What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-20 compared with 2023-08-01 · 402 added, 554 removed, 4 unchanged (100% of the section changed)

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report (the “Quarterly

Report”) to “UPTD”, “we,” “us” or the “Company” refer to TradeUP Acquisition Corp.

References to our “management” or our “management team” refer to our officers and directors, and references to

the “sponsor” refer to TradeUP Acquisition Sponsor LLC.

The following discussion and analysis of the Company’s

financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained

elsewhere in this Quarterly Report.

Certain information contained in the discussion and analysis set forth below includes forward-looking

statements that involve risks and uncertainties.

Our actual results may differ significantly from the results, expectations and plans

discussed in these forward-looking statements.

See “Cautionary Note Concerning Forward-Looking Statements.”

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking

statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical

facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.

statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements

in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s

financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.

Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”

“intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”

“project,” “should,” “would” and variations thereof and similar words and expressions are intended

to identify such forward-looking statements.

Such forward-looking statements relate to future events or future performance, but reflect

management’s current beliefs, based on information currently available.

A number of factors could cause actual events, performance

or results to differ materially from the events, performance and results discussed in the forward-looking statements.

For information

identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements,

please refer to the Risk Factors section of the Company’s final prospectus for its initial public offering filed with the SEC on

April 30, 2021, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (under heading “Risk

Factors” and in other parts of that report) and in the Company’s final prospectus for its business combination filed on July

The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov.

as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking

statements whether as a result of new information, future events or otherwise.

We are a blank check company formed as a Delaware

corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar

business combination with one or more businesses, which we refer to throughout this report as our initial business combination.

On July 19, 2021, we consummated our initial public

offering (the “IPO”) of 4,000,000 units (the “Units”).

Each Unit consists of one share of common stock, $0.0001

par value per share (the “Common Stock”), and one-half of one redeemable warrant (the “Warrant”), each whole Warrant

entitling the holder thereof to purchase one share of Common Stock at an exercise price of $11.50 per share.

The Units were sold at an

offering price of $10.00 per Unit, generating gross proceeds of $40,000,000.

Simultaneously with the closing of the IPO, we completed

the private sale (the “Private Placement”) of 295,000 shares of Common Stock (the “Private Shares”) to the Company’s

founders, TradeUP Acquisition Sponsor LLC (the “Sponsor”) and Tradeup INC., among which, the Sponsor purchased 236,000 Private

Shares and Tradeup INC.

purchased 59,000 Private Shares at a purchase price of $10.00 per Private Share, generating gross proceeds to

the Company of $2,950,000 (the “Private Placement Proceeds”).

The Private Shares are identical to the shares of Common Stock

sold as part of the Units in the IPO, except that the Private Shares are not transferable, assignable or salable (except to our officers

and directors and other persons or entities affiliated with or related to our founders, each of whom will be subject to the same transfer

restrictions) until 30 days after the completion of our initial business combination.

The proceeds of $ $40,800,000 ($10.20 per Unit)

in the aggregate from the IPO and the Private Placement (the “IPO Proceeds”), were placed in a trust account (the “Trust

Account”) established for the benefit of the Company’s public stockholders and the underwriters of the IPO with Wilmington

Trust, National Association acting as trustee.

In connection with the IPO, the underwriters were

granted an option to purchase up to 600,000 additional Units to cover over-allotments, if any (the “Over-allotment Option”).

On July 19, 2021, the underwriters partially exercised the Over-allotment Option, and July 21, 2021, the underwriters purchased 430,000

Units (the “Option Units”) generating gross proceeds of $4,300,000, and net proceeds to the Company of approximately $4,214,000

in the aggregate after deducting the underwriter discount (the “Option Unit Proceeds”).

Simultaneously with the issuance and

sale of the Option Units, the Company completed the Private Placement sale of 17,200 additional Private Shares at a purchase price of

$10.00 per share, among which, the Sponsor purchased 13,760 additional Private Shares and Tradeup INC.

purchased 3,440 additional Private

Shares, generating total proceeds of $172,000 (the “Private Placement Proceeds” and, together with the Option Unit Proceeds,

the “Over-allotment Proceeds”).

A total of $4,386,000 of the Over-allotment Proceeds were placed in the Trust Account.

IPO Proceeds and the Over-allotment Proceeds include $1,550,500 payable to the underwriters (the “Business Combination Fee”)

pursuant to a certain business combination marketing agreement among us, US Tiger Securities, Inc.

(“US Tiger”), EF Hutton,

division of Benchmark Investments, LLC (“EF Hutton”) and R.F.

Lafferty & Co., Inc., the representatives (the “Representatives”)

of the underwriters of the IPO (the “Business Combination Marketing Agreement”).

Our management has broad discretion with respect

to the specific application of the proceeds of the IPO and the Private Placement that are held out of the Trust Account, although substantially

all the net proceeds are intended to be applied generally towards consummating a business combination and working capital.

Proposed Business Combination with Estrella

Merger Agreement

On September 30, 2022, we entered into an Agreement

and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”) among

Tradeup Merger Sub Inc., a Delaware corporation and direct, wholly owned subsidiary of UPTD (“Merger Sub”), and Estrella Biopharma,

Inc., a Delaware corporation (“Estrella”).

Estrella is a preclinical-stage biopharmaceutical

company developing CD19 and CD22-targeted ARTEMIS®️ T-cell therapies with the capacity to address treatment and safety challenges

for patients with blood cancers and solid tumors.

Estrella’s mission is to harness the evolutionary power of the human immune system

to transform the lives of patients fighting cancer.

Pursuant to the Merger Agreement, among other

things, in accordance with the General Corporation Law of the State of Delaware, as amended (the “DGCL”), Merger Sub will

merge with and into the Estrella (the “Merger”), with Estrella surviving the Merger as a wholly owned subsidiary of UPTD (“Surviving

The Merger will become effective at such time on the date of the closing of the Merger (the “Closing”) as

the certificate of merger is duly filed with the Delaware Secretary of State or at such other time specified in the certificates of merger

(the “Effective Time”).

Effective as of the Closing, UPTD will change its name to “Estrella Immunopharma, Inc.”

(“New Estrella”).

The transactions contemplated by the Merger Agreement is herein referred to as the “Business Combination.”

Pursuant to the Merger Agreement, stockholders

of Estrella immediately prior to the Effective Time collectively will receive from us, in the aggregate, a number of newly issued shares

of Common Stock equal to:

(i) $325,000,000 (the “Merger Consideration”), divided by (ii) $10.00 per share in consideration

of converting their shares of common stock of Estrella, par value $0.0001 per share (the “Estrella Common Stock”).

of preferred stock of Estrella that is issued and outstanding immediately prior to the Effective Time will automatically convert into

a number of shares of Estrella Common Stock in accordance with the certificate of incorporation of Estrella immediately prior to the Effective

The Merger also calls for additional agreements,

including, among others, the Lock-Up Agreement and the Support Agreement, as described elsewhere in the Proxy Statement/Prospectus.

