AVENUE THERAPEUTICS, INC.

($ in thousands, except share and per share amounts)

Unaudited Consolidated Statements of Operations

($ in thousands, except share and per share amounts)

Unaudited Consolidated Statement of Changes in Stockholders’** Equity**

($ in thousands, except share amounts)

Unaudited Consolidated Statement of Changes in Stockholders’** Equity**

($ in thousands, except share amounts)

Unaudited Consolidated Statements of Cash Flows

(Unaudited)

($ in thousands)

**AVENUE THERAPEUTICS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization, Plan of Business Operations

Avenue Therapeutics, Inc. (the “Company” or “Avenue”) was incorporated in Delaware on* February**9,* 2015, as a wholly-owned subsidiary of Fortress Biotech, Inc. (“Fortress”). Avenue is a specialty pharmaceutical company focused on the development and commercialization of therapies for the treatment of neurologic diseases. Avenue's current product candidates are clenbuterol ("ATX-04"), a selectiveβ2-adrenergic agonist for Pompe disease, intravenous tramadol (“IV tramadol”) for the treatment of post-operative acute pain and previously, through* November 5, 2025,*BAER-101 for the treatment of epilepsy and panic disorders.

Since* March**2025,* the Company’s common stock has been quoted on the over-the-counter market (OTCID) under the symbol “ATXI”.

Going Concern

These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, as described below, substantial doubt about the Company’s ability to continue as a going concern exists.

The Company isnot yet generating revenue, has incurred substantial operating losses since its inception and expects to continue to incur significant operating losses for the foreseeable future as it executes its product development plan and* maynever become profitable. As of June 30, 2026*, the Company had an accumulated deficit of $106.9 million. Due to uncertainties regarding future operations of the Company for the development of ATX-04 and a potential Phase3 safety study for IV tramadol, the Company will need to secure additional funds through equity or debt offerings, the timing of which is unknown at this time. The Company cannot be certain that additional funding will be available to it on acceptable terms, or at all. These factors individually and collectively cause substantial doubt about the Company’s ability to continue as a going concern to exist withinone year from the date of this report. The consolidated financial statements donot include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that* may*be necessary if the Company were unable to continue as a going concern.

Note2 - Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

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 included the accounts of the Company and the accounts of the Company’s subsidiary, until its sale in* November 2025.*All intercompany balances and transactions have been eliminated.

The accompanying unaudited interim financial statements previously included the accounts of the Company's subsidiary, Baergic Bio, Inc. (“Baergic”) until its sale to Axsome Therapeutics, Inc. in* November 2025.Because the Company owned less than100%* 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.

Certain information and footnote disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited interim financial statement results arenot necessarily indicative of results to be expected for the full fiscal year or any future period. Therefore, these unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the fiscal year ended* December 31, 2025,which were included in the Company’s Annual Report on Form10*-K (the*“2025* Form10-K”) and filed with the SEC on* March 30, 2026.*

Segments

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assessing performance. The Company views its operations and manages its business inone operating and reportable segment.

Use of Estimates

The preparation of unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

6

Fair Value Measurements

The Company follows accounting guidance on fair value measurements for financial assets and liabilities measured at fair value on a recurring basis. Under the accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The accounting guidance requires fair value measurements to be classified and disclosed inone of the followingthree categories:

Level1: Quoted prices in active markets for identical assets or liabilities.

Level2: Observable inputs other than Level1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Level3: Unobservable inputs which are supported by little orno market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

Certain of the Company’s financial instruments arenot measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as accounts payable, accrued expenses and other current liabilities.

Non-Controlling Interests

Non-controlling interests in consolidated entities represented the component of equity in consolidated entities held bythird parties. Any change in ownership of a subsidiary while the controlling financial interest was retained was accounted for as an equity transaction between the controlling and non-controlling interests. Intercompany activity was eliminated entirely in consolidation prior to the allocation of net gain/loss attributable to non-controlling interest, which was based on ownership interests.

