AVENUE THERAPEUTICS, INC.

Previous wording

Avenue Therapeutics, Inc. (“Avenue” or the “Company”) is a specialty pharmaceutical company focused on the development and commercialization of therapies for the treatment of neurologic diseases. Our product candidates include an intravenous formulation of tramadol (“IV tramadol”), a schedule IV opioid for the treatment of post-operative acute pain, and BAER-101 for the treatment of epilepsy and panic disorders. We may in the future acquire additional product candidates.

Current wording

Avenue Therapeutics, Inc. (“Avenue” or the “Company”) is a specialty pharmaceutical company focused on the development and commercialization of therapies for the treatment of neurologic diseases. Our product candidate is an intravenous formulation of tramadol (“IV tramadol”), a schedule IV opioid for the treatment of post-operative acute pain and previously, through November 5, 2025, BAER-101 for the treatment of epilepsy and panic disorders. We may in the future acquire additional product candidates.

Previous 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.

Current wording

Our net loss for the nine months ended September 30, 2025 and 2024 was approximately $2.2 million and $10.1 million, respectively. As of September 30, 2025, we had an accumulated deficit of approximately $104.8 million. Substantially all our net losses resulted from costs incurred for research and development, and general and administrative purposes.

Previous wording

Baergic is a clinical-stage pharmaceutical company founded in December 2019 that focuses on the development of pharmaceutical products for the treatment of neurologic disorders. Baergic was acquired by the Company pursuant to a stock contribution agreement (the “Contribution Agreement”) with Fortress, in order to strategically align with Avenue’s goals of building a rare and neurologic pipeline. Baergic’s pipeline currently consists of a single compound, BAER-101, a novel α2/3–subtype-selective GABA A positive allosteric modulator. BAER-101 (formerly known as AZD7325) was originally developed by AstraZeneca and has an established safety profile in early clinical trials including over 700 patients.

Current wording

The descriptions below are with respect to the former product candidate BAER-101, which we sold on November 5, 2025, as it existed during the three months ended September 30, 2025. Baergic is a clinical-stage pharmaceutical company founded in December 2019 that focuses on the development of pharmaceutical products for the treatment of neurologic disorders. Baergic was acquired by the Company pursuant to a stock contribution agreement (the “Contribution Agreement”) with Fortress, in order to strategically align with Avenue’s goals of building a rare and neurologic pipeline. Baergic’s pipeline currently consists of a single compound, BAER-101, a novel α2/3–subtype-selective GABA A positive allosteric modulator. BAER-101 (formerly known as AZD7325) was originally developed by AstraZeneca and has an established safety profile in early clinical trials including over 700 patients.

Previous 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.

Current wording

At September 30, 2025, we had an accumulated deficit of $104.8 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

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.

Current wording

For the three months ended September 30, 2025 and 2024, research and development expenses were $0.2 million and $2.3 million, respectively. The decrease of $2.1 million was associated with a $2.1 million decrease in pre-clinical and clinical development costs for AJ201, prior to its sale to AnnJi.

Previous wording

We expect our research and development activities to decrease due to no further development obligations for AJ201, however we will continue to develop and attempt to gain regulatory approval for our existing product candidates, reflecting costs associated with the following:

Current wording

We expect our research and development activities to decrease due to no further development obligations for AJ201 or BAER-101, however we will continue to develop and attempt to gain regulatory approval for our existing product candidate, reflecting costs associated with the following:

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 candidate 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.

Previous 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.

Current wording

For the three months ended September 30, 2025 and 2024, general and administrative expenses were $0.5 million and $0.8 million, respectively. The decrease of $0.3 million is related to a decrease of $0.1 million in legal expenses, a $0.1 million decrease in professional fees, and a $0.1 million decrease in personnel-related costs, including salaries, severance, benefits and stock-based compensation.

Previous 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.

Current wording

The change in fair value of warrant liabilities was a loss of approximately $2,000 and a gain of approximately $18,000 for the three months ended September 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 in 2024, the exercise of warrants classified as liabilities, and fluctuation in our stock price.

Previous wording

For the three months ended June 30, 2025, we generated $1.4 million of net revenue related to the AnnJi license termination and program transfer. No revenue was recognized for the three months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, we generated $1.4 million of net revenue related to the AnnJi license termination and program transfer. No revenue was recognized for the nine months ended September 30, 2024.

Previous wording

For the six months ended June 30, 2025 and 2024, research and development expenses were $0.6 million and $3.8 million, respectively. The decrease of $3.2 million was associated with a $2.9 million decrease in pre-clinical and clinical development costs for AJ201, prior to its sale to AnnJi, a $0.1 million decrease in IV tramadol supply costs, and a $0.1 million decrease in personnel-related costs, including salaries, benefits, and stock-based compensation.

Current wording

For the nine months ended September 30, 2025 and 2024, research and development expenses were $0.8 million and $6.1 million, respectively. The decrease of $5.3 million was associated with a $5.0 million decrease in pre-clinical and clinical development costs for AJ201, prior to its sale to AnnJi, a $0.1 million decrease in IV tramadol supply costs, and a $0.2 million decrease in personnel-related costs, including salaries, benefits, and stock-based compensation.

