AVENUE THERAPEUTICS, INC.

Previous 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.

Current wording

Our net loss for the six months ended June 30, 2026 and 2025 was approximately $1.4 million and $1.5 million, respectively. As of June 30, 2026, we had an accumulated deficit of approximately $106.9 million. Substantially all our net losses resulted from costs incurred for research and development, and general and administrative purposes.

Previous wording

We are a “smaller reporting company,” meaning that either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) the market value of our shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million. As a smaller reporting company, we chose to present only the two most recent fiscal years of audited financial statements in the 2025 Form 10-K, have reduced disclosure obligations regarding executive compensation and certain other matters, and smaller reporting companies are permitted to delay adoption of certain recent accounting.

Current wording

We are a “smaller reporting company,” meaning that either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) the market value of our shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million. As a smaller reporting company, we chose to present only the two most recent fiscal years of audited financial statements in the 2025 Form 10-K, have reduced disclosure obligations regarding executive compensation and certain other matters, and smaller reporting companies are permitted to delay adoption of certain recent accounting standards.

Previous 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.

Current wording

At June 30, 2026, we had an accumulated deficit of $106.9 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

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:

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 employee-related expenses, license fees and milestone payments related to in-licensed product and technology, expenses incurred under agreements with contract research organizations ("CROs"), investigative sites and consultants that conduct our clinical trials, the cost of acquiring and manufacturing clinical trial materials, and costs associated with non-clinical activities, and regulatory interactions, submissions, and approvals.

Previous 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.

Current wording

For the six months ended June 30, 2026 and 2025, research and development expenses were $0.4 million and $0.6 million, respectively. The decrease of $0.2 million was associated with a $0.2 million decrease in personnel related costs, including salaries, severance, benefits and stock-based compensation.

Previous 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.

Current wording

For the six months ended June 30, 2026 and 2025, general and administrative expenses were $1.0 million and $2.4 million, respectively. The decrease of $1.4 million is related to a decrease of $0.9 million in legal expenses due to costs incurred related to the AnnJi License Agreement termination in 2025, a $0.4 million decrease in personnel-related costs, including salaries, severance, benefits and stock-based compensation, and a $0.1 million decrease in professional fees.

Previous 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.

Current wording

The change in fair value of warrant liabilities was a gain of approximately $1,000 and $16,000 for the six months ended June 30, 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 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.

Current wording

At June 30, 2026, we had $1.9 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 Three Months Ended March 31, 2026 and 2025

Current wording

Cash Flows for the Six Months Ended June 30, 2026 and 2025

Previous 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.

Current wording

Net cash and cash equivalents used in operating activities was $0.9 million for the six months ended June 30, 2026, primarily comprised of our $1.4 million net loss, partially offset by increases of $0.4 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 $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 a decrease of $0.8 million in receivables from AnnJi, partially offset by an increase of $0.5 million in operating assets and liabilities and $0.4 million in share-based compensation.

Previous wording

During the three months ended March 31, 2026, no net cash and cash equivalents was used in or provided by financing activities.

Current wording

During the six months ended June 30, 2026, no net cash and cash equivalents was used in or provided by financing activities.

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 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 six months ended June 30, 2025 primarily due to $2.1 million in net proceeds from the sale of common stock pursuant to the ATM Agreement.

Previous 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.

Current wording

We are party to a share repurchase agreement with InvaGen, which requires us to pay InvaGen seven and a half percent (7.5%) of the proceeds of future financings, as defined in the agreement, up to $4.0 million in aggregate. For the six months ended June 30, 2025, the Company made payments totaling $0.2 million to InvaGen. No such payments were made during the six months ended June 30, 2026. Approximately $1.4 million in aggregate has been paid to InvaGen under the share repurchase agreement as of June 30, 2026.