Net Loss per Share

Basic and diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares outstanding, including prefunded warrants and shares held in abeyance, during the period, without consideration of potential dilutive securities. For periods in which the Company generated a net loss, the Company doesnot include potential shares of common stock in diluted net loss per share when the impact of these items is anti-dilutive. In the periods where the Company has generated a net loss, diluted net loss per share is the same as basic net loss per share since the inclusion of potentially dilutive securities would be anti-dilutive. Dividends declared are paid and set aside among the holders of shares of common stock and Class A Preferred stock pro-rata on an as-if-converted basis.

The following table sets forth the potential common shares that could potentially dilute basic income per share in the future that werenot included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the periods presented:

(1) Class A preferred shares are presented on an as-if converted basis.

The Company considers Class A preferred stock to be an additional class of common stock for the purpose of calculating net loss per share, as it doesnot have preferential rights in liquidation when compared to the Company's common stock, and therefore losses are allocated to these additional classes using thetwo-class method. Thetwo-class method is an earnings allocation formula that treats participating securities as having rights that would otherwise have been available to common stockholders. Earnings allocated to the Class A preferred stock arenot material for thethree andsix months ended* June 30, 2026and2025*.

Summary of Significant Accounting Policies

There have beenno material changes in the Company’s significant accounting policies to those previously disclosed in the2025 Form10-K.

Accounting StandardsNot Yet Adopted**

In* November 2024,the FASB issued ASUNo.* 2024-03, Income Statement–* Reporting Comprehensive Income*–* Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses*, which requires new financial statement disclosures in tabular format, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update donot change or remove current expense disclosure requirements. The amendments in this update are effective for fiscal years beginning after* December 15, 2026,and interim periods within fiscal years beginning after December 15, 2027.*Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its financial statement disclosures.

7

Note 3 —Licenses/Supplier Agreements

ATX-04

In* February 2026,*Avenue entered into a license agreement with Duke University ("Duke"), pursuant to which Avenue obtained an exclusive worldwide license (the "ATX-04 License") from Duke to certain patents and know-how pertaining to ATX-04 for the treatment of lysosomal storage diseases.

Under the ATX-04 License, Avenue made upfront payments totaling approximately $19,000 to Duke and has an obligation to make development, regulatory, and commercial milestone payments totaling approximately $15.6 million upon the achievement of certain milestones. In addition, Avenue is obligated to pay a tiered low single-digit royalty on future net sales of ATX-04.

Beginning with calendar year2028 and until thefirst regulatory approval, Avenue is obligated to make minimum annual royalty payments. In the event the ATX-04 License is terminated, minimum royalty obligations will cease, and Avenue will only be responsible for amounts due up to the termination date.

IV Tramadol License

Effective as of* February**17,* 2015, Fortress transferred the Revogenex license and all other rights and obligations under the IV Tramadol License Agreement to the Company, pursuant to the terms of a Founders Agreement, which was subsequently amended and restated on* September 13, 2016.*In connection with the terms of the IV Tramadol License Agreement, Fortress purchased an exclusive license to IV tramadol for the U.S. market from Revogenex, a privately held company in Dublin, Ireland, for $2.0 million and paid an additional $1.0 million following the Company’s submission of its NDA for IV Tramadol. In addition, under the terms of the agreement, Revogenex is eligible to receive an additional milestone payment totaling $3.0 million upon the approval of IV tramadol from the U.S. Food and Drug Administration (“FDA”) as well as royalty payments on net sales of the product ranging in the high single digits to low double digits.

On* October**29,* 2018, the Company and Zaklady Farmaceutyczne Polpharma (“Polpharma”) extended the term of their exclusive supply agreement for drug product of IV tramadol toeight years from the date of the launch of the product. In addition, under the terms of the amended agreement, Polpharma is eligible to receive a milestone payment totaling $2.0 million upon the approval of IV tramadol from the FDA, as well as a low single digit royalty on net sales of the product forfive years after launch.

