UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended: March 31, ~~2022~~2023


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

For the transition period from to

Commission File Number: 001-35182

AMPIO PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)


Delaware	26-0179592
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

(Address of principal executive offices, including 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	Trading Symbol	Name of each exchange on which registered:
Common stock, par value $0.0001 per share	AMPE	NYSE American

Indicate by 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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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


Large Accelerated Filer	☐	Accelerated Filer	☐

Non-Accelerated Filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

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

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

As of May ~~6, 2022,~~5, 2023, there were ~~227,186,867~~15,102,877 outstanding shares of common stock, par value $0.0001 per share, of the registrant.

Table of Contents

AMPIO PHARMACEUTICALS, INC.

FOR THE QUARTER ENDED MARCH 31, ~~2022~~2023

INDEX

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as forward-looking statements. All statements ~~included or incorporated by reference in this report,~~ other than statements of historical ~~fact, that address activities, events or~~facts contained in this Quarterly Report, including statements regarding our anticipated future clinical developments, ~~that we expect, believe or anticipate will or may occur in the~~ future financial position, and plans and objectives of management for future operations, are forward-looking statements. These statements appear in a number of places, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements represent our reasonable judgment about the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by such statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use wordsWords such as ~~“anticipate,” “forecast,” “suggest,” believe,” “continue,” “ongoing,” “opportunity,”~~“may”, “will”, “should”, “forecast”, “could”, “expect”, “suggest”, “believe”, “estimate”, “continue”, “anticipate”, “intend”, “ongoing”, “opportunity”, “potential”, “predicts”, ~~“seek,” “believe,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “should,”~~“seek”, “plan,” ~~“potential,” “project,” “will,” “would” and other~~or similar words, ~~of similar meaning,~~ or the negatives of such terms or other ~~variations. These~~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;~~operations or the effect of any actions we may take to reduce expenses and preserve cash and cash equivalents;

●

~~expectations regarding clinical~~potential outcomes of preclinical trials for ~~Ampion,~~OA-20X, any future capital expenditures, research and development expenses and other ~~payments;~~payments relating to OA-20X and any capital raising activities to fund OA-20X research and development related expenses;

●

our ~~beliefs~~strategic alternatives process, including any potential interested counterparty, transaction structure, timing and ~~assumptions relating to our liquidity position, including, but not limited to, our ability to obtain near-term additional financing;~~transaction expense associated with any strategic alternative and the potential success of any strategic alternative(s);

●

~~our beliefs, assumptions~~the expense, time and/or outcome of any legal proceeding; and ~~expectations about the regulatory approval pathway for Ampion including, but not limited to, our ability to obtain regulatory approval for Ampion in a timely manner, or at all; and~~

●

our ability to identify strategic partners for OA-20X or any other potential product and ~~enter into~~the execution of beneficial license, co-development, collaboration or similar arrangements.

~~Any~~

We undertake no obligation to update or ~~all of our~~revise publicly any forward-looking statements ~~may turn out~~ to ~~be wrong. They may be affected~~reflect events or circumstances after the date of such statements for any reason, except as otherwise required by ~~inaccurate assumptions or by known or unknown risks, uncertainties and other factors including, among others:~~

●

~~the results of the independent internal investigation we announced on May 16, 2022, as well as the time and expense associated with the investigation and related matters;~~

●

~~the actual and perceived effectiveness of Ampion, and how Ampion compares to competitive products;~~

●

~~the progress and results of clinical trials for~~ ~~Ampion and additional costs or delays associated therewith~~;

●

~~our ability to receive regulatory approval for and sell the products that we are developing for the treatment of severe osteoarthritis of the knee (“OAK”) or COVID-19;~~

●

~~the fact that we have incurred significant losses since inception, expect to incur net losses for at least the next several years and may never achieve or sustain profitability;~~

●

~~our ability to fund our operations, including our ability to access funding through our “at-the-market” equity offering or through other equity or debt offerings;~~

●

~~our ability to retain key employees, consultants, and advisors and to attract, retain and motivate qualified personnel;~~

●

~~our reliance on third parties to conduct our clinical trials resulting in costs or delays that prevent us from successfully commercializing Ampion;~~

●

~~competition for patients in conducting clinical trials, delaying product development and straining our limited financial resources;~~

●

~~our ability to navigate the regulatory approval process in the U.S. and other countries, and our success in obtaining required regulatory approvals for Ampion on a timely basis;~~

●

~~our need to rely on third party manufacturers if we receive regulatory approval for Ampion but do not have redundant manufacturing capabilities;~~

●

~~commercial developments for products that compete with Ampion;~~

●

~~the rate and degree of market acceptance and clinical utility of Ampion or any of our other product candidates for which we receive marketing approval;~~

~~Table of Contents~~

●

the possibility that, even if Ampion is approved for commercialization, the U.S. Food and Drug Administration (“FDA”) may impose limitations on its use or reduce the approved indications on the product label;

●

~~expenses and costs we will incur to comply with FDA post-approval requirements if we, or our collaborators, obtain marketing approval for Ampion;~~

●

~~government restrictions on pricing reimbursement, as well as other healthcare payor cost-containment initiatives;~~

●

~~our ability to obtain approval to develop, manufacture and sell our products in global markets;~~

●

~~our ability to realize the investment we made in our manufacturing facility if Ampion does not receive marketing approval;~~

●

~~adverse effects and the unpredictable nature of the ongoing COVID-19 pandemic;~~

●

~~the strength, enforceability and duration of our intellectual property protection, and the eligibility of our patent portfolio for FDA market exclusivity;~~

●

~~our success in avoiding infringement of the intellectual property rights of others;~~

●

~~adverse developments in our research and development activities;~~

●

~~potential liability if any of our product candidates cause illness, injury or death, or adverse publicity from any such events;~~

●

~~our ability to operate our business efficiently, manage capital expenditures and costs (including general and administrative expenses) and obtain financing when required; and~~

●

~~our expectations with respect to future licensing, partnering or other strategic activities.~~

law.

Forward-looking statements are ~~neither historical facts nor assurances~~based on certain assumptions and expectations of future ~~performance. Instead, they are based on the expectations, estimates, projections, beliefs~~events and ~~assumptions of our management, based on information currently available to management, all of which~~trends that are subject to ~~change. Because~~risks and uncertainties. Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements ~~relate to the future, they are subject to inherent uncertainties, risks, changes in circumstances and other factors that are difficult to predict and many~~depending on a variety of which are outside our control, any of which could cause our actual results and the timing of certain events to differ materially and adversely from those expressed or implied by such forward-looking statements. factors.

Additional factors that could cause or contribute to such differences include, but are not limited to, those described in the section entitled “Risk Factors” in Part I, Item 1A of the Form ~~10-K. These risks are not exhaustive. Other~~10-K for the year ended December 31, 2022, other similar sections of our subsequent reports. Additionally, other sections of this ~~Annual~~Quarterly Report include additional factors that could adversely impact ~~our~~the business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our businessperformance expressed or ~~the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained~~implied in any ~~forward-looking statements.~~

~~In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the~~ forward-looking statements, ~~some of which are included elsewhere in this report,~~ including, but not limited to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” ~~We have included important~~For additional information concerning factors in the cautionary statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 29, 2022 (the “2021 Annual Report”), particularly in the “Risk Factors” sections of each report, that ~~could~~may cause actual results ~~or events~~ to differ materially from the forward-looking statements that we make herein. Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement should be relied upon. Our actual future results may vary materially from those ~~expressed or implied~~stated in ~~any forward-looking statements. All~~the forward-looking statements, ~~contained in this report are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of~~see our reports on Forms 10-K, 10-Q and 8-K filed with the ~~date they are made, and we disclaim any obligation~~SEC from time to ~~update any forward-looking statements to reflect events or circumstances after the date of this report, except as otherwise required by applicable law.~~time.

This Quarterly Report on Form 10-Q includes trademarks for Ampion^®, which are protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ^® or ^TM 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 these trademarks and trade names.

Table of Contents

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
AMPIO PHARMACEUTICALS, INC.
Condensed Balance Sheets
(unaudited)

March 31,

December 31,


2022

2021

Assets




Current assets




Cash and cash equivalents

$
28,837,000

$
33,892,000
Prepaid expenses and other

1,070,000

1,740,000
Total current assets

29,907,000

35,632,000

Fixed assets, net

2,302,000

2,564,000
Right-of-use asset, net

577,000

629,000
Total assets

$
32,786,000

$
38,825,000

Liabilities and Stockholders’ Equity




Current liabilities




Accounts payable and accrued expenses

$
5,208,000

$
4,811,000
Lease liability-current portion

318,000

311,000
Total current liabilities

5,526,000

5,122,000

Lease liability-long-term

533,000

614,000
Warrant derivative liability

4,474,000

5,805,000
Total liabilities

10,533,000

11,541,000

Commitments and contingencies (Note 5)





Stockholders’ equity




Preferred Stock, par value $0.0001; 10,000,000 shares authorized; NaN issued

—

—
Common Stock, par value $0.0001; 300,000,000 shares authorized; shares issued and outstanding - 227,186,867 as of March 31, 2022 and 227,325,381 as of December 31, 2021

23,000

23,000
Additional paid-in capital

245,468,000

244,863,000
Accumulated deficit

(223,238,000)

(217,602,000)
Total stockholders’ equity

22,253,000

27,284,000

Total liabilities and stockholders’ equity

$
32,786,000

$
38,825,000

March 31,

December 31,


2023

2022

Assets




Current assets




Cash and cash equivalents

$
10,352,000

$
12,653,000
Prepaid expenses and other

383,000

676,000
Total current assets

10,735,000

13,329,000

Fixed assets, net

—

184,000
Right-of-use asset, net

—

75,000
Total assets

$
10,735,000

$
13,588,000

Liabilities and Stockholders’ Equity




Current liabilities




Accounts payable and accrued expenses

$
2,325,000

$
852,000
Lease liability-current portion

347,000

340,000
Total current liabilities

2,672,000

1,192,000

Lease liability-long-term

185,000

274,000
Warrant derivative liability

—

44,000
Asset retirement obligation

—

289,000
Total liabilities

2,857,000

1,799,000

Commitments and contingencies (Note 5)





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 March 31, 2023 and December 31, 2022

2,000

2,000
Additional paid-in capital

245,749,000

245,726,000
Accumulated deficit

(237,873,000)

(233,939,000)
Total stockholders’ equity

7,878,000

11,789,000

Total liabilities and stockholders’ equity

$
10,735,000

$
13,588,000

The accompanying notes are an integral part of these financial statements.

