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 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.

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 candidates include ATX-04, a selective β2-adrenergic agonist for Pompe disease and an intravenous tramadol (“IV tramadol”), a schedule IV opioid for the treatment of post-operative acute pain. We may in the future acquire additional product candidates.

Previous 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.

Current wording

Our net loss for the three months ended March 31, 2026 and 2025 was approximately $0.7 million and $1.9 million, respectively. As of March 31, 2026, we had an accumulated deficit of approximately $106.2 million. Substantially all our net losses resulted from costs incurred for research and development, and general and administrative purposes.

Previous wording

We are a majority-controlled subsidiary of Fortress. For related party transactions, see Note 4 to our financial statements included in this Quarterly Report on Form 10-Q.

Current wording

We are a majority-controlled subsidiary of Fortress. For related party transactions, see Note 4 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

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 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 2025 Form 10-K. There were no material changes in our critical accounting estimates or accounting policies from December 31, 2025.

Previous wording

See Note 2, “Significant Accounting Policies”, to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.

Current wording

See Note 2, “Significant Accounting Policies”, to our unaudited consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.

Previous wording

The Company’s consolidated financial statements have been prepared in conformity with U.S. GAAP, include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented and are stated in U.S. dollars. The Company’s consolidated financial statements include the accounts of the Company and the accounts of the Company’s subsidiary, Baergic. All intercompany balances and transactions have been eliminated. Because the Company owns less than 100% of Baergic, the Company records net loss attributable to non-controlling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interest retained in Baergic by the respective non-controlling parties. The Company continually assesses whether changes to existing relationships or future transactions may result in the consolidation or deconsolidation of its subsidiary.

Current wording

The Company’s consolidated financial statements have been prepared in conformity with U.S. GAAP, include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented and are stated in U.S. dollars. Prior to the sale of Baergic in November 2025, the Company’s consolidated financial statements included the accounts of the Company and the accounts of the Company’s subsidiary, Baergic. All intercompany balances and transactions were eliminated. Because the Company owned less than 100% of Baergic, the Company recorded net loss attributable to non-controlling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interest retained in Baergic by the respective non-controlling parties.

Previous 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.

Current wording

At March 31, 2026, we had an accumulated deficit of $106.2 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 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.

Current wording

For the three months ended March 31, 2026 and 2025, research and development expenses were $0.2 million and $0.4 million, respectively. The decrease of $0.2 million was associated with a $0.1 million decrease in personnel related costs, and $0.1 million one-time costs incurred related to the termination of the AnnJi License Agreement in 2025.

Previous 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:

Current wording

We expect our research and development activities to increase as we begin to develop ATX-04 and attempt to gain regulatory approval for our existing product candidates, 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.

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 candidates.

Previous 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.

Current wording

For the three months ended March 31, 2026 and 2025, general and administrative expenses were $0.5 million and $1.5 million, respectively. The decrease of $1.0 million is related to a decrease of $0.8 million in legal expenses due to costs incurred related to the AnnJi License Agreement termination in 2025, 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 $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.

Current wording

The change in fair value of warrant liabilities was a gain of approximately $1,000 and $15,000 for the three months ended March 31, 2026 and 2025, 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 fluctuation in our stock price.

Previous 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.

Current wording

At March 31, 2026, we had $2.4 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 product 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. Since March 2025, our common stock has been quoted on the over-the-counter market ("OTCID") under the symbol “ATXI”. Being listed on the OTCID 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 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 Nine Months Ended September 30, 2025 and 2024

Current wording

Cash Flows for the Three Months Ended March 31, 2026 and 2025

Previous 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.

Current wording

Net cash and cash equivalents used in operating activities was $0.4 million for the three months ended March 31, 2026, primarily comprised of our $0.7 million net loss, partially offset by increases of $0.2 million in operating assets and liabilities and $0.1 million in share-based compensation.

Previous 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.

Current 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.

Previous 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.

Current 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 from the sale of common stock pursuant to the ATM Agreement.

Previous wording

We entered into a license agreement with Revogenex, pursuant to which we received a worldwide exclusive license to make, market and sell IV tramadol. A regulatory milestone of $3.0 million is payable on approval high single-digit to low double-digit royalties are payable on net sales.

Current wording

We are party to a license agreement with Revogenex, pursuant to which we maintain a worldwide exclusive license to make, market and sell IV tramadol. A regulatory milestone of $3.0 million is payable on approval and high single-digit to low double-digit royalties are payable on net sales.

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 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.

Current wording

We are party to 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 $4.0 million in aggregate. For the three months ended March 31, 2025, the Company made payments totaling $0.2 million to InvaGen. No such payments were made during the three months ended March 31, 2026. Approximately $1.4 million in aggregate has been paid to InvaGen under the share repurchase agreement as of March 31, 2026.