What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-28 compared with 2024-03-13 · 221 added, 189 removed, 632 unchanged (39% of the section changed)

10 unchanged sentences

To the Stockholders and the Board of Directors

Aadi Bioscience, Inc.

Pacific Palisades, California

Whitehawk Therapeutics, Inc.

Morristown, New Jersey

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Aadi Bioscience, Inc.

We have audited the accompanying consolidated balance sheets of Whitehawk Therapeutics, Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and, comprehensive loss, stockholders’ equity and cash flows for each of the years then ended, and the related notes (collectively, referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years then ended , in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended , in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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Liabilities related to government rebates and chargebacks involve the use of assumptions and judgments that include consideration of historical claims experience and channel mix.

We identified management's estimated allowance for government rebates and chargebacks as a critical audit matter.

The principal consideration that led to our determination is the judgment required to estimate government rebates and chargebacks that will be processed based upon the experience to date.

Auditing these elements involved challenging auditor judgment due to the nature and extent of audit effort required to address these matters.

We identified the estimate for the allowance for government rebates and chargebacks as a critical audit matter.

Auditing the estimate for the allowance for government rebates and chargebacks involved especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters.

The primary procedures we performed to address this critical audit matter included:

• Developing an independent estimate of the allowance for government rebates and chargebacks by utilizing product sales, the historical trend of actual rebates and chargebacks claims paid;

(ii) comparing the independent estimate to management’s estimate;

and (iii) testing historical rebate and chargebacks claims received.

• Evaluating the reasonableness of management’s estimate of the allowance for government rebates and chargebacks by developing an independent estimate utilizing actual product sales and actual rebates and chargeback claims received.

• Testing the completeness and accuracy of the historical rebate and chargeback claims received.

/s/ BDO USA, P.C.

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March 27, 2025

AADI BIOSCIENCE, INC.

WHITEHAWK THERAPEUTICS, INC.

Consolidated Balance Sheets

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Operating lease liabilities, net of current portion 565 833

Due to licensor (Note 8) — 5,757

Other liabilities 202 —

Total liabilities 17,841 27,228

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Additional paid-in capital 385,114 374,129

Accumulated other comprehensive income (loss) 27 ( 115 )

Accumulated other comprehensive income 16 27

Accumulated deficit ( 332,654 ) ( 268,963 )

2 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

AADI BIOSCIENCE, INC.

WHITEHAWK THERAPEUTICS, INC.

Consolidated Statements of Operations and Comprehensive Loss

6 unchanged sentences

Research and development 51,030 48,929

Restructuring charges 2,638 —

Cost of goods sold 3,024 2,809

Impairment of acquired contract intangible asset — 3,724

Total operating expenses 93,441 96,287

4 unchanged sentences

Interest expense ( 154 ) ( 231 )

Total other income, net 6,168 2,168

Total other income (expense), net 3,767 6,168

Loss before income tax expense ( 63,691 ) ( 65,765 )

1 unchanged sentence

Net loss $ ( 63,691 ) $ ( 65,765 )

Other comprehensive income (loss):

Unrealized income (loss) on available-for-sale debt securities 142 ( 115 )

Other comprehensive loss:

Unrealized (loss) income on available-for-sale debt securities ( 11 ) 142

Comprehensive loss $ ( 63,702 ) $ ( 65,623 )

2 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

AADI BIOSCIENCE, INC.

WHITEHAWK THERAPEUTICS, INC.

Consolidated Statements of Stockholders’ Equity

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Stockholders’ Equity

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders' Equity

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Stockholders' Equity

Shares Par Value

1 unchanged sentence

Issuance of common stock upon exercise of stock options 42 — 78 — — 78

Issuance of common stock upon exercise of warrants 7 — 55 — — 55

Share-based compensation expense — — 11,954 — — 11,954

Issuance of shares under the employee stock purchase plan 77 — 408 — — 408

Issuance of common stock to PIPE Investors, net of issuance costs 3,374 — 72,178 — — 72,178

Unrealized loss on investments, net of tax — — — ( 115 ) — ( 115 )

Unrealized gain on investments, net of tax — — — 142 — 142

Net loss — — — — ( 65,765 ) ( 65,765 )

Balance at December 31, 2023 24,554 $ 2 $ 374,129 $ 27 $ ( 268,963 ) $ 105,195

Issuance of common stock upon exercise of stock options 42 — 78 — — 78

Share-based compensation expense — — 10,839 — — 10,839

Issuance of common stock in conjunction with vesting of restricted stock units 33 — — — — —

Issuance of shares under the employee stock purchase plan 94 — 146 — — 146

Unrealized gain on investments, net of tax — — — 142 — 142

Unrealized loss on investments, net of tax — — — ( 11 ) — ( 11 )

Net loss — — — — ( 63,691 ) ( 63,691 )

1 unchanged sentence

The accompanying notes are an integral part of these consolidated financial statements.

AADI BIOSCIENCE, INC.

WHITEHAWK THERAPEUTICS, INC.

Consolidated Statements of Cash Flows

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Adjustments to reconcile net loss to net cash used in operating activities:

Impairment of acquired contract intangible asset — 3,724

Share-based compensation expense 10,839 11,954

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Accounts payable and accrued liabilities ( 9,773 ) ( 132 )

Other liabilities 202 —

Net cash used in operating activities ( 59,550 ) ( 59,663 )

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Maturities of short-term investments 63,338 151,617

Net cash provided by (used in) investing activities 83,206 ( 132,886 )

Net cash provided by investing activities 25,202 83,206

Financing activities:

Proceeds from issuance of common stock and prefunded warrants to PIPE Investors — 72,500

Issuance of common stock upon exercise of stock options — 78

Proceeds from issuance under employee stock purchase plan 146 408

Issuance of common stock upon exercise of warrants — 55

Deferred offering costs paid for financing ( 16 ) ( 160 )

Costs incurred in connection with issuance of common stock — ( 322 )

Net cash provided by financing activities 130 326

Net increase (decrease) in cash, cash equivalents and restricted cash 23,869 ( 109,906 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 34,218 ) 23,869

Cash, cash equivalents and restricted cash at beginning of year 62,952 39,083

1 unchanged sentence

The accompanying notes are an integral part of these consolidated financial statements.