Common Stock Purchase Agreement

On April 20, 2023, the Company entered into a

common stock purchase agreement (the “Common Stock Purchase Agreement”) and a related registration rights agreement (the “RRA”)

with White Lion Capital, LLC, a Nevada limited liability company (“White Lion”).

Pursuant to the Common Stock Purchase Agreement,

the Company has the right, but not the obligation to require White Lion to purchase, from time to time following consummation of the business

combination contemplated by the Merger Agreement, up to $50,000,000 in aggregate gross purchase price of newly issued shares of the common

stock, par value $0.0001 per share, of New Estrella after the Business Combination (the “New Estrella Common Stock”), subject

to certain limitations and conditions set forth in the Common Stock Purchase Agreement.

On April 26, 2023, the Company and White Lion

entered into an amendment to the Common Stock Purchase Agreement (the “Amendment”).

Pursuant to the Amendment, the Company

agrees that it will, immediately prior to the Closing with Estrella, cause Estrella to issue to White Lion an aggregate of 250,000 shares

of Estrella’s Series A preferred stock, par value $0.0001 per share, which the parties have acknowledged has a value of $250,000.

The Company is obligated under the Common Stock

Purchase Agreement and the RRA to file a registration statement with the SEC to register the New Estrella Common Stock under the Securities

Act of 1933, as amended, for the resale by White Lion of shares of New Estrella Common Stock that the Company may issue to White Lion

under the Common Stock Purchase Agreement.

For more information regarding the business of

Estrella and the proposed Business Combination and relevant transactions, see the Registration Statement on Form S-4 (File No.:

which was declared effective on July 11, 2023 (the “Form S-4”), and the final prospectus filed with the SEC on July 11, 2023

(“Proxy Statement/Prospectus”).

The Company held a special meeting of its stockholders on Monday, July 31, 2023 at 9:00 a.m.

Eastern Time (the “Special Meeting”) to vote on, among others, the proposed Business Combination with Estrella.

Binding PIPE Investment Term Sheet

On July 25, 2023, the Company entered into a binding

term sheet (the “Binding Term Sheet”) with Suma Ventures, LLC (the “Investor”), Estrella, and Eureka Therapeutics,

Inc., a Delaware corporation (“Eureka”), in connection with the Business Combination.

Pursuant to the Binding Term Sheet, immediately

prior to the Closing, the Investor will acquire certain payables of Estrella owed to Eureka in an amount equal to $6.8 million (the “Indebtedness”)

in exchange for securities of Eureka owned by the Investor.

At the Closing, the Company will issue to the Investor 680,000 Class B units

(the “New Units”), each consisting of one share of Common Stock and one share of preferred stock of the Company, and the Investor,

in exchange, will agree to irrevocably waive the Indebtedness, and release Estrella and New Estrella from all obligations under the Indebtedness.

The Binding Term Sheet constitutes a binding agreement between the

Company and the Investor with respect to the subject matter thereof and supersedes all prior oral or written agreements or understandings

relating thereto.

The Binding Term Sheet is subject to the execution and delivery by all parties of mutually satisfactory documentation,

the completion of all due diligence and the consummation of the Business Combination.

Business Combination Meeting

On July 31, 2023, the Company held a special meeting

of stockholders in connection with the proposed business combination with Estrella (the “Business Combination Meeting”), where

the Company was approved by its stockholders, among the others, to adopt the Merger Agreement, consummate the Business Combination and

other relevant matters.

In connection with the votes to approve the proposals at the Business Combination Meeting, 650,580 public shares were rendered for redemption

with 98,074 public shares remained outstanding.

December 2022 Extension, Related Redemption and Extension Notes

On December 22, 2022, the Company held a special

meeting of stockholders (the “2022 Special Meeting”) where the Company was approved by its stockholders to adopt the amended

and restated certificate of incorporation to extend the date before which the Company must complete a business combination (the “Combination

Deadline”) from January 19, 2023, by one month up to six times, to July 19, 2023 or such earlier date as determined by the board

of directors of the Company.

Upon the stockholders’ approval, on December 29, 2022, the Company filed a certificate of amendment

to the amended and restated certificate of incorporation which became effective upon filing.

Additionally, as a result of the 2022 Special

Meeting, upon the stockholders’ approval, on December 29, 2022, UPTD and Wilmington Trust, National Association (“Wilmington”),

as the trustee of the Trust Account, entered into the amendment to the Investment Management Trust Agreement dated July 14, 2021 (as amended,

the “Trust Agreement”).

As a result of the 2022 Special Meeting, 3,519,780

shares of Common Stock were rendered for redemption and approximately $36.1 million was released from the Trust Account to pay such redeeming

stockholders.

Under the then existing amended and restated certificate

of incorporation, the Company may extend the Combination Deadline until July 19, 2023 by depositing $45,511 (or $0.05 per public share)

into the Trust Account (the “Original Monthly Extension Payment”) for each monthly extension.

Pursuant to the Merger Agreement,

Estrella made six Original Monthly Extension Payments to the Trust Account to extend the Combination Deadline to July 19, 2023.

Original Monthly Extension Payments were evidenced by six promissory notes (collectively, the “Original Extension Notes”)

issued by the Company to Estrella, each in the principal amount of $45,511.

July 2023 Extension, Related Redemption and Extension Note

On July 17, 2023, the Company held a special meeting

of stockholders (the “2023 Special Meeting”) where the Company was approved by its stockholders to adopt the amended and restated

certificate of incorporation to extend the date of the Combination Deadline from July 19, 2023 to July 14, 2024 or such earlier date as

determined by the board of directors of the Company.

Upon the stockholders’ approval, on July 17, 2023, the Company filed a certificate

of amendment to the amended and restated certificate of incorporation (the “Current Charter”) which became effective upon

Additionally, as a result of the 2023 Special Meeting, upon the stockholders’ approval, on July 17, 2023, UPTD and Wilmington

entered into the amendment to the Trust Agreement.

As a result of the 2023 Special Meeting, 161,566

shares of Common Stock were rendered for redemption and approximately $1.73 million was released from the Trust Account to pay such redeeming

stockholders.

Under the Current Charter, the Company may extend

the Combination Deadline until July 14, 2024, by depositing $37,432.70 (or $0.05 per public share) into the Trust Account (the “Current

Monthly Extension Payment”) for each monthly extension.

Pursuant to the Merger Agreement, Estrella made one Current Monthly Extension

Payments to the Trust Account to extend the Combination Deadline to August 19, 2023.

The Current Monthly Extension Payment was evidenced

by a promissory notes (the “Current Extension Note,” together with the Original Extension Notes, collectively, the “Extension

Notes”) issued by the Company to Estrella, in the principal amount of $37,432.70.

