AVENUE THERAPEUTICS, INC. such as entering into a material definitive agreement, notice of disbarment, or breach of a continuing listing rule or standard; Transfer of Registration, Change of Directors or Principal Officers (Form 8-K)

Section 1.01 Entering into a Material Definitive Agreement.

On May 11, 2022, Avenue Therapeutics, Inc. (the “Company”) has entered into a share contribution agreement (the “Contribution Agreement”) with its parent company Fortress Biotech, Inc. (“Fortress”), pursuant to which Fortress has agreed to transfer the ownership of 100% of its shares (common and preferred shares) in a private subsidiary of Fortress, Baergic Bio, Inc. (“Baergic”), to the Company. Under the terms of the Contribution Agreement, Fortress has also agreed to assign to Avenue certain existing intercompany agreements between Fortress and Baergic, including a Founder’s Agreement and a Management Services Agreement. The completion of the transactions contemplated by the Contribution Agreement is subject to the satisfaction of certain conditions precedent, including, among others: (i) the closing of an equity financing by the Company generating gross proceeds of at least $7.5 million(ii) the agreement entered into by the minority shareholder of Avenue
InvaGen Pharmaceuticals Inc. (“InvaGen”) to (A) have the Company repurchase 100% of its shares in the Company and (B) terminate certain of the agreements it has entered into with the Company and/or Fortress in connection with the participation of InvaGen in 2019 into the Company, which will eliminate certain negative consent rights of InvaGen over the Company and restore certain rights and privileges of Fortress into the Company (all on terms to be agreed with InvaGen), and (iii) continued listing shares of Avenue common stock on NASDAQ.

If completed, the transaction should provide Baergic with better access to development financing. The valuation and negotiation of the Contribution Agreement was overseen and the execution of the Contribution Agreement was approved by special committees at the Avenue and Fortress levels, both composed exclusively of independent and disinterested directors of the boards of directors of the respective companies.

The summary of the Contribution Agreement presented above does not purport to be complete and is submitted and qualified in its entirety by reference to the text of the Contribution Agreement, a copy of which will be filed in a subsequent periodic report of the Company.

 Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or

           Standard; Transfer of Listing.

On May 16, 2022the Company has notified the listing qualifications department
The Nasdaq Stock Market LLC (“Nasdaq”) that, the May 12, 2022the Company has determined that Jay Kranzler, MD, Ph.D. was not independent under Nasdaq listing rules. As a result, Dr Kranzler resigned from the Audit Committee of the Company’s Board of Directors (the “Board”) on May 13, 2022. As a result, the Company has notified Nasdaq that it no longer complies with Nasdaq Listing Rule 5605(c)(2)(A) relating to audit committee composition. Dr Kranzler remains a member of the board of directors.

Pursuant to Nasdaq Listing Rule 5605(c)(4), Nasdaq may grant the Company a relief period to restore compliance with Nasdaq Listing Rule 5605. As discussed in Section 5.02 of this Report current on the Form 8-K below, after the date of At Dr. Kranzler’s resignation from the audit committee, the May 16, 2022the Council has appointed Faith L. Charles to fill the vacancy on the audit committee created by At Dr. Kranzler’s resignation.

Article 5.02 Departure of directors or certain officers; Election of directors;

           Appointment of Certain Officers; Compensatory Arrangements of Certain
           Officers.

On May 16, 2022the Council has appointed Faith L. Charles as a director, whose term expires at the 2022 annual meeting of shareholders, to fill the vacancy on the board of directors resulting from the previously disclosed resignation of Lucy Lu, MD, and serve on the Audit Committee of the Board of Directors. The Board determined that Mrs Charles is independent under Nasdaq listing standards and applicable securities rules and regulations with respect to service on the Company’s Board of Directors and Audit Committee.

Faith L. Charles60 years old, was a partner in corporate transactions and securities at the law firm Thompson Hine, LLPsince 2010. She leads Thompson Hine’s life sciences practice and co-leads the securities practice, advising public and emerging biotech and pharmaceutical companies in the WE and internationally. Mrs Charles negotiates complex private and public financing transactions, mergers and acquisitions, licensing transactions and strategic collaborations. She acts as an external advisor to a myriad of life science companies and is recognized in the industry as a knowledgeable business advisor, providing valuable insights into capital markets, corporate governance and strategic development. Since
March 2021, Mrs Charles served on the Board of Directors, the Audit Committee and Nominating and Corporate Governance Committee of Abeona Therapeutics Inc., a clinical-stage biopharmaceutical company developing cell and gene therapies for life-threatening rare genetic diseases whose common stock is listed on the Nasdaq. From 2018 to October 2021, Mrs Charles sat on the board of directors and member of the audit committee and chairman of the Remuneration Committee of Entera Bio Ltd., a publicly traded biotechnology company. She also sits on the board of directors directors of several private life sciences companies. Mrs Charles founded the Women in Bio Metro New York chapter and chaired the chapter for five years. She currently sits on the national board of Women in Bio. Mrs Charles is also a member of the board of directors of Red Door Community
(formerly Gilda’s Club New York). She was recognized as a Life Sciences Star by Euromoney LMG Life Sciences, was named a BTI Customer Service All-Star and was named by Crain’s New York Business to the 2020 Notable Women in the Law list. Mrs Charles holds a JD of The George Washington University School of Law and a bachelor’s degree in psychology from Barnard College,
Colombia University. Mrs Charles is a graduate of Women in Bio’s Boardroom Ready program, an executive education program taught by The George Washington University School of Business.

Mrs Charles not have a family relationship with one of the executive corporate officers or directors of the Company. There are no arrangements or agreements between Mrs Charles and any other person by virtue of whom she was elected a director of the Company. Mrs Charles has no direct or indirect material interest in any transaction or proposed transaction required to be reported under Section 404(a) of Regulation SK.

Mrs. Charles will participate in the Company’s non-employee director compensation program, which is described in the Company’s definitive proxy statement on Schedule 14A, filed with the Security and Exchange Commission on November 21, 2021. In addition, the Company will enter into its standard directors’ indemnification agreement with Mrs Charles.

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