AVENUE THERAPEUTICS, INC.

Previous wording

Our net loss for the three months ended March 31, 2025 and 2024 was approximately $1.9 million and $4.3 million, respectively. As of March 31, 2025, we had an accumulated deficit of approximately $104.4 million. Substantially all our net losses resulted from costs incurred for research and development, and general and administrative purposes.

Current wording

Our net loss for the six months ended June 30, 2025 and 2024 was approximately $1.5 million and $7.1 million, respectively. As of June 30, 2025, we had an accumulated deficit of approximately $104.1 million. Substantially all our net losses resulted from costs incurred for research and development, and general and administrative purposes.

Previous wording

On March 17, 2025, The Nasdaq Stock Market LLC (“Nasdaq”) notified us that the Nasdaq Hearings Panel (the “Panel”) had determined to delist our common stock due to a violation of Nasdaq Listing Rule 5550(b)(1), which requires companies listed on The Nasdaq Capital Market to maintain stockholders’ equity of at least $2,500,000. As a result, trading of our common stock was suspended from Nasdaq at the open of trading on March 19, 2025, with formal delisting to occur upon Nasdaq's expected filing of a Form 25 with the SEC.

Current wording

On March 17, 2025, The Nasdaq Stock Market LLC (“Nasdaq”) notified us that the Nasdaq Hearings Panel (the “Panel”) had determined to delist our common stock due to a violation of Nasdaq Listing Rule 5550(b)(1), which requires companies listed on The Nasdaq Capital Market to maintain stockholders’ equity of at least $2,500,000. As a result, trading of our common stock was suspended from Nasdaq at the open of trading on March 19, 2025. On July 18, 2025, we were formally delisted when Nasdaq filed Form 25 with the United States Securities and Exchange Commission (the “SEC”). As a result, the common stock of the Company ceased to be registered pursuant to Section 12(b) of the Securities Act and was immediately be deemed registered pursuant to Section 12(g) of the Securities Act.

Previous wording

Our common stock began trading under its current trading symbol (“ATXI”) on the OTC Markets system effective upon the open of the markets on March 19, 2025. We plan to continue to file our required periodic reports and other filings with the SEC. We can provide no assurance that our common stock will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our common stock on this market, or whether the trading volume of our common stock will be sufficient to provide for an efficient trading market for existing and potential holders of our common stock.

Current wording

Our common stock began trading under its current trading symbol (“ATXI”) on the OTCID within the OTC Markets system effective upon the open of the markets on March 19, 2025. We plan to continue to file our required periodic reports and other filings with the SEC. We can provide no assurance that our common stock will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our common stock on this market, or whether the trading volume of our common stock will be sufficient to provide for an efficient trading market for existing and potential holders of our common stock.

Previous wording

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation. We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that involve a significant level of estimation uncertainty and affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation. We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

For a discussion of our critical accounting estimates, see the Management’s Discussion and Analysis of the Results of Operations in the Company’s Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission (“SEC”) on March 31, 2025 (the “2024 Form 10-K”). There were no material changes in our critical accounting estimates or accounting policies from December 31, 2024.

Current wording

For a discussion of our critical accounting estimates, see the Management’s Discussion and Analysis of the Results of Operations in the Company’s Annual Report on Form 10-K, which was filed with the SEC on March 31, 2025 (the “2024 Form 10-K”). There were no material changes in our critical accounting estimates or accounting policies from December 31, 2024.

Previous wording

At March 31, 2025, we had an accumulated deficit of $104.4 million. While we may in the future generate revenue from a variety of sources, including license fees, milestone payments, research and development payments in connection with strategic partnerships and/or product sales, our product candidates are still in development and may never be successfully developed or commercialized. Accordingly, we expect to continue to incur substantial losses from operations for the foreseeable future, and there can be no assurance that we will ever generate significant revenues.

Current wording

At June 30, 2025, we had an accumulated deficit of $104.1 million. While we may in the future generate revenue from a variety of sources, including license fees, milestone payments, research and development payments in connection with strategic partnerships and/or product sales, our product candidates are still in development and may never be successfully developed or commercialized. Accordingly, we expect to continue to incur substantial losses from operations for the foreseeable future, and there can be no assurance that we will ever generate significant revenues.

Previous wording

Research and development expenses primarily consist of personnel-related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for license and milestone costs related to in-licensed products and technology, payments made to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of acquiring and manufacturing clinical trial materials, costs associated with pre-commercialization validation manufacturing, costs associated with regulatory filings, laboratory costs and other supplies.

Current wording

Research and development expenses primarily consist of personnel-related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for license and milestone costs related to in-licensed products and technology, payments made to third party contract research organizations (“CROs”) for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of acquiring and manufacturing clinical trial materials, costs associated with pre-commercialization validation manufacturing, costs associated with regulatory filings, laboratory costs and other supplies.