Table of Contents

AMPIO PHARMACEUTICALS, INC.
Condensed Statements of Operations
(unaudited)

Three Months Ended March 31,


2022

2021


Operating expenses





Research and development

$
3,687,000

$
2,296,000

General and administrative

3,283,000

1,523,000

Total operating expenses

6,970,000

3,819,000

Other income





Interest income

3,000

1,000

Derivative gain

1,331,000

151,000

Total other income

1,334,000

152,000

Net loss

$
(5,636,000)

$
(3,667,000)

Net loss per common share:





Basic

$
(0.02)

$
(0.02)

Diluted

$
(0.03)

$
(0.02)

Weighted average number of common shares outstanding:

Basic

226,083,328

195,387,047

Diluted

226,110,693

200,752,267

Three Months Ended March 31,


2023

2022


Operating expenses





Research and development

$
524,000

$
3,687,000

General and administrative

3,819,000

3,283,000

Loss on sale of fixed assets

56,000

—

Total operating expenses

4,399,000

6,970,000

Other income





Interest income

103,000

3,000

Rental income

30,000

—

Loss on derecognition of ARO asset

(6,000)

—

Gain on elimination of ARO obligation

294,000

—

Derivative gain

—

1,331,000

Total other income

421,000

1,334,000

Net loss

$
(3,978,000)

$
(5,636,000)

Net loss per common share:





Basic

$
(0.26)

$
(0.37)

Diluted

$
(0.26)

$
(0.46)

Weighted average number of common shares outstanding:

Basic

15,093,894

15,072,222

Diluted

15,093,894

15,074,047

The accompanying notes are an integral part of these financial statements.

Table of Contents

AMPIO PHARMACEUTICALS, INC.
Condensed Statements of Stockholders’ Equity
(unaudited)

Additional

Total

Additional

Total

Common Stock

Paid-in

Accumulated

Stockholders'

Common Stock

Paid-in

Accumulated

Stockholders'


Shares

Amount

Capital

Deficit

Equity

Shares

Amount

Capital

Deficit

Equity
Balance at December 31, 2020

193,378,996

$
19,000

$
218,020,000

$
(200,527,000)

$
17,512,000
Issuance of common stock for services

54,052

0

80,000

0

80,000
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

—

0

166,000

0

166,000

—

—

716,000

—

716,000
Stock options exercised, net

129,500

0

33,000

0

33,000
Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards

(28,562)

(40,000)

0

(40,000)

(9,234)

—

(79,000)

—

(79,000)
Warrants exercised, net

306,705

0

114,000

0

114,000
Issuance of common stock in connection with the "at-the-market" equity offering program

1,848,437

0

2,705,000

0

2,705,000
Offering costs related to the issuance of common stock in connection with the "at-the-market" equity offering program

—

0

(126,000)

0

(126,000)

—

—

(32,000)

—

(32,000)
Net loss

—

0

0

(3,667,000)

(3,667,000)

—

—

—

(5,636,000)

(5,636,000)
Balance at March 31, 2021

195,689,128

$
19,000

$
220,952,000

$
(204,194,000)

$
16,777,000

Balance at December 31, 2021

227,325,381

23,000

244,863,000

(217,602,000)

27,284,000
Balance at March 31, 2022

15,162,877

2,000

245,489,000

(223,238,000)

22,253,000

Balance at December 31, 2022

15,102,877

2,000

245,726,000

(233,939,000)

11,789,000

Reclassification of warrant derivative upon adoption of ASU 2020-06

—

—

—

44,000

44,000
Share-based compensation, net of forfeitures

—

0

716,000

0

716,000

—

—

23,000

—

23,000
Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards

(138,514)

0

(79,000)

0

(79,000)
Offering costs related to the issuance of common stock and warrants in connection with the registered direct offering

—

0

(32,000)

0

(32,000)
Net loss

—

0

0

(5,636,000)

(5,636,000)

—

—

—

(3,978,000)

(3,978,000)
Balance at March 31, 2022

227,186,867

$
23,000

$
245,468,000

$
(223,238,000)

$
22,253,000

Balance at March 31, 2023

15,102,877

2,000

245,749,000

(237,873,000)

7,878,000

The accompanying notes are an integral part of these financial statements.

Table of Contents

AMPIO PHARMACEUTICALS, INC.
Condensed Statements of Cash Flows
(unaudited)


Three Months Ended March 31,


Three Months Ended March 31,



2022

2021


2023

2022


Cash flows used in operating activities

Net loss

$
(5,636,000)

$
(3,667,000)

$
(3,978,000)

$
(5,636,000)

Adjustments to reconcile net loss to net cash used in operating activities:

Share-based compensation, net of forfeitures

716,000

166,000

23,000

716,000

Depreciation and amortization

262,000

294,000

122,000

262,000

Issuance of common stock for services

0

80,000

Derivative (gain) loss

(1,331,000)

(151,000)

Loss on sale of fixed assets

56,000

—

Loss on derecognition of ARO asset

6,000

—

Gain on elimination of ARO obligation

(294,000)

—

Accretion of asset retirement obligation

5,000

—

Derivative gain

—

(1,331,000)

Changes in operating assets and liabilities:

(Increase) decrease in prepaid expenses and other

670,000

(651,000)

Increase (decrease) in accounts payable and accrued expenses

397,000

(199,000)

Decrease in prepaid expenses and other

292,000

670,000

Increase in accounts payable and accrued expenses

1,474,000

397,000

Decrease in lease liability

(22,000)

(19,000)

(7,000)

(22,000)

Net cash used in operating activities

(4,944,000)

(4,147,000)

(2,301,000)

(4,944,000)

Cash flows used in investing activities

Purchase of fixed assets

0

(81,000)

Net cash used in investing activities

0

(81,000)

Cash flows from financing activities

Proceeds from sale of common stock in connection with the "at-the-market" equity offering program

0

2,705,000

Costs related to sale of common stock in connection with the "at-the-market" equity offering program

0

(126,000)

Proceeds from sale of common stock and warrants in connection with the registered direct offering

0

114,000

Cash flows used in financing activities

Costs related to the sale of common stock and warrants in connection with the registered direct offering

(32,000)

0

—

(32,000)

Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards

(79,000)

0

Other

0

(7,000)

Net cash (used in) provided by financing activities

(111,000)

2,686,000

Funding of tax obligation relative to shares withheld in connection with restricted stock awards

—

(79,000)

Net cash used in financing activities

—

(111,000)

Net change in cash and cash equivalents

(5,055,000)

(1,542,000)

(2,301,000)

(5,055,000)

Cash and cash equivalents at beginning of period

33,892,000

17,346,000

12,653,000

33,892,000

Cash and cash equivalents at end of period

$
28,837,000

$
15,804,000

$
10,352,000

$
28,837,000

Non-cash transactions:

Commercial insurance premium financing agreement

$
1,159,000

$
1,016,000

The accompanying notes are an integral part of these financial statements.

Table of Contents

AMPIO PHARMACEUTICALS, INC.
Notes to Condensed Financial Statements
(unaudited)
Note 1 – The Company and Summary of Significant Accounting Policies
Ampio Pharmaceuticals, Inc. (“Ampio” or the “Company”) is a pre-revenue stage biopharmaceutical company ~~focused on~~that until May 2022 was engaged with the ~~research,~~ development of Ampion and ~~advancement~~early development of ~~immunomodulatory therapies for~~AR-300, a synthetic version of Ampion and subsequently, a small molecule pre-clinical stage development asset which was designed to leverage the ~~treatment~~key attributes of ~~pain from osteoarthritis.~~Ampion, which is referred to as the OA-20X program. As part of the OA-20X program, we have been focusing our ongoing efforts toward optimizing two potential small molecule formulations to take forward into development. In the third quarter of 2023, we intend to select one of these optimized formulations to move towards clinical development. Given that these formulations are unique, proprietary, and are neither Ampion nor AR-300 (or derivatives thereof), we now refer to development of these new formulations as the OA-20X program.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States for interim financial information and with the instructions of the SEC on Quarterly Reports on Form 10-Q and Article 8 of Regulation S-X. Accordingly, such financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the financial position and of the results of operations and cash flows of the Company for the periods presented.

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 condensed financial statements for the quarters ended March 31, 2023 and March 31, 2022. 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 condensed financial statements for the quarters ended March 31, 2023 and March 31, 2022. 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.

These financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, ~~2021~~2022 included in the Company’s ~~2021~~ Annual ~~Report.~~Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”). The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The information as of and for the three months ended March 31, 2023 and March 31, 2022 is unaudited. The balance sheet at December 31, ~~2021~~2022 was derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.
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 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 fully 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 three months ended~~As of March 31, ~~2022, and as consistent with prior reporting periods,~~2023, the Company ~~maintained~~no longer holds balances in excess of federally insured limits.

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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 closeout costs accrual, projected useful lives and ~~potential~~the assessment of impairment of ~~fixed~~long-lived assets. The Company develops these estimates using its judgment based upon the facts and circumstances known to it at the time.

~~Table of Contents~~

Liquidity / Going Concern
We are a pre-revenue stage biopharmaceutical company that has incurred an accumulated deficit of ~~$223.2~~$237.8 million as of March 31, ~~2022.~~2023. We expect to generate continued operating losses for the foreseeable future as we are pursuing the continued development and advancement of the OA-20X program and the Ampio board of directors is ~~considering~~pursuing various strategic alternatives, ~~for Ampio and Ampion,~~ which ~~may include the continued development and advancement of Ampion,~~includes capital raising, licensing and other partnering opportunities, positioning the Company for a strategic transaction or other alternative(s).

As of March 31, ~~2022,~~2023, we had ~~$28.8~~$10.4 million of cash and cash equivalents. Based on our current cash position and current projection of operating expenses and capital expenditures, we believe we will have sufficient liquidity to fund operations ~~into the second half of~~through fourth quarter 2023. Our cash resources and our capital needs are based upon management estimates as to future operations and expense, which involve significant judgment. Once we optimize two potential small molecule formulations to take forward into development, we intend to fund that future development of the OA-20X program 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. Additionally, given that the Ampio board of directors is considering strategic alternatives, our forecasts regarding the sufficiency of our liquidity is based upon maintaining our current operations. Accordingly, we may ~~exhaust our available cash and cash equivalents earlier~~require a greater amount of capital than presently anticipated ~~and~~or may require ~~more~~ capital more quickly than presently ~~anticipated.~~anticipated, or both.

Additional financing may not be available in the amount or at the time we need it or may not be available on acceptable terms or at all. We may obtain future additional financing ~~by incurring indebtedness or~~ from an offering of our equity securities or by incurring indebtedness or either of these. If we raise additional 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. If we raise additional equity financing, new investors may demand rights, preferences, or privileges senior to those of existing holders of common stock.

Based on the above, these existing and ongoing factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited interim financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
These financial statements do not include any separate adjustments relating to the recovery of recorded assets or the classification of liabilities, which adjustments may be necessary in the future should the Company be unable to continue as a going concern.

Adoption of ~~Recent Accounting Pronouncements~~
~~The Company has not adopted any recent accounting pronouncements during the three months ended March 31, 2022, as none were deemed to be applicable.~~
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“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

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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 ~~is currently evaluating the impact~~adopted ASU 2020-06 effective January 1, 2023. The adoption of ASU 2020-06 did not have a material impact on the Company’s financial ~~statements and has decided to wait to implement ASU 2020-06 until its effective date.~~statements.

Recent Accounting Pronouncements

This Quarterly Report on Form 10-Q 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.

