Financial Performance - As of September 30, 2024, the company reported an accumulated deficit of approximately $22.9 million[171]. - The company incurred a net loss of approximately $3.4 million for the three months ended September 30, 2024, compared to a net loss of $1.9 million for the same period in 2023[184]. - The company had cash of approximately $1.8 million as of September 30, 2024, and has not generated any revenue to date[185][186]. - The company had net cash used in operating activities of approximately $2.2 million, primarily due to a net loss of approximately $3.4 million[198]. - The company anticipates ongoing losses and negative cash flows until product candidates receive regulatory approval and generate revenue[186]. Research and Development Expenses - For the three months ended September 30, 2024, research and development expenses increased to approximately $2.8 million from $0.5 million in the same period of 2023[180]. - The company expects significant increases in expenses related to ongoing research and development and public company operations[187]. - As of September 30, 2024, the company has paid $3.5 million to Eureka for milestone achievements related to the development of EB103[169]. - The company has entered into a Statement of Work with Eureka, agreeing to pay total fees of $33.0 million for milestone achievements in the STARLIGHT-1 clinical trial[169]. - Total fees of $33.0 million are agreed upon for achieving milestones in the STARLIGHT-1 clinical trial, with approximately $6.3 million expensed to Eureka as of September 30, 2024[191]. - The research plan under the Collaboration Agreement with Imugene was completed as of August 30, 2023, with costs shared equally between the parties[208]. Business Combination and Financing - The Business Combination on September 29, 2023, resulted in net proceeds of approximately $20.1 million after various deductions[188]. - The company remitted approximately $9.3 million to Eureka upon consummation of the Business Combination and expects to use the remaining net proceeds for preclinical and clinical development and compliance costs[190]. - The company plans to raise additional capital in the future to continue research and development programs, but the ability to do so is subject to various risks and uncertainties[197]. - The company had net cash provided by financing activities of approximately $20.0 million for the three months ended September 30, 2023, primarily from the Business Combination[201]. Stock and Equity - As of September 30, 2024, the closing price of the company's Common Stock was $1.16 per share, significantly lower than the exercise price of the Warrants at $11.50 per share, making it unlikely for warrant holders to exercise their warrants[194]. - The company has not issued any Equity Line Shares under the Common Stock Purchase Agreement, which allows for the purchase of up to $50.0 million in shares, pending majority stockholder approval[196]. Liabilities and Compensation - The company accrued $2.75 million in liabilities related to two patient dosing milestones completed during the three months ended September 30, 2024[211]. - As of September 30, 2024, the company had fully paid the license fee to Eureka, which included a one-time payment of $1.0 million and milestone payments upon FDA approval[206][205]. Accounting and Reporting - Stock-based compensation costs are recognized as an expense over the requisite service period based on fair value measurements using the Black-Scholes-Merton option-pricing model[217]. - The fair value of stock options is amortized on a straight-line basis over the vesting period, which generally equals the requisite service period[220]. - The company is classified as an emerging growth company, allowing it to delay the adoption of certain accounting standards until they apply to private companies[220]. - The company accounts for equity instruments issued to non-employees using the fair value of services received or the fair value of the equity instrument, whichever is more reliable[219]. - Compensation expense for awards with graded vesting is recognized over the requisite service period applicable to each individual award[220]. - Forfeitures of stock-based awards are recognized when realized, impacting the overall compensation expense[220]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[222].
Estrella Immunopharma(ESLA) - 2024 Q3 - Quarterly Report