AADI BIOSCIENCE, INC.

WHITEHAWK THERAPEUTICS, INC.

Consolidated Statements of Cash Flows (continued)

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Interest paid during the period $ 211 $ 230

Costs incurred in connection with issuance of common stock paid during the period $ — $ 322

Supplemental disclosure of non-cash activities:

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Amounts accrued for purchases of property and equipment $ 1,153 $ 571

Right-of-use assets obtained in exchange for operating lease liabilities $ — $ 1,241

The accompanying notes are an integral part of these consolidated financial statements.

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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 cancers with alterations in the mTOR pathway, a key regulator of cell growth and cancer progression.

Aadi’s lead drug product, FYARRO ® , combines two established technologies — nanoparticle albumin-bound ( nab ) technology and the anti-cancer agent, sirolimus.

Nab -sirolimus is a potent inhibitor of the mTOR biological pathway with demonstrated anti-cancer activity in Aadi's lead indication, advanced unresectable or metastatic malignant perivascular epithelioid cell tumor (“PEComa”), a rare cancer.

In November 2021, the U.S.

Food and Drug Administration (the “FDA”) approved FYARRO sirolimus protein-bound particles for injectable suspension (albumin-bound) for the treatment of adult patients with locally advanced unresectable or metastatic malignant 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, which is a wholly owned subsidiary of Bristol-Myers Squibb Company ("BMS").

The Company’s historical operations have consisted principally of sales of FYARRO after receiving FDA approval, 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.

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.

Whitehawk Therapeutics, Inc.

is an oncology therapeutics company applying advanced technologies to established tumor biology that are intended to efficiently deliver improved cancer treatments .

The Company has a deep experience in chemistry, formulation, and drug delivery, as well as research, clinical, and commercial pharmaceutical development, and taking product candidates from the clinic to approval, launch, and commercialization.

Current ADC Business

On December 19, 2024, the Company entered into an intellectual property license agreement (the “WuXi License Agreement”) with WuXi Biologics (Shanghai FX) Co., Ltd.

(“WuXi Biologics”) for the development and global commercialization of a portfolio of three next generation antibody drug conjugates (“ADCs”) targeting clinically validated, broadly overexpressed tumor antigens in high potential cancer indications with significant unmet need.

Refer to Note 13 for further information on the ADC license agreement and its terms.

Legacy FYARRO Business .

For the periods presented and through the FYARRO Divestiture (as defined below), the Company's lead drug product was FYARRO ® (sirolimus protein-bound particles for injectable suspension (albumin-bound);

nab-sirolimus), which combines two established technologies - nanoparticle albumin-bound (nab) technology and the anti-cancer agent, sirolimus.

The Company exclusively licensed FYARRO, previously called ABI-009, nab-sirolimus, from Abraxis BioScience, LLC, a wholly owned subsidiary of Celgene Corporation, which is a wholly owned subsidiary of Bristol-Myers Squibb Company (“BMS”).

The Company refers to the development, production and commercial sale of FYARRO herein as the “FYARRO Business”.

On February 22, 2022, the Company launched FYARRO in the United States for treatment of advanced malignant perivascular epithelioid cell tumor PEComa.

On December 19, 2024, the Company entered into a Stock Purchase Agreement (the “Divestiture Agreement”) with KAKEN INVESTMENTS INC., a Delaware corporation (“KAKEN”), KAKEN PHARMACEUTICAL CO., LTD, and Aadi Subsidiary, Inc., a Delaware corporation and the Company's former wholly owned subsidiary and the operating company for the FYARRO Business (“Aadi Subsidiary”).

Under the Divestiture Agreement, KAKEN acquired 100 % of the outstanding shares of capital stock of Aadi Subsidiary from the Company for a cash payment of $ 102.4 million (following applicable purchase price adjustments under the Divestiture Agreement) (the "FYARRO Divestiture").

The FYARRO Divestiture closed on March 25, 2025 and, as a result, the Company no longer operates the FYARRO Business.

Company Name Change .

In connection with the FYARRO Divestiture, the Company changed the Company's name from "Aadi Bioscience, Inc." to "Whitehawk Therapeutics, Inc." and the Company's common stock is now traded under the symbol "WHWK".

Merger with Aerpio Pharmaceuticals, Inc.

On August 26, 2021 (the “Closing Date”), Aadi Bioscience, Inc., a Delaware corporation (f/k/a Aerpio Pharmaceuticals, Inc.), completed its business combination with Aadi Subsidiary, Inc.

(f/k/a Aadi Bioscience, Inc., or “Private Aadi”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated May 16, 2021, by and among Aadi, Aspen Merger Subsidiary, Inc.

(“Merger Sub”) and Private Aadi (the “Merger Agreement”), pursuant to which Merger Sub merged with and into Private Aadi, with Private Aadi surviving as a wholly owned subsidiary of the Company (the “Merger”).

Commencing in February 2022, the Company began to realize revenues from its planned principal operations commencing with the commercial sale of FYARRO.

The Company has experienced net losses since its inception and expects to continue to incur net losses into the foreseeable future.

As of and for the year ended December 31, 2024, the Company had an accumulated deficit of $ 332.7 million and a net loss of $ 63.7 million.

T o date, these operating losses have been funded primarily from sales of FYARRO, outside sources of invested capital through the issuance of convertible promissory notes, grant funding, the sale of securities, and proceeds from license agreements.

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, cash equivalents and short term investments of $ 47.2 million at December 31, 2024.

Management believes the Company’s current cash, cash equivalents and short-term investments will provide sufficient funds to enable the Company to meet its obligations for at least twelve months from the filing date of this report.

Upon the completion of the strategic transactions announced in December 2024, the Company added approximately $ 202.4 million to its cash, cash equivalents and short-term investments as of March 26, 2025, which includes $ 102.4 million received from

the FYARRO Divestiture and $ 100.0 million received from the 2025 PIPE Financing.

