Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-35182
AMPIO PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
373 Inverness Parkway
Suite 200
Englewood, Colorado
(Address of principal executive offices)
26-0179592
(I.R.S. Employer
Identification No.)
80112
(Zip Code)
(720) 437-6500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $0.0001 per share
Trading Symbol
AMPE
Name of each exchange on which registered
NYSE American
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ⌧
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ⌧
Indicate by a check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 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
Non-accelerated filer
☐
⌧
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive
officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧
The aggregate market value of common stock held by non-affiliates of the registrant as of June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter,
was $37.3 million based on the closing price of $0.1680 (pre-reverse stock split) as of that date.
As of March 22, 2023, 15,102,877 shares of the registrant’s common stock, par value $0.0001 per share were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information required by Part III is omitted from this Annual Report on Form 10-K and incorporated by reference to our definitive proxy statement for our 2023 annual meeting of
stockholders (“2023 Proxy Statement”), to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, or Exchange Act within 120 days of our year end of December
31, 2022.
Table of Contents
TABLE OF CONTENTS
Item 1
BUSINESS
Item 1A
RISK FACTORS
Item 1B
UNRESOLVED STAFF COMMENTS
Item 2
PROPERTIES
Item 3
LEGAL PROCEEDINGS
Item 4
MINE SAFETY DISCLOSURES
PART I
PART II
Item 5
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Item 6
RESERVED
Item 7
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Item 7A
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Item 9A
CONTROLS AND PROCEDURES
Item 9B
OTHER INFORMATION
Item 9C
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
PART III
Item 10
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 11
EXECUTIVE COMPENSATION
Item 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Item 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Item 14
PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
Item 15
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Item 16
FORM 10-K SUMMARY
SIGNATURES
2
Page
5
7
13
14
14
16
17
17
17
23
23
23
23
24
24
24
25
25
25
25
25
27
28
Table of Contents
This Annual Report on Form 10-K (“Annual Report”) refers to trademarks, such as Ampio and Ampion ®, which are
protected under applicable intellectual property laws and are our property. This Form 10-K also contains trademarks,
service marks, copyrights and trade names of other companies which are the property of their respective owners. Solely
for convenience, our trademarks and tradenames referred to in this Form 10-K may appear without the ® or ™ symbols,
but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable
law, our rights to such trademarks and tradenames.
Unless otherwise indicated or unless the context otherwise requires, references in this Form 10-K to the “Company,”
“Ampio,” “we,” “us,” or “our” relate to Ampio Pharmaceuticals, Inc.
3
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, or Annual Report, includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other reports filed with
the Securities and Exchange Commission (“SEC”), in materials delivered to stockholders and in press releases. In
addition, the Company’s representatives may from time to time make oral forward-looking statements.
All statements other than statements of historical facts contained in this Annual Report, including statements
regarding our anticipated future clinical developments, future financial position, and plans and objectives of management
for future operations, are forward-looking statements. Words such as “may”, “will”, “should”, “forecast”, “could”, “expect”,
“suggest”, “believe”, “estimate”, “continue”, “anticipate”, “intend”, “ongoing”, “opportunity”, “potential”, “predicts”, “seek”,
“plan,” or similar words, or the negatives of such terms or other variations on such terms or comparable terminology,
typically identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements
relating to the following:
●
●
●
●
●
projected operating or financial results, including anticipated cash flows used in operations or the effect of
any actions we may take to reduce expenses and preserve cash;
potential outcomes of preclinical trials for AR-300, any future capital expenditures, research and
development expenses and other payments relating to AR-300 and any capital raising activities to fund AR-
300 research and development related expenses;
our strategic alternatives process, including any potential interested counterparty, transaction structure,
timing and transaction expense associated with any strategic alternative and the potential success of any
strategic alternative;
the expense, time or outcome of any legal proceeding; and
our ability to identify strategic partners for Ampion or any other potential product and enter into beneficial
license, co-development, collaboration or similar arrangements.
We undertake no obligation to update or revise publicly any forward-looking statements to reflect events or
circumstances after the date of such statements for any reason, except as otherwise required by law.
Forward-looking statements are based on certain assumptions and expectations of future events and trends that are
subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those
reflected in any such forward-looking statements depending on a variety of factors. Important information as to these
factors can be found in this Annual Report, including, among others, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” under the headings of “Overview,” “Liquidity and Capital Resources” and annually in
“Critical Accounting Policies, Estimates and Judgments.” Discussion of these factors is incorporated by reference from
Part I, Item 1A, “Risk Factors,” of this Annual Report, and should be considered an integral part of Part II, Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For additional information
concerning factors that may cause actual results to vary materially from those stated in the forward-looking statements,
see our reports on Forms 10-K, 10-Q and 8-K filed with the SEC from time to time.
4
Table of Contents
Item 1. Business.
Overview
AMPIO PHARMACEUTICALS, INC.
PART I
We are a pre-revenue stage biopharmaceutical company. Until May 2022 we were focused on the clinical development of
Ampion® and preclinical development of AR-300, a novel, proprietary, small molecule formulation that has (i)
demonstrated anti-inflammatory properties in vitro and (ii) protection of cartilage in preclinical rat meniscal tear studies.
Subsequently, we have shifted nearly all of our focus towards the preclinical development of AR-300 and we are currently
conducting studies to evaluate the efficacy of AR-300 in osteoarthritis-related pain. If the preclinical data is compelling,
we would plan to initially target clinical development of AR-300 for the treatment of osteoarthritis of the knee (OAK).
Osteoarthritis is widely regarded as being typified by cartilage loss. Substances that protect articular cartilage during the
course of osteoarthritis have been termed chondroprotective. Clinical demonstration of cartilage protection and pain
management in the knee could position AR-300 for administration early in the current OAK treatment paradigm which we
believe is a potentially large and attractive market opportunity.
The development of AR-300 to date has been based, in part, on our extensive drug discovery and clinical development
experience obtained during the development of Ampion for the treatment of OAK. It is important to note, however, that
AR-300 is not Ampion, rather it is a novel and unique formulation in preclinical development. We currently expect to have
preclinical pain and chondroprotection results for AR-300 in the first half of 2023.
In addition, and given the overall risks associated with preclinical drug development, we continue to opportunistically
identify and evaluate strategic opportunities that would allow us to acquire or license later stage assets and/or merge with
companies that have those assets as part of the strategic alternatives process that we announced in May 2022. In 2022,
we evaluated more than a dozen potential strategic alternatives with the assistance of our legal, clinical and regulatory,
and financial advisors consistent with our strategic alternatives process.
On November 9, 2022, the Company effected a 15-to-1 reverse stock split. The Company has retroactively applied the
reverse stock split made effective on November 9, 2022 to share and per share amounts in the consolidated financial
statements as of December 31, 2022 and December 31, 2021. Additionally, pursuant to their terms, a proportionate
adjustment was made to the per share exercise price and number of shares issuable under all of the Company’s
outstanding options and warrants, and the number of shares authorized for issuance pursuant to the Company’s equity
incentive plans have been reduced proportionately, with any fractional shares rounded up to the next whole share. The
Company also retroactively applied such adjustments in the notes to the consolidated financial statements as of
December 31, 2022 and December 31, 2021. The reverse stock split did not reduce the number of authorized shares of
common stock and preferred stock and did not alter the par value.
5
Table of Contents
Government Regulation
FDA Approval Process
If Ampio determines that pain and chondroprotection data from the AR-300 preclinical studies justify moving forward with
the clinical development of AR-300, it is our intent to approach FDA in INTERACT (Initial Targeted Engagement for
Regulatory Advice) and pre-IND meeting later in 2023 to discuss the development plan for the drug, which we believe will
be regulated as a small molecule formulation, and will require additional, IND-enabling preclinical studies, a Phase 1
safety study, at least one Phase 2 proof of efficacy study, and likely two randomized, controlled Phase 3 studies. Based
on current input from our clinical and regulatory advisor, we believe this regulatory process could comprise five-to-seven
years and require an incremental investment over and above Ampio’s general operating expense during that period.
Intellectual Property Summary
We will be able to protect our proprietary intellectual property rights from unauthorized use by third parties only to the
extent that such rights are covered by valid and enforceable patents or are effectively maintained as trade secrets. We
seek to protect our trade secrets and proprietary know-how through confidentiality and nondisclosure agreements and
other controls over confidential information. If we do not adequately protect our trade secrets and proprietary know-how,
our competitive position and business prospects could be materially harmed.
The following describes our patents and patent applications relating to AR-300 and Ampion®.
AR-300
We own a number of United States provisional patent applications covering AR-300, as well as its uses, formulations, and
manufacturing processes. We expect that these provisional patent applications, which are the patent rights we consider
most significant in relation to our business as a whole, will be consolidated and filed as a single PCT (Patent Cooperation
Treaty) application in the second quarter of 2023. One or more national phase applications will be filed from this PCT
application approximately eighteen (18) months later, in the third quarter of 2024.
Because we are currently focused on the preclinical development of AR-300, we anticipate filing additional patent
applications in the future, covering new discoveries, formulations and/or research advancements in or relating to AR-300,
as we determine appropriate.
Patents covering AR-300 may extend for varying periods according to the date of patent filing or grant and the legal term
of patents in the various countries where patent protection is obtained. Generally speaking, patents to issue from the
above-mentioned PCT application will exist for a period of twenty years from the filing date of the PCT application, or until
the second quarter of 2043. The scope of protection afforded by a patent can also vary from country to country and
depends on the patent type, the scope of its patent claims and the availability of legal remedies. Patent term extensions
(PTE) may be available in some countries to compensate for a loss of patent term due to delay in a product’s approval
due to the regulatory requirements.
Reliable patent protection and enforcement around the world are among the key factors we consider for continued
business and R&D investment. The WTO Agreement on Trade Related Aspects of Intellectual Property Rights (WTO-
TRIPS) requires participant countries
for
pharmaceutical products by law, with an exemption provided for least developed countries until 2033. While some
countries have made improvements, we may face patent grant, enforcement and other intellectual property challenges in
many countries.
intellectual property-related protection
to provide patent and other
Ampion
Globally, we own a large number of issued patents and pending patent applications covering Ampion®, our proprietary
biological pharmaceutical product, as well as its uses, formulations, and manufacturing processes. Given the decision to
focus available resources on the research and development of AR-300, we made the decision starting in 2023 to
significantly limit or discontinue much of the existing patent portfolio covering Ampion®. Those members of the existing
Ampion® patent estate that we expect to continue to maintain will be based on the relative importance of technologies
6
Table of Contents
covered by patents, the geographic jurisdiction of patents, and remaining patent term. We believe that this strategy will
significantly reduce the overall number of patents and minimize the economic impact of the Ampion® patent estate on the
Company.
Human Capital Resources
As we move forward with the development of AR-300, we believe it is crucial that we have just-in-time access to specific
best-in-class expertise at each unique stage of the drug’s development, including the following: (i) expertise in planning,
executing, and evaluating preclinical development, (ii) planning and executing the Phase 1 safety study, (iii) planning and
executing the Phase 2 and 3 clinical studies, (iv) interfacing with regulatory authorities, and (v) maintaining, analyzing,
and presenting data required to support regulatory filings and decisions. In addition, we continue to be a public-reporting
company and, as such, require the resources to comply with our public reporting and stock exchange obligations.
Accordingly, we have implemented a hybrid organizational model whereby we retain the organizational competencies to
govern and comply with the public reporting requirements and select and manage specific third-party independent
contractors with proven industry expertise in formulation development, preclinical development, GMP manufacturing,
clinical development, regulatory and legal on an as needed basis. We believe this model will position us best to develop
AR-300 in the most expeditious and cost-effective manner, and effectively control the fixed costs associated with building
an all-employee organization.
We began implementing this model toward the end of 2022 and have continued implementation into the first quarter of
2023. As of December 31, 2022, we had eight full-time employees focused on research, manufacturing, project
management, accounting and finance, administrative support, information technology (“IT”), and corporate governance.
As of February 1, 2023, we had five employees focused on project management, accounting and finance, IT, and
corporate governance. Consistent with our outsourcing philosophy, we have contracted with third-party firms to provide
medical/clinical oversight, financial and accounting control, assistance with transferring manufacturing methods, and
administrative support, and have engaged third-party firms with specific orthopedic expertise to assist with designing and
implementing preclinical, clinical and regulatory development plans for AR-300.
Available Information
We file annual reports, quarterly reports, proxy statements and other documents with the SEC under the Exchange Act.
The SEC maintains a website that contains reports, proxy and information statements, and other information regarding
issuers, including Ampio, that file electronically with the SEC. These filings are available through the SEC’s website at
https://www.sec.gov.
Ampio also makes available free of charge through its website, http://www.ampiopharma.com, its annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished
pursuant to the Exchange Act as soon as reasonably practicable after the Company electronically files such material with,
or furnishes it to, the SEC. Information found on our website is not incorporated by reference into this Annual Report.
Item 1A. Risk Factors.
You should carefully consider the following risk factors and all other information contained herein as well as the
information included in this Annual Report and other reports and filings made with the SEC in evaluating our business
and prospects. Risks and uncertainties, in addition to those we describe below, that are not presently known to us or that
we currently believe are immaterial may also impair our business operations. If any of the following risks occur, our
business and financial results could be harmed, and the price of our common stock could decline. You should also refer to
the other information contained in this Annual Report, including our Consolidated Financial Statements and the related
Notes.
7
Table of Contents
Risks Related to the Development of AR-300, Strategic Alternatives and Our Business
We are dependent on the success of our AR-300 technology and we cannot be certain that any preclinical data
will support its further development.
AR-300 is a novel, proprietary (patents pending), small molecule formulation that has demonstrated promising anti-
inflammatory properties in vitro and protection of cartilage in preclinical rat meniscal tear studies. We are currently
conducting studies to evaluate the efficacy of AR-300 in osteoarthritis pain. We expect to have preclinical pain and
chondroprotection results in the first half of 2023. The future development of AR-300 will depend on the success and
level of positive data from the current and near-term preclinical studies. At this time, AR-300 is our only potential product
in development. We do not have any products that are approved for commercial sale and may never be able to develop
marketable products. In 2022, we generated no revenue from any source other than interest income.
If the results from the preclinical studies of AR-300 are sufficiently positive, any future product candidate from a
formulation of AR-300 will require additional development, including further preclinical studies, as well as clinical trials,
optimization of their formulation, and regulatory clearances, before they can be commercialized. Positive results obtained
during early development do not necessarily mean later development will succeed. If AR-300 fails to demonstrate
sufficiently positive data at any time or we determine there are other barriers to successful commercialization, we may
abandon development of AR-300.
We believe that sufficiently positive pre-clinical data for AR-300 is a condition to future capital raising to fund AR-300
development. If our available cash resources are insufficient to fund our expenses (including relating to legal proceedings)
and the development of AR-300 and/or completion of a strategic transaction, we may implement further cost reduction
and other cash-focused measures to manage liquidity and we may pursue a plan of liquidation or dissolution of Ampio or
seek bankruptcy protection. If we decided to cease operations and dissolve and liquidate our assets, it is unclear to what
extent we would be able to pay our obligations. In such a circumstance and in light of the Company’s current liquidity
position and pending legal matters, it is unlikely that cash would be available for distributions to stockholders.
We may explore strategic alternatives but there can be no assurance that we will be successful in identifying or
completing any strategic alternative or that any such strategic alternative will yield value for our stockholders.
Given the risks associated with preclinical drug development, we continue to opportunistically identify and evaluate
strategic opportunities to acquire or license later stage assets and/or merge with companies that have those assets. To-
date, we have evaluated more than a dozen such opportunities. Finding attractive and affordable assets and/or merger
partners has been challenging due to competition from the high number of companies with failed clinical trials that are
pursuing the same strategy; in addition to our circumstances regarding our cash balance, the uncertainty around our
continued listing on a major exchange, and the potential risks associated with ongoing legal and regulatory matters.
The process of exploring strategic alternatives is time consuming, and our board of directors has not set a timetable for
the conclusion of its review of strategic alternatives. Our review of strategic options and alternatives could result in,
among other things, a sale, merger, reverse merger, consolidation or business combination, asset divestiture, partnering,
licensing or other collaboration agreements, or potential acquisitions, recapitalizations or restructurings, or in one or more
transactions. There can be no assurance that the exploration of strategic alternatives is the correct strategy to pursue or
that it will result in the identification or consummation of any transaction. Certain potential strategic transaction
alternatives, if available and achieved, could result in substantial dilution to existing stockholders and have a material
adverse effect on the market price of Ampio’s common stock.
Additionally, in light of our current stock price and ongoing legal matters, there can be no assurance that we will have
sufficient capital resources to fund any strategic transaction, if available. If we raise additional funds through the issuance
of equity securities, including as part of a strategic transaction, it could result in substantial dilution to our existing
stockholders, increased fixed payment obligations, and any issued securities may have rights senior to those of the
Company’s shares of common stock.