AJ201 Termination

In* February 2023,the Company entered into a license agreement with AnnJi Pharmaceutical Co. Ltd. (“AnnJi”), whereby Avenue obtained an exclusive license (the “AnnJi License Agreement”) for exclusive rights to intellectual property related toAJ201,* a clinical-stage product candidate. Under the AnnJi License Agreement, the Company made an upfront payment of*$3.0* million, issued shares of Avenue stock intwo tranches, and agreed to certain development, regulatory, and commercial milestone payments, as well as royalties on net sales.

On* April 24, 2025,the Company and AnnJi entered into a License Termination and Program Transfer Agreement (the “Termination and Transfer Agreement”), pursuant to which: (i) the AnnJi License Agreement and related agreements were terminated with immediate effect; (ii) the parties dismissed all pending dispute resolution proceedings and provided mutual releases of claims; (iii) Avenue transferred to AnnJi all of its rights, title and interest to and under the assets arising under the AnnJi License Agreement and otherwise related toAJ201* and (iv) Avenue agreednot to, for48 months following the date of the Termination and Transfer Agreement, develop, commercialize, manufacture or sell any product competing withAJ201 in the US, Canada, the European Union, Great Britain or Israel. Under the Termination and Transfer Agreement, Avenue repurchased all shares previously issued to AnnJi for nominal consideration and paid approximately $0.2 million as consideration for legal expenses, which was accounted for as consideration payable to a customer and recorded as a reduction of revenue.

Under the Termination and Transfer Agreement, AnnJi agreed to pay the Company $1.6 million (net of withholding taxes), which was received in2025. The Company recognized $1.4 million as other revenue during the quarter ended* June 30, 2025,*representing the consideration for the transfer of rights less the consideration for legal expenses.

The Company remains eligible to receive development and regulatory milestones relating toAJ201 of up to $5.0 million, commercial milestones of up to $17.0 million, a 1.75% royalty on future net sales ofAJ201, and certain sublicense income subject to specified caps and conditions. Such amounts are considered variable consideration and are constrained until the achievement of the specified milestones. The Termination and Transfer Agreement also contains customary representations and warranties and provision related to confidentiality and indemnification.

8

Note 4 —Related Party Agreements

Founders Agreement and Management Services Agreement with Fortress

In* February 2015,Fortress entered into a Management Services Agreement (the “MSA”) with the Company to provide services for the Company pursuant to the terms of the MSA. Expenses related to the MSA are recorded 50% in research and development expenses and 50% in general and administrative expenses in the Unaudited Consolidated Statements of Operations. For thethree* months ended* June 30, 2026and2025*, the Company recorded expense related to the MSA of $0.1 million and $0.1 million, respectively. For thesix months ended* June 30, 2026and2025*, the Company recorded expense related to the MSA of $0.3 million and $0.3 million, respectively.

In* February 2015,Fortress entered into a Founders Agreement with the Company, under which the Company agreed to: (i) issue annually to Fortress, shares of common stock equal totwo* andone half percent (2.5%) of the fully-diluted outstanding equity of the Company at the time of issuance (the “Annual Equity Fee”) and (ii) issue shares of the common stock equal totwo andone half percent (2.5%) of the gross amount of any equity or debt financing (the “Financing Equity Fee”).

Annual Equity Fee

Pursuant to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), the Company issued 111,209 shares of common stock to Fortress as the Annual Stock Dividend on* January 1, 2026 (as such term is defined in the Certificate of Incorporation), representing 2.5% of the fully-diluted outstanding equity of the Company on December 31, 2025.The value of these shares was recorded as common stock issuable to Fortress in the Statement of Stockholders’ Equity at December31,* 2025. The Company recorded an expense of approximately $0.1 million in research and development – licenses acquired related to these issuable shares during the year ended* December31,* 2025.

Financing Equity Fee

For thethree andsix months ended* June 30, 2026*, the Company didnot have a Financing Equity Fee.

For thethree months ended* June 30, 2025*, the Company recordedno Financing Equity Fee. For thesix months ended* June 30, 2025*, the Company recorded a Financing Equity Fee of $0.1 million and issued 23,474 shares of the Company's common stock to Fortress.

