Recent Developments

STARLIGHT-1 Clinical Trial Progress In November 2025, the Company announced the completion of Phase I dosing in the STARLIGHT-1 clinical trial of EB103, their lead product candidate. On January 9, 2026, one Phase II patient was dosed in the STARLIGHT-1 clinical trial, representing the tenth patient dosed in total. All dosing milestones recognized as of March 31, 2026 have been recorded as research and development expense under the SOW with Eureka. The Company continues to enroll patients and advance the STARLIGHT-1 clinical trial.

January 2026 Registered Direct Offering and Private Placement On January 6, 2026, the Company consummated a Registered Direct Offering (“RDO”) and concurrent Private Placement pursuant to a Securities Purchase Agreement entered into with a healthcare-focused institutional investor, resulting in gross proceeds of approximately $8.0 million before deducting placement agent fees and other offering expenses of approximately $0.8 million.

The Company issued 4,063,290 shares of Common Stock and Pre-Funded Warrants to purchase 1,000,000 shares of Common Stock at an exercise price of $0.00001 per warrant share. The Company also issued Common Stock Warrants exercisable for up to 7,594,935 shares of Common Stock at an exercise price of $1.39 per warrant share, expiring on January 6, 2031. During the three months ended March 31, 2026, 631,000 Pre-Funded Warrants were exercised, resulting in the issuance of 631,000 shares of Common Stock.

Business Combination and Corporate History On September 29, 2023, the Company consummated the Business Combination with TradeUP Acquisition Corp. (“UPTD”) pursuant to the terms of the Merger Agreement. Estrella was the accounting acquirer, and the Business Combination was accounted for as a reverse recapitalization. On June 26, 2024, the Company completed a short-form merger to absorb its wholly-owned subsidiary, Estrella Biopharma Inc., and on November 25, 2024, the Board of Directors approved a change to the fiscal year end from June 30 to December 31. On November 27, 2024, the Company established Estrella Immunopharma (Hong Kong) Co. Ltd. (“Estrella HK”) as a wholly-owned subsidiary.

Nasdaq Listing Compliance On January 7, 2026, the Company received a written notice from Nasdaq indicating that they were not in compliance with Nasdaq Listing Rule 5620(a) due to the failure to hold an annual meeting of shareholders within twelve months of the end of the transition period ended December 31, 2024. On February 27, 2026, Nasdaq granted the Company an extension until June 29, 2026 to regain compliance.

Results of Operations Estrella was formed on March 30, 2022 and has not commenced revenue-producing operations. Their operations have consisted of the development and clinical-stage testing of their product candidates, EB103 and EB104, preparation and submission of the IND application for EB103, and conduct of the STARLIGHT-1 clinical trial.

Results of Operations for the Three Months Ended March 31, 2026 and 2025 (Unaudited)

Research and Development Expenses For the three months ended March 31, 2026 and 2025, the Company incurred approximately $1.4 million of research and development expenses, all dedicated to the development of ARTEMIS® T-cell therapies targeting CD19 and CD22. The breakdown is summarized in the table below:

General and Administrative Expenses For the three months ended March 31, 2026 and 2025, the Company incurred approximately $0.9 million and $0.7 million in general and administrative expenses, respectively. The increase of approximately $0.2 million, or 28.5%, was primarily attributable to higher legal and professional fees and a loss of $108,627 recognized for the change in fair value of derivative liabilities.

Net Loss The Company incurred a net loss of approximately $2.3 million and $2.1 million for the three months ended March 31, 2026 and 2025, respectively. The Company expects research and development expenses to continue increasing as they advance their product candidates.

Liquidity and Capital Resources As of March 31, 2026, the Company had cash and cash equivalents of approximately $1.9 million and a working capital deficit of approximately $6.8 million. The Company has experienced significant losses and negative cash flows from operations. For the three months ended March 31, 2026, the Company reported a net loss of approximately $2.3 million and net cash used in operating activities of approximately $6.7 million. As of March 31, 2026, the Company had an accumulated deficit of approximately $39.3 million.

Going Concern and Management’s Assessment of Liquidity The Company expects expenses and operating losses to increase significantly as they continue to advance their product candidates through clinical development. The recurring losses from operations, accumulated deficit, and need for additional financing to fund future operations raise substantial doubt about the Company’s ability to continue as a going concern.

The Company completed a private placement between May and September 2025, receiving gross proceeds of approximately $2.4 million, and a registered direct offering and concurrent private placement on January 6, 2026, resulting in gross proceeds of approximately $8.0 million. However, management is of the opinion that the Company will not have sufficient funds to meet their working capital requirements and debt obligations as they become due starting from one year from the date of this report.

Material Cash Requirements and Capital Sources The Company’s primary use of cash is to fund operating expenses, primarily consisting of clinical trial activities and related research and development costs. Pursuant to the SOW with Eureka for the STARLIGHT-1 clinical trial, the Company agreed to pay total non-refundable net fees of $33.5 million for the achievement of all projected milestones. As of March 31, 2026, the Company has cumulatively incurred approximately $17.8 million to Eureka for milestones achieved and holds an accrued liability to related parties of approximately $8.3 million for the outstanding milestone payments.

The Company’s ability to fund their operations is dependent on their cash on hand, their ability to raise debt or additional equity financing, and ultimately their ability to generate sufficient revenue. The Company plans to raise additional capital in the future, but there is no assurance that such financing will be available on acceptable terms, or at all.

Cash Flows Net cash used in operating activities was approximately $6.7 million for the three months ended March 31, 2026, primarily attributable to the net loss, decrease in other payables and accrued liabilities, and decrease in related party liabilities, offset by non-cash items.

Net cash provided by financing activities was approximately $7.2 million for the three months ended March 31, 2026, primarily attributable to the net proceeds from the Registered Direct Offering and concurrent Private Placement.

Commitments and Contingencies The Company has various commitments and contingencies, including a License Agreement, Services Agreement, and Statement of Work with Eureka, as well as an office lease and equity financing agreements with True-Up features.

Critical Accounting Policies and Estimates The Company has identified critical accounting estimates related to Derivative Liabilities and Stock-Based Compensation. The fair value of the derivative liability related to the True-Up Shares was valued at $465,132 as of March 31, 2026 using a Monte Carlo Simulation model. The Company recognizes stock-based compensation expense over the requisite service period applicable to each individual award, using the Black-Scholes-Merton option-pricing model to measure the fair value of options.