We also cannot assure that any potential transaction or other strategic alternative, if identified, evaluated and
consummated, will provide greater value to our stockholders or otherwise successfully address the challenges associated
with our dependence upon a single preclinical asset for our business. Any potential transaction would be dependent upon
a number
8
Table of Contents
of factors that may be beyond our control, including, among other factors, market conditions, industry trends, the interest
of third parties in our business or preclinical development progress, and the availability of financing to potential buyers on
reasonable terms.
We rely on third parties for critical resources, including AR-300 development, and we may not be able to manage
these third parties to provide timely, high quality, and cost-effective services to us.
As of December 31, 2022, we had eight full-time employees and as of February 1, 2023, we had five full-time employees.
These employees are focused on project management, accounting & finance, IT, and corporate governance. As part of
our AR-300 development strategy, we have determined to outsource and contract with independent organizations,
advisors and consultants to provide specific services, such as orthopedic expertise to assist with designing and
implementing preclinical, clinical and regulatory development plans for AR-300. We have also determined to contract with
third parties for other business-related functions such as finance and accounting and administrative support. We believe
that we will be able to obtain support and relevant expertise from the third party resources at an overall lower cost profile
than hiring our own employees as well as benefit from greater range of expertise from third party resources than may be
found in any number of employees. However, there can be no assurance that our strategy of using third parties will result
in these intended benefits.
We currently rely, and for the foreseeable future will continue to rely, in substantial part on third parties to provide critical
services to us. We cannot assure you that the services of these third parties will continue to be available to us on a timely
basis when needed, or that we can find qualified replacements. If the cost of these services increase for any reason, or if
these third parties are unable or unwilling provide services to us, we may have to find another third party to provide these
services which could result in interruptions, increased costs, delays, in other challenges in the development of AR-300, in
the execution of strategic alternatives or strategic transactions, in our ability to fulfill our SEC reporting obligation or
comply with the continued listing requirements of NYSE American, or in the proper functioning of other business
functions. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the
services provided by third-party service providers is compromised for any reason, we may similarly suffer from
interruptions, increased costs, delays and from the other challenges described above. We cannot assure you that we will
be able to manage our existing third-party service providers or find other competent outside contractors and consultants
on economically reasonable terms, or at all.
Risks Related to Our Financial Position and Capital Requirements
Our history of losses and our cash resources available to execute our business plan over the next twelve
months raise substantial doubt about our ability to continue as a going concern.
In 2022, we experienced net losses of $16.3 million, had no revenue other than interest income, and used $21.1 million in
cash to fund our operations. Due to the current level of liquidity at December 31, 2022 and the projected shortfall to cover
operating expenses requiring cash for a period of 12 months from the report date of the annual report, management has
expressed substantial doubt as to our ability to continue as a going concern.
As of December 31, 2022, our source of liquidity consisted of $12.7 million of cash and cash equivalents. While we
implemented cost reductions in 2022, our finite cash resources available to execute our business plan present the risk
that we will not have sufficient cash available in the amount or at the time we need it to fund our ongoing operations and
execute our business plan involving the development of AR-300 and strategic alternatives over the next twelve months.
Our capital needs are based upon management estimates as to future expense and potential future capital raising
activity, which involve significant judgment particularly given that we are pursuing a strategic alternatives process and
cannot predict the duration or expense associated with this process. Additionally, the expense associated with and
outcome of any legal proceeding is not possible to determine at this time. We cannot assure you that additional financing
will be available in the amount or at the time we need it, or that it will be available on acceptable terms or at all. We
believe that positive pre-clinical data for AR-300 is a condition to future capital raising to fund further development of AR-
300 and an identifiable, attractive strategic transaction is a condition to future capital raising to fund that strategic
transaction.
If our available cash resources are insufficient to fund our expenses (including relating to legal proceedings) and the
development of AR-300 and/or completion of a strategic transaction, we may implement further cost reduction and other
cash-focused measures to manage liquidity and we may pursue a plan of liquidation or dissolution of Ampio or seek
9
Table of Contents
bankruptcy protection. If we decided to cease operations and dissolve and liquidate our assets, it is unclear to what extent
we would be able to pay our obligations. In such a circumstance and in light of the Company’s current liquidity position
and pending legal matters, it is unlikely that cash would be available for distributions to stockholders.
We are involved in legal proceedings that likely will adversely affect our financial position and our pursuit of
strategic alternatives.
We are involved in and may in the future be involved in legal proceedings. Regardless of whether any claims against us
are valid or whether we are liable, litigation claims or regulatory proceedings are expensive and time consuming to defend
against, require us to advance potentially substantial amounts to director and officer defendants for their defense of the
claims, and will result in the diversion of management attention and resources from our business and strategic goals.
Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters.
The outcome of any legal proceeding is not possible to determine at this time. If we are liable in any legal proceeding,
such proceeding could result in injunctions or other equitable relief, settlements, penalties, fines or damages that could
materially adversely affect our results of operations, cash position and the conduct of our business and pursuit of strategic
alternatives. The uncertainty relating to any legal proceedings may also impair our ability to raise capital. Given our limited
cash resources, significant liabilities resulting from legal proceedings could force us to implement further cost reduction
and other cash-focused measures to manage liquidity, including potential termination of our strategic alternatives
process, and the Company may pursue a plan of liquidation or dissolution of the Company or seek bankruptcy protection,
any of which could cause the value of any investment in the Company to decline to zero. If we decided to cease
operations and dissolve and liquidate our assets, it is unclear to what extent we would be able to pay our obligations. In
such a circumstance and in light of the Company’s current liquidity position and pending legal matters, it is unlikely that
cash would be available for distributions to stockholders.
We may need additional capital to fund our future operations, the development of AR-300 and any strategic
transaction.
As of December 31, 2022, we had $12.7 million of cash and cash equivalents which we expect can fund our operations
through the fourth quarter of 2023. Our future capital requirements will depend on, and could increase significantly as a
result of, many factors including:
●
●
●
●
●
●
progress in and the costs of our AR-300 preclinical studies and any future clinical trials and research and
development relating to AR-300;
costs relating to the exploration of strategic alternatives and costs associated with pursuit of any strategic
transaction, including any consideration we may pay to acquire or license later stage assets and/or merge
with companies that have those assets or other transaction or series of transactions;
the costs of defending lawsuits and other claims such as those described in Part I, Item 3. “Legal
Proceedings” and any amounts paid to resolve those legal matters;
the costs involved in filing, prosecuting, enforcing, and defending patent claims and other intellectual property
rights;
efforts to cure any future non-compliance with the minimum stockholders’ equity or other requirement of the
NYSE American; and
the costs of sustaining our corporate overhead requirements, including D&O insurance, and hiring and
retaining necessary personnel or third parties.
Our capital needs are based upon management estimates as to future expense and potential future capital raising
activity, which involve significant judgment particularly given that we are in the middle of the strategic alternatives process
and cannot predict the duration or expense associated with this process. Additionally, the expense associated with and
outcome of any legal proceeding is not possible to determine at this time.
10
Table of Contents
We cannot assure you that additional financing will be available in the amount or at the time we need it, or that it will be
available on acceptable terms or at all. We believe that positive pre-clinical data for AR-300 is a condition to pursue future
capital raising to fund AR-300 and an identifiable, attractive strategic transaction is a condition to pursue future capital
raising to fund that strategic transaction. We may obtain future additional financing by incurring indebtedness or from an
offering of our equity securities or any of these.
If we raise equity financing, our stockholders may experience significant dilution of their ownership interests and the value
of shares of our common stock could decline. Our efforts to raise additional funds from the sale of equity may be
hampered by the currently depressed trading price of our common stock, by pending legal matters, and by our prior non-
compliance or any future non-compliance with the continued listing requirements of the NYSE American. If we raise
additional equity financing, new investors may demand rights, preferences or privileges senior to those of existing holders
of common stock. Our efforts to raise funds by incurring indebtedness may be hampered by our limited assets to secure
debt and the absence of any revenue to support debt service payments. Any financing would likely have covenants that
would affect the manner in which we conduct our business, including by restricting our ability to incur indebtedness or sell
additional equity securities.
If we cannot timely raise any needed funds, we may implement further cost reduction and other cash-focused measures
to manage liquidity and we may pursue a plan of liquidation or dissolution of Ampio or seek bankruptcy protection. If we
decided to cease operations and dissolve and liquidate our assets, it is unclear to what extent we would be able to pay
our obligations. In such a circumstance and in light of the Company’s current liquidity position and pending legal matters,
it is unlikely that cash would be available for distributions to stockholders.
Risks Related to Our Intellectual Property
We are dependent on adequate protection of our patent and proprietary rights.
We rely on patents, trade secrets, trademarks, copyrights, know-how, and contractual provisions to establish and protect
our intellectual property rights. We own a number of United States provisional patent applications covering AR-300, our
proprietary small molecule pharmaceutical product, as well as its uses, formulations, and manufacturing processes. We
anticipate filing additional patent applications in the future, covering new discoveries, formulations and/or research
advancements in or relating to AR-300, as needs arise. If we do not diligently pursue our intellectual property rights or
they are invalidated or circumvented, our development of AR-300 and any future commercialization of any formulation of
AR-300 will be adversely affected. We must successfully defend these rights against third-party challenges.
However, these legal means afford us only limited protection and may not adequately protect our rights or remedies to
gain or keep any advantages we may have over other companies seeking to commercialize product candidates similar or
identical to AR-300. If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent
or other legal protections of our intellectual property rights, our ability to prevent our competitors from commercializing
product candidates similar or identical to AR-300 would be adversely affected.
Additionally, competitors, many of which have substantial resources and may make substantial investments in competing
products and product candidates, may apply for and obtain patents that will prevent, limit, or interfere with our ability to
develop, manufacture or market any product relating to AR-300. Further, while we do not believe that our claimed
intellectual property interferes with the rights of others, third parties may nonetheless assert patent infringement claims
against us in the future.
Costly litigation may be necessary to enforce patents issued or licensed to us, to protect trade secrets or “know-how” we
own, to defend us against claimed infringement of the rights of others or to determine the ownership, scope, or validity of
our proprietary rights and the rights of others.
Any claim of infringement against us may involve significant liabilities to third parties, could require us to seek licenses
from third parties, and could prevent us from manufacturing, selling, or using any products that we may develop. The
occurrence of this litigation or the effect of an adverse determination in any of this type of litigation could have a material
adverse effect on our business and financial condition.
11
Table of Contents
Risks Related to Our Common Stock
The price of our stock has been extremely volatile and may continue to be volatile and fluctuate substantially,
which could result in substantial losses for purchasers of our common stock.
The price of our common stock has been extremely volatile and may continue to be so, particularly as we confront and
attempt to address the risks relating to AR-300, our strategic alternatives process, our capital resources, and the other
risk factors described in this section. Additionally, the stock market in general and the market for pre-revenue stage
biopharmaceutical companies have experienced extreme volatility that has often been unrelated to the operating
performance of a particular company. The following factors, in addition to the other risk factors described in this section,
may also have a significant impact on the market price of our common stock:
●
●
●
●
●
●
●
●
●
●
●
●
any actual or perceived adverse developments in the preclinical studies for AR-300, any clinical trials
involving AR-300, or the general development of AR-300;
uncertainties relating to the strategic alternatives or any strategic transaction, including actual or perceived
adverse developments in this process or the announcement or pendency of any transaction;
any announcements of developments with, or comments by, the FDA or other regulatory authorities that may
impact Ampio or the potential regulatory path for AR-300;
developments in any legal proceeding in which we are or may become involved;
any announcements concerning our retention or loss of key employees;
our continued compliance with NYSE American listing requirements and any action taken by the NYSE
American relating to our common stock;
announcements of patent issuances or denials, infringement claims or other intellectual property related
developments;
announcements of the introduction of new competitive products by other companies;
future issuances of common stock or other securities;
sales of stock by our stockholders holding a significant position in the Company;
economic and other external factors beyond our control; and
public confidence in the securities markets and regulation by or of the securities market.
A significant drop in the price of our stock could expose us to the risk of securities class action lawsuits, which could result
in substantial costs and divert management’s attention and resources, which could adversely affect our business.
If we cannot continue to satisfy the NYSE American continued listing requirements and rules, our securities may
be delisted, which could negatively impact the price of our securities.
Currently, our common stock is listed on the NYSE American. In order to maintain our listing on the NYSE American, we
must continue to satisfy the applicable continued listing requirements and rules, including such rules and requirements
relating to minimum share price, minimum stockholders’ equity and a minimum number of public stockholders.
The NYSE American may delist the securities of any issuer if, in its opinion, the issuer’s financial condition and/or
operating results appear unsatisfactory; if it appears that the extent of public distribution or the aggregate market value of
the security has become so reduced as to make continued listing on the NYSE American inadvisable; if the issuer sells or
disposes of principal operating assets or ceases to be an operating company; if an issuer fails to comply with the NYSE
American’s listing requirements; if an issuer's common stock sells at what the NYSE American considers a “low selling
price” (generally trading below $0.20 per share for an extended period of time); maintaining minimum stockholders’
equity at least $6.0 million; or if any other event occurs or any condition exists which makes continued listing on the
NYSE American, in its opinion, inadvisable.
12
Table of Contents
If the NYSE American delists our securities, we could face significant consequences, including:
●
●
●
●
●
●
●
a limited availability for market quotations for our securities;
reduced liquidity with respect to our securities;
a determination that our common stock is a “penny stock,” which will require brokers trading in our common
stock to adhere to more stringent rules and possibly result in reduced trading;
activity in the secondary trading market for our common stock;
reduced opportunities for strategic alternatives;
limited amount of news and analyst coverage; and
a decreased ability to issue additional securities or obtain additional financing in the future.
While we continue to monitor our compliance with the NYSE American continued listing requirements, there can be no
assurance that we will be able to continue to comply with the NYSE American listing requirements.
The market for the Company’s common stock may be thinly traded and stockholders may be unable to sell at or
near ask prices or at all.
The Company’s common stock may be thinly traded on the NYSE American, meaning that the number of persons
interested in purchasing the Company’s shares at or near ask prices at any given time may be relatively small or non-
existent. Consequently, there may be periods of several days or more when trading activity in the Company’s shares is
minimal or non-existent. The Company cannot assure investors that a broader or more active public trading market for
the Company’s common stock will develop or be sustained or that current trading levels will be maintained.
Anti-takeover provisions in our charter and bylaws and in Delaware law could prevent or delay a change in
control of Ampio.
Provisions of our certificate of incorporation and bylaws may discourage, delay, or prevent a merger or acquisition that
stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for
their shares. These provisions include:
●
●
●
requiring supermajority stockholder voting to effect certain amendments to our certificate of incorporation and
bylaws;
restricting the ability of stockholders to call special meetings of stockholders; and
establishing advance notice requirements for nominations for election to the board of directors or for
proposing matters that can be acted on by stockholders at stockholder meetings.
If securities or industry analysts do not publish research or reports or publish unfavorable research or reports
about our business, our stock price and trading volume could decline.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts
publish about us, our business, our market or our competitors. Coverage by securities and industry analysts and initiation
of coverage in the future is uncertain at this time. If securities or industry analysts do not cover our company, the trading
price for our stock could continue to be negatively impacted. Additionally, if any analyst downgrades our stock, our stock
price would likely decline.Click or tap here to enter text.
Item 1B. Unresolved Staff Comments.
None.
13
Table of Contents
Item 2. Properties.
We maintain our headquarters, research laboratories, and manufacturing facilities in leased space located in Englewood,
Colorado, for monthly minimum lease payments of approximately $30,000. The lease expires in September 2024.
Effective March 1, 2023, the Company entered into a sublease agreement with the consent of the Landlord pursuant to
which the Company will sublease the Premises for a term commencing on March 1, 2023 and continuing until the
expiration of the Lease on September 30, 2024. However, the address of the Company’s principal executive offices
continues to be 373 Inverness Parkway, Suite 200, Englewood, Colorado 80112.
Item 3. Legal Proceedings.
From time to time, the Company may be a party to litigation arising in the ordinary course of business. In addition, a s of
December 31, 2022, Ampio was involved in the following material pending legal proceedings:
Kain v. Ampio Pharmaceuticals, Inc., et al., 22-cv-2105
On August 17, 2022, a putative Ampio shareholder filed a securities fraud class action against the Company, its current
CEO Michael A. Martino and two former executives, Michael Macaluso and Holli Cherevka, in the United States District
Court for the District of Colorado, captioned Kain v. Ampio Pharmaceuticals, Inc., et al. , 22-cv-2105. The Complaint
alleges that Ampio and the individual defendants made various false and misleading statements regarding the efficacy,
clinical trials and FDA communications relating to Ampio’s lead product, Ampion, and its treatment of severe osteoarthritis
of the knee in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
Rule 10b-5 promulgated thereunder. The Complaint also asserts control person liability against the individual defendants
under Section 20 of the Exchange Act.
