0001564590-22-019856 | 10-Q | XBRL Viewer

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Commitments And Contingencies Disclosure [Abstract]
Accrued clinical and contract manufacturing expense	$ 3.7	$ 4.8

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2022

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):

	March 31, 2022
Intangible asset, net, January 1, 2022	$	3,811
Less amortization		(68	)
Intangible asset, net, March 31, 2022	$	3,743

2022 (remaining)	$	205
2023		273
2024		273
2025		273
2026		273
Amounts thereafter		2,446
	$	3,743

Stockholders' Equity (Deficit) - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Aug. 26, 2021	Mar. 31, 2022	Dec. 31, 2021	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
Preferred stock, shares issued		0	0
Common stock, shares authorized	300,000,000.0	300,000,000	300,000,000
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares outstanding	2,500,000	20,941,973	20,894,695
Issuance of common stock, Shares	2,558,218
Dividends common stock declared or paid		$ 0
Sales Agreement [Member]
Class Of Stock [Line Items]
Issuance of common stock, Shares		0
ATM offering price		$ 75,000
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
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
Proceeds from the issuance of common stock to PIPE Investors	$ 155,000
Aggregate net proceeds from issuance of common stock	$ 145,400
Series Seed Preferred Stock [Member]
Class Of Stock [Line Items]
Number of shares converted							734,218
Series A Preferred Stock [Member]
Class Of Stock [Line Items]
Number of shares converted				881,286				482,426
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

Operating Lease - Schedule of Rent Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Cash paid included in operating cash flows	$ 28	$ 54
Operating leases rent expense	$ 50	$ 46

Stock-Based Compensation - Stock Options Valuation Assumptions (Detail) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average fair value of options granted	$ 14.80	$ 0
Risk-free interest rate, Minimum	1.46%
Risk-free interest rate, Maximum	1.76%
Expected volatility, Minimum	85.99%
Expected volatility, Maximum	86.25%
Expected term (in years)	6 years 1 month 6 days

Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

9. Stock-Based Compensation

Stock Option Plan – 2014 Plan (as amended and restated in February 2017, the “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 together with the 2011 Plan, the “Prior Plans”). No new awards may be granted under the Prior Plans effective as of 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 permits the award of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance 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.

As a result of the evergreen increase, a total of 835,787 shares were added to the 2021 Plan on January 1, 2022.

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 March 31, 2022, zero, 394,120, 105,690 and 1,527,931 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 three months ended March 31, 2022:

	Stock Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value (in thousands)
Outstanding, January 1, 2022		1,749,876		$	20.71		8.48	$	10,007
Granted		346,700			20.40
Exercised		(39,778	)		6.13
Expired/cancelled		(29,057	)		25.02
Outstanding, March 31, 2022		2,027,741		$	20.88		8.63	$	5,632
Vested and exercisable as of March 31, 2022		419,036		$	8.26		5.21	$	4,475
Vested and expected to vest as of March 31, 2022		2,027,741		$	20.88		8.63	$	5,632

As of March 31, 2022, the aggregate intrinsic value of options outstanding was $5.6 million.

As of March 31, 2022, there was $25.2 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 2.92 years.

As of March 31, 2022, zero and 1,899,350 shares were reserved for issuance under the Private Aadi Plan and 2021 Plan, respectively.

Option Awards

During the three months ended March 31, 2022 and 2021, option awards to purchase an aggregate of 346,700 and zero 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 March 31,
	2022		2021
Research and development	$	680	$	25
Selling, general and administrative		1,101		11
Total	$	1,781	$	36

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 three months ended March 31, 2022 and 2021 was $14.80 and $0 per share, respectively. No grants were issued during the three months ended March 31, 2021. The calculation was based on the following assumptions:

	Three Months Ended
	March 31, 2022
Weighted average grant date fair value (per share)	$	14.80
Risk-free interest rate	1.46% - 1.76%
Expected volatility	85.99% - 86.25%
Expected term (in years)	6.1
Expected dividend yield	-

Warrants to Purchase Common Stock

The Company had warrants outstanding for the purchase of 29,166 and 36,666 shares of the Company’s common stock at March 31, 2022 and December 31, 2021, respectively. 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. During the three months ended March 31, 2022, 7,500 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).

Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. 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. As of March 31, 2022, the Company is not currently involved in any material legal proceedings.

Purchase Commitments

The Company has ongoing contracts with vendors for clinical trials and contract manufacturing. These contracts are generally cancellable, with notice, at the Company’s option. The Company recorded accrued expenses of $3.7 million and $4.8 million in its consolidated balance sheet for expenditures incurred by clinical and contract manufacturing vendors as of March 31, 2022 and December 31, 2021, respectively.

At March 31, 2022, the Company had one significant contract with Fresenius Kabi that contains specific activities such as non-cancellable commitments, minimum purchase commitments, or binding annual forecasts.

Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The Company did not record a current or deferred income tax expense or benefit for the three months ended March 31, 2022 due to the Company’s net losses and continues to maintain a full 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.