Payables and Accrued Expenses Related Party

In the normal course of business, Fortress incurs certain expenses on behalf of the Company. Such expenses are recorded as accounts payable and accrued expenses – related party and are recorded at the invoiced amount and reimbursed to Fortress in the normal course of business. The Company believes that the difference, if any, between the amounts invoiced and the amounts that would have been incurred if the Company operated as an unaffiliated entity isnot material.

Founders Agreement and Management Services Agreement with Baergic

In connection with the Company’s previous ownership of Baergic, the Company was party to a Founders Agreement (“Avenue-Baergic Founders Agreement”) and a Management Services Agreement (“Avenue-Baergic MSA”) with Baergic, which were assigned to the Company in* November 2022.*Under the Avenue-Baergic Founders Agreement, the Company was entitled to (i) an annual stock dividend equal to 2.5% of Baergic’s fully-diluted equity, (ii) equity-based fees equal to 2.5% of certain financing transactions, (iii) a cash fee equal to 4.5% of Baergic’s annual net sales, and (iv) a change-in-control fee based on a multiple of net sales. Under the Avenue-Baergic MSA, the Company provided management and advisory services to Baergic and received an annual consulting fee of $0.5 million, which was subject to an increase of $1.0 million in years when Baergic’s net assets exceeded $100 million.

The Avenue-Baergic Founders Agreement and Avenue-Baergic MSA were terminated on* November 5, 2025*in connection with the sale of Baergic.

9

Note 5 —Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following (in thousands):

Note 6 - Commitments and Contingencies

Leases

The Company isnot party to any leases for office space or equipment.

Litigation

The Company recognizes a liability for a contingency when it is probable that liability has been incurred and when the amount of loss can be reasonably estimated. When a range of probable loss can be estimated, the Company will accrue the most likely amount of such loss, and if such amount isnot determinable, then the Company will accrue the minimum of the range of probable loss. As of* June 30, 2026*, there wasno litigation against the Company.

Note7 - Stockholders' Equity

Class A Preferred Stock

On* September**13,* 2016, 2,000,000 shares of Preferred Stock were authorized, of which 250,000 have been designated as Class A Preferred Stock and the remainder are undesignated preferred stock. The Class A Preferred Stock, with a par value of $0.0001 per share, is identical to undesignated Common Stock other than as to voting rights, conversion rights, and the Annual Stock Dividend right (as described below). The undesignated Preferred Stock* maybe issued from time to time inone* or more series. The Company’s Board of Directors is authorized to determine or alter the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions, if any), the redemption price or prices, the liquidation preferences and other designations, powers, preferences and relative, participating, optional or other special rights, if any, and the qualifications, limitations and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock, and to fix the number of shares of any series of Preferred Stock (butnot below the number of shares of any such series then outstanding).

On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Class A Preferred Stock shall be entitled to cast for each share of Class A Preferred Stock held by such holder as of the record date for determining stockholders entitled to vote on such matter, the number of votes that is equal toone andone-tenth (1.1) times a fraction, the numerator of which is the sum of (A) the number of shares of outstanding Common Stock and (B) the whole shares of Common Stock into which the shares of outstanding Class A Preferred Stock are convertible, and the denominator of which is number of shares of outstanding Class A Preferred Stock. Thus, the Class A Preferred Stock will at all times constitute a voting majority.

Each share of Class A Preferred Stock is convertible, at the option of the holder, intoone fully paid and nonassessable share of Common Stock (the “Conversion Ratio”), subject to certain adjustments, including the adjustment for reverse stock splits described below. If the Company, at any time effects a subdivision or combination of the outstanding Common Stock (by any stock split, stock dividend, recapitalization, reverse stock split or otherwise), the applicable Conversion Ratio in effect immediately before that subdivision is proportionately decreased or increased, as applicable, so that the number of shares of Common Stock issuable on conversion of each share of Class A Preferred Stock shall be increased or decreased, as applicable, in proportion to such increase or decrease in the aggregate number of shares of Common Stock outstanding. Additionally, if any reorganization, recapitalization, reclassification, consolidation or merger involving the Company occurs in which the Common Stock (butnot the Class A Preferred Stock) is converted into or exchanged for securities, cash or other property, then each share of Class A Preferred Stock becomes convertible into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Company issuable upon conversion ofone share of the Class A Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction. Pursuant to the reverse stock splits by the Company in* September 2022and April 2024,the Class A Preferred Stock has a Conversion Ratio of 1,125 Class A Preferred toone* share of Common Stock.