~~Table of Contents~~

Note 2 – Prepaid Expenses and Other
Prepaid expenses and other balances as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022 are as follows:






March 31, 2022

December 31, 2021

March 31, 2023

December 31, 2022

Unamortized commercial insurance premiums

$
277,000

$
610,000
Deposits

$
565,000

$
884,000

34,000

34,000
Unamortized commercial insurance premiums

212,000

465,000
Professional fees

87,000

235,000

18,000

19,000
Maintenance service contracts

63,000

—
Clinical trial inventory

—

72,000
Other receivable

19,000

16,000
Other

124,000

68,000

54,000

13,000
Total prepaid expenses and other

$
1,070,000

$
1,740,000

$
383,000

$
676,000

Note 3 – Fixed Assets
Fixed assets are recorded based on acquisition cost and once placed in service, are depreciated utilizing the straight-line method over their estimated economic useful lives. Leasehold improvements are accreted over the shorter of the estimated economic life or related lease term. Effective March 1, 2023, the Company entered into a sublease of its existing facility and in connection with that sublease, entered into a bill of sale with the subtenant for all of the Company’s existing fixed assets. As a result, the Company recognized a loss on the sale of fixed assets in the amount of $56,000 during the quarter ended March 31, 2023 (see Note 5).
Fixed assets, net of accumulated depreciation, ~~and amortization,~~ consist of the following:

Estimated

Useful Lives


(in Years)

March 31, 2022

December 31, 2021

Leasehold improvements

10

$
6,075,000

$
6,075,000
Manufacturing facility/clean room

3 - 8

2,984,000

2,984,000
Lab equipment and office furniture

5 - 8

1,739,000

1,739,000
Fixed assets, gross

10,798,000

10,798,000
Accumulated depreciation

(8,496,000)

(8,234,000)
Fixed assets, net

$
2,302,000

$
2,564,000

~~Depreciation and amortization expense for the respective periods is as follows:~~

Three Months Ended March 31,


2022

2021


Depreciation and amortization expense

$
262,000

$
294,000

Estimated

Useful Lives


(in Years)

March 31, 2023

December 31, 2022

Leasehold improvements

10

$
—

$
4,965,000
Manufacturing facility/clean room

3 - 8

—

2,803,000
Lab equipment and office furniture

5 - 8

—

1,661,000
Fixed assets, gross

—

9,429,000
Accumulated depreciation

—

(9,245,000)
Fixed assets, net

$
—

$
184,000

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Depreciation and amortization expense for the respective periods is as follows:

Three Months Ended March 31,


2023

2022


Depreciation and amortization expense

$
122,000

$
262,000

Note 4 – Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022 are as follows:





March 31, 2022

December 31, 2021

March 31, 2023

December 31, 2022





Professional fees

$
1,408,000

$
157,000
Accounts payable

$
1,582,000

$
427,000

575,000

97,000
Clinical trials

2,919,000

2,995,000
Professional fees

302,000

510,000
Accrued compensation

292,000

389,000
Preclinical and clinical trials

175,000

89,000
Commercial insurance premium financing

—

269,000

—

189,000
Accrued severance

10,000

143,000
Other

113,000

221,000

157,000

177,000
Accounts payable and accrued expenses

$
5,208,000

$
4,811,000

$
2,325,000

$
852,000

Commercial Insurance Premium Financing Agreement

In June ~~2021,~~2022, the Company entered into an insurance premium financing agreement for ~~$916,000,~~$1,159,000, with a term of ~~nine~~eight months and an annual interest rate of ~~3.57%.~~3.98% and made a down payment of $402,000. Under the terms and provisions of the agreement, the Company ~~was~~is required to make principal and interest payments totaling ~~$82,000~~$95,000 per month over the remaining term of the agreement. The ~~outstanding obligation for the Company’s annual~~ insurance ~~premiums were~~premium financing agreement was paid in full ~~as of~~at March 31, ~~2022.~~2023.

Accrued Severance

The Company completed the final phase of its previously communicated reduction in force on January 31, 2023. The remaining accrued severance outstanding obligation represents the estimated obligation for COBRA benefits elected by former employees and reimbursed by the Company in accordance with the severance agreements.

Note 5 - Commitments and Contingencies
~~Key Clinical Research Trial Obligations~~Employment Agreements
~~Please see Part II, Item 5 of this Form 10-Q for information regarding an internal investigation relating to our clinical studies.~~
~~Osteoarthritis of the Knee~~~~ ~~

~~AP-013 study~~
In December 2020, the Company entered into an initial contract with a CRO in reference to the AP-013 study database totaling $1.4 million. The contractual provisions required an initial retainer of $315,000, which was applied to study expenses as further defined by the contract during the first three months ended March 31, 2022. The Company entered into a change order to the initial contract in April 2022 totaling $0.7 million which reflects the estimated final costs to close out the study with expected completion in the next ~~three~~ ~~to five months.~~

~~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”). The contractual provisions required an initial retainer of $105,000 to be applied to future study expenses as further defined by the contract. Subsequent to March 2021, the Company agreed to a contractual amendment of $1.0 million. As of March 31, ~~2022, the contract is substantially complete and any future services to be performed are deemed to be minimal.~~

~~Table of Contents~~

~~In June 2021,~~2023, the Company ~~entered into~~is a ~~contract~~party to an employment agreement dated October 11, 2021 with Daniel Stokely to serve as the Company’s Chief Financial Officer with a ~~CRO totaling $2.5 million~~term ending 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 provisions required~~October 2024 and at an initial ~~retainer~~base salary of $300,000 to be applied to study expenses as further defined by the contract. The contractual amount was later amended by $0.9 million. As such, the revised contractual commitment for the AP-019 study is $3.4 million as of March 31, 2022. Enrollment of the AP-019 study was terminated on May 3, 2022, as no beneficial effect of nebulized Ampion could be documented. The Company will pay for contractually obligated services rendered and expenses incurred through the date of finalization of the study. The CRO will refund any unused portion of the retainer. $335,000.

As of March 31, ~~2022,~~2023, the Company ~~expects~~is a party to ~~spend $0.5 million related to future services expected to be performed under this contract~~an employment agreement with Michael A. Martino, Chief Executive Officer, dated November 22, 2021 and ~~accordingly, does not expect any refund of any unused portion of the retainer.~~

~~Intravenous (“IV”) treatment for COVID-19 patients~~

~~AP-017 study~~

~~In December 2020, the Company entered into a contract~~amended August 30, 2022 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 complications arising from COVID-19 (the “AP-017 study”). The contractual provisions required an initial ~~retainer~~base salary of ~~$345,000~~$550,000. The amendment on August 30, 2022 extended the term to ~~be applied to study expenses as further defined by the contract. The Company stopped the trial after an interim enrollment~~November 22, 2023. All other terms and conditions of 35 subjects, which resulted in a favorable contractual adjustment of $0.5 million to reflect the lower study enrollment. As such, the revised contractual commitment for the AP-017 study is $1.3 million as of March 31, 2022. The Company has an outstanding future commitment of $324,000 as of March 31, 2022, which reflects future services related to finalizing the study.

~~Employment Agreements~~

~~In October 2021, the Company entered into 3~~Mr. Martino’s employment agreement remain unchanged. Under these employment agreements, that expire in October 2024 and in November 2021, the Company entered into 1 employment agreement that expires in November 2022. These employment agreements call for initial base salaries ranging from $335,000 to $550,000. The employment agreements provide that the employee is entitled to a discretionary bonus. Additionally, the employeeeach executive is entitled to a severance payment in the event the Company terminates employee’s employment without ~~Cause,~~cause, or employee terminates his ~~or her~~ employment with ~~Good Reason.~~

~~Related Party Research Agreements~~

In February 2022, the Company entered into a sponsored research agreement with Trauma Research, LLC, an entity owned by one of the Company’s directors. The agreement totals $400,000 for research activities to be performed over the next year. In addition, the Company also entered into an agreement with that director to provide research services. The agreement totals $250,000, which is to be paid in 4 equal installments payable quarterly over the one-year term. As of March 31, 2022, commitments for future services expected to be rendered for the research and research service agreements total $358,000 and $208,000, respectively.good reason.

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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. There are no related party agreements in effect as of March 31, 2023.

Facility Lease

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”). In December 2013, the Company entered into a 125-month non-cancellable operating lease for office space and a manufacturing ~~facility.~~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. ~~The Company adopted the FASB issued ASC 842,~~ ~~“Leases (Topic 842)”~~ ~~effective January~~

Effective March 1, ~~2019. With the adoption of ASC 842,~~2023, the Company ~~recorded an operating right-of-use (“ROU”) asset~~entered into a sublease agreement whereby the Company subleased the Premises for a term commencing on March 1, 2023 and ~~an operating lease liability on its balance sheet. The ROU asset represents~~continuing until the ~~Company’s right to use the underlying asset~~expiration for the ~~lease term~~Lease on September 30, 2024. Under the terms and conditions of the ~~lease~~sublease agreement, the Company was fully released of its obligation ~~represents~~under the ~~Company’s commitment~~Lease to ~~make the lease payments arising from the lease. ROU lease assets~~dismantle and ~~obligations are recognized~~remove certain components of leasehold improvements at the ~~commencement date based on the present value~~end of ~~remaining lease payments over~~ the lease term. ~~As the Company’s lease does not provide an implicit rate,~~Accordingly, the Company ~~used an estimated incremental borrowing rate~~derecognized its asset retirement obligation (“ARO”) in the amount of ~~5.75% based~~$294,000 which resulted in the recognition of a non-cash gain totaling $288,000 gain, net of $6,000 loss on the ~~information available at the commencement date in determining the present value~~derecognition 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 both as current in part and long-term on the balance sheet.ARO asset.

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 disclosed on the balance sheet as of March 31, ~~2022:~~2023:


Facility Lease Payments

2022

2023

2024

2025

2026

Thereafter

Facility Lease Payments

2023

2024

2025

2026

2027

Thereafter

Remaining Facility Lease Payments

$
912,000

$
268,000

$
364,000

$
280,000

$
—

$
—

$
—

$
554,000

$
274,000

$
280,000

$
—

$
—

$
—

$
—
Less: Discount Adjustment

(61,000)

(22,000)

Total lease liability

$
851,000

$
532,000

Lease liability-current portion

$
318,000

$
347,000

Long-term lease liability

$
533,000

$
185,000

The ROU asset was fully amortized as of March 31, 2023. The following table provides a reconciliation of the Company’s remaining ROU asset for its facility lease presented in the balance sheet as of March 31, ~~2022:~~2023:


ROU Asset

Balance as of December 31, 2021

$
629,000
Amortization

(52,000)
Balance as of March 31, 2022

$
577,000

~~The Company recorded lease expense in the respective periods is as follows:~~

Three Months Ended March 31,


2022

2021


Lease expense

$
81,000

$
73,000

~~Note 6 – Warrants~~
The Company has issued both equity (“placement agent”) and liability (“investor”) classified warrants in conjunction with previous equity raises. The Company had a total of 1.1 million equity-classified warrants and 17.2 million liability-classified warrants outstanding as of March 31, 2022.


