UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-38114

AVENUE THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)


Delaware		47-4113275
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2 Gansevoort Street, 9^th Floor, New York, NY 10014

(Address of principal executive offices and zip code)

(781) 652-4500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of Class	Trading Symbol(s)	Exchange Name
Common Stock	ATXI	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” , “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ⌧	Smaller reporting company ⌧
Emerging growth company ⌧

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⌧

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.


Class of Common Stock		Outstanding Shares as of August 8, 2022
Common Stock, $0.0001 par value		22,134,784


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Interim Condensed Financial Statements

	Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	3

	Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2022 and 2021	4

	Unaudited Condensed Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021	5

	Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2022 and 2021	6

	Notes to Unaudited Interim Condensed Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18

Item 4.	Controls and Procedures	18

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	19

Item 1A.	Risk Factors	19

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20

Item 3.	Defaults Upon Senior Securities	20

Item 4.	Mine Safety Disclosures	20

Item 5.	Other Information	20

Item 6.	Exhibits	21

Signatures		22


	June 30,		December 31,
	2022		2021
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	890	$	3,763
Other receivables - related party		—		90
Prepaid expenses and other current assets		115		107
Total Assets	$	1,005	$	3,960

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	397	$	451
Accounts payable and accrued expenses - related party		10		58
Total current liabilities		407		509

Total Liabilities		407		509

Commitments and Contingencies

Stockholders’ Equity
Preferred Stock ($0.0001 par value), 2,000,000 shares authorized
Class A Preferred Stock, 250,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021		—		—
Common Stock ($0.0001 par value), 50,000,000 shares authorized
Common shares, 22,134,784 and 21,089,658 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		2		2
Additional paid-in capital		81,060		80,448
Accumulated deficit		(80,464)		(76,999)
Total Stockholders’ Equity		598		3,451
Total Liabilities and Stockholders’ Equity	$	1,005	$	3,960


	For the Three Months Ended				For the Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Operating expenses:
Research and development	$	151	$	328	$	1,959	$	586
General and administrative		454		623		1,509		1,366
Loss from operations		(605)		(951)		(3,468)		(1,952)

Interest income		(1)		(2)		(3)		(5)
Net Loss	$	(604)	$	(949)	$	(3,465)	$	(1,947)

Net loss per common share outstanding, basic and diluted	$	(0.03)	$	(0.06)	$	(0.16)	$	(0.12)

Weighted average number of common shares outstanding, basic and diluted		21,916,005		16,556,320		21,439,242		16,556,320


Three months ended June 30, 2022

	Class A Preferred						Additional				Total
	Shares			Common Shares			paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		capital		deficit		equity
Balance at March 31, 2022	250,000	$	—	22,134,784	$	2	$	81,017	$	(79,860)	$	1,159
Share based compensation	—		—	—		—		43		—		43
Net loss	—		—	—		—		—		(604)		(604)
Balance at June 30, 2022	250,000	$	—	22,134,784	$	2	$	81,060	$	(80,464)	$	598


Six months ended June 30, 2022

	Class A Preferred						Additional				Total
	Shares			Common Shares			paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		capital		deficit		equity
Balance at December 31, 2021	250,000	$	—	21,089,658	$	2	$	80,448	$	(76,999)	$	3,451
Share based compensation	—		—	1,045,126		—		612		—		612
Net loss	—		—	—		—		—		(3,465)		(3,465)
Balance at June 30, 2022	250,000	$	—	22,134,784	$	2	$	81,060	$	(80,464)	$	598


Three months ended June 30, 2021

	Class A Preferred						Additional				Total
	Shares			Common Shares			paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		capital		deficit		equity
Balance at March 31, 2021	250,000	$	—	16,748,068	$	2	$	75,739	$	(74,266)	$	1,475
Share based compensation	—		—	—		—		116		—		116
Net loss	—		—	—		—		—		(949)		(949)
Balance at June 30, 2021	250,000	$	—	16,748,068	$	2	$	75,855	$	(75,215)	$	642