Outstanding Promissory Notes and Loans

As of the date hereof, we have outstanding loans

from various parties in the aggregated amount of $708,600, which include (i) an unsecured promissory note dated July 25, 2022 (the “Running

Lion Note”) in the amount of $204,000 to Running Lion Holdings Limited (“Running Lion”), a company limited by shares

incorporated under the laws of British Virgin Islands, which is wholly owned and controlled by Mr.

Weiguang Yang, the Co-Executive Officer

and director of the Company, (ii) an unsecured promissory note dated July 25, 2022 (the “July 2022 Sponsor Note”) in the amount

of $294,600 to Tradeup INC., (iii) an unsecured promissory note dated January 19, 2023 (the “January 2023 Sponsor Note”) in

the amount of $50,000 to the Sponsor, to evidence a deposit that the Sponsor provided to the Company to pay its certain operating expenses,

(iv) an unsecured promissory note dated March 3, 2023 in the amount of $50,000 to Tradeup INC.

(v) an unsecured promissory note dated

June 3, 2023 in the amount of $60,000 to Tradeup INC.

(the “June 2023 Sponsor Note”), and (vi) an unsecured promissory note

dated July 20, 2023 in the amount of $50,000 to Tradeup INC.

for working capital purpose (the “July 2023 Sponsor Note” ,

together with Running Lion Note, July 2022 Sponsor Note, January 2023 Sponsor, March 2023 Sponsor Note, and June 2023 Sponsor Notes, collectively

the “Notes”).

connection with the Extension, we issued the Extension Notes in the amount of $310,499 to Estrella to evidence the funds deposited into

the Trust Account .

Notice of Delisting or Failure to Satisfy a Continued Listing Rule

April 3 Notice

On April 3, 2023, the Company received a written

notice (the “April 3 Notice”) from the listing qualifications department staff of The Nasdaq Stock Market (“Nasdaq”)

notifying the Company that for the last 30 consecutive business days, the Company’s minimum Market Value of Listed Securities (“MVLS”)

was below the minimum of $35 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(2)

(the “Market Value Standard”).

The April 3 Notice is only a notification of deficiency, not of imminent delisting, and has

no current effect on the listing or trading of the Company’s securities on the Nasdaq Capital Market.

In accordance with Nasdaq Listing Rule 5810(c)(3)(C),

the Company will have 180 calendar days, or until October 2, 2023, to regain compliance with the Market Value Standard.

To regain compliance

with the Market Value Standard, the MVLS for the Company’s Common Stock must be at least $35 million for a minimum of 10 consecutive

business days at any time during this 180-day period.

If the Company regains compliance with the Market Value Standard, Nasdaq will provide

the Company with written confirmation and will close the matter.

If the Company does not regain compliance with

the rule by October 2, 2023, Nasdaq will provide notice that the Company’s securities will be delisted from the Nasdaq Capital Market.

In the event of such notification, the Nasdaq rules permit the Company an opportunity to appeal Nasdaq’s determination.

The Company is monitoring the MLVS of its common

stock and is evaluating options to regain compliance with the Market Value Standard.

However, there can be no assurance that the Company

will be able to regain or maintain compliance with Nasdaq listing standards.

April 19 Notice

On April 19, 2023, the Company received a written

notice (the “April 19 Notice”) from Nasdaq notifying the Company that the Company was not in compliance with Listing Rule

5550(a)(3) (the “Minimum Public Holders Rule”), which requires the Company to have at least 300 public holders for continued

listing on the Nasdaq Capital Market.

The April 19 Notice is only a notification of deficiency, not of imminent delisting, and has no

current effect on the listing or trading of the Company’s securities on the Nasdaq Capital Market.

April 19 Notice states that the Company has 45 calendar days to submit a plan to regain compliance with the Minimum Public Holders Rule.

The Company submitted its plan of compliance on June 5, 2023 accordingly.

On June 22, 2023, the Company received a notification letter

from Nasdaq states that Nasdaq determined to grant the Company an extension until October 16, 2023 to regain compliance with the Minimum

Public Holder Rule.

Investment Company Act and Liquidation of Investments

in the Trust Account into Cash Held in the Trust Account

Since the consummation of the IPO, the Company

has deposited the proceeds of the IPO and partial proceeds of the concurrent private placements into the Trust Account to invest in U.S.

government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the

Investment Company Act.

As a result, it is possible that a claim could be made that the Company has been operating as an unregistered

investment company.

If the Company was deemed to be an investment company for purposes of the Investment Company Act, compliance with

these additional regulatory burdens would require additional expenses for which the Company has not allotted funds and may hinder the

Company’s ability to complete a business combination.

The Company might be forced to abandon its efforts to complete an initial

business combination and instead be required to liquidate.

If the Company is required to liquidate, its investors would not be able to

realize the benefits of owning stock in a successor operating business, such as any appreciation in the value of the Company’s securities

following such a transaction, its warrants would expire worthless and shares of common stock would have no value apart from their pro

rata entitlement to the funds then-remaining in the Trust Account.

The longer that the funds

in the Trust Account are held in short-term U.S.

government treasury obligations or in money market funds invested exclusively in such

securities there is a greater risk that the Company may be considered an unregistered investment company, in which case the Company may

be required to liquidate.

In order to mitigate the potential risks of being deemed to have been operating as an unregistered investment

company for purposes of the Investment Company Act of 1940, as amended (the “Investment Company Act”), the Company has instructed

Wilmington to liquidate the U.S.

government treasury obligations and money market funds held in the Trust Account on July 14, 2023 and

to hold all funds in the Trust Account in cash until the earlier of consummation of the Company’s initial business combination or

Following such liquidation, the Company will likely continue to receive, minimal interest, if any, on the funds held in the

Trust Account, which would reduce the dollar amount its public stockholders would receive upon any redemption or liquidation of the Company.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Unless the context

otherwise requires, for purposes of this section, the terms “Company’, “we,” “us,” “our,”

refer to Immunopharma, Inc.

collectively with its subsidiary Estrella Biopharma, Inc., while the term “Estrella” refers to

Estrella Biopharma, Inc.

prior to closing of the Business Combination.

The following discussion and analysis of our results of operations

and financial condition should be read together with our unaudited condensed consolidated financial statements and the notes thereto,

which are included elsewhere in this Report and our audited financial statements as exhibit 99.1 on Form 8-K filed with the SEC on October

5, 2023 and the section entitled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations”

included in the Company’s Registration Statement on Form S-1, filed with the SEC on October 11, 2023 and amended on November 13,

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks

and uncertainties.

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United

States of America (“U.S.

The Company is

a preclinical-stage biopharmaceutical company developing T-cell therapies with the capacity to address treatment challenges for patients

with blood cancers and solid tumors.

We believe T-cell therapy continues to represent a revolutionary step towards providing a potential

solution for many forms of cancer, including cancers poorly addressed by current approaches.

On June 28, 2022, pursuant

to the Contribution Agreement, Eureka contributed certain assets related to T-cell therapies targeting CD19 and/or CD22 to Estrella in

exchange for 105,000,000 shares of Series AA Preferred Stock of Estrella (the “Separation”).