ROU Asset

Balance as of December 31, 2022

$
75,000
Amortization

(75,000)
Balance as of March 31, 2023

$
—

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The Company recorded lease expense in the respective periods as follows:

Three Months Ended March 31,


2023

2022


Lease expense

$
87,000

$
81,000

~~There was no warrant activity during~~Note 6 – Warrants
The Company adopted ASU 2020-06 effective January 1, 2023 using the ~~three months ended~~modified retrospective method, and accordingly reclassified its “investor” liability classified warrants to retained earnings. The Company’s “placement agent” warrants were previously classified as equity. The Company had a total of 1.1 million equity-classified warrants as of March 31, ~~2022:~~2023.




Weighted

Weighted Average

Number of

Average

Remaining

Warrants

Exercise Price

Contractual Life

Outstanding as of December 31, 2020

4,130,724

$
0.66

2.05
Warrants issued in connection with the registered direct offering

15,000,000

$
1.10

4.96
Warrant exercised

(812,827)

$
0.58

—
Warrants expired

(15,000)

Outstanding as of December 31, 2021

18,302,897

$
1.02

4.24
Warrants issued in connection with the registered direct offering

—

$
—

Warrants exercised

—

$
—

Warrants expired

—

$
—

Outstanding as of March 31, 2022

18,302,897

$
1.02

3.99




Weighted

Weighted Average

Number of

Average

Remaining

Warrants

Exercise Price

Contractual Life

Outstanding as of December 31, 2022

1,065,137

$ 15.94

3.80

Outstanding as of March 31, 2023

1,065,137

$ 15.94

3.55

The following table summarizes the Company’s outstanding warrants between placement agent and investor warrant classifications:








Weighted

Weighted Average

Number of

Average

Remaining
Date

Exercise Price

Type

Warrants

Exercise Price

Contractual Life

December 2021 registered direct offering

$
1.10

Investor

15,000,000

4.71
August 2018 public offering

$
0.40

Investor

153,400

1.37
June 2017 registered direct offering

$
0.76

Investor

2,026,915

0.17
June 2019 public offering

$
0.50

Placement agent

823,650

2.22
June 2017 registered direct offering

$
0.76

Placement agent

298,932

0.17
Outstanding as of March 31, 2022

18,302,897

$
1.02

3.99








Weighted

Weighted Average

Number of

Average

Remaining
Date

Exercise Price

Type

Warrants

Exercise Price

Contractual Life

December 2021 registered direct offering

$ 16.50

Investor

1,000,000

3.71
August 2018 public offering

$ 6.00

Investor

10,227

0.37
June 2019 public offering

$ 7.50

Placement agent

54,910

1.22
Outstanding as of March 31, 2023

1,065,137

$ 15.94

3.55

There was no warrant derivative liability as of March 31, 2023. The total value for the warrant derivative liability as of ~~March~~December 31, 2022 iswas approximately ~~$4.5 million~~$44,000 (see Note 7).

Note 7 - 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 reflect 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;

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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.

~~Table of Contents~~

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.
As noted previously, the Company early adopted ASU 2020-06 resulting in the reclassification of the warrant derivative liability to stockholder’s equity, effective January 1, 2023.
The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March ~~31, 2022~~31,2023 and December 31, ~~2021,~~2022, by level within the fair value hierarchy:


Fair Value Measurements Using

Fair Value Measurements Using


Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total
March 31, 2022








December 31, 2022








Liabilities:
















Warrant derivative liability

$
—

$
—

$
4,474,000

$
4,474,000

$
—

$
—

$
44,000

$
44,000

December 31, 2021








Liabilities:








Warrant derivative liability

$
—

$
—

$
5,805,000

$
5,805,000

The warrant derivative liability for ~~both periods~~the December 31, 2022 period presented was valued using the Black-Scholes valuation methodology ~~because~~as we believe that model embodies all the relevant assumptions (including trading volatility, estimated terms and risk-free interest rates) that address the features underlying these instruments.
The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as Level 3 in the fair value hierarchy:


Derivative Instruments

Balance as of December 31, 2021

$
5,805,000
Warrant issuances

—
Warrant exercises

—
Change in fair value

(1,331,000)
Balance as of March 31, 2022

$
4,474,000


Derivative Instruments

Balance as of December 31, 2022

$
44,000
Implementation of ASU 2020-06

(44,000)
Balance as of March 31, 2023

$
—

Note 8 - Common Stock
Authorized Shares
The Company had 300.0 million authorized shares of common stock as of March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.
The following table summarizes the Company’s remaining authorized shares available for future issuance:

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March 31, ~~2022~~2023

Authorized shares

300,000,000

Common stock outstanding

~~227,186,867~~15,102,877
Options outstanding

~~9,010,312~~283,723
Warrants outstanding

~~18,302,897~~1,065,137
Reserved for issuance under 2019 Stock and Incentive Plan

~~2,984,023~~455,037
Available shares for future issuance

~~Available shares~~

~~42,515,901~~283,093,226

ATM Equity Offering Program
In February 2020, the Company entered into a Sales Agreement with 2two 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. Subject to the terms and conditions of the Sales Agreement, the agents shall use their commercially reasonable efforts to sell shares from time to time, based upon the Company’s instructions as documented on a purchase notification form. If an agent declines to accept the purchase notification form, the agent must promptly notify the Company and the other agent then has the ability to accept or decline the purchase notification form. The Company has no obligation to sell any shares and may, at any time and in its sole discretion, suspend sales under the Sales Agreement or terminate the Sales Agreement in accordance with its terms. 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. The shelf registration statement associated with the ATM equity offering program expired on May 6, 2023. Due to its terms and conditions, the Company does not anticipate any sales of stock under the Sales Agreement.
~~The following table summarizes the Company’s~~There were no sales ~~and~~or related issuance costs incurred under the Sales Agreement during the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022.
Note 9 - Equity

Three Months Ended March 31,

2022

2021

Total shares of common stock sold

—

1,848,437

Gross proceeds

$
—

$
2,705,000

Commissions earned by placement agents

—

(109,000)

Issuance fees

—

(17,000)

Net proceeds

$
—

$
2,579,000

Options
~~Common Stock Issued~~In December 2019, the Company’s Board of Directors and stockholders approved the adoption of the 2019 Plan, under which shares were reserved for ~~Services~~
~~The Company issued an aggregate~~future issuance of ~~54,052 shares of common~~equity related awards classified as option awards, restricted stock awards (“RSAs”) and other equity related awards as further defined under the ~~Ampio Pharmaceuticals, Inc.~~ 2019 Plan. The 2019 Plan permits grants of equity awards to employees, directors and consultants. The stockholders approved a total of 666,667 shares to be reserved for issuance under the 2019 Plan. The Company’s previous 2010 Stock and Incentive Plan (the ~~“2019~~“2010 Plan”)~~, valued at an aggregate~~ was cancelled concurrently with the adoption of ~~$80,000~~the 2019 Plan.
The following table summarizes the activity of the 2019 Plan and the shares available for future equity awards as ~~partial compensation~~of March 31, 2023:

2019 Plan

Total shares reserved for equity awards as of December 31, 2022

441,300
Forfeited, expired and/or cancelled equity option awards

13,737
Remaining shares available for future equity awards as of March 31, 2023

455,037

The following table summarizes the ~~services of four non-employee directors,~~Company’s restricted stock awards activity during the three months ended March 31, ~~2021. During the three months ended March 31, 2022, the Company did not issue any shares of common stock as partial compensation for the services of non-employee directors.~~2023:




Weighted


Average Grant-Date

Aggregate

Awards

Fair Value

Intrinsic Value
Nonvested as of December 31, 2022

13,400

$
24.60

Vested

(4,467)

$
24.60

$
—
Nonvested as of March 31, 2023

8,933

$
24.60

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~~Note 9 - Equity~~
~~Options~~
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, 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. 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 March 31, 2022:~~

~~2019 Plan~~

~~Total shares reserved for equity awards~~

~~10,000,000~~
~~Options granted, net of forfeitures during previous fiscal years~~

~~(3,933,471)~~
~~Options granted during fiscal 2022~~

~~(1,598,323)~~
~~Restricted stock awards, net of settlement granted during fiscal 2021~~

~~(1,785,000)~~
~~Restricted stock awards, net of settlement granted during fiscal 2022~~

0
~~Forfeited, expired and/or cancelled equity awards, prior year~~

~~5,500~~
~~Forfeited, expired and/or cancelled equity awards, during 2022~~

~~26,500~~
~~Shares forfeited to settle exercise price and tax obligation during fiscal 2021~~

~~130,303~~
~~Shares forfeited to settle exercise price and tax obligation during 2022~~

~~138,514~~
~~Remaining shares available for future equity awards~~

~~2,984,023~~

The following table summarizes the Company’s ~~restricted~~ stock ~~awards activity during the three months ended March 31, 2022:~~option activity:




Weighted


Average Grant-Date

Aggregate

Awards

Fair Value

Intrinsic Value
Nonvested as of December 31, 2021

1,468,000

$
1.64

Granted

—

Vested

(367,000)

$
1.64

$
—
Nonvested as of March 31, 2022

1,101,000

$
1.64

~~Of the vested restricted stock awards reported above, the Company withheld 138,514 common shares which represented the fair value of the tax settlement.~~
~~The following table summarizes the Company’s stock option activity during the three months ended March 31, 2022:~~




Weighted

Weighted Average





Weighted

Weighted Average


Number of

Average

Remaining

Aggregate

Number of

Average

Remaining

Aggregate

Options

Exercise Price

Contractual Life

Intrinsic Value

Options

Exercise Price

Contractual Life

Intrinsic Value
Outstanding as of December 31, 2021

7,506,989

$
1.04

7.36

$
—
Granted

1,598,323

$
0.48

Exercised

—

$
—

Outstanding as of December 31, 2022

297,460

$
14.97

6.41

$
—
Forfeited, expired and/or cancelled

(95,000)

$
0.89

(13,737)

$
6.83

—

$
—
Outstanding as of March 31, 2022

9,010,312

$
1.01

7.50

$
36,000
Exercisable as of March 31, 2022

6,624,442

$
1.12

6.69

$
17,000
Outstanding as of March 31, 2023

283,723

$
15.36

6.58

$
—
Exercisable as of March 31, 2023

261,017

$
15.37

6.39

$
—

~~Table of Contents~~

The following table summarizes the outstanding options that were issued in accordance with the 2010 Plan and the 2019 Plan:

Outstanding Options by Plan

March 31, ~~2022~~2023
2010 Plan

~~3,561,518~~116,571
2019 Plan

~~5,448,794~~167,152
Outstanding as of March 31, ~~2022~~2023

~~9,010,312~~283,723

Stock options outstanding as of March 31, ~~2022~~2023 are summarized in the table below:


Number of

Weighted

Weighted Average

Number of

Weighted

Weighted Average

Options

Average

Remaining

Options

Average

Remaining
Range of Exercise Prices

Outstanding

Exercise Price

Contractual Lives

Outstanding

Exercise Price

Contractual Lives
Up to $0.50

1,767,823

$
0.45

9.22
$0.51 - $1.00

4,697,345

$
0.69

6.81
$1.01 - $1.50

937,000

$
1.19

9.45
$1.51 and above

1,608,144

$
2.46

6.48
Up to $7.50

49,720

$
6.62

6.22
$7.51 - $15.00

140,327

$
10.39

6.00
$15.01 - $22.50

53,600

$
17.30

8.42
$22.51 and above

40,076

$
40.98

6.62
Total

9,010,312

$
1.01

7.50

283,723

$
15.36

6.58

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 maturity. The Company did not grant or modify options during the quarter ended March 31, 2023. The Company computed the fair value of options granted/modified during the period ended March 31, 2022, using the following assumptions:

Three Months Ended March 31,


2022

2021

Expected volatility

117% - 119
%

127.17
%
Risk free interest rate

1.26% - 1.94
%

0.78
%
Expected term (years)

5.45 - 6.51

5.0

Three Months Ended March 31,

2022

Expected volatility
117% - 119
%
Risk free interest rate
1.26% - 1.94
%
Expected term (years)
5.45 - 6.51

~~Stock-based~~Share-based compensation expense related to the fair value of stock options is included in the statements of operations as research and development expenses or general and administrative expenses as set forth in the table below. The following

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table summarizes ~~stock-based~~share-based compensation expense (stock options, restricted stock awards and common stock issued for services) for the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:

Three Months Ended March 31,


2022

2021
Research and development expenses




Share-based compensation

$
47,000

$
46,000

General and administrative expenses




Issuance of common stock for services (see Note 8)

0

80,000
Share-based compensation

669,000

120,000

Total share-based compensation

$
716,000

$
246,000

Unrecognized share-based compensation expense related to stock options as of March 31, 2022

$
996,000



Weighted average remaining years to vest for stock options

2.04



Unrecognized share-based compensation expense related to restricted stock awards as of March 31, 2022

1,339,000

Weighted average remaining years to vest for restricted stock awards

2.76

Three Months Ended March 31,


2023

2022
Research and development expenses




Share-based compensation, net of forfeitures

$
(33,000)

$
47,000

General and administrative expenses




Share-based compensation, net of forfeitures

56,000

669,000

Total share-based compensation, net of forfeitures

$
23,000

$
716,000

Unrecognized share-based compensation expense related to stock options as of March 31, 2023

$
103,000



Weighted average remaining years to vest for stock options

1.08



Unrecognized share-based compensation expense related to restricted stock awards as of March 31, 2023

$
96,000

Weighted average remaining years to vest for restricted stock awards

1.76

Note 10 - 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, ~~and~~ warrants for the shares of common ~~stock.~~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 three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:

Three Months Ended March 31,

Three Months Ended March 31,


2022

2021

2023

2022
Net loss

$
(5,636,000)

$
(3,667,000)

$
(3,978,000)

$
(5,636,000)
Less: decrease in fair value of investor warrants

(1,331,000)

(151,000)

—

(1,331,000)
Loss available to common stockholders

$
(6,967,000)

$
(3,818,000)
Net loss available to common stockholders

$
(3,978,000)

$
(6,967,000)

Basic weighted-average common shares outstanding

226,083,328

195,387,047

15,093,894

15,072,222
Add: dilutive effect of equity instruments

27,365

5,365,220

—

1,825
Diluted weighted-average shares outstanding

226,110,693

200,752,267

15,093,894

15,074,047
Earnings per share – basic

$
(0.02)

$
(0.02)

$
(0.26)

$
(0.37)
Earnings per share – diluted

$
(0.03)

$
(0.02)

$
(0.26)

$
(0.46)

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The potentially dilutive shares of common stock that have been excluded from the calculation of net loss per share because of their anti-dilutive effect are as follows:

Three Months Ended March 31,
Three Months Ended March 31,

2022

2021
2023

2022
Warrants to purchase shares of common stock
18,275,532

2,939,996
1,065,137

842,597
Outstanding stock options
9,010,312

1,510,485
283,723

500,466
Restricted stock awards
1,101,000

—
8,933

97,867
Total potentially dilutive shares of common stock
28,386,844

4,450,481
1,357,793

1,440,930

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

This discussion should be read in conjunction with our historical financial statements. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. For additional information regarding these risks and uncertainties, please see “Cautionary Note Regarding Forward-Looking Statements”, above, Part II, Item 1A of this Quarterly Report on Form 10-Q, ~~“Risk Factors,”~~ and the risk factors included in ~~our 2021~~the 2022 Annual Report.

~~Executive Summary~~

We are a pre-revenue stage biopharmaceutical company focused on the research, development and advancement of immunomodulatory therapies for the treatment of pain from osteoarthritis. We have not generated operating revenue to date, and our operations have been substantially funded through equity raises, which have occurred from time to time since inception.

Ampion is our lead product candidate. We have been studying Ampion for the potential treatment of multiple inflammatory conditions (e.g., osteoarthritis of the knee or OAK, osteoarthritis of the hand, and COVID-19 inflammation in the lung).

During 2021 and continuing into the first quarter of 2022, we have been primarily engaged in clinical development of Ampion. We have conducted four discrete clinical trials in the United States and abroad as follows:

~~Study~~
~~Name~~
~~Title~~
~~AP-013~~

~~A Randomized, Controlled, Double-Blind Phase 3 Study to Evaluate the Efficacy and Safety of an Intra-Articular Injection of Ampion in Adults with Pain Due to Severe Osteoarthritis of the Knee~~

~~AP-017~~

~~A Randomized, Double-Blinded, Placebo-Controlled Phase 2 Study to Evaluate the Safety and Efficacy of Intravenous Ampion in Adult COVID-19 Patients Requiring Oxygen Supplementation~~

~~AP-019~~

~~A Randomized, Double-Blinded, Placebo-Controlled Phase 2 Study to Evaluate the Safety and Efficacy of Inhaled Ampion in Adults with Respiratory Distress Due to COVID-19~~

~~AP-018~~

~~A Randomized, Double-Blinded, Placebo-Controlled Phase 1 Study to Evaluate the Safety and Efficacy of Ampion in Patients with Prolonged Respiratory Symptoms due to COVID-19 (Long-COVID)~~

~~Table of Contents~~

As of March 31, 2022, we had one clinical trial outstanding with patient enrollment, AP-019, and the other clinical studies were in various stages of completion. In May 2022, we terminated enrollment of the AP-019 study, as no beneficial effect of nebulized Ampion could be documented. We continued to recognize patient enrollment and study costs throughout the first quarter 2022. Clinical trial accrual amounts were $2.9 million as of March 31, 2022 as compared to $3.0 million as of December 31, 2021.

~~Please see Part II, Item 5 of this Form 10-Q for information regarding an internal investigation relating to our clinical studies.~~

~~Known Trends or Future Events; Outlook~~

We are a pre-revenue stage biopharmaceutical company that has incurred an accumulated deficit of $223.2 million as of March 31, 2022. We expect to generate continued operating losses for the foreseeable future as the Ampio board of directors is considering strategic alternatives for Ampio and Ampion, which may include the continued development and advancement of Ampion, capital raising, licensing and other partnering opportunities, positioning the Company for a strategic transaction or other alternative(s).

As of March 31, 2022, we had $28.8 million of cash and cash equivalents. Based on our current cash position and projection of operating expenses and capital expenditures, we believe we will have sufficient liquidity to fund operations into the second half of 2023. Our cash resources and our capital needs are based upon management estimates as to future operations and expense, which involve significant judgment. Additionally, given that the Ampio board of directors is considering strategic alternatives, our forecasts regarding the sufficiency of our liquidity is based upon maintaining our current operations. Accordingly, we may exhaust our available cash and cash equivalents earlier than presently anticipated and may require more capital more quickly than presently anticipated.

Additional financing may not be available in the amount or at the time we need it or may not be available on acceptable terms or at all. We may obtain future additional financing by incurring indebtedness or from an offering of our equity securities or either of these. If we raise additional 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. If we raise additional equity financing, new investors may demand rights, preferences, or privileges senior to those of existing holders of common stock.

We had approximately 42.5 million shares of common stock authorized and available for future issuance as of March 31, 2022 and our ability to raise additional funds by issuing equity securities may be limited by our authorized and available common stock. Additionally, we are limited in the amount of equity securities we may sell under our current shelf registration statement to the $44.3 million remaining, of which $13.3 million is currently reserved for the ATM equity offering program.

ACCOUNTING POLICIES

Significant Accounting Policies and Estimates

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.

~~Table of Contents~~

Our significant accounting policies and estimates have not changed substantially from those previously disclosed in ~~our 2021~~the 2022 Annual Report.

Newly Issued Accounting Pronouncements

Information regarding the recently issued accounting standards (adopted and not adopted as of March 31, ~~2022)~~2023) is contained in Note 1 to the Financial Statements.

RESULTS OF OPERATIONS

Results of Operations – March 31, ~~2022~~2023 Compared to March 31, ~~2021~~2022

We recognized a net loss for the three months ended March 31, ~~2022~~2023 (“~~2022~~2023 quarter”) of ~~$5.6~~$4.0 million compared to a net loss of ~~$3.7~~$5.6 million for the three months ended March 31, ~~2021~~2022 (“~~2021~~2022 quarter”). The net loss during the 2023 quarter was attributable to operating expenses of $4.4 million, partially offset by a $0.3 million gain on elimination of ARO obligation and interest income of $0.1 million. The net loss during the 2022 quarter was primarily attributable to operating expenses of $7.0 million, partially offset by a non-cash derivative gain of $1.3 million. The net loss during the 2021 quarter was primarily attributable to operating expenses of $3.8 million, partially offset by the non-cash derivative gain of $0.2 million. The decrease in our stock price from $0.57 as of December 31, 2021 to $0.47 as of March 31, 2022 caused the valuation of the warrant liability to decrease resulting in a derivative gain during the 2022 quarter. Operating expenses ~~increased $3.2~~

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decreased $2.7 million (37%) from the ~~2021~~2022 quarter to the ~~2022~~2023 quarter primarily due to a ~~$1.4~~$3.2 million ~~increase~~(86%) decrease in research and development ~~costs, as well as~~costs; partially offset by a ~~$1.8~~$0.5 million (16%) increase in general and administrative costs, both of which are further explained below.