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+ Details

Operating Lease - Summary of Information Related to Lease (Detail) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets:
Operating lease right-of-use asset	$ 518	$ 557
Liabilities:
Operating lease liabilities, current portion	163	131
Operating lease liabilities, non-current	424	474
Total operating lease liabilities	$ 587	$ 605

Nature of Organization and Operations - Additional Information (Detail)				3 Months Ended
	Mar. 17, 2022 USD ($)	Aug. 26, 2021 USD ($) $ / shares shares	May 16, 2021	Mar. 31, 2022 USD ($) shares	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) shares
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Issuance of common stock, Shares \| shares		2,558,218
Anniversary effective term period		20 years
Preferred stock value \| $
Common stock, shares outstanding \| shares		2,500,000		20,941,973		20,894,695
Accumulated deficit \| $				$ 156,542,000		$ 142,685,000
Net loss \| $				13,857,000	$ 5,476,000
Cash and cash equivalents \| $				$ 129,849,000		$ 148,989,000
PIPE Investors [Member]
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Ownership percentage on common stock		55.60%
Former Shareholders of Aadi [Member]
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Ownership percentage on common stock		29.20%
Former Stockholders/Executives of Aerpio Upon Merger [Member]
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Ownership percentage on common stock		15.20%
Sales Agreement [Member]
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Issuance of common stock, Shares \| shares				0
Sales Agreement [Member] \| Cowen [Member] \| Common Stock [Member]
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Issuance of common stock, Shares \| shares				0
Maximum aggregate offering price \| $	$ 75,000,000.0
Merger Agreement [Member]
Organization Consolidation And Presentations 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
Estimated fair value consideration \| $		$ 110,400,000
Number of common stock issued under purchase consideration \| shares		3,208,718
Business acquisition, common stock per share \| $ / shares		$ 33.00
Percentage of cumulative dividend on preferred stock		4.00%
Preferred stock value \| $		$ 4,400,000
Merger Agreement [Member] \| Private Investment in Public Equity [Member]
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Common stock, shares outstanding \| shares		20,800,000
Merger Agreement [Member] \| CVR Agreement [Member]
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Percentage of proceeds plus reimbursement of expenses		10.00%
Merger Agreement [Member] \| Subscription Agreements [Member]
Organization Consolidation And Presentations 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 Presentations Of Financial Statements [Line Items]
Issuance of common stock, Shares \| shares		11,852,862
Aggregate proceeds from issuance of common stock \| $		$ 155,000,000.0
Aggregate net proceeds from issuance of common stock \| $		$ 145,400,000
Merger Agreement [Member] \| Registration Rights Agreements [Member]
Organization Consolidation And Presentations Of Financial Statements [Line Items]
Date of acquisition agreement		Aug. 26, 2021

Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accrued Liabilities Current [Abstract]
Accrued clinical	$ 2,533	$ 2,507
Accrued contract manufacturing	1,223	2,287
Accrued professional fees	1,423	1,948
Accrued bonus	976	1,465
Accrued other - sales related	514
Accrued other	668	496
Total accrued liabilities	$ 7,337	$ 8,703

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	20,941,973	20,894,695
Common stock, shares outstanding	20,941,973	20,894,695

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net loss	$ (13,857)	$ (5,476)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Share-based compensation expense	1,781	36
Change in fair value of convertible promissory notes		1,165
Non-cash interest expense	58	224
Non-cash lease expense	66	44
Depreciation and amortization expense	74	2
Changes in operating assets and liabilities:
Accounts receivables	(2,708)	14,029
Inventory	(202)
Prepaid expenses and other current assets	(579)	(1)
Other non-current assets	125
Operating lease liabilities	(44)	(52)
Accounts payable and accrued liabilities	(4,129)	592
Net cash (used in) provided by operating activities	(19,415)	10,563
Cash flows from investing activities:
Purchase of property and equipment	(23)
Net cash used in investing activities	(23)
Cash flows from financing activities:
Issuance of common stock upon exercise of stock options	244
Issuance of common stock upon exercise of warrants	54
Net cash provided by financing activities	298
Net (decrease) increase in cash and cash equivalents	(19,140)	10,563
Cash and cash equivalents at beginning of year	148,989	4,455
Cash and cash equivalents at March 31, 2022 and 2021	129,849	15,018
Supplemental disclosure of cash flow information:
Interest paid during the period	58
Supplemental disclosure of non-cash activities:
Deferred transaction costs included in accounts payable and accrued liabilities	249	$ 151
Accrued property and equipment	$ 27

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Activity

The following table summarizes the stock option activity during the three months ended March 31, 2022:

	Stock Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value (in thousands)
Outstanding, January 1, 2022		1,749,876		$	20.71		8.48	$	10,007
Granted		346,700			20.40
Exercised		(39,778	)		6.13
Expired/cancelled		(29,057	)		25.02
Outstanding, March 31, 2022		2,027,741		$	20.88		8.63	$	5,632
Vested and exercisable as of March 31, 2022		419,036		$	8.26		5.21	$	4,475
Vested and expected to vest as of March 31, 2022		2,027,741		$	20.88		8.63	$	5,632

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 March 31,
	2022		2021
Research and development	$	680	$	25
Selling, general and administrative		1,101		11
Total	$	1,781	$	36

Stock Options Valuation Assumptions

The calculation was based on the following assumptions:

