ATXI

Risk Factors” under “The OTC Pink Open Market is a thinly traded market lacking in liquidity, which could make it difficult for our stockholders to sell their shares of common stock,” and “Our stock price and trading volume on the OTC Pink Open Market is subject to price volatility unrelated to us or our operations, which could depress the market price of our common stock and result in rapid and substantial losses for our stockholders, who may lose all or part of their investment.” Critical Accounting Policies and Use of Estimates Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.
The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements.
On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation.
We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions.
Research and Development Research and development costs are expensed as incurred.
Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.
Upfront and milestone payments due to third parties that perform research and development services on our behalf will be expensed as services are rendered or when the milestone is achieved.
Costs incurred in obtaining technology licenses are charged to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future use.
Research and development costs primarily consist of personnel related expenses, including salaries, benefits, travel, and other related expenses, stock-based compensation, payments made to third parties for license and milestone costs related to in-licensed products and technology, payments made to third party contract research organizations for preclinical and clinical studies, investigative sites for clinical trials, consultants, the cost of acquiring and manufacturing clinical trial materials, costs associated with regulatory filings and patents, laboratory costs and other supplies.
Costs incurred in obtaining technology licenses are charged to research and development expense if the technology licensed has not reached commercial feasibility and has no alternative future use.
The licenses purchased by us require substantial completion of research and development, regulatory and marketing approval efforts in order to reach commercial feasibility and has no alternative future use.
Accordingly, the total purchase price for the licenses acquired are reflected as research and development.
Stock-Based Compensation We expense stock-based compensation to employees, consultants and board members over the requisite service period based on the estimated grant-date fair value of the awards.
Stock-based award expense is recognized over the requisite service period for each separately vesting tranche of the award.
The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.
Warrants We have issued freestanding warrants to purchase shares of our common stock in connection with financing activities and account for them in accordance with applicable accounting guidance as either liabilities or as equity instruments depending on the specific terms of the warrant agreements.
Our outstanding common stock warrants issued in connection with the equity financings completed in 2022 are classified as liabilities in the consolidated balance sheet as they contain terms for redemption of the underlying security that are outside our control.
We use the Black-Scholes option pricing model to value warrants, which requires management to estimate inputs including expected volatility and expected term, and is most significantly impacted by our common stock price.
These inputs are inherently subjective and require significant analysis and judgment to develop.
The fair value of all warrants 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).
We will continue to re-measure the fair value of the warrant liabilities until exercise or expiration of the related warrant.
Equity-classified warrants are recorded within equity and are not remeasured.
Recently Adopted Accounting Standards See Note 2 to our consolidated financial statements included herein for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on results of operations and financial condition.
Smaller Reporting Company Status 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 $700 million.
As a smaller reporting company, we may choose to present only the two most recent fiscal years of financial statements in our Annual Report on Form 10-K, have reduced disclosure obligations regarding executive compensation, and smaller reporting companies are permitted to delay adoption of certain recent accounting pronouncements discussed in Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 For The Years Ended December 31, Change ($ in thousands) 2025 2024 $ % Revenue Other revenue $ 1,404 $ — $ 1,404 % Operating expenses: Research and development $ 1,037 $ 6,645 $ (5,608 ) -84 % General and administrative 3,653 4,638 (985 ) -21 % Gain on sale of Baergic (203 ) — (203 ) % Total operating expenses 4,487 11,283 (6,796 ) -60 % Loss from operations (3,083 ) (11,283 ) 8,200 -73 % Interest income (121 ) (176 ) -31 % Loss on common stock warrant liabilities — (759 ) -100 % Change in fair value of warrant liabilities (15 ) (170 ) -91 % Net loss $ (2,947 ) $ (11,696 ) $ 8,749 -75 % Net loss attributable to non-controlling interests (38 ) (44 ) -14 % Net loss attributable to common stockholders $ (2,909 ) $ (11,652 ) $ 8,743 -75 % Revenue For the year ended December 31, 2025, revenue was $1.4 million, comprised of payments received from AnnJi related to the termination of the license agreement for AJ201.
There was no comparable revenue recorded in 2024.
Research and Development Expenses For the years ended December 31, 2025 and 2024, research and development expenses were $1.0 million and $6.6 million, respectively.
The $5.6 million decrease primarily reflects a decrease of $5.2 million in pre-clinical and clinical development costs for AJ201, prior to its return to AnnJi, $0.2 million decrease in non-cash stock compensation costs, $0.1 million decrease in personnel costs, and $0.1 million decrease in manufacturing expenses.
We expect our research and development activities to remain flat or increase as we continue to advance our portfolio, reflecting costs associated with the following: ● employee-related expenses; ● license fees and milestone payments related to in-licensed products and technologies; ● expenses incurred under agreements with contract research organizations, 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 approvals.
General and Administrative Expenses General and administrative expenses consist principally of professional fees for legal and consulting services, market research, personnel-related costs, public company reporting 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 potential commercialization of our product candidates.
For the years ended December 31, 2025 and 2024, general and administrative expenses were $3.7 million and $4.6 million, respectively.
The $0.9 million decrease primarily reflects a decrease of $0.5 million in professional fees and $0.4 million in non-cash stock compensation costs.
Gain on Sale of Baergic During the year ended 2025, a gain of $0.2 million was recognized on the sale of Baergic to Axsome in November 2025.
Interest Income Interest income was $0.1 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively. Loss on common stock warrant liabilities The loss on common stock warrant liabilities was $0 and $0.8 million for the year ended December 31, 2025 and 2024, respectively.
In 2024, the Series A common stock warrants, Series B common stock warrants, Series C common stock warrants and Series D common stock warrants had a fair value of $0.8 million allocated to the liability classified warrants to purchase shares of our common stock originally issued in October 2022 and January 2023 at the time of issuance as a cost of inducement, which was recorded as a loss on settlement of common stock warrant liabilities.
Change in fair value of warrant liabilities Change in the estimated fair value of warrant liabilities is comprised of the fair value remeasurement of the liabilities associated with the October 2022 Public Offering and January 2023 Registered Direct Offering and Private Placement.
We account 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 ASC 480 and ASC 815.