Previous wording

For the three months ended March 31, 2025 and 2024, research and development expenses were $0.4 million and $2.4 million, respectively. The decrease of $2.0 million was associated with a $1.9 million decrease in pre-clinical and clinical development costs for AJ201, prior to its sale to AnnJi, and $0.1 million in IV tramadol supply costs.

Current wording

For the three months ended June 30, 2025 and 2024, research and development expenses were $0.2 million and $1.4 million, respectively. The decrease of $1.2 million was associated with a $1.1 million decrease in pre-clinical and clinical development costs for AJ201, prior to its sale to AnnJi, and a $0.1 million decrease in personnel-related costs, including salaries, benefits, and stock-based compensation.

Previous wording

General and administrative expenses consist principally of professional fees for legal and consulting services, market research, personnel-related costs, public reporting company related costs and other general operating expenses not otherwise included in research and development expenses. We expect our general and administrative costs to continue as we seek potential regulatory approval and commercialization of our product candidates and explore strategic alternatives for our Baergic subsidiary.

Current wording

General and administrative expenses consist principally of professional fees for legal and consulting services, market research, personnel-related costs, public reporting company related costs and other general operating expenses not otherwise included in research and development expenses. We expect our general and administrative costs to continue as we seek potential regulatory approval and commercialization of our product candidate and explore strategic alternatives for our Baergic subsidiary.

Previous wording

For the three months ended March 31, 2025 and 2024, general and administrative expenses were $1.5 million and $1.3 million, respectively. The increase of $0.2 million is related to an increase of $0.4 million in legal expenses, partially offset by a decrease of $0.1 million in personnel-related costs, including salaries, benefits, and stock-based compensation and $0.1 million in professional fees.

Current wording

For the three months ended June 30, 2025 and 2024, general and administrative expenses were $0.9 million and $1.5 million, respectively. The decrease of $0.6 million is related to a decrease of $0.3 million in legal expenses, a $0.2 million decrease in stock issuance to Fortress, and a $0.1 million decrease in professional fees, partially offset by an increase of $0.1 million in personnel-related costs, including salaries, severance, and benefits.

Previous wording

The loss on common stock warrant liabilities was $0 and $0.6 million for the three months ended March 31, 2025 and 2024, respectively. The January 2024 Series A Warrants and January 2024 Series B Warrants had a fair value of $0.6 million allocated to the January 2023 Warrants at the time of issuance as a cost of inducement, which was recorded as a loss on settlement of common stock warrant liabilities.

Current wording

The loss on common stock warrant liabilities was nil and $0.2 million for the three months ended June 30, 2025 and 2024, respectively. The May 2024 Warrants had a fair value of $0.2 million allocated to the October 2022 Warrants at the time of issuance as a cost of inducement, which was recorded as a loss on settlement of common stock warrant liabilities in the quarter ended June 30, 2024.

Previous wording

The change in fair value of warrant liabilities was a gain of $15 thousand and a loss of $0.1 million for the three months ended March 31, 2025 and 2024, respectively. Warrants to purchase common stock that are required to be classified as a liability are valued at fair market value at each reporting period. The change in the fair value of warrant liabilities was primarily due to the modification of the exercise price as part of a warrant inducement, the exercise of warrants classified as liabilities, and fluctuation in our stock price.

Current wording

The change in fair value of warrant liabilities was a gain of approximately $16,000 and a loss of $0.1 million for the six months ended June 30, 2025 and 2024, respectively. Warrants to purchase common stock that are required to be classified as a liability are valued at fair market value at each reporting period. The change in the fair value of warrant liabilities was primarily due to the modification of the exercise price as part of a warrant inducement, the exercise of warrants classified as liabilities, and fluctuation in our stock price.

Previous wording

At March 31, 2025, we had $3.5 million in cash and cash equivalents. To date, we have funded our operations primarily with proceeds from various public and private offerings of our common stock. We expect that our expenses will continue for the foreseeable future as we continue to advance our candidates through clinical development and ultimately regulatory approval, and seek opportunities to license or acquire additional products. We will require additional financing to carry out our business plan and implement our strategy, and continue to analyze various alternatives, including potentially obtaining lines of credit, debt or equity financings. We cannot be sure that any additional funding, if needed, will be available on terms favorable to us or at all. If we obtain funding through a strategic collaboration or licensing arrangement, we may be required to relinquish our rights to our product candidates or marketing territories. Without additional capital, we do not expect our cash will be sufficient to fund our projected operating requirements or allow us to fund our operating plan for more than 12 months from the date of issuance of the accompanying unaudited condensed consolidated financial statements. We regularly evaluate market conditions, our liquidity profile, and various financing alternatives for opportunities to enhance our capital structure.