	Three Months Ended
	March 31, 2022
Weighted average grant date fair value (per share)	$	14.80
Risk-free interest rate	1.46% - 1.76%
Expected volatility	85.99% - 86.25%
Expected term (in years)	6.1
Expected dividend yield	-

Summary of Significant Accounting Policies - Additional Information (Detail)		3 Months Ended
	Aug. 26, 2021 $ / shares shares	Mar. 31, 2022 USD ($) Segment $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Aug. 25, 2021 shares
Summary Of Significant Accounting Policies [Line Items]
Capital stock held \| shares				8,100,000
Common stock, shares outstanding \| shares	2,500,000	20,941,973	20,894,695
Common stock, shares authorized \| shares	300,000,000.0	300,000,000	300,000,000
Common stock, par value \| $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Reverse stock split, description		No fractional shares were issued in connection with the Reverse Stock Split.
Number of operating segment \| Segment		1
Cash and cash equivalents		$ 129,849,000	$ 148,989,000
Convertible promissory notes outstanding		0
Allowance for doubtful accounts		$ 0	0
Estimated useful life of intangible assets		14 years 3 months 18 days
Impairment of long-lived intangible asset		$ 0
Convertible promissory notes converted into common stock \| shares	698,018	698,018
Product Sales Allowance [Member]
Summary Of Significant Accounting Policies [Line Items]
Deduction from product sales allowances		$ 400,000
Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property and equipment estimated useful lives		3 years
Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property and equipment estimated useful lives		5 years
Money Market Investments [Member]
Summary Of Significant Accounting Policies [Line Items]
Cash and cash equivalents		$ 122,100,000	$ 140,000,000.0

Convertible Notes

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Convertible Notes

7. Convertible Notes

Private Aadi received $8.1 million in October 2019 and $1.0 million in January 2020 for the proceeds in connection with the issuance of convertible promissory notes (“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 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.

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 based on 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 on conversion of $0.4 million in the year ended December 31, 2021.

- 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.

+ References

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+ Details

Employee Stock Purchase Plan - Additional Information (Detail) - Employee Stock Purchase Plan [Member] - shares		3 Months Ended
	Aug. 17, 2021	Mar. 31, 2022	Jan. 01, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares acquired		0
Common Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares available for issuance	310,617		208,946
Maximum number of shares provided for issuance	310,617
Percentage of annual increase in number of shares reserved for issuance	1.00%

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 129,849,000	$ 148,989,000
Accounts receivable	2,708,000
Inventory	202,000
Prepaid expenses and other current assets	2,861,000	2,283,000
Total current assets	135,620,000	151,272,000
Property and equipment, net	101,000	57,000
Operating lease right-of-use asset	518,000	557,000
Intangible asset, net	3,743,000	3,811,000
Other assets	2,337,000	2,213,000
Total assets	142,319,000	157,910,000
Current liabilities:
Accounts payable	4,010,000	6,439,000
Accrued liabilities	7,337,000	8,703,000
Operating lease liabilities, current portion	163,000	131,000
Total current liabilities	11,510,000	15,273,000
Operating lease liabilities, net of current portion	424,000	474,000
Due to licensor (Note 6)	5,757,000	5,757,000
Total liabilities	17,691,000	21,504,000
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2022 and December 31, 2021
Common stock, $0.0001 par value; 300,000,000 shares authorized; 20,941,973 and 20,894,695 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	2,000	2,000
Additional paid-in capital	281,168,000	279,089,000
Accumulated deficit	(156,542,000)	(142,685,000)
Total stockholders’ equity	124,628,000	136,406,000
Total liabilities and stockholders’ equity	$ 142,319,000	$ 157,910,000

Intangible Assets - Summary of Estimated Amortization Expense Related to Definite Lived Intangible Asset (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Finite-lived Intangible Assets [Roll Forward]
Intangible asset, net, Beginning balance	$ 3,811,000
Less amortization	(68,000)	$ 0
Intangible asset, net, Ending balance	3,743,000	0
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2022 (remaining)	205,000
2023	273,000
2024	273,000
2025	273,000
2026	273,000
Amounts thereafter	2,446,000
Intangible asset, net	$ 3,743,000	$ 0

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation

The unaudited condensed consolidated financial statements, and the related disclosures, have been prepared in accordance with GAAP and Securities and Exchange Commission (“SEC”) regulations 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 normal and recurring in nature. The Company’s condensed consolidated financial statements are stated in U.S. dollars.

Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, the accompanying unaudited interim financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2021, which are included in the Company’s Annual Report on Form 10-K filed with the SEC filed on March 17, 2022.

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, the Company 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.

Other Comprehensive Income

The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss in all periods presented.

Other Comprehensive Income

The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss in all periods presented.

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 has identified its Chief Executive Officer as the chief operating decision maker and 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 condensed consolidated financial statements and accompanying notes. In the opinion of management, all adjustments, are considered necessary for a fair presentation have been included. The most significant estimates in the Company’s condensed consolidated financial statements relate to fair value of intangible asset, fair value of the convertible promissory notes, gross-to-net accruals, 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 March 31, 2022 and December 31, 2021, cash and cash equivalents included money market investments totaling $122.1 million and $140.0 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. 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 March 31, 2022, 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 and accounts payable are reasonable estimates of their fair value because of the short maturity of these items.

