Whitehawk Therapeutics, Inc. 10-Q

Item 1. Financial Statements. WHITEHAWK THERAPEUTICS, INC. Condensed Consolidated Balance Sheets (In thousands, except share data and par value) (Unaudited) March 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 227,569 $ 28,670 Short-term investments 3,493 18,567 Accounts receivable, net — 5,903 Inventory — 5,311 Prepaid expenses and other current assets 1,552 2,836 Total current assets 232,614 61,287 Property and equipment, net 25 6,846 Operating lease right-of-use assets — 787 Other assets 1,363 1,399 Total assets $ 234,002 $ 70,319 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 3,657 $ 2,159 Accrued liabilities 8,617 14,647 Operating lease liabilities, current portion — 268 Total current liabilities 12,274 17,074 Operating lease liabilities, net of current portion — 565 Other liabilities — 202 Total liabilities 12,274 17,841 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, 2025 and December 31, 2024 — — Common stock, $ 0.0001 par value; 300,000,000 shares authorized; 46,784,618 and 24,680,708 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively. 4 2 Additional paid-in capital 481,361 385,114 Accumulated other comprehensive income 1 16 Accumulated deficit ( 259,638 ) ( 332,654 ) Total stockholders’ equity 221,728 52,478 Total liabilities and stockholders’ equity $ 234,002 $ 70,319 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents WHITEHAWK THERAPEUTICS, INC. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (In thousands, except share data and earnings per share amounts) (Unaudited) Three Months Ended March 31, 2025 2024 Revenue Product sales, net $ 7,145 $ 5,353 Total revenue 7,145 5,353 Operating expenses Selling, general and administrative 12,815 10,620 Research and development 8,788 13,593 Cost of goods sold 760 652 Total operating expenses 22,363 24,865 Loss from operations ( 15,218 ) ( 19,512 ) Other income (expense) Gain on sale of business 87,443 — Foreign exchange loss — ( 1 ) Interest income 791 1,282 Interest expense — ( 58 ) Total other income (expense), net 88,234 1,223 Net income (loss) $ 73,016 $ ( 18,289 ) Other comprehensive income (loss): Unrealized loss on investments, net of tax ( 15 ) ( 35 ) Comprehensive income (loss) 73,001 ( 18,324 ) Net income (loss) per share: Basic $ 1.84 $ ( 0.68 ) Diluted $ 1.83 $ ( 0.68 ) Weighted average shares outstanding: Basic 39,640,826 26,980,698 Diluted 39,932,539 26,980,698 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents WHITEHAWK THERAPEUTICS, INC. Condensed Consolidated Statements of Stockholders’ Equity (In thousands, including share amounts) (Unaudited) For the Three Months Ended March 31, 2025 Stockholders' Equity Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Shares Par Value Balance at December 31, 2024 24,681 $ 2 $ 385,114 $ 16 $ ( 332,654 ) $ 52,478 Share-based compensation expense — — 1,680 — — 1,680 Issuance of common stock upon exercise of warrants 426 — — — — — Issuance of common stock upon exercise of stock options 22 — 21 — — 21 Issuance of common stock in conjunction with vesting of restricted stock units 63 — — — — — Private placement, net of transaction costs 21,592 2 94,546 — — 94,548 Unrealized loss on investments, net of tax — — — ( 15 ) — ( 15 ) Net income — — — — 73,016 73,016 Balance at March 31, 2025 46,784 $ 4 $ 481,361 $ 1 $ ( 259,638 ) $ 221,728 For the Three Months Ended March 31, 2024 Stockholders' Equity Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shares Par Value Balance at December 31, 2023 24,554 $ 2 $ 374,129 $ 27 $ ( 268,963 ) $ 105,195 Share-based compensation expense — — 3,589 — — 3,589 Unrealized loss on investments, net of tax — — — ( 35 ) — ( 35 ) Net loss — — — — ( 18,289 ) ( 18,289 ) Balance at March 31, 2024 24,554 $ 2 $ 377,718 ( 8 ) $ ( 287,252 ) $ 90,460 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents WHITEHAWK THERAPEUTICS, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income (loss) $ 73,016 $ ( 18,289 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Share-based compensation expense 1,680 3,589 Gain on sale of business ( 87,443 ) — Discount amortization on short-term investments 19 ( 422 ) Non-cash interest expense — 58 Non-cash lease expense 74 115 Depreciation expense 57 50 Changes in operating assets and liabilities: Accounts receivable ( 1,000 ) 555 Inventory 170 490 Prepaid expenses and other current assets 765 953 Other non-current assets 114 138 Operating lease liabilities ( 89 ) ( 126 ) Accounts payable and accrued liabilities 975 ( 6,764 ) Other liabilities ( 202 ) — Net cash used in operating activities ( 11,864 ) ( 19,653 ) Cash flows from investing activities: Proceeds from sale of business, net cash, cash equivalents, and restricted cash 101,356 — Purchases of property and equipment ( 551 ) ( 739 ) Purchase of short-term investments — ( 7,646 ) Maturity of short-term investments 14,693 18,940 Net cash provided by investing activities 115,498 10,555 Cash flows from financing activities: Proceeds from sale of common stock and prefunded warrants in PIPE financing 100,002 — Issuance of common stock upon exercise of stock options 21 — Payment of PIPE financing related transaction costs ( 4,822 ) — Deferred offering costs paid for financing — ( 10 ) Net cash provided by (used in) financing activities 95,201 ( 10 ) Net decrease in cash, cash equivalents and restricted cash 198,835 ( 9,108 ) Cash, cash equivalents and restricted cash at beginning of period 28,734 62,952 Cash, cash equivalents and restricted cash, end of period $ 227,569 $ 53,844 Supplemental disclosure of cash flow information: Interest paid during the period $ — $ 58 Supplemental disclosure of non-cash activities: Costs incurred in connection with Private Placement included in accounts payable $ 632 $ — Deferred transaction costs included in accounts payable and accrued liabilities $ 167 $ — Accrued property and equipment $ — $ 540 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Nature of Organization and Operations Whitehawk Therapeutics, Inc. (the "Company") 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 12 for further information on the WuXi Biologics 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 its name from "Aadi Bioscience, Inc." to "Whitehawk Therapeutics, Inc." and the Company changed its ticker symbol on the Nasdaq Capital Market to "WHWK". Merger with Aerpio Pharmaceuticals, Inc. On August 26, 2021 (the “Closing Date”), the Company 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 the Company, 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 “Reverse Merger”) until the FYARRO Divestiture. 