10

Common Stock

Holders of the Company's common stock are entitled toone vote for each share held on all matters submitted to a vote of stockholders and donot have cumulative voting rights. An election of directors by the stockholders is determined by a plurality of the votes cast by the stockholders entitled to vote on the election. Holders of common stock are entitled to receive proportionately any dividends as* may*be declared by the Company's Board of Directors, subject to any preferential dividend rights of outstanding preferred stock.

In the event of the Company's liquidation or dissolution, the holders of common stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock haveno preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to, and* maybe adversely affected by, the rights of the holders of shares of any series of preferred stock that the Company may*designate and issue in the future.

Capital Raises

2021 Shelf

On* December 7, 2021,the Company filed a shelf registration statement (FileNo.* 333-261520) on Form S-3, which was declared effective on* December 10, 2021 (the “Shelf”). The Company filed a replacement shelf registration on Form S-3 on December 4, 2024 (the “Replacement Shelf”), which hasnot* yet become effective under the Securities Act of1933, as amended (the “Securities Act”). On* July 17, 2025,Nasdaq filed a Form25* with the SEC, and as of this date, the Company is ineligible to use Form S-3 and therefore unable to use the Shelf or have declared effective the Replacement Shelf.

ATM Facility

On* May 10, 2024,the Company entered into an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co. LLC (the “ATM Manager”) under which the Company was previously able to offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.0001 per share, through or to the ATM Manager. During thesix* months ended* June 30, 2025*, the Company sold an aggregate of 938,990 shares of its common stock pursuant to the ATM Agreement, resulting in net proceeds of approximately $2.1 million after deducting underwriting discounts. The Company isno longer able to utilize the ATM Agreement as a result of the suspension of its common stock from trading on Nasdaq. The following describes the Company’s ability to use the ATM Agreement until such suspension. Offers and sales of the shares are made pursuant to the Shelf, and the related prospectus supplement dated* May 10, 2024 (including such replacement registration statement as maybe filed with the SEC, the “ATM Registration Statement”) and filed with the SEC on such date pursuant to Rule424*(b) under the Securities Act.

Under the ATM Agreement, the ATM Manager* maysell shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule415*(a)(4) under the Securities Act. The ATM Manager will use commercially reasonable efforts to sell the shares from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company* mayimpose). The Company agreed to pay the ATM Manager a commission of 3.0% of the gross proceeds from the sales of shares sold through the ATM Manager under the ATM Agreement and has provided the ATM Manager with customary indemnification and contribution rights. The Company also agreed to reimburse the ATM Manager for certain expenses incurred in connection with the ATM Agreement. The Company and the ATM Manager may*each terminate the ATM Agreement at any time upon specified prior written notice.

Equity Incentive Plan

The Company has in effect the Avenue Therapeutics, Inc.2015 Incentive Plan (as amended, the*“2015* Incentive Plan”). The2015 Incentive Plan was adopted in* January**2015* by the Company's stockholders and, in* December 2021,the Company’s stockholders approved an amendment to the plan to increase the number of authorized shares issuable to 3,556 shares. On January 30, 2023,the Company’s stockholders approved an amendment to the2015* Incentive Plan to increase the number of authorized shares issuable to 70,223 shares. On* June 24, 2024,the Company’s stockholders approved an amendment to the2015* Incentive Plan to increase the number of authorized shares issuable to 5,070,223 shares, which extended the term of the2015 Incentive Plan to* June 24, 2034,to increase the limit of the number of shares that maybe issued upon exercise of incentive stock options by 5,000,000 shares, and to increase the annual share limit awards for non-employee directors to 500,000. Under the2015* Incentive Plan, the compensation committee of the Company’s board of directors is authorized to grant stock-based awards to directors, officers, employees and consultants. The2015 Incentive Plan authorizes grants to issue up to 5,070,223 shares of authorized but unissued common stock and expires 10 years from adoption and limits the term of each option tono more than 10 years from the date of grant.