The following table sets forth the recurring 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 March 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	122,138	$	—	$	—	$	122,138

	Fair Value Measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	140,032	$	—	$	—	$	140,032

(1)

Included in cash and cash equivalents in the accompanying balance sheets.

Accounts Receivable

Accounts receivable are recorded net of customer allowances for chargebacks and allowance for doubtful accounts. Allowance for chargebacks is based on contractual terms. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. As of March 31, 2022 and December 31, 2021, no allowance for doubtful accounts was recorded.

Inventory

Inventory is stated at the lower of cost or estimated net realizable value. The Company uses actual costing methodology determined on a first-in, first-out method. The Company capitalizes inventory costs associated with its products based upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed. Prior to FDA approval of FYARRO, all costs related to the manufacturing of FYARRO were charged to research and development expense in the period incurred. Substantially all of the inventory represents work in process.

Property and Equipment, Net

Property and equipment, consisting of computers, furniture and fixtures, office equipment and construction in process are stated at cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, generally three to 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, the 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. No impairment was recorded for the long-lived intangible asset during the three months ended March 31, 2022.

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 March 31, 2022 and December 31, 2021.

Revenue Recognition

The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, Revenue from Contracts with Customer (“Topic 606”), the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then

recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Product Net Sales

FYARRO was approved by the FDA in November 2021. On February 22, 2022, the Company launched sales of FYARRO to specialty distributors (“SD”s) and a specialty pharmacy (“SP”). The Company recognizes product sales when the SDs and SP obtain control of the product. Product sales are recorded at the net sales price, which includes provisions for the following allowances which are reflected either as a reduction to the related account receivable or as an accrued liability, depending on how the allowance is settled:

Distribution Fees: Distribution fees include distribution service fees paid to the SDs and SP based on a contractually fixed percentage of the wholesale acquisition cost (“WAC”). Distribution fees are recorded as an offset to product sales based on contractual terms at the time revenue from the sale is recognized.

Rebates: Allowance for rebates include mandated discounts under the Medicaid Drug Rebate Program and TRICARE program. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements or statutory requirements. The allowance for rebates is based on contracted or statutory discount rates and expected utilization by benefit plan participants. The Company’s estimates for expected utilization of rebates are based on utilization data received from the SDs and SP since product launch. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity. If actual future rebates vary from estimates, the Company may need to adjust prior period accruals, which would affect product sales in the period of adjustment.

Chargebacks: Chargebacks are discounts and fees that relate to contracts with government and other entities purchasing from the SDs and SP at a discounted price. The SDs and SP charge back to the Company the difference between the price initially paid by the SDs and SP and the discounted price paid to the SDs and SP by these entities. If actual future chargebacks vary from these estimates, the Company may need to adjust prior period accruals, which would affect product sales in the period of adjustment.

Co-Payment Assistance: The Company offers co-payment assistance to commercially insured patients meeting certain eligibility requirement. Co-payment assistance is accrued at the time of product sale to SDs and SP based on estimated patient participation and average co-pay benefit to be paid per a claim. The Company estimated amounts are compared to actual program participation and co-pay amounts paid using data provided by third-party administrators. If actual amounts differ from the original estimates the assumptions being applied are updated and adjustment for prior period accruals will be adjusted in the current period.

Product Returns: Consistent with industry practice, the Company offers the SDs and SP limited product return rights for damages, shipment errors, and expiring product, provided that the return is within a specified period around the product expiration date as set forth in the applicable individual distribution agreement. The Company does not allow product returns for product that has been dispensed to a patient. As the Company receives inventory reports from the SDs and SP and has the ability to control the amount of product that is sold to the SDs and SP the Company’s estimate of future potential product returns is based on the on-hand channel inventory data and sell-through data obtained from the SDs and SP. In arriving at its estimate, the Company also considers historical product returns, the underlying product demand, and industry data specific to the specialty pharmaceutical distribution industry.

The total amount deducted from gross product sales for the allowances described above for the three months ended March 31, 2022 was $0.4 million.

Grant Revenue

The Company’s grant revenues are derived from federal grants with the FDA. 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.

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.

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 in 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. 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, 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 limited 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 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 promissory notes, convertible preferred stock, outstanding stock options and warrants 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):

	Three Months Ended March 31,
	2022		2021
Options to purchase common stock		2,028		391
Warrants to purchase common stock		29		—
Series Seed convertible preferred stock		—		734
Series A convertible preferred stock		—		7,212
		2,057		8,337

The table above excludes the conversion of the principal balance and accrued interest on the convertible promissory notes which converted into 698,018 shares of common stock in conjunction with the closing of the Merger.

