0001564590-21-055958 | 10-Q | XBRL Viewer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2021	Nov. 05, 2021
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Period End Date	Sep. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Trading Symbol	AADI
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Registrant Name	AADI BIOSCIENCE, INC.
Entity Central Index Key	0001422142
Entity Common Stock, Shares Outstanding		20,894,029
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity File Number	001-38560
Entity Tax Identification Number	61-1547850
Entity Address, Address Line One	17383 Sunset Boulevard
Entity Address, Address Line Two	Suite A250
Entity Address, City or Town	Pacific Palisades
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90272
City Area Code	424
Local Phone Number	473-8055
Entity Information, Former Legal or Registered Name	Aerpio Pharmaceuticals, Inc.
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common stock, $0.0001 par value per share
Security Exchange Name	NASDAQ
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false
Former Address [Member]
Document Information [Line Items]
Entity Address, Address Line One	c/o 10663 Loveland
Entity Address, Address Line Two	Madeira Road #168
Entity Address, City or Town	Loveland
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45140

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 161,375	$ 4,455
Accounts receivable		14,149
Prepaid expenses and other current assets	643	81
Total current assets	162,018	18,685
Property and equipment, net	14	21
Operating lease right-of-use assets	597	119
Intangible asset, net	3,880
Other assets	2,263
Total assets	168,772	18,825
Current liabilities:
Accounts payable	5,205	2,392
Accrued liabilities	6,250	4,099
Payable to related party	22	14,314
Convertible related party promissory notes payable at fair value		9,029
Operating lease liabilities, current portion	90	125
Other current liabilities		99
Total current liabilities	11,567	30,058
Convertible promissory notes payable at fair value		1,102
Payable to related party	5,757
Operating lease liabilities, net of current portion	523
Other liabilities		97
Total liabilities	17,847	31,257
Commitments and contingencies (Note 15)
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 300,000,000 and 20,000,000 shares authorized; 20,883,454 and 2,542,358 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	2	1
Additional paid-in capital	277,618	20,161
Accumulated deficit	(126,695)	(32,595)
Total stockholders’ equity (deficit)	150,925	(12,432)
Total liabilities and stockholders’ equity (deficit)	168,772	18,825
Series Seed Preferred Stock [Member]
Stockholders’ equity (deficit):
Preferred stock value
Series A Preferred Stock [Member]
Stockholders’ equity (deficit):
Preferred stock value		1
Total stockholders’ equity (deficit)		$ 1

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Preferred stock, par value	$ 0.0001
Preferred stock, shares authorized	10,000,000
Preferred stock, shares outstanding	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	20,000,000
Common stock, shares issued	20,883,454	2,542,358
Common stock, shares outstanding	20,883,454	2,542,358
Series Seed Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	0	734,218
Preferred stock, shares issued	0	734,218
Preferred stock, shares outstanding	0	734,218
Preferred stock, aggregate liquidation preference	$ 0	$ 1,101
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	0	7,211,948
Preferred stock, shares issued	0	7,211,948
Preferred stock, shares outstanding	0	7,211,948
Preferred stock, aggregate liquidation preference	$ 0	$ 28,433

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenue		$ 231	$ 120	$ 431
Operating expenses
Research and development	$ 5,754	2,395	12,443	9,684
General and administrative	7,401	499	8,793	1,700
Impairment of acquired contract intangible asset	74,156		74,156
Total operating expenses	87,311	2,894	95,392	11,384
Loss from operations	(87,311)	(2,663)	(95,272)	(10,953)
Other income (expense)
Change in fair value of convertible promissory notes	380		1,585
Gain upon extinguishment of debt			196
Interest income		1	1	41
Interest expense (includes related party amounts of $142, $204, $542 and $531, respectively)	(157)	(229)	(608)	(585)
Total other income (expense), net	223	(228)	1,174	(544)
Loss before income tax expense	(87,088)	(2,891)	(94,098)	(11,497)
Income tax expense		(1)	(2)	(1)
Net and comprehensive loss	(87,088)	(2,892)	(94,100)	(11,498)
Cumulative dividends on convertible preferred stock	(154)	(247)	(647)	(740)
Net and comprehensive loss attributable to common stockholders	$ (87,242)	$ (3,139)	$ (94,747)	$ (12,238)
Net and comprehensive loss per share attributable to common stockholders, basic and diluted	$ (9.17)	$ (1.23)	$ (19.37)	$ (4.81)
Weighted average number of common shares outstanding used in computing net and comprehensive loss per share attributable to common stockholders, basic and diluted	9,510,379	2,542,358	4,890,556	2,542,358
Grant [Member]
Revenue		$ 231	$ 120	$ 431

Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Interest expense, related party	$ 142	$ 204	$ 542	$ 531

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Promissory Note [Member]	PIPE Investors [Member]	Former Stockholders/Executives of Aerpio Upon Merger [Member]	Series Seed Preferred Stock [Member]	Series A Preferred Stock [Member]	Common Stock	Common Stock Promissory Note [Member]	Common Stock PIPE Investors [Member]	Common Stock Former Stockholders/Executives of Aerpio Upon Merger [Member]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] Promissory Note [Member]	Additional Paid-in Capital [Member] PIPE Investors [Member]	Additional Paid-in Capital [Member] Former Stockholders/Executives of Aerpio Upon Merger [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2019	$ (9,093)					$ 1	$ 1				$ 20,022				$ (29,117)
Balance, Shares at Dec. 31, 2019					734	7,212	2,542
Share-based compensation expense	29										29
Net and comprehensive loss	(3,324)														(3,324)
Balance at Mar. 31, 2020	(12,388)					$ 1	$ 1				20,051				(32,441)
Balance, Shares at Mar. 31, 2020					734	7,212	2,542
Balance at Dec. 31, 2019	(9,093)					$ 1	$ 1				20,022				(29,117)
Balance, Shares at Dec. 31, 2019					734	7,212	2,542
Net and comprehensive loss	(11,498)
Balance at Sep. 30, 2020	(20,491)					$ 1	$ 1				20,122				(40,615)
Balance, Shares at Sep. 30, 2020					734	7,212	2,542
Balance at Mar. 31, 2020	(12,388)					$ 1	$ 1				20,051				(32,441)
Balance, Shares at Mar. 31, 2020					734	7,212	2,542
Share-based compensation expense	37										37
Net and comprehensive loss	(5,282)														(5,282)
Balance at Jun. 30, 2020	(17,633)					$ 1	$ 1				20,088				(37,723)
Balance, Shares at Jun. 30, 2020					734	7,212	2,542
Share-based compensation expense	34										34
Net and comprehensive loss	(2,892)														(2,892)
Balance at Sep. 30, 2020	(20,491)					$ 1	$ 1				20,122				(40,615)
Balance, Shares at Sep. 30, 2020					734	7,212	2,542
Balance at Dec. 31, 2020	(12,432)					$ 1	$ 1				20,161				(32,595)
Balance, Shares at Dec. 31, 2020					734	7,212	2,542
Share-based compensation expense	36										36
Net and comprehensive loss	(5,476)														(5,476)
Balance at Mar. 31, 2021	(17,872)					$ 1	$ 1				20,197				(38,071)
Balance, Shares at Mar. 31, 2021					734	7,212	2,542
Balance at Dec. 31, 2020	$ (12,432)					$ 1	$ 1				20,161				(32,595)
Balance, Shares at Dec. 31, 2020					734	7,212	2,542
Exercise of stock options to purchase common stock, Shares	61,075
Net and comprehensive loss	$ (94,100)
Balance at Sep. 30, 2021	150,925						$ 2				277,618				(126,695)
Balance, Shares at Sep. 30, 2021							20,883
Balance at Mar. 31, 2021	(17,872)					$ 1	$ 1				20,197				(38,071)
Balance, Shares at Mar. 31, 2021					734	7,212	2,542
Share-based compensation expense	39										39
Net and comprehensive loss	(1,536)														(1,536)
Balance at Jun. 30, 2021	(19,369)					$ 1	$ 1				20,236				(39,607)
Balance, Shares at Jun. 30, 2021					734	7,212	2,542
Exercise of stock options to purchase common stock	745										745
Exercise of stock options to purchase common stock, Shares							61
Issuance of common stock			$ 145,384	$ 105,888					$ 1				$ 145,383	$ 105,888
Issuance of common stock, Shares									11,853	3,209
Conversion of convertible promissory note/preferred stock in to common stock upon merger	(1)	$ 9,130				$ (1)						$ 9,130
Conversion of convertible promissory note/preferred stock in to common stock upon merger, shares					(734)	(7,212)	2,520	698
Share-based compensation expense	648										648
Cumulative dividends paid on Series A preferred stock	(4,412)										(4,412)
Net and comprehensive loss	(87,088)														(87,088)
Balance at Sep. 30, 2021	$ 150,925						$ 2				$ 277,618				$ (126,695)
Balance, Shares at Sep. 30, 2021							20,883

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net and comprehensive loss	$ (87,088)	$ (94,100)	$ (11,498)
Adjustments to reconcile net and comprehensive loss to net cash used in operating activities:
Impairment of acquired contract intangible asset		74,156
Change in fair value of convertible promissory notes (includes related party amounts of $135 and $0, respectively)	(380)	(1,585)
Non-cash interest expense (includes related party amounts of $542 and $531, respectively)		584	585
Gain on forgiveness of Payroll Protection Plan loan		(196)
Share-based compensation expense	648	723	100
Non-cash lease expense		133	124
Depreciation and amortization expense		33	7
Changes in operating assets and liabilities:
Accounts receivables		14,149	54
Prepaid expenses and other current assets		(526)	(37)
Other non-current assets		430
Operating lease liability		(121)	(146)
Accounts payable and accrued expenses		4,860	1,611
Payable to related party		(8,535)	(226)
Net cash used in operating activities		(9,995)	(9,426)
Cash flows from investing activities:
Cash acquired in connection with the Merger		29,700
Transaction expenses related to Merger		(4,501)
Net cash provided by investing activities		25,199
Cash flows from financing activities:
Issuance of common stock upon exercise of stock options		745
Issuance of common stock to PIPE Investors	155,000	155,000
Costs incurred in connection with issuance of common stock		(9,617)
Dividends paid		(4,412)
Proceeds from issuance of convertible promissory notes			1,000
Proceeds from Payroll Protection Loan Program			194
Net cash provided by financing activities		141,716	1,194
Net increase (decrease) in cash and cash equivalents		156,920	(8,232)
Cash and cash equivalents at beginning of year		4,455	15,962
Cash and cash equivalents, end of period	$ 161,375	161,375	$ 7,730
Supplemental disclosure of cash flow information:
Issuance of common stock upon Merger		105,888
Operating lease liability arising from obtaining right-of-use asset		610
Conversion of convertible promissory note into common stock upon merger		9,130
PIPE Investors [Member]
Cash flows from financing activities:
Issuance of common stock to PIPE Investors		$ 155,000

Condensed Consolidated Statements of Cash Flows (Parenthetical) (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Statement Of Cash Flows [Abstract]
Related party transaction amounts included in change fair value of convertible promissory notes	$ 135	$ 0
Related party costs included in non-cash interest expense	$ 542	$ 531

- Definition

Direct costs arising from transactions with related parties who are not affiliates or joint Ventures. These costs are categorized as cost of goods sold.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.2)
-URI http://asc.fasb.org/extlink&oid=123367319&loc=SL114868664-224227

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(C))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(k)(1))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
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-Subparagraph (SX 210.13-01(a)(4)(iii)(B))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

+ Details

Nature of Organization and Operations

9 Months Ended

Sep. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Nature of Organization and Operations

1. Nature of Organization and Operations

Aadi Bioscience, Inc. (together with its subsidiaries, the “Company” or “Aadi”) is a clinical stage biopharmaceutical company focused on development and commercialization of precision medicines targeted to rare mutation-driven diseases. Aadi’s initial focus is on the development of nab-sirolimus (sirolimus albumin-bound nanoparticles for injectable suspension, or “ABI-009”) for diseases driven by the mTOR pathway activation through mutations or deletions of specific genes such as Tuberous Sclerosis Complex 1 and 2 (“TSC1” and “TSC2”) or PTEN. ABI-009 is licensed to Aadi by Abraxis BioScience, LLC, a wholly owned subsidiary of Celgene Corporation, now Bristol Myers Squibb Company (“Celgene”), for all therapeutic areas including oncology, cardiovascular, and metabolic related diseases.