and 708 more.

Gone since FY2024

Risk Factors” for more information regarding this dispute.
In November 2022, we completed a Stock Contribution Agreement, dated May 11, 2022 (the “Contribution Agreement”) with Fortress Biotech, Inc (“Fortress”) to acquire the shares in Baergic Bio, Inc.
(“Baergic”), which is developing BAER-101, a novel α2/3–subtype-selective gamma-aminobutyric acid ("GABA") A positive allosteric modulator (“PAM”).
As a result, Baergic is a majority-controlled and owned subsidiary company of Avenue.
We have been developing IV tramadol since inception of the Company and prior to our initial public offering in 2017.
As used throughout this filing, the words “we”, “us” and “our” may refer to Avenue individually or together with our subsidiary, Baergic, each as dictated by context.
We are a majority-controlled subsidiary of Fortress.
Product Candidates Under Development AJ201 AJ201 is a novel, first-in-class asset in development for the treatment of SBMA.
It was designed to modify SBMA through multiple mechanisms, including degradation of the mutant androgen receptor ("AR") protein and stimulation of the Nrf1 and Nrf2 pathways, which are involved in protecting cells from oxidative stress that can lead to cell death.
AJ201 is currently being studied in a Phase 1b/2a multicenter, randomized, double-blind clinical trial in six clinical sites across the U.S., which aims to evaluate the safety, pharmacokinetic (“PK”) and pharmacodynamic (“PD”) data and clinical response of AJ201 in patients suffering from SBMA.
In July 2023, we announced the first patient was dosed in the Phase 1b/2a trial of AJ201.
The 12-week, multicenter, randomized, double-blind Phase 1b/2a clinical trial of AJ201 enrolled 25 patients, randomly assigned to AJ201 (600 mg/day) or placebo.
The primary endpoint of the study is to assess the safety and tolerability of AJ201 in subjects with clinically and genetically defined SBMA.
Secondary endpoints include pharmacodynamic data measuring change from baseline in mutant AR protein levels in skeletal muscle and changes in the fat and muscle composition as seen on MRI scans, which are believed to be biomarkers indicating likelihood for longer term clinical improvement.
Further details about this study can be found at ClinicalTrials.gov (Identifier: NCT05517603).
Information on clinicaltrials.gov does not constitute part of this Annual Report on Form 10-K.
In January 2024, we announced the completion of enrollment for the Phase 1b/2a trial and in May 2024, we announced last patient last visit in the Phase 1b/2a trial.
AnnJi Dispute On March 3, 2025, the Company received a notice of AnnJi’s intent to terminate the AnnJi License Agreement (the “ Purported Termination Notice ”) in which AnnJi purports to assert its right to terminate the AnnJi License Agreement due to alleged material breaches by the Company of various provisions in the AnnJi License Agreement for (i) failure to use its commercially reasonable efforts to develop and commercialize AJ201, (ii) failure to negotiate and execute a clinical supply agreement by March 31, 2024, and (iii) the anticipated failure of the Company to meet a diligence milestone of first patient dosing in a Phase 2/3 clinical trial by February 28, 2027.
The Company firmly believes that the grounds for termination of the AnnJi License Agreement stated in the Purported Termination Notice are without merit and intends to pursue all rights provided to it under the AnnJi License Agreement and by law.
Accordingly, the Company believes that the purported termination of the AnnJi License Agreement in the Purported Termination Notice is invalid and of no force and effect, and that the AnnJi License Agreement remains a valid and binding agreement.
The Company has filed a Request for Arbitration with the International Court of Arbitration and also intends to follow the dispute resolution procedure set forth in the AnnJi License Agreement, which includes mediation.