The Company expects to pay $ 38 million in April 2025 to Wuxi Biologics for the in-licensing of the ADC Therapies.

Management believes the Company’s cash, cash equivalents and short-term investments will provide sufficient funds to enable the Company to meet its obligations for at least twelve months from the filing date of this report.

If the Company is unable to achieve and maintain profitability, it will need additional financing to support its continuing operations and pursue its strategic objectives.

Additional financing may be achieved through a combination of equity offerings, and debt financings.

Additional financing may be achieved through a combination of equity offerings and debt financing.

The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all.

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Certain prior year amounts have been reclassified to conform to the current year presentation.

Risks and Uncertainties

The Company is a preclinical-stage biopharmaceutical company, has a limited operating history and has three preclinical products in development.

The Company's ability to generate revenue and achieve profitability depends significantly on the ability to achieve several objectives relating to the discovery, development and commercialization of the ADC Therapies and any other product candidates that may be developed in the future.

Comprehensive Loss

1 unchanged sentence

Comprehensive loss has been reflected in the consolidated statements of operations and comprehensive loss for 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

3 unchanged sentences

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.

Restructuring Charges

Restructuring charges consist primarily of employee severance, contract termination costs and other costs.

Liabilities for costs associated with a restructuring activity are recognized when the liability is incurred and are measured at fair value.

For one-time employee terminations benefits, the Company recognizes the liability in full on the communication date when future services are not required or amortizes the liability ratably over the service period, if required.

The fair value of termination benefits reflects the Company’s estimate of expected utilization of certain Company-funded post-employment benefits.

One-time termination benefits include severance and continuation of health insurance coverage for certain employees.

Concentrat ion of Credit Risk

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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.

While the Company has not experienced any losses in such deposits, the recent failure of Silicon Valley Bank, at which the Company holds cash and cash equivalents in multiple accounts, exposed the Company to credit risk prior to the resolution by the Federal Deposit Insurance Corporation in a manner that fully protected all depositors.

While the Company has not experienced any losses in such deposits, the 2023 failure of Silicon Valley Bank, at which the Company holds cash and cash equivalents in multiple accounts, exposed the Company to credit risk prior to the resolution by the Federal Deposit Insurance Corporation in a manner that fully protected all depositors.

The Company has not experienced any losses on deposits since inception.

The Company’s accounts receivable is derived from customers located in the United States.

The Company’s accounts receivable are derived from customers located in the United States.

The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses on customers’ accounts when deemed necessary.

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Additionally, two customers accounted for 42 % and 56 % of net accounts receivable as of December 31, 2024.

One customer accounted for 100 % of net accounts receivable as of December 31, 2022 .

T wo customers accounted for 44 % and 56 % of net accounts receivable as of December 31, 2023.

Cash, Cash Equivalents and Restricted Cash

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.

Restricted cash consists of a letter of credit secured by restricted cash in connection with one of the Company's office leases described in Note 7, and is included in other assets on the consolidated balance sheets.

Restricted cash consists of a letter of credit secured by restricted cash in connection with one of the Company's office leases and is included in other assets on the consolidated balance sheets.

Refer to Note 6 for further information on the Company's leases.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets (in thousands):

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The Company classifies its investments as available-for-sale and records them at fair value based upon market prices at period end.

Unrealized gains and losses that are deemed temporary in nature are recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity.

Unrealized gains and losses that are deemed temporary in nature are recorded in accumulated other comprehensive income as a separate component of stockholders' equity.

Dividend and interest income are recognized when earned.

1 unchanged sentence

Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of investments sold.

The Company classifies short-term investments wi th remaining maturities greater than one year as current assets because such short-term investments are available to fund the Company’s current operations.

The Company classifies short-term investments with remaining maturities greater than one year as current assets because such short-term investments are available to fund the Company’s current operations.

At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the decline in fair value below amortized cost is a result of credit losses or other factors, whether the Company expects to recover the amortized cost of the security, the Company's intent to sell and if it is more likely than not that the Company will be required to sell the securities before the recovery of amortized cost.

The Company records changes in allowance for expected credit loss in other income (expense).

The Company records changes in allowance for expected credit loss in other income (expense), net.

There has been no allowance for expected credit losses recorded during any of the periods presented.

See Note 4 for further informatio n.

See Note 4 for further information.

Accounts Receivable, Net

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Receivables are recorded to an allowance for credit loss when it is probable that amounts will not be collected based on terms of the customer contracts.

Accounts receivable are net of $ 0.2 million and $ 0.1 million of customer allowances for chargebacks as

of December 31, 2023 and December 31, 2022, respectively.

Accounts receivable are net of $ 0.1 million and $ 0.2 million of customer allowances for chargebacks as of December 31, 2024 and December 31, 2023, respectively.

There were no allowances for credit losses and no receivables were written off for the years ended December 31, 2024 and 2023.

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Property and equipment, net $ 6,846 $ 4,802

Construction in progress mainly consists of lab, production, and testing equipment.

Construction in process mainly consists of lab, production, and testing equipment.

Depreciation expense on property, plant, and equipment amounted to $ 0.2 million and $ 0.2 million for the years ended December 31, 2024 and 2023, respectively.

Impairment of Long-Lived Asset

The Company reviews long-lived assets, including property, equipment, and the intangible asset for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount.

The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value.

An impairment was recorded for the long-lived intangible asset during the year ended December 31, 2022 based on the termination of the Gossamer License Agreement effective July 24, 2022 (see Note 5).

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.

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.

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To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”), the Company performs the following five steps:

(i) identify the contract(s) with a customer;

(i) identify the contract(s) with a

(ii) identify the performance obligations in the contract;

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Allowance for rebates includes 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.

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.

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The Company offers co-payment assistance to commercially insured patients meeting certain eligibility requirements.

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 claim.

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.

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Balance at end of period $ 1,411 $ 1,065

Cost of Goods Sold

Cost of goods sold consist primarily of royalties paid to BMS, costs incurred on sales of FYARRO and costs to manufacture and prepare the product for sales subsequent to the FDA approval in November 2021.