Operating Expenses

Research and Development

Research and development costs ~~(benefits)~~ are summarized as follows and exclude an allocation of general and administrative expenses:


	Three Months Ended March 31,				Three Months Ended March 31,
	2022		2021		2023		2022
Clinical trial and sponsored research expenses	$	1,925,000	$	769,000	$	(18,000)	$	1,925,000
Salaries and benefits		772,000		621,000		126,000		772,000
Depreciation		256,000		289,000		123,000		256,000
Operations/manufacturing		205,000		389,000
Laboratory		260,000		115,000		206,000		260,000
Professional fees		194,000		35,000		124,000		194,000
Equipment rental and repair		15,000		33,000
Regulatory / FDA		13,000		(1,000)
Operations/manufacturing						(6,000)		205,000
Share-based compensation		47,000		46,000		(33,000)		47,000
Other						2,000		28,000
Total research and development	$	3,687,000	$	2,296,000	$	524,000	$	3,687,000

~~2022~~2023 Quarter Compared to ~~2021~~2022 Quarter

Research and development costs ~~increased~~decreased by approximately ~~$1.4~~$3.2 million, or ~~61%~~86%, for the ~~2022~~2023 quarter compared to the ~~2021~~2022 quarter. Research and development costs with variances above $75,000 and 10% compared with the previous quarter are further explained below.

Clinical trial and sponsored research expenses

The clinical trial and sponsored research expense ~~increased $1.2~~decreased $1.9 million, or ~~150%~~101%, ~~primarily~~ due to the ~~study~~discontinuation / finalization of all Ampion related ~~costs associated with the~~clinical trials (i.e., AP-013, AP-017, AP-018 and ~~AP-019 COVID-19 studies whereby~~AP-019) in 2022 and no clinical trials underway in the ~~interim enrollment was completed~~2023 quarter.

Salaries and Benefits

Salaries and benefit expense decreased $646,000, or 84%, for the ~~AP-019 study and the Phase 1 AP-018 study was substantially completed in~~2023 quarter compared with the 2022 quarter ~~resulting~~as a result of (i) the reduction in ~~a cost increase of $1.6 million. These studies did not commence until early/mid second-half 2021 resulting~~force plan (“RIF”) implemented in ~~no costs~~third quarter 2022 and finalized in first quarter 2023 which resulted in the ~~2021~~elimination of eleven full-time equivalent positions and (ii) the separate termination of employment of one executive officer in May 2022. Toward the end of 2022 continuing into the first quarter of 2023, we implemented a hybrid organizational model whereby we retain a number of employees with competencies to govern and comply with the public reporting requirements and also 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.

Operations / Manufacturing

Operations / manufacturing expenses decreased $211,000, or 103%, for the 2023 quarter compared with the 2022 quarter as a result of the shut-down of the clean room / manufacturing facility in third-quarter 2022 due to the discontinuation of the Ampion clinical development program.

Share-based compensation

Share-based compensation expense decreased $80,000, or 170%, for the 2023 quarter compared with the 2022 quarter as a result of the RIF implemented in third quarter 2022 and finalized in first quarter 2023 which resulted in the expense reversal from expired / forfeited stock options and restricted stock awards.

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~~quarter. This increase was partially offset by a decrease in costs associated with the AP-013 study resulting in a decrease in costs of $0.4 million.~~

~~Salaries and benefits~~

Salaries and benefit expense increased $151,000, or 24%, for the 2022 quarter compared with the 2021 quarter as a result of (i) modest increase in health and medical benefits and (ii) market-based compensation adjustments effective at the beginning of the 2022 quarter.

~~Operations / manufacturing~~

~~Operations / manufacturing expenses decreased $184,000, or 47%, as a result of no clinical trial product manufacturing in the 2022 quarter compared to the 2021 quarter.~~

~~Laboratory~~

Laboratory expenses increased $145,000, or 126%, for the 2022 quarter compared with the 2021 quarter as a result of the Company entering into, in February 2022, a sponsored research agreement with Trauma Research, LLC and a separate agreement with the director that owns this company to provide research services. The costs directly related to these agreements was $83,000 in the 2022 quarter. In addition, the Company initiated a series of animal studies to support the dosing and biological effects of our drug in vivo in fourth quarter 2021 and into the 2022 quarter which resulted in $57,000 of incremental costs during the 2022 quarter.

~~Professional Fees~~

Professional fees expense increased $159,000, or 454%, for the 2022 quarter compared with the 2021 quarter as a result of the Company entering into an agreement with Dr. Howard Levy in October 2021 to serve in the capacity as the Company’s Chief Medical Officer. In addition, the Company incurred incremental costs during the 2022 quarter related to review of the AP-013 study information and related documents supporting the briefing book which was submitted to the FDA during the period.

General and Administrative

General and administrative expenses are summarized as follows:


	Three Months Ended March 31,				Three Months Ended March 31,
	2022		2021		2023		2022
Professional fees	$	1,403,000	$	479,000	$	2,922,000	$	1,403,000
Salaries and benefits						274,000		632,000
Insurance		254,000		340,000		311,000		254,000
Salaries and benefits		632,000		237,000
Stock-based compensation		669,000		200,000
Share-based compensation						56,000		669,000
Facilities		136,000		128,000		115,000		136,000
Director fees		105,000		92,000		74,000		105,000
Depreciation		6,000		5,000
Other		78,000		42,000		67,000		84,000
Total general and administrative	$	3,283,000	$	1,523,000	$	3,819,000	$	3,283,000

~~2022~~2023 Quarter Compared to ~~2021~~2022 Quarter

General and administrative costs increased ~~$1.8 million,~~$536,000, or ~~116%~~16%, for the ~~2022~~2023 quarter compared to the ~~2021~~2022 quarter. General and administrative costs with variances ~~above~~greater than $75,000 and 10% are further explained below.

Professional fees

Professional fees increased ~~$924,000,~~$1.5 million, or ~~193%~~108%, for the ~~2022~~2023 quarter compared to the ~~2021~~2022 quarter due primarily to legal costs associated with an ~~increase~~SEC investigation and class action / derivative lawsuits initiated in second half of 2022. This was partially offset by reduction in costs ~~related to (i)~~associated with investor, / public relations and strategic outreach ~~activities, (ii) third-party market research studies, (iii)~~activities.

Salaries and Benefits

Salaries and benefit expense decreased $358,000, or 57%, for the 2023 quarter compared with the 2022 quarter as a result of the reduction of headcount resulting from the RIF and implementation of a hybrid organizational model as previously discussed and the separate termination of employment for one executive officer in May 2022.

Share-based compensation

Share-based compensation expense decreased $613,000, or 92%, for the 2023 quarter compared with the 2022 quarter as a result of forfeitures and cancellations of vested and unvested stock options/ restricted stock awards resulting from employee terminations / board resignations in 2022.

Other income

The Company recognized a $288,000 gain on the elimination of its asset retirement obligation (“ARO”) and derecognition of the ARO asset in conjunction with the sublease agreement entered into on March 1, 2023. In addition, the Company recognized $30,000 in sublease income since the effective date of the sublease and recognized a loss on the sale of fixed assets of $56,000 in conjunction with the sublease agreement. There was no derivative gain on the fair value of warrant liability during the 2023 quarter due to the adoption of ASU 2020-06 which converted the warrant liability to stockholder’s equity effective January 1, 2023.

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technical accounting services and (iv) legal services associated with certain FDA regulatory matters and indemnification payments related to legal services incurred by a former advisor relating to an SEC investigation of the former advisor.

~~Salaries and benefits~~

Salaries and benefit expense increased $395,000, or 167%, for the 2022 quarter compared with the 2021 quarter as a result of (i) incremental headcount in the 2022 quarter and, (ii) market-based compensation adjustments effective at the beginning of the 2022 quarter.

~~Stock-based compensation~~

Stock-based compensation expense increased $469,000, or 235%, for the 2022 quarter compared with the 2021 quarter as a result of non-cash expense in the 2022 quarter associated with (i) the vesting of restricted stock awards issued to certain officers in October 2021, (ii) issuance of option grants to newly elected Board members in fourth quarter 2021 and 2022 quarter, (iii) issuance of option grants to the interim Chairman and Chief Executive Officer and (iv) annual option grants issued to non-Section 16 employees in the 2022 quarter.

Cash Flows

Cash flows for the respective periods are as follows:


	Three Months Ended March 31,				Three Months Ended March 31,
	2022		2021		2023		2022
Net cash used in operating activities	$	(4,944,000)	$	(4,147,000)	$	(2,301,000)	$	(4,944,000)
Net cash used in investing activities		—		(81,000)
Net cash (used in) provided by financing activities		(111,000)		2,686,000
Net cash provided by investing activities						—		—
Net cash used in financing activities						—		(111,000)
Net change in cash and cash equivalents	$	(5,055,000)	$	(1,542,000)	$	(2,301,000)	$	(5,055,000)

Net Cash Used in Operating Activities

During the three months ended March 31, 2023 our operating activities used approximately $2.3 million in cash and cash equivalents, which was less than our reported net loss of $4.0 million. The difference is primarily a result of a decrease in working capital, excluding cash and cash equivalents, totaling $1.8 million and non-cash charges related to depreciation and amortization and stock-based compensation totaling $0.1 million and the $56,000 loss on sale of fixed assets.

During the three months ended March 31, 2022 our operating activities used approximately $4.9 million in cash and cash equivalents, which was less than our reported net loss of $5.6 million. The difference is primarily a result of a decrease in working capital, excluding cash and cash equivalents, totaling $1.1 million and non-cash charges related to depreciation and amortization and stock-based compensation totaling $1.0 million, partially offset by a non-cash adjustment of $1.3 million related to the warrant derivative gain.

During the three months ended March 31, 2021 our operating activities used approximately $4.1 million in cash and cash equivalents, which was more than our reported net loss of $3.7 million. The difference is primarily a result of an increase in working capital, excluding cash and cash equivalents, totaling $0.8 million and non-cash adjustment for the warrant derivative gain totaling $0.2 million, partially offset by recurring non-cash charges related to depreciation and amortization, stock-based compensation and issuance of common stock for services totaling $0.5 million.

Net Cash ~~Used in~~Provided by Investing Activities

During the three months ended March 31, 2023 and March 31, 2022, there was no change in cash related to investing activities.

Net Cash Used in Financing Activities

During the three months ended March 31, ~~2021, $81,000~~2023, there was no change in cash ~~and cash equivalents was used~~related to ~~acquire manufacturing machinery and equipment.~~financing activities.

~~Net Cash Provided by (used in) Financing Activities~~
During the three months ended March 31, 2022, 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 ~~138,514~~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.

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 are currently focusing nearly all of our resources towards the preclinical development of the OA-20X program. As part of the OA-20X program, we have been focusing on our ongoing efforts toward optimizing two potential small molecule formulations to take forward into development. In the third quarter of 2023, we intend to select one of these optimized formulations to move towards clinical development. Additionally, with the data from these studies, we expect to be in position later this year to seek scientific advice meetings with the FDA, UK, and EU regulators.

The Company’s sources of liquidity are its cash and cash equivalents, which were $10.4 million on March 31, 2023. We expect to use cash in operations for the continued development of the OA-20X program, as well as opportunistically identifying and evaluating strategic opportunities as part of the strategic alternatives process. Based on our current

2521

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~~During the three months ended~~projection we expect our cash balance on March 31, ~~2021, we received gross proceeds of $2.7 million from~~2023 to support existing business operations through the sale of approximately 1.8 million shares of common stock pursuant to the ATM equity offering program, which was partially offset by offering related costs of $126,000. In addition, we also received proceeds of $114,000 from investor warrant exercises representing 284,000 shares of common stock.