Under the terms of the AnnJi License Agreement, the Company or AnnJi may terminate the AnnJi License Agreement upon a material breach by the other party upon written notice to the breaching party, provided that the breaching party has not cured such breach within sixty (60) calendar days after the date such written notice was received (such period, the “Cure Period”), provided that if the breaching party is exercising commercially reasonable efforts to cure the breach, the Cure Period is automatically extended for so long as such breaching party is exercising such efforts, but in no event no more than ninety (90) calendar days in the aggregate from the date of a written termination notice.
The AnnJi License Agreement further provides that if the parties disagree as to whether there has been a material breach (including whether the breach is material), the disputing party may contest the allegation in accordance with the applicable provisions of the AnnJi License Agreement, and the Cure Period for any dispute must run through the date of resolution of such dispute.
During the pendency of any such dispute, all terms and conditions of the AnnJi License Agreement remain in effect, and the parties are required to continue to perform their respective obligations under the AnnJi License Agreement.
In sending the Purported Termination Notice, AnnJi did not observe these dispute resolution provisions in the AnnJi License Agreement.
The continued dispute with AnnJi may impact our ability to further pursue our clinical efforts for AJ201 and otherwise affect our business plans and operations.
IV Tramadol Under the terms of certain agreements described herein, we have an exclusive license with Revogenex to develop and commercialize IV tramadol in the United States.
In 2016, we completed a pharmacokinetic study for IV Tramadol in healthy volunteers as well as an end of phase 2 meeting with the U.S.
In the third quarter of 2017, we initiated a Phase 3 development program of IV Tramadol for the management of post-operative pain.
In December 2019, we submitted a New Drug Application (“NDA”) under the 505(b)(2) regulatory pathway for IV tramadol and received a Complete Response Letter (the “First CRL”) from the FDA in October 2020.
In February 2021, we resubmitted the NDA for IV tramadol.
The FDA assigned a Prescription Drug User Fee Act (“PDUFA”) goal date of April 12, 2021 for the resubmitted NDA for IV Tramadol.
On June 14, 2021, we announced that we had received a second Complete Response Letter (the “Second CRL”) from the FDA regarding our NDA for IV tramadol.
We submitted a formal dispute resolution request (“FDRR”) with the Office of Neuroscience of the FDA on July 27, 2021.
On August 26, 2021, we received an Appeal Denied Letter from the Office of Neuroscience of the FDA in response to the FDRR submitted on July 27, 2021.
On August 31, 2021, we submitted a FDRR with the Office of New Drugs (“OND”) of the FDA.
On October 21, 2021, we received a written response from the OND of the FDA stating that the OND needed additional input from an Advisory Committee in order to reach a decision on the FDRR.
On February 15, 2022, a Joint Meeting of the Anesthetic and Analgesic Drug Products Advisory Committee and the Drug Safety and Risk Management Advisory Committee was held.
In the final part of the public meeting, the Advisory Committee voted yes or no on the following question: “Has the Applicant submitted adequate information to support the position that the benefits of their product outweigh the risks for the management of acute pain severe enough to require an opioid analgesic in an inpatient setting?” The results were 8 yes votes and 14 no votes.
On March 18, 2022, we received an Appeal Denied Letter from the OND in response to the FDRR.

and 1224 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch ATXI. Know when insiders buy.

One email the day a filing lands. Free.