The Company’s historical operations have consisted principally of performing research and development activities and raising capital. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding before sustainable revenues and profit from operations are achieved.

Merger with Aerpio Pharmaceuticals, Inc. and Name Change

On May 16, 2021, the Company, then operating as Aerpio, entered into the Agreement and Plan of Merger (“Merger Agreement”) with Aspen Merger Subsidiary, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Aerpio (“Merger Sub”) and Aadi Subsidiary, Inc. (formerly known as Aadi Bioscience, Inc. (“Private Aadi”)).

Pursuant to the terms set forth in the Merger Agreement and effective August 26, 2021 (the “Effective Time”): (i) Merger Sub merged with and into Private Aadi, with Private Aadi surviving as a wholly-owned subsidiary of Aerpio (the “Merger”), (ii) Aerpio changed its name to Aadi Bioscience, Inc. in connection with and immediately prior to the Effective Time of the Merger, and (iii) Aerpio effected a 15:1 reverse stock split of the Aerpio common stock (“Reverse Stock Split”) immediately prior to the Effective Time of the Merger. At the Effective Time, each share of Private Aadi common stock outstanding immediately prior to the Effective Time, including the shares of Private Aadi common stock issuable upon the conversion of all shares of preferred stock and convertible promissory notes immediately prior to the closing of the Merger, were converted into the right to receive shares of the Company’s common stock based on an exchange ratio of 0.3172 (the “Exchange Ratio”), after taking into account the Reverse Stock Split.

Pursuant to the Merger Agreement, Aerpio assumed all of the outstanding and unexercised options to purchase shares of Private Aadi capital stock under the Private Aadi Amended and Restated 2014 Equity Incentive Plan (the “Private Aadi Plan”), and, in connection with the Merger, such options were converted into options to purchase shares of the Company’s common stock based on the Exchange Ratio. At the closing of the Merger at the Effective Time, the Company issued an aggregate of 5,776,660 shares of common stock to holders of Private Aadi common stock, including for shares of Private Aadi common stock issuable upon the conversion of all shares of preferred stock and convertible promissory notes outstanding immediately prior to the Effective Time. In connection with the Merger, the Company entered into a Contingent Value Rights Agreement (the “CVR Agreement”) with a legacy director of Aerpio, as Holder Representative (as defined in the CVR Agreement), and American Stock Transfer & Trust Company, LLC, as Rights Agent (as defined in the CVR Agreement), in accordance with the terms of the Merger Agreement. The CVR Agreement entitles each holder of Aerpio common stock as of immediately prior to the closing of the Merger (each, a “CVR Holder”) to receive one contingent value right (“CVR”) for each outstanding share of Aerpio common stock held by such CVR Holder as of immediately prior to the closing of the Merger, each representing the right to receive certain net proceeds, if any, derived from the CVR completed during a CVR Payment Period, which means successive six-month periods, prior to the expiration of the CVR Term (as defined in the CVR Agreement), with any potential payment obligations continuing until the earlier of (a) the 20-year anniversary of the Effective Time and (b) the time at which the license agreement with Gossamer Bio, Inc., the underlying basis for the CVR, has expired or been terminated. Under the terms of the Merger Agreement, as related to the CVR, the Company is entitled to 10% of any proceeds paid from the underlying license agreement plus reimbursement of expenses. There can be no assurances that any proceeds will result therefrom.

The Merger has been accounted for using the reverse asset acquisition method under U.S. generally accepted accounting principles (“GAAP”). For accounting purposes, Private Aadi is considered to have acquired Aerpio and the Merger has been accounted for as a reverse asset acquisition. Private Aadi is considered the accounting acquirer even though Aerpio issued the common stock in the Merger based on the terms of the Merger Agreement and other factors including: (i) following the Merger, the stockholders of Private Aadi collectively owned a substantial portion of the voting rights of the Company; (ii) three (3) of seven (7) members of the board of directors of the Company post-Merger were composed of directors designated by Private Aadi under the terms of the Merger Agreement, and one (1) member of the board of directors of the Company post-Merger was a director mutually designated by Private

Aadi and Aerpio; (iii) existing members of Private Aadi’s management became the management of the Company post-Merger; (iv) the PIPE Investors (as defined below) consist of individuals and funds, and for purpose of this analysis, while they owned approximately 55.6% on a fully-diluted basis, as of immediately following the Merger (and after giving effect to the PIPE Financing), no one individual or fund held more shares than the holders of Private Aadi collectively owned immediately following the Merger and they are not considered to be a single voting group; and (v) following the Merger, the Company is named “Aadi Bioscience, Inc.” and headquartered in Pacific Palisades, California, and all ongoing operations of the Company are those of Private Aadi. To determine the accounting for this transaction under GAAP, a company must assess whether an integrated set of assets and activities should be accounted for as an acquisition of a business or an asset acquisition. Upon closing of the Merger, substantially all of the fair value is concentrated in cash, working capital and a long-lived contract intangible asset. As such, the acquisition was treated as an asset acquisition. The net assets of Aerpio have been recorded at their relative fair value in the consolidated financial statements of the Company and the reported operating results prior to the Merger will be those of Private Aadi.

Pursuant to the closing of the Merger, Private Aadi’s board of directors declared a 4% cumulative dividend on its preferred stock of $4.4 million which was paid at the Effective Time.

PIPE Financing and Subscription Agreement

On May 16, 2021, the Company entered into a subscription agreement (“Subscription Agreement”) with certain investors (the “PIPE Investors”), pursuant to which it would sell shares of its Common Stock concurrently with the closing of the Merger (the “PIPE Financing”). At the closing of the PIPE Financing, the Company entered into a Registration Rights Agreement, dated August 26, 2021 (“Registration Rights Agreement”), with the PIPE Investors. The PIPE Investors purchased an aggregate of 11,852,862 shares of common stock of the Company (the “PIPE Shares”) for an aggregate purchase price of $155.0 million pursuant to the Subscription Agreement (“PIPE Financing”). The aggregate net proceeds for the issuance and sale of the of the PIPE Shares was $145.4 million, after deducting certain expenses incurred that were direct and incremental to the issuance of the PIPE Shares.

Immediately following the Effective Time, and after giving effect to the Reverse Stock Split and the PIPE Financing, there were approximately 20.8 million shares of common stock of the Company outstanding. Immediately following the Effective Time and after giving effect to the Reverse Stock Split and the PIPE Financing: (i) the Private Aadi stockholders owned approximately 29.2% of the outstanding shares of common stock; (ii) Aerpio’s stockholders immediately prior to the Merger, whose shares of common stock, as adjusted for the Reverse Stock Split, remain outstanding after the Merger, owned approximately 15.2% of the outstanding shares of common stock; and (iii) the PIPE Investors owned approximately 55.6% of the outstanding shares of common stock, in each case as calculated on a fully-diluted basis.

Liquidity

Since inception, the Company has devoted substantially all of its resources to research and development activities, business planning, establishing and maintaining its intellectual property portfolio, hiring personnel, raising capital and providing general and administrative support for these operations and has not realized revenues from its planned principal operations.

The Company has experienced net losses since its inception and expects to continue to incur net losses into the foreseeable future. The Company had an accumulated deficit of $126.7 million as of September 30, 2021 and net loss of $87.1 million and $94.1 million for the three and nine months ended September 30, 2021, respectively. To date, these operating losses have been funded primarily from outside sources of invested capital through the issuance of convertible promissory notes, grant funding, the sale of securities, and proceeds from license agreements.

During the three and nine months ended September 30, 2021, the Company raised capital through the PIPE Financing of $155.0 million which netted $145.4 million after financing expenses. Additionally, the Company assumed $29.7 million of cash from Aerpio in the Merger, which netted to $27.7 million after $2.0 million of compensation related expenses for former Aerpio executives related to the Merger. The Company had cash and cash equivalents of $161.4 million at September 30, 2021. Management believes that the Company’s current cash and cash equivalents, including the aggregate net proceeds from the PIPE Financing, will provide sufficient funds to enable the Company to meet its obligations for at least twelve months from the filing date of this report.

COVID-19

In December 2019, a strain of coronavirus was reported in Wuhan, China and began to spread globally, including to the United States and Europe, in the following months. The World Health Organization has declared COVID-19 to be a global pandemic. The full impact of the COVID-19 pandemic is inherently uncertain at the time of this report. The COVID-19 pandemic has resulted in travel restrictions and, in some cases, prohibitions of non-essential

activities, disruption and shutdown of businesses, and greater uncertainty in global financial markets. As COVID-19 has spread, it has significantly impacted the health and economic environment around the world, and many governments have closed most public establishments, including restaurants, workplaces, and schools. Aadi’s clinical trials have been, and may continue to be, affected by the closure of offices, or country borders, among other measures being put in place around the world. The inability to travel and conduct face-to-face meetings can also make it more difficult to enroll new patients in ongoing or planned clinical trials. Any of these circumstances will potentially have a negative impact on our financial results and the timing of our clinical trials.

The COVID-19 pandemic has caused the Company to modify business practices (including but not limited to curtailing or modifying employee travel, moving to full remote work, and cancelling physical participation in meetings, events, and conferences), and may take further actions as may be required by government authorities or that are determined to be in the best interests of the Company’s employees, patients, and business partners.

The extent of the impact of the COVID-19 pandemic on Aadi’s future liquidity and operational performance will depend on certain developments, including the duration and spread of the outbreak, the availability and effectiveness of vaccines, the impact on our clinical trials, patients, and collaboration partners, and the effect on our suppliers.

Related Party Transactions

9 Months Ended

Sep. 30, 2021

Related Party Transactions

2. Related Party Transactions

Presented below are the details of a license agreement with Celgene, an entity which was a stockholder of Private Aadi prior to the Merger and became a stockholder of the Company as a result of the Merger.

Celgene License Agreement

On April 9, 2014, the Company’s wholly owned subsidiary, Private Aadi, entered into a license agreement (the “Celgene License Agreement”) with Celgene for exclusive rights for certain patents and a non-exclusive license for certain technology and know-how pertaining to ABI-009.

The Celgene License Agreement will remain in effect from the effective date of April 9, 2014 until expiration of all milestone and royalty payment obligations under the agreement, unless terminated by either of the parties upon giving an advance notice as specified in the Celgene License Agreement. Under the terms of the Celgene License Agreement, Celgene agreed to supply the Company with licensed products of ABI-009 necessary for clinical or non-clinical development.