The Complaint relies largely on Ampio’s announcement on May 16, 2022, that it had formed a special Board committee to
investigate the statistical analysis of Ampio’s AP-013 clinical trial and the unauthorized provision of Ampion to various
individuals who were not participating in clinical trials, and Ampio’s further announcement on August 3, 2022, that the
investigation had revealed that various employees were aware that the AP-013 trial did not demonstrate efficacy for
Ampion’s primary endpoints and did not fully and timely report the results of the trial and the timing of unblinding data
from the trial. Based on the Company’s reports, the Complaint asserts that various statements made by the Company
during the Class Period were false and misleading because they: (i) inflated Ampio’s ability to successfully obtain FDA
approval for Ampion; (ii) inflated the results of the AP-013 clinical trial and failed to disclose the timing of unblinding the
data from the study; and (iii) overstated the Company’s business, operations and prospects.
The Complaint seeks an unspecified amount of compensatory damages as well as attorneys’ fees and costs. On October
17, 2022, six putative shareholders filed motions seeking to be named lead plaintiff. On November 7, 2022, two of the
movants filed oppositions to each other’s motions; the remaining movants either withdrew their motions or filed non-
oppositions to another putative shareholder’s motion. The Court has not yet ruled on the competing motions for
appointment of lead plaintiff. In the interim, the Court approved the parties’ joint motion to stay proceedings, and all
deadlines are deferred until after a decision on the lead plaintiff motion(s).
Ampio intends to defend itself vigorously against this action.
Maresca v. Martino, et al., 22-cv-2646-KLM
On October 7, 2022, putative Ampio shareholder Robert Maresca filed a Verified Shareholder Derivative Complaint in the
United States District Court for the District of Colorado, captioned Maresca v. Martino, et al. , 22-cv-2646-KLM. The
derivative complaint, brought on behalf of the Company, asserts claims against a number of current and former
executives and directors of the Company, namely Michael A. Martino, Michael Macaluso, Holli Cherevka, David Bar-Or,
David Stevens, J. Kevin Buchi, Philip H. Coelho and Richard B. Giles.
Based largely on the same allegations as the Kain securities fraud class action complaint (including Ampio’s reports in
May and August, 2022, regarding its internal investigation and findings), the Complaint asserts that the individual
defendants caused the Company to make false or misleading statements in its SEC filings by “hyp[ing Ampio’s] ability to
successfully file a BLA for Ampion;” “exaggerate[ing] results of the AP-013 study;” “misstat[ing] the true timing of
14
Table of Contents
unblinding of data from the AP-013 study;” and “fail[ing] to maintain internal controls.” The Complaint also asserts that
the defendants failed to exercise due care and comply with the Company’s policies and procedures designed to ensure
Board and Audit Committee oversight of the business operations and that ethical business practices were maintained. It
also contends that two of the defendants (Cherevka and Coelho) sold Company stock while in possession of material
non-public information at artificially inflated prices in violation of the Company’s insider trading restrictions. The
Complaint asserts that the individuals should not have received compensation while violating their duties to the Company.
The Complaint also alleges that the defendants caused the Company to repurchase its own stock at artificially inflated
prices, causing damage to the Company itself.
The Complaint asserts six causes of action on behalf of the Company and against the individual defendants: (1)
violations of Section 14(a) of the Exchange Act based on purportedly false and misleading statements in the Company’s
proxy statements; (2) violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder; (3) control
person liability under Section 20(a) of the Exchange Act; (4) breach of fiduciary duty; (5) unjust enrichment; and (6) waste
of corporate assets. The Complaint seeks an unspecified amount of compensatory and restitution damages to be paid to
Ampio, together with pre- and post-judgment interest, as well as injunctive relief imposing certain corporate governance
reforms and attorneys’ fees and costs.
On November 2, 2022, the Company and plaintiff (together with plaintiff in a second derivative action -- the Marquis
action, discussed below) filed a joint motion to consolidate the two derivative actions and appoint the lawyers
representing the two plaintiffs as co-lead counsel. That same day, the Company and plaintiff filed a stipulation providing
the Company additional time to answer, move or otherwise respond to the Complaint.
On January 10, 2023, after the Company received additional extensions of time to respond, the Court granted
consolidation of the Maresca and Marquis actions but denied appointment of co-lead counsel for plaintiffs without
prejudice. On January 11, 2023, Plaintiffs renewed their motion for appointment of co-lead counsel. On January 12,
2023, the Court granted the renewed motion and appointed co-lead counsel for plaintiffs.
On January 17, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the consolidated derivative
actions, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an
answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On January
25, 2023, the Court granted the motion for temporary stay. Accordingly, all deadlines are deferred until the stay is
terminated.
Ampio intends to defend itself vigorously against this action.
Marquis v. Martino, et al., 22-cv-2803-KLM
On October 25, 2022, putative shareholder Samantha Marquis filed a derivative complaint in the United States District
Court for the District of Colorado, captioned Marquis v. Martino, et al., 22-cv-2803-KLM. The Complaint, filed on behalf of
Ampio, asserts that various current and former officers and directors of Ampio – namely, Michael Martino, Michael
Macaluso, Holli Cherevka, David Bar-Or, David Stevens, Kevin Buchi, Philip Coelho, and Richard Giles, breached their
fiduciary duties as directors and/or officers and violated Section 14(a) of the Exchange Act by causing the Company to file
false and misleading proxy statements. The Complaint focuses on the Company’s alleged failure to timely report that the
results of the AP-013 trial for Ampion were unfavorable, failing to show efficacy on the co-primary endpoints of pain and
function, and the Company’s alleged failure to disclose the results of and timing of unblinding the study data. The
Complaint asserts that the individual defendants breached their fiduciary duties by making or causing the Company to
make materially false and misleading statements regarding Ampio’s business, operations and prospects and by failing to
maintain adequate internal controls. Based on these allegations, the Complaint asserts two causes of action on behalf of
the Company: (1) violations of Section 14(a) of the Exchange Act against all defendants other than Cherevka; and (2)
breach of fiduciary duty against all defendants. Based on these claims, the Complaint seeks judgment in favor of the
Company and against the individual defendants in an unspecified amount of compensatory and restitution damages,
together with pre- and post-judgment interest and costs of the action including reasonable attorneys’ and experts’ fees as
well as a mandatory injunction requiring Ampio and the defendants to reform and improve the corporate governance and
internal controls of the Company.
15
Table of Contents
On November 2, 2022, the Company and plaintiff (together with plaintiff in the previously filed Maresca action, discussed
above) filed a joint motion to consolidate the two derivative actions and appoint the lawyers representing the two plaintiffs
as co-lead counsel.
On January 10, 2023, the Court granted consolidation of the Maresca and Marquis actions but denied appointment of co-
lead counsel for plaintiffs without prejudice. On January 11, 2023, Plaintiffs renewed their motion for appointment of co-
lead counsel. On January 12, 2023, the Court granted the renewed motion and appointed co-lead counsel for plaintiffs.
On January 17, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the consolidated derivative
actions, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an
answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On January
25, 2023, the Court granted the motion for temporary stay. Accordingly, all deadlines are deferred until the stay is
terminated.
Ampio intends to defend itself vigorously against this action.
McCann v. Martino, et al., 2023cv30287
On January 27, 2023, putative shareholder John McCann filed a derivative complaint in the District Court, City & County
of Denver, State of Colorado, captioned McCann v. Martino, et al., 2023cv30287. The Complaint, filed on behalf of
Ampio, asserts that various current and former officers and directors of Ampio – namely, Michael Martino, J. Kevin Buchi,
David Stevens, Elizabeth Jobes, Holli Cherevka, David Bar-Or, Philip H. Coelho, and Richard B. Giles, breached their
fiduciary duties as directors and/or officers by allowing the Company to issue false and misleading statements, The
Complaint focuses on the Company’s alleged failure to timely report that the results of the AP-013 trial for Ampion were
unfavorable, failing to show efficacy on the co-primary endpoints of pain and function, and the Company’s alleged failure
to disclose the results of and timing of unblinding the study data. The Complaint asserts that the individual defendants
breached their fiduciary duties by allowing the Company to make materially false and misleading statements regarding
Ampio’s business, operations and prospects and by failing to maintain adequate internal controls. Based on these
allegations, the Complaint asserts five causes of action on behalf of the Company: (1) breach of fiduciary duty against the
current directors; (2) gross mismanagement against the current directors; (3) waste of corporate assets against the
current directors; (4) unjust enrichment against all defendants; and (5) breach of fiduciary duty by insider trading against
defendants Cherevka and Coelho. Based on these claims, the Complaint seeks judgment in favor of the Company and
against the individual defendants in an unspecified amount of compensatory damages, costs of the action including
reasonable attorneys’ and experts’ fees as well as a mandatory injunction requiring Ampio to reform and improve the
corporate governance and internal procedures of the Company.
Defendant Cherevka was served and by order dated February 9, 2023, obtained an extension of time to respond to the
Complaint through March 31, 2023. On March 2, 2023, the parties filed a joint stipulated motion seeking a temporary stay
of the action, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an
answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On March
3, 2023, the Court granted the motion for temporary stay. Accordingly, all deadlines are deferred until the stay is
terminated.
Ampio intends to defend itself vigorously against this action.
SEC Investigation
On October 12, 2022, the Securities and Exchange Commission, or SEC, entered an order directing private investigation
and designating officers to take testimony to determine whether we or any other entities or persons have engaged in, or
are about to engage in, any violations of the securities laws. The SEC has since issued subpoenas to the Company and
numerous current and former officers, directors, employees and consultants of the Company. We intend to cooperate fully
with the SEC.
Item 4. Mine Safety Disclosures.
Not applicable.
16
Table of Contents
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
PART II
Securities.
Market Information
Our common stock currently trades on the NYSE American under the ticker symbol “AMPE.”
Holders of Common Stock
As of March 22, 2023, there were approximately 191 registered holders of our common stock. A substantially greater
number of holders of our common stock are “street name” or beneficial holders, whose shares are held of record by
banks, brokers, and other financial institutions.
Dividend Policy
We have never paid cash dividends and have no plans to pay cash dividends in the near future. We intend to utilize all
current and future available sources of liquidity to develop and commercialize AR-300. If we issue any preferred stock
and/or obtain financing from a bank in the future, the terms of those financings may contain restrictions on our ability to
pay dividends in the near or long term.
Equity Compensation Plan Information
Information regarding our equity compensation plans is incorporated by reference from Part III, Item 12 “Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with
our financial statements and the related notes appearing elsewhere in this report. Some of the information contained in
this discussion and analysis, including information with respect to our plans and strategy for our business and related
financings, includes forward-looking statements that involve risks and uncertainties. You should read the “Risk Factors”
section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the
results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Critical Accounting Policies, Estimates and Judgments
Our financial statements were prepared in accordance with GAAP. The preparation of the financial statements requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of expenses incurred during the reporting period. On an on-going
basis, management evaluates its estimates and judgments. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable and appropriate under the circumstances, the
results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The methods, estimates, and judgments used by us in applying these critical accounting policies have a significant impact
on the results we report in our financial statements. Additional information regarding our critical accounting policies and
estimates is contained in Notes 2, 6, 8 and 10 to the Financial Statements. We consider the following accounting policies
to be those that are most important to the portrayal of our financial condition and that require a higher degree of judgment.
17
Table of Contents
Clinical Trial Accrual
As part of the process of preparing our financial statements, we are required to estimate our expenses resulting from our
obligations under contracts with various vendors, which primarily include clinical and pre-clinical research organizations,
consultants and clinical site/investigatory agreements in connection with our active and ongoing clinical trials over the
reporting period. The financial terms of these contracts are subject to negotiations, subsequent amendment(s) as a result
of change in scope of work and often results in payments that do not match the periods over which materials and/or
services are provided under such contracts. Our key objective is to reflect the appropriate trial expenses in the financial
statements by matching those expenses with the period in which services are performed, materials are received and
efforts are expended. We account for these expenses according to the progress of the trials as measured by subject
enrollment and progression/timing of various aspects of the trials. We determine accrual estimates by taking into account
discussions with applicable personnel and outside service providers as to the progress or state of the trials, or the
services completed. During the course of a clinical trial, we adjust the clinical expense recognition if actual results differ
from estimates. We make estimates of our accrued expenses as of each balance sheet date based on the facts and
circumstances known to us at that time. Our clinical trial accruals are dependent upon the timely and accurate reporting of
contract research organizations and other third-party vendors. Although we do not expect our estimates to be materially
different from amounts actually incurred, our understanding of the status and timing of services performed relative to the
actual status and timing of services performed may vary and may result in the reporting of amounts that are too high or
too low for any particular period. To date, there have not been any material adjustments to our prior estimates of accrued
research and development expenses. As of December 31, 2022 all of the clinical trials related to Ampion have been
completed and, as such, we do not expect to incur any significant future costs related to these trials.
Share-Based Compensation
We account for share-based payments by recognizing compensation expense based upon the estimated fair value of the
share-based payments on the date of grant. We determine the estimated fair value of the share-based payments granted
using the fair market value of the stock in the case of restricted stock awards or Black-Scholes option pricing model in the
case of stock options and recognize compensation costs ratably over the requisite service period which approximates the
vesting period using the graded method. To calculate the fair value of the options, certain assumptions are made
regarding components of the model, including the fair value of the underlying common stock, risk-free interest rate,
volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant
adjustments to the valuation. We calculate our volatility assumptions using the actual changes in the market value of our
stock. Forfeitures are recognized as they occur. Our historical option exercises do not provide a reasonable basis to
estimate an expected term due to the lack of sufficient data. Therefore, we estimate the expected term by using the
simplified method. The simplified method calculates the expected term as the average of the vesting term plus the
contractual life of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the
grant for treasury securities of similar maturity. The assumptions used in determining the fair value of share-based
awards represent our best estimates, but the estimates involve inherent uncertainties and the application of our judgment.
As a result, if factors change and we use significantly different assumptions or estimates, our share-based compensation
expense could be materially different in the future.
Impairment of Long-Lived Assets
Fixed assets are amortized or depreciated over their estimated useful life on a straight-line basis. We monitor conditions
related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization
or depreciation period. Management performs an annual evaluation of the recoverability of the carrying value of its long-
lived assets or whenever our management concludes events or changes in circumstances indicate that the carrying
amount may not be recoverable. When we determine that the useful lives of assets are shorter than we had originally
estimated, we accelerate the rate of depreciation over the assets’ new, shorter useful lives. During the year ended
December 31, 2022, management determined that there were impairment indicators; the fair value of the long-lived
assets were determined based on Level 3 fair value measurements and resulted in an impairment loss of $1.6 million.
18
Table of Contents
Derivative Warrant Liabilities
Warrants issued pursuant to equity offerings that are potentially exercisable resulting in a variable number of shares being
issued are considered derivative liabilities and therefore are measured at fair value. The Company uses the Black-
Scholes pricing model to estimate fair value at each exercise and period end date. The key assumptions used in the
model are the expected future volatility in the price of the Company’s shares and the expected life of the warrants. The
impact of changes in key assumptions is described in Note 8.
Recent Accounting Pronouncements
Information regarding recently issued and relevant accounting standards (adopted and not adopted as of December 31,
2022) is contained in Note 2 to the Financial Statements.
Results of Operations—Year Ended December 31, 2022 Compared to December 31, 2021
We recognized a net loss for the year ended December 31, 2022 (the “2022 period”) of $16.3 million compared to the net
loss recognized of $17.1 million for the year ended December 31, 2021 (the “2021 period”). The net loss during the 2022
period was primarily attributable to operating expenses of $22.3 million, that included a $1.9 million impairment loss
related to long-lived and ROU assets; partially offset by the non-cash derivative gain and interest income of $5.8 million
and $0.2 million, respectively. The net loss during fiscal 2021 was attributable to operating expenses of $20.6 million,
partially offset by non-cash derivative gain of $3.5 million. Operating expenses increased $1.7 million, or 9%, from the
2021 period to the 2022 period primarily due to a (i) $2.8 million, or 32%, increase in general and administrative costs, (ii)
recognition of $1.9 million impairment loss associated with the Company’s long-lived and ROU assets; partially offset by
(iii) a $3.0 million reduction in research and development costs.