Eureka determined that the Separation

would allow for the flexibility to create a capital structure tailored to Estrella’s strategic goals, provide increased access to

capital markets, allow for greater focus on the product candidates contributed to Estrella, and result in a dedicated management team.

As part of the Separation,

Estrella entered into a License Agreement with Eureka and Eureka Therapeutics (Cayman) Ltd., an affiliate of Eureka, and a Services Agreement

with Eureka, and Eureka contributed and assigned the Collaboration Agreement between Eureka and Imugene to Estrella.

The License Agreement

grants Estrella an exclusive license to develop CD19 and CD22-targeted T-cell therapies using Eureka’s ARTEMIS ® platform.

Under the Services Agreement, Eureka has agreed to perform certain services for us in connection with the development of our product candidates,

EB103 and EB104, and researching the use of EB103 in conjunction with CF33-CD19t.

The Collaboration Agreement establishes our collaboration

with Imugene related to the development of solid tumor treatments using CF33-CD19t in conjunction with EB103.

On March 2, 2023, the FDA

cleared the IND for EB103, allowing Estrella to proceed with the Phase I/II Starlight-1 Clinical Trial, which Estrella expects to commence

in the first half of 2024.

To date, we have funded our

operations primarily from the June 28, 2022 issuance of $5.0 million of our Series A Preferred Stock, and net proceeds of approximately

$20.1 million raised from completion of the Business Combination on September 29, 2023.

We have a limited operating history.

inception, our operations have focused on preparing for the Business Combination, regulatory filings (including the INDs), planning preclinical

studies, and building our management team.

We do not have any product candidates approved for sale and have not generated any revenue

from product sales.

As of September 30, 2023 we

had an accumulated deficit of approximately $14.1 million.

We have remitted payment of approximately $9.3 million to Eureka, consisting

of the upfront payment incurred under the License Agreement and monthly service provided by Eureka under the Services Agreement on October

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

to advance preclinical and clinical development of our product candidates and preclinical

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

up our clinical and regulatory capabilities;

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

expand, and protect our intellectual property portfolio;

operational, financial and management information systems and personnel, including personnel

to support our product development and planned future commercialization efforts;

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

Recent Developments

The Business Combination and Public Company Costs

On September 29, 2023, we

consummated the previously announced Business Combination with UPTD pursuant to the terms of the Merger Agreement by and among UPTD, Merger

Sub and Estrella.

No closing conditions set forth in the Merger Agreement were waived by either UPTD or Estrella.

Moreover, concurrently

with closing of the Merger, Estrella consummated the following transactions:

(i) sales of 9.25 million shares of Estrella Series A Preferred

Stock for $9.25 million ($730,000 of which was comprised of funds in the trust account delivered to the Company at the closing of the

Business Combination that would have otherwise been paid to US Tiger Securities, Inc as a deferred underwriting fee in connection with

UPTD’s initial public offering), which shares were converted to shares of Estrella Common Stock and subsequently exchanged for Merger

Consideration Shares of UPTD immediately prior to the effective time of the merger at an exchange ratio of 0.2407, with such shares becoming

shares of New Estrella Common Stock from and after the effective time of the Merger;

(ii) issuance of 500,000 shares of Estrella’s

Series A Preferred Stock to White Lion for $500,000 and 250,000 shares of Estrella Series A Preferred Stock to White Lion in consideration

for its commitments under the Common Stock Purchase Agreement, dated April 20, 2023, between UPTD and White Lion and in accordance with

the Joinder to the Series A Preferred Stock Purchase Agreement between Estrella and White Lion, dated April 20, 2023, which shares were

subsequently converted to shares of Estrella Common Stock and exchanged for Merger Consideration Shares of UPTD at an exchange ratio of

0.2407, with such Merger Consideration Shares becoming shares of New Estrella Common Stock from and after the effective time of the Merger

and (iii) issued an unsecured promissory note to a third party for $300,000 at 12% interest per annum, which note will be payable 30 days

after the closing date of the Merger of September 29, 2023.

While the legal acquirer in the Business Combination was UPTD, for

financial accounting and reporting purposes under U.S.

GAAP, Estrella was the accounting acquirer and the Business Combination was accounted

for as a “reverse recapitalization.” A reverse recapitalization (i.e., a capital transaction involving the issuance of stock

by UPTD for the stock of Estrella) does not result in a new basis of accounting, and the consolidated financial statements of the combined

company represent the continuation of the consolidated financial statements of Estrella in many respects.

Accordingly, the consolidated

assets, liabilities and results of operations of Estrella became the historical consolidated financial statements of the combined company,

and UPTD’s assets, liabilities, and results of operations were consolidated with Estrella beginning on the Closing Date.

prior to the Business Combination are presented as those of Estrella.

The net assets of UPTD are recognized at historical cost (which

is expected to be consistent with carrying value), with no goodwill or other intangible assets recorded upon execution of the Business

As a consequence of the Merger,

Estrella became the successor to an SEC-registered and Nasdaq-listed company which will require Estrella to hire additional personnel

and implement procedures and processes to address public company regulatory requirements and customary practices.

Estrella expects to

incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance,

director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal

Estrella’s future results

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

Results of Operations

We have neither engaged in any operations nor

generated any operating revenues to date.

Our only activities from inception through June 30, 2023 were organizational activities and

those necessary to prepare for the IPO, search for a target company, and effectuate the business combination with Estrella.

expect to generate any operating revenues until after the completion of our business combination with Estrella.

We generate non-operating income

in the form of dividend.

We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and

auditing compliance), as well as for due diligence expenses in connection with searching for and completion of the business combination.

For the three months ended June 30, 2023,

we had a net loss of $76,004, which consisted of formation and operating costs of $155,295, franchise tax expenses of $13,942, and income

taxes provision of $21,077, offset by dividend earned on investment held in Trust Account of $114,310.

For the three months ended June 30, 2022, we had

a net loss of $359,586, which consisted of formation and operating costs $399,765 and franchise tax expenses of $24,000, offset by dividend

earned on investment held in Trust Account of $64,179.

For the six months ended June 30, 2023, we had

a net loss of $139,329, which consisted of formation and operating costs of $291,845, franchise tax expenses of $27,042, and income taxes

provision of $40,542, offset by dividend earned on investment held in Trust Account of $220,100.

For the six months ended June 30, 2022, we had

a net loss of $500,838, which consisted of formation and operating costs $520,505 and franchise tax expenses of $48,200, offset by dividend

earned on investment held in Trust Account of $67,867.

Estrella was formed on March

30, 2022, and has not commenced revenue-producing operations.

To date, our operations have consisted of the development and early-stage

testing of our initial product candidates, EB103 and EB104, preparation and submission of the IND Application for and researching the

use of EB103 in conjunction with CF33-CD19t.