Celgene had the option to terminate the Celgene License Agreement and all of the Company’s related rights and licenses upon the occurrence of each of the following: (a) successful completion of the first Phase 2 Trial for a licensed product (“First Trigger Event”), or (b) if Celgene elects not to exercise its option upon the First Trigger Event, then upon the acceptance by the Food and Drug Administration or the European Medicines Agency, as applicable, of the first New Drug Application either in the United States or European Union, whichever occurs first, for a licensed product (“Second Trigger Event”). Celgene could also terminate the Celgene License Agreement upon written notice to the Company at any time following the occurrence of the First Trigger Event and prior to the occurrence of the Second Trigger Event (an “Early Exercise”). In each case, the termination would be subject to a payment to the Company by Celgene equal to the valuation of the Company as per the terms of the Celgene License Agreement. On October 3, 2016, the Celgene License Agreement was amended to include an option extension payment that allowed Celgene the option of paying $3.0 million to the Company to extend the period of time that Celgene had to Early Exercise. The Company has certain milestones that it is required to meet as specified in the Celgene License Agreement. If the Company fails to meet these milestones and cannot agree upon new terms and conditions, Celgene may terminate the Celgene License Agreement.

Celgene is entitled to receive certain development milestone payments, royalties on net sales from licensed products under the agreement and any sublicense fees. No payments related to milestones or royalties under this agreement were paid during the three and nine months ended September 30, 2021 or 2020.

On May 1, 2019, Celgene terminated its rights to elect an option to terminate the Celgene License Agreement upon the occurrence of a First Trigger Event, Second Trigger Event or Early Exercise. As a result, the Company is free to negotiate and enter into any agreement with respect to an acquisition of all or substantially all of the business or assets of the Company whether by merger, sale of equity or assets, or otherwise and to consummate the same as it sees fit.

On November 15, 2019, Celgene and the Company entered into an amendment to the Celgene License Agreement (the “Amended Celgene License Agreement”) to terminate certain of Celgene’s ABI-009 product supply obligations and to transfer control over certain regulatory filings under the original Celgene License Agreement from Celgene to the Company. The Amended Celgene License Agreement also waived the obligations related to certain development milestone payments and waived the liability related to 2016 and 2017 licensed drug manufacturing costs of $1.2 million and $2.7 million, respectively.

On August 30, 2021, the Company and Celgene entered into Amendment No. 1 (the “Amendment”) to the Amended Celgene License Agreement related to certain intellectual property rights of Celgene pertaining to the compound known as ABI-009. Under the terms of the Amendment, the Company paid Celgene $5.8 million representing 50% of the previously outstanding payment obligation under the terms of the Amended Celgene License Agreement, following the Effective Time of the PIPE Financing. Pursuant to the terms of the Amendment, the remaining previously outstanding payment obligation of $5.8 million, is due on the third anniversary of the Effective Time plus any accrued and unpaid interest due thereon (“Balloon Payment”). The Balloon Payment shall accrue interest, beginning as of the Effective Time until paid in full, at a rate equal to 4.0% per annum based on the weighted average amount outstanding during the applicable calendar quarter, and interest shall be payable quarterly in arrears. In addition, the parties agreed to amend the royalty rates payable to Celgene based on net sales of products subject to the Amended Celgene License Agreement.

On December 8, 2020, the Company entered into a license agreement (“EOC License Agreement”) with EOC Pharma (Hong Kong) Limited (“EOC”) under which the Company received $14.0 million in January 2021 in non-refundable upfront consideration as partial payment for the rights and licenses granted to EOC by the Company for the further development and commercialization of ABI-009 in the People’s Republic of China, Hong Kong Special Administration Region, Macao Special Administrative Region and Taiwan (the “Licensed Territory”). In accordance with the Celgene License Agreement, the Company is required to pay 20% of all sublicense fees to Celgene. As such, the Company recognized $2.8 million of license expense in the fourth quarter of 2020 and had a corresponding $2.8 million sublicense payable to Celgene on the balance sheet as of December 31, 2020. During the three and nine months ended September 30, 2021, the Company paid the $2.8 million sublicense fee. Refer to Note 8 for additional information on the EOC License Agreement.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

3. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements, and the related disclosures, have been prepared in accordance with U.S. Securities and Exchange Commission (“SEC”) regulations and include all of the information and disclosures required by GAAP for interim financial reporting, and, in the opinion of management include all adjustments necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows for each period presented. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). All adjustments are of a normal and recurring in nature. The Company’s condensed consolidated financial statements are stated in U.S. Dollars.

On August 26, 2021, when the Company closed the Merger, all outstanding shares of common stock along with preferred stock of Private Aadi were exchanged for new shares of common stock of the Company and the approximately 8.1 million shares of Private Aadi capital stock held by stockholders of Private Aadi immediately prior to the Merger were exchanged for approximately 2.5 million shares of common stock of the Company based on the Exchange Ratio. The authorized number of shares of common stock was not reduced and remains at 300.0 million. The par value of the Company’s common stock remains unchanged at $0.0001 per share.

Also on August 26, 2021, and immediately prior to the closing of the Merger, Aerpio effected the Reverse Stock Split. Accordingly, all share and per share amounts for the period presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split. No fractional shares were issued in connection with the Reverse Stock Split. Unless otherwise noted, all references to shares of the Company’s common stock and per share amounts have also been adjusted to reflect the Exchange Ratio.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics. All the assets and operations of the Company’s sole operating and reportable segment are located in the United States.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation

have been included. The most significant estimates in the Company’s condensed consolidated financial statements relate to stock-based compensation expense and accrued research and development costs. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may materially differ from these estimates and assumptions.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents and certain investments in money market funds. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company has not experienced any losses on deposits since inception.

Cash and Cash Equivalents

The Company considers all highly liquid marketable securities purchased with original maturities of three months or less at the time of purchase date to be cash equivalents. As of September 30, 2021 and December 31, 2020, cash and cash equivalents included money market investments totaling $152.5 million and $3.0 million, respectively.

Fair Value Option

The Company has elected the fair value option to account for its convertible promissory notes issued. The Company records these convertible promissory notes at fair value with changes in fair value recorded in the statements of operations and comprehensive loss. As a result of applying the fair value option, direct costs and fees related to the convertible promissory notes were recognized in earnings as incurred and not deferred. As of September 30, 2021, there were no Convertible Notes outstanding as they were converted to shares of Private Aadi common stock immediately prior to the closing of the Merger.

Fair Value of Financial Instruments

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs, such as quoted prices in active markets

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions which reflect those that a market participant would use

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

In determining the fair value of its financial instruments, the Company considers the source of observable market data inputs, liquidity of the instrument, the credit risk of the counterparty to the contract, and its risk of nonperformance. In the case fair value is not observable, for the items subject to fair value measurements, the Company applies valuation techniques deemed the most appropriate under the GAAP guidance based on the nature of the assets and liabilities being measured.

The carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued liabilities are reasonable estimates of their fair value because of the short maturity of these items.

The following table sets forth the fair value of the Company’s financial assets and liabilities, allocated into the Level 1, Level 2 and Level 3 hierarchy that were measured at fair value on a recurring basis (amounts in thousands):

	Fair Value Measurements as of September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	152,465	$	—	$	—	$	152,465
Liabilities:
Convertible promissory notes	$	—	$	—	$	—	$	—

	Fair Value Measurements as of December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	3,041	$	—	$	—	$	3,041
Liabilities:
Convertible promissory notes	$	—	$	—	$	10,131	$	10,131

(1) Included in cash and cash equivalents in the accompanying balance sheets.

As further described in Note 9, Private Aadi issued convertible notes in October 2019 and January 2020 (collectively the “Convertible Notes”). The Company elected the fair value option to account for the Convertible Notes. The fair value was estimated using a scenario-based analysis based on the probability-weighted value of expected future investment returns, considering possible outcomes available to the noteholders including conversions in subsequent equity financings, change of control transactions, settlement, and dissolution. The Company adjusts the carrying value of its Convertible Notes to their estimated fair value at each reporting date, with any related increases or decreases in the fair value recorded as a change in fair value of convertible promissory notes in the statements of operations and comprehensive loss.

As of September 30, 2021 there were no Convertible Notes outstanding as the Convertible Notes were converted to shares of Private Aadi common stock immediately prior to the closing of the Merger, which were concurrently exchanged for common stock of the Company based on the Exchange Ratio in connection with the closing of the Merger. As of December 31, 2020, the significant unobservable inputs used in the fair value measurement of the Convertible Notes included an expected settlement date in August 2021 and June 2021, respectively, and an estimated discount rate of 25%. Other significant unobservable inputs include the relative weighting applied to the possible outcomes available to the noteholders including conversions in subsequent equity financings, change of control transactions, settlement, and dissolution.

There are significant judgments, assumptions and estimates inherent in the determination of the fair value of the Convertible Notes described above. These include determination of a valuation method and selection of the possible outcomes available to the Company, including the determination of timing and expected future investment returns for such scenarios, as well as the likelihood of repayment, conversion, and dissolution. The related judgments, assumptions and estimates are highly interrelated and changes in any one assumption could necessitate changes in another. Any changes in the probability of a particular outcome would require a related change to the probability of another outcome.

The following table provides a reconciliation of the Convertible Notes (refer to Note 9) measured at fair value using significant unobservable inputs (Level 3) (amounts in thousands):

	Convertible Notes
	(Level 3)
Balance as of December 31, 2020	$	10,131
Issuance of convertible promissory notes		—
Accrual of interest		584
Change in fair value of convertible promissory notes		(1,585	)
Conversion to common stock		(9,130	)
Balance September 30, 2021	$	—

	Convertible Notes
	(Level 3)
Balance as of December 31, 2019	$	8,165
Issuance of convertible promissory notes		1,000
Accrual of interest		585
Change in fair value of convertible promissory notes		—
Balance September 30, 2020	$	9,750

There have been no transfers between levels during the reporting periods.

Accounts Receivable

Accounts receivable represents revenue recognized, but for which payment has not yet been received. Accounts receivable at December 31, 2020 includes $14.0 million receivable related to the EOC upfront payment and $0.1 million grant revenue. These amounts were subsequently collected in 2021. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations and historical payment patterns. No allowance for doubtful accounts was recorded as of September 30, 2021 and December 31, 2020.

Property and Equipment, Net

Property and equipment, consisting of computers, furniture and fixtures, and office equipment, are stated at cost, less accumulated depreciation. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally five years. Such costs are periodically reviewed for recoverability when impairment indicators are present.

Intangible Asset

The Company’s intangible asset consists of a single asset, Aerpio’s license agreement with Gossamer Bio., Inc. acquired in the Merger. The intangible asset is stated at fair value and is amortized using the straight-line method over its estimated useful life of 14.3 years. The intangible asset is reviewed for potential impairment when events or circumstances indicate that carrying amounts may not be recoverable.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including property, equipment, and the intangible asset for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value. An impairment was recorded for the long-lived intangible asset during three and nine months ended September 30, 2021 (see Note 5).

Leases

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset upon commencement of the lease using the implicit rate or a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company does not recognize assets or liabilities for leases with lease terms of less than 12 months.

The Company additionally evaluates leases at their inception to determine if they are to be accounted for as an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five

criteria: (i) the lease has a purchase option that is reasonably certain of being exercised, (ii) the present value of the future cash flows is substantially all of the fair market value of the underlying asset, (iii) the lease term is for a significant portion of the remaining economic life of the underlying asset, (iv) the title to the underlying asset transfers at the end of the lease term, or (v) if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. Operating lease assets represent a right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease liabilities with a term greater than one year and their corresponding right-of-use assets are recognized on the balance sheet at the commencement date of the lease based on the present value of lease payments over the expected lease term.

Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. As the Company’s leases do not typically provide an implicit rate, the Company utilizes the appropriate incremental borrowing rate, determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment. For finance leases, depreciation expense is recognized for the leased asset acquired and interest expense is recognized related to the portion of the financing in the statements of operations. For operating leases, lease cost is recognized on a straight-line basis over the lease term and variable lease payments are recognized as operating expense in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. The Company has elected the practical expedient to not separate between lease and non-lease components.