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 condensed consolidated 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. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

Accrued Liabilities

3 Months Ended

Mar. 31, 2022

Accrued Liabilities Current [Abstract]

Accrued Liabilities

4. Accrued Liabilities

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

	March 31,		December 31,
	2022		2021
Accrued clinical	$	2,533	$	2,507
Accrued contract manufacturing		1,223		2,287
Accrued professional fees		1,423		1,948
Accrued bonus		976		1,465
Accrued other - sales related		514		—
Accrued other		668		496
Total accrued liabilities	$	7,337	$	8,703

Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended
	Aug. 26, 2021	Feb. 28, 2017	Mar. 31, 2022	Mar. 31, 2021	Jan. 01, 2022	Dec. 31, 2021	Oct. 14, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares outstanding			2,027,741			1,749,876
Aggregate intrinsic value of option outstanding			$ 5,632			$ 10,007
Shares, Granted			346,700	0
Weighted-average fair value of options granted			$ 14.80	$ 0
Warrants outstanding			29,166			36,666
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			7,500
Private Aadi Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares available for issuance			0
Vesting period		4 years
Shares outstanding			394,120
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		1,899,350		835,787
Percentage applied to the outstanding shares as annual increase in number of shares authorized for issuance	4.00%
Shares outstanding			1,527,931
Aggregate intrinsic value of option outstanding			$ 5,600
Unrecognized compensation cost related to stock options			$ 25,200
Weighted average period expected to be recognized			2 years 11 months 1 day
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
Aerpio 2017 Stock Option and Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares outstanding			105,690

License Agreements

3 Months Ended

Mar. 31, 2022

Revenue From Contract With Customer [Abstract]

License Agreements

6. License Agreements

Celgene License Agreement

On April 9, 2014, the Company entered into a license agreement (as amended 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 FYARRO.

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 FYARRO necessary for clinical or non-clinical development.

Under the terms of 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. During three months ended March 31, 2022, $0.2 million in royalties were accrued on net product sales recognized during the three months ended March 31, 2022. However, no payments related to milestones or royalties were paid during either of the three months ended March 31, 2022 or 2021.

On August 30, 2021, the Company and Celgene entered into Amendment No. 1 (the “Amendment”) to the Celgene License Agreement related to certain intellectual property rights of Celgene pertaining to the compound known as FYARRO. 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 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, or August 26, 2024 plus any accrued and unpaid interest due thereon (“Balloon Payment”). The Balloon Payment shall accrue interest, beginning August 26, 2021 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 is 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 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 FYARRO 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 year ended December 31, 2020 and had a corresponding $2.8 million sublicense payable to Celgene on the balance sheet as of December 31, 2020, which was paid in the three months ended March 31, 2021.

During the year ended December 31, 2021, the Company recognized license revenue and received $1.0 million from EOC for achieving the FDA approval milestone on November 22, 2021. In accordance with the Celgene

License Agreement, the Company recognized $0.2 million of license expense in the year ended December 31, 2021 and had a corresponding $0.2 million sublicense payable to Celgene on the balance sheet as of December 31, 2021, which was paid in the three months ended March 31, 2022.

EOC License Agreement

In December 2020, the Company entered into the EOC License Agreement with EOC for the further development of ABI-009, now called FYARRO, and commercialization of FYARRO 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. The Company earned $1.0 million in milestone revenue upon achievement of the FDA approval milestone on November 22, 2021. EOC paid the $1.0 million milestone payment in December 2021. In accordance with the Company’s agreement with Celgene, 20% of the $1.0 million payment, or $0.2 million was accrued at December 31, 2021, and paid in January 2022.

Subsequent Events - Additional Information (Detail)		3 Months Ended
Subsequent Events - Additional Information (Detail)	Apr. 25, 2022	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($) ft²	Mar. 31, 2021 USD ($)
Subsequent Event [Line Items]
Base rent			$ 50,000	$ 46,000
Impairment of intangible assets			$ 0
Forecast [Member] \| Gossamer License Agreement [Member]
Subsequent Event [Line Items]
Impairment of intangible assets		$ 3,700,000
Subsequent Event [Member] \| Gossamer License Agreement [Member]
Subsequent Event [Line Items]
License agreement termination date	Jul. 24, 2022
Morristown, New Jersey [Member]
Subsequent Event [Line Items]
Area of lease \| ft²			10,615
Lease term			73 months
Base rent			$ 21,230

Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2022

Accrued Liabilities Current [Abstract]

Schedule of Accrued Liabilities

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

	March 31,		December 31,
	2022		2021
Accrued clinical	$	2,533	$	2,507
Accrued contract manufacturing		1,223		2,287
Accrued professional fees		1,423		1,948
Accrued bonus		976		1,465
Accrued other - sales related		514		—
Accrued other		668		496
Total accrued liabilities	$	7,337	$	8,703

Nature of Organization and Operations

3 Months Ended

Mar. 31, 2022

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 biopharmaceutical company focused on developing and commercializing precision therapies for genetically defined cancers with alterations in mTOR pathway genes. Aadi’s lead drug product, FYARRO^TM, nab-sirolimus, (sirolimus protein-bound particles for injectable suspension), is a form of sirolimus bound to albumin. Sirolimus is a potent inhibitor of the mTOR biological pathway, the activation of which pathway can promote tumor growth, and inhibits downstream signaling from mTOR. In November 2021, the U.S. Food and Drug Administration (the “FDA”) approved FYARRO sirolimus protein-bound particles for injectable suspension (albumin-bound) for intravenous use for the treatment of adult patients with locally advanced malignant perivascular epithelioid cell tumors (“PEComa”). On February 22, 2022, Aadi launched FYARRO in the United States for treatment of advanced malignant PEComa. FYARRO 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 Pharmaceuticals, Inc. (“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, and (iii) Aerpio effected a 15:1 reverse stock split of the Aerpio common stock (“Reverse Stock Split”) immediately prior to the Effective Time. 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, the Company 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 in respect of shares of Private Aadi common stock issued 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 the Company, 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 Company 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 the Company and the Merger has been accounted for as a reverse asset acquisition. The estimated fair value of total consideration given was $110.4 million based on 3,208,718 shares of common stock at $33.00 per share, after taking into account the Reverse Stock Split, outstanding immediately prior to the Effective time, plus Private Aadi’s transaction costs. Private Aadi is considered the accounting acquirer even though the Company 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, as defined below), 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 agreed to 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 only recently begun to realize revenues from its planned principal operations commencing with the commercial sale of FYARRO.