The results of operations

for the three months ended September 30, 2023 and 2022 represented Estrella’s results of operations to be comparable with the same

period in 2022

There are two major expenses incurred for the

past and current operation:

Research and Development Expenses

Research and development expenses

consist primarily of costs related to the enhancement of our technology which were mainly performed by Eureka.

For the three months ended

September 30, 2023 and 2022, we incurred approximately $0.5 million and $2.6 million of research and development expenses, respectively.

All research and development expense incurred for the periods presented above were dedicated to the development of ARTEMIS ® T-cell

therapies targeting CD19 and CD22.

The decrease in research and development expenses was mainly due to Estrella not incurring service

fees with Eureka under the Services Agreement for the three months ended September 30, 2023.

Our breakdown of research

and development expenses by categories for the three months ended September 30, 2023 and 2022 are summarized below:

Three Months Ended September 30,

Consulting and laboratory related fee

Stock based compensation

Total research and development

General and administrative expense

For the three months ended September 30, 2023 and 2022, we incurred

approximately $1.4 million and $0.3 million of general and administrative expenses, respectively.

The increase in general and administrative

expenses for the three months ended September 30, 2023, was mainly due to an increase in professional fee, and recognition of the acceleration

of the stock based compensation upon consummation of the Business Combination.

The increase was also attributable to approximately $0.4

million of bonus granted to our executive officers in recognition of their service.

We incurred a net loss of

approximately $1.9 million and $2.9 million for the three months ended September 30, 2023 and 2022, respectively.

We expect our research

and development expenses to continue to increase as we continue to work with Eureka to advance the IND filings, preclinical and clinical

development of our product candidates and preclinical programs, seek regulatory approval for any product candidates that successfully

complete clinical trials, scale up our clinical and regulatory capabilities, adapt our regulatory compliance efforts to incorporate requirements

applicable to marketed products, maintain, expand, and protect our intellectual property portfolio, add operational, financial, and management

information systems and personnel, including personnel to support our product development and planned future commercialization efforts,

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

Liquidity and Capital Resources

As of June 30, 2023, we had cash outside the Trust

Account of $34,688 available for working capital needs.

All remaining cash is held in the Trust Account and is generally unavailable for

our use, prior to an initial business combination, and is restricted for use either in a business combination or to redeem the shares

of Common Stock.

As of June 30, 2023, none of the amount on deposit in the Trust Account was available to be withdrawn as described above.

For the six months ended June 30, 2023, there was $488,384 of cash used in operating activities.

Net loss of $139,329 was affected by

dividend earned on investment held in Trust Account amounting to $220,100, deferred tax expense of $21,102, increase in prepaid expenses

of $83,050, decrease in franchise tax payable of $143,927 and offset by increase in accounts payable and accrued expenses of $108,656

and increase in income tax payable of $10,468.

For the six months ended June 30, 2022, there was $390,587 of cash used in operating activities.

Net loss of $500,838 was affected by

dividend earned on an investment held in Trust Account amounting to $67,867 and decrease in franchise tax payable of $21,954 and offset

by decrease in prepaid expenses of $96,625 and increase in accounts payable and accrued expenses of $103,447.

For the six months ended June 30, 2023, there was $99,204 of cash provided by investing activities resulting from withdrawal of an investment

held in the Trust Account amounting to $372,270 and offset by the purchase of an investment held in Trust Account amounting to $273,066.

For the six months ended June 30, 2022, there were no cash investing activities.

For the six months ended June 30, 2023, there was $383,066 of cash provided by financing activities resulting from proceeds from the issuance

of promissory notes amounting to $273,066 and the issuance of working loans to a related party amounting to $110,000.

For the six months ended June 30, 2022, there were no cash financing activities.

Until consummation of the business combination,

we will be using the funds not held in the Trust Account, and any additional funding that may be loaned to us by our Sponsor, for identifying

and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and

from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements

of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business

If our estimates of the costs of undertaking in-depth

due diligence and negotiating business combination are less than the actual amount necessary to do so, we may have insufficient funds

available to operate its business prior to the business combination and will need to raise additional capital.

In this event, our officers,

directors or their affiliates may, but are not obligated to, loan us funds as may be required.

If we consummate an initial business combination,

we would repay such loaned amounts out of the proceeds of the Trust Account released to us upon consummation of the business combination,

or, at the lender’s discretion, up to $1,200,000 of such loans may be convertible into units of the post business combination entity

at a price of $10.00 per share.

In the event that the initial business combination does not close, we may use a portion of the working

capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment.

The terms of such loans by our initial stockholders, officers and directors, if any, have not been determined and no written agreements

exist with respect to such loans.

Moreover, we may need to obtain additional financing

either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares

upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with

such business combination.

Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously

with the consummation of our initial business combination.

Following our initial business combination, if cash on hand is insufficient,

we may need to obtain additional financing in order to meet our obligations.

As of June 30, 2023, we had cash of $34,688 and

a working deficit of $1,301,969.

We have incurred and expect to continue to incur significant professional costs to remain as a publicly

traded company and to incur significant transaction costs in pursuit of the consummation of a business combination.

In connection

with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards

Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,”

management has determined that these conditions raise substantial doubt about our ability to continue as a going concern.

The management’s

plan in addressing this uncertainty is through the Promissory Notes – related parties and the working capital loans, as discussed

In addition, if we are unable to complete a business combination by July 14, 2024, our board of directors would proceed to commence

a voluntary liquidation and thereby a formal dissolution of us.

There is no assurance that our plans to consummate a business combination

will be successful by July 14, 2024.

As a result, management has determined that such additional condition also raise substantial doubt

about our ability to continue as a going concern.

The unaudited condensed consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities

that would be considered off-balance sheet arrangements as of June 30, 2023.

We do not participate in transactions that create

relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have

been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet

financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

As of June 30, 2023, we do not have any long-term

debt, capital lease obligations, operating lease obligations or long-term liabilities.

The holders of the founder shares, the Private

Shares, and any Conversion Shares will be entitled to registration rights pursuant to a registration and shareholder rights agreement

entered into in connection with the IPO.

The holders of these securities are entitled to make up to three demands, excluding short form

demands, that we register such securities.

In addition, the holders have certain “piggy-back” registration rights with respect

to registration statements filed subsequent to our completion of our initial business combination.

We will bear the expenses incurred

in connection with the filing of any such registration statements.

We are obligated to pay the Representatives the

Business Combination Fee equal to 3.5% of the gross proceeds of the IPO and the sale of over-allotment Option Units.

As of September 30, 2023,

we had cash of approximately $22.1 million.

Our ability to fund our operations is dependent on the amount of cash on hand, our ability

to raise debt or additional equity financing, and ultimately our ability to generate sufficient revenue.

We have expended substantial

funds on research and development, have experienced losses and negative cash flows from operations since our inception, and expect losses

and negative cash flows from operations to continue until such time that our product candidates receive regulatory approval and we generate

sufficient revenue and positive cash flow from operations, if ever.

To date, we have not generated

any revenues from any source, and we do not expect to generate revenue for at least the next few years.