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. Prior to the FYARRO Divestiture, the Company also realized revenues from 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. The Company had an accumulated deficit of $ 259.6 million as of March 31, 2025 and net income of $ 73.0 million and a net loss of $ 18.3 million for the three months ended March 31, 2025 and 2024, respectively. The net income recorded as of March 31, 2025 is primarily attributable to the gain on sale related to the FYARRO Divestiture. Prior to the FYARRO Divestiture, these operating losses were 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 $ 231.1 million at March 31, 2025. The Company paid $ 38.0 million, the balance of the up-front license fee, plus a 6 % VAT fee on April 16, 2025 to Wuxi Biologics for the 6 Table of Contents in-licensing of Mucin-16 (“MUC16”), Protein Tyrosine Kinase 7 (“PTK7”) and Seizure Related 6 Homolog (“SEZ6”) (each an “ADC Therapy,” and collectively, 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 issuance of these financial statements. 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 financing. The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all. 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 price of up to $ 75.0 million through Cowen as its sales agent for an at-the-marketing-offering. Any sales under the Sales Agreement may result in dilution to existing shareholders. As of March 31, 2025 , no shares of common stock had been sold under this Sales Agreement. 2. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements, and the related disclosures, have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and U.S. 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”). The financial statements noted above reflect the financial position and results of operations of the Company, including Aadi Subsidiary, Inc., for the comparative periods prior to its sale on March 25, 2025. The transaction did not meet the criteria for discontinued operations under ASC 205-20, and therefore no reclassification has been made to prior period statements. The condensed consolidated balance sheet as of March 31, 2025 excludes the assets and liabilities of Aadi Subsidiary, which were divested as of the sale date. Comparative information as of December 31, 2024 includes balances related to the divested business, such as accounts receivable, inventory, and customer concentration disclosures. The Company’s condensed consolidated financial statements are stated in U.S. dollars. See Note 14 for additional information. 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 condensed interim financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2024, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2025. Risks and Uncertainties Following the FYARRO Divestiture, the Company is a preclinical-stage biopharmaceutical company with a limited operating history and 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 Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on short-term investments. Comprehensive income (loss) has been reflected in the condensed consolidated statements of operations and comprehensive income (loss) for all periods presented. 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 consolidated condensed financial statements and accompanying notes. In the opinion of management, all adjustments that are considered necessary for fair presentation have been included. The most significant estimates in the Company’s consolidated condensed financial statements relate to gross-to-net accruals, share-based compensation expense and accrued research and development costs. Although these estimates are based on the Company’s 7 Table of Contents 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. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and cash equivalents, and available-for-sale marketable debt securities. 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. Customer Concentration For the three months ended March 31, 2025, two customers represented 37 % and 60 % of the Company’s revenue. For the three months ended March 31, 2024, two customers represented 48 % and 52 % of the Company’s revenue. Additionally, two customers accounted for 51 % and 49 % of net accounts receivable as of March 31, 2024. The Company did not have accounts receivable as of March 31, 2025. See Note 14 for further information. 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 the Morristown, New Jersey office lease described in Note 6, and is included in other assets on the condensed consolidated balance sheets as of December 31, 2024. The Company did not have restricted cash as of March 31, 2025 as the Morristown lease was assumed by KAKEN. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet (in thousands): March 31, 2025 December 31, 2024 Cash and cash equivalents $ 227,569 $ 28,670 Restricted cash, non-current — 64 Total cash, cash equivalents and restricted cash $ 227,569 $ 28,734 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 8 Table of Contents 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 equivalents, accounts payable, and accrued liabilities are reasonable estimates of their fair value because of the short maturity of these items. Short-Term Investments The Company invests in various types of securities, including United States government treasury bills, commercial paper, corporate debt securities, and government agency bonds. 