portability and Accountability Act (“HIPAA”), state data breach notification

laws, state health information privacy laws and federal and state consumer protection laws, that govern the collection, use,

disclosure and protection of health-related and other personal information could apply to our operations or the operations of any

future potential collaborators or service providers.

In addition, we may obtain health information from third parties (including

research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under HIPAA,

or other privacy and data security laws.

Depending on the facts and circumstances, we could be subject to civil or criminal

penalties if we obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a

manner that is not authorized or permitted by HIPAA, or if we otherwise violate applicable privacy and data security laws.

International data

protection laws, including the EU’s General Data Protection Regulation (“GDPR”), may also apply to health-related

and other personal information obtained outside of the United States.

The GDPR went into effect on May 25, 2018, and imposes stringent

data protection requirements for processing of personal data of individuals within the European Economic Area (“EEA”) as

well as potential fines for noncompliant companies of up to the greater of €20 million or 4% of annual global revenue.

imposes numerous requirements for the collection, use and disclosure of personal data, including stringent requirements relating to consent

and the information that must be shared with data subjects about how their personal information is used, the obligation to notify regulators

and affected individuals of personal data breaches, extensive internal privacy governance obligations and obligations to honor expanded

rights of individuals in relation to their personal information.

addition, the GDPR places restrictions on cross-border data transfers.

A decision by the Court of Justice of the European Union (“CJEU”)

in 2020 invalidated the EU-U.S.

Privacy Shield Framework, which was one of the primary mechanisms used by U.S.

companies to import personal

information from Europe in compliance with the GDPR’s cross-border data transfer restrictions, and raised questions about whether

the European Commission’s Standard Contractual Clauses, one of the primary alternatives to the Privacy Shield, can lawfully be

used for personal information transfers from Europe to the United States or most other countries.

Similarly, the Swiss Federal Data Protection

and Information Commissioner has opined that the Swiss-U.S.

Privacy Shield is inadequate for transfers of data from Switzerland to the

Furthermore, on June 4, 2021, the European Commission issued new forms of standard contractual clauses for data transfers from controllers

or processors in the EEA (or otherwise subject to the GDPR) to controllers or processors established outside the EEA (and not subject

to the GDPR).

The new forms of standard contractual clauses have replaced the standard contractual clauses that were adopted previously

under the Data Protection Directive.

We will be required to transition to the new forms of standard contractual clauses and doing so

will require significant effort and cost.

The new standard contractual clauses may also impact our business as companies based in Europe

may be reluctant to utilize the new clauses to legitimize transfers of personal information to third countries given the burdensome requirements

of transfer impact assessments and the substantial obligations that the new standard contractual clauses impose upon exporters.

are investigated by a European data protection authority, we may face fines and other penalties.

The GDPR went into effect on May 25, 2018, and imposes

stringent data protection requirements for processing of personal data of individuals within the European Economic Area

(“EEA”) as well as potential fines for noncompliant companies of up to the greater of €20 million or 4% of

annual global revenue.

The GDPR imposes numerous requirements for the collection, use and disclosure of personal data, including

stringent requirements relating to consent and the information that must be shared with data subjects about how their personal

information is used, the obligation to notify regulators and affected individuals of personal data breaches, extensive internal

privacy governance obligations and obligations to honor expanded rights of individuals in relation to their personal

In addition, the GDPR

places restrictions on cross-border data transfers.

On July 10, 2023, the European Commission adopted an adequacy decision for the

EU-US Data Privacy Framework, which remains in effect as of February 2026 and enables transfers of personal data from the EEA to

entities certified under the framework.

Similarly, the Swiss-U.S.

Data Privacy Framework was extended in September 2023 to

align with the EU-US framework, facilitating data transfers from Switzerland to certified U.S.

Furthermore, the European

Commission’s Standard Contractual Clauses, updated in June 2021, continue to serve as a primary mechanism for data transfers

where adequacy decisions do not apply, subject to transfer impact assessments and supplementary measures as required.

investigated by a European data protection authority, we may face fines and other penalties.

Any such investigation or charges by

European data protection authorities could have a negative effect on our existing business and on our ability to attract and retain new

clients or pharmaceutical partners.

We may also experience hesitancy, reluctance, or refusal by European or multi-national clients or

pharmaceutical partners to continue to use our products due to the potential risk exposure as a result of the current (and, in particular,

future) data protection obligations imposed on them by certain data protection authorities in interpretation of current law, including

Such clients or pharmaceutical partners may also view any alternative approaches to compliance as being too costly, too burdensome,

too legally uncertain, or otherwise objectionable and therefore decide not to do business with us.

Any of the foregoing could materially

harm our business, prospects, financial condition, and results of operations.

GDPR has increased our responsibilities and potential liability in relation to personal data processed subject to the GDPR, and we may

be required to put in place additional mechanisms to ensure compliance with the GDPR, including as implemented by individual countries.

Companies now have to comply with the GDPR and also the United Kingdom GDPR (“UK GDPR”), which, together with the amended

UK Data Protection Act 2018, retains the GDPR in UK national law.

European data protection authorities could have a negative effect on our existing business and on our ability to attract and retain

new clients or pharmaceutical partners.

We may also experience hesitancy, reluctance, or refusal by European or multi-national

clients or pharmaceutical partners to continue to use our products due to the potential risk exposure as a result of the current

(and, in particular, future) data protection obligations imposed on them by certain data protection authorities in interpretation of

current law, including the GDPR.

Such clients or pharmaceutical partners may also view any alternative approaches to compliance

as being too costly, too burdensome, too legally uncertain, or otherwise objectionable and therefore decide not to do business with

Any of the foregoing could materially harm our business, prospects, financial condition, and results of operations.

The GDPR has increased

our responsibilities and potential liability in relation to personal data processed subject to the GDPR, and we may be required to

put in place additional mechanisms to ensure compliance with the GDPR, including as implemented by individual countries.

now have to comply with the GDPR and also the United Kingdom GDPR (“UK GDPR”), which, together with the amended UK Data

Protection Act 2018, retains the GDPR in UK national law.

The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the

greater of £17.5 million or 4% of global turnover.

In addition, on June 28, 2021, the European Commission adopted an adequacy decision

in respect of transfers of personal data to the UK for a four-year period (until June 27, 2025).

Similarly, the UK has determined that

it considers all of the EEA to be adequate for the purposes of data protection.

This ensures that data flows between the UK and the EEA

remain unaffected.

Compliance with the GDPR and applicable laws and regulations relating to privacy and data protection of EEA Member

States and the UK is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business

practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm

in connection with our European activities.

In addition, any failure by us (or our business partners who handle personal data) to comply

with GDPR and applicable laws and regulations relating to privacy and data protection of EEA member states and the UK may result in regulators

prohibiting our processing of the personal data of EEA data subjects, which could impact our operations and ability to develop our products

and provide our services, including interrupting or ending EEA clinical trials.

addition, states are constantly adopting new laws or amending existing laws, requiring attention to frequently changing regulatory requirements.

For example, California enacted the California Consumer Privacy Act (the “CCPA”) on June 28, 2018, which took effect on January

The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal

information sharing and receive detailed information about how their personal information is used by requiring covered companies to provide

new disclosures to California consumers (as that term is broadly defined and can include any of our current or future employees who may

be California residents) and provide such residents new ways to opt-out of certain sales of personal information.

The CCPA provides for

civil penalties for violations, as well as a private right of action for data breaches and statutory damages, which is expected to increase

data breach class action litigation and result in significant exposure to costly legal judgments and settlements.

Although the law includes

limited exceptions for health-related information, including clinical trial data, such exceptions may not apply to all of our operations

and processing activities.

As we expand our operations and trials (both preclinical and clinical), the CCPA may increase our compliance

costs and potential liability.

Some observers have noted that the CCPA could mark the beginning of a trend towards more stringent privacy

legislation in the United States.

In November 2020, California passed the California Privacy Rights Act (the “CPRA”) which

amends and expands the CCPA.

The CPRA will impose additional data protection obligations on covered businesses, including additional

consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive

It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased

privacy and information security enforcement.

The majority of the provisions will go into effect on January 1, 2023, and additional compliance

In addition, the European Commission renewed the UK adequacy decisions

under the GDPR and the Law Enforcement Directive in December 2025, extending them until December 2031, enabling continued free flow

of personal data from EEA member states to the UK.

These decisions are subject to a mid-term review after four years and may be

renewed further based on ongoing assessments.

Similarly, the UK has determined that it considers all of the EEA to be adequate for

the purposes of data protection.

This ensures that data flows between the UK and the EEA remain unaffected.

Compliance with the GDPR

and applicable laws and regulations relating to privacy and data protection of EEA Member States and the UK is a rigorous and

time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite

those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm in connection with

our European activities.

In addition, any failure by us (or our business partners who handle personal data) to comply with GDPR and

applicable laws and regulations relating to privacy and data protection of EEA member states and the UK may result in regulators

prohibiting our processing of the personal data of EEA data subjects, which could impact our operations and ability to develop our

products and provide our services, including interrupting or ending EEA clinical trials.

In addition, states are constantly adopting new laws or amending existing

laws, requiring attention to frequently changing regulatory requirements.

For example, California enacted the California Consumer Privacy

Act (the “CCPA”) on June 28, 2018, which took effect on January 1, 2020.

The CCPA gives California residents expanded rights

to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about

how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term

is broadly defined and can include any of our current or future employees who may be California residents) and provide such residents

new ways to opt-out of certain sales of personal information.

The CCPA provides for civil penalties for violations, as well as a private

right of action for data breaches and statutory damages, which is expected to increase data breach class action litigation and result

in significant exposure to costly legal judgments and settlements.

Although the law includes limited exceptions for health-related information,

including clinical trial data, such exceptions may not apply to all of our operations and processing activities.

As we expand our operations

and trials (both preclinical and clinical), the CCPA may increase our compliance costs and potential liability.

Some observers have noted

that the CCPA could mark the beginning of a trend towards more stringent privacy legislation in the United States.

In November 2020, California

passed the California Privacy Rights Act (the “CPRA”) which amends and expands the CCPA.

The CPRA imposes additional data

protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements

for higher risk data, and opt outs for certain uses of sensitive data.

It also expands the types of data breaches subject to the CCPA’s

private right of action, provides for increased penalties for CPRA violations concerning California residents under the age of 16 and

creates a new California data protection agency authorized to issue substantive regulations, which has resulted in increased privacy and

information security enforcement.

The majority of the provisions have been in effect since January 1, 2023, and additional compliance

investment and potential business process changes may be required.

The CPRA has created additional uncertainty and may increase our cost

of compliance.

Other states are beginning to pass similar laws.

In the event that we are subject to or affected by HIPAA, the GDPR, the

CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these

laws could adversely affect our financial condition.

and international data protection laws and regulations could require us to take on more onerous obligations in our contracts,

restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.

and regulations worldwide relating to privacy, data protection and cybersecurity are, and are likely to remain, uncertain for the foreseeable

While we strive to comply with applicable laws and regulations relating to privacy, data protection and cybersecurity, external

and internal privacy and security policies and contractual obligations relating to privacy, data protection and cybersecurity to the

extent possible, we may at times fail to do so, or may be perceived to have failed to do so.