Costs incurred prior to the FDA approval were expensed when incurred .

Research and Development

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As actual expenses become known, the Company adjusts its accrued expenses.

In-Process Research and Development (IPR&D)

Acquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed in-process research and development (“IPR&D”) projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and pre-commercialization milestone payments related to various collaborations and the costs of rights to IPR&D projects.

Refer to Note 13 for further information on the ADC license agreement and its terms.

The Company recorded a $ 6.0 million upfront payment related to the WuXi Biologics license agreement as IPR&D expense for the year ended December 31, 2024.

The Company had no IPR&D expense for the year ended December 31, 2023.

Share-Based Compensation

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All of the Company’s share-based awards, to employees, non-employees, officers, and directors, are subject only to service-based vesting conditions.

Compensation expense for awards to employees is calculated on a straight-line basis by recognizing the

fair value over the associated service period of the award, which is generally the vesting term.

Compensation expense for awards to employees is calculated on a straight-line basis by recognizing the fair value over the associated service period of the award, which is generally the vesting term.

Options granted during the year have a maximum contractual term of ten years .

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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.

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.

12 unchanged sentences

Warrants to purchase common stock — 29,167

Adoption of New Accounting Standard

The Company adopted FASB ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures on December 28, 2024.

This ASU requires interim and annual disclosure of significant segment expenses that are regularly provided to the chief operating decision-maker (“CODM”) and included within the reported measure of a segment’s profit or loss, requires interim disclosures about a reportable segment’s profit or loss and assets that are currently required annually, requires disclosure of the position and title of the CODM, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and contains other disclosure requirements.

This authoritative guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The requirements of this ASU are disclosure-related and did not have an impact on the Company’s consolidated financial position and results of operations.

See Note 15, Segment Information, for the updated segment disclosures as a result of adopting this ASU.

Recent Accounting Pronouncements

In 2016, the FASB issued ASU 2016-13 “ Financial Instruments - Credit Losses” which (i) significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model which will be based on an estimate of current expected credit loss;

and (ii) provides for recording credit losses on available-for-sale debt securities through an allowance account.

The standard also requires certain incremental disclosures.

Subsequently, the FASB issued several ASUs to clarify, improve, or defer the adoption of ASU 2016-13.

The Company adopted ASU 2016-13 beginning January 2023.

The Company determined that the adoption of this standard did not result in a material impact to the consolidated financial statements.

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

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 consolidated financial statements.

In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.

The new standard requires a company to disclose incremental segment information on an annual and interim basis, including significant segment expenses and measures of profit or loss that are regularly provided to the chief operating decision maker.

The standard is effective for us beginning in fiscal year 2024 and interim periods within fiscal year 2025, with early adoption permitted.

We do not expect to early adopt the new standard.

We are currently evaluating the impact of ASU 2023-07 on the consolidated financial statements and related disclosures and will adopt the new standard using a retrospective approach.

In December 2023, the FASB also issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.

The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

The standard is effective for us beginning in fiscal year 2025, with early adoption permitted.

We do not expect to early adopt the new standard.

The standard is effective for the Company beginning in fiscal year 2025, with early adoption permitted.

The Company does not expect to early adopt the new standard.

The new standard is expected to be applied prospectively, but retrospective application is permitted.

We are currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures.

The Company is currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-04) - Disaggregation of Income Statement Expenses”, which requires additional disclosure in the notes to the financial statements of the nature of certain expenses included in the income statement.

The amendments are effective on a prospective basis, with the option to apply it retrospectively, for fiscal years beginning after December 15, 2026.

The Company is currently evaluating the impact of adopting this new accounting guidance.

Fair Value Measurement

6 unchanged sentences

Corporate bonds — 4,261 — 4,261

Government agency — 5,482 — 5,482

Total financial assets $ 40,047 $ 6,005 $ — $ 46,052

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

(2) Includes $ 1.1 million of corporate bonds in cash and cash equivalent in the accompanying consolidated balance sheet.

Net unrealized gain on investments was $ 27,000 as of December 31, 2023.

As of December 31, 2022, net unrealized losses were $ 0.1 million.

(2) Includes investments classified as cash and cash equivalent in the accompanying consolidated balance sheet.

As of December 31, 2024 and 2023, all marketable securities had a contractual maturity of less than one year.

7 unchanged sentences

Corporate bonds Less than 1 4,256 5 — 4,261

Government agency Less than 1 5,486 — ( 4 ) 5,482

Total $ 46,037 $ 15 $ — $ 46,052

7 unchanged sentences

Total $ 108,111 $ 33 $ ( 6 ) $ 108,138

Intangible Asset

On August 26, 2021, the Company closed its reverse merger pursuant to which the Company’s wholly-owned subsidiary merged with and into Aadi Subsidiary, Inc.

(formerly Aadi Bioscience, Inc.) (“Private Aadi”), with Private Aadi surviving as a wholly owned subsidiary of the Company (the “Merger”).

The Company recorded a long-lived contract intangible asset as a result of the Merger, related to the license agreement, dated June 24, 2018, with Gossamer Bio, Inc.

("Gossamer"), as amended (the "Gossamer License Agreement"), 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.

At the effective time of the merger, the Company 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 related to contingent cash flows expected from the out-licensing arrangement, of which 90 % of any future net cash proceeds will be remitted to each holder of common stock of the Company's predecessor, Aerpio, as of immediately prior to the closing of the merger and paid through the contingent value rights ("CVRs") pursuant to a Contingent Value Rights Agreement, dated as of August 26, 2021 (the "CVR Agreement").

The useful life of the intangible asset was estimated to be approximately 14.3 years.

On April 25, 2022, the Company received a formal notice of termination from Gossamer for the Gossamer License Agreement, relating to Gossamer’s GB004 product candidate, a legacy product candidate of Aerpio, after Gossamer announced 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 terminated effective July 24, 2022.

Based on the termination of the Gossamer License Agreement, the Company fully impaired the intangible asset, $ 3.7 million, of which the Gossamer License Agreement is the underlying asset, during the year ended December 31, 2022.

There was no amortization expense for the year ended December 31, 2023.