On March 17, 2022, the Company entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the Company may offer and sell, from time to time at the Company’s sole discretion, shares of its common stock having an aggregate offering prices of up to $75.0 million through Cowen as its sales agent. As of March 31, 2022, no shares of common stock had been sold under this Sales Agreement.

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 $156.5 million as of March 31, 2022 and a net loss of $13.9 million for the three months ended March 31, 2022. 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.

The Company had cash and cash equivalents of $129.8 million at March 31, 2022. Management believes the Company’s current cash and cash equivalents 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. 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. Restrictions on the ability to travel and conduct face-to-face meetings, as well as constraints surrounding hospital resources, infrastructure, staff and other resources, 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 the Company’s financial results and the timing of its clinical trials.

The COVID-19 pandemic has caused the Company to modify business practices (including but not limited to curtailing or modifying employee travel and participation in meetings, events and conferences, and curtailing or modifying its clinical trials), 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 further outbreaks, the availability, acceptance and effectiveness of vaccines, the impact on the Company’s clinical trials, patients, and collaboration partners, and the effect on its suppliers.

Stockholders; Equity (Deficit)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Stockholders’ Equity (Deficit)

8. Stockholders’ Equity (Deficit)

Preferred Stock

As of March 31, 2022 and December 31, 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 March 31, 2022 and December 31, 2021, the Company had 300,000,000 shares of authorized common stock, par value of $0.0001 per share under the Company’s certificate of incorporation, as amended and restated. As of March 31, 2022 and December 31, 2021, the shares of common stock outstanding were 20,941,973 and 20,894,695, 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.

In March 2022, the Company entered into the Sales Agreement with Cowen, with respect to an “at the market offering” program pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of common stock having aggregate gross proceeds of up to $75.0 million through Cowen as its sales agent. As of March 31, 2022, no shares of common stock had been sold pursuant to the Sales Agreement.

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.

+ References

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-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 15: 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(e)(1))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Employee Stock Purchase Plan

3 Months Ended

Mar. 31, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Employee Stock Purchase Plan

10. 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, at which 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 were acquired under the 2021 ESPP during the three months ended March 31, 2022.

As a result of the evergreen increase described above, a total of 208,946 shares were added to the 2021 ESPP on January 1, 2022.

Operating Lease

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Operating Lease

5. 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 Pacific Palisades, 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.

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

	March 31,		December 31,
	2022		2021
Assets:
Operating lease right-of-use asset	$	518	$	557

Liabilities:
Operating lease liabilities, current	$	163	$	131
Operating lease liabilities, non-current		424		474
Total operating lease liabilities	$	587	$	605

Rent expense related to this lease for each of the three months ended March 31, 2022 and 2021 is presented on the following table (amounts in thousands):

	Three Months Ended March 31,
	2022		2021
Cash paid included in operating cash flows	$	28	$	54
Operating leases rent expense	$	50	$	46

The future minimum lease payments required under the operating lease as of March 31, 2022, are summarized below (amounts in thousands):

Future Minimum Lease Payments:
2022	$	139
2023		231
2024		238
2025		40
Total minimum lease payments	$	648
Less: amount representing interest		(61	)
Present value of operating lease liabilities	$	587
Less: operating lease liabilities, current		(163	)
Operating lease liabilities, non-current	$	424
Remaining lease term (in years)		2.92
Incremental borrowing rate		6.80	%

Income Taxes - Additional Information (Detail)	3 Months Ended
Income Taxes - Additional Information (Detail)	Mar. 31, 2022 USD ($)
Income Tax Disclosure [Abstract]
Current income tax expense or benefit	$ 0
Deferred income tax expense or benefit	$ 0

Operating Lease (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Summary of Information Related to Lease

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

	March 31,		December 31,
	2022		2021
Assets:
Operating lease right-of-use asset	$	518	$	557

Liabilities:
Operating lease liabilities, current	$	163	$	131
Operating lease liabilities, non-current		424		474
Total operating lease liabilities	$	587	$	605

Schedule of Rent Expense

Rent expense related to this lease for each of the three months ended March 31, 2022 and 2021 is presented on the following table (amounts in thousands):

	Three Months Ended March 31,
	2022		2021
Cash paid included in operating cash flows	$	28	$	54
Operating leases rent expense	$	50	$	46

Summary of Future Minimum Lease Payments Required under Operating Lease

The future minimum lease payments required under the operating lease as of March 31, 2022, are summarized below (amounts in thousands):

Future Minimum Lease Payments:
2022	$	139
2023		231
2024		238
2025		40
Total minimum lease payments	$	648
Less: amount representing interest		(61	)
Present value of operating lease liabilities	$	587
Less: operating lease liabilities, current		(163	)
Operating lease liabilities, non-current	$	424
Remaining lease term (in years)		2.92
Incremental borrowing rate		6.80	%

Subsequent Events

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

13. Subsequent Events

New Jersey Lease

On March 31, 2022, the Company entered into a new lease for 10,615 square feet in Morristown, New Jersey. The term of the lease is seventy-three months, unless terminated sooner. Base rent is $21,230 per month and is subject to fixed rent escalations on each annual anniversary during the lease term.