Moreover, despite our efforts, we may not

be successful in achieving compliance if our personnel, collaborators, partners or vendors do not comply with applicable laws and regulations

relating to privacy, data protection and cybersecurity, external and internal privacy and security policies and contractual obligations

relating to privacy, data protection and cybersecurity.

Actual or perceived failure to comply with any laws and regulations relating

to privacy, data protection or cybersecurity in the U.S.

or foreign jurisdictions could result in government enforcement actions (which

could include civil or criminal penalties), private litigation or adverse publicity and could negatively affect our operating results

and business.

Moreover, clinical trial subjects about whom we or our potential collaborators or service providers obtain information,

as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information.

Claims that we have violated individuals’ privacy rights, failed to comply with applicable laws or regulations, or breached our

contractual obligations, even if we are not found liable, could be expensive and time consuming to defend, result in regulatory actions

and proceedings, in addition to private claims and litigation, and could result in adverse publicity that could harm our business.

also are, or may be asserted to be, subject to the terms of our external and internal privacy and security policies, representations,

certifications, publications, and frameworks and contractual obligations to third parties related to privacy, data protection, information

security, and processing.

Failure to comply or the perceived failure to comply with any of these, or if any of these policies or any

of our representations, certifications, publications, or frameworks are, in whole or part, found or perceived to be inaccurate, incomplete,

deceptive, unfair, or misrepresentative of our actual practices, could result in reputational harm, result in litigation, cause a material

adverse impact to business operations or financial results, and otherwise result in other material harm to our business.

we or our existing or potential future collaborators, manufacturers or service providers fail to comply with healthcare laws and regulations,

we or they could be subject to enforcement actions, which could affect our ability to develop, market and sell our product candidates

and may harm our reputation.

providers, physicians, and third-party payors, among others, will play a primary role in the prescription and recommendation of any product

candidates for which we obtain marketing approval.

Our current and future arrangements with third-party payors, providers, and customers,

among others, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business

or financial arrangements and relationships through which we market, sell, and distribute our product candidates for which we obtain

marketing approval.

Restrictions under applicable federal and state healthcare laws and regulations in the United States and other countries,

include the following:

federal Anti-Kickback Statute, which prohibits, among other things, a person or entity from

knowingly and willfully soliciting, offering, paying, receiving or providing remuneration,

directly or indirectly, in cash or in kind, to induce or reward either the referral of an

individual for, or the purchase, lease order, arranging for or recommendation of, any good,

facility, item or service, for which payment may be made, in whole or in part, by a federal

healthcare program, such as Medicare or Medicaid.

A person or entity does not need to have

actual knowledge of the statute or specific intent to violate it in order to have committed

civil and criminal false claims laws, including the federal False Claims Act, which provides

for civil whistleblower or qui tam actions, and civil monetary penalties laws, that impose

penalties against individuals or entities for knowingly presenting, or causing to be presented,

to the federal government, claims for payment that are false or fraudulent or making a false

statement to avoid, decrease or conceal an obligation to pay money to the federal government.

In addition, the government may assert that a claim including items and services resulting

from a referral made in violation of the federal Anti-Kickback Statute constitutes a false

or fraudulent claim for purposes of the False Claims Act;

which imposes criminal and civil liability for executing a scheme to defraud any healthcare

benefit program, or knowingly and willfully falsifying, concealing, or covering up a material

fact or making any materially false statement in connection with the delivery of or payment

for healthcare benefits, items, or services.

Similar to the federal Anti-Kickback Statute,

a person or entity does not need to have actual knowledge of the statute or specific intent

to violate it in order to have committed a violation;

as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”)

and its implementing regulations, including the Final Omnibus Rule published in January 2013,

which impose obligations on certain covered entity healthcare providers, health plans and

healthcare clearinghouses as well as their business associates and their subcontractors that

perform certain services involving the use or disclosure of individually identifiable health

information, including mandatory contractual terms, with respect to safeguarding the privacy,

security and transmission of individually identifiable health information, and require notification

to affected individuals and regulatory authorities of certain breaches of security of individually

identifiable health information.

HITECH also created new tiers of civil monetary penalties,

amended HIPAA to make civil and criminal penalties directly applicable to business associates,

and gave state attorneys general new authority to file civil actions for damages or injunctions

in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs

associated with pursuing federal civil actions.

In addition, there may be additional federal,

state, and non-U.S.

laws which govern the privacy and security of health and other personal

information in certain circumstances, many of which differ from each other in significant

ways and may not have the same effect, thus complicating compliance efforts;

federal false statements statute, which prohibits knowingly and willfully falsifying, concealing,

or covering up a material fact or making any materially false statement in connection with

the delivery of or payment for healthcare benefits, items, or services;

federal physician payment transparency requirements, sometimes referred to as the “Sunshine

Act” under the Affordable Care Act, require certain manufacturers of drugs, devices,

biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s

Health Insurance Program to report to the CMS information related to transfers of value made

to physicians (currently defined to include doctors, dentists, optometrists, podiatrists

and chiropractors) and teaching hospitals, as well as ownership and investment interests

of such physicians and their immediate family members.

Effective January 1, 2022, these reporting

obligations extend to include payments and transfers of value, made during the previous year

to certain non-physician providers, including physician assistants, nurse practitioners,

clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants

and certified nurse midwives;

local, state and foreign laws and regulations, such as state anti-kickback and false claims

laws that may apply to healthcare items or services reimbursed by third party payors, including

private insurers, local, state and foreign transparency laws that require manufacturers to

report information related to payments and transfers of value to other healthcare providers

and healthcare entities, marketing expenditures, or drug pricing, state laws that require

pharmaceutical companies to register certain employees engaged in marketing activities in

the location and comply with the pharmaceutical industry’s voluntary compliance guidelines

and the relevant compliance guidance promulgated by the federal government, and state and

foreign laws governing the privacy and security of health information in certain circumstances,

many of which differ from each other in significant ways and often are not preempted by HIPAA,

thus complicating compliance efforts.

that our future business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial

It is possible that governmental authorities will conclude that our business practices, including our relationships with physicians

and other healthcare providers, some of whom are compensated in the form of stock options for consulting services provided, may not comply

with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws

and regulations.

If our operations are found to be in violation of any such requirements, we may be subject to penalties, including criminal

and significant civil monetary penalties, damages, fines, imprisonment, disgorgement, contractual damages, reputational harm, exclusion

from participation in government healthcare programs, integrity obligations, injunctions, recall or seizure of products, total or partial

suspension of production, denial or withdrawal of pre-marketing product approvals, private qui tam actions brought by individual whistleblowers

in the name of the government, refusal to allow us to enter into supply contracts, including government contracts, additional reporting

requirements and oversight if subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance

with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our

business and our results of operations.

Although effective compliance programs can mitigate the risk of investigation and prosecution

for violations of these laws, these risks cannot be entirely eliminated.

Any action against us for an alleged or suspected violation

could cause us to incur significant legal expenses and could divert our management’s attention from the operation of our business,

even if our defense is successful.

Therefore, even if we are successful in defending against any such actions that may be brought against

us, our business may be impaired.

If any of the above occur, our ability to operate our business and our results of operations could

be adversely affected.

In addition, achieving and sustaining compliance with applicable laws and regulations may be costly to us in terms

of money, time, and resources.

we fail to comply with U.S.

and foreign regulatory requirements, regulatory authorities could limit or withdraw any marketing or commercialization

approvals we may receive and subject us to other penalties that could materially harm our business.

if we receive marketing and commercialization approval of a product candidate, we will be subject to continuing regulatory requirements,

including in relation to adverse patient experiences with the product and clinical results that are reported after a product is made

New regulations under the CCPA and CPRA took effect on January 1, 2026,

including requirements for risk assessments, cybersecurity audits, and opt-out confirmation mechanisms.

The CPRA has created additional

uncertainty and may increase our cost of compliance.

As of February 2026, at least 18 other states have enacted comprehensive consumer

privacy laws similar to the CCPA and CPRA, including Virginia (effective January 1, 2023), Colorado (effective July 1, 2023), Connecticut

(effective July 1, 2023), Utah (effective December 31, 2023), Florida (effective July 1, 2024), Texas (effective July 1, 2024), Oregon

(effective July 1, 2024), Montana (effective October 1, 2024), Delaware (effective January 1, 2025), Iowa (effective January 1, 2025),

Tennessee (effective July 1, 2025), Indiana (effective January 1, 2026), and Nebraska (effective January 1, 2025), with additional states

expected to follow.

These laws vary in scope but generally grant consumers rights to access, delete, and opt out of the sale or sharing

of their personal information, and impose obligations on businesses such as data minimization, purpose limitation, and security requirements.

In the event that we are subject to or affected by HIPAA, the GDPR, the CCPA, the CPRA or other domestic privacy and data protection laws,

any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

Compliance with U.S.

international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict

our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.

regulations worldwide relating to privacy, data protection and cybersecurity are, and are likely to remain, uncertain for the

foreseeable future.

While we strive to comply with applicable laws and regulations relating to privacy, data protection and

cybersecurity, external and internal privacy and security policies and contractual obligations relating to privacy, data protection

and cybersecurity to the extent possible, we may at times fail to do so, or may be perceived to have failed to do so.

despite our efforts, we may not be successful in achieving compliance if our personnel, collaborators, partners or vendors do not

comply with applicable laws and regulations relating to privacy, data protection and cybersecurity, external and internal privacy

and security policies and contractual obligations relating to privacy, data protection and cybersecurity.

Actual or perceived

failure to comply with any laws and regulations relating to privacy, data protection or cybersecurity in the U.S.

jurisdictions could result in government enforcement actions (which could include civil or criminal penalties), private litigation

or adverse publicity and could negatively affect our operating results and business.

Moreover, clinical trial subjects about whom we

or our potential collaborators or service providers obtain information, as well as the providers who share this information with us,

may contractually limit our ability to use and disclose the information.

Claims that we have violated individuals’ privacy

rights, failed to comply with applicable laws or regulations, or breached our contractual obligations, even if we are not found

liable, could be expensive and time consuming to defend, result in regulatory actions and proceedings, in addition to private claims

and litigation, and could result in adverse publicity that could harm our business.

We also are, or may be asserted

to be, subject to the terms of our external and internal privacy and security policies, representations, certifications, publications,

and frameworks and contractual obligations to third parties related to privacy, data protection, information security, and processing.

Failure to comply or the perceived failure to comply with any of these, or if any of these policies or any of our representations, certifications,

publications, or frameworks are, in whole or part, found or perceived to be inaccurate, incomplete, deceptive, unfair, or misrepresentative

of our actual practices, could result in reputational harm, result in litigation, cause a material adverse impact to business operations

or financial results, and otherwise result in other material harm to our business.

If we or our existing or potential future

collaborators, manufacturers or service providers fail to comply with healthcare laws and regulations, we or they could be subject to

enforcement actions, which could affect our ability to develop, market and sell our product candidates and may harm our reputation.

Healthcare providers, physicians,

and third-party payors, among others, will play a primary role in the prescription and recommendation of any product candidates for which

we obtain marketing approval.

Our current and future arrangements with third-party payors, providers, and customers, among others, may

expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial

arrangements and relationships through which we market, sell, and distribute our product candidates for which we obtain marketing approval.