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 as a separate component of stockholders' equity. Dividend and interest income are recognized when earned. The Company recognizes purchase premiums and discounts as interest income using the interest method over the terms of the securities. 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 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). There has been no allowance for expected credit losses recorded during any of the periods presented. See Note 4 for further information. Accounts Receivable, Net Accounts receivable are recorded net of customer allowances for chargebacks and allowance for credit losses. Allowance for chargebacks is based on contractual terms. The Company estimates the allowance for credit losses based on existing contractual payment terms, actual payment patterns of its customers, individual customer circumstances and credit loss. 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 $ 0.1 million, of customer allowances for chargebacks as of December 31, 2024. There were no allowances for credit losses and no receivables were written off for the periods ended March 31, 2025 and December 31, 2024. As of December 31, 2024, accounts receivable included balances associated with Aadi Subsidiary, Inc. which was sold on March 25, 2025. Accounts receivable related to Aadi Subsidiary was removed from the consolidated condensed balance sheet as of March 25, 2025. See Note 14 for more information. 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. As of December 31, 2024, inventory included balances associated with Aadi Subsidiary, Inc., which was sold on March 25, 2025. Inventory related to Aadi Subsidiary, Inc. was removed from the consolidated condensed balance sheet as of the sale date. See Note 14 for more information. Details of inventory are presented as follows (in thousands): March 31, 2025 December 31, 2024 Raw materials $ — $ 3,533 Work in process — — Finished goods — 1,778 Total $ — $ 5,311 Property and Equipment, Net 9 Table of Contents Property and equipment, consisting of computers and software, construction in process, furniture and fixtures, lab equipment, and leasehold improvements are stated at cost, less accumulated depreciation. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to five years . Such costs are periodically reviewed for recoverability when impairment indicators are present. Details of property and equipment are presented as follows (in thousands): March 31, 2025 December 31, 2024 Computers and Software $ 341 $ 470 Construction in process — 6,590 Furniture and fixtures 36 65 Lab equipment — 51 Leasehold improvements — 133 Total $ 377 $ 7,309 Accumulated depreciation ( 352 ) ( 463 ) Property and equipment, net $ 25 $ 6,846 Depreciation expense on property, plant, and equipment amounted to $ 57,000 and $ 50,000 for the three months ended March 31, 2025 and 2024, respectively. 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 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 condensed consolidated statements of operations and comprehensive loss . 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 that 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 no t recorded any such liabilities as of March 31, 2025 and December 31, 2024 . 10 Table of Contents Revenue Recognition and Related Allowances 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 Customers (“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 (“SDs”) 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 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. 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 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 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. Revenue and allowances described above were recorded through the FYARRO divestiture date of March 25, 2025. The total amount deducted from gross product sales for the allowances described above for the three months ended March 31, 2025, and 2024, was $ 2.1 million and $ 1.1 million, respectively. 11 Table of Contents The following table sets forth the changes in the accrued revenue allowances (in thousands): As of March 31, 2025 2024 Balance at beginning of period $ 1,411 $ 1,065 Provision for current period sales 2,085 1,084 Payments ( 1,686 ) ( 1,292 ) Allowances transferred in sale of Aadi Subsidiary, Inc. ( 1,810 ) — Balance at end of period $ — $ 857 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 Research and development expenses consist of costs incurred in performing research and development activities, including salaries and benefits, materials and supplies, preclinical expenses, share-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 condensed consolidated balance sheets and within research and development expenses in the condensed consolidated statements of operations and comprehensive loss. These expenses are a significant component of the Company’s research and development expenses and require significant estimates and judgments. The Company accrues for these expenses based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. As actual expenses become known, the Company adjusts its accrued expenses. Warrants The Company determines the accounting classification of warrants it issues as either liability or equity classified by first assessing whether the warrants meet the liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“ASC 480”), then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock (“ASC 815”). If warrants do not meet liability classification under ASC 480-10, the Company assesses the requirements under ASC 815-40. In order for a warrant to be classified in stockholders’ equity, the warrant must be (a) indexed to the Company’s equity and (b) meet the conditions for equity classification in ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Equity. If a warrant does not meet the conditions for equity classification, it is carried on the consolidated balance sheet as a warrant liability measured at fair value, with subsequent changes in the fair value of the warrant recorded in the statement of operations as change in fair value of warrants in other income (expense). If a warrant meets both conditions for equity classification, the warrant is initially recorded in additional paid-in capital on the consolidated balance sheets, and the amount initially recorded is not subsequently remeasured at fair value. The Company has classified its pre-funded warrants as equity. Share-Based Compensation The Company recognizes all share-based payments to employees, including grants of employee stock options and restricted stock units in the consolidated statements of operations and comprehensive loss based on their fair values. 