Research and Development
Research and development costs decreased by approximately $3.0 million, or 25%, for the 2022 period compared to the
2021 period. Categories of research and development costs are summarized as follows and exclude an allocation of
general and administrative expenses:
Clinical trial and sponsored research expenses
Salaries and benefits
Depreciation
Laboratory
Professional fees
Operations/manufacturing
Share-based compensation
Other
Total research and development
Year Ended December 31,
2022
$ 2,991,000
2,755,000
1,031,000
890,000
780,000
308,000
139,000
22,000
$ 8,916,000
2021
$ 5,787,000
2,981,000
1,070,000
779,000
335,000
816,000
46,000
86,000
$ 11,900,000
Clinical trial and sponsored research expenses
The clinical trial and sponsored research expenses decreased by approximately $2.8 million or 48%, primarily due to a
decrease in certain Ampion clinical trial costs (i.e., AP-017, AP-018 and AP-019) totaling $1.7 million. These studies
commenced in late 2020 through the first half of 2021 but were substantially completed from a patient enrollment
perspective in early 2022. In addition, clinical trial costs related to Ampion clinical trial AP-013 decreased $1.1 million as
the study was completed with an analysis of the results filed with the FDA in late first quarter 2022 with modest costs
related to final close-out of the study throughout the remainder of the 2022 period. All clinical trials were completed in
2022.
19
Table of Contents
Salaries and benefits
Salaries and benefits expenses decreased $0.2 million, or 8%, for the 2022 period compared with the 2021 period
primarily due to the reduction in force (“RIF”) communicated in August 2022 which resulted in a reduction of 11 full-time
equivalents (“FTEs”) with 9 FTEs separated in August 2022 and 2 FTEs in January 2023. As a result of the RIF and the
termination of two executive officers, 2022 had a weighted average 11 FTEs which was 27% lower than a weighted
average 15 FTEs for 2021. The reduction of salary and benefits cost for 2022 resulting from lower average FTEs and the
lack of incentive compensation accrued in 2022 was partially offset by severance and related benefits related to the RIF
totaling approximately $0.7 million. Accordingly, we have implemented a hybrid organizational model whereby we retain
the organizational competencies to govern and comply with the public reporting requirements and select and manage
specific third-party independent contractors with proven industry expertise in formulation development, preclinical
development, GMP manufacturing, clinical development, regulatory and legal on an as needed basis. We believe this
model will position us best to develop AR-300 in the most expeditious and cost-effective manner, and effectively control
the fixed costs associated with building an all-employee organization.
Professional Fees
Professional fees expense increased $0.4 million, or 133% for the 2022 period compared with the 2021 period as a result
of the engagement of Chief Medical Officer, serving in the capacity as a consultant which commenced in the fourth
quarter 2021 and continued throughout the 2022 period. In addition, we incurred incremental costs in the 2022 period
associated with additional third-party biostatisticians and other consultants in connection with finalizing and closing out
the prior Ampion clinical studies (i.e., AP-013, AP-017, AP-018 and AP-019).
Operations/Manufacturing
Operations/manufacturing expense decreased by $0.5 million or 62% as all studies were completed during the 2022
period and, as such, the purchase of supplies to manufacture clinical trial product was not necessary.
General and Administrative
General and administrative expenses increased $2.8 million, or 32%, for the 2022 period compared to the 2021 period.
Categories of general and administrative expenses are summarized as follows:
Professional fees
Salaries and benefits
Insurance
Share-based compensation
Facilities
Director fees
Other
Total general and administrative
Professional fees
Year Ended December 31,
2022
$ 6,896,000
1,485,000
1,124,000
814,000
538,000
312,000
297,000
$ 11,466,000
2021
$ 2,517,000
1,141,000
1,186,000
2,758,000
512,000
350,000
207,000
$ 8,671,000
Professional fees increased $4.4 million, or 174%, for the 2022 period compared to the 2021 period due primarily to legal
costs incurred related to investigations coordinated and conducted by the independent special committee of the Ampio
Board of Directors (the “Special Committee”) and which focused primarily on (i) the statistical analysis of Ampio’s AP-013
clinical trial and (ii) the unauthorized provision of Ampion. In addition, the increase is also attributable to incremental legal
costs associated with an SEC investigation and class action / derivative lawsuits initiated in the second half of 2022. Legal
costs will continue to be incurred by the Company to defend itself vigorously against these actions. Finally, we incurred an
increase in costs associated with the evaluation and assessment of strategic opportunities and outsourced accounting,
market research studies and public and investor relation services which were focused primarily on a special stockholders
meeting and the approval of the reverse stock split effected on November 9, 2022.
20
Table of Contents
Salaries and benefits
Salaries and benefit expense increased $0.3 million, or 30%, for the 2022 period compared with the 2021 period as a
result of market-based compensation adjustments for the Chief Executive Officer and Chief Financial Officer effective in
October 2021 which was partially offset by a lower weighted average incremental headcount during the 2022 period due
primarily to the termination of the employment of one executive officer in May 2022.
Share-based Compensation
Share-based compensation expense decreased $1.9 million, or 71%, primarily due to stock option and restricted stock
award adjustments related to forfeitures and cancellations of unvested stock options / restricted stock awards resulting
from the employee terminations / board resignations during the 2022 period and whereby the expense was previously
recognized.
Impairment of Long-lived Fixed and ROU Assets
In accordance with ASC Topic 360, Property, Plant and Equipment, the Company assesses all of its long-lived assets for
impairment when impairment indicators are identified. Based on the assessment performed on September 30, 2022, the
Company recorded a non-cash impairment related to its long-lived assets which was triggered by the Company’s
announcement during the third quarter reporting period that it was discontinuing further development of its lead
development asset, Ampion. Since the carrying value of the long-lived assets exceeded its undiscounted cash flows, an
impairment loss, calculated as the difference between carrying value and fair value, was necessary. Accordingly, the
Company recorded a $1.6 million impairment loss for the year ended December 31, 2022 through a direct reduction to
the cost basis of the affected assets in its balance sheet.
In addition, the Company performed an assessment of potential impairment of the ROU asset consistent with the
approach applied to other long-lived assets. ROU assets are reviewed for recoverability whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is
based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If
the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for
the excess of the asset’s carrying amount over its fair value. Accordingly, the Company recorded a $0.3 million
impairment loss on the ROU asset for the year ended December 31, 2022.
There were no impairment charges for the year ended December 31, 2021.
Cash Flows
Cash flows for the respective periods are as follows:
Year Ended December 31,
2021
2022
Net cash used in operating activities
Net cash used in investing activities
Net cash (used in) provided by financing activities
Net change in cash and cash equivalents
Net Cash Used in Operating Activities
$ (21,128,000) $ (14,089,000)
(97,000)
30,732,000
16,546,000
—
(111,000)
$ (21,239,000) $
During the 2022 period, our operating activities used approximately $21.1 million in cash and cash equivalents, which was
more than our reported net loss of $16.3 million. The difference of approximately $4.8 million is attributable to a non-cash
adjustment of $5.8 million related to the warrant derivative gain and a decrease in accounts payable and accrued
expenses of $4.0 million, partially offset by non-cash charges related to impairment loss, depreciation, accretion,
amortization and stock-based compensation totaling $3.9 million and decreases in prepaid expenses and other of $1.1
million.
During the 2021 period, our operating activities used approximately $14.1 million in cash and cash equivalents, which was
less than our reported net loss of $17.1 million. The difference is primarily a result of periodic non-cash charges
21
Table of Contents
related to depreciation and amortization and share-based compensation totaling $3.9 million and an increase in working
capital of $2.6 million; partially offset by the non-cash adjustment for the warrant derivative gain totaling $3.5 million.
Net Cash Used in Investing Activities
During the 2022 period, there was no change in cash related to investing activities. During the 2021 period, $97,000 in
cash and cash equivalents was used to acquire manufacturing machinery and equipment.
Net Cash Used in (Provided by) Financing Activities
During the 2022 period, we settled a tax liability of $79,000 related to the vesting of restricted stock awards. As a result of
the settlement, the Company withheld 9,234 common shares for taxes which represented the fair value of the tax
settlement. In addition, the Company paid $32,000 in offering costs related to the registered direct offering which was
finalized in December 2021.
During the 2021 period, we received gross proceeds of $22.5 million in connection with a registered direct offering, which
was partially offset by offering-related costs of $1.8 million. We also received approximately $10.5 million from the sale of
approximately 0.4 million shares of common stock pursuant to the ATM equity offering program, which was partially offset
by offering-related costs of $0.5 million. In addition, we received proceeds of $0.2 million from investor warrant exercises
and stock option exercises which was offset by the shares held back in the settlement of tax obligations related to the
restricted stock awards totaling $0.2 million.
Contractual Obligations and Commitments
Our contractual obligations as of December 31, 2022 primarily consist of employment agreements and a non-cancellable
operating lease arrangement for our office and manufacturing facility. As of December 31, 2022, the value of our
obligations under the operating lease was $614,000. For a more detailed description of our contractual obligations see
Note 6 to the Financial Statements.
Liquidity and Capital Resources
Since inception, we have not generated revenue, profits or operating cash flow. Over this period, we have continued to be
focused on research and pre-clinical / clinical development all of which has required raising a substantial amount of
capital. We have completed the clinical trial reports for all legacy Ampion trials and have concluded any further
development efforts on Ampion. We have shifted nearly all of our focus towards the preclinical development of AR-300
and we are currently conducting studies to evaluate the efficacy of AR-300 in osteoarthritis-related pain.
The Company’s sources of liquidity are its cash and cash equivalents, which were $12,653,000 on December 31, 2022.
We expect to use cash in operations for the continued development of AR-300, as well as opportunistically identifying and
evaluating strategic opportunities as part of the strategic alternatives process. Based on our current projection we expect
our cash balance at December 31, 2022 to support existing business operations through the fourth quarter of 2023.
These projections are based on assumptions that may prove to be incorrect. As such, it is possible that we could exhaust
our available cash and cash equivalents earlier than presently anticipated.
If we determine to move forward with the clinical development of AR-300, we believe the development and regulatory
process could comprise five-to-seven years and require an incremental investment over and above Ampio’s general
operating expense during that period. We intend to fund future AR-300 clinical development expense through an offering
of our equity securities. We may also seek to raise equity capital in order to attempt to cure non-compliance with the
minimum stockholders’ equity requirement of the NYSE American. Such additional liquidity is subject to market conditions
and other factors, including limitations that may apply to the Company under applicable SEC and NYSE American
regulations and challenges associated with raising sufficient capital to meet the Company’s financing needs in light of the
Company’s current stock price and related constraints. Should we require additional financing, financing may not be
available in the amount or at the time we need it and/or may not be available on acceptable terms or at all.
Although we have implemented cash-focused measures to manage liquidity such as the RIF and implementation of our
outsourcing philosophy and the recent sublease of our office and manufacturing facility, we continue to expect cash used
22
Table of Contents
by operating activities for 2023 to be negatively impacted by general and administrative expense, driven by higher
professional fees including incremental legal and other costs associated with an SEC investigation and class action /
derivative lawsuits.
Based on management's sensitivity analysis of liquidity requirements, we expect we will be able to maintain current
operations and meet anticipated capital expenditure requirements through the fourth quarter 2023 based upon our cash
resources and our ability to delay or discontinue development of AR-300 in order to limit expenses consistent with the
availability of our cash resources. However, it is possible that we could exhaust our available cash and cash equivalents
earlier than presently anticipated due to a number of factors, including unexpected expense associated with legal
matters, strategic alternatives or transactions, compliance with our reporting requirements, efforts to raise capital for AR-
300 and maintain our listing on the NYSE American. Our lack of revenue or cash inflows and our cash resources on
December 31, 2022 raise substantial doubt as to our ability to continue as a going concern.
Management’s plans to address the doubt regarding the Company’s ability to continue as a going concern include active
monitoring of our operating expenses and use of our outsourcing philosophy to minimize expenses associated with AR-
300. Management expects to manage future expense associated with AR-300 clinical development to align with the
timing and amount of expense with future capital raising activities. If our available cash resources are insufficient to fund
our expenses (including relating to legal proceedings) and the development of AR-300 and/or completion of a strategic
transaction, we may implement further cost reduction and other cash-focused measures to manage liquidity and we may
pursue a plan of liquidation or dissolution of Ampio or seek bankruptcy protection. If we decided to cease operations and
dissolve and liquidate our assets, it is unclear to what extent we would be able to pay our obligations. In such a
circumstance and in light of the Company’s current liquidity position and pending legal matters, it is unlikely that cash
would be available for distributions to stockholders.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 8. Financial Statements and Supplementary Data.
The Financial Statements and Supplementary Data required by this item are in Item 15 of Part IV, “Index to Financial
Statements” at page F-1 of this annual report on Form 10-K and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such terms are defined in Rules 13a-15(e) and 15d-15(e) of the
Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit
under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in SEC
rules and forms, and that such information is accumulated and communicated to our management, including our CEO and
CFO, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by the Quarterly Report on Form 10-Q for the period ending March 31, 2022, the
CEO and the CFO concluded that our disclosure controls and procedures were not effective due to the maters identified
as part of the Company’s decision announced on May 16, 2022, to conduct internal investigations to be overseen by the
Special Committee. The Special Committee concluded its investigation and the results and findings are further described
in the announcement made on August 3, 2022. The Company has taken the following actions based in part upon the
investigations and the findings of the Special Committee:
Terminated the employment of two executive officers;
●
● Restructured the Board of Directors through resignation of certain directors;
● Separated the role of Chair of the Board and Chief Executive Officer;
23
Table of Contents
● Re-constituted the Company’s Disclosure Committee with additional subject matter experts;
● Enhanced Company policies and procedures including those related to inventory management and
distribution; and
● Conducted company-wide training regarding use of clinical trial stage pre-development drugs.
Due to sufficient passage of time to demonstrate operating effectiveness of the changes and improvements that were
implemented subsequent to March 31, 2022, and the results of the evaluation performed under the supervision and with
the participation of senior management, including the CEO and the CFO, the company’s design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b) were deemed effective as
of the end of the period covered by this report.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal controls over financial reporting (as
such term is defined in Rule 13a-15(f) under the Exchange Act). Our management assessed the effectiveness of our
internal controls over financial reporting as of December 31, 2022. In making this assessment, our management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-
Integrated Framework (2013). Our management has concluded that, as of December 31, 2022, our internal controls over
financial reporting are effective based on these criteria.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not Applicable.
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this item is to be included in our 2023 Proxy Statement as follows:
PART III
• The information relating to our directors and nominees for director is to be included in the section entitled
“Proposal 1—Election of Directors;”
• The information relating to our executive officers is to be included in the section entitled “Executive Officers;”
• The information relating to our audit committee, audit committee financial expert and procedures by which
shareholders may recommend nominees to our board of directors is to be included in the section entitled “Board
of Directors and Committees; Corporate Governance;” and
• If required, the information regarding compliance with Section 16(a) of the Exchange Act is to be included in the
section entitled “Delinquent Section 16(a) Reports.”
Such information is incorporated herein by reference to our 2023 Proxy Statement.
24
Table of Contents
Our Code of Business Conduct and Ethics applies to all of our employees, directors and officers, including our principal
executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar
functions, and those of our subsidiaries. The Code of Business Conduct and Ethics is available on our website
at www.ampiopharma.com under the section entitled “Investors” under “Corporate Governance.” We intend to satisfy the
disclosure requirements under Item 5.05 of the SEC Form 8-K regarding an amendment to, or waiver from, a provision of
our Code of Business Conduct and Ethics by posting such information on our website at the website address and location
specified above.
Item 11. Executive Compensation.
The information required by this item is to be included in our 2023 Proxy Statement under the sections entitled “Executive
Compensation,” and “Non-Employee Director Compensation,” and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item with respect to equity compensation plans is to be included in our 2023 Proxy
Statement under the section entitled “Equity Compensation Plan Information” and the information required by this item
with respect to security ownership of certain beneficial owners and management is to be included in our 2023 Proxy
Statement under the section entitled “Security Ownership of Certain Beneficial Owners and Management” and in each
case is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item is to be included in our 2023 Proxy Statement under the sections entitled “Certain
Relationships and Related Party Transactions” and “Director Independence” and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services.
The information required by this item is to be included in our 2023 Proxy Statement under the section entitled “Proposal 2
—Ratification of Appointment of Independent Registered Public Accounting Firm” and is incorporated herein by reference.
Item 15. Exhibits and Financial Statement Schedules.
(a)(1) Financial Statements
PART IV
The following documents are filed as part of this Form 10-K, as set forth on the Index to Financial Statements found
on page F-1.
● Report of Independent Registered Public Accounting Firm
● Balance Sheets as of December 31, 2022 and 2021
● Statements of Operations for the years ended December 31, 2022 and 2021
● Statements of Stockholders’ Equity for the years ended December 31, 2022 and 2021
● Statements of Cash Flows for the years ended December 31, 2022 and 2021
● Notes to Financial Statements
(a)(2) Financial Statement Schedules
Not Applicable.
25
Table of Contents
(a)(3) Exhibits
Exhibit
number
Exhibit title
3.1
Certificate of Incorporation of Chay Enterprises, Inc. (Incorporated by reference to Exhibit 3.3 of the
Registrant’s Form 8-K filed March 30, 2010).
3.2
Certificate of Amendment to Certificate of Incorporation of Ampio Pharmaceuticals, Inc. (f/k/a Chay
Enterprises, Inc. (Incorporated by reference to Exhibit 3.4 of the Registrant’s Form 8-K filed March 30,
2010).