Termination of Gossamer License Agreement

On April 25, 2022, the Company received a formal notice of termination from Gossamer Bio. Inc. (“Gossamer”) for the license agreement dated June 24, 2018, as amended (the “Gossamer License Agreement”), that was related to Gossamer’s GB004 product candidate, a legacy product candidate of the Company’s predecessor, Aerpio Pharmaceuticals, Inc., after announcing that its Phase 2 SHIFT-UC clinical trial studying GB004 in patients with mild-to-moderate active ulcerative colitis did not meet the primary or secondary endpoints at week 12 and the study was being terminated for lack of treatment benefit. The Gossamer License Agreement will terminate, effective July 24, 2022. The Company expects to fully impair its intangible asset, $3.7 million, of which the Gossamer License Agreement for GB004 is the underlying asset, in the second quarter of 2022.

Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment of acquired contract intangible asset	$ 74,200,000
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
Amortization expense	$ 68,000	$ 0
Intangible asset, net	$ 3,743,000	$ 0	$ 3,811,000

Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Shares, Outstanding at beginning balance	1,749,876
Shares, Granted	346,700	0
Shares, Exercised	(39,778)
Shares, Expired/cancelled	(29,057)
Shares, Outstanding at ending balance	2,027,741		1,749,876
Shares, Vested and exercisable	419,036
Shares, Vested and expected to vest	2,027,741
Weighted Average Exercise Price, Outstanding at beginning balance	$ 20.71
Weighted Average Exercise Price, Granted	20.40
Weighted Average Exercise Price, Exercised	6.13
Weighted Average Exercise Price, Expired/cancelled	25.02
Weighted Average Exercise Price, Outstanding at ending balance	20.88		$ 20.71
Weighted Average Exercise Price, Vested and exercisable	8.26
Weighted Average Exercise Price, Vested and expected to vest	$ 20.88
Weighted Average Remaining Contractual Term, Outstanding	8 years 7 months 17 days		8 years 5 months 23 days
Weighted Average Remaining Contractual Term, Vested and exercisable	5 years 2 months 15 days
Weighted Average Remaining Contractual Term, Vested and expected to vest	8 years 7 months 17 days
Aggregate Intrinsic Value, Outstanding	$ 5,632		$ 10,007
Aggregate Intrinsic Value, Vested and exercisable	4,475
Aggregate Intrinsic Value, Vested and expected to vest	$ 5,632

Intangible Assets

3 Months Ended

Mar. 31, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

3. Intangible Assets

The Company recorded a long-lived contract intangible asset as a result of the Merger, related to the 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 the out-licensing arrangement, of which 90% of any future net cash proceeds will be remitted to CVR Holders and paid through the CVRs. The estimated useful life of the intangible asset is approximately 14.3 years. Amortization expense was $68,000 for the three months ended March 31, 2022. No intangible asset or amortization expense was recorded in the three months ended March 31, 2021.

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

	March 31, 2022
Intangible asset, net, January 1, 2022	$	3,811
Less amortization		(68	)
Intangible asset, net, March 31, 2022	$	3,743

2022 (remaining)	$	205
2023		273
2024		273
2025		273
2026		273
Amounts thereafter		2,446
	$	3,743

As of March 31, 2022, 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.

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenue	$ 2,307	$ 120
Operating expenses
Selling, general and administrative	9,148	563
Research and development	6,794	3,644
Cost of goods sold	179
Total operating expenses	16,121	4,207
Loss from operations	(13,814)	(4,087)
Other income (expense)
Change in fair value of convertible promissory notes		(1,165)
Interest income	15
Interest expense	(58)	(224)
Total other expense, net	(43)	(1,389)
Loss before income tax expense	(13,857)	(5,476)
Net loss	$ (13,857)	$ (5,476)
Net loss per share attributable to common stockholders, basic and diluted	$ (0.66)	$ (2.15)
Weighted average number of common shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted	20,914,842	2,542,358
Product Sales, Net [Member]
Revenue	$ 2,307
Grant [Member]
Revenue		$ 120

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Schedule of Assets and Liabilities Measured on Recurring Basis

	Fair Value Measurements as of March 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	122,138	$	—	$	—	$	122,138

	Fair Value Measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	140,032	$	—	$	—	$	140,032

(1)

Included in cash and cash equivalents in the accompanying balance sheets.