Amortization expense was $ 87,000 for the year ended December 31, 2022.

The following table shows the amortization expense and impairment of the finite-lived intangible asset for the year ended December 31, 2022, (in thousands):

December 31, 2022

Intangible asset, December 31, 2021 $ 3,811

Less amortization ( 87 )

Impairment of contract intangible ( 3,724 )

Intangible asset, net $ —

Accrued Liabilities

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As of December 31,

Accrued professional fees $ 5,157 $ 2,504

Accrued salaries and payroll 2,681 $ 1,590

Accrued restructuring charges 1,333 —

Accrued bonus 64 3,081

Accrued professional fees 2,504 1,814

Advanced customer payments — 1,571

Accrued contract manufacturing 2,597 4,315

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In August 2021, the Company exercised its option to extend the term of the Pacific Palisades Lease for an additional three-year period and entered into an amendment to the lease agreement (the “Pacific Palisades Lease Amendment”).

Pursuant to the Pacific Palisades 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 Pacific Palisades Lease.

The Company did not exercise the option to renew.

Included in the Pacific Palisades Lease Amendment were nine months of rent abatement and a rent escalation clause.

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The Company includes option to renew the lease as part of the right of use lease asset and liability when it is reasonably certain the Company will exercise the option.

In general, the Company is not reasonably certain to exercise such options.

In general, the Company is not reasonably certain to exercise such option.

License Agreements

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On April 9, 2014, the Company entered into a license agreement (as amended, the “BMS License Agreement”) with BMS for exclusive rights for certain patents and a non-exclusive license for certain technology and know-how pertaining to FYARRO.

The BMS 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 pursuant to the terms of the BMS License Agreement, including providing advance notice as specified in the agreement.

The BMS 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 advance notice as specified in the BMS License Agreement.

Under the terms of the BMS License Agreement, BMS agreed to supply the Company with licensed products of FYARRO necessary for clinical or non-clinical development.

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1 (the “Amendment”) to the BMS License Agreement related to certain intellectual property rights of BMS pertaining to the compound known as FYARRO.

Under the terms of the Amendment, the Company paid BMS $ 5.8 million representing 50 % of the previously outstanding payment obligation under the terms of the BMS License Agreement, following the effective time of the 2021 private investment in public equity financing (the"2021 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 of the 2021

PIPE Financing, or August 26, 2024 plus any accrued and unpaid interest due thereon (the “Balloon Payment”).

The Balloon Payment shall accrue interest, beginning August 26, 2021 until paid in full, at a rate equal to 4.00 % 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 BMS based on net sales of products subject to the BMS License Agreement.

Under the terms of the Amendment, the Company paid BMS $ 5.8 million representing 50 % of the previously outstanding payment obligation under the terms of the BMS License Agreement, following the effective time of the Company's 2021 private investment in public equity financing (the “2021 PIPE Financing”).

Pursuant to the terms of the Amendment, the remaining previously outstanding payment obligation of $ 5.8 million, was due on the third anniversary of the effective time of the 2021 PIPE Financing, or August 26, 2024 plus any accrued and unpaid interest due thereon (the “Balloon Payment”).

payable quarterly in arrears.

In accordance with the terms of the Amendment, the Company paid the outstanding payment obligation of $ 5.8 million by the due date.

In addition, under the Amendment the parties agreed to amend the royalty rates payable to BMS based on net sales of products subject to the BMS License Agreement.

On December 19, 2024, the Company entered into the Divestiture Agreement with KAKEN, KAKEN PHARMACEUTICAL CO., LTD, and Aadi Subsidiary.

As part of its purchase of the FYARRO Business, KAKEN acquired the rights and responsibilities under the BMS License Agreement.

Refer to Note 15 for more information on the sale of Aadi Subsidiary.

EOC License Agreement

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On June 27, 2022, the Company received written notice from EOC that EOC elected to terminate the EOC License Agreement, effective immediately, due to alleged material breaches by the Company under such agreement.

The Company disagrees with, and continues to dispute, EOC’s allegations of material breach and does not believe that EOC had a right to terminate the EOC License Agreement for material breach, and accordingly believes that the termination of the EOC License Agreement is a termination for convenience.

EOC had the right to terminate the agreement for convenience upon 120 days advance written notice.

The Company waived such notice period in connection with EOC's termination notice and, as a result, the EOC License Agreement was terminated effective June 27, 2022.

Either party had the right to terminate the EOC License Agreement in the event that the other party breached the agreement and failed to cure the breach, became insolvent or challenged certain of the intellectual property rights licensed under the agreement.

The Company disputed EOC’s allegations of material breach.

On September 26, 2024, the arbitration panel issued a Final Award which, among other things, found and concluded that the Company did not breach the EOC License Agreement and accordingly it is not liable for any damages to EOC .

Stockholders' Equity

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As of December 31, 2024 , no shares of common stock had been sold pursuant to the Sales Agreement.

On September 22, 2022, the Company entered into a securities purchase agreement (the "Purchase Agreement") for a private investment in public equity financing (the "2022 PIPE Financing") with certain investors (the "2022 PIPE Investors") for the sale by the Company of (i) 3,373,526 shares of the Company’s common stock for a price of $ 12.50 per share and (ii) pre-funded warrants to purchase an aggregate of 2,426,493 shares of the Company's common stock (the "Pre-Funded Warrants") at a purchase price of $ 12.4999 per Pre-Funded Warrant.

Investors") for the sale by the Company of (i) 3,373,526 shares of the Company’s common stock for a price of $ 12.50 per share and (ii) pre-funded warrants to purchase an aggregate of 2,426,493 shares of the Company's common stock (the "Pre-Funded Warrants") at a purchase price of $ 12.4999 per Pre-Funded Warrant.

The Pre-Funded Warrants are exercisable at an exercise price of $ 0.0001 and will be exercisable until exercised in full.

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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).

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 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:

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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).

See Note 16 for information to the amendment and restatement of the 2021 Plan.

2023 Inducement Equity Incentive Plan

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The only persons eligible to receive awards under the Inducement Plan are individuals who are new employees and satisfy the standards for inducement grants under applicable Nasdaq listing rules.