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. Options granted during the year have a maximum contractual term of ten years . Employee Stock Purchase Plan Stock-based compensation expense for employee stock purchases under the Company’s 2021 Employee Stock Purchase Plan (the “2021 ESPP”) is recorded at the estimated fair value of the purchase as of the plan enrollment date and is recognized as an expense on a straight-line basis over the applicable six-month 2021 ESPP offering period. 12 Table of Contents 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 Income (Loss) per Share Basic net income (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. Basic and diluted weighted average shares of common stock outstanding for the three months ended March 31, 2025, includes the weighted average effect of 20,076,500 and 2,426,493 Pre-Funded Warrants, which were issued in March 2025 and September 2022, respectively, for the purchase of shares of common stock, for which the remaining unfunded exercise price is $ 0.0001 per share. See Note 8 for more information on the Pre-Funded Warrants. 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. For the three months ended March 31, 2025, options to purchase common stock totaling 3,435,449 shares, were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive. The Company incurred net losses for the three months ended March 31, 2024 and therefore did not include potentially dilutive common stock equivalents in the computation of diluted net loss per share. The computations for basic and diluted EPS were as follows (in thousands, except shares and per share amounts): Three Months Ended March 31, 2025 2024 Net income (loss) for basic and diluted EPS $ 73,016 $ ( 18,289 ) Weighted-average shares for basic EPS 39,640,826 26,980,698 Effect of dilutive stock options 192,692 — Effect of dilutive restricted stock units 99,021 — Weighted-average shares for diluted EPS 39,932,539 26,980,698 Net income (loss) per share: Basic EPS $ 1.84 $ ( 0.68 ) Diluted EPS $ 1.83 $ ( 0.68 ) Recent Accounting Pronouncements In December 2023, the FASB 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 the Company beginning in fiscal year 2025, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures. 13 Table of Contents 3. Fair Value Measurement 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 (in thousands): Fair Value Measurements as of March 31, 2025 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 227,319 $ — $ — $ 227,319 U.S. government treasury bills 1,517 — — 1,517 Corporate bonds — 1,976 — 1,976 Total financial assets $ 228,836 $ 1,976 $ — $ 230,812 Fair Value Measurements as of December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 27,485 $ — $ — $ 27,485 U.S. government treasury bills 12,562 — — 12,562 Commercial paper — 1,744 — 1,744 Corporate bonds — 4,261 — 4,261 Total financial assets $ 40,047 $ 6,005 $ — $ 46,052 (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. As of March 31, 2025, marketable securities had a contractual maturity of less than one year. 4. Short-Term Investments and Cash Equivalents The following table summarizes the Company's short-term investments (in thousands): As of March 31, 2025 Maturity (In Years) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Money market funds $ 227,319 $ — $ — $ 227,319 U.S. government treasury bills Less than 1 1,517 — — 1,517 Corporate bonds Less than 1 1,975 1 — 1,976 Total $ 230,811 $ 1 $ — $ 230,812 As of December 31, 2024 Maturity (In Years) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Money market funds $ 27,485 $ — $ — $ 27,485 U.S. government treasury bills Less than 1 12,553 9 — 12,562 Commercial paper Less than 1 1,743 1 — 1,744 Corporate bonds Less than 1 4,256 5 — 4,261 Total $ 46,037 $ 15 $ — $ 46,052 14 Table of Contents 5. Accrued Liabilities Details of accrued liabilities are presented as follows (in thousands): March 31, 2025 December 31, 2024 Accrued professional fees $ 4,952 $ 5,157 Accrued salaries and payroll 639 2,681 Accrued restructuring charges 1,134 1,333 Accrued bonus 524 64 Accrued clinical 1,252 977 Accrued contract manufacturing — 2,597 Accrued other - sales related — 1,188 Accrued other 116 650 Total accrued liabilities $ 8,617 $ 14,647 6. Operating Leases In April 2019, the Company entered into a twenty-eight month facility lease agreement for office space in Pacific Palisades, California (the “Pacific Palisades Lease”). The Pacific Palisades 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 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. Included in the Pacific Palisades Lease Amendment were nine months of rent abatement and a rent escalation clause. The Pacific Palisades Lease expired on February 28, 2025. In April 2022, the Company entered into a lease agreement for office space in Morristown, New Jersey (the “Morristown Lease”). The Morristown Lease has a term of seventy-three months , unless terminated sooner, and includes rent abatement for the first three months and the forty-seventh and forty-eighth calendar months after lease commencement. Included in the Morristown Lease are fixed rent escalations of approximately 2 % on each anniversary year of the lease term. In connection with the FYARRO Divestiture, KAKEN assumed the Morristown Lease. The Company has entered into a short-term sublease for six months with KAKEN and has elected the short-term lease exemption under ASC 842. As such, this lease is not recorded on the balance sheet. Lease