Current wording

At June 30, 2025, we had $3.3 million in cash and cash equivalents. To date, we have funded our operations primarily with proceeds from various public and private offerings of our common stock. We expect that our expenses will continue for the foreseeable future as we continue to advance our candidates through clinical development and ultimately regulatory approval, and seek opportunities to license or acquire additional products. We will require additional financing to carry out our business plan and implement our strategy, and continue to analyze various alternatives, including potentially obtaining lines of credit, debt or equity financings. We cannot be sure that any additional funding, if needed, will be available on terms favorable to us or at all. Our common stock was suspended from trading on the Nasdaq Capital Market on March 17, 2025 and subsequently has been formally delisted as of July 18, 2025. Since March 18, 2025, our common stock has been quoted on the over-the-counter market (OTCID) under the symbol “ATXI”. The delisting may make it more difficult for us to obtain additional funding. For example, we are no longer eligible to use our shelf registration statement on Form S-3, which means we cannot access our ATM facility under the At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co. LLC dated May 10, 2024. If we obtain funding through a strategic collaboration or licensing arrangement, we may be required to relinquish our rights to our product candidates or marketing territories. Without additional capital, we do not expect our cash will be sufficient to fund our projected operating requirements or allow us to fund our operating plan for more than 12 months from the date of issuance of the accompanying unaudited condensed consolidated financial statements. We regularly evaluate market conditions, our liquidity profile, and various financing alternatives for opportunities to enhance our capital structure.

Previous wording

Cash Flows for the Three Months Ended March 31, 2025 and 2024

Current wording

Cash Flows for the Six Months Ended June 30, 2025 and 2024

Previous wording

Net cash and cash equivalents used in operating activities was $1.2 million for the three months ended March 31, 2025, primarily comprised of our $1.9 million net loss, partially offset by $0.2 million in share-based compensation, $0.1 million for common shares issued to Fortress and an increase of $0.4 million in operating assets and liabilities.

Current wording

Net cash and cash equivalents used in operating activities was $1.4 million for the six months ended June 30, 2025, primarily comprised of our $1.5 million net loss and an increase of $0.8 million in receivables from AnnJi, partially offset by a decrease of $0.5 million in operating assets and liabilities and $0.4 million in share-based compensation.

Previous wording

Net cash and cash equivalents used in operating activities was $3.1 million for the three months ended March 31, 2024, primarily comprised of our $4.3 million net loss and $0.4 million reduction in common share issuable to Fortress, partially offset by a $0.6 million loss on settlement of common stock warrant liabilities, an increase of $0.3 million in operating assets and liabilities, $0.4 million for shares issued to Fortress, $0.1 million change in fair value of warrant liabilities and $0.2 million in share-based compensation.

Current wording

Net cash and cash equivalents used in operating activities was $5.4 million for the six months ended June 30, 2024, primarily comprised of our $7.1 million net loss, $0.4 million reduction in common shares issuable to Fortress and $0.1 million change in fair value of warrant liabilities, partially offset by a $0.8 million loss on settlement of common stock warrant liabilities, an increase of $0.5 million in operating assets and liabilities, $0.5 million for common shares issued to Fortress and $0.4 million in share-based compensation.

Previous wording

Net cash and cash equivalents provided by financing activities was $2.1 million for the three months ended March 31, 2025, primarily due to $2.1 million in net proceeds received from the sale of common stock pursuant to the At the Market Offering Agreement.

Current wording

Net cash and cash equivalents provided by financing activities was $2.1 million for the six months ended June 30, 2025, primarily due to $2.1 million in net proceeds received from the sale of common stock pursuant to the ATM Agreement.

Previous wording

Net cash and cash equivalents provided by financing activities was $4.5 million for the three months ended March 31, 2024, primarily comprised of $4.5 million in net proceeds from the January 2024 Warrant Inducement.

Current wording

Net cash and cash equivalents provided by financing activities was $8.5 million for the six months ended June 30, 2024, primarily due to $8.2 million in net proceeds from the May 2024 Warrant Inducement and $0.3 million in net proceeds received from the sale of common stock pursuant to the ATM Agreement.

Previous wording

We entered into a share repurchase agreement with InvaGen, which requires us to pay InvaGen seven and a half (7.5%) of the proceeds of future financings, as defined in the agreement, up to $4 million in aggregate. For the three months ended March 31, 2025 and 2024, we have paid $0.2 million and $0.3 million, respectively, towards this aggregate amount. Approximately $1.4 million in aggregate has been paid to InvaGen under the Share Repurchase Agreement through the three months ended March, 31, 2025.

Current wording

We entered into a share repurchase agreement with InvaGen, which requires us to pay InvaGen seven and a half (7.5%) of the proceeds of future financings, as defined in the agreement, up to $4 million in aggregate. For the six months ended June 30, 2025 and 2024, we have paid $0.2 million and $0.6 million, respectively, towards this aggregate amount. Approximately $1.4 million in aggregate has been paid to InvaGen under the Share Repurchase Agreement as of June 30, 2025.