~~Liquidity and Capital Resources~~

Since inception, we have not generated operating revenue or profits. We expect to generate continued operating losses for the foreseeable future as the Ampio board of directors is considering strategic alternatives for Ampio and Ampion, which may include the continued development and advancement of Ampion, capital raising, licensing and other partnering opportunities, positioning the Company for a strategic transaction or other alternative(s).

~~As of March 31, 2022, we had $28.8 million of cash and cash equivalents. During the three months ended March 31, 2022, the Company had no activity in its ATM equity offering program.~~

~~Based on our current cash position and projection of operating expenses and capital expenditures, we believe we will have sufficient liquidity to fund operations into the second half~~fourth quarter of 2023. ~~Our cash resources and our capital needs~~These projections are based ~~upon management estimates as~~on assumptions that may prove to future operations and expense, which involve significant judgment. Additionally, given that the Ampio board of directors is considering strategic alternatives, our forecasts regarding the sufficiency of our liquidity are based upon maintaining our current operations.be incorrect. Accordingly, we may ~~exhaust our available cash and cash equivalents earlier~~require a greater amount of capital than presently anticipated ~~and~~or may require ~~more~~ capital more quickly than presently ~~anticipated.~~anticipated, or both.

~~Additional~~If we continue moving forward with the development of the OA-20X program, subject to the preclinical data results, 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 the future OA-20X development expense and general operating expenses through an offering of our equity securities. We may also seek to raise equity capital in order to attempt to cure any future 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. We may obtain future additional financing by incurring indebtedness or from an offering of our equity securities or either of these. If we raise additional 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. If we raise additional equity financing, new investors may demand rights, preferences or privileges senior to those of existing holders of common stock.

~~We had approximately 42.5 million shares~~Although we have implemented cash-focused measures to manage liquidity which includes the implementation of ~~common stock authorized~~our hybrid, virtual organizational model in first quarter 2023 and ~~available~~the outsourcing philosophy and the recent sublease of our facility space on March 1, 2023, we continue to expect cash used by operating activities for ~~future issuance as~~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.

Our lack of revenue or cash inflows and our cash resources on March 31, ~~2022 and~~2023 raise substantial doubt as to our ability to ~~raise additional funds by issuing equity securities may be limited by~~continue as a going concern. Management’s plans to address the doubt regarding the Company’s ability to continue as a going concern include the continued active monitoring of our ~~authorized~~operating expenses and ~~available common stock. Additionally, we are limited in~~use of our outsourcing philosophy to minimize expenses and increase operating efficiencies associated with the OA-20X program. Management expects to manage future expense associated with the OA-20X program to align with the timing and amount of ~~equity securities~~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 the OA-20X program and/or completion of a strategic transaction, we may ~~sell under~~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 ~~current shelf registration statement~~assets, it is unclear to ~~the $44.3 million remaining, of which $13.3 million is currently reserved for the ATM equity offering program.~~

~~In the event that~~what extent we ~~are unable to obtain additional capital through equity capital raises, partnering/licensing transactions or other strategic transaction, or a combination of these, we will likely~~would be ~~required to delay, reduce the scope of or eliminate our development, manufacturing and/or regulatory programs for Ampion and/or suspend operations for a period of time until we are~~ able to ~~secure additional funding. If we are not successful~~pay our obligations. In such a circumstance and in ~~raising sufficient funds~~light of the Company’s current liquidity position and pending legal matters, it is unlikely that cash would be available for distributions to pay for further development and licensing of Ampion, we may choose to license or otherwise relinquish greater, or all, rights to Ampion at an earlier stage of development or on less favorable terms than we would otherwise choose. This could lead to impairment or other charges, which could materially affect our balance sheet and operating results.stockholders.

Off Balance Sheet Arrangements

We do not have off-balance sheet arrangements, financings or other relationships with unconsolidated entities or other persons, also known as “variable interest entities”.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required under this item.

~~Table of Contents~~

Item 4. Controls and Procedures.
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 Securities Exchange Act of 1934, or 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

Table of Contents

communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of senior management, including the CEO and the CFO, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based upon this evaluation, the CEO and ~~the~~ CFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective due to the matters identified as part of the Company’s decision announced on May 16, 2022 to conduct an internal investigation, to be overseen by an independent special committee, as described in Part II, Item 5 of this Quarterly Report on Form 10-Q.effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
~~Not applicable.~~From time to time, the Company may be a party to litigation arising in the ordinary course of business. For a summary of the material pending legal proceedings, please see Part I, Item 3 “Legal Proceedings” of the 2022 Annual Report. There were no material developments in these pending legal proceedings as of March 31, 2023.
Item 1A. Risk Factors.
In addition to the other information set forth in this Quarterly Report on Form 10-Q, ~~including Part II, Item 5,~~ you should carefully consider the factors in Part I, “Item 1A. Risk Factors” in ~~our 2021~~the 2022 Annual Report and other reports that we have filed with the SEC, which could materially affect our business, financial condition or future results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
~~During the three months ended March 31, 2022, we did not issue any unregistered securities.~~
~~During the three months ended March 31, 2022, we did not repurchase any securities, other than 138,514 shares from employees for tax withholding purposes related to vesting of restricted stock grants.~~

Total Number

Average

Of

Price Paid

Period

Shares Purchased

Per Share

January 1, 2022 to January 31, 2022

138,514

$
0.57

February 1, 2022 to February 28, 2022

0

$
-

March 1, 2022 to March 31, 2022

0

$
-

Not applicable.
Item 3. Defaults Upon Senior Securities.
None.

~~Table of Contents~~

Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
On May 16, 2022, the Company issued a press release attached hereto as Exhibit 99.1 announcing that an independent special committee of the Board of Directors (the “Committee”), with the assistance of independent legal counsel, is in the process of conducting an internal investigation that relates to, among other matters, Ampio’s AP-013 clinical trial and other clinical trials. FDA has communicated to the Company that it does not consider data from AP-013 to be sufficient to demonstrate efficacy as a second pivotal trial for Ampion. Further analysis subsequent to that communication from FDA suggests that data from AP-013 will not be sufficient to support regulatory approval in the US or other countries. Management’s recent analyses also indicate no clinically meaningful treatment effect signals from the Company’s three COVID-19 clinical trials, AP-017, AP-018, or AP-019.

Additionally, in the press release issued on May 16, 2022, Ampio disclosed that the Committee also is overseeing a review of unauthorized use of Ampion by individuals not participating in clinical trials. Ampion is an investigational drug not approved by FDA. Ampio instituted safeguards to cease this practice and engaged independent outside counsel to conduct a thorough review, which is ongoing The Company is currently in the process of working to ensure that the issue has been resolved, that appropriate mitigation measures have been implemented, and that this information is provided to FDA.
None.

2823

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Item 6. Exhibits.
The exhibits listed on the “Exhibit Index” set forth below are filed or furnished with this Quarterly Report on Form 10-Q or incorporated by reference as set forth therein.
Exhibit
Number

Description
3.1

Certificate of Incorporation of the Registrant (incorporated by reference to Registrant’s Form 8-K filed March 30, 2010).
3.2

Certificate of Amendment to Certificate of Incorporation of the Registrant (incorporated by reference to the Registrant’s Form 8-K filed March 30, 2010).
3.3

~~Plan~~Certificate of ~~Conversion~~Amendment to the Certificate of ~~Chay Enterprises, Inc. to a Delaware corporation~~Incorporation of the Registrant (incorporated by reference to the Registrant’s Form 8-K filed December 18, 2019).
3.4

Certificate of Amendment to ~~the~~ Certificate of Incorporation of the ~~Registrant (incorporated~~Registrant. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed ~~December 18, 2019)~~November 9, 2022).
3.5

Amended and Restated Bylaws of the Registrant (incorporated by reference to the Registrant’s Form 10-Q filed November 14, 2018).
10.1*

~~Research Services~~Sublease Agreement entered into February 16, 2023 but effective March 1, 2023 by and between ~~the Registrant~~Ampio Pharmaceuticals, Inc. and Trauma Research LLC, dated February 4, 2022.*
10.2*

Personal Services Agreement between the Registrant and Dr. Bar-Or, dated February 4, 2022.*Utility Global, Inc.
31.1*
Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2*
Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1#
Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.#~~
99.1*

Press Release of Ampio Pharmaceuticals, Inc. Issued May 16, 2022.*2002.
101
XBRL (eXtensible Business Reporting Language). The following financial statements from Ampio Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2022,~~2023, formatted in Inline XBRL: (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Stockholders’ Equity (Deficit), (iv) the Condensed Statements of Cash Flows, and (v) the Notes to Financial Statements.
104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith.
#Furnished herewith.

2924

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMPIO PHARMACEUTICALS, INC.

By:
/s/ Michael A. Martino

Michael A. Martino

~~Chairman and~~ Chief Executive Officer

(principal executive officer)

Date: May ~~16, 2022~~8, 2023

By:
/s/ Daniel G. Stokely

Daniel G. Stokely

Chief Financial Officer ~~and Secretary~~

(principal financial and accounting officer)

Date: May ~~16, 2022~~8, 2023

3025


		Page
	PART I-FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	54

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2118

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2622

Item 4.	Controls and Procedures	2722

	PART II-OTHER INFORMATION

Item 1.	Legal Proceedings	2723

Item 1A.	Risk Factors	2723

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2723

Item 3.	Defaults Upon Senior Securities	2723

Item 4.	Mine Safety Disclosures	2823

Item 5.	Other Information	2823

Item 6.	Exhibits	2924

SIGNATURES		3025


	March 31,		December 31,
	2022		2021

Assets
Current assets
Cash and cash equivalents	$	28,837,000	$	33,892,000
Prepaid expenses and other		1,070,000		1,740,000
Total current assets		29,907,000		35,632,000

Fixed assets, net		2,302,000		2,564,000
Right-of-use asset, net		577,000		629,000
Total assets	$	32,786,000	$	38,825,000

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued expenses	$	5,208,000	$	4,811,000
Lease liability-current portion		318,000		311,000
Total current liabilities		5,526,000		5,122,000

Lease liability-long-term		533,000		614,000
Warrant derivative liability		4,474,000		5,805,000
Total liabilities		10,533,000		11,541,000

Commitments and contingencies (Note 5)

Stockholders’ equity
Preferred Stock, par value $0.0001; 10,000,000 shares authorized; NaN issued		—		—
Common Stock, par value $0.0001; 300,000,000 shares authorized; shares issued and outstanding - 227,186,867 as of March 31, 2022 and 227,325,381 as of December 31, 2021		23,000		23,000
Additional paid-in capital		245,468,000		244,863,000
Accumulated deficit		(223,238,000)		(217,602,000)
Total stockholders’ equity		22,253,000		27,284,000

