SCHEDULE: Acuta Capital Partners and Affiliates Disclose 7.8% Stake in Aadi Bioscience Following Private Investment

Acuta Capital Partners, along with its affiliates, has disclosed a 7.8% ownership stake in Aadi Bioscience, Inc. following a private investment and board appointment.

Summary

• Acuta Capital Partners, LLC, Acuta Capital Fund, LP, and Anupam Dalal have filed a Schedule 13D disclosing their ownership in Aadi Bioscience, Inc.
• The reporting persons collectively own 1,921,297 shares, representing 7.8% of Aadi Bioscience's outstanding common stock.
• The shares were acquired for investment purposes, with the belief that the stock was undervalued.
• Acuta Capital Fund, LP used $20,399,995.74 of its working capital to purchase common stock as part of a larger transaction.
• The total funds used by the Funds to purchase common stock was $23,999,989.95.
• The reporting persons have entered into a Subscription Agreement to purchase 1,561,000 shares at $2.40 per share, but this transaction has not yet closed.
• Anupam Dalal is a member of Aadi Bioscience's board of directors.
• The reporting persons have also entered into a Stockholder Support Agreement to vote in favor of the sale of Aadi Subsidiary, Inc. to KAKEN Investments Inc.

Sentiment

Score: 7

Explanation: The document indicates a positive investment by Acuta Capital Partners, suggesting confidence in the company's future. However, the pending nature of the Subscription Agreement and the potential for future share sales introduce some uncertainty.

Positives

• The investment by Acuta Capital Partners and its affiliates indicates confidence in Aadi Bioscience's potential.
• The acquisition of a significant stake could lead to increased shareholder value.
• The board representation by Anupam Dalal could bring valuable insights and influence to the company.

Negatives

• The Subscription Agreement for 1,561,000 shares at $2.40 per share has not yet closed, indicating potential uncertainty.
• The reporting persons have no present plan or proposal that relates to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, which could be seen as a lack of a clear strategy.

Risks

• The closing of the Subscription Agreement is subject to conditions precedent that have not been met, posing a risk to the transaction.
• The reporting persons may sell their shares at any time, which could negatively impact the stock price.
• The reporting persons may enter into hedging or derivative transactions, which could introduce volatility.

Future Outlook

The reporting persons will monitor the Issuer and may take actions regarding their holdings, including purchasing or selling shares, entering into derivative transactions, and communicating with other stakeholders. They may also recommend actions to the Issuer's management, board of directors and stockholders.

Management Comments

• The reporting persons acquired Common Stock for investment purposes based on their belief that the Common Stock, when purchased, was undervalued and represented an attractive investment opportunity.

Industry Context

This filing reflects a private investment in a biotechnology company, which is a common occurrence in the industry. The involvement of an investment firm like Acuta Capital Partners is typical for companies seeking growth capital.

Comparison to Industry Standards

• Private investments in biotech companies are common, with firms like OrbiMed Advisors and RA Capital Management frequently participating in similar transactions.
• The size of the investment, approximately $24 million, is within the typical range for private placements in small to mid-cap biotech companies.
• The acquisition of a 7.8% stake is significant and could give Acuta Capital Partners considerable influence over the company's direction, similar to other activist investors in the biotech space.
• The inclusion of a board member, Anupam Dalal, is a common practice for investors with significant stakes, mirroring the actions of other investment firms in the sector.

Stakeholder Impact

• Shareholders may see a positive impact due to the investment and potential for increased value.
• Employees may be affected by the sale of Aadi Subsidiary, Inc.
• Customers and suppliers may experience changes due to the restructuring.

Next Steps

• The closing of the PIPE Financing and the Subscription Agreement.
• The filing of a resale registration statement with the SEC.
• The special meeting of the Issuer's stockholders to vote on the Purchase Agreement.

Key Dates

Keywords

Aadi Bioscience, Acuta Capital Partners, Anupam Dalal, Schedule 13D, Investment, Common Stock, Private Placement, Board of Directors, PIPE Financing, Stockholder Support Agreement