Estrella Immunopharma(US:ESLA)2024-05-15 01:49Financial Performance - The company has an accumulated deficit of approximately $15.5 million as of March 31, 2024[180]. - The company incurred a net loss of approximately $0.5 million for the three months ended March 31, 2024, down from $2.7 million for the same period in 2023[190]. - The company incurred a net loss of approximately $3.4 million for the nine months ended March 31, 2024, compared to $8.4 million for the same period in 2023[195]. - As of March 31, 2024, the company reported a net cash used in operating activities of approximately $15.8 million, primarily due to a net loss of $3.4 million and a $9.3 million decrease in accounts payable[209]. Research and Development Expenses - Research and development expenses for the three months ended March 31, 2024, were approximately $25,000, a significant decrease from $2.6 million for the same period in 2023[187]. - For the nine months ended March 31, 2024, research and development expenses were approximately $0.6 million, a decrease from $7.9 million for the same period in 2023[192]. - The company expects significant increases in expenses related to ongoing research and development and public company operations following the Business Combination[199]. General and Administrative Expenses - General and administrative expenses increased to approximately $0.4 million for the three months ended March 31, 2024, compared to $0.1 million for the same period in 2023[189]. - General and administrative expenses for the nine months ended March 31, 2024, were approximately $2.8 million, up from $0.5 million for the same period in 2023[194]. Cash and Financing Activities - As of March 31, 2024, the company had cash of approximately $4.7 million, with no revenue generated to date[196][198]. - The company received net proceeds of approximately $20.1 million from the Business Combination after deducting $5.07 million for stock redemptions and transaction expenses[200]. - Financing activities provided approximately $13.1 million, primarily from the $20 million net proceeds of the Business Combination, offset by transaction costs and stockholder payments[214]. Clinical Trials and Regulatory Approvals - The FDA cleared the IND application for EB103, allowing the company to proceed with the Phase I/II Starlight-1 Clinical Trial expected to commence in the first half of 2024[178]. - The company prepaid $3.5 million to Eureka for the initiation of the Phase I/II clinical trial of EB103, a T-cell therapy, with total fees of $33 million for achieving all milestones[202]. Stock and Equity - The company has issued 312,200 shares of common stock as Founder Shares and 1,107,500 shares as Private Shares, which are entitled to registration rights[225]. - A registration statement was filed with the SEC on October 10, 2023, and was declared effective on December 28, 2023[225]. - The company has the right to require White Lion to purchase up to $50 million in newly issued shares of Common Stock, subject to stockholder approval for issuances exceeding 20% of outstanding shares[223]. Stock-Based Compensation - The company recognizes stock-based compensation costs over the requisite service period based on fair value, using the Black-Scholes-Merton option-pricing model[227]. - Stock-based compensation expense could be materially impacted by changes in assumptions used for future grants[229]. - The company accounts for equity instruments issued to non-employees based on the fair value of services received or the equity instrument, whichever is more reliable[230]. - Compensation expense for awards with graded vesting is recognized over the requisite service period, generally equal to the vesting term[231]. Market and Capital Risks - The company is subject to various uncertainties regarding its ability to raise additional capital, which is critical for ongoing research and development programs[208]. - As of May 13, 2024, the closing price of the company's Common Stock was $1.07 per share, significantly lower than the warrant exercise price of $11.50, making warrant exercise unlikely[206]. - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[232].