Commitments and Contingencies

The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range. The Company has not recorded any such liabilities as of September 30, 2021 and December 31, 2020.

Revenue Recognition

Grant Revenue

The Company’s grant revenues are derived from federal grants with the U.S. Food and Drug Administration. The Company has determined that the government agencies providing grants to the Company are not customers. Grant revenue is recognized when there is reasonable assurance of compliance with the conditions of the grant and reasonable assurance that the grant revenue will be received. The Company recognizes grant revenues as reimbursable grant costs are incurred. The costs associated with these reimbursements are reflected as a component of research and development expense in the accompanying statements of operations and comprehensive loss.

With respect to grant revenue derived from reimbursement of direct out-of-pocket expenses for research costs associated with federal contracts, where the Company acts as principal with discretion to choose suppliers, bears credit risk, and performs part of the services required in the transaction, the Company records revenue for the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in the accompanying statements of operations and comprehensive loss.

Revenue Under License Agreement

The Company generates revenues from payments received under a license agreement. Under such license agreement, the Company recognizes revenue when it transfers promised goods or services to partners in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with partners, the Company performs the following five steps: (i) identifies the promised goods or services in the contract; (ii) identifies the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determines the transaction price, including the constraint on variable consideration; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when (or as) the Company satisfies the performance obligations.

For revenue from such license agreement, the Company generally collects an upfront license payment from the license partner and is also entitled to receive event-based payments subject to the license partner’s achievement of specified development, regulatory and sales-based milestones. In addition, the Company is generally entitled to royalties if products under the license agreement are commercialized.

Transaction price for a contract represents the amount to which the Company is entitled in exchange for providing goods and services to the partner. Transaction price does not include amounts subject to uncertainties unless it is

probable that there will be no significant reversal of revenue when the uncertainty is resolved. Apart from the upfront license payment, all other fees the Company may earn under such license agreements are subject to significant uncertainties of product development. Achievement of many of the event-based development and regulatory milestones may not be probable until such milestones are actually achieved. This generally relates to milestones such as obtaining regulatory approvals and successful completion of clinical trials. With respect to other development milestones, e.g. dosing of a first patient in a clinical trial, achievement could be considered probable prior to its actual occurrence, based on the progress towards commencement of the trial. The Company does not include any amounts subject to uncertainties into the transaction price until it is probable that the amount will not result in a significant reversal of revenue in the future. At the end of each reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the estimate of the overall transaction price.

Because such agreements generally only have one type of performance obligation, a license, which is generally all transferred at the same time as agreement inception, allocation of the transaction price among multiple performance obligations is not required. Upfront amounts allocated to licenses are recognized as revenue when the licenses are transferred to the partners. Development milestones and other fees are recognized in revenue when their occurrence becomes probable.

Research and Development

Research and development expenses consist of costs incurred in performing research and development activities, including salaries and benefits, materials and supplies, preclinical expenses, stock-based compensation expense, contract services, and other external development expenses. The Company records research and development activities conducted by third-party service providers, which include work related to preclinical studies, clinical trials, and contract manufacturing activities, to research and development expense as incurred. The Company is required to estimate the amount of services provided but not yet invoiced and include these expenses in accrued expenses on the balance sheet and within research and development expenses in the statements of operations and comprehensive loss. These expenses are a significant component of the Company’s research and development expenses and require significant estimates and judgments. The Company accrues for these expenses based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. As actual expenses become known, the Company adjusts its accrued expenses

Share-Based Compensation

The Company recognizes all stock-based payments to employees, including grants of employee stock options in the consolidated statements of operations and comprehensive loss based on their fair values. All the Company’s share-based awards, to employees, non-employees, officers, and directors, are subject only to service-based vesting conditions. The Company estimates the fair value of its stock-based awards using the Black-Scholes option pricing model, which requires the input of assumptions, including (i) the expected stock price volatility, (ii) the calculation of expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Options granted during the year have a maximum contractual term of ten years. Forfeitures are recognized and accounted for as they occur.

Due to the historical lack of a public market for the trading of the Company’s securities and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company.

The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted to employees, officers, and directors using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period, to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted to employees, and utilizes the contractual term for options granted to non-employees. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its employee population. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for zero-coupon U.S. treasury notes with maturities approximately equal to the expected term of the stock options. Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term.

Income Taxes

Income taxes have been accounted for using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance against deferred tax assets is recorded if, based upon the weight of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. The Company recognizes interest and penalties related to uncertain tax positions, if any exist, in income tax expense.

Net and Comprehensive Loss per Share Attributable to Common Stockholders

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares and common share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities, which include convertible preferred stock, outstanding stock options and warrants under the Company’s equity incentive plans have been excluded from the computation of diluted net loss per share as they would be anti-dilutive.

Net loss per share is presented as the more dilutive of the treasury stock and as-converted method or the two-class method required for participating securities. The Series A convertible preferred stock is considered a participating security and does not have a contractual obligation to share in Private Aadi’s losses. As such, the two-class method was not required.

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive (amounts in thousands):

	Nine Months Ended September 30,
	2021		2020
Options to purchase common stock		1,298		374
Warrants to purchase common stock		37		—
Series Seed convertible preferred stock		—		734
Series A convertible preferred stock		—		7,212

Accounting Pronouncements Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options” (Subtopic 470-20) and “Derivatives and Hedging – Contracts in Entity’s Own Equity” (Subtopic 815-40). This new guidance is intended to reduce the complexity of accounting for convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments. Entities may adopt ASU 2020-06 using either a partial retrospective or fully retrospective method of transition. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years for smaller reporting companies. The Company is currently evaluating the impact the adoption of ASU 2020-06 will have on the Company’s financial statements.

In April 2021, the FASB issued ASU 2021-04, which included Topic 260 “Earnings Per Share.” This guidance clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options due to a lack of explicit guidance in the FASB Codification. ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2021-04 but does not expect this will have a material impact on the Company’s financial statements.

Merger

9 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

Merger

4. Merger

The Merger was accounted for as a reverse asset acquisition because substantially all of the fair value was concentrated in cash, working capital, and a long-lived contract intangible asset (See Note 1).

The estimated fair value of total consideration given was $110.4 million as detailed below and is based on 3,208,718 shares of common stock, after taking into account the Reverse Stock Split, outstanding immediately prior to the Effective Time.

Number of common shares of the combined company to be owned by Aerpio stockholders		3,208,718
Multiplied by the fair value per share of Aerpio common stock on August 26, 2021	$	33.00
Fair value of Aerpio common stock		105,887,694
Aadi transaction costs		4,500,864
Purchase price	$	110,388,558

The allocation of the purchase price is as follows (amounts in thousands):

	August 26, 2021
Cash and cash equivalents	$	29,700
Other current assets		2,709
Intangible asset (1)		78,062
Deposits		20
Accounts payable and accrued expenses		(103	)
Net assets acquired	$	110,388

(1)

The long-lived intangible asset represents Aerpio’s out-licensing agreement with Gossamer Bio., Inc. Should payment be received from the underlying license agreement, in accordance with milestones or royalties, the Company will retain 10% of the proceeds with the balance being distributed to the CVR Holders. In accordance with GAAP for asset acquisitions, the excess purchase price over the fair value of the acquired assets and liabilities was ascribed to the acquired contract intangible asset. See Note 5 below for additional discussion of the subsequent impairment recognized.

Intangible Asset

9 Months Ended

Sep. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Asset

5. Intangible Asset

In conjunction with the Merger, the Company recorded a long-lived contract intangible asset related to Aerpio’s license agreement with Gossamer Bio. Inc., which was assumed in the Merger. In accordance with GAAP, for asset acquisitions, the excess purchase price over the fair value of the acquired assets and liabilities was ascribed to the acquired contract intangible asset. Due to the significant excess purchase price being allocated over the fair value of the acquired contract intangible asset, the Company determined that an indicator of impairment was present. The contract intangible asset was assessed for recoverability using an undiscounted cash flow model, which resulted in undiscounted cash flows below the carrying amount. The Company therefore recognized an impairment of $74.2 million to bring the carrying amount of the contract intangible asset down to its estimated fair value of $3.9 million. The fair value estimate of the intangible asset relates to contingent cash flows expected from Aerpio’s out-licensing arrangement, of which 90% of any future net cash proceeds will be remitted to CVR Holders and paid through the CVRs. The fair value determination of the intangible asset was based upon a discounted cash flow valuation of the milestone payments and Monte Carlo valuation for the sales royalties. The estimated useful life of the intangible asset is approximately 14.3 years. Amortization expense was $26,000 for the three and nine months ended September 30, 2021. No intangible asset or amortization expense was recorded in 2020.

The estimated amortization expense related to this finite lived intangible asset for the five succeeding years is as follows (amounts in thousands):

	September 30,
	2021
Intangible asset	$	3,906
Less amortization		(26	)
Intangible asset, net	$	3,880


2021 (remaining)	$	68
2022		273
2023		273
2024		273
2025		273
Amounts thereafter		2,720
	$	3,880

As of September 30, 2021, all development milestones, sales-based milestones and royalty payments within the license agreement are constrained. There can be no assurance that any proceeds will be received under the license agreement.

Accrued Liabilities

9 Months Ended

Sep. 30, 2021

Accrued Liabilities Current [Abstract]

Accrued Liabilities

6. Accrued Liabilities

Details of accrued liabilities are presented as follows (amounts in thousands):

	September 30,		December 31,
	2021		2020
Accrued clinical	$	2,367	$	2,017
Accrued contract manufacturing		1,793		1,301
Accrued bonus		563		597
Accrued other		1,527		184
Total accrued liabilities	$	6,250	$	4,099

Operating Lease

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Operating Lease

7. Operating Lease

In April 2019, the Company entered into a twenty-eight-month facility lease agreement for 2,760 square feet of office space in Los Angeles, California. The lease commenced on May 1, 2019, included four months of rent abatement and a rent escalation clause and was set to expire on August 31, 2021. In August 2021, the Company exercised its option to extend the term of the lease for an additional three-year period and entered into an amendment to the lease agreement (the “Lease Amendment”). Pursuant to the Lease Amendment, the Company and the landlord agreed to extend the term for an additional period of three (3) years and six (6) months, until February 28, 2025, with an option to renew for an additional three (3) years in accordance with the terms of the lease agreement. Included in the Lease Amendment were nine months of rent abatement and a rent escalation clause. Rent expense is being recorded on a straight-line basis. Rent expense related to this lease was $47,000 and $0.1 million for the three and nine months ended September 30, 2021, respectively. Rent expense related to the lease was $46,000 and $0.1 million for the three and nine months ended September 30, 2020, respectively.

The following table summarizes information related to the Company’s lease (amounts in thousands):

	September 30, 2021		December 31, 2020
Assets:
Operating lease right-of-use assets	$	597	$	119
Total right-of-use assets	$	597	$	119

Liabilities:
Operating lease liabilities, current	$	90	$	125
Operating lease liabilities, non-current		523		—
Total operating lease liabilities	$	613	$	125

The future minimum lease payments required under the operating lease as of September 30, 2021, are summarized below (amounts in thousands):

Future Minimum Lease Payments:
Fourth quarter 2021	$	9
2022		178
2023		231
2024		238
2025		40
Total minimum lease payments	$	696
Less: amount representing interest		(83	)
Present value of operating lease liabilities	$	613
Less: operating lease liabilities, current		(90	)
Operating lease liabilities, non-current	$	523
Remaining lease term (in years)		3.42
Incremental borrowing rate		6.80	%

EOC License Agreement

9 Months Ended

Sep. 30, 2021

Revenue From Contract With Customer [Abstract]

EOC License Agreement

8. EOC License Agreement

In December 2020, the Company entered into the EOC License Agreement with EOC for the further development and commercialization of ABI-009 in the Licensed Territory. Under the terms of the EOC License Agreement, the Company granted to EOC an exclusive, royalty-bearing license to develop and commercialize the product in the Licensed Territory.