If we fail to complete the

development of our product candidates in a timely manner or fail to obtain their regulatory approval, our ability to generate future revenue

will be adversely affected.

We do not know when, or if, we will generate any revenue from our product candidates, and we do not expect

to generate revenue unless and until we obtain regulatory approval of, and commercialize, our product candidates.

We expect our expenses to

increase significantly in connection with our ongoing activities, particularly as we continue research and development, and seek marketing

approval for, our product candidates.

In addition, if we obtain approval for any of our product candidates, we expect to incur significant

commercialization expenses related to sales, marketing, manufacturing, and distribution.

Furthermore, following the completion of the

Business Combination, we expect to incur additional costs associated with operating as a public company.

On September 29, 2023, the

Business Combination and several concurrent financing transactions were consummated, with Estrella receiving net proceeds of approximately

$20.1 million, after deducting $5.07 million payable to redeem 467,122 shares of UPTD Common Stock at $10.86 per share in connection with

the special meeting of UPTD stockholders related to the Business Combination held on July 31, 2023, $1.6 million for transaction expenses

and $0.7 million for repayment of working capital loans, consisting of:

(i) $9.75 million from the issuance of shares of Estrella Series

A Preferred Stock immediately prior to the closing of the Business Combination ($730,000 of which was comprised of funds in the trust

account delivered to Estrella at the closing of the Business Combination that would have otherwise been paid to US Tiger Securities, Inc.

as a deferred underwriting fee in connection with UPTD’s IPO);

(ii) $0.3 million from the issuance of an unsecured promissory note

by us to a third party investor;

(iii) $3.06 million from the funds held in UPTD’s trust account;

and (iv) $10 million from the

PIPE investors pursuant to the Subscription Agreements.

On October 10, 2023, we remitted approximately $9.3 million to Eureka upon consummation

of the Business Combination.

We expect to devote the remaining net proceeds from the Business Combination to the preclinical and clinical

development of our product candidates and our public company compliance costs.

Based on our current operating plan, we expect that the

net proceeds from the Business Combination will be able to fund our operating expenses and capital requirements through one year from

the issuance of these unaudited condensed consolidated financial statements.

However, this estimate is subject to various uncertainties

and risks, some of which are beyond our control.

We may use our available capital resources sooner than we currently anticipate, and we

may need to seek additional funds sooner than planned.

Our estimate as to how long we expect the net proceeds from the Business Combination

to be able to fund our operating expenses and capital requirements is based on assumptions that may prove to be wrong, and we could use

our available capital resources sooner than we currently expect.

Changing circumstances, some of which may be beyond our control, could

result in fewer cash and cash equivalents available to us or cause us to consume capital significantly faster than we currently anticipate,

and we may need to seek additional funds sooner than planned.

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

(2) the timely and successful completion of any additional financing;

(3) the development of competitive therapies by other

biotechnology and pharmaceutical companies;

(4) our ability to manage growth of the organization;

(5) our ability to protect our technology

and products;

and, ultimately (6) regulatory approval and successful commercialization and market acceptance of our product candidates.

We plan to raise additional

capital in the future in order to continue our research and development programs and fund operations.

However, our ability to raise additional

capital is dependent on a number of factors, including the market demand for our securities, which itself is subject to a number of business

risks and uncertainties, as well as uncertainty that we would be able to raise such additional capital at a price or on terms that are

favorable to us.

If we raise additional capital by issuing equity securities, our then-existing stockholders will experience dilution

and the market price of our common stock may decline.

We cannot be certain that additional financing, whether debt or equity, will be

available in amounts or on terms acceptable to us, if at all.

In addition, there is no assurance

that the Warrant holders will exercise their Warrants because they are currently out of the money.

As of November 15, 2023, the closing

price of our Common Stock was $1.20 per share, which is significantly lower than the exercise price of the Warrants of $11.50 per share.

Therefore, it is unlikely that the warrant holders will exercise their warrants unless the market price of our Common Stock increases

substantially above the exercise price.

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

and the number of Warrants being exercised.

We cannot predict when or if any Warrants will be exercised, and it is possible that none

or only a small number of Warrants will ever be exercised.

Therefore, we may not be able to rely on the warrant exercise as a source of

liquidity or capital resources.

Furthermore, although the

Common Stock Purchase Agreement with White Lion provides that the Company may, in its discretion, from time to time, direct White Lion

to purchase shares of up to $50,000,000 of Common Stock (“Equity Line Shares”) from the Company in one or more purchases in

accordance with the Common Stock Purchase Agreement, the Company is not permitted to issue any Equity Line Shares under the Common Stock

Purchase Agreement without obtaining majority stockholder approval if such issuance would equal 20% or more of the Company’s outstanding

common stock, which had not been obtained as of the date hereof and may not be obtained in the future.

Additionally, such shares will

only be issuable to White Lion upon effectiveness of a registration statement for the Equity Line Shares, which had not occurred as of

the date hereof.

We plan to raise additional

capital in the future in order to continue our research and development programs and fund operations.

However, our ability to raise additional

capital in the equity or debt markets is dependent on various factors, and there is no assurance that such financing will be available

on acceptable terms, or at all.

The market demand of our equity is subject to a number of risks and uncertainties, including but not limited

to, negative economic conditions, adverse market conditions, and adverse financial results.

Operating activities

Net cash used in operating

activities was approximately $0.3 million for the three months ended September 30, 2023, and was primarily attributable to a net loss

of approximately $1.9 million, offset by approximately $1.6 million increase in non-cash item such as stock-based compensation as we incurred

amortization for the three months ended September 30, 2023 related to the stock options granted to our employees, board of directors,

and other consultants under the Incentive Plan.

Net cash used in operating

activities was approximately $1.1 million for the three months ended September 30, 2022 and was primarily attributable to a net loss

of approximately $2.9 million, offset by (a) approximately $0.8 million increase in account payable related party which related to service

fee incurred from the Services Agreement, (b) approximately $0.1 million increase in non-cash item such as stock-based compensation as

we incurred amortization for the three months ended September 30, 2022 related to the stock options granted to our employees, board of

directors, and other consultants under the Incentive Plan for the year ended June 30, 2022, (c) approximately $0.8 million decrease in

prepaid expenses as we utilized prior prepaid service fees from the Services Agreement in the current period, and (d) an approximately

$66,050 increase in other payables and accrued liabilities as we accrued various legal, consulting, and research and development expenses

related to the Business Combination.

Investing activities

Net cash used in investing

activities was approximately $0.1 million for the three months ended September 30, 2023, and was primarily attributable approximately $0.1 million loan to UPTD as

Monthly Extension Payment before merger.

Financing activities

Net cash provided by financing

activities was approximately $20.0 million for the three months ended September 30, 2023, and was primarily attributable to approximately

$20.0 million net proceed received from the consummation of the Business Combination, which included approximately $9.0 million in gross

proceeds raised through sales of Estrella Series A Preferred Stock immediately prior to the effective time of the Merger, approximately

$0.3 million raised through issuance of an unsecured promissory note by Estrella to a third party investor, approximately $0.7 million

proceeds raise from the reverse recapitalization, and $10.0 million net proceeds from the PIPE Investment that closed concurrently with

the consummation of the Business Combination.