3.3
Certificate of Amendment to Certificate of Incorporation of the Registrant. (Incorporated by reference to
Exhibit 3.1 to the Registrant’s Form 8-K filed December 18, 2019).
3.4
3.5
Certificate of Amendment to Certificate of Incorporation of the Registrant. (Incorporated by reference to
Exhibit 3.1 to the Registrant’s Form 8-K filed November 9, 2022).
Amended and Restated Bylaws of the Registrant, as currently in effect. (Incorporated by reference to
Exhibit 3.1 to the Registrant’s Form 10-Q filed November 14, 2018).
4.1
Specimen Common Stock Certificate of the Registrant. (Incorporated by reference to Exhibit 4.1 to the
Registrant’s Form 10-K for the year ended December 31, 2021).
4.2
Description of Capital Stock of Ampio Pharmaceuticals, Inc. (Incorporated by reference to Exhibit 4.5 to
the Registrant’s Form 10-K filed on February 21, 2020).
10.1**
10.2**
10.3**
10.4**
10.5
2010 Stock Incentive Plan and forms of option agreements. (Incorporated by reference to Exhibit 10.7
from Registrant’s Form 8-K/A filed March 17, 2010)
Amendment of 2010 Stock and Incentive Plan. (Incorporated by reference to Appendix A to the
Registrant’s Proxy Statement on Form 14A filed October 21, 2011)
2019 Stock Incentive Plan and forms of option agreements. (Incorporated by reference to Exhibit 10.4 to
the Registrant’s Form 10-K filed on March 3, 2021)
Form of restricted stock award agreement under the 2019 Stock Incentive Plan. (Incorporated by
reference to Exhibit 10.4 to the Registrant’s Form 10-K filed on March 29, 2022)
Lease Agreement by and between Ampio Pharmaceuticals, Inc. and NCWP – Inverness Business Park,
LLC, dated December 13, 2013. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K
filed December 19, 2013)
10.6**
Employment Agreement between Ampio Pharmaceuticals, Inc. and Daniel Stokely, dated October 11,
2021. (Incorporated by reference to Exhibit 10.8 to the Registrant’s Form 10-K filed on March 29, 2022)
10.7**
10.8**
Employment Agreement between Ampio Pharmaceuticals, Inc. and Michael Martino, dated November
22, 2021. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K Filed November 29,
2021)
Amendment No. 1 to Employment Agreement by and between Ampio Pharmaceuticals, Inc. and Michael
A. Martino, dated August 30, 2022. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-
K filed on September 1, 2022)
10.9**
Stock Option Cancellation and Grant Agreement for Executive between Ampio Pharmaceuticals, Inc.
and Daniel Stokely, dated August 20, 2019. (Incorporated by reference to Exhibit 10.2 to the Registrant's
Form 8-K filed August 23, 2019)
26
Table of Contents
10.10**
Form of Indemnification Agreement between Ampio Pharmaceuticals, Inc. and certain directors,
executive officers and key employees. (Incorporated by reference to Exhibit 10.11 to the Registrant’s
Form 10-K filed on March 29, 2022)
10.11**
Amendment to Cancellation Agreement, dated November 7, 2019, between Ampio Pharmaceuticals Inc.
and Daniel Stokely. (Incorporated by reference to Exhibit 10.4 to the Registrant's Form 10-Q filed
November 7, 2019)
14.1
23.1*
31.1*
31.2*
32.1*
101
Ampio Pharmaceuticals, Inc. Code of Business Conduct and Ethics. (Incorporated by reference to
Exhibit 14.1 to the Registrant’s Form 8-K filed December 18, 2019.)
Consent of Moss Adams LLP.
Certificate of the Chief Executive Officer of Ampio Pharmaceuticals, Inc. pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Certificate of the Chief Financial Officer of Ampio Pharmaceuticals, Inc. pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Certificate of the Chief Executive Officer and the Chief Financial Officer of Ampio Pharmaceuticals, Inc.
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Inline XBRL (extensible Business Reporting Language). The following materials from Ampio
Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 formatted
in XBRL: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Stockholders’
Equity (Deficit), (iv) the Statements of Cash Flows, and (v) the Notes to the Financial Statements.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
**
Filed herewith.
This exhibit is a management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary.
None.
27
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: March 27, 2023
AMPIO PHARMACEUTICALS, INC.
By:
/s/ Michael A . Martino
Michael A. Martino
Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant in the capacities indicated, on March 27, 2023.
Signature
Title
/s/ Michael A. Martino
Chief Executive Officer (Principal Executive Officer) and Director
Michael A. Martino
/s/ Daniel G. Stokely
Daniel G. Stokely
Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ David R. Stevens
Director
David R. Stevens
/s/ J. Kevin Buchi
J. Kevin Buchi
Director
/s/ Elizabeth Varki Jobes
Director
Elizabeth Varki Jobes
28
Table of Contents
INDEX TO FINANCIAL STATEMENTS
AMPIO PHARMACEUTICALS, INC.
Report of Independent Registered Public Accounting Firm (Moss Adams LLP, Denver, Colorado PCAOB ID
659)
Balance Sheets
Statements of Operations
Statements of Stockholders’ Equity
Statements of Cash Flows
Notes to Financial Statements
F-1
Page
F-2
F-4
F-5
F-6
F-7
F-8
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
Ampio Pharmaceuticals, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Ampio Pharmaceuticals, Inc. (the Company) as of
December 31, 2022 and 2021, the related statements of operations, stockholders’ equity, and cash flows
for the years then ended, and the related notes (collectively referred to as the “financial statements”). In
our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in the United States of
America.
Going Concern Uncertainty
The accompanying financial statements have been prepared assuming that the Company will continue as
a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring
losses from operations and cash used in operations that raise substantial doubt about its ability to
continue as a going concern. Management’s plans in regard to these matters are also described in Note
2. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the
purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures to respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
F-2
Table of Contents
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the
financial statements that was communicated or required to be communicated to the audit committee and
that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved
our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Impairment Evaluation of Long-lived Assets and Right-of-use Asset
As described in Note 2, the Company performs an evaluation on an annual basis, or sooner if
management believes a triggering event has occurred, of the recoverability related to the carrying value
of its long-lived assets to determine if facts and circumstances indicate that the carrying value of assets
may be impaired and if any adjustment is warranted. The Company recorded impairment charges of $1.6
million and $0.3 million on its long-lived and ROU assets, respectively, during the year ended December
31, 2022.
We identified the impairment evaluation of long-lived assets and right-of-use asset as a critical audit
matter because of significant judgements made by management to estimate the fair value of the long-
lived assets and right-of-use asset. This required a high degree of auditor judgement and an increased
extent of effort, including the need to involve internal valuation specialists, when performing audit
procedures to evaluate the reasonableness of management’s estimates and assumptions.
The primary procedures we performed to address this critical audit matter included:
• Testing management’s process for assessing impairment of long-lived assets, including the
timing of the triggering events leading to the impairment. We corroborated key events through
review of board minutes, external press releases, corroborating inquiries of management, and
direct testing of the reduction in force.
• Utilizing our internal valuation specialist to assist in testing the methodologies and significant
assumptions, including marketability of long-lived assets, and calculations of management’s
fair value estimates.
• Performing appropriate mathematical checks of supporting schedules related to the
assumptions, data, methodology and models used in the valuation report, including the
completeness and accuracy of the fixed asset detail used in impairment analysis, as well as
the impairment adjustment and agreeing to general ledger.
/s/ Moss Adams LLP
Denver, Colorado
March 27, 2023
We have served as the Company’s auditor since 2019.
F-3
Table of Contents
AMPIO PHARMACEUTICALS, INC.
Balance Sheets
Assets
Current assets
Cash and cash equivalents
Prepaid expenses and other
Total current assets
Fixed assets, net
Right-of-use asset, net
Total assets
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued expenses
Lease liability-current portion
Total current liabilities
Lease liability-long-term
Warrant derivative liability
Asset retirement obligation
Total liabilities
December 31,
2022
December 31,
2021
$
$
$
12,653,000
676,000
13,329,000
184,000
75,000
13,588,000
852,000
340,000
1,192,000
274,000
44,000
289,000
1,799,000
$
$
$
33,892,000
1,740,000
35,632,000
2,564,000
629,000
38,825,000
4,811,000
311,000
5,122,000
614,000
5,805,000
—
11,541,000
Commitments and contingencies (Note 6 and Note 13)
Stockholders’ equity
Preferred Stock, par value $0.0001; 10,000,000 shares authorized; none issued
Common Stock, par value $0.0001; 300,000,000 shares authorized; shares issued
and outstanding - 15,102,877 as of December 31, 2022 and 15,172,111 as of
December 31, 2021
Additional paid-in capital
Accumulated deficit
Total stockholders’ equity
Total liabilities and stockholders’ equity
—
—
2,000
245,726,000
(233,939,000)
11,789,000
2,000
244,884,000
(217,602,000)
27,284,000
$
13,588,000
$
38,825,000
The accompanying notes are an integral part of these financial statements.
F-4
AMPIO PHARMACEUTICALS, INC.
Statements of Operations
Table of Contents
Operating expenses
Research and development
General and administrative
Long-lived assets impairment
Right-of-use asset impairment
Total operating expenses
Other income
Interest income
Derivative gain
Total other income
Net loss
Net loss per common share:
Basic
Diluted
Weighted average number of common shares outstanding:
Basic
Diluted
Year Ended December 31,
2022
2021
$
8,916,000
11,466,000
1,614,000
322,000
22,318,000
$ 11,900,000
8,671,000
—
—
20,571,000
220,000
5,761,000
5,981,000
4,000
3,492,000
3,496,000
$ (16,337,000) $ (17,075,000)
$
$
(1.08) $
(1.47) $
(1.29)
(1.51)
15,072,308
15,072,308
13,286,605
13,664,202
The accompanying notes are an integral part of these financial statements.
F-5
Table of Contents
AMPIO PHARMACEUTICALS, INC.
Statements of Stockholders’ Equity
Balance at December 31, 2020
Issuance of common stock for services
Share-based compensation, net of forfeitures
Stock options exercised, net
Shares held back in settlement of tax obligation for shares issued in connection
with restricted stock awards
Warrants exercised, net
Shares issued in connection with restricted stock awards
Issuance of common stock in connection with the "at-the-market" equity offering
program
Issuance of common stock and warrants in connection with the registered direct
offering
Offering costs related to the issuance of common stock in connection with the
"at-the-market" equity offering program
Offering costs related to the issuance of common stock and warrants in
connection with the registered direct offering
Fair value related to the issuance of warrants in connection with the registered
direct offering
Net loss
Common Stock
Shares
12,909,017
Amount
$
2,000
Additional
Paid-in
Capital
$ 218,041,000
Accumulated
Deficit
$ (200,527,000)
Total
Stockholders'
Equity
17,516,000
$
3,604
—
25,774
—
—
—
80,000
2,724,000
120,000
—
—
—
80,000
2,724,000
120,000
(7,572)
39,215
119,000
416,406
1,666,667
—
—
—
—
—
—
—
—
—
—
—
(186,000)
114,000
—
10,511,000
22,497,000
(512,000)
(1,816,000)
—
—
—
—
—
—
—
(186,000)
114,000
—
10,511,000
22,497,000
(512,000)
(1,816,000)
—
—
(6,689,000)
—
—
(17,075,000)
(6,689,000)
(17,075,000)
Balance at December 31, 2021
15,172,111
2,000
244,884,000
(217,602,000)
27,284,000
Share-based compensation, net of forfeitures
Shares held back in settlement of tax obligation for shares issued in connection
with restricted stock awards
Offering costs related to the issuance of common stock and warrants in
connection with the registered direct offering
Restricted stock award forfeitures
Net loss
—
(9,234)
—
(60,000)
—
—
—
—
—
1,462,000
(79,000)
(32,000)
(509,000)
—
—
—
—
(16,337,000)
1,462,000
(79,000)
(32,000)
(509,000)
(16,337,000)
Balance at December 31, 2022
15,102,877
2,000
245,726,000
(233,939,000)
11,789,000
The accompanying notes are an integral part of these financial statements.
F-6
Table of Contents
AMPIO PHARMACEUTICALS, INC.
Statements of Cash Flows
Cash flows used in operating activities
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation, net of forfeitures
Restricted stock award compensation, forfeitures
Issuance of common stock for services
Depreciation and amortization
Long-lived assets impairment
Right-of-use asset impairment
Accretion of asset retirement obligation
Derivative gain
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses and other
(Decrease) increase in accounts payable and accrued expenses
Decrease in lease liability
Net cash used in operating activities
Cash flows used in investing activities
Purchase of fixed assets
Net cash used in investing activities
Cash flows (used in) provided by financing activities
Proceeds from sale of common stock in connection with the "at-the-market" equity offering program
Costs related to sale of common stock in connection with the "at-the-market" equity offering program
Proceeds from sale of common stock and warrants in connection with the registered direct offering
Costs related to the sale of common stock and warrants in connection with the registered direct offering
Proceeds from warrant and stock option exercises, net
Funding of tax obligation relative to shares withheld in connection with restricted stock awards
Net cash (used in) provided by financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Non-cash transactions:
Commercial insurance premium financing agreement
Recognition of asset retirement obligation
Year Ended December 31,
2021
2022
$
(16,337,000)
$
(17,075,000)
1,462,000
(509,000)
—
1,048,000
1,614,000
322,000
7,000
(5,761,000)
1,064,000
(3,959,000)
(79,000)
(21,128,000)
2,724,000
—
80,000
1,094,000
—
—
—
(3,492,000)
(593,000)
3,262,000
(89,000)
(14,089,000)
—
—
(97,000)
(97,000)
—
—
—
(32,000)
—
(79,000)
(111,000)
10,512,000
(512,000)
22,500,000
(1,816,000)
234,000
(186,000)
30,732,000
(21,239,000)
16,546,000
33,892,000
12,653,000
1,159,000
282,000
17,346,000
33,892,000
1,016,000
—
$
$
$
$
$
$
The accompanying notes are an integral part of these financial statements.
F-7
Table of Contents
AMPIO PHARMACEUTICALS, INC.
Notes to Financial Statements
Note 1 – Basis of Presentation
The accompanying financial statements have been prepared in conformity with U.S. Generally Accepted Accounting
Principles (“GAAP”). Ampio Pharmaceuticals, Inc. (“Ampio” or “the Company”) is a pre-revenue stage biopharmaceutical
company, located in Englewood, CO, that is currently focused on the preclinical development of AR-300 and currently
conducting studies to evaluate the efficacy of AR-300 in osteoarthritis related pain.
The Company’s core activities relate to research and development and raising capital. The Company has not generated
operating revenue to date.
On November 9, 2022, the Company effected a 15-to-1 reverse stock split. The Company has retroactively applied the
reverse stock split made effective on November 9, 2022 to share and per share amounts in the consolidated financial
statements as of December 31, 2022 and December 31, 2021. Additionally, pursuant to their terms, a proportionate
adjustment was made to the per share exercise price and number of shares issuable under all of the Company’s
outstanding options and warrants, and the number of shares authorized for issuance pursuant to the Company’s equity
incentive plans have been reduced proportionately, with any fractional shares rounded up to the next whole share. The
Company also retroactively applied such adjustments in the notes to the consolidated financial statements as of
December 31, 2022 and December 31, 2021. The reverse stock split did not reduce the number of authorized shares of
common stock and preferred stock and did not alter the par value.
Note 2 – Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and expenses, and related disclosures in the financial
statements and accompanying notes. The Company bases its estimates on historical experience and on assumptions
believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.
Significant items subject to such estimates and assumptions primarily include the Company’s projected current and long-
term liquidity, the clinical trial accrual, projected useful lives and potential impairment of long-lived assets and ROU asset
(“right-of-use asset”). The Company develops these estimates using its judgment based upon the facts and
circumstances known at the time.
Cash and Cash Equivalents
The Company considers instruments purchased with an original maturity of three months or less to be cash equivalents.
The Company’s investment policy is to preserve principal and maintain liquidity. On March 10, 2023, the Federal Deposit
Insurance Corporation (“FDIC”) placed Silicon Valley Bank (SVB) into receivership. At that time, the Company held
approximately $1,250,000 in a deposit account at SVB. The balance of the Company’s cash was held in an investment
account that is not a deposit account and therefore, these amounts would not be impacted by the FDIC’s receivership of
SVB or subject to FDIC insurance limits. Following the joint statement by the U.S. Treasury, Federal Reserve and the
FDIC on March 12, 2023, the Company regained access to all of its deposit account funds. The Company refined its
cash management strategy in order to further mitigate the potential risk of loss associated with deposit accounts balances
in excess of the FDIC insured amount.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of
cash and cash equivalents. The Company has no off-balance-sheet concentrations of credit risk, such as foreign
F-8
Table of Contents
exchange contracts, option contracts or foreign currency hedging arrangements. The Company consistently maintains its
cash and cash equivalent balances in the form of bank demand deposits, United States federal government backed
treasury securities and liquid money market fund accounts with financial institutions that management believes are
creditworthy. The Company periodically monitors its cash positions with, and the credit quality of, the financial institutions
with which it invests. During the years ended December 31, 2022 and 2021, the Company has maintained balances in
excess of federally insured limits.