As of December 31, 2023, zero , 256,456 , 99,025 , 3,766,736 , and 490,000 shares were outstanding under the 2011 Plan, Private Aadi Plan, 2017 Plan, 2021 Plan, and 2023 Inducement Plan, respectively.

As of December 31, 2024, 193,452 , 15,036 , 4,508,018 , and 490,000 shares were outstanding under the Private Aadi Plan, 2017 Plan, 2021 Plan, and 2023 Inducement Plan, respectively.

As of December 31, 2024, no shares were outstanding under the 2011 Plan.

The following table summarizes the stock option activity during the year ended December 31, 2024:

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Exercised — —

Expired/cancelled ( 651,540 ) 19.98

Cancelled/Forfeited ( 1,091,446 ) 11.82

Expired ( 61,104 ) 16.96

Outstanding as of December 31, 2024 4,950,016 $ 10.82 7.99 $ 1,818

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As of December 31, 2024, there was $ 9.9 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 1.8 years.

The total intrinsic value of the options exercised during the years ended December 31, 2023 and 2022 was $ 0.2 million and $ 1.3 million, respectively.

As of December 31, 2023, 657,734 shares were reserved for issuance under the 2021 Plan.

As of December 31, 2023, 110,000 shares were reserved for issuance under the 2023 Inducement Plan.

No options were exercised during the year ended December 31, 2024.

The total intrinsic value of the options exercised during the year ended December 31, 2023 was $ 0.2 million.

As of December 31, 2024, 1,013,055 shares were reserved for issuance for new awards under the 2021 Plan.

As of December 31, 2024, 110,000 shares were reserved for issuance for new awards under the 2023 Inducement Plan.

Restricted Stock Units

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The value of an RSU award is based on the Company’s stock price on the date of grant.

Employee grants vest over one year .

Forfeitures of

RSUs are recognized as they occur.

Employee grants vest over four years .

Forfeitures of RSUs are recognized as they occur.

The shares underlying the RSU awards are not issued until the RSUs vest.

Upon vesting, each RSU converts into one share of the Company’s common stock.

The total fair value of RSUs that vested was $ 0.1 million for 2024.

No RSUs vested in 2023.

Activity with respect to the Company’s restricted stock units during the year ended December 31, 2024 is as follows:

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Grant Date Fair Value

Nonvested shares at January 1, 2023 — $ —

Nonvested shares at December 31, 2023 32,558 $ 4.30

Granted 308,700 1.92

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Nonvested shares at December 31, 2024 256,490 $ 1.92

As of December 31, 2023, there was $ 0.1 million of unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted average period of nine months .

As of December 31, 2024, there was $ 0.4 million of unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted average period of 3.2 years.

Compensation Expense Summary

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Treasury yield curve for instruments in effect at the time of measurement with a term commensurate with the expected term assumption.

Expected Volatility – Due to the Company’s limited historical stock price volatility data, the Company based its estimate of expected volatility on the estimated and expected volatilities of a guideline group of publicly traded companies.

Expected Volatility – The Company based its estimate of expected volatility on a weighted average using the Company's limited historical stock price volatility data, supplemented with the estimated and expected volatilities of a guideline group of publicly traded companies.

For these analyses, the Company selected companies with comparable characteristics including enterprise value, risk profiles, and with historical share price information sufficient to meet the expected life of the share-based awards.

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Expected Dividend – The expected dividend yield is assumed to be zero because the Company has never paid dividends and does not have current plans to pay any dividends on its common stock.

Expected Term – The Company estimates the expected term of its stock options granted to employees and non-employee directors using the simplified method, whereby, the expected term equals the average of the vesting term and the original

contractual term of the option.

The Company utilizes this method since it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

Merger Warrants to Purchase Common Stock

The Company had warrants outstanding for the purchase of 29,167 shares of the Company’s common stock at December 31, 2023 and 2022.

The Company had warrants outstanding for the purchase of 29,167 shares of the Company’s common stock at December 31, 2023, such warrants, however, expired on October 24, 2024.

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 a ratio of 15:1 effected on August 26, 2021 immediately prior to the closing of the merger (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.

No warrants were exercised during the year ended December 31, 2023.

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.

These warrants were fully vested as of the date of the Merger.

No warrants were exercised during the year ended December 31, 2024.

Employee Stock Purchase Plan

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An aggregate of 519,563 shares of common stock was initially reserved for issuance under the 2021 ESPP.

The number of shares of common stock available for issuance under the 2021 ESPP is 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, (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 of directors or its designated committee no later than the last day of the immediately preceding fiscal year.

• 310,617 shares of common stock;

• one percent ( 1 %) of the outstanding shares of all classes of common stock on the last day of the immediately preceding fiscal year;

• an amount to be determined by the board of directors or its designated committee no later than the last day of the immediately preceding fiscal year.

As a result of the increase, a total of 246,807 shares of common stock were added to the 2021 ESPP on January 1, 2025 .

On January 1, 2024, 245,542 shares of common stock were added to the 2021 ESPP.

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As of December 31, 2024 and 2023, 810,743 and 659,146 shares of common stock were available for issuance under the 2021 ESPP, respectively.

The Company had an outstanding liability of $ 0.1 million and $ 76,000 at December 31, 2023 and 2022, respectively, which will be recognized over six months .

The Company had an outstanding liability of $ 37,000 and $ 0.1 million at December 31, 2024 and 2023, respectively, which will be recognized over six months .

During the years ended December 31, 2024 and 2023 , 93,945 and 77,565 shares were issued under the 2021 ESPP, respectively.

The Company recorded no income tax expense for the years ended December 31, 2023 and 2022.

Employee Retirement Plan

The Company maintains a 401(k) plan (the “401k Plan”) created in 2015 for the benefit of its employees.

All employees who have attained the age of 21 are eligible to participate in the 401k Plan as of the first entry date, as defined by the 401k Plan document, following the employment date.

Each employee can contribute a percentage of compensation up to a maximum of the statutory limits per year.

Company contributions are discretionary.