payments made are recognized on a straight-line basis over the lease term in the income statement. The following table summarizes information related to the Company’s leases (in thousands): March 31, 2025 December 31, 2024 Assets: Operating lease right-of-use assets $ — $ 787 Liabilities: Operating lease liabilities, current $ — $ 268 Operating lease liabilities, non-current — 565 Total operating lease liabilities $ — $ 833 15 Table of Contents Rent expense for the three months ended March 31, 2025 and 2024 is presented on the following table (in thousands): Three Months Ended March 31, 2025 2024 Operating lease rent expense $ 74 $ 115 Cash paid for leases and included in operating cash flows for the three months ended March 31, 2025 and 2024 is presented on the following table (in thousands): Three Months Ended March 31, 2025 2024 Cash paid included in operating cash flows $ 99 $ 126 7. L icense Agreements Former Bristol-Myers Squibb Company License Agreement 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. 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. Under the terms of the BMS License Agreement, BMS is entitled to receive royalties on net sales from licensed products under the agreement and any sublicense fees. During the three months ended March 31, 2025 and 2024, royalties on net product sales were $ 0.5 million and $ 0.4 million, respectfully. No payments related to sublicense fees were paid during the three months ended March 31, 2025 or 2024. On August 30, 2021, the Company and BMS entered into Amendment No. 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 became 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 accrued 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. which was 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. As part of its purchase of the FYARRO Business, KAKEN acquired the Company's rights and responsibilities under the BMS License Agreement. 8. Stockholders’ Equity Preferred Stock As of March 31, 2025 and December 31, 2024 , 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. Common Stock and Pre-Funded Warrants As of March 31, 2025 and December 31, 2024, 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, 2025 and December 31, 2024, the shares of common stock outstanding were 46,784,618 and 24,680,708 , respectively. 16 Table of Contents In March 2022, the Company entered into a Sales Agreement (the "Sales Agreement") with Cowen and Company LLC (“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 . The Company will pay Cowen 3.0 % of the aggregate gross proceeds from each sale of shares of common stock under the Sales Agreement. As of March 31, 2025 , 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 (the "Pre-Funded Warrants") to purchase an aggregate of 2,426,493 shares of the Company's common stock 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. The holders of Pre-Funded Warrants may not exercise a Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 4.99 % of the number of shares of the Company's common stock outstanding immediately after giving effect to such exercise; provided, that the holders of Pre-Funded Warrants may increase or decrease such percentages not in excess of 19.99 % by providing at least 61 days’ prior notice to the Company. The 2022 PIPE Financing closed on September 26, 2022. Aggregate net proceeds, after deducting certain expenses incurred of $ 0.3 million related to the issuance of the shares were $ 72.2 million. On September 26, 2022, the Company and the 2022 PIPE Investors entered into a Registration Rights Agreement (the “2022 PIPE Registration Rights Agreement”) providing for the registration for resale of the securities sold under the Purchase Agreement, including the shares issuable upon the exercise of the Pre-Funded Warrants, that are not then registered on an effective registration statement, pursuant to a registration statement filed with the SEC. The Pre-Funded Warrants meet the criteria to be classified within stockholders’ equity. As of March 31, 2025, 2,000,037 Pre-Funded Warrants are still outstanding. On December 19, 2024, the Company entered into the Subscription Agreement for a private investment in public equity financing (the "2024 PIPE Financing") with certain investors (the "2024 PIPE Investors"), pursuant to which the Company agreed to sell to the 2024 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 net proceeds of $ 94.5 million, after deducting certain expenses incurred of $ 5.5 million related to the issuance of shares. The 2024 PIPE Financing was conditioned upon the Company's shareholders approving the transaction and closed on March 4, 2025 after such approval was obtained. The Pre-Funded Warrants are indexed to the Company's common stock and meet the conditions for equity classification in accordance with ASC 815-40. As such, the Pre-Funded Warrants are classified as additional paid-in capital within stockholders' equity on the Company's condensed consolidated balance sheets. The Pre-Funded Warrants are exercisable at an exercise price of $ 0.0001 per share of the Company's common stock and will be exercisable until exercised in full. The holders of Pre-Funded Warrants may not exercise a Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 4.99 % or 9.99 %, at the election of the holder, of the number of shares of the Company's common stock outstanding immediately after giving effect to such exercise. The holders of Pre-Funded Warrants may increase or decrease such percentages not in excess of 19.99 % by providing at least 61 days’ prior notice to the Company. As of March 31, 2025, all 20,076,500 Pre-Funded Warrants are still outstanding. Dividends The holders of common stock are entitled to receive cash dividends, if and when declared by the board of directors of the Company (the “board of directors”). Since the Company’s inception, no cash 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 at all meetings of stockholders for each share of common stock held by such stockholders as of the record date. 17 Table of Contents 9. Share-Based Compensation 2014 Plan (as amended and restated in February 2017, the “Private Aadi Plan”) In connection with the Reverse Merger, the Company assumed the 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 Reverse 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. 