Fixed Assets
Fixed assets are stated at cost less accumulated depreciation and amortization. Cost includes expenditures for
equipment, leasehold improvements, replacements, and renewals and the related cost required to get certain equipment
in operating condition. The Company charges routine and ongoing maintenance and repairs to expense as incurred.
When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the
accounts and any resulting gain or loss is reflected in operations. The cost of property and equipment is depreciated
using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are
amortized over the remaining life of the lease.
Impairment of Long-Lived Assets
The Company performs an evaluation on an annual basis, or sooner if management believes a triggering event has
occurred, of the recoverability related to the carrying value of its long-lived assets to determine if facts and circumstances
indicate that the carrying value of assets may be impaired and if any adjustment is warranted. The Company recorded
impairment charges of $1.6 million and $0.3 million on its long-lived and ROU assets, respectively, during the year ended
December 31, 2022. No impairment existed for long-lived or ROU assets at December 31, 2021.
Fair Value of Financial Instruments
The Company’s financial instruments include cash and cash equivalents, accounts payable and accrued expenses, and
warrant derivative liability. The carrying amounts of cash and cash equivalents, accounts payable and accrued expenses
are carried at cost, which approximates fair value due to the short maturity of these instruments. The warrant derivative
liability is recorded at estimated fair value based on utilization of the Black-Scholes warrant pricing model depending on
facts and circumstances. See Note 7 and Note 8 for additional information on the warrant derivative liability.
Share-Based Compensation
The Company accounts for share-based payments by recognizing compensation expense based upon the estimated fair
value of the share-based payments on the date of grant. The Company determines the estimated fair value of the share-
based payments granted using the fair market value or Black-Scholes option pricing model and recognizes compensation
costs ratably over the requisite service period which approximates the vesting period using the graded method. See
Note 10 for additional information on share-based compensation.
Income Taxes
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and
operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in the period that includes the enactment date. The overall change in deferred tax assets and liabilities for the
period measures the deferred tax expense or benefit for the period. The measurement of deferred tax assets may be
reduced by a valuation allowance based on judgmental assessment of available evidence if deemed more likely than not
that some or all of the deferred tax assets will not be realized. The Company has recorded a valuation allowance against
all of its net deferred tax assets, as management has concluded that it is more likely than not that the net deferred tax
asset will not be realized through projected future taxable income, based primarily on the Company’s ongoing history of
operating losses and the lack of taxable income in the foreseeable future. See Note 11 for additional information on
income taxes.
F-9
Table of Contents
Research and Development
Research and development costs are expensed as incurred in the respective periods.
Liquidity
The company recognized a net loss of $16.3 million, which is primarily attributable to operating expenses of $22.3 million,
partially offset by the non-cash derivative gain of $5.8 million (see Note 8) and interest income of $0.2 million. The
Company used $21.1 million of cash to fund business operations for the year ended December 31, 2022 and ended the
year with an accumulated deficit and stockholders’ equity of $233.9 million and $11.8 million, respectively. As a pre-
revenue stage biopharmaceutical company, the Company has not generated any operating revenues or profits since
inception. Based on current cash flow projections, management believes that additional capital will be required to fund the
business subsequent to December 31, 2023. Our current projection which contemplates the completion of the preclinical
studies for AR-300 and, depending on the data results, taking additional steps toward the filing of an IND reflects that we
should have sufficient liquidity to fund operations through the fourth quarter 2023. This projection is based on many
assumptions that may prove to be incorrect. As such, it is possible that we could exhaust our available cash and cash
equivalents earlier than presently anticipated. Due to the current level of liquidity at December 31, 2022 and the projected
shortfall to cover operating expenses requiring cash for a period of 12 months from the report date of the annual report,
management has expressed substantial doubt as to our ability to continue as a going concern.
Over this period, we have continued to be focused on research and pre-clinical / clinical drug development all of which
has required raising a substantial amount of capital.
Recently, we announced that we completed clinical trial reports for all legacy Ampion trials and submitted those reports to
the appropriate agencies for review and ultimate publication on Clinical Trials.gov. In addition, we also informed the FDA
that we have discontinued further development of the product and withdrawn the INDs. The combination of these
activities concludes the development efforts on Ampion.
In addition, we have continued to focus on reducing operating costs, including but not limited to, the reduction of
personnel expense to correspond to the conclusion of development efforts relating to Ampion and have engaged a
nationally recognized commercial real estate broker to assist with sublease of the existing office space. As previously
stated, we are currently conducting preclinical studies to evaluate the safety and efficacy of AR-300 with the initial target
for treatment of OAK.
Adoption of Recent Accounting Pronouncements
The Company has not adopted any recent accounting pronouncements during the year ended December 31, 2022, as
none were deemed to be applicable.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standard Board (the “FASB”) issued ASU 2020-06, “ Debt (Subtopic 470-20);
Debt with Conversion and Other Options and Derivatives and Hedging (Subtopic 815-40) Contracts in Entity’s Own
Equity”. The updated guidance is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity
in U.S. GAAP. Consequently, more convertible debt instruments will be reported as single liability instruments with no
separate accounting for embedded conversion features. The ASU 2020-06 also removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts
to qualify for the exception. In addition, ASU 2020-06 also simplifies the diluted net income per share calculation in
certain areas. The updated guidance is effective for fiscal years beginning after December 15, 2023, and interim periods
within those fiscal years, with early adoption permitted for periods beginning after December 15, 2020. The Company
plans to early adopt ASU 2020-06 in the first quarter of 2023; the adoption is not expected to have a material impact on
the Company’s financial statements.
F-10
Table of Contents
This Annual Report on Form 10-K does not discuss recent pronouncements that are not anticipated to have a current
and/or future impact on or are unrelated to the Company’s financial condition, results of operations, cash flows or
disclosures.
Note 3 – Prepaid Expenses and Other
Prepaid expenses and other balances as of December 31, 2022 and 2021 are as follows:
Unamortized commercial insurance premiums
Deposits
Professional fees
Clinical trial inventory
Other
Total prepaid expenses and other
Note 4 – Fixed Assets
December 31, 2022 December 31, 2021
$
$
610,000 $
34,000
19,000
—
13,000
676,000 $
465,000
884,000
235,000
72,000
84,000
1,740,000
Fixed assets balances, net of accumulated depreciation, as of December 31, 2022 and 2021 are as follows:
Leasehold improvements
Manufacturing facility/clean room
Lab equipment and office furniture
Fixed assets, gross
Accumulated depreciation
Fixed assets, net
Estimated
Useful Lives
(in Years)
10
3 - 8
5 - 8
December 31, 2022
December 31, 2021
$
$
4,965,000
2,803,000
1,661,000
9,429,000
(9,245,000)
184,000
$
$
6,075,000
2,984,000
1,739,000
10,798,000
(8,234,000)
2,564,000
In accordance with ASC Topic 360, Property, Plant and Equipment, the Company assesses all of its long-lived assets for
impairment when impairment indicators are identified. Based on the assessment at September 30, 2022, the Company
recorded a non-cash impairment related to its long-lived assets which was triggered by the Company’s announcement
during the current reporting period that it was discontinuing further development of its lead pipeline asset, Ampion. The
Company utilized a market valuation approach for determining the fair value of the ROU asset and a combination of the
indirect cost approach and market approach for determining the fair value of the long-lived fixed assets. Based on this
analysis, we concluded that the carrying value of the assets exceeded its undiscounted cash flows, and, as such, an
impairment loss, calculated as the difference between carrying value and fair value, was deemed necessary. Accordingly,
the Company recorded a $1.6 million impairment loss during the third quarter of 2022 as a direct reduction to the cost
basis of the affected assets.
Depreciation expense as of December 31, 2022 and 2021 is as follows:
Depreciation and amortization expense
F-11
Year Ended December 31,
2022
2021
$ 1,048,000
$ 1,094,000
Table of Contents
Note 5 – Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of December 31, 2022 and 2021 is as follows:
Accounts payable
Clinical trials
Professional fees
Commercial insurance premium financing
Accrued severance
Accrued compensation
Other
Accounts payable and accrued expenses
December 31, 2022 December 31, 2021
$
$
97,000 $
89,000
157,000
189,000
143,000
—
177,000
852,000 $
427,000
2,995,000
510,000
269,000
—
389,000
221,000
4,811,000
Commercial Insurance Premium Financing Agreement
In June 2022, the Company entered into an insurance premium financing agreement for $1.2 million, with a term of eight
months and an annual interest rate of 3.98% and made a down payment of $402,000. Under the terms and provisions of
the agreement, the Company is required to make principal and interest payments totaling $95,000 per month over the
remaining term of the agreement. The outstanding obligation of $189,000 as of December 31, 2022 was paid in full in
February 2023.
Note 6 – Commitments and Contingencies
Key Clinical Research Trial Obligations
Osteoarthritis of the Knee
AP-013 study
In December 2020, the Company entered into an initial contract with a clinical research organization (“CRO”) in reference
to the AP-013 study totaling $1.4 million. The contractual provisions required a retainer of $315,000, which was applied to
study expenses as further defined by the contract. The Company entered into change orders to the initial contract in
February 2022 totaling $0.2 million and April 2022 totaling $0.7 million which reflected the final costs to close out the
study. The Company had an outstanding future contractual commitment of $120,000 (net of the $315,000 deposit) as of
December 31, 2021. As of December 31, 2022, trial activities and related services have been completed and, as such,
there is no commitment for future services.
Inhaled treatment for COVID-19 patients
AP-018 study and AP-019 study
In March 2021, the Company entered into a contract with a CRO totaling $318,000 in reference to a Phase 1 study for at-
home treatment utilizing inhaled Ampion to treat patients with Long-COVID, or prolonged respiratory symptoms due to
COVID-19 (the “AP-018 study”). Subsequent to March 2021, the Company agreed to a contractual amendment totaling
$946,000 resulting in a total contractual commitment of $1.3 million. As of December 31, 2022, trial activities and related
services have been completed and, as such, there is no commitment for future services.
F-12
Table of Contents
In June 2021, the Company entered into a contract with a CRO totaling $2.6 million in reference to a multicenter Phase 2
clinical trial, using inhaled Ampion in the treatment of respiratory distress due to COVID-19 (the “AP-019 study”). The
contractual amount was subsequently amended by $0.9 million resulting in a total contractual commitment of $3.5 million.
The AP-019 study has been completed as of December 31, 2022 and, as such, there is no commitment for future
services.
Intravenous (“IV”) treatment for COVID-19 patients
AP-017 study
In December 2020, the Company entered into a contract with a CRO totaling $1.8 million in reference to a multicenter
Phase 2 clinical trial utilizing IV Ampion in the treatment of patients with COVID-19 requiring oxygen supplementation (the
“AP-017 study”). The Company stopped the trial after an interim analysis which reflected enrollment of 35 subjects and
resulted in a favorable net contractual adjustment and revised contractual commitment of $0.5 million and $1.3 million,
respectively. The AP-017 study was completed as of December 31, 2022 and, as such, there is no commitment for future
services.
Employment Agreements
As of December 31, 2022, the Company is a party to an employment agreement dated October 11, 2021 with Daniel
Stokely to serve as the Company’s Chief Financial Officer with a term ending in October 2024 and at an initial base
salary of $335,000. On August 30, 2022, the Company amended the existing employment agreement, originally dated
November 22, 2021 that specified an initial base salary of $550,000, with Michael A. Martino to serve as the Company’s
Chief Executive Officer. The employment term was extended to November 22, 2023. All other terms and conditions of Mr.
Martino’s employment agreement remain unchanged. Under these employment agreements, each executive is entitled to
a severance payment in the event the Company terminates employee’s employment without cause, or employee
terminates his employment with good reason.
Related Party Research Agreements
On February 4, 2022, the Company entered into a sponsored research services agreement with Trauma Research, LLC,
an entity owned by one of the Company’s former directors. The agreement totaled $400,000 for research activities to be
performed over the next two years. In addition, the Company also entered into a personal services agreement dated
February 4, 2022 with that individual to provide research services. The agreement totaled $250,000 and was to be paid in
four equal installments payable quarterly over the one-year term. On August 5, 2022, the Company delivered notice of
termination of the personal services agreement, effective September 5, 2022 and during September paid the remaining
obligation of $21,000. On August 5, 2022, the Company delivered notice of termination of the research services
agreement, effective November 4, 2022, and paid the remaining obligation of $63,000.
Facility Lease
In December 2013, the Company entered into a 125-month non-cancellable operating lease for office space and a
manufacturing facility, set to expire September 2024 with the right to renew for an additional 60 months. The effective
date of the lease was May 1, 2014. The initial base rent of the lease was $23,000 per month. The total base rent over the
term of the lease is approximately $3.3 million, which includes rent abatements and leasehold incentives. In accordance
with the provisions of the lease agreement, the Company is legally obligated to dismantle and remove certain
components of leasehold improvements at the end of the lease term. (See also Note 15.) In accordance with FASB ASC
410-20, Asset Retirement Obligations, the Company recognized the fair value of a liability for an asset retirement
obligation in the amount of $0.3 million which was capitalized as part of the cost of leasehold improvements.
The Company adopted the FASB issued ASC 842, “Leases (Topic 842)” effective January 1, 2019. With the adoption of
ASC 842, the Company recorded an operating right-of-use (“ROU”) asset and an operating lease liability on its balance
sheet. The ROU asset represents the Company’s right to use the underlying asset for the lease term and the lease
F-13
Table of Contents
obligation represents the Company’s commitment to make the lease payments arising from the lease. ROU lease assets
and obligations are recognized at the commencement date based on the present value of remaining lease payments over
the lease term. As the Company’s lease does not provide an implicit rate, the Company used an estimated incremental
borrowing rate of 5.75%, based on the information available at the commencement date in determining the present value
of the lease payments. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes
in the lease or expectations regarding the terms. The lease liability is classified as both current in part and long-term on
the balance sheet.
The following table provides a reconciliation of the Company’s remaining undiscounted payments for its facility lease and
the carrying amount of the lease liability presented in the balance sheet as of December 31, 2022:
Facility Lease Payments
2023
2024
2025 2026 2027 Thereafter
Remaining Facility Lease
Payments
Less: Discount Adjustment
Total lease liability
Lease liability-current portion
Long-term lease liability
$
$
$
$
644,000
(30,000)
614,000
340,000
274,000
$ 364,000
$ 280,000
$ — $ — $ — $
—
The Company reviews the potential for impairment of the ROU asset consistent with the approach applied to other long-
lived assets. ROU assets are reviewed for recoverability whenever events or changes in circumstances indicate that the
carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of
undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of
an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the
asset’s carrying amount over its fair value. Accordingly, the Company recorded a $0.3 million impairment loss on the
right-of-use asset, recorded in operating expenses and against the ROU asset, during the year ended December 31,
2022. The following table provides a reconciliation of the Company’s remaining ROU asset for its facility lease presented
in the balance sheet as of December 31, 2022:
Balance as of December 31, 2021
Amortization
Impairment loss
Balance as of December 31, 2022
The Company recorded lease expense in the respective periods is as follows:
Lease expense
F-14
ROU Asset
629,000
(232,000)
(322,000)
75,000
$
$
Year Ended December 31,
2022
2021
$ 311,000
$ 275,000
Table of Contents
Note 7 – Warrants
The Company has issued both equity (“placement agent”) and liability classified (“investor”) warrants in conjunction with
equity raises. The Company had a total of 0.1 million equity-classified warrants and 1.0 million liability-classified warrants
outstanding as of December 31, 2022.