Contributions of $ 0.6 million and $ 0.7 million were made during the years ended December 31, 2024 and 2023.

The Company recorded no income tax expense or benefit for the years ended December 31, 2024 and 2023.

The Company continues to maintain a full valuation allowance.

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Change in tax rate 0.2 1.3

Investment in subsidiary 53.6 —

Officers compensation ( 2.1 ) ( 0.7 )

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Effective tax rate — % — %

Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

Significant compo nents of the Company’s deferred tax assets and liabilities are as follows (in thousands):

As of December 31,

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Section 174 capitalized research expense 20,061 14,153

Investment in subsidiary 34,112 —

Other 7,135 6,131

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Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized in future periods.

The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income and has determined it is more likely than not that the assets will not be realized.

As a result, the Company has concluded that a full valuation allowance against its deferred tax asset is necessary at this time.

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Of the amount of federal and state NOL carryforwards, $ 162.8 million and $ 30.9 million, respectively, can be carried forward indefinitely.

The remaining federal and state NOL carryforwards begin to expire in 2030 and 2037 , unless previously utilized.

The Company also has federal and state research credit carryforwards of approximately $ 9.1 million and $ 3.1 million, respectively, unless previously utilized.

The remaining federal and state NOL carryforwards begin to expire in 2030 and 2037 , respectively, unless previously utilized.

The Company also has federal and state research credit carryforwards of approximately $ 12.1 million and $ 4.0 million, respectively, as of December 31, 2024.

The federal and New Jersey research credit carryforwards will begin to expire in 2037 and 2027, respectively, unless previously utilized.

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Future ownership changes occurring subsequent to December 31, 2023 may cause NOL and R&D credit carryforwards to expire unused and, if so, such tax attributes will be removed from the deferred tax asset table above.

During the year ended December 31, 2024, the Company recorded a deferred tax asset of $ 34.1 million for the excess of its tax over financial reporting basis in its subsidiary as the Company has assessed that it is probable the excess tax basis related to this investment will reverse within the next twelve months.

Uncertain tax positions are evaluated based upon the facts and circumstances that exist at each reporting period.

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Balance at the beginning of year $ 4,597 $ 3,380

Decrease related to prior year positions 235 2

Increase related to prior year positions 71 235

Increase related to current year positions 703 982

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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.

On June 27, 2022, EOC filed a Request for Arbitration with the International Chamber of Commerce’s International Court of Arbitration against the Company.

In the Request for Arbitration, EOC claims that the Company breached certain provisions of the EOC License Agreement, including failing to provide certain manufacturing information to EOC.

As a result, EOC is seeking monetary damages.

The arbitration process is ongoing.

The Company intends to defend itself vigorously in this matter and pursue all relief to which the Company is entitled.

The Company is unable to estimate the possible loss or range of loss.

No amounts have been accrued as of December 31, 2023.

See Note 8 to these audited financial statements for more information about the EOC License Agreement and its termination.

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 December 31, 2024, the Company was not a party to any material legal proceedings and is not aware of any other proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition or results of operations.

Purchase Commitments

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The Company recorded accrued expenses of $ 3.6 million and $ 5.7 million for expenditures incurred by clinical and contract manufacturing vendors as of December 31, 2024 and 2023, respectively.

At December 31, 2023 the Company was party to a Negotiated Purchase Order Terms and Conditions for Clinical and Commercial Product, as amended effective as of August 1, 2022 (the "Fresenius Agreement"), with Fresenius Kabi that contains specific activities including non-cancellable commitments, minimum purchase commitments, and binding annual

At December 31, 2024 the Company was party to a Negotiated Purchase Order Terms and Conditions for Clinical and Commercial Product, as amended effective as of August 1, 2022, March 31, 2024, and July 31, 2024 (the "Fresenius Agreement"), with Fresenius Kabi that contains specific activities including non-cancellable commitments, minimum purchase commitments, and binding annual forecasts.

As of December 31, 2024, there were non-cancellable purchase commitments under the Fresenius Agreement related to the purchase of inventory for $ 2.7 million to be paid in 2025.

On December 19, 2024, the Company entered into the Divestiture Agreement) with KAKEN, KAKEN PHARMACEUTICAL CO., LTD, and Aadi Subsidiary.

As part of its purchase of the FYARRO Business, KAKEN acquired the rights and responsibilities under the BMS License Agreement.

Refer to Note 15 for more information on the sale of Aadi Subsidiary.

Mirati Collaboration

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(“Mirati”) to evaluate the combination of Mirati’s adagrasib, a KRAS G12C selective inhibitor, and FYARRO in KRAS G12C mutant non-small cell lung cancer (NSCLC) and other solid tumors.

Under the terms of the agreement, Mirati will be responsible for sponsoring and operating the Phase 1/2 study and the Company will supply study drug and jointly share the cost of the study.

The primary objective of this multi-center, single-arm, open-label Phase 1/2 trial is to determine the optimal dose and recommended Phase 2 dose for the combination of adagrasib and FYARRO in patients with KRAS G12C mutant solid tumors.

In addition, the study will investigate the safety, tolerability and efficacy of adagrasib and FYARRO in combination in patients both with and without prior exposure to a KRAS G12C inhibitor.

The trial will build on preclinical data showing enhanced anti-tumor efficacy with the combination of adagrasib and FYARRO relative to either agent alone.

In May 2024, the Company announced the mutually agreed upon termination of the collaboration and supply agreement with Mirati and the discontinuation of the Phase 1/2 study.

Under the terms of the agreement, Mirati was responsible for sponsoring and operating the Phase 1/2 study and the Company supplied study drug and jointly shared the cost of the study, which will continue during the winding down process.

For the year ended December 31, 2024, the Company incurred $ 1.1 million in expenses related to the Mirati collaboration.

For the year ended December 31, 2022, no expense was incurred related to the Mirati collaboration.

Employee Retirement Plan

The Company maintains a 401(k) plan (the “401k Plan”) created in 2015 for the benefit of its employees.

All employees who have attained the age of 21 are eligible to participate in the 401k Plan as of the first entry date, as defined by the 401k Plan document, following the employment date.