2011 Plan and 2017 Plan In connection with the closing of the Reverse 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 will be granted under the Prior Plans effective as of the closing of the Reverse Merger and the adoption of the 2021 Plan (as defined below). 2021 Plan At the closing of the Reverse Merger, the Company adopted the Aadi Bioscience, Inc. 2021 Equity Incentive Plan, which is now named the Whitehawk Therapeutics, 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 Reverse Merger (provided that the maximum number of shares that may be added to the 2021 Plan pursuant to this provision 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: • 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 of directors or its designated committee may determine. As a result of the evergreen increase, a total of 987,228 shares of common stock were added to the 2021 Plan on January 1, 2025 and 982,168 shares of common stock were added to the 2021 Plan on January 1, 2024. On February 28, 2025, the Company’s stockholders approved the amendment and restatement of 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. 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). 18 Table of Contents 2023 Inducement Equity Incentive Plan On September 27, 2023 the Company adopted the 2023 Inducement Equity Incentive Plan (the “Inducement Plan”), pursuant to which the Company may from time to time make equity grants to new employees as a material inducement to their employment. The Company reserved 600,000 shares of common stock for issuance under the Inducement Plan. 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 March 31, 2025, 161,534 , 15,036 , 4,660,249 , and 490,000 shares were outstanding under the Private Aadi Plan, 2017 Plan, 2021 Plan, and 2023 Inducement Plan, respectively. The following table summarizes the stock option activity during the three months ended March 31, 2025: Stock Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2024 4,950,016 $ 10.82 7.99 $ 1,818 Granted 687,979 2.31 Exercised ( 22,204 ) 0.95 Cancelled/Forfeited ( 288,972 ) 11.52 Outstanding as of March 31, 2025 5,326,819 $ 9.72 8.06 $ 29 Options exercisable as of March 31, 2025 2,996,934 $ 13.26 7.41 $ — Vested and expected to vest as of March 31, 2025 5,326,819 $ 9.72 8.06 $ 29 As of March 31, 2025, there was $ 8.4 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 1.92 years. The total intrinsic value of the options exercised during the three months ended March 31, 2025, and 2024, was $ 43,000 and $ 0 , respectively As of March 31, 2025, and December 31, 2024, 1,632,796 and 1,013,055 shares were reserved for future awards under the 2021 Plan, respectively. As of March 31, 2025 and December 31, 2024, 110,000 shares were reserved for future awards under the 2023 Inducement Plan. Restricted Stock Units Restricted stock consists of restricted stock unit awards (RSUs) which have been granted to employees. The value of an RSU award is based on the Company’s stock price on the date of grant. Employee grants vest over four years . Forfeitures 19 Table of Contents 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. Activity with respect to the Company’s restricted stock units during the three months ended March 31, 2025 is as follows: Shares Weighted Average Grant Date Fair Value Nonvested shares at December 31, 2024 256,490 $ 1.92 Granted — — Vested/Issued ( 63,250 ) 1.92 Forfeited ( 31,519 ) 1.92 Nonvested shares at March 31, 2025 161,721 $ 1.92 As of March 31, 2025, there was $ 0.3 million of unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted average period of 2.92 years. Compensation Expense Summary The Company recognized the following compensation cost related to employee and non-employee share-based compensation activity for the periods presented (in thousands): Three Months Ended March 31, 2025 2024 Selling, general and administrative $ 983 $ 2,342 Research and development 697 1,247 Total $ 1,680 $ 3,589 The Company uses the Black-Scholes option pricing model to determine the estimated fair value for share-based option 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. Forfeitures are recognized and accounted for as they occur. The calculation was based on the following assumptions: Three Months Ended March 31, 2025 2024 Weighted average grant date fair value (per share) $ 1.76 $ 1.43 Risk-free interest rate 4.02 % - 4.02 % 4.13 % - 4.14 % Expected volatility 89.48 % - 89.48 % 89.22 % - 91.46 % Expected term (in years) 6.1 - 6.1 5.0 - 6.1 Expected dividend yield — — The Company determines the assumptions used in the option pricing model in the following manner: Risk-Free Interest Rate – For the determination of the risk-free interest rates, the Company utilizes the U.S. Treasury yield curve for instruments in effect at the time of measurement with a term commensurate with the expected term assumption. 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. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. 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 20 Table of Contents 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. 10. Employee Stock Purchase Plan On August 17, 2021, a special meeting of the Company’s stockholders was held to approve the Reverse Merger and related matters, at which the Company's stockholders considered and approved the Company’s 2021 ESPP which permits participants to contribute up to 15 % of their eligible compensation during defined rolling six-month offering periods to purchase the Company's common stock. The purchase price of the shares will be 85 % of the lower of the fair market value of the Company's common stock on the first day of trading of the offering period or on the applicable purchase date. Upon approval of the 2021 ESPP by the stockholders, Aerpio’s Amended and Restated 2017 Employee Stock Purchase Plan terminated. 