The following table summarizes the Company’s warrant activity:
Outstanding as of December 31, 2021
Warrants expired
Outstanding as of December 31, 2022
Number of
Warrants
Weighted
Average
Exercise Price
Weighted Average
Remaining
Contractual Life
1,220,194
(155,057)
1,065,137
$ 15.36
$ 11.40
$ 15.94
4.24
3.80
The following table summarizes the Company’s outstanding warrants between placement agent and investor warrant
classifications:
Date
Exercise Price
Type
Number of
Warrants
Weighted
Average
Exercise Price
Weighted Average
Remaining
Contractual Life
December 2021 registered direct offering
August 2018 public offering
June 2019 public offering
Outstanding as of December 31, 2022
$ 16.50
$ 6.00
$ 7.50
Investor
Investor
Placement
agent
1,000,000
10,227
54,910
1,065,137
$ 15.94
3.96
0.61
1.46
3.80
In connection with the December 2021 registered direct offering, the Company issued investor warrants to purchase an
aggregate of 1.0 million shares of common stock at an exercise price of $16.50 with a term of five years and are
immediately exercisable (see Note 9). Due to certain derivative features, these warrants were accounted for under liability
accounting and are recorded at fair value each reporting period. As of December 31, 2022 and 2021, these warrants had
a fair value of $44,000 and $5.6 million, respectively. The assumptions, using the Black-Scholes valuation model as of
December 31, 2022, and at issuance were as follows:
Assumptions for warrants issued December 15, 2021:
December 31, 2022 December 31, 2021
Exercise Price
Volatility
Equivalent term (years)
Risk-free interest rate
Number of warrants
Derivative liability
$ 16.50
$ 16.50
121 %
3.96
4.11 %
101 %
4.96
1.25 %
1,000,000
$ 44,000
1,000,000
$ 5,597,000
In connection with the August 2018 confidentially marketed public offering, the Company issued investor warrants to
purchase an aggregate of 1.3 million shares of common stock at an exercise price of $6.00 with a term of
five years. Due to certain derivative features, these warrants were accounted for under liability accounting and are
recorded at fair value each reporting period. As of December 31, 2022 and 2021, these warrants had a fair value of
approximately $0 and $52,000, respectively. The assumptions, using the Black-Scholes valuation model, as of
December 31, 2022, December 31, 2021, and at issuance were as follows:
F-15
Table of Contents
Assumptions for warrants issued August 13, 2018:
December 31, 2022 December 31, 2021
Exercise Price
Volatility
Equivalent term (years)
Risk-free interest rate
Number of warrants
Derivative liability
$ 6.00
200 %
0.61
4.75 %
10,227
$ -
$ 6.00
107 %
1.61
0.60 %
10,227
$ 52,000
In connection with the June 2017 registered direct offering, the Company issued investor warrants to purchase an
aggregate of 733,334 shares of common stock at an exercise price of $11.40 with a term of five years. Due to certain
derivative features, these warrants are accounted for under liability accounting and are recorded at fair value each
reporting period. The investor warrants expired on June 1, 2022. As of December 31, 2021, these warrants had a fair
value of $156,000. Significant assumptions as of December 31, 2021 were as follows:
Assumptions for warrants issued June 2, 2017:
December 31, 2021
Exercise Price
Volatility
Equivalent term (years)
Risk-free interest rate
Number of warrants
Derivative liability
$ 11.40
92 %
0.42
0.15 %
135,128
$ 156,000
There were no issuances or exercises of warrants during the year ended December 31, 2022. The total value for the
warrant derivative liability as of December 31, 2022 was approximately $44,000 (see Note 8).
During the year ended December 31, 2021, the Company issued 18,940 shares of its common stock as a result of the
exercise of investor warrants with an exercise price of $6.00. The Company received proceeds of $114,000 during the
period related to these investor warrant exercises. In addition, former placement agents elected to exercise 35,249 of their
warrants utilizing the net exercise option, where the total number of shares of common stock issued was reduced to
cover the exercise price and, as such, the Company issued 20,275 shares of common stock. The Company did not
receive any cash related to the exercise of placement agent warrants.
Note 8 – Fair Value Considerations
Authoritative guidance defines fair value as the price that would be received upon the sale of an asset or paid to transfer
a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance
establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and
minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.
Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data
obtained from sources not affiliated with the Company. Unobservable inputs are inputs that reflect the Company’s
assumptions of what market participants would use in pricing the asset or liability based on the best information available
in the circumstances. The hierarchy is broken down into three levels based on reliability of the inputs as follows:
Level 1:
Inputs that reflect unadjusted quoted prices in active markets that are accessible to the Company for
identical assets or liabilities;
F-16
Table of Contents
Level 2:
Inputs that include quoted prices for similar assets and liabilities in active or inactive markets or that
are observable for the asset or liability either directly or indirectly; and
Level 3: Unobservable inputs that are supported by little or no market activity.
The Company’s financial instruments include cash and cash equivalents, accounts payable and accrued expenses, and
warrant derivative liability. Warrants are recorded at estimated fair value utilizing the Black-Scholes warrant pricing
model.
The Company’s assets and liabilities which are measured at fair value are classified in their entirety based on the lowest
level of input that is significant to their fair value measurement. The Company’s policy is to recognize transfers in and/or
out of the fair value hierarchy as of the date in which the event or change in circumstances caused the transfer. The
Company has consistently applied the valuation techniques in all periods presented.
The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a
recurring basis as of December 31, 2022 and 2021, by level within the fair value hierarchy:
December 31, 2022
Liabilities:
Warrant derivative liability
December 31, 2021
Liabilities:
Warrant derivative liability
Fair Value Measurements Using
Level 1 Level 2
Level 3
Total
$
— $
— $
44,000
$
44,000
$
— $
— $ 5,805,000
$ 5,805,000
The recurring warrant derivative liability was valued using the Black-Scholes valuation methodology because that model
embodies all the relevant assumptions that address the features underlying these instruments. The significant
assumptions in valuing the warrant derivative liability as of December 31, 2022, December 31, 2021, and at issuance are
disclosed in Note 7.
The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as Level 3 in the
fair valued hierarchy:
Balance as of December 31, 2021
Change in fair value
Balance as of December 31, 2022
Note 9 – Common Stock
Authorized Shares
Derivative Instruments
$
$
5,805,000
(5,761,000)
44,000
The Company had 300.0 million authorized shares of common stock as of December 31, 2022 and 2021.
The following table summarizes the Company’s remaining authorized shares available for future issuance:
F-17
Table of Contents
Authorized shares
Common stock outstanding
Options outstanding
Warrants outstanding
Reserved for issuance under 2019 Stock and Incentive Plan
Available shares for future issuance
Registered Direct Offering
December 31, 2022
300,000,000
15,102,877
297,460
1,065,137
441,300
283,093,226
In December 2021, the Company completed a registered direct offering whereby it issued 1.67 million shares of its
common stock at a price of $13.50 per share, along with investor warrants to purchase up to 1.0 million shares of
common stock, generating gross proceeds of $22.5 million. In connection with this offering, the Company entered into a
Placement Agent Agreement with the placement agent. Pursuant to the Placement Agent Agreement, the placement
agent received a 7% commission of $1.6 million, and $75,000 as compensation for other costs related to the offering. The
Company also incurred expenses related to legal, accounting, and other registration costs of $167,000. The shares and
warrants were offered and sold pursuant to the Company’s shelf registration statement.
The investor warrants issued in connection with the registered direct offering have an exercise price of $16.50 per share
and are immediately exercisable with a term of five years from issuance. Based on the terms of the warrant and related
securities law, the contract does not meet the criteria within Accounting Standards Codification (“ASC”) 815 “Derivatives
and Hedging” to permit the company to settle in unregistered shares. Therefore, the Company could be forced to cash
settle the warrants. Based on this derivative feature, these warrants must be accounted for as a liability at fair value
under ASC 815. On the date of issuance, these warrants were valued at $6.7 million, using the Black-Scholes valuation
model (see Note 7) and represents a reduction in additional paid-in capital at the time of issuance.
ATM Equity Offering Program
Sales Agreement
In February 2020, the Company entered into a Sales Agreement with two agents to implement an “at the market” (ATM)
equity offering program under which the Company, from time to time and at its sole discretion, may offer and sell shares
of its common stock having an aggregate offering price up to $50.0 million to the public through the agents until (i) each
agent declines to accept the terms for any reason, (ii) the entire amount of shares has been sold, or (iii) the Company
suspends or terminates the Sales Agreement. The Sales Agreement includes customary indemnification rights in favor of
the agents and provides that the agents will be entitled to an aggregate fixed commission of 4.0% of the gross proceeds
(2.0% to each agent) to the Company from any shares sold pursuant to the Sales Agreement. Due to its terms and
conditions, the Company does not anticipate any sales of stock under the Sales Agreement.
During the year ended December 31, 2022, the Company had no activity under the ATM equity offering program. During
December 31, 2021, the Company sold 416,406 shares of common stock which resulted in net proceeds of $10.0 million
after deducting $0.5 million for placement agent commissions and issuance costs.
Issuance of Common Stock for Services
The Company issued 3,604 shares of common stock under the Ampio Pharmaceuticals, Inc. 2019 Stock and Incentive
Plan (the “2019 Plan”), valued at $80,000, as partial compensation for the services of non-employee directors, during the
year ended December 31, 2021. During the year ended December 31, 2022, the Company did not issue any shares of
common stock as partial compensation for the services of non-employee directors.
F-18
Table of Contents
Note 10 – Equity Instruments
In December 2019, the Company’s Board of Directors and stockholders approved the adoption of the 2019 Plan, under
which shares were reserved for future issuance of equity related awards classified as option awards/grants, restricted
stock awards and other equity related awards. The 2019 Plan permits grants of equity awards to employees, directors and
consultants. The stockholders approved a total of 10.0 million shares to be reserved for issuance under the 2019 Plan,
which was reduced to 666,667 shares as a result of the 15-to-1 reverse stock split effective November 9, 2022. The
Company’s previous 2010 Stock and Incentive Plan (the “2010 Plan”) was cancelled concurrently with the adoption of the
2019 Plan.
The following table summarizes the activity of the 2019 Plan and the shares available for future equity awards as of
December 31, 2022:
Total shares reserved for equity awards as of December 31, 2021
Options granted
Forfeited, expired and/or cancelled equity option awards
Forfeited, expired and/or cancelled equity restricted stock awards
Shares forfeited to settle exercise price and tax obligation
Remaining shares available for future equity awards as of December 31, 2022
Options
The Company’s stock option activity is summarized in the table below:
2019 Plan
294,489
(106,555)
184,132
60,000
9,234
441,300
Weighted Weighted Average
Outstanding as of December 31, 2021
Granted
Forfeited, expired and/or cancelled
Outstanding as of December 31, 2022
Exercisable as of December 31, 2022
Average
Number of
Exercise Price
Options
16.81
$
500,466
7.14
$
106,555
(309,561) $
297,460
$
257,216
$
15.26
14.97
15.85
Remaining
Contractual Life
Aggregate
Intrinsic Value
—
7.36 $
6.41
$
6.59 $
—
—
Outstanding options that were issued in accordance with the 2010 Plan and 2019 Plan are summarized in the table
below:
Outstanding Options by Plan
2010 Plan
2019 Plan
Outstanding as of December 31, 2022
December 31, 2022
116,571
180,889
297,460
F-19
Table of Contents
Stock options outstanding at December 31, 2022 are summarized in the table below:
Range of Exercise Prices
Up to $7.50
$7.51 - $15.00
$15.01 - $22.50
$22.51 and above
Total
Restricted Stock Awards
Number of
Options
Outstanding
63,457
140,327
53,600
40,076
297,460
Weighted
Average
Exercise Price
$
$
$
$
$
6.67
10.39
17.30
40.98
14.97
Weighted Average
Remaining
Contractual Lives
3.73
6.45
8.83
7.31
6.41
In connection with the three executive employment agreements issued in October 2021, the Company awarded 119,000
shares of restricted stock in accordance with the 2019 Plan, of which a portion vested immediately, with the remaining
shares of restricted stock awards vesting annually on January 1st until 2025. The 2019 Plan allows the restricted stock
award grantee to authorize the Company to withhold shares of common stock to settle the tax obligation at such time the
shares vest. The shares of restricted stock that vested immediately were subject to statutory tax withholdings and all
three employees authorized the Company to withhold shares of common stock to settle the tax obligation, which resulted
in a forfeiture of 9,234 shares of common stock, due to the termination of two executives during 2022, and 15,233 net
shares of common stock being issued during the year ended December 31, 2022.
The restricted stock awards activity for the twelve-month period ended December 31, 2022 is summarized in the table
below:
Nonvested as of December 31, 2021
Vested
Forfeited
Nonvested as of December 31, 2022
Share-based Compensation
Awards
97,867
(24,467)
(60,000)
13,400
$
$
$
Weighted
Average Grant-Date
Fair Value
24.60
24.60
$
24.60
Aggregate
Intrinsic Value
—
The Company computes the fair value for all options granted or modified using the Black-Scholes option pricing model.
To calculate the fair value of the options, certain assumptions are made regarding components of the model, including
the fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected
option life. Changes to the assumptions could cause significant adjustments to the valuation. The Company calculates its
volatility assumption using the actual changes in the market value of its stock. Forfeitures are recognized as they occur.
The Company’s historical option exercises do not provide a reasonable basis to estimate an expected term due to the
lack of sufficient data. Therefore, the Company estimates the expected term by using the simplified method. The
simplified method calculates the expected term as the average of the vesting term plus the contractual life of the options.
The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of
similar
F-20
Table of Contents
maturity. The Company computed the fair value of options granted and modified during the period ended December 31,
2022 and December 31, 2021, using the following assumptions:
Year Ended December 31,
2022
2021
Expected volatility
Risk free interest rate
Expected term (years)
116.83% - 119.43 %
1.26% - 1.94 %
5.45 - 6.51
113% - 127 %
0.78% - 1.38 %
5.00 - 6.50
Based on these assumptions, the Company recognized approximately $1.1 million of share-based compensation related
to options, which was partially offset by $0.2 million due to reversals for non-vested shares for director and employee
forfeitures during the year ended December 31, 2022.
The Company also computes the fair value for all restricted stock awards based on the closing stock price on the grant
date and recognizes share-based compensation ratably over the requisite service period which approximates the vesting
period. The Company recognized $0.5 million of share-based compensation relating to restricted stock awards which was
fully offset by $0.5 million due to forfeitures.
Share-based compensation expense related to the fair value of stock options and restricted stock awards is included in
the statements of operations as research and development expenses and general and administrative expenses as set
forth in the table below. The Company determined the fair value as of the date of grant for options using the Black-
Scholes option pricing model and expenses the fair value ratably over the vesting period. The following table summarizes
stock-based compensation for the years ended December 31, 2022 and December 31, 2021:
Research and development expenses
Share-based compensation, net of forfeitures
General and administrative expenses
Issuance of common stock for services (see Note 9)
Share-based compensation, net of forfeitures
Year Ended December 31,
2022
2021
$ 139,000
$
46,000
—
80,000
2,678,000
814,000
Total share-based compensation, net of forfeitures
$ 953,000
$ 2,804,000
Unrecognized share-based compensation expense related to stock options as of
December 31, 2022
Weighted average remaining years to vest for stock options
$ 185,000
1.42
Unrecognized share-based compensation expense related to restricted stock awards as of
December 31, 2022
$ 116,000
Weighted average remaining years to vest for restricted stock awards
2.01
F-21
Table of Contents
Note 11 – Income Taxes
Income tax expense (benefit) resulting from applying statutory rates in jurisdictions in which the Company is taxed
(Federal and State of Colorado) differs from the income tax provision (benefit) in the Company’s financial statements.
The following table reflects the reconciliation for the respective periods:
Benefit at federal statutory rate
State, net of federal income tax impact
Stock-based compensation
Registered offering gain/warrant expense
Change in state deferred tax rate
Expiration of tax attribute carryforwards
Other
Change in valuation allowance
Effective tax rate
Years Ended December 31,
2022
2021
(21.0)%
(4.0)%
4.0 %
(7.2)%
1.5 %
0.6 %
0.0 %
26.1 %
0.0 %
(21.0)%
(4.4)%
0.1 %
(4.6)%
0.0 %
1.1 %
2.1 %
26.7 %
0.0 %
Deferred income taxes arise from temporary differences in the recognition of certain items for income tax and financial
reporting purposes. The approximate tax effects of significant temporary differences which comprise the deferred tax
assets and liabilities are as follows for the respective periods:
Long-term deferred income tax assets (liabilities):
Years Ended December 31,
2022
2021
Accrued liabilities
Interest expense carryforward
ROU asset
Lease liability
Net operating loss carryforward
Share-based compensation
Unrealized loss on trading security
Property and equipment
Warrants
Capitalized development costs
Asset retirement obligation
Other
Less: Valuation allowance
Total long-term deferred income tax assets (liabilities)
$
3,000
—
(18,000)
150,000
50,196,000
459,000
768,000
606,000
65,000
2,093,000
68,000
1,000
(54,391,000)
$
$
96,000
73,000
(155,000)
228,000
47,858,000
1,050,000
772,000
113,000
96,000
—
—
1,000
(50,132,000)
—
— $
As of December 31, 2022, Ampio has approximately $205.0 million in net operating loss (“NOL”) carryforwards that,
subject to limitation, may be available in future tax years to offset taxable income. These net operating loss carryforwards
expire from 2023 through 2037. Approximately $74.5 million of the NOL carryforward carries forward indefinitely. Under
the provisions of the Internal Revenue Code, substantial changes in the Company’s ownership may result in limitations
on the amount of NOL carryforwards that can be utilized in future years.
