ESLAW

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.
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 losses.
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 regulatory filings, research and development, and from general and administrative costs associated with our operations.
We expect our net losses to increase substantially as we: ● 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; and ● incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.
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.
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; and ● 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.
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.
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; and net 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 loss.
Our future operations are highly dependent on a combination of factors, including but not necessarily limited to (1) the success of our research and development programs; (2) the timely and successful completion of any additional financing; (3) the development of competitive therapies by other biotechnology and pharmaceutical companies; (4) our ability to manage growth of the organization; (5) our ability to protect our technology and products; and, ultimately (6) regulatory approval and successful commercialization and market acceptance of our product candidates.
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.
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 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.
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 dose.
In the Phase I dose-escalation phase, no treatment-related serious adverse events were reported, and the high-dose cohort achieved a 100% complete response rate at Month 1 in all evaluable patients, many of whom were considered high-risk and ineligible for 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.
We may not be able to access 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 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 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 guidelines; or ● the FDA or other regulatory authorities interpreting our data differently than we do.
Even if 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 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.
It is likely that there will be side effects associated with their use.
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 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 trials.

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Gone since FY2024

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.
Sales 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.
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 $19.5 million and $12.2 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.
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; and ● incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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