Restrictions under applicable federal and state healthcare laws and regulations in the United States and other countries, include

the following:

● the federal Anti-Kickback Statute, which prohibits, among

other things, a person or entity from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly

or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease order, arranging

for or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, by a federal healthcare

program, such as Medicare or Medicaid.

A person or entity does not need to have actual knowledge of the statute or specific intent to

violate it in order to have committed a violation;

● federal civil and criminal false claims laws, including the

federal False Claims Act, which provides for civil whistleblower or qui tam actions, and civil monetary penalties laws, that impose penalties

against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that

are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

In addition, the government may assert that a claim including items and services resulting from a referral made in violation of the federal

Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

● HIPAA, which imposes criminal and civil liability for executing

a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing, or covering up a material fact

or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services.

to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to

violate it in order to have committed a violation;

● HIPAA, as amended by the Health Information Technology for

Economic and Clinical Health Act (“HITECH”) and its implementing regulations, including the Final Omnibus Rule published

in January 2013, which impose obligations on certain covered entity healthcare providers, health plans and healthcare clearinghouses

as well as their business associates and their subcontractors that perform certain services involving the use or disclosure of individually

identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission

of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain

breaches of security of individually identifiable health information.

HITECH also created new tiers of civil monetary penalties, amended

HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority

to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and

costs associated with pursuing federal civil actions.

In addition, there may be additional federal, state, and non-U.S.

govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other

in significant ways and may not have the same effect, thus complicating compliance efforts;

● the federal false statements statute, which prohibits knowingly

and willfully falsifying, concealing, or covering up a material fact or making any materially false statement in connection with the

delivery of or payment for healthcare benefits, items, or services;

● the federal physician payment transparency requirements,

sometimes referred to as the “Sunshine Act” under the Affordable Care Act, require certain manufacturers of drugs, devices,

biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report

to the CMS information related to transfers of value made to physicians (currently defined to include doctors, dentists, optometrists,

podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests of such physicians and their immediate

family members.

Effective January 1, 2022, these reporting obligations extend to include payments and transfers of value, made during

the previous year to certain non-physician providers, including physician assistants, nurse practitioners, clinical nurse specialists,

certified registered nurse anesthetists, anesthesiologist assistants and certified nurse midwives;

● analogous local, state and foreign laws and regulations,

such as state anti-kickback and false claims laws that may apply to healthcare items or services reimbursed by third party payors, including

private insurers, local, state and foreign transparency laws that require manufacturers to report information related to payments and

transfers of value to other healthcare providers and healthcare entities, marketing expenditures, or drug pricing, state laws that require

pharmaceutical companies to register certain employees engaged in marketing activities in the location and comply with the pharmaceutical

industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, and state

and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other

in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Ensuring that our future business

arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs.

It is possible

that governmental authorities will conclude that our business practices, including our relationships with physicians and other healthcare

providers, some of whom are compensated in the form of stock options for consulting services provided, may not comply with current or

future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any such requirements, we may be subject to penalties, including criminal and significant

civil monetary penalties, damages, fines, imprisonment, disgorgement, contractual damages, reputational harm, exclusion from participation

in government healthcare programs, integrity obligations, injunctions, recall or seizure of products, total or partial suspension of production,

denial or withdrawal of pre-marketing product approvals, private qui tam actions brought by individual whistleblowers in the name of the

government, refusal to allow us to enter into supply contracts, including government contracts, additional reporting requirements and

oversight if subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws,

and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our

results of operations.

Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of

these laws, these risks cannot be entirely eliminated.

Any action against us for an alleged or suspected violation could cause us to incur

significant legal expenses and could divert our management’s attention from the operation of our business, even if our defense is

Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may

If any of the above occur, our ability to operate our business and our results of operations could be adversely affected.

In addition, achieving and sustaining compliance with applicable laws and regulations may be costly to us in terms of money, time, and

If we fail to comply with U.S.

foreign regulatory requirements, regulatory authorities could limit or withdraw any marketing or commercialization approvals we may receive

and subject us to other penalties that could materially harm our business.

Even if we receive

marketing and commercialization approval of a product candidate, we will be subject to continuing regulatory requirements, including

in relation to adverse patient experiences with the product and clinical results that are reported after a product is made

commercially available, both in the United States and any foreign jurisdiction in which we seek regulatory approval.

The FDA and other

regulatory authorities have significant post-market authority, including the authority to require labeling changes based on new safety

information and to require post-market studies or clinical trials to evaluate safety risks related to the use of a product or to require

and other regulatory authorities have significant post-market authority, including the authority to require labeling changes based

on new safety information and to require post-market studies or clinical trials to evaluate safety risks related to the use of a

product or to require withdrawal of the product candidate from the market.

The FDA and other regulatory authorities also have the

authority to require a REMS after approval, which may impose further requirements or restrictions on the distribution or use of an

approved drug or therapeutic biologic.

The manufacturer and manufacturing facilities we use to make a future product, if any, will

also be subject to periodic review and inspection by the FDA and other regulatory authorities, including for continued compliance

with cGMP and cGTP requirements.

The discovery of any new or previously unknown problems with our third-party manufacturers,

manufacturing processes or facilities may result in restrictions on the product candidate, manufacturer, or facility, including

withdrawal of the product candidate from the market.

The FDA and other regulatory authorities also have the authority to require a REMS

after approval, which may impose further requirements or restrictions on the distribution or use of an approved drug or therapeutic biologic.

The manufacturer and manufacturing facilities we use to make a future product, if any, will also be subject to periodic review and inspection

by the FDA and other regulatory authorities, including for continued compliance with cGMP and cGTP requirements.

The discovery of any

new or previously unknown problems with our third-party manufacturers, manufacturing processes or facilities may result in restrictions

on the product candidate, manufacturer, or facility, including withdrawal of the product candidate from the market.

We intend to rely

on third-party manufacturers and we will not have control over compliance with applicable rules and regulations by such manufacturers.

Any product promotion and advertising will also be subject to regulatory requirements and continuing regulatory review.

existing or future collaborators, manufacturers or service providers fail to comply with applicable continuing regulatory requirements

or foreign jurisdictions in which we seek to market our products, we or they may be subject to, among other things, fines,

warning letters, holds on clinical trials, delay of approval or refusal by the FDA, or other regulatory authorities to approve pending

applications or supplements to approved applications, suspension or withdrawal of regulatory approval, product recalls and seizures,

administrative detention of products, refusal to permit the import or export of products, operating restrictions, injunction, civil penalties,

and criminal prosecution.

if we are able to commercialize any product candidate, such product candidate may become subject to unfavorable pricing regulations or

third-party coverage and reimbursement policies, which would harm our business.

the United States and markets in other countries, patients generally rely on third-party payors to reimburse all or part of the costs

associated with their treatment.

Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid,

and private health insurers is critical to new product acceptance.

is also significant uncertainty related to the insurance coverage and reimbursement of newly approved products and coverage may be more

limited than the purposes for which the medicine is approved by the FDA or comparable foreign regulatory authorities.

In the United States,

the principal decisions about reimbursement for new medicines are typically made by the CMS, an agency within the U.S.

Department of

Health and Human Services.

CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private

payors tend to follow CMS to a substantial degree.

ability to commercialize any products successfully will depend, in part, on the extent to which coverage and adequate reimbursement for

these products and related treatments will be available from third-party payors, such as government authorities, private health insurers

and health maintenance organizations.

Patients who are prescribed medications for the treatment of their conditions generally rely on

third-party payors to reimburse all or part of the costs associated with their prescription drugs.

Coverage and adequate reimbursement

from government healthcare programs, such as Medicare and Medicaid, and private health insurers are critical to new product acceptance.

Patients are unlikely to use our future products, if any, unless coverage is provided and reimbursement is adequate to cover a significant

portion of the cost.

Obtaining coverage and adequate reimbursement for our product candidates may be particularly difficult because of

the higher prices often associated with drugs administered under the supervision of a physician.

Similarly, because our product candidates

are physician-administered, separate reimbursement for the product itself may or may not be available.

Instead, the administering physician

may or may not be reimbursed for providing the treatment or procedure in which our product is used.

Cost-containment

is a priority in the U.S.

We intend to rely on third-party manufacturers and we will not have control

over compliance with applicable rules and regulations by such manufacturers.

Any product promotion and advertising will also be

subject to regulatory requirements and continuing regulatory review.

If we or our existing or future collaborators, manufacturers or

service providers fail to comply with applicable continuing regulatory requirements in the U.S.

or foreign jurisdictions in

which we seek to market our products, we or they may be subject to, among other things, fines, warning letters, holds on clinical

trials, delay of approval or refusal by the FDA, or other regulatory authorities to approve pending applications or supplements to

approved applications, suspension or withdrawal of regulatory approval, product recalls and seizures, administrative detention of

products, refusal to permit the import or export of products, operating restrictions, injunction, civil penalties, and criminal

Even if we are able to commercialize any

product candidate, such product candidate may become subject to unfavorable pricing regulations or third-party coverage and reimbursement

policies, which would harm our business.

In the United States and

markets in other countries, patients generally rely on third-party payors to reimburse all or part of the costs associated with their

Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and private health

insurers is critical to new product acceptance.

There is also significant uncertainty

related to the insurance coverage and reimbursement of newly approved products and coverage may be more limited than the purposes for

which the medicine is approved by the FDA or comparable foreign regulatory authorities.

In the United States, the principal decisions

about reimbursement for new medicines are typically made by the CMS, an agency within the U.S.

Department of Health and Human Services.

CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow

CMS to a substantial degree.

Our ability to commercialize

any products successfully will depend, in part, on the extent to which coverage and adequate reimbursement for these products and related

treatments will be available from third-party payors, such as government authorities, private health insurers and health maintenance organizations.

Patients who are prescribed medications for the treatment of their conditions generally rely on third-party payors to reimburse all or

part of the costs associated with their prescription drugs.

Coverage and adequate reimbursement from government healthcare programs, such

as Medicare and Medicaid, and private health insurers are critical to new product acceptance.

Patients are unlikely to use our future

products, if any, unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost.

Obtaining coverage

and adequate reimbursement for our product candidates may be particularly difficult because of the higher prices often associated with

drugs administered under the supervision of a physician.

Similarly, because our product candidates are physician-administered, separate

reimbursement for the product itself may or may not be available.

Instead, the administering physician may or may not be reimbursed for

providing the treatment or procedure in which our product is used.

Cost-containment is a

priority in the U.S.

healthcare industry and elsewhere.

As a result, government authorities and other third-party payors have attempted

to control costs by limiting coverage and the amount of reimbursement for particular medications.

Increasingly, third-party payors are

requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical

Third-party payors also may request additional clinical evidence beyond the data required to obtain marketing approval, requiring

a company to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of its product.

Commercial third-party payors often rely upon Medicare coverage policy and payment limitations in setting their reimbursement rates,

but also have their own methods and approval process apart from Medicare determinations.

Therefore, coverage and reimbursement for pharmaceutical

products in the U.S.

can differ significantly from payor to payor.

We cannot be sure that coverage and adequate reimbursement will be

available for any product that we commercialize and, if reimbursement is available, that the level of reimbursement will be adequate.

Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval.

If coverage and reimbursement are not available or are available only at limited levels, we may not be able to successfully commercialize

any product candidate for which we obtain marketing approval.

Additionally,

the regulations that govern regulatory approvals, pricing and reimbursement for new drugs and therapeutic biologics vary widely from

country to country.

As a result, government authorities and other third-party payors have

attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.

Increasingly,

third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging

the prices charged for medical products.

Third-party payors also may request additional clinical evidence beyond the data required

to obtain marketing approval, requiring a company to conduct expensive pharmacoeconomic studies in order to demonstrate the medical

necessity and cost-effectiveness of its product.

Commercial third-party payors often rely upon Medicare coverage policy and payment

limitations in setting their reimbursement rates, but also have their own methods and approval process apart from Medicare

determinations.

Therefore, coverage and reimbursement for pharmaceutical products in the U.S.

can differ significantly from

payor to payor.

We cannot be sure that coverage and adequate reimbursement will be available for any product that we commercialize

and, if reimbursement is available, that the level of reimbursement will be adequate.

Coverage and reimbursement may impact the

demand for, or the price of, any product candidate for which we obtain marketing approval.

If coverage and reimbursement are not

available or are available only at limited levels, we may not be able to successfully commercialize any product candidate for which

we obtain marketing approval.

Additionally, the regulations

that govern regulatory approvals, pricing and reimbursement for new drugs and therapeutic biologics vary widely from country to country.

Some countries require approval of the sale price of a drug or therapeutic biologic before it can be marketed.

many countries, the pricing review period begins after marketing approval is granted.

In some foreign markets, prescription pharmaceutical

pricing remains subject to continuing governmental control even after initial approval is granted.

As a result, we might obtain regulatory

approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product,

possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country.

Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates

In many countries, the

pricing review period begins after marketing approval is granted.

In some foreign markets, prescription pharmaceutical pricing remains

subject to continuing governmental control even after initial approval is granted.

As a result, we might obtain regulatory approval for

a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly

for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country.

pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates

obtain regulatory approval.

are subject to U.S.

and foreign anti-corruption and anti-money laundering laws with respect to our operations and non-compliance with

such laws can subject us to criminal or civil liability and harm our business.

are subject to the U.S.

Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S.

domestic bribery statute

contained in 18 U.S.C.

We are subject to U.S.

anti-corruption and anti-money laundering laws with respect to our operations and non-compliance with such laws can subject us to criminal

or civil liability and harm our business.

We are subject to the U.S.

Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S.

domestic bribery statute contained in 18 U.S.C.

§ 201, the U.S.

Travel Act, the USA PATRIOT Act, and possibly other state and national anti-bribery and anti-money

laundering laws in countries in which we conduct activities.

Anti-corruption laws are interpreted broadly and prohibit companies and

their employees, agents, third-party intermediaries, joint venture partners and collaborators from authorizing, promising, offering or

providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector.

We interact with officials

and employees of government agencies and government-affiliated hospitals, universities, and other organizations.

In addition, we may

engage third-party intermediaries to promote our clinical research activities abroad or to obtain necessary permits, licenses and other

regulatory approvals.

We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees,

representatives, contractors, collaborators, and agents, even if we do not explicitly authorize or have actual knowledge of such activities.

connection with the Business Combination, Estrella adopted a Code of Business Conduct and Ethics and we expect to prepare and implement

policies and procedures to ensure compliance with such code.

The Code of Business Conduct and Ethics mandates compliance with the FCPA

and other anti-corruption laws applicable to our business throughout the world.

However, we cannot assure you that our employees and

third-party intermediaries will comply with the Code of Business Conduct and Ethics or such anti-corruption laws.

Noncompliance with

anti-corruption and anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements,

prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions,

suspension, or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage

and other collateral consequences.

If any subpoenas, investigations, or other enforcement actions are launched, or governmental or other

sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations and

financial condition could be materially harmed.

In addition, responding to any action will likely result in a materially significant

diversion of management’s attention and resources and significant defense and compliance costs and other professional fees.

certain cases, enforcement authorities may even cause us to appoint an independent compliance monitor which can result in added costs

and administrative burdens.

at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain

or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved, or commercialized

in a timely manner or at all, which could negatively impact our business.

ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding

levels, statutory, regulatory and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of

user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.

Average review times at the

FDA have fluctuated in recent years as a result.

In addition, government funding of other government agencies that fund research and

development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other

agencies may also slow the time necessary for new drugs and biologics or modifications to approved drugs and biologics to be reviewed

and/or approved by necessary government agencies, which would adversely affect our business.

For example, over the last several years,

including for 35 days beginning on December 22, 2018, the U.S.

government has shut down several times and certain regulatory agencies,

such as the FDA, have had to furlough critical FDA employees and stop critical activities.

March 2020 when foreign and domestic inspections of facilities were largely placed on hold, the FDA has been working to resume routine

surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis.

Since April 2021, the FDA has conducted limited

inspections and has employed remote interactive evaluations, using risk management methods, to meet user fee commitments and goal dates.

Ongoing travel restrictions and other uncertainties continue to impact oversight operations both domestic and abroad and it is unclear

when standard operational levels will resume.

The FDA is continuing to complete mission-critical work, prioritize other higher-tiered

inspectional needs (e.g., for-cause inspections), and carry out surveillance inspections using risk-based approaches for evaluating public

Should FDA determine that an inspection is necessary for approval and an inspection cannot be completed during the review cycle

due to restrictions on travel, and the FDA does not determine a remote interactive evaluation to be adequate, the agency has stated that

it generally intends to issue, depending on the circumstances, a complete response letter or defer action on the application until an

inspection can be completed.

During the COVID-19 public health emergency, a number of companies announced receipt of complete response

letters due to the FDA’s inability to complete required inspections for their applications.

Regulatory authorities outside the

may adopt similar restrictions or other policy measures in response to the ongoing COVID-19 pandemic and may experience delays in

their regulatory activities.

or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery

plans may not adequately protect us from a serious disaster.

share our facilities with Eureka (“Facilities”) located in Emeryville, California, near major earthquake faults, fire zones

and the shore of San Francisco Bay.

Any unplanned event, such as earthquake, flood, fire, explosion, extreme weather condition, medical

epidemics, including any potential effects from the current global spread of COVID-19, power shortage, telecommunication failure, or

other natural or man-made accidents or incidents that result in us being unable to fully utilize the Facilities may have a material adverse

effect on our ability to operate our business, particularly on a daily basis and have significant negative consequences on our financial

and operating conditions.

Loss of access to the Facilities may result in increased costs, delays in the development of our product candidates,

or interruption of our business operations.

Natural disasters or pandemics such as the COVID-19 outbreak could further disrupt our operations

and have a material adverse effect on our business, financial condition, results of operations, and prospects.

If a natural disaster,

power outage or other event occurred that prevented us from using all or a significant portion of the Facilities, that damaged critical

infrastructure, such as research facilities or the manufacturing facilities of our third-party contract manufacturers, or that otherwise

disrupted operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period

We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans,

which could have a material adverse effect on our business.

In the event of an accident or incident at the Facilities, we cannot assure

our investors that the amounts of insurance payable, if any, will be sufficient to satisfy any damages and losses.

If the Facilities

or the manufacturing facilities of our third-party contract manufacturers are unable to operate because of an accident or incident or

for any other reason, even for a short period of time, any or all of our research and development programs may be harmed.

interruption may have a material adverse effect on our business, financial condition, results of operations, and prospects.

quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each

of which may cause our stock price to fluctuate or decline.

expect our operating results to be subject to quarterly fluctuations.

Our net loss and other operating results will be affected by numerous

factors, including:

in the level of expense related to the ongoing development of our product candidates or future

development programs;

of preclinical studies and clinical trials, or the addition or termination of preclinical

studies and clinical trials or funding support by us or potential future collaborators;

execution of any collaboration, licensing, or similar arrangements, and the timing of payments

we may make or receive under potential future arrangements or the termination or modification

Travel Act, the USA PATRIOT Act, and possibly other state and national anti-bribery and anti-money laundering

laws in countries in which we conduct activities.

Anti-corruption laws are interpreted broadly and prohibit companies and their employees,

agents, third-party intermediaries, joint venture partners and collaborators from authorizing, promising, offering or providing, directly

or indirectly, improper payments or benefits to recipients in the public or private sector.

We interact with officials and employees of

government agencies and government-affiliated hospitals, universities, and other organizations.

In addition, we may engage third-party

intermediaries to promote our clinical research activities abroad or to obtain necessary permits, licenses and other regulatory approvals.

We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives,

contractors, collaborators, and agents, even if we do not explicitly authorize or have actual knowledge of such activities.

In connection with the Business

Combination, Estrella adopted a Code of Business Conduct and Ethics and we expect to prepare and implement policies and procedures to

ensure compliance with such code.

The Code of Business Conduct and Ethics mandates compliance with the FCPA and other anti-corruption

laws applicable to our business throughout the world.

However, we cannot assure you that our employees and third-party intermediaries

will comply with the Code of Business Conduct and Ethics or such anti-corruption laws.

Noncompliance with anti-corruption and anti-money

laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions,

disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension, or debarment from

contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage and other collateral consequences.

If any subpoenas, investigations, or other enforcement actions are launched, or governmental or other sanctions are imposed, or if we

do not prevail in any possible civil or criminal litigation, our business, results of operations and financial condition could be materially

In addition, responding to any action will likely result in a materially significant diversion of management’s attention

and resources and significant defense and compliance costs and other professional fees.

In certain cases, enforcement authorities may

even cause us to appoint an independent compliance monitor which can result in added costs and administrative burdens.

General Risk Factors

Disruptions at the FDA and other government

agencies caused by reductions in staffing, funding shortages or government shutdowns could hinder their ability to review regulatory submissions

or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which

could negatively impact our business.

The ability of the FDA, the

European Medicines Agency (“EMA”) and other comparable foreign regulatory authorities to review and approve new products can

be affected by a variety of factors, including government budget and funding levels, agency efforts to reduce or restructure the federal

workforce, and broader statutory, regulatory and policy changes.

In March 2025, the U.S.

Department of Health and Human Services (“HHS”)

implemented a major restructuring that reduced HHS staffing by approximately 20,000 positions, including about 3,500 positions at the

Current and former FDA employees and industry observers have expressed concern that such cuts have eroded morale and disrupted the

agency’s regulatory work, even though HHS stated that core drug, device and food reviewers were intended to be protected.

reductions occurred in fiscal year 2026, with the FDA experiencing a net loss of an additional 473 employees, contributing to delays in

application reviews and slower response times across drug and biologics centers.

In late 2025,

federal government experienced a partial shutdown following a lapse in appropriations, during which many federal employees

were furloughed and agencies, including the FDA, operated under contingency

plans with reduced staffing.

During shutdown periods, the FDA typically limits activities to those deemed “essential,” which

can include certain safety-related functions but may delay or suspend review of some regulatory submissions, inspections and policy work.

Although funding was subsequently restored and furloughed employees were authorized to return to work, similar shutdowns or lapses in

appropriations could recur in the future.

Disruptions and personnel turnover at the FDA and other agencies —

whether as a result of leadership changes, workforce reductions, hiring freezes, difficulty retaining key personnel, or government shutdowns

— may slow the time necessary for new drugs and biologics to be reviewed and/or approved.

Cuts in FDA staffing or sustained uncertainty

around agency resources could result in longer response times, delays in the review of INDs or other applications, slower issuance of

regulations or guidance, or diminished ability to implement or enforce regulatory requirements in a timely fashion.

If a prolonged government

shutdown occurs, or if staffing changes prevent the FDA, the USPTO, the SEC or other regulatory authorities from conducting their regular

inspections, reviews, or other regulatory activities, including formal and informal interactions with product developers, it could significantly

impact the timing of review and processing of our regulatory submissions and intellectual property filings, which could have a material

adverse effect on our business, financial condition and results of operations.

We or the related parties upon whom we depend may be adversely affected by natural disasters and our business

continuity and disaster recovery plans may not adequately protect us from a serious disaster.

We share our facilities with Eureka (“Facilities”) located in Emeryville, California, near major

earthquake faults, fire zones and the shore of San Francisco Bay.

Any unplanned event, such as earthquake, flood, fire, explosion, extreme

weather condition, medical epidemics, power shortage, telecommunication failure, or other natural or man-made accidents or incidents that

result in us being unable to fully utilize the Facilities may have a material adverse effect on our ability to operate our business, particularly

on a daily basis and have significant negative consequences on our financial and operating conditions.

Loss of access to the Facilities

may result in increased costs, delays in the development of our product candidates, or interruption of our business operations.

disasters or pandemics such as the COVID-19 outbreak could further disrupt our operations and have a material adverse effect on our business,

financial condition, results of operations, and prospects.

If a natural disaster, power outage or other event occurred that prevented

us from using all or a significant portion of the Facilities, that damaged critical infrastructure, such as research facilities or the

manufacturing facilities of our contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases,

impossible, for us to continue our business for a substantial period of time.

We may incur substantial expenses as a result of the limited

nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.

of an accident or incident at the Facilities, we cannot assure our investors that the amounts of insurance payable, if any, will be sufficient

to satisfy any damages and losses.

If the Facilities or the manufacturing facilities of our contract manufacturers are unable to operate

because of an accident or incident or for any other reason, even for a short period of time, any or all of our research and development

programs may be harmed.

Any business interruption may have a material adverse effect on our business, financial condition, results of

operations, and prospects.

Our quarterly operating results may fluctuate

significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate

We expect our operating results

to be subject to quarterly fluctuations.

Our net loss and other operating results will be affected by numerous factors, including:

● variations in the level of expense related to the ongoing

development of our product candidates or future development programs;

● results of preclinical studies and clinical trials, or the

addition or termination of preclinical studies and clinical trials or funding support by us or potential future collaborators;

● our execution of any collaboration, licensing, or similar

arrangements, and the timing of payments we may make or receive under potential future arrangements or the termination or modification

of any of our existing or potential future collaboration, licensing, or similar arrangements;

intellectual property infringement, misappropriation or violation lawsuit or opposition,

interference or cancellation proceeding in which we may become involved;

and departures of key personnel;

decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint

ventures, strategic investments, or changes in business strategy;

any of our product candidates receives regulatory approval, the terms of such approval and

market acceptance and demand for such product candidates;

developments affecting our product candidates or those of our competitors;

in general market and economic conditions.

our quarterly operating results fall below the expectations of investors or securities analysts, the price of our Common Stock could

decline substantially.

Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to

fluctuate substantially.

We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not

be relied upon as an indication of our future performance.

may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information

of third parties.

have received confidential and proprietary information from third parties.

In addition, we employ individuals who were previously employed

at other biotechnology or pharmaceutical companies.

We may be subject to claims that we or our employees, consultants, or independent

contractors have inadvertently or otherwise used or disclosed confidential information of these third parties or our employees’

former employers, or that we caused an employee to breach the terms of his or her non-competition or non-solicitation agreement.

may be necessary to defend against these claims.

Even if we are successful in defending against these claims, litigation could result

in substantial cost and be a distraction to our management and employees.

If our defenses to these claims fail, in addition to requiring

us to pay monetary damages, a court could prohibit us from using technologies or features that are essential to our product candidates,

if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the

former employers.

Moreover, any such litigation or the threat thereof may adversely affect our reputation, our ability to form strategic

alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which

would have an adverse effect on our business, results of operations, financial condition, and prospects.

Even if we are successful in

defending against such claims, litigation could result in substantial costs and be a distraction to management.

management team is not subject to non-competition restrictions if they terminate their employment with us.

employment agreements with Dr.

Xu do not contain non-competition covenants limiting their ability to compete with us if they

terminate their employment.

Although the employment agreements contain customary confidentiality and non-solicitation covenants, the

departure of one or more of the members of our management team, followed by such departing member competing with us could diminish our

strategic advantages and could have an adverse effect on our business, results of operations, financial condition, and prospects.

addition, Dr.

Liu’s employment agreement does not contain invention assignment provisions.

● any intellectual property infringement, misappropriation

or violation lawsuit or opposition, interference or cancellation proceeding in which we may become involved;

● additions and departures of key personnel;

● strategic decisions by us or our competitors, such as acquisitions,

divestitures, spin-offs, joint ventures, strategic investments, or changes in business strategy;

● if any of our product candidates receives regulatory approval,

the terms of such approval and market acceptance and demand for such product candidates;

● regulatory developments affecting our product candidates

or those of our competitors;

● changes in general market and economic conditions.

If our quarterly operating

results fall below the expectations of investors or securities analysts, the price of our Common Stock could decline substantially.

any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially.

that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our

future performance.

We may be subject to claims that our employees,

consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties.

We have received confidential and proprietary information from third

In addition, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies.

subject to claims that we or our employees, consultants, or independent contractors have inadvertently or otherwise used or disclosed

confidential information of these third parties or our employees’ former employers, or that we caused an employee to breach the

terms of his or her non-competition or non-solicitation agreement.

Litigation may be necessary to defend against these claims.

we are successful in defending against these claims, litigation could result in substantial cost and be a distraction to our management

and employees.

If our defenses to these claims fail, in addition to requiring us to pay monetary damages, a court could prohibit us from

using technologies or features that are essential to our product candidates, if such technologies or features are found to incorporate

or be derived from the trade secrets or other proprietary information of the former employers.

Moreover, any such litigation or the threat

thereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to collaborators, engage

with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations,

financial condition, and prospects.

Even if we are successful in defending against such claims, litigation could result in substantial

costs and be a distraction to management.

Our management team is not subject to non-competition

restrictions if they terminate their employment with us.

The employment agreements with

Xu do not contain non-competition covenants limiting their ability to compete with us if they terminate their

Although the employment agreements contain customary confidentiality and non-solicitation covenants, the departure of one

or more of the members of our management team, followed by such departing member competing with us could diminish our strategic advantages

and could have an adverse effect on our business, results of operations, financial condition, and prospects.

In addition, Dr.

employment agreement does not contain invention assignment provisions.

As a result, any invention by Dr.

would remain his intellectual property and we would have no right to ownership of such invention.

Related to our Securities

Common Stock price may be volatile.

Common Stock price is likely to be volatile.

The market price for our Common Stock may be influenced by many factors, including the other

risks described in this section of the Annual Report entitled “ Risk Factors ” and the following:

ability to advance its current or potential future product candidates into the clinic;

of preclinical studies and clinical trials for Estrella’s current or potential future

product candidates, or those of its competitors or potential future collaborators;

impact of the ongoing COVID-19 pandemic on Estrella’s business;

or legal developments in the United States and other countries, especially changes in laws

or regulations applicable to Estrella’s future products;

success of competitive products or technologies;

● introductions

and announcements of new products by Estrella, its future commercialization collaborators,

or its competitors, and the timing of these introductions or announcements;

taken by regulatory authorities with respect to Estrella future products, clinical trials,

manufacturing process or sales and marketing terms;

or anticipated variations in Estrella’s financial results or those of companies that

are perceived to be similar to Estrella;

success of Estrella’s efforts to acquire or in-license additional technologies, products,

or product candidates;

● developments

concerning any future collaborations, including, but not limited to, those with any sources

of manufacturing supply and future commercialization collaborators;

conditions in the pharmaceutical and biotechnology sectors;

conditions and sentiment involving companies that have recently completed a business combination

with a special purpose acquisition company (“SPAC”);

● announcements

by Estrella or its competitors of significant acquisitions, strategic alliances, joint ventures

or capital commitments;

● developments

or disputes concerning patents or other proprietary rights, including patents, litigation

matters and Estrella’s ability to obtain patent protection for its products;

ability or inability to raise additional capital and the terms on which it is raised;

recruitment or departure of key personnel;

in the structure of healthcare payment systems;

or anticipated changes in earnings estimates or changes in stock market analyst recommendations

regarding our Common Stock, other comparable companies or the industry generally;

failure or the failure of its competitors to meet analysts’ projections or guidance

that Estrella or its competitors may give to the market;

● fluctuations

in the valuation of companies perceived by investors to be comparable to Estrella;

● announcement

and expectation of additional financing efforts;

● speculation

in the press or investment community;

volume of our Common Stock;

of our Common Stock by Estrella or its stockholders, including the negative pressure potential

sales of shares issued in the deSPAC transaction and registered pursuant to the registration

statement relating to the offer and resale from time to time of an aggregate of 3,829,338

shares of Common Stock;

concentrated ownership of our Common Stock;

in accounting principles;

acts, acts of war or periods of widespread civil unrest;

disasters, public health crises and other calamities;

economic, industry and market conditions.

addition, the stock markets in general, and the markets for SPAC post-business combination businesses, pharmaceutical, biopharmaceutical

and biotechnology stocks in particular, have experienced extreme volatility, including since the public announcement of the Merger Agreement

in October 2022.

This volatility can often be unrelated to the operating performance of the underlying business.

These broad market and

industry factors may seriously harm the market price of our Common Stock, regardless of Estrella’s operating performance.

may incur significant costs from class action litigation due to the expected stock volatility.

stock price may fluctuate for many reasons, including as a result of public announcements regarding the progress of development efforts

for Estrella’s platform and product candidates, the development efforts of future collaborators or competitors, the addition or

departure of key personnel, variations in quarterly operating results and changes in market valuations of biopharmaceutical and biotechnology

This risk is especially relevant to Estrella because biopharmaceutical and biotechnology companies have experienced significant

stock price volatility in recent years, including since the public announcement of the Merger Agreement in October 2022.

recently there has been significant stock price volatility involving the shares of companies that have recently completed a business

combination with a SPAC.

When the market price of a stock has been volatile, as Estrella’s stock price may be, holders of that

stock have occasionally brought securities class action litigation against the company that issued the stock.

Additionally, there has

recently been a general increase in litigation against companies that have recently completed a business combination with a SPAC alleging

fraud and other claims based on inaccurate or misleading disclosures.

If any Estrella stockholders were to bring a lawsuit of this type

against Estrella, even if the lawsuit is without merit, Estrella could incur substantial costs defending the lawsuit.

The lawsuit could

also divert the time and attention of management.

are a “controlled company” within the meaning of Nasdaq listing rules and, as a result, can rely on exemptions from certain

corporate governance requirements that provide protection to shareholders of other companies.

a result of Eureka Therapeutics, Inc.

holding more than 50% of the voting power of our board of directors, we will be a “controlled

company” within the meaning of Nasdaq’s listing rules.