The Company has provided a full valuation allowance against its deferred tax assets as it has determined that it is not
more likely than not that recognition of such deferred tax assets will be utilized in the foreseeable future. The amount of
income taxes and related income tax positions taken are subject to audits by federal and state tax authorities. The
Company has adopted accounting guidance for uncertain tax positions which provides that in order to recognize an
uncertain tax benefit, the taxpayer must be more likely than not of sustaining the position, and the measurement of the
benefit is calculated as the largest amount that is more than 50% likely to be realized upon recognition of the benefit.
F-22
Table of Contents
The Company believes that it has no material uncertain tax positions and has fully reserved against its future tax benefit
with a valuation allowance and does not expect significant changes in the amount of unrecognized tax benefits to occur
within the next twelve months. The Company’s policy is to record a liability for the difference between benefits that are
both recognized and measured pursuant to GAAP and tax positions taken or expected to be taken on the tax return.
Then, to the extent that the assessment of such tax positions changes, the change in estimate is recorded in the period in
which the determination is made. The Company reports tax-related interest and penalties as a component of income tax
expense. During the periods reported, management of the Company has concluded that no significant tax position
requires recognition. The Company files income tax returns in the United States federal and various state jurisdictions.
The Company is no longer subject to income tax examinations for federal income taxes before 2019 or for Colorado
before 2018. Net operating loss carryforwards are subject to examination in the year they are utilized regardless of
whether the tax year in which they are generated has been closed by statute. The amount subject to disallowance is
limited to the NOL utilized. Accordingly, the Company may be subject to examination for prior NOL’s generated as such
NOL’s are utilized.
Note 12 – Earnings Per Share
Basic earnings per share is computed by dividing net loss available to common stockholders by the weighted-average
number of shares of common stock outstanding during each period. Diluted earnings per share is based on the treasury
stock method and computed by dividing net loss available to common stockholders by the diluted weighted-average
shares of common stock outstanding during each period. The Company’s potentially dilutive shares include stock options,
warrants for the shares of common stock and restricted stock awards. The potentially dilutive shares are considered to be
common stock equivalents and are only included in the calculation of diluted net loss per share when the effect is dilutive.
The investor warrants are treated as equity in the calculation of diluted earnings per share in both the computation of the
numerator and denominator, if dilutive. The following table sets forth the calculations of basic and diluted earnings per
share for the year ended December 31, 2022 and 2021:
Net loss
Less: decrease in fair value of investor warrants
Net loss available to common stockholders
Basic weighted-average common shares outstanding
Add: dilutive effect of equity instruments
Diluted weighted-average shares outstanding
Earnings per share – basic
Earnings per share – diluted
Year Ended December 31,
2021
2022
$ (17,075,000)
$ (16,337,000)
(3,492,000)
(5,761,000)
$ (20,567,000)
$ (22,098,000)
15,072,308
—
15,072,308
$
$
(1.08) $
(1.47) $
13,286,605
377,597
13,664,202
(1.29)
(1.51)
The potentially dilutive shares of common stock equivalents that have been excluded from the calculation of net loss per
share because of the anti-dilutive effect as of December 31, 2022 and 2021 are as follows:
Warrants to purchase shares of common stock
Outstanding stock options
Restricted stock awards
Total potentially dilutive shares of common stock
F-23
Year Ended December 31,
2022
1,065,137
297,460
13,400
1,375,997
2021
842,597
500,466
97,867
1,440,930
Table of Contents
Note 13 – Litigation
From time to time, the Company may be a party to litigation arising in the ordinary course of business. In
addition, as of December 31, 2022, Ampio was involved in the following material pending legal
proceedings:
Kain v. Ampio Pharmaceuticals, Inc., et al., 22-cv-2105
On August 17, 2022, a putative Ampio shareholder filed a securities fraud class action against the Company, its current
CEO Michael A. Martino and two former executives, Michael Macaluso and Holli Cherevka, in the United States District
Court for the District of Colorado, captioned Kain v. Ampio Pharmaceuticals, Inc., et al. , 22-cv-2105. The Complaint
alleges that Ampio and the individual defendants made various false and misleading statements regarding the efficacy,
clinical trials and FDA communications relating to Ampio’s lead product, Ampion, and its treatment of severe osteoarthritis
of the knee in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
Rule 10b-5 promulgated thereunder. The Complaint also asserts control person liability against the individual defendants
under Section 20 of the Exchange Act.
The Complaint relies largely on Ampio’s announcement on May 16, 2022, that it had formed a special Board committee to
investigate the statistical analysis of Ampio’s AP-013 clinical trial and the unauthorized provision of Ampion to various
individuals who were not participating in clinical trials, and Ampio’s further announcement on August 3, 2022, that the
investigation had revealed that various employees were aware that the AP-013 trial did not demonstrate efficacy for
Ampion’s primary endpoints and did not fully and timely report the results of the trial and the timing of unblinding data
from the trial. Based on the Company’s reports, the Complaint asserts that various statements made by the Company
during the Class Period were false and misleading because they: (i) inflated Ampio’s ability to successfully obtain FDA
approval for Ampion; (ii) inflated the results of the AP-013 clinical trial and failed to disclose the timing of unblinding the
data from the study; and (iii) overstated the Company’s business, operations and prospects.
The Complaint seeks an unspecified amount of compensatory damages as well as attorneys’ fees and costs. On October
17, 2022, six putative shareholders filed motions seeking to be named lead plaintiff. On November 7, 2022, two of the
movants filed oppositions to each other’s motions; the remaining movants either withdrew their motions or filed non-
oppositions to another putative shareholder’s motion. The Court has not yet ruled on the competing motions for
appointment of lead plaintiff. In the interim, the Court approved the parties’ joint motion to stay proceedings, and all
deadlines are deferred until after a decision on the lead plaintiff motion(s).
Ampio intends to defend itself vigorously against this action.
Maresca v. Martino, et al., 22-cv-2646-KLM
On October 7, 2022, putative Ampio shareholder Robert Maresca filed a Verified Shareholder Derivative Complaint in the
United States District Court for the District of Colorado, captioned Maresca v. Martino, et al. , 22-cv-2646-KLM. The
derivative complaint, brought on behalf of the Company, asserts claims against a number of current and former
executives and directors of the Company, namely Michael A. Martino, Michael Macaluso, Holli Cherevka, David Bar-Or,
David Stevens, J. Kevin Buchi, Philip H. Coelho and Richard B. Giles.
Based largely on the same allegations as the Kain securities fraud class action complaint (including Ampio’s reports in
May and August, 2022, regarding its internal investigation and findings), the Complaint asserts that the individual
defendants caused the Company to make false or misleading statements in its SEC filings by “hyp[ing Ampio’s] ability to
successfully file a BLA for Ampion;” “exaggerate[ing] results of the AP-013 study;” “misstat[ing] the true timing of
unblinding of data from the AP-013 study;” and “fail[ing] to maintain internal controls.” The Complaint also asserts that
the defendants failed to exercise due care and comply with the Company’s policies and procedures designed to ensure
Board and Audit Committee oversight of the business operations and that ethical business practices were maintained. It
also contends that two of the defendants (Cherevka and Coelho) sold Company stock while in possession of material
non-public information at artificially inflated prices in violation of the Company’s insider trading restrictions. The
Complaint asserts that the individuals should not have received compensation while violating their duties to the
F-24
Table of Contents
Company. The Complaint also alleges that the defendants caused the Company to repurchase its own stock at artificially
inflated prices, causing damage to the Company itself.
The Complaint asserts six causes of action on behalf of the Company and against the individual defendants: (1)
violations of Section 14(a) of the Exchange Act based on purportedly false and misleading statements in the Company’s
proxy statements; (2) violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder; (3) control
person liability under Section 20(a) of the Exchange Act; (4) breach of fiduciary duty; (5) unjust enrichment; and (6) waste
of corporate assets. The Complaint seeks an unspecified amount of compensatory and restitution damages to be paid to
Ampio, together with pre- and post-judgment interest, as well as injunctive relief imposing certain corporate governance
reforms and attorneys’ fees and costs.
On November 2, 2022, the Company and plaintiff (together with plaintiff in a second derivative action -- the Marquis
action, discussed below) filed a joint motion to consolidate the two derivative actions and appoint the lawyers
representing the two plaintiffs as co-lead counsel. That same day, the Company and plaintiff filed a stipulation providing
the Company additional time to answer, move or otherwise respond to the Complaint.
On January 10, 2023, after the Company received additional extensions of time to respond, the Court granted
consolidation of the Maresca and Marquis actions but denied appointment of co-lead counsel for plaintiffs without
prejudice. On January 11, 2023, Plaintiffs renewed their motion for appointment of co-lead counsel. On January 12,
2023, the Court granted the renewed motion and appointed co-lead counsel for plaintiffs.
On January 17, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the consolidated derivative
actions, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an
answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On January
25, 2023, the Court granted the motion for temporary stay. Accordingly, all deadlines are deferred until the stay is
terminated.
Ampio intends to defend itself vigorously against this action.
Marquis v. Martino, et al., 22-cv-2803-KLM
On October 25, 2022, putative shareholder Samantha Marquis filed a derivative complaint in the United States District
Court for the District of Colorado, captioned Marquis v. Martino, et al., 22-cv-2803-KLM. The Complaint, filed on behalf of
Ampio, asserts that various current and former officers and directors of Ampio – namely, Michael Martino, Michael
Macaluso, Holli Cherevka, David Bar-Or, David Stevens, Kevin Buchi, Philip Coelho, and Richard Giles, breached their
fiduciary duties as directors and/or officers and violated Section 14(a) of the Exchange Act by causing the Company to file
false and misleading proxy statements. The Complaint focuses on the Company’s alleged failure to timely report that the
results of the AP-013 trial for Ampion were unfavorable, failing to show efficacy on the co-primary endpoints of pain and
function, and the Company’s alleged failure to disclose the results of and timing of unblinding the study data. The
Complaint asserts that the individual defendants breached their fiduciary duties by making or causing the Company to
make materially false and misleading statements regarding Ampio’s business, operations and prospects and by failing to
maintain adequate internal controls. Based on these allegations, the Complaint asserts two causes of action on behalf of
the Company: (1) violations of Section 14(a) of the Exchange Act against all defendants other than Cherevka; and (2)
breach of fiduciary duty against all defendants. Based on these claims, the Complaint seeks judgment in favor of the
Company and against the individual defendants in an unspecified amount of compensatory and restitution damages,
together with pre- and post-judgment interest and costs of the action including reasonable attorneys’ and experts’ fees as
well as a mandatory injunction requiring Ampio and the defendants to reform and improve the corporate governance and
internal controls of the Company.
On November 2, 2022, the Company and plaintiff (together with plaintiff in the previously filed Maresca action, discussed
above) filed a joint motion to consolidate the two derivative actions and appoint the lawyers representing the two plaintiffs
as co-lead counsel.
F-25
Table of Contents
On January 10, 2023, the Court granted consolidation of the Maresca and Marquis actions but denied appointment of co-
lead counsel for plaintiffs without prejudice. On January 11, 2023, Plaintiffs renewed their motion for appointment of co-
lead counsel. On January 12, 2023, the Court granted the renewed motion and appointed co-lead counsel for plaintiffs.
On January 17, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the consolidated derivative
actions, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an
answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On January
25, 2023, the Court granted the motion for temporary stay. Accordingly, all deadlines are deferred until the stay is
terminated.
Ampio intends to defend itself vigorously against this action.
McCann v. Martino, et al., 2023cv30287
On January 27, 2023, putative shareholder John McCann filed a derivative complaint in the District Court, City & County
of Denver, State of Colorado, captioned McCann v. Martino, et al., 2023cv30287. The Complaint, filed on behalf of
Ampio, asserts that various current and former officers and directors of Ampio – namely, Michael Martino, J. Kevin Buchi,
David Stevens, Elizabeth Jobes, Holli Cherevka, David Bar-Or, Philip H. Coelho, and Richard B. Giles, breached their
fiduciary duties as directors and/or officers by allowing the Company to issue false and misleading statements, The
Complaint focuses on the Company’s alleged failure to timely report that the results of the AP-013 trial for Ampion were
unfavorable, failing to show efficacy on the co-primary endpoints of pain and function, and the Company’s alleged failure
to disclose the results of and timing of unblinding the study data. The Complaint asserts that the individual defendants
breached their fiduciary duties by allowing the Company to make materially false and misleading statements regarding
Ampio’s business, operations and prospects and by failing to maintain adequate internal controls. Based on these
allegations, the Complaint asserts five causes of action on behalf of the Company: (1) breach of fiduciary duty against the
current directors; (2) gross mismanagement against the current directors; (3) waste of corporate assets against the
current directors; (4) unjust enrichment against all defendants; and (5) breach of fiduciary duty by insider trading against
defendants Cherevka and Coelho. Based on these claims, the Complaint seeks judgment in favor of the Company and
against the individual defendants in an unspecified amount of compensatory damages, costs of the action including
reasonable attorneys’ and experts’ fees as well as a mandatory injunction requiring Ampio to reform and improve the
corporate governance and internal procedures of the Company.
Defendant Cherevka was served and by order dated February 9, 2023, obtained an extension of time to respond to the
Complaint through March 31, 2023. On March 2, 2023, the parties filed a joint stipulated motion seeking a temporary stay
of the action, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing
an answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On
March 3, 2023, the Court granted the motion for temporary stay. Accordingly, all deadlines are deferred until the stay is
terminated.
Ampio intends to defend itself vigorously against this action.
SEC Investigation
On October 12, 2022, the Securities and Exchange Commission, or SEC, entered an order directing private investigation
and designating officers to take testimony to determine whether we or any other entities or persons have engaged in, or
are about to engage in, any violations of the securities laws. The SEC has since issued subpoenas to the Company and
numerous current and former officers, directors, employees and consultants of the Company. We intend to cooperate fully
with the SEC.
F-26
Table of Contents
Note 14 – Employee Benefit Plan
The Company has a 401(k) plan that allows participants to contribute a portion of their salary, subject to eligibility
requirements and annual IRS limits. The Company provided $67,000 matching employee contributions during the year
ended December 31, 2022.
Note 15 – Subsequent Event
Ampio Pharmaceuticals, Inc. (the “Company”) is a party to a Lease Agreement (the “Lease”) with Beta Investors Group,
LLC (successor by assignment to NCWP – Inverness Business Park, LLC) (the “Landlord”) dated December 13, 2013
pursuant to which the Company has leased office and manufacturing space in Suite 200 and Suite 204 in the building
located at 373 Inverness Parkway, Englewood, Colorado (the “Premises”).
Effective March 1, 2023, the Company entered into a sublease agreement with the consent of the Landlord pursuant to
which the Company will sublease the Premises for a term commencing on March 1, 2023 and continuing until the
expiration of the Lease on September 30, 2024. However, the address of the Company’s principal executive offices
continues to be 373 Inverness Parkway, Suite 200, Englewood, Colorado 80112.
F-27
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-
237723) and Form S-8 (No. 333-235853) of Ampio Pharmaceuticals, Inc. (the “Company”), of our
report dated March 27, 2023, relating to the financial statements of the Company (which report
expresses an unqualified opinion and includes an explanatory paragraph relating to a going concern
uncertainty), appearing in this Annual Report on Form 10-K of the Company for the year ended
December 31, 2022.
Exhibit 23.1
/s/ Moss Adams LLP
Denver, Colorado
March 27, 2023
EXHIBIT 31.1
I, Michael A. Martino, certify that:
CERTIFICATION
1. I have reviewed this Annual Report on Form 10-K of Ampio Pharmaceuticals, Inc. for the year ended December 31, 2022;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Date: March 27, 2023
/s/ Michael A. Martino
Michael A. Martino
Chief Executive Officer
EXHIBIT 31.2
I, Daniel G. Stokely, certify that:
CERTIFICATION
1. I have reviewed this Annual Report on Form 10-K of Ampio Pharmaceuticals, Inc. for the year ended December 31, 2022;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
/s/ Daniel G. Stokely
Daniel G. Stokely
Chief Financial Officer and Secretary
Date: March 27, 2023
CERTIFICATIONS
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
EXHIBIT 32.1
In connection with the Annual Report of Ampio Pharmaceuticals, Inc. (the “Company”) on Form 10-K for the year ended
December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned
officers of the Company, certifies to his knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Section 906), the following:
(1) The Report fully complies with the requirements of section 13(a) and 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company for the period covered by the Report.
/s/ Michael A. Martino
Michael A. Martino
Chief Executive Officer
/s/ Daniel G. Stokely
Daniel G. Stokely
Chief Financial Officer and Secretary
Date: March 27, 2023
This certification accompanies the annual report on Form 10-K to which it relates, is not deemed filed with the Securities and
Exchange Commission and is not to be incorporated by reference into any filing of Ampio Pharmaceuticals, Inc. under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-
K), irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by
Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Ampio Pharmaceuticals, Inc. and will be retained by Ampio
Pharmaceuticals, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.