Unless earlier terminated, the term of the EOC License Agreement continues until the expiration of the royalty obligations. EOC has the right to terminate the agreement for any reason upon 120 days advance written notice. Either party may terminate the EOC License Agreement in the event that the other party breaches the agreement and fails to cure the breach, becomes insolvent or challenges certain of the intellectual property rights licensed under the agreement.

The Company assessed the EOC License Agreement and concluded that EOC is a customer and identified the license of ABI-009 provided to EOC as the sole performance obligation. The $14.0 million upfront payment received from EOC is non-refundable and non-creditable and is considered fixed consideration. The Company recognized revenue of $14.0 million in December 2020 when the EOC License Agreement was signed, and the $14.0 million upfront payment was received in January 2021.

The potential milestone payments and royalty payments under the EOC License Agreement are considered variable consideration and are constrained with respect to revenue recognition notification from EOC that the milestone and royalty payments have been achieved.

The Company is eligible to receive an additional $257.0 million in the aggregate upon achievement of certain development, regulatory, and sales milestones, as well as tiered royalties on net sales in the Licensed Territory. Under the terms of the EOC License Agreement, EOC will fund all research, development, regulatory, marketing and commercialization activities in the defined Licensed Territory.

Convertible Notes

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Convertible Notes

9. Convertible Notes

Private Aadi received $8.1 million in October 2019 and $1.0 million in January 2020 for the proceeds from the issuance of Convertible Notes. The October 2019 Convertible Notes were issued to existing equity holders of Private Aadi. The Convertible Notes issued in October 2019 and January 2020 originally had a maturity date of one year from the date of issuance and bear an escalating interest rate of 6% per annum for the first four months following the effective date of the loan agreement, 8% per annum for the fifth and sixth months, and 10% per annum for the remaining six months of the note term until maturity at twelve months. The Convertible Notes contain certain redemption features, including conversion to preferred stock upon the closing of Private Aadi’s next issuance of preferred stock resulting in net proceeds to the Company of at least $25.0 million (“Qualified Financing”). The Convertible Notes will convert into a variable, whole number of preferred shares equal to the number obtained by dividing the principal plus accrued interest of the Convertible Notes by 80% of the price per share paid by cash investors in the Qualifying Financing if converted in the first four months following the effective date of the loan agreement, 75% if converted in months five or six, and 70% if converted later than six months. The Convertible Notes also contained a mandatory prepayment provision that required Private Aadi to pay the outstanding principal, plus accrued and unpaid interest together with a premium in the event that a qualified liquidity event occurred. The

premium was equal to 120% of the outstanding principal amount to be prepaid in the event the liquidity event occurs within four months of the note date, 130% between the fifth and sixth month, and 140% if after the sixth month but prior to maturity.

In November 2020, Private Aadi entered into an amendment to the October 2019 and January 2020 Convertible Notes, whereby the term was extended from one year to two years. The amendment was accounted for as a debt modification.

In May 2021, Private Aadi entered into an amendment to the October 2019 and January 2020 Convertible Notes, whereby upon the closing of the Merger (see Note 1), the outstanding principal amount of the Convertible Notes and all accrued and unpaid interest as of immediately prior to the closing of the Merger would automatically convert into fully paid and nonassessable shares of Private Aadi common stock at a price per share equal to $4.80 and would be concurrently exchanged for shares of the Company’s common stock based on the Exchange Ratio. In conjunction with the closing of the Merger on August 26, 2021, the outstanding Convertible Notes were converted into shares of Private Aadi common stock which were concurrently exchanged for 698,018 shares of the Company’s common stock after taking into account the Exchange Ratio. At the date of conversion, the convertible notes were marked to market and valued at $9.5 million, resulting in a gain of $0.4 million.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Payroll Protection Program Loan

9 Months Ended

Sep. 30, 2021

Payroll Protection Program Loan [Abstract]

Payroll Protection Program Loan

10. Payroll Protection Program Loan

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19.

In May 2020, Aadi was approved for a $0.2 million SBA PPP loan, as provided for in the CARES Act (“PPP Loan”). Under certain conditions, the PPP Loan and accrued interest are forgivable after a twenty-four-week covered period as long as the loan proceeds were used for eligible expenses, including payroll, benefits, rent and utilities, and the company maintains certain payroll levels. The amount of loan forgiveness is subject to reduction if the Company terminates employees or reduces salaries during the twenty-four-week covered period. The unforgiven portion of the loan is payable over two years at an interest rate of 1%, with a deferral of payments for the ten months following the end of the twenty-four-week covered period. On April 29, 2021, the Company received notification from the SBA that the Company’s Forgiveness Application of the PPP Loan and accrued interest was approved in full, and the Company had no further obligations related to the PPP Loan. Accordingly, the Company recorded a gain on the forgiveness of the PPP Loan totaling $0.2 million.

The SBA has stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by the SBA for compliance with program requirements. If the SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request or the subsequent use of loan proceeds, the SBA will seek repayment of the PPP loan, including interest and potential penalties. While the Company believes the loan was properly obtained and forgiven, there can be no assurance regarding the outcome of an SBA review. The Company has not accrued any liability associated with the risk of an adverse SBA review.

Stockholders' Equity (Deficit)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Stockholders' Equity (Deficit)

11. Stockholders’ Equity (Deficit)

Preferred Stock

As of September 30, 2021, under the Company’s certificate of incorporation, as amended and restated, the Company has 10,000,000 shares of preferred stock, par value $0.0001 per share, in authorized capital with no shares outstanding.

Series Seed Preferred Stock

On February 23, 2017, Private Aadi converted from a limited liability company to a corporation and at that time converted 734,218 membership units into shares of Series Seed Preferred Stock. All outstanding shares of Series Seed Preferred Stock were converted into Private Aadi’s common stock and concurrently exchanged for the Company’s common stock based on the Exchange Ratio in connection with the closing of the Merger.

Series A Preferred Stock

In February and March 2017, Private Aadi sold and issued in a private placement 5,847,940 shares of Series A Preferred Stock at $3.42 per share (the “Series A Financing”). Upon the closing of the Series A Financing, convertible notes issued in 2015 converted into 482,426 shares of Series A Preferred Stock at 85% of the $3.42 price per share (the “Series A Original Issue Price”) paid by the Series A Financing investors. Convertible notes issued in 2017 converted into 881,286 shares of Series A Preferred Stock at the Series A Original Issue Price. All outstanding shares of Series A Preferred Stock were converted into shares of Private Aadi common stock and concurrently exchanged for the Company’s common stock based on the Exchange Ratio in connection with the closing of the Merger.

Common Stock

As of September 30, 2021 and December 31, 2020, the Company had 300,000,000 and 20,000,000 shares of authorized common stock with par value of $0.0001 per share, respectively, under the Company’s certificate of incorporation, as amended and restated. As of September 30, 2021 and December 31, 2020, the shares of common stock outstanding were 20,883,454 and 2,542,358, respectively.

In conjunction with the closing of the Merger, the Company issued an aggregate of 2,558,218 shares of common stock to holders of Private Aadi common stock in exchange for all of the Private Aadi capital stock outstanding immediately prior to the closing of the Merger. Concurrently with the closing of the Merger, the PIPE Investors purchased an aggregate of 11,852,862 shares of the Company’s common stock for an aggregate purchase price of $155.0 million pursuant to the Subscription Agreement entered into with the Company on May 16, 2021. The aggregate net proceeds, after deducting certain expenses incurred that were direct and incremental to the issuance of the PIPE shares, was $145.4 million.

Dividends

The holders of common stock are entitled to receive dividends, if and when declared by the board of directors of the Company (the “Board of Directors”). Since the Company’s inception, no dividends have been declared or paid to the holders of common stock.

Liquidation

In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Company, the holders of common stock are entitled to share ratably in the Company’s assets.

Voting

The holders of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Stock-Based Compensation

9 Months Ended

Sep. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

12. Stock-Based Compensation

Stock Option Plan – 2014 Plan (“Private Aadi Plan”)

In connection with the Merger, the Company assumed Private Aadi Plan, which was amended and restated in February 2017, and the issued and outstanding stock options under the Private Aadi Plan (the Private Aadi common stock underlying the awards was adjusted for shares of the Company’s common stock pursuant to the Merger Agreement). The Private Aadi Plan allowed for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock unit awards and other stock awards. In connection with the closing of the Merger and the adoption of the 2021 Plan (as defined below), no further awards will be issued under the Private Aadi Plan.

The options that are granted from the Private Aadi Plan are exercisable at various dates as determined upon grant and will expire no more than ten years from their date of grant. The Private Aadi Plan stock options generally vest over a four-year term.

Stock Option Plan – 2011 Plan and 2017 Plan

In connection with the closing of the Merger, the Company assumed the Aerpio 2011 Equity Incentive Plan (the “2011 Plan”) and the Aerpio 2017 Stock Option and Incentive Plan (the “2017 Plan,” and collectively with the 2011 Plan, the “Prior Plans”). No new awards will be granted under the 2017 Plan effective upon the closing of the Merger and adoption of the 2021 Plan (as defined below).

Stock Option Plan – 2021 Plan

At the closing of the Merger, the Company adopted the Aadi Bioscience, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), which also permits stock options and restricted stock unit grants to employees, members of the board of directors, and outside consultants.

Subject to the adjustment provisions contained in the 2021 Plan and the evergreen provision described below, a total of 2,070,784 shares of common stock were initially reserved for issuance pursuant to the 2021 Plan. In addition, the shares reserved for issuance under the 2021 Plan include any shares of common stock (i) subject to awards of stock options or other awards granted under the Prior Plans that expire or otherwise terminate without having been exercised in full and shares of common stock granted under the Prior Plans that are forfeited or repurchased by the Company, and (ii) any shares of common stock subject to stock options or similar awards granted under the Private Aadi Plan that were assumed in the Merger (provided that the maximum number of shares that may be added to the 2021 Plan pursuant to this sentence is 764,154 shares).

The number of shares available for issuance under the 2021 Plan also will include an annual increase, or the evergreen feature, on the first day of each of the Company’s fiscal years, beginning with the Company’s fiscal year 2022, equal to the least of:

•

2,070,784 shares of common stock;

•

a number of shares equal to 4% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year; or

•

such number of shares as the Board or its designated committee may determine.

Shares issuable under the 2021 Plan are authorized, but unissued, or reacquired shares of common stock. If an award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an exchange program, or, with respect to restricted stock, restricted stock units, performance units or performance shares, is forfeited to or repurchased by the combined company due to failure to vest, the unpurchased shares (or for awards other than stock options or stock appreciation rights, the forfeited or repurchased shares) will become available for future grant or sale under the 2021 Plan (unless the 2021 Plan has terminated).

As of September 30, 2021, zero, 432,978, 195,737 and 669,731 shares were outstanding under the 2011 Plan, Private Aadi Plan, 2017 Plan and 2021 Plan, respectively.

The following table summarizes the stock option activity during the nine months ended September 30, 2021:

	Stock Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value (in thousands)
Outstanding, January 1, 2021		390,949		$	2.00		7.26	$	505
Granted		727,620			26.58
Assumed through Merger		248,258			29.20
Exercised		(61,075	)		12.20
Expired/cancelled		(7,306	)		36.47
Outstanding, September 30, 2021		1,298,446		$	20.33		7.63	$	13,156
Options exercisable, September 30, 2021		493,890		$	13.79		3.46	$	9,646

As of September 30, 2021, the aggregate intrinsic value of options outstanding was $13.2 million. The intrinsic value for stock options is calculated based on the difference between the exercise prices of the underlying awards and the quoted stock price of the Company’s common stock as of the reporting date.