Six months ended June 30, 2021
	Class A Preferred						Additional				Total
	Shares			Common Shares			paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		capital		deficit		equity
Balance at December 31, 2020	250,000	$	—	16,747,803	$	2	$	75,625	$	(73,268)	$	2,359
Share based compensation	—		—	—		—		230		—		230
Cashless exercise of warrants	—		—	265		—		—		—		—
Net loss	—		—	—		—		—		(1,947)		(1,947)
Balance at June 30, 2021	250,000	$	—	16,748,068	$	2	$	75,855	$	(75,215)	$	642


	For the Six Months Ended
	June 30, 2022		June 30, 2021
Cash flows from operating activities:
Net loss	$	(3,465)	$	(1,947)
Adjustments to reconcile net loss to net cash used in operating activities:
Share based compensation		612		230
Changes in operating assets and liabilities:
Other receivables - related party		90		—
Prepaid expenses and other current assets		(8)		43
Accounts payable and accrued expenses		(54)		(441)
Accounts payable and accrued expenses - related party		(48)		104
Net cash and cash equivalents used in operating activities		(2,873)		(2,011)

Net change in cash and cash equivalents		(2,873)		(2,011)
Cash and cash equivalents, beginning of period		3,763		3,132
Cash and cash equivalents, end of period	$	890	$	1,121


		For the Three and Six Months Ended
	June 30,
		2022	2021
Unvested restricted stock units/awards		321,230	1,139,910
Preferred shares		250,000	250,000
Total potential dilutive effect		571,230	1,389,910


	As of June 30,		As of December 31,
	2022		2021
Accounts payable	$	293	$	304
Accrued employee compensation		15		24
Accrued contracted services and other		89		123
Accounts payable and accrued expenses	$	397	$	451


		Weighted Average
	Number of Units and	Grant Date Fair
	Awards	Value
Unvested balance at December 31, 2021	1,416,356	$	3.75
Forfeited	(10,000)	$	0.93
Vested	(1,085,126)	$	2.52
Unvested balance at June 30, 2022	321,230	$	2.21


	For The Three Months Ended
	June 30,				Change
($ in thousands)	2021		2020		$		%
Operating expenses:
Research and development	$	151	$	328	$	(177)	(54)	%
General and administrative		454		623		(169)	(27)	%
Loss from operations		(605)		(951)		346	(36)	%

Interest income		(1)		(2)		(1)	(50)	%
Net Loss	$	(604)	$	(949)	$	345	(36)	%


Exhibit No.		Description

3.1		Third Amended and Restated Certificate of Incorporation of Avenue Therapeutics, Inc., filed as Exhibit 3.1 to Form 8-K filed on June 27, 2017 (File No. 001-38114) and incorporated herein by reference.
3.2		Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation of Avenue Therapeutics, Inc., filed as Exhibit 3.1 to Form 10-Q filed on August 14, 2018 (File No. 001-38114) and incorporated herein by reference.
3.3		Amended and Restated Bylaws of Avenue Therapeutics, Inc., filed as Exhibit 3.1 to Form 8-K filed on February 11, 2019 (File No. 000-38114) and incorporated herein by reference.
10.1		Stock Contribution Agreement between Avenue Therapeutics, Inc. and Fortress Biotech, Inc., dated May 11, 2022*
31.1		Certification of Principal Executive Officer of Avenue Therapeutics, Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 15, 2022. *
31.2		Certification of Principal Financial Officer of Avenue Therapeutics, Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 15, 2022. *
32.1		Certification of Principal Executive Officer of Avenue Therapeutics, Inc. pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated August 15, 2022. **
32.2		Certification of Principal Financial Officer of Avenue Therapeutics, Inc. pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated August 15, 2022. **
101		The following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended June 30 , 2022, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Stockholders’ Equity, (iv) the Condensed Statements of Cash Flows, and (v) Notes to the Condensed Financial Statements. *

SEC Form 10-Q filed by Avenue Therapeutics Inc.