Total liabilities and stockholders’ equity	$	32,786,000	$	38,825,000


				Additional				Total					Additional				Total
	Common Stock			Paid-in		Accumulated		Stockholders'		Common Stock			Paid-in		Accumulated		Stockholders'
	Shares	Amount		Capital		Deficit		Equity		Shares	Amount		Capital		Deficit		Equity
Balance at December 31, 2020	193,378,996	$	19,000	$	218,020,000	$	(200,527,000)	$	17,512,000
Issuance of common stock for services	54,052		0		80,000		0		80,000
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	—		0		166,000		0		166,000	—		—		716,000		—		716,000
Stock options exercised, net	129,500		0		33,000		0		33,000
Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards	(28,562)				(40,000)		0		(40,000)	(9,234)		—		(79,000)		—		(79,000)
Warrants exercised, net	306,705		0		114,000		0		114,000
Issuance of common stock in connection with the "at-the-market" equity offering program	1,848,437		0		2,705,000		0		2,705,000
Offering costs related to the issuance of common stock in connection with the "at-the-market" equity offering program	—		0		(126,000)		0		(126,000)	—		—		(32,000)		—		(32,000)
Net loss	—		0		0		(3,667,000)		(3,667,000)	—		—		—		(5,636,000)		(5,636,000)
Balance at March 31, 2021	195,689,128	$	19,000	$	220,952,000	$	(204,194,000)	$	16,777,000

Balance at December 31, 2021	227,325,381		23,000		244,863,000		(217,602,000)		27,284,000
Balance at March 31, 2022										15,162,877		2,000		245,489,000		(223,238,000)		22,253,000

Balance at December 31, 2022										15,102,877		2,000		245,726,000		(233,939,000)		11,789,000

Reclassification of warrant derivative upon adoption of ASU 2020-06										—		—		—		44,000		44,000
Share-based compensation, net of forfeitures	—		0		716,000		0		716,000	—		—		23,000		—		23,000
Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards	(138,514)		0		(79,000)		0		(79,000)
Offering costs related to the issuance of common stock and warrants in connection with the registered direct offering	—		0		(32,000)		0		(32,000)
Net loss	—		0		0		(5,636,000)		(5,636,000)	—		—		—		(3,978,000)		(3,978,000)
Balance at March 31, 2022	227,186,867	$	23,000	$	245,468,000	$	(223,238,000)	$	22,253,000

Balance at March 31, 2023										15,102,877		2,000		245,749,000		(237,873,000)		7,878,000



	March 31, 2022		December 31, 2021		March 31, 2023		December 31, 2022

Unamortized commercial insurance premiums					$	277,000	$	610,000
Deposits	$	565,000	$	884,000		34,000		34,000
Unamortized commercial insurance premiums		212,000		465,000
Professional fees		87,000		235,000		18,000		19,000
Maintenance service contracts		63,000		—
Clinical trial inventory		—		72,000
Other receivable		19,000		16,000
Other		124,000		68,000		54,000		13,000
Total prepaid expenses and other	$	1,070,000	$	1,740,000	$	383,000	$	676,000


	Estimated
	Useful Lives
	(in Years)	March 31, 2022		December 31, 2021

Leasehold improvements	10	$	6,075,000	$	6,075,000
Manufacturing facility/clean room	3 - 8		2,984,000		2,984,000
Lab equipment and office furniture	5 - 8		1,739,000		1,739,000
Fixed assets, gross			10,798,000		10,798,000
Accumulated depreciation			(8,496,000)		(8,234,000)
Fixed assets, net		$	2,302,000	$	2,564,000


	Facility Lease Payments		2022		2023		2024		2025		2026		Thereafter		Facility Lease Payments		2023		2024		2025		2026		2027		Thereafter

Remaining Facility Lease Payments	$	912,000	$	268,000	$	364,000	$	280,000	$	—	$	—	$	—	$	554,000	$	274,000	$	280,000	$	—	$	—	$	—	$	—
Less: Discount Adjustment		(61,000)														(22,000)
Total lease liability	$	851,000													$	532,000

Lease liability-current portion	$	318,000													$	347,000

Long-term lease liability	$	533,000													$	185,000


	ROU Asset

Balance as of December 31, 2021	$	629,000
Amortization		(52,000)
Balance as of March 31, 2022	$	577,000


	ROU Asset

Balance as of December 31, 2022	$	75,000
Amortization		(75,000)
Balance as of March 31, 2023	$	—


		Weighted		Weighted Average
	Number of	Average		Remaining
	Warrants	Exercise Price		Contractual Life

Outstanding as of December 31, 2020	4,130,724	$	0.66	2.05
Warrants issued in connection with the registered direct offering	15,000,000	$	1.10	4.96
Warrant exercised	(812,827)	$	0.58	—
Warrants expired	(15,000)
Outstanding as of December 31, 2021	18,302,897	$	1.02	4.24
Warrants issued in connection with the registered direct offering	—	$	—
Warrants exercised	—	$	—
Warrants expired	—	$	—
Outstanding as of March 31, 2022	18,302,897	$	1.02	3.99


	Level 1:	Inputs that reflect unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities;

	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.


	Fair Value Measurements Using								Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
March 31, 2022
December 31, 2022
Liabilities:
Warrant derivative liability	$	—	$	—	$	4,474,000	$	4,474,000	$	—	$	—	$	44,000	$	44,000

December 31, 2021
Liabilities:
Warrant derivative liability	$	—	$	—	$	5,805,000	$	5,805,000


	Derivative Instruments

Balance as of December 31, 2021	$	5,805,000
Warrant issuances		—
Warrant exercises		—
Change in fair value		(1,331,000)
Balance as of March 31, 2022	$	4,474,000


	March 31, ~~2022~~2023

Authorized shares		300,000,000

Common stock outstanding		~~227,186,867~~15,102,877
Options outstanding		~~9,010,312~~283,723
Warrants outstanding		~~18,302,897~~1,065,137
Reserved for issuance under 2019 Stock and Incentive Plan		~~2,984,023~~455,037
Available shares for future issuance
~~Available shares~~		~~42,515,901~~283,093,226


	2019 Plan

Total shares reserved for equity awards as of December 31, 2022		441,300
Forfeited, expired and/or cancelled equity option awards		13,737
Remaining shares available for future equity awards as of March 31, 2023		455,037


		Weighted
		Average Grant-Date			Aggregate
	Awards	Fair Value			Intrinsic Value
Nonvested as of December 31, 2022	13,400	$	24.60
Vested	(4,467)	$	24.60	$	—
Nonvested as of March 31, 2023	8,933	$	24.60


	~~2019 Plan~~

~~Total shares reserved for equity awards~~		~~10,000,000~~
~~Options granted, net of forfeitures during previous fiscal years~~		~~(3,933,471)~~
~~Options granted during fiscal 2022~~		~~(1,598,323)~~
~~Restricted stock awards, net of settlement granted during fiscal 2021~~		~~(1,785,000)~~
~~Restricted stock awards, net of settlement granted during fiscal 2022~~		0
~~Forfeited, expired and/or cancelled equity awards, prior year~~		~~5,500~~
~~Forfeited, expired and/or cancelled equity awards, during 2022~~		~~26,500~~
~~Shares forfeited to settle exercise price and tax obligation during fiscal 2021~~		~~130,303~~
~~Shares forfeited to settle exercise price and tax obligation during 2022~~		~~138,514~~
~~Remaining shares available for future equity awards~~		~~2,984,023~~


Outstanding Options by Plan	March 31, ~~2022~~2023
2010 Plan		~~3,561,518~~116,571
2019 Plan		~~5,448,794~~167,152
Outstanding as of March 31, ~~2022~~2023		~~9,010,312~~283,723


	Three Months Ended March 31,
	2022

Expected volatility	117% - 119	%
Risk free interest rate	1.26% - 1.94	%
Expected term (years)	5.45 - 6.51


~~Study~~ ~~Name~~		~~Title~~
~~AP-013~~		~~A Randomized, Controlled, Double-Blind Phase 3 Study to Evaluate the Efficacy and Safety of an Intra-Articular Injection of Ampion in Adults with Pain Due to Severe Osteoarthritis of the Knee~~
~~AP-017~~		~~A Randomized, Double-Blinded, Placebo-Controlled Phase 2 Study to Evaluate the Safety and Efficacy of Intravenous Ampion in Adult COVID-19 Patients Requiring Oxygen Supplementation~~
~~AP-019~~		~~A Randomized, Double-Blinded, Placebo-Controlled Phase 2 Study to Evaluate the Safety and Efficacy of Inhaled Ampion in Adults with Respiratory Distress Due to COVID-19~~
~~AP-018~~		~~A Randomized, Double-Blinded, Placebo-Controlled Phase 1 Study to Evaluate the Safety and Efficacy of Ampion in Patients with Prolonged Respiratory Symptoms due to COVID-19 (Long-COVID)~~


	Total Number	Average
	Of	Price Paid
Period	Shares Purchased	Per Share
January 1, 2022 to January 31, 2022	138,514	$	0.57
February 1, 2022 to February 28, 2022	0	$	-
March 1, 2022 to March 31, 2022	0	$	-


Exhibit Number		Description
3.1		Certificate of Incorporation of the Registrant (incorporated by reference to Registrant’s Form 8-K filed March 30, 2010).
3.2		Certificate of Amendment to Certificate of Incorporation of the Registrant (incorporated by reference to the Registrant’s Form 8-K filed March 30, 2010).
3.3		~~Plan~~Certificate of ~~Conversion~~Amendment to the Certificate of ~~Chay Enterprises, Inc. to a Delaware corporation~~Incorporation of the Registrant (incorporated by reference to the Registrant’s Form 8-K filed December 18, 2019).
3.4		Certificate of Amendment to ~~the~~ Certificate of Incorporation of the ~~Registrant (incorporated~~Registrant. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed ~~December 18, 2019)~~November 9, 2022).
3.5		Amended and Restated Bylaws of the Registrant (incorporated by reference to the Registrant’s Form 10-Q filed November 14, 2018).
10.1*		~~Research Services~~Sublease Agreement entered into February 16, 2023 but effective March 1, 2023 by and between ~~the Registrant~~Ampio Pharmaceuticals, Inc. and Trauma Research LLC, dated February 4, 2022.*
10.2*		Personal Services Agreement between the Registrant and Dr. Bar-Or, dated February 4, 2022.*Utility Global, Inc.
31.1*		Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2*		Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1#		Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.#~~
99.1*		Press Release of Ampio Pharmaceuticals, Inc. Issued May 16, 2022.*2002.
101		XBRL (eXtensible Business Reporting Language). The following financial statements from Ampio Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2022,~~2023, formatted in Inline XBRL: (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Stockholders’ Equity (Deficit), (iv) the Condensed Statements of Cash Flows, and (v) the Notes to Financial Statements.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


	AMPIO PHARMACEUTICALS, INC.

	By:	/s/ Michael A. Martino
		Michael A. Martino
		~~Chairman and~~ Chief Executive Officer
		(principal executive officer)
		Date: May ~~16, 2022~~8, 2023

	By:	/s/ Daniel G. Stokely
		Daniel G. Stokely
		Chief Financial Officer ~~and Secretary~~
		(principal financial and accounting officer)
		Date: May ~~16, 2022~~8, 2023