Material Agreement - Form 8-K

Item 1.01 Entry into a Material Definitive Agreement.

On March 4, 2024, Estrella Immunopharma, Inc. (the "Company"), Estrella Biopharma, Inc. ("Estrella Biopharma"), a wholly-owned and sole operating subsidiary of the Company, and Eureka Therapeutics, Inc. ("Eureka"), the controlling shareholder of the Company, entered into Statement of Work No. 001 ("SOW") relating to the clinical trial services to be performed by Eureka in connection with the Phase I/II clinical trial of Estrella Biopharma's product candidate, EB103, a T-cell therapy targeting CD19 using ARTEMIS™ T cell technology licensed by Estrella Biopharma from Eureka. The trial is designed to assess the safety, tolerability, recommended Phase II dose, and preliminary anti-cancer activity of EB103 for the treatment of relapsed or refractory (R/R) B-cell non-Hodgkin lymphoma (NHL) patients.

The SOW is governed by the terms of the Services Agreement, dated June 28, 2022, between Estrella Biopharma and Eureka (as amended by Amendment No. 1, effective as of October 1, 2022, and Amendment No. 2, effective as of March 1, 2023, the "Services Agreement"), and incorporates all the terms of the Services Agreement by reference. Notwithstanding the foregoing, the terms and conditions of the SOW govern in the event of any conflict with the terms and conditions of the Services Agreement.

Services, Fees and Expenses

The scope of work set forth in the SOW includes study start-up, patient dosing and related activities, study close-out, and reporting. Additionally, the SOW sets forth the various services Eureka will provide in connection with the clinical trial, including regulatory document development, site activation, patient enrollment and consent management, data collection, and pharmacovigilance.

Pursuant to the SOW, Estrella Biopharma agrees to pay Eureka non-refundable net fees in connection with the achievement of certain milestones set forth in the SOW, with total fees of $33,000,000 for achievement of all milestones, excluding additional pass-through costs and expenses incurred by Eureka and payable by Estrella Biopharma as further described below. Such amount assumes 20 patients are dosed and one clinical site is activated. An additional $500,000 will become payable to Eureka if a second site is activated following mutual agreement of Estrella Biopharma and Eureka. In addition to the milestone payments, Eureka will invoice Estrella Biopharma quarterly for additional pass-through costs and expenses incurred in connection with its services under the SOW. Estrella Biopharma is required to settle invoices within 30 days, with Eureka reserving the right to impose monthly interest charges of 1.5% for undisputed amounts unpaid after 30 days. Estrella Biopharma will also be responsible for payment of any taxes, fees, duties or charges imposed by any governmental authority in connection with the services provided by Eureka under the SOW, other than any taxes on Eureka's income.

The first invoice payable to Eureka issuable upon execution of the SOW is for $3.5 million, covering the fees associated with the initiation of the study, the preparation and activation of the first study site, and the First Patient First Visit (FPFV) milestones. Prior to the commencement of the patient dosing phase, a deposit of $1.5 million is required to be delivered to Eureka to ensure the readiness for patient treatment expenses and will be applied against our final invoice, and any unused portion will be returned to Estrella Biopharma following collection of all outstanding fees and costs payable to Eureka under the SOW. Additional invoices will be issued in connection with the patient dosing milestone, amounting to $1,375,000 per patient and a total cost $27,500,000 for 20 patients, excluding any pass-through costs and additional expenses. The SOW provides an estimated dosing timeline of 6 patients by the end of 2024 and an additional 14 patients by the end of 2025. Lastly, a $2,000,000 milestone fee will become due in connection with the study close-out phase, estimated to be completed by the end of 2025. Services provided in connection with this milestone include finalizing patient data, trial data cleaning, statistical analysis, and preparing and submitting the final study report.

Eureka is required to provide monthly updates to Estrella Biopharma to keep it informed of progress and results of the activities in the scope of the SOW. Additionally Eureka, as the controlling shareholder of the Company, agrees to cooperate with the Company or Estrella Biopharma, as applicable, to take all reasonable actions necessary in order for the Company or Estrella Biopharma, as applicable, to consummate financing transactions sufficient to pay the amounts payable by Estrella Biopharma pursuant to the SOW in accordance with Nasdaq listing rules and standards and applicable state and federal law.