As of September 30, 2021, there was $13.9 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 3.15 years.

As of September 30, 2021, zero and 1,845,971 shares were reserved for issuance under the Private Aadi Plan and 2021 Plan, respectively.

Option Awards

During the three months ended September 30, 2021 and 2020, option awards to purchase an aggregate of 669,731 and zero shares of common stock were granted, respectively.

During the nine months ended September 30, 2021 and 2020, option awards to purchase an aggregate of 727,620 and 53,131 shares of common stock were granted, respectively.

Compensation Expense Summary

The Company recognized the following compensation cost related to employee and non-employee stock-based compensation activity for the periods presented (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Research and development	$	124	$	23	$	180	$	67
General and administrative		524		11		543		33
Total	$	648	$	34	$	723	$	100

Included in the three and nine months ended September 30, 2021 is $0.3 million of expense related to the acceleration of vesting associated with individual awards assumed in the Merger.

The Company uses the Black-Scholes option pricing model to determine the estimated fair value for stock-based awards. Option pricing and models require the input of various assumptions, including the option’s expected life, expected dividend yield, price volatility and risk-free interest rate of the underlying stock. Accordingly, the weighted-average fair value of the options granted during the nine months ended September 30, 2021 and 2020 was $19.24 and $2.57 per share, respectively. The calculation was based on the following assumptions. No grants were issued during the three months ended September 30, 2020.

	Three Months Ended September 30,			Nine Months Ended September 30,
	2021	2020		2021	2020
Expected term (years)	5.27 - 6.08		—	5.08 - 6.25	5.27 - 6.25
Risk-free interest rate	0.84% - 1.15%		—	0.84% - 1.15%	0.34% - 0.80%
Expected volatility	86.02% - 87.27%		—	85.21% - 87.88%	89.57% - 92.52%
Expected dividend yield	—		—	—	—

Warrants to Purchase Common Stock

The Company had warrants outstanding for the purchase of 36,666 shares of the Company’s common stock at September 30, 2021. There were no warrants outstanding as of December 31, 2020. These warrants were assumed in the Merger and were issued by Aerpio in October 2019, for the purchase of 40,000 shares (after taking into account the Reverse Stock Split) of the Company’s common stock at an exercise price of $7.29 per share (after taking into account the Reverse Stock Split). These warrants were fully vested as of the date of the Merger and expire on October 24, 2024. Prior to the closing of the Merger, 3,334 warrants were exercised. At the grant date, the fair value of these awards was determined using a Black-Scholes option pricing model.

The number of shares and the exercise price shall be adjusted for standard anti-dilution events such as stock splits, combinations, reorganizations, or issue shares as part of a stock dividend. The warrants meet the criteria to be classified within stockholders’ equity (deficit).

Employee Stock Purchase Plan

9 Months Ended

Sep. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Employee Stock Purchase Plan

13. Employee Stock Purchase Plan

On August 17, 2021, a special meeting of the Company’s stockholders was held to approve the Merger and related matters which included, among others, an employee stock purchase plan (“Special Meeting”). At the Special Meeting, the Company’s stockholders considered and approved the Company’s 2021 Employee Stock Purchase Plan (the “2021 ESPP”). Upon approval of the 2021 ESPP by the stockholders, Aerpio’s Amended and Restated 2017 Employee Stock Purchase Plan terminated. An aggregate of 310,617 shares of common stock (after taking into account the Reverse Stock Split) have been reserved and are available for issuance under the 2021 ESPP. The number of shares of common stock available for issuance under the 2021 ESPP will be increased on the first day of each fiscal year beginning with the 2022 fiscal year in an amount equal to the least of (i) 310,617 shares of common stock (after taking into account the Reverse Stock Split), (ii) one percent (1%) of the outstanding shares of all classes of common stock on the last day of the immediately preceding fiscal year, or (iii) an amount to be determined by the Board or its designated committee no later than the last day of the immediately preceding fiscal year. Shares of common stock issuable under the 2021 ESPP will be authorized, but unissued, or reacquired shares of common stock. If the Company’s capital structure changes because of a stock dividend, stock split or similar event, the number of shares that can be issued under the 2021 ESPP will be appropriately adjusted. No shares under the 2021 ESPP are outstanding at September 30, 2021.

Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

The Company did not record a current or deferred income tax expense or benefit for the three and nine months ended September 30, 2021 and 2020, due to the Company’s net losses and increases in its deferred tax asset valuation allowance.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

15. Commitments and Contingencies

Legal Proceedings

From time to time, the Company could be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. Regardless of the outcome, legal proceedings can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Except as set forth below, as of the date of this Quarterly Report, the Company is not currently involved in any material legal proceedings.

Between June 30, 2021 and August 3, 2021, the following actions were filed by purported stockholders of Aerpio: Dwayne Komurke v. Aerpio Pharmaceuticals Inc., et al., Case No. 1:21-cv-05686 (S.D.N.Y.); Matthew Whitfield v. Aerpio Pharmaceuticals Inc., et al., Case No. 1:21-cv-05787 (S.D.N.Y.); Robin Odach v. Aerpio Pharmaceuticals Inc., et al., Case No. 1:21-cv-05802 (S.D.N.Y.); Miah v. Aerpio Pharmaceuticals, Inc., et al., Case No. 1:21-cv-03912 (E.D.N.Y.); Weir v. Aerpio Pharmaceuticals, Inc., et al., Case No. 1:21-cv-06456 (S.D.N.Y.); Carlisle v. Aerpio Pharmaceuticals, Inc., et al., Case No. 1:21-cv-01123 (D. Del.); Adam Franchi v. Aerpio Pharmaceuticals, Inc., et al., 1:21-cv-06566 (S.D.N.Y.) and Alex Ciccotelli v. Aerpio Pharmaceuticals, Inc., et al., 2:21-cv-03463 (E.D. Pa.). The complaints alleged that the Company’s preliminary proxy statement filed with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the Merger on June 21, 2021, and its definitive proxy statement filed with the SEC in connection with the Merger on July 8, 2021, contained false and misleading statements and omissions, including relating to (i) the process leading up to the Merger; (ii) certain financial projections prepared by the Company’s management and summarized in the preliminary and definitive proxy statements; (iii) the financial analyses conducted by Ladenburg in connection with Ladenburg’s discounted cash flow analysis and fairness opinion to the Company’s board of directors; and (iv) certain information concerning a second financial advisor. Following the closing of the Merger, all of these actions were voluntarily dismissed by each respective plaintiff.

As previously disclosed, the Company’s Board of Directors also received a demand letter from a purported stockholder of the Company, requesting certain books and records of the Company concerning the Merger pursuant to Section 220 of the Delaware General Corporation Law. Thereafter, on August 16, 2021, the same purported stockholder filed a complaint in the Court of Chancery seeking books and records, captioned Weiss v. Aerpio Pharmaceuticals, Inc., Case No. 2021-0699-KSJM (Del. Ch.). On September 29, 2021, the plaintiff voluntarily dismissed this action.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

Segment Information

Use of Estimates

Cash and Cash Equivalents

Fair Value Option

Fair Value of Financial Instruments

Level 1: Observable inputs, such as quoted prices in active markets

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions which reflect those that a market participant would use

	Fair Value Measurements as of September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	152,465	$	—	$	—	$	152,465
Liabilities:
Convertible promissory notes	$	—	$	—	$	—	$	—

	Fair Value Measurements as of December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	3,041	$	—	$	—	$	3,041
Liabilities:
Convertible promissory notes	$	—	$	—	$	10,131	$	10,131

(1) Included in cash and cash equivalents in the accompanying balance sheets.

The following table provides a reconciliation of the Convertible Notes (refer to Note 9) measured at fair value using significant unobservable inputs (Level 3) (amounts in thousands):

	Convertible Notes
	(Level 3)
Balance as of December 31, 2020	$	10,131
Issuance of convertible promissory notes		—
Accrual of interest		584
Change in fair value of convertible promissory notes		(1,585	)
Conversion to common stock		(9,130	)
Balance September 30, 2021	$	—

	Convertible Notes
	(Level 3)
Balance as of December 31, 2019	$	8,165
Issuance of convertible promissory notes		1,000
Accrual of interest		585
Change in fair value of convertible promissory notes		—
Balance September 30, 2020	$	9,750

There have been no transfers between levels during the reporting periods.

Accounts Receivable

Property and Equipment, Net

Intangible Asset

Impairment of Long-Lived Assets

Leases

Commitments and Contingencies

Revenue Recognition

Grant Revenue

Revenue Under License Agreement

Research and Development

Share-Based Compensation

Income Taxes

Net and Comprehensive Loss per Share Attributable to Common Stockholders

	Nine Months Ended September 30,
	2021		2020
Options to purchase common stock		1,298		374
Warrants to purchase common stock		37		—
Series Seed convertible preferred stock		—		734
Series A convertible preferred stock		—		7,212

Accounting Pronouncements Not Yet Adopted

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Schedule of Assets and Liabilities Measured on Recurring Basis

	Fair Value Measurements as of September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	152,465	$	—	$	—	$	152,465
Liabilities:
Convertible promissory notes	$	—	$	—	$	—	$	—

	Fair Value Measurements as of December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	3,041	$	—	$	—	$	3,041
Liabilities:
Convertible promissory notes	$	—	$	—	$	10,131	$	10,131

(1) Included in cash and cash equivalents in the accompanying balance sheets.

Reconciliation of Convertible Notes Measured at Fair Value Significant Unobservable Inputs

The following table provides a reconciliation of the Convertible Notes (refer to Note 9) measured at fair value using significant unobservable inputs (Level 3) (amounts in thousands):

	Convertible Notes
	(Level 3)
Balance as of December 31, 2020	$	10,131
Issuance of convertible promissory notes		—
Accrual of interest		584
Change in fair value of convertible promissory notes		(1,585	)
Conversion to common stock		(9,130	)
Balance September 30, 2021	$	—

	Convertible Notes
	(Level 3)
Balance as of December 31, 2019	$	8,165
Issuance of convertible promissory notes		1,000
Accrual of interest		585
Change in fair value of convertible promissory notes		—
Balance September 30, 2020	$	9,750

Schedule of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share

	Nine Months Ended September 30,
	2021		2020
Options to purchase common stock		1,298		374
Warrants to purchase common stock		37		—
Series Seed convertible preferred stock		—		734
Series A convertible preferred stock		—		7,212

Merger (Tables)

9 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

Schedule of Estimated Fair Value Consideration

Number of common shares of the combined company to be owned by Aerpio stockholders		3,208,718
Multiplied by the fair value per share of Aerpio common stock on August 26, 2021	$	33.00
Fair value of Aerpio common stock		105,887,694
Aadi transaction costs		4,500,864
Purchase price	$	110,388,558

Summary of Allocation of Purchase Price

The allocation of the purchase price is as follows (amounts in thousands):

	August 26, 2021
Cash and cash equivalents	$	29,700
Other current assets		2,709
Intangible asset (1)		78,062
Deposits		20
Accounts payable and accrued expenses		(103	)
Net assets acquired	$	110,388

Intangible Asset (Tables)

9 Months Ended

Sep. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Estimated Amortization Expense Related to Finite Lived Intangible Asset

The estimated amortization expense related to this finite lived intangible asset for the five succeeding years is as follows (amounts in thousands):

	September 30,
	2021
Intangible asset	$	3,906
Less amortization		(26	)
Intangible asset, net	$	3,880


2021 (remaining)	$	68
2022		273
2023		273
2024		273
2025		273
Amounts thereafter		2,720
	$	3,880