Each employee can contribute a percentage of compensation up to a maximum of the statutory limits per year.

Company contributions are discretionary.

Contributions of $ 0.7 million and $ 0.5 million were made during the years ended December 31, 2023 and 2022.

For the year ended December 31, 2023, the Company incurred $ 0.9 million in expenses related to the Mirati collaboration.

WuXi Biologics License Agreement

On December 19, 2024, the Company entered into an Intellectual Property License Agreement (the “License Agreement”) with WuXi Biologics (Shanghai FX) Co., Ltd.

(“WuXi Biologics”) for exclusive rights to certain patents and know-how pertaining to WuXi Biologics’ preclinical antibody drug conjugate programs leveraging Hangzhou DAC Biotechnology Co., Ltd.’s (“Hangzhou DAC”) linker-payload technology targeting each of Mucin-16 (“MUC16”), Protein Tyrosine Kinase 7 (“PTK7”) and Seizure Related 6 Homolog (“SEZ6”) (each an “ADC Therapy,” and collectively, the “ADC Therapies”).

Under the License Agreement, the Company paid WuXi Biologics a non-refundable, partial upfront payment of $ 6.0 million on December 20, 2024.

An additional non-refundable, upfront payment of $ 38.0 million is due within one-hundred twenty ( 120 ) days after the effective date of the License Agreement for the rights and licenses granted to the Company by WuXi Biologics.

In accordance with the License Agreement, WuXi Biologics is eligible to receive from the Company (a) up to an aggregate of $ 265.0 million upon the achievement of certain development milestones, and (b) up to an aggregate of $ 540.0 million upon the achievement of certain commercial milestones, across all ADC Therapies.

WuXi Biologics is also entitled to running royalties during the agreed upon royalty term ranging from low-single-digit to upper-single-digit percentages of annual net sales of licensed products in the territory.

Restructuring

On August 21, 2024, the Company announced a restructuring plan to reduce the Company’s workforce by approximately 32 % in response to the Company's announcement on August 20, 2024 that it planned to halt the registration-intended PRECISION1 trial of nab-sirolimus in patients with solid tumors harboring TSC1 or TSC2 inactivating alterations.

The Company recorded a total restructuring charge of $ 2.6 million, which consists of one-time termination benefits such as severance costs and related benefits.

For the year ended December 31, 2024, the Company made cash payments related to the restructuring of $ 1.1 million.

As of December 31, 2024, the $ 1.5 million of one-time termination benefits remain payable and are recorded within the accrued liabilities and other liabilities line items on the Company's balance sheet.

Restructuring payments commenced in September 2024 and will extend through March 2026.

Segment Information

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, applying technology to efficiently deliver improved therapies for people living with difficult-to-treat cancer, as well as research, clinical, and commercial pharmaceutical development.

The CODM assesses performance for the Company's single operating segment and decides how to allocate resources primarily based on research and development expenses incurred, which is a component of the Company's consolidated net loss as reported on the consolidated statement of operations and comprehensive loss.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

Further, segment depreciation expense and segment asset additions are consistent with consolidated amounts reported within the consolidated statement of cash flows given the Company's operations are aggregated within a single reportable segment.

The Company's revenues are derived by FYARRO.

All the assets and operations of the Company’s sole operating and reportable segment are located in the United States.

Significant segment expenses which are regularly reported to the CODM for purposes of making decisions regarding the allocation of resources are included within the table below and are reconciled to consolidated net loss (in thousands):

Year Ended December 31,

Product sales, net $ 25,983 $ 24,354

FYARRO - research and development expenses 34,338 39,693

FYARRO - contract manufacturing expenses 10,692 9,236

In process research and development expenses 6,000 —

FYARRO - commercial and marketing expenses 2,130 7,881

Finance and accounting expenses (1) 11,758 12,216

Legal expenses 7,437 8,709

Other segment items (2) 21,244 18,784

Interest income ( 3,925 ) ( 6,400 )

Net loss $ ( 63,691 ) $ ( 65,765 )

(1) Finance and accounting expenses primarily include shared-based compensation, insurance, salaries and wages, and other outside consulting services.

(2) Other segment items primarily include other SGA departmental expenses, cost of sales, restructure costs, interest expense, and foreign exchange loss.

Subsequent Events

Divestiture of FYARRO

On December 19, 2024, the Company entered into the Divestiture Agreement with KAKEN, KAKEN PHARMACEUTICAL CO., LTD, and Aadi Subsidiary for the sale to KAKEN of 100 % of the outstanding shares of capital stock of Aadi Subsidiary and thereby all of Whitehawk’s assets related to its FYARRO (sirolimus protein-bound particles for injectable suspension) (albumin-bound) program.

Per the terms and subject to the conditions of the Divestiture Agreement, KAKEN paid to the Company a cash payment of $ 102.4 million (following applicable purchase price adjustments under the Divestiture Agreement) at the closing of the FYARRO Divestiture on March 25, 2025.

PIPE Financing

On December 19, 2024, the Company entered into the Subscription Agreement with PIPE Investors, pursuant to which the Company agreed to sell to the PIPE Investors (i) 21,592,000 shares of the Company’s common stock, par value $ 0.0001 per share, at a purchase price of $ 2.40 per share, and (ii) 20,076,500 Pre-Funded Warrants, at a purchase price of $ 2.3999 per Pre-Funded Warrant, for aggregate gross proceeds of $ 100.0 million.

The PIPE financing closed on March 4, 2025.

Amendment and Restatement of the Company's 2021 Equity Incentive Plan

On February 28, 2025 the Company’s stockholders approved the amendment and restatement of the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) to (i) increase the number of shares available for future grant under the 2021 Plan from 2,000,284 shares to 8,300,284 shares and (ii) increase the 2021 Plan’s default annual automatic share reserve increase occurring on January 1 of each year from 4 % of outstanding shares on the last day of the immediately preceding fiscal year to 5 %.

Upon stockholder approval, such amendment and restatement of the 2021 Plan became effective.

See Note 9 for additional information on the 2021 Plan.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data