Previous wording

We expect our research and development activities to decrease due to no further development obligations for AJ201, however we will continue to develop and attempt to gain regulatory approval for our existing product candidates, reflecting costs associated with the following:

Current wording

We expect our research and development activities to decrease due to no further development obligations for AJ201 or BAER-101, however we will continue to develop and attempt to gain regulatory approval for our existing product candidate, reflecting costs associated with the following:

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 candidate 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.

Previous wording

For the six months ended June 30, 2025 and 2024, general and administrative expenses were $2.4 million and $2.8 million, respectively. The decrease of $0.4 million is related to a decrease of $0.3 million in professional fees and a $0.1 million decrease in equity issuance to Fortress.

Current wording

For the nine months ended September 30, 2025 and 2024, general and administrative expenses were $3.0 million and $3.6 million, respectively. The decrease of $0.6 million is related to a decrease of $0.3 million in professional fees, a decrease of a $0.2 million in personnel-related costs, including salaries, benefits, and stock-based compensation, and a decrease of $0.1 million in legal expenses.

Previous wording

Interest income was $0.1 million and $0.1 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Interest income was $0.1 million and $0.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

The loss on common stock warrant liabilities was nil and $0.8 million for the six months ended June 30, 2025 and 2024, respectively. The January 2024 Series A Warrants, January 2024 Series B Warrants, and May 2024 Warrants had a fair value of $0.8 million allocated to the liability classified October 2022 Warrants and 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 for the six month period ended June 30, 2024.

Current wording

The loss on common stock warrant liabilities was nil and $0.8 million for the nine months ended September 30, 2025 and 2024, respectively. The January 2024 Series A Warrants, January 2024 Series B Warrants, and May 2024 Warrants had a fair value of $0.8 million allocated to the liability classified October 2022 Warrants and 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 for the nine month period ended September 30, 2024.

Previous wording

The change in fair value of warrant liabilities was a gain of approximately $1,000 and $0.3 million for the three 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.

Current wording

The change in fair value of warrant liabilities was a gain of approximately $14,000 and $0.2 million for the nine months ended September 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 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.

Current wording

At September 30, 2025, we had $3.7 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 candidate 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 Six Months Ended June 30, 2025 and 2024

Current wording

Cash Flows for the Nine Months Ended September 30, 2025 and 2024

Previous 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.

Current wording

Net cash and cash equivalents used in operating activities was $1.0 million for the nine months ended September 30, 2025, primarily comprised of our $2.2 million net loss, partially offset by a decrease of $0.7 million in operating assets and liabilities and $0.5 million in share-based compensation.

Previous 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.

Current wording

Net cash and cash equivalents used in operating activities was $8.3 million for the nine months ended September 30, 2024, primarily comprised of our $10.1 million net loss, $0.4 million reduction in common shares issuable to Fortress and $0.2 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 $0.4 million in operating assets and liabilities, $0.5 million for common shares issued to Fortress and $0.7 million in share-based compensation.

Previous 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.

Current wording

Net cash and cash equivalents provided by financing activities was $2.1 million for the nine months ended September 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 $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.

Current wording

Net cash and cash equivalents provided by financing activities was $9.1 million for the nine months ended September 30, 2024, primarily due to $8.2 million in net proceeds from the inducement offer letter agreements we entered into in January 2024 and April 2024 and $0.9 million in net proceeds received from the sale of common stock pursuant to the At the Market Offering Agreement we entered into with H.C. Wainwright & Co. in May 2024.

Previous wording

Our subsidiary, Baergic, has entered into two license agreements with: (i) AstraZeneca AB to acquire an exclusive license to patent and related intellectual property rights pertaining to their proprietary compound and (ii) Cincinnati Children's Hospital Medical Center to acquire patent and related intellectual property rights pertaining to a program for neurological disorders. Development milestones totaling up to approximately $81.5 million in the aggregate are due upon achievement of such milestones, and commercial and sales-based milestone payments totaling up to approximately $151.0 million may be payable. Royalties are payable on net sales of products covered by the licensed intellectual property in the low to high single digits.

Current wording

Our subsidiary through November 5, 2025, Baergic, entered into two license agreements with: (i) AstraZeneca AB to acquire an exclusive license to patent and related intellectual property rights pertaining to their proprietary compound and (ii) Cincinnati Children's Hospital Medical Center to acquire patent and related intellectual property rights pertaining to a program for neurological disorders. Development milestones totaling up to approximately $81.5 million in the aggregate are due upon achievement of such milestones, and commercial and sales-based milestone payments totaling up to approximately $151.0 million may be payable. Royalties are payable on net sales of products covered by the licensed intellectual property in the low to high single digits. On November 5, 2025, we sold Baergic to Axsome under the Baergic 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 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.

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 nine months ended September 30, 2025 and 2024, we have paid $0.2 million and $0.7 million, respectively, towards this aggregate amount. Approximately $1.4 million in aggregate has been paid to InvaGen under the Share Repurchase Agreement as of September 30, 2025.