Total shares available for the issuance of stock-based awards under the Company’s2015 Incentive Plan was 4,575,906 shares at* June 30, 2026*.

Restricted Stock Units and Restricted Stock Awards

The following table summarizes the restricted stock unit and award activity during thesix months ended* June 30, 2026*:

At* June 30, 2026*, the Company had unrecognized stock-based compensation expense related to restricted stock units and restricted stock awards of approximately $19,000, which is expected to be recognized over the remaining weighted-average vesting period of 0.3 years. The expense is recognized over the vesting period of the awards.

The Company offers certain executives and key employees the opportunity to defer settlement of vested restricted stock units as part of our nonqualified deferred compensation plan. As of* June 30, 2026*, the Company had 235,000 outstanding deferred restricted stock units.

11

Stock Options

The following table summarizes stock option activity during thesix months ended* June 30, 2026*:

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of the Company's common stock for those options that had exercise prices lower than the fair value of the Company's common stock. As of* June 30, 2026*, the total compensation cost related to non-vested options awardsnot yet recognized is approximately $50,000 with a weighted average remaining vesting period of 0.4 years.

Stock-based compensation expense has been reported in the Company's consolidated statements of operations as follows:

Stock Warrants

The following table summarizes the warrant activity for thethree andsix months ended* June 30, 2026*:

Upon the exercise of warrants, the Company will issue new shares of its common stock.

InvaGen Share Repurchase

In* July 2022,the Company entered into a share repurchase agreement with InvaGen Pharmaceuticals, Inc. ("InvaGen") under which the Company repurchased all of InvaGen's shares in Avenue, the Company agreed to pay InvaGenseven* and a half percent (7.5%) of the proceeds of future financings, up to $4.0 million, which the Company accounts for as a derivative. Due to the uncertainty related to future financings, the estimated fair value of the derivative isnot material. The Company recognizes changes in fair value within general and administrative expenses in the Unaudited Consolidated Statement of Operations. For thesix months ended* June 30, 2025*, the Company made payments totaling $0.2 million to InvaGen. No such payments were owed or made during thesix 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*.

12

Note8 - Common Stock Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC480 and ASC815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC480, meet the definition of a liability pursuant to ASC480, and whether the warrants meet all of the requirements for equity classification under ASC815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that donot meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each consolidated balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a gain or loss on the consolidated statements of operations.

Warrant Liability

The Company has previously issued freestanding warrants to purchase shares of its common stock in connection with financing activities. The* October 2022*Warrants are classified as liabilities on the balance sheet as they contain terms for redemption of the underlying security that are outside the Company's control. The Black-Scholes Model is used to value the warrants classified as liabilities and the approach required management to estimate inputs including expected volatility and expected term and is most significantly impacted by the volatility of the Company's common stock price. These inputs are inherently subjective and require significant analysis and judgment to develop.

The fair value of the warrants was measured at the time of issuance and is re-measured at each financial reporting date with any changes in fair value being recognized in change in fair value of warrant liabilities, a component of other income (expense), in the consolidated statements of operations and comprehensive income (loss). The Company will continue to re-measure the fair value of the* October 2022Warrant liabilities until exercise or expiration of the warrants on October 10, 2027.*

Fair Value of Warrant Liabilities

Warrant liabilities are categorized within Level3 of the fair value hierarchy and are measured at fair value on a recurring basis as follows (in thousands):

The key inputs for the* October 2022*Warrants using the Black-Scholes model were as follows:

13