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. On January 1, 2025, 246,807 shares of common stock were added to the 2021 ESPP. 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. The Company opened enrollment into the ESPP in May 2022. The Company uses the Black-Scholes model to determine the estimated fair value for purchases under the 2021 ESPP. Black-Scholes models require the input of various assumptions, including the expected life, expected dividend yield, price volatility and risk-free interest rate of the underlying stock. The expected volatility used in calculating the estimated fair value for purchases under the 2021 ESPP is based on the historical volatility of the Company's common stock. The calculation was based on the following assumptions: Three Months Ended March 31, 2025 Strike price (per share) $ 2.11 Risk-free interest rate 4.44 % Expected volatility 55.26 % Expected term (in years) 0.5 Expected dividend yield — As of March 31, 2025, and December 31, 2024, 1,057,550 and 810,743 shares of common stock were available for issuance under the 2021 ESPP, respectively. The Company had an outstanding liability of $ 0.1 million and $ 37,000 as of March 31, 2025, and December 31, 2024 , respectively, which will be recognized over six months . No shares were issued under the 2021 ESPP during the three months ended March 31, 2025, and 2024 , respectively. 11. Income Taxes The Company recorded income tax expense of zero for the three months ended March 31, 2025 and 2024, respectively. The Company continues to maintain a full valuation allowance. 12. Commitments and Contingencies Litigation 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. 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 $ 1.3 million and $ 3.6 million for expenditures incurred by clinical and contract manufacturing vendors as of March 31, 2025, and December 31, 2024, respectively. 21 Table of Contents Mirati Collaboration In October 2022, the Company entered into a collaboration and supply agreement with Mirati Therapeutics, Inc. (“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. 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. For the three months ended March 31, 2025 and 2024, the Company incurred zero and $ 0.2 million in expenses related to the Mirati collaboration, respectively. 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 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 was 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 and was paid on April 16, 2025. The Company did not accrue the $ 38.0 million as of March 31, 2025 in accordance with the License Agreement because the Company was not obligated to pay WuXi Biologics the additional non-refundable, upfront paymen t, nor had any liability to WuXi Biologics with respect to the such payme nt, if the Company elected, in its sole discretion, not to make the additional upfront payment and continue with the License Agreement. 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 ranging from low-single-digit to upper-single-digit percentages of annual net sales of licensed products in the territory on a product-by product and region-by-region basis from the first commercial sale of the applicable licensed product in a particular region until the date which is the later of (i) expiration of the last to expire valid claim of a license patent in such region covering the sale of such licensed product in such region or (ii) ten years after the first commercial sale of such licensed product in such region. Each party may terminate the License Agreement in its entirety, or on a program-by-program basis, as applicable, if the other party remains in material breach of the License Agreement following a cure period to remedy the material breach or if the other party is declared insolvent or in similar financial distress. In addition, WuXi Biologics may terminate the License Agreement on a program-by-program basis if the Company does not meet certain development due diligence milestones. The Company may terminate the License Agreement in its entirety, or on a program-by-program basis, as applicable, with or without cause. 13. 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. As of March 31, 2025, $ 1.1 million of one-time termination benefits remain payable and are recorded within the accrued liabilities on the Company's condensed consolidated balance sheet. As of December 31, 2024, $ 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 condensed consolidated balance sheet. The Company paid $ 0.4 million of the liability during the three months ended March, 31, 2025. There were no restructuring charges for the three months ended, March 31, 2025 and 2024. Restructuring payments commenced in September 2024 and will extend through March 2026. 14. 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 the Company’s assets related to the FYARRO Business. 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. 22 Table of Contents We recorded a net gain on the sale of the divestiture of $ 87.4 million during the three months ended March 31, 2025 which has been recorded on the unaudited condensed consolidated statement of operations and comprehensive income (loss). The $ 87.4 million gain represents the aggregate consideration of $ 102.4 million, less the assets and liabilities transferred, which are listed below (in thousands): March 25, 2025 Assets Current assets: Cash and cash equivalents $ ( 1,000 ) Accounts receivable, net ( 6,903 ) Inventory ( 5,141 ) Prepaid expenses and other current assets ( 866 ) Total current assets ( 13,910 ) Property and equipment, net ( 6,836 ) Operating lease right-of-use assets ( 707 ) Other assets ( 64 ) Total assets $ ( 21,517 ) Current liabilities: Accounts payable $ ( 852 ) Accrued liabilities ( 4,951 ) Operating lease liabilities, current portion ( 201 ) Total current liabilities ( 6,004 ) Operating lease liabilities, net of current portion ( 536 ) Total liabilities ( 6,540 ) Net assets disposed of $ ( 14,977 ) The Company evaluated various qualitative and quantitative factors related to the disposition of the FYARRO Business and determined the transaction did not meet the criteria for discontinued operations under ASC 205-20, and therefore no reclassification has been made to prior period statements. 