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Accrued Liabilities Current [Abstract]

Schedule of Accrued Liabilities

Details of accrued liabilities are presented as follows (amounts in thousands):

	September 30,		December 31,
	2021		2020
Accrued clinical	$	2,367	$	2,017
Accrued contract manufacturing		1,793		1,301
Accrued bonus		563		597
Accrued other		1,527		184
Total accrued liabilities	$	6,250	$	4,099

Operating Lease (Tables)

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Summary of Information Related to Lease

The following table summarizes information related to the Company’s lease (amounts in thousands):

	September 30, 2021		December 31, 2020
Assets:
Operating lease right-of-use assets	$	597	$	119
Total right-of-use assets	$	597	$	119

Liabilities:
Operating lease liabilities, current	$	90	$	125
Operating lease liabilities, non-current		523		—
Total operating lease liabilities	$	613	$	125

Summary of Future Minimum Lease Payments Required under Operating Lease

The future minimum lease payments required under the operating lease as of September 30, 2021, are summarized below (amounts in thousands):

Future Minimum Lease Payments:
Fourth quarter 2021	$	9
2022		178
2023		231
2024		238
2025		40
Total minimum lease payments	$	696
Less: amount representing interest		(83	)
Present value of operating lease liabilities	$	613
Less: operating lease liabilities, current		(90	)
Operating lease liabilities, non-current	$	523
Remaining lease term (in years)		3.42
Incremental borrowing rate		6.80	%

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Activity

The following table summarizes the stock option activity during the nine months ended September 30, 2021:

	Stock Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value (in thousands)
Outstanding, January 1, 2021		390,949		$	2.00		7.26	$	505
Granted		727,620			26.58
Assumed through Merger		248,258			29.20
Exercised		(61,075	)		12.20
Expired/cancelled		(7,306	)		36.47
Outstanding, September 30, 2021		1,298,446		$	20.33		7.63	$	13,156
Options exercisable, September 30, 2021		493,890		$	13.79		3.46	$	9,646

Summary of Recognized Compensation Cost Related to Employee and Non-employee Stock-Based Compensation Activity

The Company recognized the following compensation cost related to employee and non-employee stock-based compensation activity for the periods presented (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Research and development	$	124	$	23	$	180	$	67
General and administrative		524		11		543		33
Total	$	648	$	34	$	723	$	100

Stock Options Valuation Assumptions

The calculation was based on the following assumptions. No grants were issued during the three months ended September 30, 2020.

	Three Months Ended September 30,			Nine Months Ended September 30,
	2021	2020		2021	2020
Expected term (years)	5.27 - 6.08		—	5.08 - 6.25	5.27 - 6.25
Risk-free interest rate	0.84% - 1.15%		—	0.84% - 1.15%	0.34% - 0.80%
Expected volatility	86.02% - 87.27%		—	85.21% - 87.88%	89.57% - 92.52%
Expected dividend yield	—		—	—	—

Nature of Organization and Operations - Additional Information (Detail) $ in Thousands			3 Months Ended						9 Months Ended
	Aug. 26, 2021 USD ($) shares	May 16, 2021	Sep. 30, 2021 USD ($) shares	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2021 USD ($) shares	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) shares
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Issuance of common stock, Shares \| shares	2,558,218
Anniversary effective term period	20 years
Aggregate proceeds from issuance of common stock			$ 155,000						$ 155,000
Aggregate net proceeds from issuance of common stock	$ 145,400		$ 145,400						$ 145,400
Common stock, shares outstanding \| shares	2,500,000		20,883,454						20,883,454		2,542,358
Accumulated deficit			$ (126,695)						$ (126,695)		$ (32,595)
Net and comprehensive loss			(87,088)	$ (1,536)	$ (5,476)	$ (2,892)	$ (5,282)	$ (3,324)	(94,100)	$ (11,498)
Cash received from Aerpio in merger									29,700
Cash received from Aerpio in merger, net									27,700
Cash received from Aerpio in merger after compensation expenses									2,000
Cash and cash equivalents			$ 161,375						161,375		$ 4,455
PIPE Investors [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Ownership percentage on common stock	55.60%
Aggregate proceeds from issuance of common stock									$ 155,000
Former Shareholders of Aadi [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Ownership percentage on common stock	29.20%
Former Stockholders/Executives of Aerpio Upon Merger [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Ownership percentage on common stock	15.20%
Merger Agreement [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Date of acquisition agreement		May 16, 2021
Reverse stock split ratio	15
Exchange ration of shares of common stock \| shares	0.3172
Issuance of common stock, Shares \| shares	5,776,660
Percentage of cumulative dividend on preferred stock	4.00%
Preferred stock value	$ 4,400
Merger Agreement [Member] \| Private Investment in Public Equity [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Aggregate net proceeds from issuance of common stock	$ 145,400
Common stock, shares outstanding \| shares	20,800,000
Merger Agreement [Member] \| CVR Agreement [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Percentage of proceeds plus reimbursement of expenses	10.00%
Merger Agreement [Member] \| Subscription Agreements [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Date of acquisition agreement		May 16, 2021
Merger Agreement [Member] \| Subscription Agreements [Member] \| Private Investment in Public Equity [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Issuance of common stock, Shares \| shares	11,852,862
Aggregate proceeds from issuance of common stock	$ 155,000
Merger Agreement [Member] \| Registration Rights Agreements [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Date of acquisition agreement	Aug. 26, 2021

Related Party Transactions - Additional Information (Detail) - USD ($)			1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended
	Aug. 30, 2021	Oct. 03, 2016	Jan. 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Related party transaction, amount paid							$ 135,000	$ 0
Payable to related party				$ 22,000	$ 14,314,000		22,000
Celgene License Agreement [Member]
Related Party Transaction [Line Items]
License agreement option to extension payment		$ 3,000,000.0
Payments related to milestone				0		$ 0	0	0
Payments related to royalties				0		$ 0	0	$ 0
Licensed drug manufacturing costs									$ 2,700,000	$ 1,200,000
Related party transaction, amount paid	$ 5,800,000
Related party transaction, percentage of outstanding payment obligation	50.00%
Payable to related party	$ 5,800,000
Related party transaction, balloon payment interest rate per annum	4.00%
Celgene License Agreement [Member] \| EOC Pharma (Hong Kong) Limited [Member]
Related Party Transaction [Line Items]
Related party transaction, amount paid				$ 2,800,000			$ 2,800,000
Payable to related party					2,800,000
Payment received from license agreement			$ 14,000,000.0
Sublicense fees, percentage			20.00%
License expense, related party					$ 2,800,000

Summary of Significant Accounting Policies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2021 USD ($) Segment $ / shares shares	Sep. 30, 2020 USD ($)	Aug. 26, 2021 $ / shares shares	Aug. 25, 2021 shares	Dec. 31, 2020 USD ($) $ / shares shares
Summary Of Significant Accounting Policies [Line Items]
Reverse stock split, description	No fractional shares were issued in connection with the Reverse Stock Split.
Capital stock held \| shares				8,100,000
Common stock, shares outstanding \| shares	20,883,454		2,500,000		2,542,358
Common stock, shares authorized \| shares	300,000,000		300,000,000.0		20,000,000
Common stock, par value \| $ / shares	$ 0.0001		$ 0.0001		$ 0.0001
Number of operating segment \| Segment	1
Cash and cash equivalents	$ 161,375,000				$ 4,455,000
Convertible promissory notes outstanding	0
Fair value, assets, transfers from Level 1 to Level 2	0	$ 0
Fair value, assets, transfers from Level 2 to Level 1	0	0
Fair value, liabilities, transfers from Level 1 to Level 2	0	0
Fair value, liabilities, transfers from Level 2 to Level 1	0	0
Fair value, assets, transfers into Level 3	0	0
Fair value, assets, transfers out of Level 3	0	0
Fair value, liabilities, transfers into Level 3	0	0
Fair value, liabilities, transfers out of Level 3	0	$ 0
Accounts receivable					14,149,000
Allowance for doubtful accounts	$ 0				0
Property and equipment estimated useful lives	5 years
Estimated useful life of intangible assets	14 years 3 months 18 days
Grant [Member]
Summary Of Significant Accounting Policies [Line Items]
Accounts receivable					100,000
EOC [Member]
Summary Of Significant Accounting Policies [Line Items]
Accounts receivable					14,000,000.0
Discount Rate
Summary Of Significant Accounting Policies [Line Items]
Estimated discount rate	25
Money Market Investments
Summary Of Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 152,500,000				$ 3,000,000.0

Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Aug. 26, 2021	Dec. 31, 2020
Liabilities:
Convertible promissory notes		$ 9,500
Fair Value, Measurements, Recurring [Member]
Liabilities:
Convertible promissory notes			$ 10,131
Fair Value, Measurements, Recurring [Member] \| Money Market Funds [Member]
Assets:
Money market funds	$ 152,465		3,041
Fair Value, Measurements, Recurring [Member] \| Level 1 [Member] \| Money Market Funds [Member]
Assets:
Money market funds	$ 152,465		3,041
Fair Value, Measurements, Recurring [Member] \| Level 3 [Member]
Liabilities:
Convertible promissory notes			$ 10,131

Summary of Significant Accounting Policies - Reconciliation of Convertible Notes Measured at Fair Value Significant Unobservable Inputs (Detail) - Convertible Notes, Level 3 [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Beginning balance	$ 10,131	$ 8,165
Issuance of convertible promissory notes		1,000
Accrual of interest	584	585
Change in fair value of convertible promissory notes	(1,585)
Conversion to common stock	$ (9,130)
Ending balance		$ 9,750

Summary of Significant Accounting Policies - Schedule of Outstanding Potentially Dilutive Securities Excluded in Calculation of Diluted Net Loss per Share (Detail) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Options to Purchase Common Stock [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total amount of anti-dilutive securities excluded from computation of earnings per share	1,298	374
Warrants to Purchase Common Stock [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total amount of anti-dilutive securities excluded from computation of earnings per share	37
Series Seed Convertible Preferred Stock [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total amount of anti-dilutive securities excluded from computation of earnings per share		734
Series A convertible preferred stock [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total amount of anti-dilutive securities excluded from computation of earnings per share		7,212

Merger - Additional Information (Details) - Merger Agreement [Member]	Aug. 26, 2021 USD ($) shares
Business Acquisition [Line Items]
Estimated fair value consideration \| $	$ 110,388,558
Number of common stock issued under purchase consideration \| shares	3,208,718

Merger - Schedule of Estimated Fair Value Consideration (Detail) - Merger Agreement [Member]	Aug. 26, 2021 USD ($) $ / shares shares
Business Acquisition [Line Items]
Number of common stock issued under purchase consideration \| shares	3,208,718
Multiplied by the fair value per share of Aerpio common stock on August 26, 2021 \| $ / shares	$ 33.00
Fair value of Aerpio common stock	$ 105,887,694
Aadi transaction costs	4,500,864
Estimated fair value consideration	$ 110,388,558

Merger - Summary of Allocation of Purchase Price (Detail) - Merger Agreement [Member] $ in Thousands	Aug. 26, 2021 USD ($)
Business Acquisition [Line Items]
Cash and cash equivalents	$ 29,700
Other current assets	2,709
Intangible asset	78,062
Deposits	20
Accounts payable and accrued expenses	(103)
Net assets acquired	$ 110,388

Merger - Summary of Allocation of Purchase Price (Parenthetical) (Detail)	Aug. 26, 2021
Merger Agreement [Member]
Business Acquisition [Line Items]
Percentage of proceeds with balance distributed to shareholders	10.00%

