Financial Performance - Estrella Immunopharma, Inc. reported a net loss of approximately $5.5 million for the three months ended June 30, 2025, compared to a net loss of $4.0 million for the same period in 2024, reflecting an increase in operational expenses [182]. - The company incurred a net loss of approximately $7.6 million for the six months ended June 30, 2025, compared to a net loss of $4.4 million for the same period in 2024 [186]. - As of June 30, 2025, Estrella had an accumulated deficit of approximately $31.6 million, reflecting the company's ongoing investment in product development without any revenue from product sales [166]. - The company has not generated any revenue to date and does not expect to do so for at least the next few years [188]. Research and Development Expenses - Research and development expenses for the three months ended June 30, 2025, were approximately $4.7 million, up from $3.5 million in the same period in 2024, primarily due to higher service fees during the clinical phase [179]. - For the six months ended June 30, 2025, research and development expenses totaled approximately $6.1 million, compared to $3.6 million for the same period in 2024, indicating a significant increase in clinical trial activities [183]. - Estrella's research and development expenses for the six months ended June 30, 2025, included $6.05 million in consulting and laboratory-related fees, compared to $3.55 million in the same period in 2024 [184]. - The company anticipates significant increases in expenses as it advances preclinical and clinical development, seeks regulatory approvals, and scales up its operational capabilities [167]. - The company expects significant increases in expenses related to ongoing research and development and commercialization efforts if product candidates receive regulatory approval [189]. Clinical Trials - Estrella has initiated the Phase I/II STARLIGHT-1 Clinical Trial for its product candidate EB103, with six patients dosed as of June 30, 2025 [164]. Liabilities and Capital Raising - The company has accrued approximately $8.8 million in liabilities related to clinical trial milestones as of June 30, 2025, with $3.5 million paid to Eureka for study initiation milestones achieved [164]. - The company plans to raise additional capital to fund operations and research and development, but faces uncertainties regarding market conditions and financing availability [197]. - The company has issued 70,000 Equity Line Shares to White Lion for an aggregate consideration of $79,491 as of June 30, 2025 [195]. - The company has entered into a Securities Purchase Agreement to issue 2,233,334 shares of common stock at a purchase price of $1.50 per share, with gross proceeds expected to be approximately $3.35 million [196]. - The company has paid approximately $12.3 million to Eureka for milestone achievements related to its product candidate EB103 as of June 30, 2025 [192]. Accounting and Valuation - The fair value of the derivative liability related to the True-Up Shares was independently valued at $187,941 using a Monte Carlo Simulation model [214]. - The model for the True-Up obligation included a one-year volatility of 110%, a risk-free rate of 4.0%, and a spot price of $0.96 per share [214]. - The Black-Scholes-Merton option-pricing model is used to estimate the fair value of stock-based awards, incorporating various assumptions such as expected volatility and risk-free interest rate [215]. - Stock-based compensation expense could be materially affected by different assumptions on future grants [216]. - The fair value of equity instruments issued to non-employees is measured using either the fair value of the services received or the fair value of the equity instrument [217]. - Compensation expense for awards with graded vesting is recognized over the requisite service period, generally equal to the vesting term [218]. - The company is classified as an emerging growth company, allowing it to delay the adoption of certain accounting standards [219]. - As a smaller reporting company, the company is not required to provide certain market risk disclosures [220].
TRADEUP ACQUISIT(UPTD) - 2025 Q2 - Quarterly Report