15. 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, applying advanced technologies to established tumor biology that are intended to efficiently deliver improved cancer treatments . 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 income (loss) as reported on the consolidated statement of operations and comprehensive income (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 relate to sales of FYARRO, which was divested as of March 25, 2025. 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): 23 Table of Contents Three Months Ended March 31, 2025 2024 Product sales, net $ 7,145 $ 5,353 Less: FYARRO - research and development expenses 5,313 10,271 FYARRO - contract manufacturing expenses — 3,322 ADC assets - contract manufacturing 3,475 — FYARRO - commercial and marketing expenses 294 601 Finance and accounting expenses (1) 3,216 3,692 Legal expenses 2,587 1,258 Other segment items (2) 7,478 5,780 Interest income ( 791 ) ( 1,282 ) Gain on sale of business ( 87,443 ) — Net loss $ 73,016 $ ( 18,289 ) (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, interest expense, and foreign exchange loss. 24 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q (“Quarterly Report”) contains express or implied forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report may include, but are not limited to, statements about: • our estimates regarding expenses, capital requirements, needs for additional financing and the period over which we anticipate our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements, including our belief that, based on our current plans, our existing cash, cash equivalents and short-term investments will enable us to conduct our planned operations into 2028; • our ability to obtain and maintain regulatory approval for our portfolio of three next generation antibody drug conjugates (the “ADC Therapies”) or any other product candidates we may develop in the future, and any related restrictions, limitations or warnings in the label of an approved product candidate; • the timing, progress and results of preclinical studies and clinical trials for our programs and product candidates (including our anticipated timing of submitting three investigational new drug (“IND”) applications for the ADC Therapies with the U.S. Food and Drug Administration by mid-2026) , the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs; • the anticipated timing of releasing data for current or future clinical trials; • the anticipated timing of commencement, enrollment, and completion of any current or future clinical trials for the ADC Therapies or any other product candidates we may develop; • our belief that, with the three ADC Therapies, we have the ability to pursue multiple cancer indications with high potential in large addressable patient populations, including and beyond those indications currently expected to be targeted in the upcoming Phase 1 trials; • our belief that the ADC Therapies will be able to target cancers expressing specified tumor markers precisely and deliver the potent, cytotoxic Topoisomerase I ("TOPO1") inhibitor at the site of cancer; • our view that we are positioned to unlock the high potential of the ADC Therapies due to our track record of strong execution of novel drug formulation, research, clinical development, and commercialization in oncology, combined with our deep understanding of antibody drug conjugates ("ADCs") ; • our belief that our team is well positioned to execute on our strategy to develop and, if approved, commercialize the ADC Therapies and future pipeline assets to ultimately bring broad benefit to cancer patients worldwide; • our manufacturing capabilities and strategy; • the expectations regarding the beneficial characteristics, safety, efficacy and therapeutic effects of the ADC Therapies and any other product candidates that we may develop; • the implementation of our business model and our strategic plans for our business; • our ability to contract with and rely on third parties to assist in conducting our clinical trials and manufacturing the ADC Therapies and any other product candidates we may develop in the future; • the size and growth potential of the markets for the ADC Therapies and any other product candidates we may develop, if approved, and our ability to serve those markets, either alone or in partnership with others; • our ability to obtain funding for our operations, including funding necessary to complete development, approval and, if approved, commercialization of the ADC Therapies and any other product candidates we may develop; • the potential for our business development efforts to maximize the potential value of our portfolio; • our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates; • our financial performance; and 25 Table of Contents • our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals. Forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions, and projections about the business and future financial results of the pharmaceutical industry, and other legal, regulatory and economic developments. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “intend,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” “continue,” “likely,” and similar expressions (including their use in the negative) intended to identify forward-looking statements although not all forward-looking statements contain these identifying words. Actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including, but not limited to, those described in Part II, Item 1A (Risk Factors) of this Quarterly Report. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. The forward-looking statements in this Quarterly Report represent our views as of the date of this Quarterly Report. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report. 26 Table of Contents