Intangible Asset - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment of acquired contract intangible asset	$ 74,156,000		$ 74,156,000
Impairment of intangible assets, estimated fair value			$ 3,900,000
Percentage of future net cash proceeds will be remitted to CVR Holders			90.00%
Estimated useful life of intangible assets			14 years 3 months 18 days
Finite-Lived Intangible Assets, Net	3,880,000	$ 0	$ 3,880,000	$ 0
Amortization expense	$ 26,000	$ 0	$ 26,000	$ 0

Intangible Asset - Summary of Estimated Amortization Expense Related to Definite Lived Intangible Asset (Detail) - USD ($)	Sep. 30, 2021	Sep. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Intangible asset	$ 3,906,000
Less amortization	(26,000)
Intangible asset, net	3,880,000	$ 0
2021 (remaining)	68,000
2022	273,000
2023	273,000
2024	273,000
2025	273,000
Amounts thereafter	$ 2,720,000

Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Accrued Liabilities Current [Abstract]
Accrued clinical	$ 2,367	$ 2,017
Accrued contract manufacturing	1,793	1,301
Accrued bonus	563	597
Accrued other	1,527	184
Total accrued liabilities	$ 6,250	$ 4,099

Operating Lease - Additional Information (Detail) - Los Angeles, California [Member]	1 Months Ended		3 Months Ended		9 Months Ended
	Aug. 31, 2021	Apr. 30, 2019 ft²	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)
Lessee Lease Description [Line Items]
Operating lease, agreement term		28 months
Area of office space on operating lease \| ft²		2,760
Operating lease, commencement date		May 01, 2019
Operating lease, rent abatement period	9 months	4 months
Operating lease, expiration date	Feb. 28, 2025	Aug. 31, 2021
Operating lease, lease amendment term	3 years	3 years
Operating lease, extend the term for an additional period	3 years 6 months
Operating lease, rent expense \| $			$ 47,000	$ 46,000	$ 100,000	$ 100,000

Operating Lease - Summary of Information Related to Lease (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Assets:
Operating lease right-of-use assets	$ 597	$ 119
Liabilities:
Operating lease liabilities, current portion	90	125
Operating lease liabilities, non-current	523
Total operating lease liabilities	$ 613	$ 125

Operating Lease - Summary of Future Minimum Lease Payments Required under Operating Lease (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Future Minimum Lease Payments:
Fourth quarter 2021	$ 9
2022	178
2023	231
2024	238
2025	40
Total minimum lease payments	696
Less: amount representing interest	(83)
Total operating lease liabilities	613	$ 125
Less: operating lease liabilities, current	(90)	$ (125)
Operating lease liabilities, non-current	$ 523
Remaining lease term (in years)	3 years 5 months 1 day
Incremental borrowing rate	6.80%

EOC License Agreement - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended
	Jan. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenue From Contract With Customer [Abstract]
Right to terminate the agreement				120 days
Upfront payment	$ 14,000			$ 14,000
Revenue		$ 14,000	$ 231	120	$ 431
Amount of certain development, regulatory, and sales milestones payments eligible to receive under license agreement.				$ 257,000

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Convertible Notes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended		9 Months Ended
	Aug. 26, 2021	Jan. 31, 2020	Oct. 31, 2019	Sep. 30, 2021	May 31, 2021
Debt Disclosure [Abstract]
Proceeds from issuance of convertible notes		$ 1.0	$ 8.1
Convertible notes interest rate for fourth month date of loan agreement		6.00%	6.00%	80.00%
Convertible notes interest rate for fifth and sixth month date of loan agreement		8.00%	8.00%
Convertible notes interest rate for remaining sixth months term until maturity at twelve months		10.00%	10.00%
Proceeds from issuance of preferred stock				$ 25.0
Convertible notes interest Rate in five or six months				75.00%
Convertible notes interest rate later than six months				70.00%
Outstanding principal percentage to be prepaid within four months				120.00%
Outstanding principal percentage to be prepaid within fifth and sixth months				130.00%
Outstanding principal percentage to be prepaid after sixth month but prior to maturity				140.00%
Term extension				Private Aadi entered into an amendment to the October 2019 and January 2020 Convertible Notes, whereby the term was extended from one year to two years
Conversion into common stock, fixed conversion price per share					$ 4.80
Conversion notes converted into common stock	698,018
Convertible promissory notes	$ 9.5
Gain on conversion	$ 0.4

Payroll Protection Program Loan - Additional Information (Detail) - Small Business Administration (SBA), CARES Act, Payroll Protection Program (PPP) Loan [Member] - USD ($)		1 Months Ended
	Apr. 29, 2021	May 31, 2020	Sep. 30, 2021
Payroll Protection Program Loan [Line Items]
Proceeds from approved loan		$ 200,000
Period after which debt instrument forgiven		168 days
Period for unforgiven debt payable		2 years
Debt instrument, interest rate for unforgiven debt		1.00%
Period for deferral payments of unforgiven debt		10 months
Minimum amount of debt, subject to review by government agency			$ 2,000,000
Accrued liability associated with risk of adverse review			$ 0
Principal Forgiveness [Member]
Payroll Protection Program Loan [Line Items]
Gain on debt forgiveness	$ 200,000

Stockholders' Equity (Deficit) - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended
	Aug. 26, 2021	Sep. 30, 2021	Sep. 30, 2021	Dec. 31, 2020	Dec. 31, 2017	Mar. 31, 2017	Feb. 28, 2017	Feb. 23, 2017	Dec. 31, 2015
Class Of Stock [Line Items]
Preferred stock, shares authorized		10,000,000	10,000,000
Preferred stock, par value		$ 0.0001	$ 0.0001
Preferred stock, shares outstanding		0	0
Common stock, shares authorized	300,000,000.0	300,000,000	300,000,000	20,000,000
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares outstanding	2,500,000	20,883,454	20,883,454	2,542,358
Issuance of common stock, Shares	2,558,218
Issuance of common stock to PIPE Investors		$ 155,000	$ 155,000
Aggregate net proceeds from issuance of common stock	$ 145,400	$ 145,400	145,400
Dividends common stock declared or paid			$ 0
Merger Agreement [Member]
Class Of Stock [Line Items]
Issuance of common stock, Shares	5,776,660
Private Investment in Public Equity [Member] \| Merger Agreement [Member]
Class Of Stock [Line Items]
Common stock, shares outstanding	20,800,000
Aggregate net proceeds from issuance of common stock	$ 145,400
Private Investment in Public Equity [Member] \| Merger Agreement [Member] \| Subscription Agreements [Member]
Class Of Stock [Line Items]
Issuance of common stock, Shares	11,852,862
Issuance of common stock to PIPE Investors	$ 155,000
Series Seed Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock, shares authorized		0	0	734,218
Preferred stock, par value		$ 0.0001	$ 0.0001	$ 0.0001
Preferred stock, shares outstanding		0	0	734,218
Number of shares converted								734,218
Preferred stock, shares issued		0	0	734,218
Series A Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock, shares authorized		0	0	7,211,948
Preferred stock, par value		$ 0.0001	$ 0.0001	$ 0.0001
Preferred stock, shares outstanding		0	0	7,211,948
Number of shares converted					881,286				482,426
Preferred stock, shares issued		0	0	7,211,948
Preferred stock, issued price									$ 3.42
Convertible preferred stock, shares issued upon conversion percentage									85.00%
Series A Preferred Stock [Member] \| Private Investment in Public Equity [Member]
Class Of Stock [Line Items]
Preferred stock, shares issued						5,847,940	5,847,940
Preferred stock, issued price						$ 3.42	$ 3.42

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 26, 2021	Feb. 28, 2017	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Oct. 14, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options or similar awards granted, assumed through merger					248,258
Shares outstanding			1,298,446		1,298,446		390,949
Aggregate Intrinsic Value, Outstanding			$ 13,156		$ 13,156		$ 505
Shares, Granted			669,731	0	727,620	53,131
Expense related to the acceleration of vesting associated with individual awards			$ 300		$ 300
Weighted-average fair value of options granted					$ 19.24	$ 2.57
Warrants outstanding			36,666	0	36,666	0
Number of warrants issued to purchase common stock								40,000
Warrants exercise price per share								$ 7.29
Warrants expiration date					Oct. 24, 2024
Number of warrants exercised					3,334
Private Aadi Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares available for issuance			0		0
Vesting period		4 years
Shares outstanding			432,978		432,978
Private Aadi Plan [Member] \| Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Term of options granted		10 years
2011 Plan and 2017 Plan [Member] \| Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options or similar awards granted, assumed through merger					0
2021 Equity Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares available for issuance	2,070,784		1,845,971		1,845,971
Percentage applied to the outstanding shares as annual increase in number of shares authorized for issuance	4.00%
Shares outstanding			669,731		669,731
Aggregate Intrinsic Value, Outstanding			$ 13,200		$ 13,200
Unrecognized compensation cost related to stock options				$ 13,900		$ 13,900
Weighted average period expected to be recognized						3 years 1 month 24 days
2021 Equity Incentive Plan [Member] \| Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options or similar awards granted, assumed through merger	764,154
Aerpio 2011 Equity Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares outstanding			0		0
Aerpio 2017 Stock Option and Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares outstanding			195,737		195,737

Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Shares, Outstanding at beginning balance			390,949
Shares, Granted	669,731	0	727,620	53,131
Shares, Assumed through Merger			248,258
Shares, Exercised			(61,075)
Shares, Expired/cancelled			(7,306)
Shares, Outstanding at ending balance	1,298,446		1,298,446		390,949
Shares, Options exercisable	493,890		493,890
Weighted Average Exercise Price, Outstanding at beginning balance			$ 2.00
Weighted Average Exercise Price, Granted			26.58
Weighted Average Exercise Price, Assumed through Merger			29.20
Weighted Average Exercise Price, Exercised			12.20
Weighted Average Exercise Price, Expired/cancelled			36.47
Weighted Average Exercise Price, Outstanding at ending balance	$ 20.33		20.33		$ 2.00
Weighted Average Exercise Price, Options exercisable	$ 13.79		$ 13.79
Weighted Average Remaining Contractual Term, Outstanding			7 years 7 months 17 days		7 years 3 months 3 days
Weighted Average Remaining Contractual Term, Options exercisable			3 years 5 months 15 days
Aggregate Intrinsic Value, Outstanding	$ 13,156		$ 13,156		$ 505
Aggregate Intrinsic Value, Options exercisable	$ 9,646		$ 9,646

Stock-Based Compensation - Summary of Recognized Compensation Cost Related to Employee and Non-employee Stock-Based Compensation Activity (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	$ 648	$ 34	$ 723	$ 100
Research and development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	124	23	180	67
General and administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	$ 524	$ 11	$ 543	$ 33

Stock-Based Compensation - Stock Options Valuation Assumptions (Detail)	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate, Minimum	0.84%	0.84%	0.34%
Risk-free interest rate, Maximum	1.15%	1.15%	0.80%
Expected volatility, Minimum	86.02%	85.21%	89.57%
Expected volatility, Maximum	87.27%	87.88%	92.52%
Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)	5 years 3 months 7 days	5 years 29 days	5 years 3 months 7 days
Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)	6 years 29 days	6 years 3 months	6 years 3 months

Employee Stock Purchase Plan - Additional Information (Detail) - shares	Aug. 17, 2021	Sep. 30, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares outstanding		1,298,446	390,949
Employee Stock Purchase Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares outstanding		0
Employee Stock Purchase Plan [Member] \| Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares available for issuance	310,617
Maximum number of shares provided for issuance	310,617
Percentage of annual increase in number of shares reserved for issuance	1.00%

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Current income tax expense or benefit	$ 0	$ 0	$ 0	$ 0
Deferred income tax expense or benefit	$ 0	$ 0	$ 0	$ 0