Off-Balance Sheet Arrangements

As of September 30, 2023 and

June 30, 2023, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules and regulations

Commitments & Contingencies

In the normal course of business,

we are subject to loss contingencies, such as legal proceedings and claims arising out of our business, that cover a wide range of matters,

including, among others, government investigations and tax matters.

In accordance with ASC No.

450-20, “Loss Contingencies”,

we will record accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can

be reasonably estimated.

License Agreement

Pursuant to the License Agreement,

we were obligated to make (i) a one-time, non-refundable, non-creditable payment of $1,000,000, payable in 12 equal monthly installments,

(ii) certain one-time, non–refundable, non-creditable development “milestone” payments upon the occurrence of certain

events related to development and sales, with potential aggregate multi-million dollar payments upon FDA approval, and (iii) royalty payments

of a single digit percentage on net sales during any consecutive 12-month period.

As of September 30, 2023, we have paid two installments, an aggregate

of approximately $0.2 million, of the upfront payment to Eureka.

On January 30, 2023, one development

milestone payment in the amount of $50,000 related to the submission of EB103 to the FDA was earned by Eureka under the Agreement, which

has not been paid as of the date hereof.

No other development milestone, sales milestone, or royalty payment has been earned as we do

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

On October 10, 2023, the balance of the upfront fee in the amount of approximately $0.9 million and the $50,000 development milestone payment

related to the submission of EB103 to the FDA was paid to Eureka.

Collaboration Agreement

Pursuant to the Collaboration

Agreement, we and Imugene will be separately responsible for all qualified full-time person (“FTE”) and other internal costs

incurred in the performance of its research, as well as the full cost of procurement of leukopaks and purification of T-cells from two

donors, and of manufacturing and quality control of EB103 T-cells under the research plan.

Any joint cost will be shared equally.

we or Imugene incurs out-of-pocket costs in excess of the amount budgeted for such costs in the applicable research budget plus allowable

overruns, then the other party will not be responsible for its 50% share of the excess of such budgeted amount plus allowable overruns,

unless the joint steering committee approves such excess costs (either before or after such costs have been incurred).

Services Agreement

Pursuant to the Services Agreement,

we agreed to (i) pay Eureka $10,000,000 in connection with the services thereunder payable in 12 equal monthly installments and (ii) reimburse

Eureka on a monthly basis for reasonable pass-through costs incurred or paid to providers by Eureka in providing the services.

we will be charged for other services performed by Eureka outside the scope of the services set forth in the Services Agreement, at a

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

As of September 30, 2023, we had remitted to Eureka

two installments of $1,666,667 and $21,560 of pass-through costs for services provided pursuant to the Services Agreement.

On October 10, 2023 we

remitted the remaining monthly installment payments under the Services Agreement and License Agreement in the amount of approximately $9.3

million to Eureka.

Equity Financing Commitment

On April 20, 2023, UPTD entered into a Common Stock purchase agreement

(as amended on April 26, 2023 and from time to time, the “Common Stock Purchase Agreement”) and a related registration rights

agreement (the “White Lion RRA”) with White Lion.

Pursuant to the Common Stock Purchase Agreement, following the Closing,

the Company has the right, but not the obligation to require White Lion to purchase, from time to time, up to the lesser of (i) $50,000,000

in aggregate gross purchase price of newly issued shares of Common Stock of New Estrella and (ii) the Exchange Cap (as defined below),

in each case, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement.

Registration Rights

The holders of 312,200 shares of common stock that were issued to the

initial stockholders of UPTD (the “Founder Shares”) and of 1,107,500 shares of Common Stock issued to certain investors in

a private placement in connection with UPTD’s initial public offering (the “Private Shares”) are entitled to registration

rights pursuant to a registration rights agreement, dated July 14, 2021, among TradeUP Acquisition Corp., TradeUP Acquisition Sponsor

LLC and certain security holders named therein.

The Company assumed the obligations of UPTD under such agreement upon consummation of

the Business Combination.

Fee of $1,550,500 will become payable to the Representatives from the amounts held in the Trust Account solely in the event that we complete

a Business Combination.

As of the date hereof, we have outstanding loans

from various related parties in the aggregated amount of $708,600, which include (i) the Running Lion Note in the amount of $204,000 to

Running Lion, (ii) the July 2022 Sponsor Note in the amount of $294,600 to Tradeup INC., (iii) the January 2023 Sponsor Note in the amount

of $50,000 to the Sponsor, to evidence a deposit that the Sponsor provided to the Company to pay its certain operating expenses, (iv)

the March 2023 Sponsor Note in the amount of $50,000 to Tradeup INC.

(v) the June 2023 Sponsor Note in the amount of $60,000 to Tradeup

INC., and (vi) the July 2023 Sponsor Note in the amount of $50,000 to Tradeup INC.

In connection with the Extension, we issued the Extension

Notes in the amount of $310,498.70 to Estrella to evidence the funds deposited into the Trust Account.

The holders of the majority of these securities are entitled to make up to three demands, excluding short form

demands, that the Company registers such securities.

In addition, the holders have certain “piggy-back” registration rights

with respect to registration statements filed subsequent to the completion of the initial Business Combination and rights to require the

Company to register for resale such securities pursuant to Rule 415 under the Securities Act.

We are also obligated to file a registration

statement for the (i) Equity Line Shares that we may issue to White Lion pursuant to the Common Stock Purchase Agreement and White Lion

RRA, (ii) up to 2,225,000 shares of Common Stock issuable upon exercise of the Warrants and (iii) the shares issued or that will be issued

pursuant to the Subscription Agreements.

The Company will bear the expenses incurred in connection with the filing of any such registration

The Company filed a registration statement on Form S-1 with the SEC on October 10, 2023 and Amendment No.

1 thereto on November

13, 2023 with respect to the Founder Shares, Private Shares, Equity Line Shares, the shares of Common Stock issuable upon exercise of

the Warrants and certain shares issuable under the Subscription Agreements.

The registration statement had not been declared effective

as of the date hereof.

Critical Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated

financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and pursuant to the rules and regulations of the SEC, and include all normal and recurring adjustments that management of

the Company considers necessary for a fair presentation of its financial position and operation results.

Interim results are not necessarily

indicative of results to be expected for any other interim period or for the full year.

The information included in this Form 10-Q should

be read in conjunction with information included in the Company’s annual report on Form 10-K for the year ended December 31, 2022,

filed with the Securities and Exchange Commission on March 14, 2023.

Emerging Growth Company Status

The Company is an “emerging growth company,”

as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS

Act”), As an emerging growth company, the Company may take advantage of certain exemptions from various reporting requirements that

are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply

with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding

executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory

vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts

emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that

is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered

under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply

to non-emerging growth companies but any such an election to opt out is irrevocable.