Therefore, we are not required to comply with certain corporate governance

rules that would otherwise apply to us as a listed company on Nasdaq including the requirement that compensation committee and nominating

and corporate governance committee be composed entirely of “independent” directors (as defined by Nasdaq’s listing

As a “controlled company” the Estella Board is not required to include a majority of “independent” directors.

Liu would remain his intellectual

property and we would have no right to ownership of such invention.

Risks Related to our Securities

Our Common Stock price may be volatile.

Our Common Stock price is likely

to be volatile.

The market price for our Common Stock may be influenced by many factors, including the other risks described in this section

of the prospectus entitled “ Risk Factors ” and the following:

● Estrella’s ability to advance its current or potential

future product candidates into the clinic;

● results of preclinical studies and clinical trials for Estrella’s

current or potential future product candidates, or those of its competitors or potential future collaborators;

● regulatory or legal developments in the United States

and other countries, especially changes in laws or regulations applicable to Estrella’s future products;

● the success of competitive products or technologies;

● introductions and announcements of new products by Estrella,

its future commercialization collaborators, or its competitors, and the timing of these introductions or announcements;

● actions taken by regulatory authorities with respect to Estrella

future products, clinical trials, manufacturing process or sales and marketing terms;

● actual or anticipated variations in Estrella’s financial

results or those of companies that are perceived to be similar to Estrella;

● the success of Estrella’s efforts to acquire or in-license

additional technologies, products, or product candidates;

● developments concerning any future collaborations, including,

but not limited to, those with any sources of manufacturing supply and future commercialization collaborators;

● market conditions in the pharmaceutical and biotechnology

● announcements by Estrella or its competitors of significant

acquisitions, strategic alliances, joint ventures or capital commitments;

● developments or disputes concerning patents or other proprietary

rights, including patents, litigation matters and Estrella’s ability to obtain patent protection for its products;

● Estrella’s ability or inability to raise additional

capital and the terms on which it is raised;

● the recruitment or departure of key personnel;

● changes in the structure of healthcare payment systems;

● actual or anticipated changes in earnings estimates or changes

in stock market analyst recommendations regarding our Common Stock, other comparable companies or the industry generally;

● Estrella’s failure or the failure of its competitors

to meet analysts’ projections or guidance that Estrella or its competitors may give to the market;

● fluctuations in the valuation of companies perceived by investors

to be comparable to Estrella;

● announcement and expectation of additional financing efforts;

● speculation in the press or investment community;

● trading volume of our Common Stock;

● sales of our Common Stock by us or our stockholders, including

sales of shares registered for resale under this or other registration statements, which could create or increase an overhang in the

● the concentrated ownership of our Common Stock;

● changes in accounting principles;

● terrorist acts, acts of war or periods of widespread civil

termination or non-renewal of key agreements, such as the Service Agreement with Eureka;

● natural disasters, public health crises and other calamities;

● general economic, industry and market conditions.

In addition, stock markets

in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology companies in particular, have experienced significant

volatility in recent years, often unrelated to the operating performance of the underlying businesses.

This type of broad market

and industry volatility may adversely affect the trading price of our Common Stock, regardless of our operating performance.

If we fail to maintain compliance with Nasdaq

listing standards, our Common Stock could be delisted, which could adversely affect the trading price and liquidity of our Common Stock

and subject us to additional trading restrictions, including the “penny stock” rules.

Our Common Stock is currently

listed on the Nasdaq Capital Market.

To maintain this listing, we must satisfy ongoing requirements, including, among others, the minimum

bid price requirement under Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of $1.00 per share, and the minimum market

value of listed securities requirement under Nasdaq Listing Rule 5550(b)(2).

On November 19, 2024, we received notices from Nasdaq that

we were not in compliance with the minimum bid price requirement and the requirement to maintain a minimum of $2,500,000 in stockholders’

We regained compliance with both of these requirements on December 11, 2024.

Subsequently, in April 2025,

we received a notice from Nasdaq that we were not in compliance with the minimum bid price requirement, and in August 2025 we received

a notice that we were not in compliance with the minimum market value of listed securities requirement.

In September 2025, Nasdaq notified

us that we had regained compliance with both of these listing standards and that these matters were closed.

Additionally, on January 7, 2026, we received a notice from Nasdaq that we are not in compliance with Nasdaq

Listing Rule 5620(a) because we have not yet held an annual meeting of shareholders within twelve months of the end of the transition

period ended December 31, 2024.

We submitted a plan to regain compliance, which Nasdaq accepted on February 27, 2026, granting us an extension

until June 29, 2026, to hold a joint 2025/2026 annual meeting.

There can be no assurance that we will be able to regain compliance within

the extension period granted.

If we do not satisfy the terms, Nasdaq will provide written notification that our securities will be delisted,

at which time we may appeal to a Hearings Panel.

In addition, there can be no assurance that we will continue to satisfy

Nasdaq’s other listing requirements related to minimum bid price or market value of listed securities in the future.

Our stock price

may again fall below the $1.00 minimum bid price requirement, or our market value of listed securities or other metrics may fall below

applicable thresholds.

Nasdaq has recently adopted changes that may shorten the time available to regain compliance with the minimum bid

price requirement and restrict the use of reverse stock splits to cure bid-price deficiencies.

If we are unable to regain or maintain

compliance with Nasdaq’s listing standards within the applicable cure periods, our Common Stock could be subject to delisting.

If our Common Stock is

delisted from Nasdaq and is not listed on another national securities exchange, our Common Stock may be quoted on an

over-the-counter market.

In that event, we could become subject to the Securities and Exchange Commission’s “penny

stock” rules, which generally apply to securities trading below $5.00 per share that are not listed on a national securities

These rules impose additional disclosure and suitability obligations on broker-dealers that effect transactions in penny

stocks, including obtaining a customer’s written consent before a transaction in a penny stock, which could reduce the number

of broker-dealers willing to make a market in our Common Stock and may further limit the liquidity and trading volume of our shares.

As a result, delisting from Nasdaq could adversely affect the trading price of our Common Stock, make it more difficult for

stockholders to sell their shares, impair our ability to raise additional capital on acceptable terms or at all, and could have a

material adverse effect on our business, financial condition and results of operations.

Estrella may incur significant costs from

class action litigation due to the expected stock volatility.

The trading price of our Common

Stock may fluctuate for many reasons, including as a result of public announcements regarding the progress of development efforts for

our platform and product candidates, the development efforts of collaborators or competitors, the addition or departure of key personnel,

variations in our quarterly operating results, changes in market valuations of biopharmaceutical and biotechnology companies, changes

in overall market conditions, or other factors discussed in this “Risk Factors” section.

This risk is especially relevant

to us because biopharmaceutical and biotechnology companies have experienced significant stock price volatility in recent years and

continue to be among the industries most frequently targeted in securities class action lawsuits.

In the past, securities class action

litigation has often been brought against public companies following periods of volatility in the market price of their securities, including

life sciences companies whose stock prices declined after clinical, regulatory or financing developments.

If any of our stockholders were

to bring a securities class action lawsuit against us, even if the claims are without merit, we could incur substantial costs defending

the action, and such litigation could divert the time and attention of our management and other personnel from operating our business,

which could harm our business, operating results, financial condition and cash flows.

We are a “controlled company”

within the meaning of Nasdaq listing rules and, as a result, can rely on exemptions from certain corporate governance requirements that

provide protection to shareholders of other companies.

As a result of Eureka Therapeutics, Inc.

holding more than 50% of the

voting power of our board of directors, we will be a “controlled company” within the meaning of Nasdaq’s listing rules.

Therefore, we are not required to comply with certain corporate governance rules that would otherwise apply to us as a listed company

on Nasdaq including the requirement that compensation committee and nominating and corporate governance committee be composed entirely

of “independent” directors (as defined by Nasdaq’s listing rules).

As a “controlled company” the Estrella

Board is not required to include a majority of “independent” directors.

We do not intend to rely on those exemptions.

However, we cannot guarantee that this may not change going forward.

the interests of Eureka Therapeutics, Inc.

differ from those of other stockholders, it is possible that the other shareholders might

not be afforded such protections as might exist if the board of directors of us, or such committees, were required to have a majority,

or be composed exclusively, of directors who were independent of Eureka Therapeutics, Inc.

we cannot guarantee that this may not change going forward.

Should the interests of Eureka

Therapeutics, Inc.

differ from those of other stockholders, it is possible that the other shareholders might not be afforded such protections

as might exist if the board of directors of us, or such committees, were required to have a majority, or be composed exclusively, of directors

who were independent of Eureka Therapeutics, Inc.

or our management.

is an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth

companies will make our Common Stock less attractive to investors and may make it more difficult to compare performance with other public

is an emerging growth company as defined in the JOBS Act, and it intends to take advantage of certain exemptions from various reporting

requirements that are applicable to other public companies that are not emerging growth companies, including 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 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.

Investors may find our Common

Stock less attractive because Estrella will continue to rely on these exemptions.

If some investors find our Common Stock less attractive

as a result, there may be a less active trading market for our Common Stock, and the stock price may be more volatile.

emerging growth company may elect to delay the adoption of new or revised accounting standards.

Section 102(b)(2) of the JOBS Act allows

Estrella to delay adoption of new or revised accounting standards until those standards apply to non-public business entities.

the financial statements contained in this Annual Report and those that Estrella will file in the future may not be comparable to companies

Estrella is an “emerging growth company”

and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less

attractive to investors and may make it more difficult to compare performance with other public companies.

Estrella is an emerging growth

company as defined in the JOBS Act, and it intends to take advantage of certain exemptions from various reporting requirements that are

applicable to other public companies that are not emerging growth companies, including 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 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.

Investors may find our Common Stock less attractive because

Estrella will continue to rely on these exemptions.

If some investors find our Common Stock less attractive as a result, there may be

a less active trading market for our Common Stock, and the stock price may be more volatile.

An emerging growth company

may elect to delay the adoption of new or revised accounting standards.

Section 102(b)(2) of the JOBS Act allows Estrella to

delay adoption of new or revised accounting standards until those standards apply to non-public business entities.

As a result, the consolidated

financial statements contained in this Annual Report and those that Estrella will file in the future may not be comparable to companies

that comply with the effective dates of revised accounting standards for public entities.

sales and issuances of Common Stock or rights to purchase Common Stock could result in additional dilution of the percentage ownership

of Estrella stockholders and could cause Common Stock price to fall.

additional capital will be needed in the future to continue Estrella’s planned operations, including further development of Estrella’s

product candidates, payments under the Services Agreement in connection with preparing regulatory filings, conducting preclinical studies

and clinical trials, commercialization efforts, expanded research and development activities and costs associated with operating a public

To raise capital, Estrella may sell Common Stock, convertible securities, or other equity securities in one or more transactions

at prices and in a manner as determined from time to time.

If Estrella sells Common Stock, convertible securities, or other equity securities,

investors may be materially diluted by subsequent sales.

Such sales may also result in material dilution to existing stockholders, and

new investors could gain rights, preferences, and privileges senior to the holders of Common Stock.

to the Incentive Plan, the Estrella Board or a committee appointed by the Estrella Board to administer the Incentive Plan (the “Incentive

Plan Administrator”), is authorized to grant stock options to Estrella’s employees, directors, and consultants.

the maximum aggregate number of shares of Common Stock that may be issued pursuant to stock awards under the Incentive Plan will be equal

to the number of shares of Common Stock initially reserved under the Incentive Plan.

The number of shares authorized for issuance under

the Incentive Plan is approximately 3,520,123 shares of Common Stock.

In addition, annually on the first trading day of the calendar

year beginning in calendar year 2024, such share reserve will automatically increase by 10% of the total number of shares of Common Stock

outstanding as of the last day of the immediately preceding calendar year, unless the Incentive Plan Administrator acts prior to January

Future sales and issuances of Common Stock

or rights to purchase Common Stock could result in additional dilution of the percentage ownership of Estrella stockholders and could

cause the price of our Common Stock to fall.

Significant additional capital

will be needed in the future to continue our planned operations, including further development of our product candidates, payments under

the Services Agreement in connection with preparing regulatory filings, conducting preclinical studies and clinical trials, commercialization

efforts, expanded research and development activities and costs associated with operating as a public company.

To raise capital, we may

sell Common Stock, convertible securities or other equity securities in one or more transactions at prices and in a manner as determined

from time to time.

If we sell Common Stock, convertible securities or other equity securities, investors may be materially diluted by

subsequent sales.

Such sales may also result in material dilution to existing stockholders, and new investors could gain rights, preferences

and privileges senior to the holders of our Common Stock.

Pursuant to our 2023 Omnibus

Incentive Plan (the “2023 Plan”), our board of directors or a committee appointed by the board to administer the 2023 Plan

(the “Incentive Plan Administrator”) is authorized to grant stock options and other equity awards to our employees, directors

and consultants.

Initially, 3,520,123 shares of Common Stock were authorized for issuance under the 2023 Plan.

On January 1, 2024,

under the plan’s evergreen provision, the share reserve automatically increased by 1,941,293 shares, and on January 1, 2025,

it increased by an additional 1,920,444 shares.

In addition, on the first trading day of each subsequent calendar year, beginning

with calendar year 2026, the share reserve will automatically increase by up to 5% of the total number of shares of Common Stock outstanding

as of the last day of the immediately preceding calendar year, unless the Incentive Plan Administrator acts prior to January 1

of such year to provide that there will be no increase or a lesser increase in the share reserve for that year.

Unless the Incentive

Plan Administrator acts not to increase the number of shares available for issuance under the Incentive Plan, Estrella stockholders may

experience additional dilution, which could cause Estrella’s stock price to fall.

issuance of additional shares of common stock or other equity securities of equal or senior rank would, all else being equal, have the

following effects:

stockholders’ proportionate ownership interest in Estrella would decrease;

amount of cash available per share, including for payment of dividends in the future, may

relative voting strength of each previously outstanding share of common stock would be diminished;

market price of shares of Common Stock may decline.

exercise by Estrella of its right to issue Common Stock pursuant to the Common Stock Purchase Agreement could cause substantial dilution,

which could materially affect the trading price of Common Stock.

connection with the closing of the Business Combination, the Common Stock Purchase Agreement granted Estrella the right, but not the

obligation, to require White Lion to purchase, from time to time, up to the lesser of (i) $50,000,000 of newly issued shares of Common

Stock and (ii) the Exchange Cap, subject to satisfaction of certain conditions.

To the extent Estrella exercises its right to sell such

shares under the Common Stock Purchase Agreement, Estrella will need to issue new shares to White Lion.

Although we cannot predict the

number of shares of Common Stock that would actually be issued in connection with any such sales, such issuances could result in substantial

dilution and decreases to the stock price of Common Stock.

may be unable to sell shares to White Lion pursuant to the Common Stock Purchase Agreement if our Common Stock is delisted.

of the conditions precedent to the commencement of the Common Stock Purchase Agreement is that Common Stock must be listed on a Principal

Market and must not be suspended from trading or delisted.

If our Common Stock is delisted, we will not be able to sell Equity Line Shares

to White Lion and Estrella will lose a significant source of potential financing for its business.

This could adversely affect our ability

to fund our operations and obtain regulatory approval for our product candidates and could materially harm our business, financial condition

and results of operations.

Furthermore, if our Common Stock is delisted, we may face other negative consequences, such as reduced liquidity

and trading volume of our shares, lower investor interest and confidence in our company, decreased analyst coverage and market making

activity, limited availability of capital or financing options, and increased volatility in our stock price.

Warrants may never be in the money, and they may expire worthless.

exercise price for our Private Warrants is $11.50 per-share (subject to adjustment as described herein), which exceeds the market price

of our Common Stock, which was $1.01 per share based on the closing price of our Common Stock on the Nasdaq Capital Market on July 1,

If all of our Warrants were exercised in full for cash, we would receive an aggregate of approximately $25,472,500.

We do not expect

warrant holders to exercise their Warrants and, therefore, we do not expect to receive cash proceeds from any such exercise, for so long

as the Warrants remain out-of-the money.

There can be no assurance that the Warrants will ever be in the money prior to their expiration

and, as such, the Warrants may expire worthless.

may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to investors, thereby making our Warrants worthless.

have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at $0.01 per

warrant, provided that the last reported sales price (or the closing bid price of our Common Stock in the event the shares of our Common

Stock are not traded on any specific trading day) of the Common Stock equals or exceeds $16.50 per share (as adjusted for stock splits,

stock dividends, reorganizations and the like) on each of 20 trading days within the 30 trading-day period ending on the third business

day prior to the date on which we send proper notice of such redemption, provided that on the date we give notice of redemption and during

the entire period thereafter until the time we redeem the warrants, we have an effective registration statement under the Securities

Act covering the Common Stock issuable upon exercise of the warrants and a current prospectus relating to them is available.

The registration

statement registering the shares of Common Stock issuable upon exercise of the Warrants was declared effective on December 28, 2023.

If and when the Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the

underlying securities for sale under all applicable state securities laws.

Redemption of the outstanding Warrants could force a warrant

(i) to exercise its warrants and pay the exercise price therefor at a time when it may be disadvantageous for it to do so, (ii)

to sell its warrants at the then-current market price when it might otherwise wish to hold its Warrants or (iii) to accept the nominal

redemption price which, at the time the outstanding Public Warrants are called for redemption, will be substantially less than the market

value of its Warrants.

warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New

York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our Warrants, which

could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with us.

warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating

in any way to the warrant agreement including under the Securities Act, will be brought and enforced in the courts of the State of New

York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction,

which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.

We will waive any objection to such exclusive

jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding

the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by

the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive

Any person or entity purchasing or otherwise acquiring any interest in any of our Warrants shall be deemed to have notice of and

to have consented to the forum provisions in our warrant agreement.

If any action, the subject matter of which is within the scope the

forum provisions of the warrant agreement is filed in a court other than a court of the State of New York or the United States District

Court for the Southern District of New York (for purposes of this subsection, a “foreign action”) in the name of any holder

of our Warrants such holder shall be deemed to have consented to:

(x) the personal jurisdiction of the state and federal courts located

in the State of New York in connection with any action brought in any such court to enforce the forum provisions (for purposes of this

subsection, an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement

action by service upon such warrant holder’s counsel, as applicable, in the foreign action as agent for such warrant holder.

choice-of-forum provision may limit the ability of warrant holders to bring a claim in a judicial forum that they find favorable for

disputes with our company, which may discourage such lawsuits.

Alternatively, if a court were to find this provision of our warrant agreement

inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs

associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition

and results of operations and result in a diversion of the time and resources of our management and the Estrella Board.

Warrants are exercisable for our Common Stock, which, upon exercise, would increase the number of shares eligible for future resale in

the public market and result in dilution to our shareholders.

Warrants to purchase an aggregate of 2,215,000 shares of Common Stock became exercisable on the completion of the Business Combination

and the registration statement registering the shares of Common Stock underlying the Warrants becoming effective on December 28, 2023.

Each Warrant entitles the holder thereof to purchase one share of our Common Stock at a price of $11.50 per whole share, subject to adjustment.

may be exercised only for a whole number of shares of Common Stock.

To the extent such Warrants are exercised, additional shares of Common

Stock will be issued, which will result in dilution to the then existing holders of our Common Stock and increase the number of shares

eligible for resale in the public market.

Sales of substantial numbers of such shares in the public market could adversely affect the

market price of our Common Stock.

internal control over financial reporting may not prevent or detect all errors or acts of fraud.

must design its internal control over financial reporting to reasonably assure that information we must disclose in reports we file or

submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized, and reported within

the time periods specified in the rules and forms of the SEC.

We believe that any disclosure controls and procedures or internal controls

and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of

the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that

breakdowns can occur because of simple error or mistake.

For example, our directors or executive officers could inadvertently fail to

disclose a new relationship or arrangement causing us to fail to make a required related party transaction disclosure.

Additionally,

controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override

of the controls.

Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur

and not be detected.

has identified material weaknesses in its internal control over financial reporting which, if not corrected, could affect the reliability

of Estrella’s consolidated financial statements, and have other adverse consequences.

In connection with the audits

of Estrella’s financial statements for the years ended June 30, 2023 and 2024, material weaknesses in Estrella’s internal

control over financial reporting were identified in relation to:

(i) Estrella’s lack of 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.

A material weakness is a deficiency or combination of deficiencies in internal control over financial

reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements would not

be prevented or detected on a timely basis.

identified material weaknesses, if not corrected, could result in a material misstatement to Estrella’s consolidated financial

statements that may not be prevented or detected.

Unless the Incentive Plan

Administrator acts not to increase, or to reduce the increase in, the number of shares available for issuance under the 2023 Plan, our

stockholders may experience additional dilution, which could cause the price of our Common Stock to fall.

In 2024, options to purchase

3,600,000 shares of our Common Stock were granted to our employees, members of our board of directors and other consultants under the

Estrella’s issuance of

additional shares of common stock or other equity securities of equal or senior rank would, all else being equal, have the following effects:

● existing stockholders’ proportionate ownership interest

in Estrella would decrease;

● the amount of cash available per share, including for payment

of dividends in the future, may decrease;

● the relative voting strength of each previously outstanding

share of common stock would be diminished;

● the market price of shares of Common Stock may decline.

Estrella’s internal control over financial

reporting may not prevent or detect all errors or acts of fraud.

Estrella must design its internal

control over financial reporting to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act

is accumulated and communicated to management, and recorded, processed, summarized, and reported within the time periods specified in

the rules and forms of the SEC.

We believe that any disclosure controls and procedures or internal controls and procedures, no matter

how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because

of simple error or mistake.

For example, our directors or executive officers could inadvertently fail to disclose a new relationship or

arrangement causing us to fail to make a required related party transaction disclosure.

Additionally, controls can be circumvented by

the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.

Accordingly, because

of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Estrella has identified material weaknesses

in its internal control over financial reporting which, if not corrected, could affect the reliability of Estrella’s consolidated

financial statements, and have other adverse consequences.

In connection with the audits of Estrella’s consolidated financial

statements for the fiscal year ended December 31, 2025, and the six-month transition period ended December 31, 2024, material weaknesses

in Estrella’s internal control over financial reporting were identified in relation to Estrella’s lack of 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 consolidated financial statements and related disclosures under U.S.

A material weakness is a deficiency or combination

of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement

of our consolidated financial statements would not be prevented or detected on a timely basis.

The identified material

weaknesses, if not corrected, could result in a material misstatement to Estrella’s consolidated financial statements that may

not be prevented or detected.

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 2023.

The implementation of the material aspects of this plan took place

during the second and third quarters of fiscal year 2024.

Additional qualified out-sourced personnel with appropriate levels of accounting

knowledge and experience to address U.S.

GAAP accounting issues have been added to prepare and review financial statements and related

disclosures under U.S.

Non-routine transactions are analyzed by the chief financial officer and third-party consultants to ensure

proper accounting treatment.

Narratives and policies for business processes that relate to financial statements have been put in place

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 2025 and 2024.

Additional qualified out-sourced personnel with appropriate levels of accounting knowledge and

experience to address U.S.

GAAP accounting issues have been added to prepare and review financial statements and related disclosures

Non-routine transactions are analyzed by the chief financial officer and third-party consultants to ensure proper accounting

Narratives and policies for the Company’s business processes that relate to financial statements have been put in place

to establish 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, 2024, our disclosure controls and procedures

were not effective at the reasonable assurance level.

If Estrella fails to establish and maintain proper internal financial reporting

controls, its ability to produce accurate financial statements or comply with applicable regulations could be impaired.

is a public company in the United States subject to the Sarbanes-Oxley Act of 2002.

Section 404 of the Sarbanes-Oxley Act of 2002, or

Section 404, requires that Estrella include a report from management on Estrella’s internal control over financial reporting in

Estrella’s annual report on Form 10-K beginning with Estrella’s annual report for the fiscal year ended June 30, 2024.

addition, if Estrella ceases to be an “emerging growth company,” Estrella’s independent registered public accounting

firm may be required to attest to and report on the effectiveness of Estrella’s internal control over financial reporting.

Estrella fails to implement any required improvements to its disclosure controls and procedures to address any material weaknesses in

its internal control over financial reporting, such material weaknesses could result in inaccuracies in Estrella’s financial statements

and could also impair its ability to comply with applicable financial reporting requirements and related regulatory filings on a timely

addition, Estrella’s reporting obligations may place a significant strain on its management, operational, and financial resources

and systems for the foreseeable future.

weaknesses, our chief executive officer and chief financial officer concluded that as of December 31, 2025, our disclosure controls and

procedures were not effective at the reasonable assurance level.

If Estrella fails to establish and maintain proper internal financial

reporting controls, its ability to produce accurate financial statements or comply with applicable regulations could be impaired.

Estrella is a public company in the United States subject to the Sarbanes-Oxley

Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we include a report from management on our internal

control over financial reporting in our annual reports on Form 10-K.

In addition, if Estrella ceases to be an “emerging growth company,”

our independent registered public accounting firm may be required to attest to and report on the effectiveness of our internal control

over financial reporting.

If Estrella fails to implement

any required improvements to its disclosure controls and procedures to address any material weaknesses in its internal control over financial

reporting, such material weaknesses could result in inaccuracies in Estrella’s consolidated financial statements and could also

impair its ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis.

In addition, Estrella’s

reporting obligations may place a significant strain on its management, operational, and financial resources and systems for the foreseeable

Estrella may be unable to timely complete its evaluation testing and any required remediation.

published by analysts, including projections in those reports that differ from Estrella’s actual results, could adversely affect

the price and trading volume of our Common Stock.

currently expects that securities research analysts will establish and publish their own periodic financial projections for the business

These projections may vary widely and may not accurately predict the results that Estrella will actually achieve.

stock price may decline if its actual results do not match the projections of these securities research analysts.

Similarly, if one or

more of the analysts who write reports on Estrella downgrades its stock or publishes inaccurate or unfavorable research about its business,

Estrella’s stock price could decline.

If one or more of these analysts ceases coverage of Estrella or fails to publish reports

on Estrella regularly, its stock price or trading volume could decline.

If no analysts commence coverage of Estrella, the trading price

and volume for our Common Stock could be adversely affected.

obligations associated with being a public company will involve significant expenses and will require significant resources and management

attention, which may divert from Estrella’s business operations.

a public company, Estrella is subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act.

Reports published by analysts, including

projections in those reports that differ from Estrella’s actual results, could adversely affect the price and trading volume of

our Common Stock.

Estrella currently expects

that securities research analysts will establish and publish their own periodic financial projections for the business of Estrella.

projections may vary widely and may not accurately predict the results that Estrella will actually achieve.

Estrella’s stock price

may decline if its actual results do not match the projections of these securities research analysts.

Similarly, if one or more of the

analysts who write reports on Estrella downgrades its stock or publishes inaccurate or unfavorable research about its business, Estrella’s

stock price could decline.

If one or more of these analysts ceases coverage of Estrella or fails to publish reports on Estrella regularly,

its stock price or trading volume could decline.

If no analysts commence coverage of Estrella, the trading price and volume for our Common

Stock could be adversely affected.

The obligations associated with being a

public company will involve significant expenses and will require significant resources and management attention, which may divert from

Estrella’s business operations.

As a public company,

Estrella is subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act.

The Exchange Act

requires the filing of annual, quarterly, and current reports with respect to a public company’s business and financial condition.

The Sarbanes-Oxley Act requires, among other things, that a public company establish and maintain effective internal control over financial

As a result, Estrella will incur significant legal, accounting, and other expenses that Estrella did not previously incur

as a private company prior to the Business Combination.

Estrella’s entire management team and many of its other current or future

employees will be required to devote substantial time to compliance, and Estrella may not effectively or efficiently manage its transition

into a public company.

rules and regulations have and will continue to result in Estrella incurring substantial legal and financial compliance costs and will

make some activities more time-consuming and costly.

For example, these rules and regulations make it more difficult and more expensive

for Estrella to obtain and maintain director and officer liability insurance, and it may be required to accept reduced policy limits

and coverage or incur substantially higher costs to obtain or maintain the same or similar coverage in the future.

As a result, it may

be difficult for Estrella to attract and retain qualified people to serve on its board of directors, its board committees, or as executive

in Estrella’s Amended Charter Estrella’s amended and restated bylaws (the “Amended Bylaws”) and Delaware law

may have anti-takeover effects that could discourage an acquisition of Estrella by others, even if an acquisition would be beneficial

to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management, which could depress the

trading price of our Common Stock.

Amended Charter, the Amended Bylaws, and Delaware law contain provisions that may have the effect of discouraging, delaying, or preventing

a change in control of us or changes in our management that stockholders may consider favorable, including transactions in which you

might otherwise receive a premium for your shares.

requires the filing of annual, quarterly, and current reports with respect to a public company’s business and financial

The Sarbanes-Oxley Act requires, among other things, that a public company establish and maintain effective internal

control over financial reporting.

As a result, Estrella will incur significant legal, accounting, and other expenses that Estrella

did not previously incur as a private company prior to the Business Combination.

Estrella’s entire management team and many of

its other current or future employees will be required to devote substantial time to compliance, and Estrella may not effectively or

efficiently manage its transition into a public company.

These rules and regulations

have and will continue to result in Estrella incurring substantial legal and financial compliance costs and will make some activities

more time-consuming and costly.

For example, these rules and regulations make it more difficult and more expensive for Estrella to obtain

and maintain director and officer liability insurance, and it may be required to accept reduced policy limits and coverage or incur substantially

higher costs to obtain or maintain the same or similar coverage in the future.

As a result, it may be difficult for Estrella to attract

and retain qualified people to serve on its board of directors, its board committees, or as executive officers.

Provisions in Estrella’s Amended Charter,

Estrella’s amended and restated bylaws (the “Amended Bylaws”) and Delaware law may have anti-takeover effects that could

discourage an acquisition of Estrella by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts

by our stockholders to replace or remove our current management, which could depress the trading price of our Common Stock.

Estrella’s Amended Charter,

the Amended Bylaws, and Delaware law contain provisions that may have the effect of discouraging, delaying, or preventing a change in

control of us or changes in our management that stockholders may consider favorable, including transactions in which you might otherwise

receive a premium for your shares.

Estrella’s Amended Charter and the Amended Bylaws include provisions that:

the Estrella Board to issue up to 10,000,000 shares of preferred stock, with any rights,

preferences, and privileges as they may designate, including the right to approve an acquisition

● permit the Estrella Board to issue up to 10,000,000 shares

of preferred stock, with any rights, preferences, and privileges as they may designate, including the right to approve an acquisition

or other change of control;

that the number of directors of Estrella may be changed only by resolution of Estrella Board;

that, subject to the rights of any series of preferred stock to elect directors, directors

may be removed only for cause by the holders of two-thirds (66 and 2/3%) of the voting power

of all of the then outstanding shares of voting stock of Estrella entitled to vote generally

at an election of directors;

that all vacancies, subject to the rights of any series of preferred stock, including newly

created directorships, may, except as otherwise required by law, be filled exclusively by

the affirmative vote of a majority of the directors then in office, even though less than

a quorum, or by a sole remaining director;

that stockholders seeking to present proposals before a meeting of stockholders or seeking

to nominate candidates for election as directors at a meeting of stockholders must provide

advance notice in writing, and specify requirements as to the form and content of such notice;

that special meetings of Estrella’s stockholders may be called by the Estrella Board;

that the Estrella Board will be divided into three classes of directors, with only one class

of directors being elected each year and each individual director serving a three-year term,

therefore making it more difficult for stockholders to change the composition of the board

of directors.

provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

These provisions

could also limit the price that investors might be willing to pay in the future for shares of our Common Stock, thereby depressing the

market price of our Common Stock.

addition, because we are incorporated in the State of Delaware, we are governed by the provisions of Section 203 of the General Corporation

Law of the State of Delaware, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining

with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding

voting stock, unless the merger or combination is approved in a prescribed manner.

provision of Estrella’s Amended Charter, Amended Bylaws or Delaware law that has the effect of delaying or deterring a change in

control could limit the opportunity for our stockholders to receive a premium for their shares of our Common Stock, and could also affect

the price that some investors are willing to pay for our Common Stock.

● provide that the number of directors of Estrella may be changed

only by resolution of Estrella Board;

● provide that, subject to the rights of any series of preferred

stock to elect directors, directors may be removed only for cause by the holders of two-thirds (66 and 2/3%) of the voting power of all

of the then outstanding shares of voting stock of Estrella entitled to vote generally at an election of directors;

● provide that all vacancies, subject to the rights of any

series of preferred stock, including newly created directorships, may, except as otherwise required by law, be filled exclusively by

the affirmative vote of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director;

● provide that stockholders seeking to present proposals before

a meeting of stockholders or seeking to nominate candidates for election as directors at a meeting of stockholders must provide advance

notice in writing, and specify requirements as to the form and content of such notice;

● provide that special meetings of Estrella’s stockholders

may be called by the Estrella Board;

● provide that the Estrella Board will be divided into three

classes of directors, with only one class of directors being elected each year and each individual director serving a three-year term,

therefore making it more difficult for stockholders to change the composition of the board of directors.

These provisions, alone or

together, could delay or prevent hostile takeovers and changes in control or changes in our management.

These provisions could also limit

the price that investors might be willing to pay in the future for shares of our Common Stock, thereby depressing the market price of

our Common Stock.

In addition, because we

are incorporated in the State of Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of

the State of Delaware, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining

with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our

outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

Any provision of Estrella’s

Amended Charter, Amended Bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity

for our stockholders to receive a premium for their shares of our Common Stock, and could also affect the price that some investors are

willing to pay for our Common Stock.

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-K

Item 1A. Risk Factors