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

Operating Lease - Additional Information (Detail) - Pacific Palisades, California [Member] - ft²	1 Months Ended
	Aug. 31, 2021	Apr. 30, 2019
Lessee Lease Description [Line Items]
Operating lease, agreement term		28 months
Area of office space on operating lease		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

License Agreements - Additional Information (Detail) - USD ($)			1 Months Ended		3 Months Ended			12 Months Ended
	Nov. 22, 2021	Aug. 30, 2021	Jan. 31, 2021	Dec. 31, 2020	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2021
License Agreement [Line Items]
Payable to licensor					$ 5,757,000			$ 5,757,000
Revenue					2,307,000	$ 120,000
Celgene License Agreement [Member]
License Agreement [Line Items]
Payments related to milestone					0	$ 0
Royalties were accrued on product sales					200,000
License fees, amount paid		$ 5,800,000			$ 200,000
License fees, percentage of previously outstanding payment obligation		50.00%
Payable to licensor		$ 5,800,000		$ 2,800,000			$ 2,800,000	$ 200,000
License agreement, balloon payment interest rate per annum		4.00%
Sublicense fees, percentage			20.00%					20.00%
License expense							$ 2,800,000	$ 200,000
Revenue								1,000,000.0
EOC License Agreement [Member]
License Agreement [Line Items]
Payment received from license agreement			$ 14,000,000.0
Right to terminate the agreement					120 days
Upfront payment			$ 14,000,000.0		$ 14,000,000.0
Amount of certain development, regulatory, and sales milestones payments eligible to receive under license agreement.					$ 257,000,000.0
Milestone revenue	$ 1,000,000.0
Milestone payment received								$ 1,000,000.0
EOC License Agreement [Member] \| License [Member]
License Agreement [Line Items]
Revenue				$ 14,000,000.0

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
	Mar. 31, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	$ 1,781	$ 36
Research and development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	680	25
Selling, general and administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	$ 1,101	$ 11

Convertible Notes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended		3 Months Ended	12 Months Ended
	Aug. 26, 2021	Jan. 31, 2020	Oct. 31, 2019	Mar. 31, 2022	Dec. 31, 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%
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%
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			698,018
Convertible notes market fair value	$ 9.5
Gain on conversion					$ 0.4

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

Other Comprehensive Income

The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss in all periods presented.

Segment Information

Use of Estimates

Concentration of Credit Risk

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 March 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	122,138	$	—	$	—	$	122,138

	Fair Value Measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds (1)	$	140,032	$	—	$	—	$	140,032

(1)

Included in cash and cash equivalents in the accompanying balance sheets.

Accounts Receivable

Inventory

Property and Equipment, Net

Intangible Asset

Impairment of Long-Lived Assets

Leases

Commitments and Contingencies

Revenue Recognition

recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Product Net Sales

The total amount deducted from gross product sales for the allowances described above for the three months ended March 31, 2022 was $0.4 million.

Grant Revenue

Revenue Under License Agreement

Research and Development

Share-Based Compensation

Income Taxes

Net Loss per Share Attributable to Common Stockholders

	Three Months Ended March 31,
	2022		2021
Options to purchase common stock		2,028		391
Warrants to purchase common stock		29		—
Series Seed convertible preferred stock		—		734
Series A convertible preferred stock		—		7,212
		2,057		8,337

Accounting Pronouncements Not Yet Adopted

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Preferred Stock [Member] Series Seed Preferred Stock [Member]	Preferred Stock [Member] Series A Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2020	$ (12,432)		$ 1	$ 1	$ 20,161	$ (32,595)
Balance, Shares at Dec. 31, 2020		734,000	7,212,000	2,542,000
Share-based compensation expense	36				36
Net loss	(5,476)					(5,476)
Balance at Mar. 31, 2021	(17,872)		$ 1	$ 1	20,197	(38,071)
Balance, Shares at Mar. 31, 2021		734,000	7,212,000	2,542,000
Balance at Dec. 31, 2021	136,406			$ 2	279,089	(142,685)
Balance, Shares at Dec. 31, 2021				20,895,000
Share-based compensation expense	1,781				1,781
Issuance of common stock upon exercise of warrants	54				54
Issuance of common stock upon exercise of warrants, shares				7,000
Issuance of common stock upon exercise of stock options	$ 244				244
Issuance of common stock upon exercise of stock options, shares	39,778			40,000
Net loss	$ (13,857)					(13,857)
Balance at Mar. 31, 2022	$ 124,628			$ 2	$ 281,168	$ (156,542)
Balance, Shares at Mar. 31, 2022				20,942,000

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 942
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-Section S99
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
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-URI http://asc.fasb.org/extlink&oid=123482062&loc=SL123482106-238011

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Operating Lease - Summary of Future Minimum Lease Payments Required under Operating Lease (Detail) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Future Minimum Lease Payments:
2022	$ 139
2023	231
2024	238
2025	40
Total minimum lease payments	648
Less: amount representing interest	(61)
Total operating lease liabilities	587	$ 605
Less: operating lease liabilities, current	(163)	(131)
Operating lease liabilities, non-current	$ 424	$ 474
Remaining lease term (in years)	2 years 11 months 1 day
Incremental borrowing rate	6.80%

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	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total amount of anti-dilutive securities excluded from computation of earnings per share	2,057	8,337
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	2,028	391
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	29
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

Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - Money Market Funds [Member] - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets:
Money market funds	$ 122,138	$ 140,032
Level 1 [Member]
Assets:
Money market funds	$ 122,138	$ 140,032