The Company has elected not to opt out of such extended

transition period which means that when a standard is issued or revised and it has different application dates for public or private companies,

the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised

This may make comparison of the Company’s financial statements with another public company that is neither an emerging

growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because

of the potential differences in accounting standards used.

Use of Estimates

The preparation of these unaudited condensed consolidated

financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported

amounts of expenses during the reporting period.

Actual results could differ from those estimates.

The accompanying unaudited condensed

consolidated financial statements include all adjustments management considers necessary for a fair presentation.

The Company considers all short-term investments

with an original maturity of three months or less when purchased to be cash equivalents.

The Company did not have any cash equivalents.

Investments Held in Trust Account

As of June 30, 2023 and December 31, 2022, the

assets held in the Trust Account were held in money market funds, which are invested in U.S.

Treasury securities.

Gains and losses resulting from the change in

fair value of investments held in Trust Account are accounted as dividend income in the accompanying unaudited condensed statement of

Dividend income for the three months ended June 30, 2023 and 2022 amounted to $114,310 and $64,179, respectively.

income for the six months ended June 30, 2023 and 2022 amounted to $220,100 and $67,867, respectively.

Offering Costs

The Company complies with the requirements of

FASB ASC Topic 340-10-S99-1, “ Other Assets and Deferred Costs – SEC Materials ” (“ASC 340-10-S99”)

and SEC Staff Accounting Bulletin Topic 5A, “ Expenses of Offering ”.

Offering costs were $3,019,474 consisting principally

of underwriting, legal, accounting and other expenses that are directly related to the Initial Public Offering and charged to stockholders’

equity upon the completion of the Initial Public Offering.

The Company accounts for warrants as either equity-classified

or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance

in Financial Accounting Standards Board (“FASB”) ASC 480 “Distinguishing Liabilities from Equity” (“ASC

480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding

financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants

meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s

own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside

of the Company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional

judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all

of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded

as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Changes in the estimated fair

value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

Common Stock Subject to Possible Redemption

The Company accounts for its Common Stock subject

to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common Stock

subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value.

Conditionally redeemable

Common Stock (including Common Stock that feature redemption rights that are either within the control of the holder or subject to redemption

upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity.

times, Common Stock are classified as stockholders’ equity.

The Company’s public shares feature certain redemption rights

that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.

Accordingly, as

of June 30, 2023 and December 31, 2022, Common Stock subject to possible redemption are presented at redemption value of $10.71 and

$10.25 per share, respectively, as temporary equity, outside of the stockholders’ equity section of the Company’s balance

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Common

Stock to equal the redemption value at the end of each reporting period.

Increases or decreases in the carrying amount of redeemable Common

Stock are affected by charges against additional paid in capital or accumulated deficit if additional paid in capital equals to zero.

Concentration of Credit Risk

Financial instruments that potentially subject

the Company to concentration of credit risk consist of a cash account in a financial institution.

The Company has not experienced losses

on this account and management believes the Company is not exposed to significant risks on such account.

As of June 30, 2023 and December

31, 2022, no balance was over the Federal Deposit Insurance Corporation (FDIC) limit.

Fair Value of Financial Instruments

The fair value of the Company’s assets and

liabilities approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

The fair value of the Company’s financial

assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale

of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the

measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of

observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions

about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities

based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

● Level 1 - inputs to the valuation methodology are quoted prices

(unadjusted) for identical assets or liabilities in active markets.

● Level 2 - inputs to the valuation methodology include quoted prices

for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or

indirectly, for substantially the full term of the financial instruments.

● Level 3 - inputs to the valuation methodology are unobservable and

significant to the fair value.

The Company accounts for income taxes under ASC

740 Income Taxes (“ASC 740”).

ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected

impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit

to be derived from tax loss and tax credit carry forwards.

ASC 740 additionally requires a valuation allowance to be established when

it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty

in income taxes recognized in an enterprise’s unaudited condensed consolidated financial statements and prescribes a recognition

threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken

in a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by

taxing authorities.

ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period,

disclosure and transition.

The Company recognizes accrued interest and penalties

related to unrecognized tax benefits as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest

and penalties as of June 30, 2023 and December 31, 2022.

The Company is currently not aware of any issues under review that could result

in significant payments, accruals or material deviation from its position.

The Company has identified the United States as

its only “major” tax jurisdiction.

The Company may

be subject to potential examination by federal and state taxing authorities in the areas of income taxes.

These potential examinations

may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with

federal and state tax laws.

The Company’s management does not expect that the total amount of unrecognized tax benefits will materially

change over the next twelve months.

Net Income (Loss) per Share

Recent Accounting Pronouncements

Management does not believe

that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our unaudited

condensed consolidated financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

Not applicable.

Our unaudited financial statements

accompanying notes have been prepared in accordance with U.S.

The preparation of these financial statements and accompanying

notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and

related disclosure of contingent assets and liabilities.

We base our estimates on historical experience and on various other assumptions

that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying

values of assets and liabilities that are not readily apparent from other sources.

We have identified certain accounting estimates that

are significant to the preparation of our financial statements.

These estimates are important for an understanding of our financial condition

and results of operation.

Certain accounting estimates are particularly sensitive because of their significance to financial statements

and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments.

We believe no critical accounting estimate was identified other than below listed significant estimate and accounting policies.

Stock-Based Compensation

We recognize compensation

costs resulting from the issuance of stock-based awards to employees, non-employees, and directors as an expense in the statements of

operations over the requisite service period based on a measurement of fair value for each stock-based award.

The fair value of each option

granted is estimated as of the date of grant using the Black-Scholes-Merton option-pricing model, net of actual forfeitures.

value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the

vesting period.

The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of Estrella

Common Stock, expected life of stock options, the expected volatility, and the expected risk-free interest rate, among others.

These assumptions

reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside of our control.

As a result, if other assumptions

had been used, stock-based compensation expense, as determined in accordance with authoritative guidance, could have been materially impacted.

Furthermore, if we use different assumptions on future grants, stock-based compensation expense could be materially affected in future

We account for the fair value

of equity instruments issued to non-employees using either the fair value of the services received or the fair value of the equity instrument,

whichever is considered more reliable .

We utilize the Black-Scholes-Merton option-pricing model to measure the fair value

of options issued to non-employees.

We record compensation expense

for the awards with graded vesting using the straight-line method.

We recognize compensation expense over the requisite service period

applicable to each individual award, which generally equals the vesting term.

Forfeitures are recognized when realized.

Emerging Growth Company and Smaller Reporting Company Status

In April 2012, the JOBS

Act was enacted.

Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended

transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private

We previously elected the extended transition period for complying with new or revised accounting standards, which delays the

adoption of these accounting standards until they would apply to private companies.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

We are a smaller reporting

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis