UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, ~~2022~~2023

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

Commission File Number 001-35182

AMPIO PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)


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

373 Inverness ParkwaySuite 200Englewood, Colorado	80112
9800 Mount Pyramid CourtSuite 400Englewood, Colorado	80112
(Address of principal executive offices)	(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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻ No ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ◻ No ⌧

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

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

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

Large accelerated filer	◻	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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over

financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit

report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of common stock held by non-affiliates of the registrant as of June 30, ~~2022~~2023, the last business day of the registrant’s most recently completed second fiscal quarter, was $~~37.~~3.4 million based on the closing price of $0.~~1680~~23 (pre-September 2023 reverse stock split) as of that date.

As of March 22 15, ~~2023~~2024, 151,~~102~~135,~~877~~358 shares of the registrant’s common stock, par value $0.0001 per share were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required by Part III is omitted from this Annual Report on Form 10-K and incorporated by reference to our definitive proxy statement for our 2023 annual meeting of stockholders (“2023 Proxy Statement”), to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, or Exchange Act within 120 days of our year end of December 31, 2022.

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TABLE OF CONTENTS

		Page
	PART I
Item 1	BUSINESS	5
Item 1A	RISK FACTORS	7
Item 1B	UNRESOLVED STAFF COMMENTS	1310
Item 2	PROPERTIES	14
Item 1C	CYBERSECURITY	10
Item 3	LEGAL PROCEEDINGS	14
Item 2	PROPERTIES	11
Item 4	MINE SAFETY DISCLOSURES	16
Item 3	LEGAL PROCEEDINGS	11
Item 4	MINE SAFETY DISCLOSURES	12
	PART II
Item 5	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	1712
Item 6	RESERVED	1713
Item 7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1713
Item 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2317
Item 8	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	2318
Item 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	2318
Item 9A	CONTROLS AND PROCEDURES	2318
Item 9B	OTHER INFORMATION	2418
Item 9C	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	2418
	PART III
Item 10	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	2419
Item 11	EXECUTIVE COMPENSATION	2522
Item 12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	2529
Item 13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	2530
Item 14	PRINCIPAL ACCOUNTANT FEES AND SERVICES	2531
	PART IV
Item 15	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	2533
Item 16	FORM 10-K SUMMARY	2735
SIGNATURES		2836

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This Annual Report on Form 10-K (“Annual Report”) refers to trademarks, such as Ampio and Ampion®, which are protected under applicable intellectual property laws and are our property. This Form 10-K also contains trademarks, service marks, copyrights and trade names of other companies which are the property of their respective owners. Solely for convenience, our trademarks and tradenames referred to in this Form 10-K may appear without the ^® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to such trademarks and tradenames.

Unless otherwise indicated or unless the context otherwise requires, references in this Form 10-K to the “Company,” “Ampio,” “we,” “us,” or “our” relate to Ampio Pharmaceuticals, Inc.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, or Annual Report, includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other reports filed with the Securities and Exchange Commission (“SEC”), in materials delivered to stockholders and in press releases. In addition, the Company’s representatives may from time to time make oral forward-looking statements.

All statements other than statements of historical facts contained in this Annual Report, including statements regarding our anticipated future clinical developments, future financial position, and plans and objectives of management for future operations, are forward-looking statements. Words such as “may”, “will”, “should”, “forecast”, “could”, “expect”, “suggest”, “believe”, “estimate”, “continue”, “anticipate”, “intend”, “ongoing”, “opportunity”, “potential”, “predicts”, “seek”, “plan,” or similar words, or the negatives of such terms or other variations on such terms or comparable terminology, typically identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements relating to the following:

● projected ~~operating~~cash balances or ~~financial results, including anticipated~~ cash ~~flows~~ used in operations or the effect of any actions we may take to reduce expenses and preserve cash;

● potential outcomes of preclinical trials for AR-300, any future capital expenditures, research and development expenses and other payments relating to AR-300 and any capital raising activities to fund AR-300 research and development related expenses;

● our ~~strategic~~Board’s ~~alternatives~~assessment ~~process,~~of ~~including~~internal ~~any~~and ~~potential~~external ~~interested~~options ~~counterparty,~~in ~~transaction~~light ~~structure,~~of ~~timing~~the ~~and~~failure ~~transaction~~of ~~expense~~recently ~~associated~~completed non-clinical pre-IND enabling studies with ~~any~~OA-201 ~~strategic~~to ~~alternative~~demonstrate ~~and~~efficacy ~~the~~versus ~~potential~~saline ~~success~~control ofto ~~any~~reduce ~~strategic~~pain ~~alternative~~and preserve cartilage;

~~● the expense, time or outcome of any legal proceeding; and~~

● the outcomes of our ~~ability~~immediate actions to ~~identify~~preserve ~~strategic~~our ~~partners~~cash ~~for~~in ~~Ampion~~order orto ~~any~~be ~~other~~able ~~potential~~to ~~product~~adequately ~~and~~fund ~~enter~~an ~~into~~orderly ~~beneficial~~wind ~~license,~~down ~~co-development,~~of ~~collaboration~~the orCompany’s ~~similar~~operations ~~arrangements.~~and to maximize the Company’s cash position; and

●

the expense, time and/or outcome of any existing and/or future legal proceeding(s), including the settlement in principle of certain legal proceedings that was announced on January 11, 2024.

We undertake no obligation to update or revise publicly any forward-looking statements to reflect events or circumstances after the date of such statements for any reason, except as otherwise required by law.

Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. Important information as to these factors can be found in this Annual Report, including, among others, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings of “Overview,” “Liquidity and Capital Resources” and annually in “Critical Accounting Policies, Estimates and Judgments.” ~~Discussion~~Further, discussion of these factors is incorporated by reference from Part I, Item 1A, “Risk Factors,” of this Annual Report, and should be considered an integral part of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For additional information concerning factors that may cause actual results to vary materially from those stated in the forward-looking statements, see our reports on Forms 10-K, 10-Q and 8-K filed with the SEC from time to time.

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AMPIO PHARMACEUTICALS, INC.

PART I

Item 1.Business.

Overview

WeAmpio ~~are~~Pharmaceuticals, Inc. (“Ampio” or “the Company”) is a pre-revenue stage biopharmaceutical company. ~~Until~~that ~~May~~until ~~2022~~February we2024 ~~were~~was focused on the ~~clinical~~ development of ~~Ampion®~~a ~~and~~potential ~~preclinical~~treatment ~~development~~for osteoarthritis of ARthe knee (“OAK”) as part of its OA-~~300,~~201 adevelopment ~~novel,~~program (“OA-201 program” or “OA-201”). The OA-201 program sought to advance Ampio’s unique and proprietary, small molecule formulation that ~~has~~was Ampio’s only product development opportunity. In late 2023, we initiated non-clinical studies to determine whether OA-201 would support an Investigational New Drug (i“IND”) submission. Previous smaller studies had demonstrated ~~anti~~that OA-~~inflammatory~~201 ~~properties~~showed inefficacy ~~vitro~~versus saline control to reduce pain and ~~(ii)~~preserve ~~protection~~cartilage in non-clinical models of ~~cartilage~~osteoarthritis of the knee. However, as we announced in ~~preclinical~~February ~~rat~~2024, ~~meniscal~~the ~~tear~~pain reduction benefit was not observed in the data from the recent set of non-clinical studies which utilized a larger population of animal subjects.

Subsequently, we have shifted nearly all of our focus towards the preclinical development of AR-300 and we are currently conducting studies to evaluate the efficacy of AR-300 in osteoarthritis-related pain. If the preclinical data is compelling, we would plan to initially target clinical development of AR-300 for the treatment of osteoarthritis of the knee (OAK). Osteoarthritis is widely regarded as being typified by cartilage loss. Substances that protect articular cartilage during the course of osteoarthritis have been termed chondroprotective. Clinical demonstration of cartilage protection and pain management in the knee could position AR-300 for administration early in the current OAK treatment paradigm which we believe is a potentially large and attractive market opportunity.

The development of AR-300 to date has been based, in part, on our extensive drug discovery and clinical development experience obtained during the development of Ampion for the treatment of OAK. It is important to note, however, that AR-300 is not Ampion, rather it is a novel and unique formulation in preclinical development. We currently expect to have preclinical pain and chondroprotection results for AR-300 in the first half of 2023.

In addition, and given the overall risks associated with preclinical drug development, we continue to opportunistically identify and evaluate strategic opportunities that would allow us to acquire or license later stage assets and/or merge with companies that have those assets as part of the strategic alternatives process that we announced in May 2022. In 2022, we evaluated more than a dozen potential strategic alternatives with the assistance of our legal, clinical and regulatory, and financial advisors consistent with our strategic alternatives process.

On November 9, 2022, the Company effected a 15-to-1 reverse stock split. The Company has retroactively applied the reverse stock split made effective on November 9, 2022 to share and per share amounts in the consolidated financial statements as of December 31, 2022 and December 31, 2021. Additionally, pursuant to their terms, a proportionate adjustment was made to the per share exercise price and number of shares issuable under all of the Company’s outstanding options and warrants, and the number of shares authorized for issuance pursuant to the Company’s equity incentive plans have been reduced proportionately, with any fractional shares rounded up to the next whole share. The Company also retroactively applied such adjustments in the notes to the consolidated financial statements as of December 31, 2022 and December 31, 2021. The reverse stock split did not reduce the number of authorized shares of common stock and preferred stock and did not alter the par value.

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Government Regulation

FDA Approval Process

If Ampio determines that pain and chondroprotection data from the AR-300 preclinical studies justify moving forward with the clinical development of AR-300, it is our intent to approach FDA in INTERACT (Initial Targeted Engagement for Regulatory Advice) and pre-IND meeting later in 2023 to discuss the development plan for the drug, which we believe will be regulated as a small molecule formulation, and will require additional, IND-enabling preclinical studies, a Phase 1 safety study, at least one Phase 2 proof of efficacy study, and likely two randomized, controlled Phase 3 studies. Based on current input from our clinical and regulatory advisor, we believe this regulatory process could comprise five-to-seven years and require an incremental investment over and above Ampio’s general operating expense during that period.

Intellectual Property Summary

We will be able to protect our proprietary intellectual property rights from unauthorized use by third parties only to the extent that such rights are covered by valid and enforceable patents or are effectively maintained as trade secrets. We seek to protect our trade secrets and proprietary know-how through confidentiality and nondisclosure agreements and other controls over confidential information. If we do not adequately protect our trade secrets and proprietary know-how, our competitive position and business prospects could be materially harmed.

The following describes our patents and patent applications relating to AR-300 and Ampion®.

AR-300

WeBecause ~~own~~the adata ~~number~~from ofthe ~~United~~larger ~~States~~non-clinical ~~provisional~~pain ~~patent~~reduction ~~applications~~trial ~~covering~~of AROA-~~300,~~201 asdid ~~well~~not support the same pain reduction benefit as ~~its~~was ~~uses~~demonstrated in the earlier, ~~formulations~~smaller, proof-of-concept trials, Ampio determined to cease substantially all preclinical and ~~manufacturing~~clinical ~~processes.~~development Weactivities ~~expect~~relating ~~that~~to ~~these~~OA-201. ~~provisional~~Following ~~patent~~the ~~applications,~~February ~~which~~2024 ~~are~~announcement, the ~~patent~~Company’s ~~rights~~management weand ~~consider~~the ~~most~~Board ~~significant~~of inDirectors ~~relation~~began toan ~~our~~assessment ~~business~~of asboth ainternal ~~whole~~and external options. Additionally, ~~will~~the beCompany ~~consolidated~~took ~~and~~immediate ~~filed~~action asin aFebruary ~~single~~and ~~PCT~~March ~~(Patent~~2024 ~~Cooperation~~to ~~Treaty)~~preserve ~~application~~its cash in ~~the~~order ~~second~~to ~~quarter~~be able to adequately fund any option identified by the Board of ~~2023~~Directors. These ~~One~~actions orincluded ~~more~~termination ~~national~~of ~~phase~~employees ~~applications~~directly ~~will~~involved bein ~~filed~~the ~~from~~OA-201 ~~this~~program ~~PCT~~and ~~application~~corporate ~~approximately~~support, ~~eighteen~~termination ~~(18)~~of ~~months~~third-party ~~later~~consultants, inand ~~the~~termination of agreements with third ~~quarter~~parties ofrelating ~~2024~~to OA-201 development activities.

Because we do not believe that the data from the preclinical studies would support future capital raises necessary to further develop OA-201, we terminated our At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright effective March 6, 2024. We also filed a post-effective amendment to deregister the remaining securities available under the registration statement relating to the offerings under the ATM Agreement, which was declared effective by the SEC on March 4, 2024.

Throughout the months of February and March 2024, the Board of Directors sought to identify and evaluate potential options available to the Company. Based on these evaluations, the Board determined to take steps designed to ensure sufficient cash to adequately fund an orderly wind down of the Company’s operations and to maximize the Company’s cash position. Consistent with this goal, on March 25, 2024, the Board of Directors determined to pursue voluntary delisting of Ampio’s common stock from the NYSE American. After delisting, the Company expects to suspend the Company’s reporting obligations under Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and deregister its common stock under Section 12(b) of the Exchange Act.

While the Board of Directors remains open to strategic options, given our prior efforts to develop similar strategic options, the Board of Directors believes that more likely options include the liquidation and wind up of the Company through a dissolution pursuant to a plan of liquidation and dissolution that would be subject to Board and stockholder approval or bankruptcy (should our net assets decline to levels that would require such action).

In addition, we are continuing to pursue resolution of the pending legal proceedings described in this Annual Report on Form 10-K under Part I, Item 3 “Legal Proceedings.”

The financial statements as of and for the year ended December 31, 2023 do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that will likely result when the Company is unable to continue as a going concern.

Reverse Stock Split

~~Because~~On weNovember ~~are~~9, ~~currently~~2022, ~~focused~~the onCompany effected a 15-to-1 reverse stock split. On September 12, 2023, the ~~preclinical~~Company ~~development~~effected ofa AR20-~~300,~~to-1 wereverse ~~anticipate~~stock ~~filing~~split. ~~additional~~The ~~patent~~Company ~~applications~~has inretroactively applied the ~~future,~~reverse ~~covering~~stock ~~new~~splits ~~discoveries,~~to ~~formulations~~share and~~/or~~ ~~research~~per ~~advancements~~share amounts in orthe ~~relating~~condensed tofinancial ~~AR-300,~~statements as weof ~~determine~~December ~~appropriate~~31, 2023 and December 31, 2022. Additionally,

Patents covering AR-300 may extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection is obtained. Generally speaking, patents to issue from the above-mentioned PCT application will exist for a period of twenty years from the filing date of the PCT application, or until the second quarter of 2043. The scope of protection afforded by a patent can also vary from country to country and depends on the patent type, the scope of its patent claims and the availability of legal remedies. Patent term extensions (PTE) may be available in some countries to compensate for a loss of patent term due to delay in a product’s approval due to the regulatory requirements.

Reliable patent protection and enforcement around the world are among the key factors we consider for continued business and R&D investment. The WTO Agreement on Trade Related Aspects of Intellectual Property Rights (WTO-TRIPS) requires participant countries to provide patent and other intellectual property-related protection for pharmaceutical products by law, with an exemption provided for least developed countries until 2033. While some countries have made improvements, we may face patent grant, enforcement and other intellectual property challenges in many countries.

Ampion

Globally, we own a large number of issued patents and pending patent applications covering Ampion®, our proprietary biological pharmaceutical product, as well as its uses, formulations, and manufacturing processes. Given the decision to focus available resources on the research and development of AR-300, we made the decision starting in 2023 to significantly limit or discontinue much of the existing patent portfolio covering Ampion®. Those members of the existing Ampion® patent estate that we expect to continue to maintain will be based on the relative importance of technologies

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~~covered~~pursuant byto ~~patents~~their terms, a proportionate adjustment was made to the ~~geographic~~per ~~jurisdiction~~share exercise price and number of ~~patents~~shares issuable under all the Company’s outstanding options under the 2010/2019 Stock and Incentive Plans, the number of shares of restricted stock outstanding under the 2019 Stock and ~~remaining~~Incentive ~~patent~~Plan, ~~term.~~and Wecommon ~~believe~~stock ~~that~~warrants, ~~this~~with ~~strategy~~any ~~will~~fractional ~~significantly~~shares ~~reduce~~rounded up to the ~~overall~~next whole share. The number of ~~patents~~shares authorized for issuance pursuant to the Company’s 2023 Stock and ~~minimize~~Incentive Plan (the ~~economic~~“2023 ~~impact~~Plan”) was not impacted by the 20-to-1 reverse stock split (see Note 9 for additional information). The Company also retroactively applied such adjustments in the notes to the condensed financial statements as of December 31, 2023 and December 31, 2022. The reverse stock split did not reduce the ~~Ampion®~~number ~~patent~~of ~~estate~~authorized onshares of common stock and preferred stock and did not alter the ~~Company~~par value.

Intellectual Property Summary

As of December 31, 2023, Ampio had two pending US provisional patent applications relating to and protecting the OA-201 program. A third US provisional patent application covering the OA-201 program was filed in the beginning of the first quarter of 2024.

Our intellectual property strategy has been to file patent applications in the United States and abroad to strengthen our intellectual property rights, expand our portfolio, and protect the OA-201 program in strategic global markets. Given the non-clinical study data described above, we do not expect to continue pursuing future patents and/or supporting provisional patent applications relating to the OA-201 program.

Human Capital Resources

As of December 31, 2023, we ~~move~~had ~~forward~~six employees, all of which were employed in the United States. In 2022, Ampio implemented a human capital resources strategy to align with the ~~development~~needs of ARthe OA-~~300~~201 program and the Company’s capital resources. As part of our strategy, we ~~believe~~determined itto isoutsource ~~crucial~~and ~~that~~contract wewith ~~have~~independent ~~just~~third-~~in-time~~party ~~access~~organizations, advisors and consultants to provide specific ~~best-~~services. Our agreements with third parties involved in the OA-~~class~~201 ~~expertise~~program atwere ~~each~~terminated ~~unique~~following ~~stage~~the analysis of the ~~drug’s~~data ~~development,~~from ~~including~~ the ~~following:~~non-clinical ~~(i)~~studies ~~expertise~~ in ~~planning,~~February ~~executing,~~2024. ~~and~~Following ~~evaluating~~the ~~preclinical~~employee ~~development,~~terminations ~~(ii)~~described ~~planning~~above, ~~and~~Ampio ~~executing~~has ~~the~~three ~~Phase~~employees 1as ~~safety~~of ~~study~~March 15, ~~(iii)~~2024. ~~planning~~On ~~and~~March ~~executing~~25, 2024, the ~~Phase~~Board 2of ~~and~~Directors 3determined ~~clinical~~to ~~studies~~terminate the employment of Daniel G. Stokely, ~~(iv)~~the ~~interfacing~~Company’s ~~with~~Chief ~~regulatory~~Financial ~~authorities~~Officer, ~~and~~as ~~(v)~~of ~~maintaining~~March 31, ~~analyzing~~2024, ~~and~~in ~~presenting~~order ~~data~~to ~~required~~preserve cash to ~~support~~adequately ~~regulatory~~fund ~~filings~~an ~~and~~orderly ~~decisions.~~wind Indown ~~addition,~~of wethe ~~continue~~Company’s operations and to bemaximize athe ~~public-reporting~~Company’s ~~company~~cash ~~and,~~position. asMichael ~~such~~A. Martino, ~~require~~ the ~~resources~~Company’s toChief ~~comply~~Executive ~~with~~Officer, ~~our~~will ~~public~~assume ~~reporting~~the ~~and~~role ~~stock~~of ~~exchange~~Chief ~~obligations~~Financial Officer following Mr. Stokely’s departure.

Accordingly, we have implemented a hybrid organizational model whereby we retain the organizational competencies to govern and comply with the public reporting requirements and select and manage specific third-party independent contractors with proven industry expertise in formulation development, preclinical development, GMP manufacturing, clinical development, regulatory and legal on an as needed basis. We believe this model will position us best to develop AR-300 in the most expeditious and cost-effective manner, and effectively control the fixed costs associated with building an all-employee organization.

We began implementing this model toward the end of 2022 and have continued implementation into the first quarter of 2023. As of December 31, 2022, we had eight full-time employees focused on research, manufacturing, project management, accounting and finance, administrative support, information technology (“IT”), and corporate governance. As of February 1, 2023, we had five employees focused on project management, accounting and finance, IT, and corporate governance. Consistent with our outsourcing philosophy, we have contracted with third-party firms to provide medical/clinical oversight, financial and accounting control, assistance with transferring manufacturing methods, and administrative support, and have engaged third-party firms with specific orthopedic expertise to assist with designing and implementing preclinical, clinical and regulatory development plans for AR-300.

Available Information

We currently file annual reports, quarterly reports, proxy statements and other documents with the SEC under the Exchange Act. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including Ampio, that file electronically with the SEC. These filings are available through the SEC’s website at https://www.sec.gov.

Ampio also makes available free of charge through its website, http://www.ampiopharma.com, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. Information found on our website is not incorporated by reference into this Annual Report.

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Item 1A.

Risk Factors.

You should carefully consider the following risk factors and all other information contained herein as well as the information included in this Annual Report and other reports and filings made with the SEC in evaluating our business and prospects. Risks and uncertainties, in addition to those we describe below, that are not presently known to us or that we currently believe are immaterial may also impair our business operations. If any of the following risks occur, our business and financial results could be harmed, and the price of our common stock could decline. You should also refer to the other information contained in this Annual Report, including our Consolidated Financial Statements and the related Notes.

Risks and uncertainties, in addition to those we describe below, that are not presently known to us or that we currently believe are immaterial may also impair our business operations. If any of the following risks occur, our business and financial results could be harmed, and the price of our common stock could decline. You should also refer to the other information contained in this Annual Report, including our Consolidated Financial Statements and the related Notes.

These risk factors are current through the date of this Annual Report on Form 10-K.

Risks Related to Our Business

Our OA-201 program was our only product development opportunity and with the recent data from non-clinical studies, we have ceased further development activity relating to OA-201.

We do not have any products that are approved for commercial sale and may never be able to develop marketable products. We have generated no revenue from sales of any products or services. The OA-201 program was our only development program, and the small molecule formulation was our only potential product in development. Because the data from the recently completed non-clinical pain reduction trial of OA-201 did not support a pain reduction benefit, Ampio determined to cease substantially all non-clinical and clinical development activities relating to OA-201 in February 2024. Our activities currently consist of taking steps to preserve cash to adequately fund an orderly wind down of the Company’s operations and to maximize the Company’s cash position and the pursuit of the resolution of currently pending legal proceedings.

Our available alternatives are limited and there is no assurance that any alternative will result in any distribution to or cash return to our stockholders.

Throughout the months of February and March 2024, the Board of Directors sought to identify and evaluate potential options available to the Company. Based on these evaluations, the Board determined to take steps designed to ensure sufficient cash to adequately fund an orderly wind down of the Company’s operations and to maximize the Company’s cash position. Consistent with this goal, on March 25, 2024, the Board of Directors determined to pursue voluntary delisting of Ampio’s common stock from the NYSE American. After delisting, the Company expects to suspend its reporting obligations under the Exchange Act and deregister its common stock under Section 12(b) of the Exchange Act.

Given our prior efforts to develop strategic options, the Board of Directors believes that more likely options include the liquidation and wind up of the Company through a plan of liquidation and dissolution that would be subject to Board of Director and stockholder approval or bankruptcy (should our net assets decline to levels that would require such action). If we wind up our business and dissolve, there is no assurance that our capital resources will be sufficient to discharge all of our liabilities and fund a distribution to our stockholders. We cannot predict the timing of or the amount of distributions, if any, to our stockholders in a dissolution that may be approved by the Board due to uncertainties as to the ultimate amount of our liabilities, the operating costs and amounts to be reserved for claims, obligations and provisions during the liquidation and winding-up process, and the related timing to complete this process, as well as the time and expense associated with our currently pending legal proceedings and any future legal proceedings in which we may become involved. Examples of uncertainties that could reduce our current cash resources and therefore reduce the amount that may become available to our stockholders in a dissolution if approved by the Board include: costs relating to the current and future legal defense costs in excess of coverage afforded by the existing insurance policies, satisfaction or settlement of lawsuits or other claims threatened against us or our directors or officers in excess of the coverage afforded by the existing insurance policies; amounts necessary to resolve claims of any creditors or other third parties; and delays in the liquidation and dissolution or other winding up process, including relating to seeking stockholder approval of dissolution if approved by the Board.

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~~Risks~~We ~~Related~~plan to ~~the~~initiate ~~Development~~steps ofto ~~AR-300~~exit from certain reporting requirements under the Exchange Act, ~~Strategic~~which ~~Alternatives~~will ~~and~~substantially ~~Our~~reduce ~~Business~~publicly available information about us.

WeOur ~~are~~common ~~dependent~~stock onis currently registered under the ~~success~~Exchange ofAct, which requires that we, and our ~~AR-300~~officers ~~technology~~and directors with respect to Section 16 of the Exchange Act, comply with certain public reporting and proxy statement requirements thereunder. Compliance with these requirements is costly and time-consuming. We plan to initiate steps to exit from such reporting requirements in order to curtail expenses. Until we ~~cannot~~exit befrom ~~certain~~these ~~that~~reporting ~~any~~requirements, ~~preclinical~~we ~~data~~will continue to incur expenses that will ~~support~~reduce ~~its~~the ~~further~~amount ~~development~~available for pursuit of our options and the amount available for payment of our liabilities, reserves or potential distribution to stockholders. If our reporting obligations cease, publicly available information about us will be substantially reduced.

~~AR-300~~There is asubstantial ~~novel,~~doubt ~~proprietary~~about (patents pending), small molecule formulation that has demonstrated promising anti-inflammatory properties in vitro and protection of cartilage in preclinical rat meniscal tear studies. We are currently conducting studies to evaluate the efficacy of AR-300 in osteoarthritis pain. We expect to have preclinical pain and chondroprotection results in the first half of 2023. The future development of AR-300 will depend on the success and level of positive data from the current and near-term preclinical studies. At this time, AR-300 is our ~~only~~ability ~~potential product in development. We do not have any products that are approved for commercial sale and may never be able~~ to ~~develop~~continue ~~marketable~~as ~~products.~~a Ingoing ~~2022, we generated no revenue from any source other than interest income~~concern.

IfIn ~~the~~2023, ~~results~~we ~~from~~experienced ~~the~~net ~~preclinical~~losses ~~studies~~ of ~~AR-300~~$8.6 ~~are sufficiently positive~~million, ~~any~~had ~~future~~no ~~product~~revenue ~~candidate~~other ~~from~~than ainterest ~~formulation~~income, ofand ~~AR-300~~used ~~will~~$8.6 ~~require~~million ~~additional~~in ~~development,~~cash ~~including~~to ~~further~~fund ~~preclinical~~our ~~studies,~~operations. asDue ~~well~~to asthe ~~clinical~~current ~~trials,~~level ~~optimization~~ of ~~their~~liquidity ~~formulation,~~at ~~and~~December ~~regulatory clearances~~31, ~~before~~2023 ~~they~~and ~~can~~the beprojected ~~commercialized.~~shortfall ~~Positive~~to ~~results~~cover ~~obtained~~operating ~~during~~expenses ~~early~~requiring ~~development~~cash dofor ~~not~~a ~~necessarily~~period ~~mean~~of ~~later~~12 ~~development~~months ~~will~~from ~~succeed.~~the Ifreport ~~AR-300~~date ~~fails~~of tothe ~~demonstrate~~annual ~~sufficiently~~report, ~~positive~~management ~~data~~has atexpressed ~~any~~substantial ~~time~~doubt oras weto ~~determine~~our ~~there~~ability ~~are other barriers~~ to ~~successful~~continue ~~commercialization,~~as wea ~~may~~going ~~abandon development of AR-300~~concern.

WeAs ~~believe~~of ~~that~~December ~~sufficiently~~31, ~~positive~~2023, ~~pre-clinical~~our ~~data~~source ~~for~~of ~~AR-300~~liquidity isconsisted aof ~~condition~~$4.1 tomillion ~~future~~of ~~capital~~cash ~~raising~~and tocash ~~fund~~equivalents ~~AR-300~~and ~~development~~$0.9 Ifmillion ~~our~~of ~~available~~an ~~cash~~insurance ~~resources~~recovery ~~are~~receivable. As ~~insufficient~~of toFebruary ~~fund~~29, ~~our~~2024, ~~expenses~~we ~~(including~~had ~~relating~~$3.4 tomillion ~~legal~~in ~~proceedings)~~cash and ~~the~~cash ~~development~~equivalents ~~of AR-300~~ and~~/or~~ ~~completion~~$0.5 million of aan ~~strategic~~insurance ~~transaction,~~recovery receivable. While we ~~may~~continued to implement ~~further~~ cost ~~reduction~~reductions ~~and~~in ~~other~~2023 ~~cash-focused measures to manage liquidity~~ and weadditional ~~may~~cost ~~pursue~~reductions ain ~~plan~~February ofand ~~liquidation~~March or2024, ~~dissolution~~we ofhave ~~Ampio~~finite orcash ~~seek~~resources ~~bankruptcy~~available ~~protection.~~to Iffund weour ~~decided~~now tolimited ~~cease~~ operations. ~~and~~Our ~~dissolve~~activities ~~and~~currently ~~liquidate~~consist ~~our~~of ~~assets,~~taking itsteps ~~is unclear~~ to ~~what~~preserve ~~extent~~cash weto ~~would~~adequately befund ~~able~~an toorderly ~~pay~~wind ~~our~~down ~~obligations.~~of Inthe ~~such~~Company’s aoperations ~~circumstance~~ and into ~~light~~maximize of the Company’s ~~current~~cash ~~liquidity~~ position and ~~pending~~pursuit ~~legal~~of ~~matters,~~the itresolution isof ~~unlikely~~currently ~~that~~pending ~~cash~~legal ~~would be available for distributions to stockholders~~proceedings.

WeCurrently, ~~may~~pending ~~explore~~legal ~~strategic~~proceedings ~~alternatives~~and ~~but~~any ~~there~~future ~~can~~legal beproceedings nomay ~~assurance~~adversely ~~that~~affect weour ~~will~~cash beposition ~~successful~~and inlimit ~~identifying~~our orpursuit ~~completing~~of ~~any~~ strategic ~~alternative or that any such strategic alternative will yield value for our stockholders~~options.

~~Given~~We ~~the~~are ~~risks~~currently ~~associated~~involved ~~with~~in ~~preclinical drug development, we continue to opportunistically identify~~ and ~~evaluate~~may ~~strategic~~in ~~opportunities~~the tofuture ~~acquire~~be orinvolved ~~license~~in ~~later~~legal ~~stage~~proceedings. ~~assets~~Please ~~and/or~~see ~~merge~~“The ~~with~~settlement ~~companies~~in ~~that~~principle ~~have~~of ~~those~~certain ~~assets.~~legal ~~To-date,~~actions weis ~~have~~subject ~~evaluated~~to ~~more than~~ a ~~dozen~~number ~~such~~of ~~opportunities.~~conditions ~~Finding attractive~~ and ~~affordable~~risks” ~~assets~~for ~~and/or~~a ~~merger~~summary ~~partners~~of ~~has~~risks ~~been~~relating ~~challenging due~~ to ~~competition from~~ the ~~high~~settlement ~~number~~in principle of ~~companies~~certain ~~with~~of ~~failed~~the ~~clinical~~pending ~~trials~~legal ~~that~~proceedings. ~~are~~The ~~pursuing~~settlements ~~the same strategy;~~ in ~~addition~~principle todo ~~our~~not ~~circumstances~~affect ~~regarding~~the ~~our~~ongoing ~~cash~~investigation ~~balance,~~by the ~~uncertainty~~SEC. ~~around~~We ~~our~~intend ~~continued~~to ~~listing~~continue onto acooperate ~~major~~fully ~~exchange,~~with ~~and~~ the ~~potential risks associated with ongoing legal and regulatory matters~~SEC.

~~The~~Regardless ~~process~~ of ~~exploring~~whether ~~strategic~~any ~~alternatives is~~claims ~~time~~against ~~consuming,~~us ~~and~~are ~~our~~valid ~~board~~or ofwhether ~~directors~~we ~~has~~are ~~not set a timetable for the conclusion of its review of strategic alternatives. Our review of strategic options and alternatives could result in~~liable, ~~among~~any ~~other~~future ~~things,~~litigation ~~a sale~~claims, ~~merger, reverse merger, consolidation~~ or ~~business~~regulatory ~~combination,~~proceedings ~~asset~~likely ~~divestiture,~~will ~~partnering,~~be ~~licensing~~expensive orand ~~other~~time ~~collaboration~~consuming ~~agreements,~~to ordefend ~~potential acquisitions~~against, ~~recapitalizations~~require orus ~~restructurings,~~to oradvance insubstantial ~~one~~amounts orto ~~more~~director ~~transactions.~~and ~~There~~officer ~~can~~defendants beand noother ~~assurance~~indemnifiable ~~that~~defendants ~~the~~for ~~exploration of strategic alternatives is~~ the ~~correct~~defense ~~strategy to pursue or that it will result in the identification or consummation~~ of ~~any~~their ~~transaction. Certain potential strategic transaction alternatives~~claims, ~~if available~~ and ~~achieved, could~~ result in ~~substantial~~the ~~dilution~~diversion toof ~~existing~~management ~~stockholders~~attention and ~~have~~reduce aour ~~material~~current ~~adverse~~cash ~~effect on the market price of Ampio’s common stock~~resources.

~~Additionally,~~We incurrently ~~light~~expect ofthe ~~our~~amount ~~current~~to ~~stock~~be ~~price~~paid ~~and~~in ~~ongoing~~both ~~legal matters~~settlements, ~~there~~including ~~can~~related bedefense nocosts, ~~assurance~~will ~~that~~be wecovered ~~will~~by, ~~have~~and ~~sufficient~~within ~~capital~~the ~~resources~~policy tolimits ~~fund~~of ~~any~~our ~~strategic~~D&O ~~transaction~~insurance policy. However, if ~~available.~~defense Ifcosts weor ~~raise~~the ~~additional~~amounts ~~funds~~associated ~~through~~with the ~~issuance~~settlements of ~~equity~~the ~~securities,~~pending ~~including~~actions asand ~~part~~stockholder ofdemands aexceed ~~strategic~~Ampio’s ~~transaction~~current expectation, itits ~~could~~insurance ~~result~~coverage inmay ~~substantial~~not ~~dilution~~be adequate to ~~our~~cover ~~existing~~the ~~stockholders~~amounts incurred by the Company, ~~increased~~including ~~fixed~~as ~~payment~~a result of its indemnification obligations, to its current and ~~any~~former ~~issued~~officers ~~securities~~and directors and other parties. Additionally, insurance may ~~have~~not ~~rights~~be ~~senior~~available at all or in sufficient amounts to ~~those~~cover ofany liabilities with respect to the ~~Company’s~~pending ~~shares~~SEC investigation that is not resolved through the settlements in principle of ~~common~~the ~~stock~~civil litigations.

In addition, insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to any future claims against us. We ~~also~~may ~~cannot~~be ~~assure~~required ~~that~~to expend significant amounts to satisfy our self-insured retention in order to obtain coverage of any ~~potential~~future ~~transaction~~claims oragainst us, our directors and officers and other ~~strategic~~indemnifiable ~~alternative,~~parties. ifThe ~~identified~~costs relating to the defense, ~~evaluated~~satisfaction and/or ~~consummated,~~settlement ~~will~~of ~~provide~~lawsuits ~~greater~~or ~~value~~other toclaims threatened against us, our ~~stockholders~~directors and officers or ~~otherwise~~other ~~successfully~~indemnifiable ~~address~~parties ~~the~~and ~~challenges~~amounts ~~associated~~necessary ~~with~~to ~~our~~resolve ~~dependence~~claims ~~upon~~of aany ~~single~~creditors ~~preclinical~~or ~~asset~~other ~~for~~third parties will reduce our ~~business.~~current ~~Any~~cash ~~potential~~resources ~~transaction~~and ~~would~~therefore bereduce ~~dependent~~the ~~upon~~amount that may become available to our stockholders in a ~~number~~dissolution if approved by the Board and the Company’s shareholders.

If we are liable in any legal proceeding, such proceeding could result in injunctions or other equitable relief, settlements, penalties, fines, or damages that could materially adversely affect our cash position. Given our limited cash resources, if

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ofwe ~~factors~~are ~~that~~exposed ~~may~~to besignificant ~~beyond~~liabilities ~~our~~resulting ~~control,~~from ~~including,~~our ~~among~~current ~~other~~or ~~factors,~~future ~~market~~legal ~~conditions,~~proceedings ~~industry~~that ~~trends,~~are ~~the~~not ~~interest~~covered ofby ~~third~~insurance ~~parties~~or inif our ~~business~~cash orresources ~~preclinical~~are ~~development~~otherwise ~~progress,~~insufficient ~~and~~to ~~the~~satisfy ~~availability~~all ofclaims ~~financing~~and toliabilities, ~~potential~~we ~~buyers~~may onseek ~~reasonable~~bankruptcy ~~terms~~protection.

WeThe ~~rely~~settlement onin ~~third~~principle ~~parties~~of ~~for~~certain ~~critical~~legal ~~resources,~~actions ~~including~~is ~~AR-300~~subject ~~development, and we may not be able~~ to ~~manage~~a ~~these~~number ~~third~~of ~~parties~~conditions ~~to provide timely, high quality,~~ and ~~cost-effective services to us~~risks.

AsOn ofJanuary ~~December 31~~11, ~~2022~~2024, we ~~had~~announced ~~eight~~that ~~full-time~~settlements ~~employees~~in ~~and~~principle ~~as of February 1, 2023, we~~ had ~~five~~been ~~full-time~~reached ~~employees.~~in ~~These~~the ~~employees~~pending ~~are~~securities ~~focused~~fraud onclass ~~project management~~action, ~~accounting~~Case &Number ~~finance, IT, and corporate governance. As part of our AR~~22-~~300~~cv-2105-WJM-MEH ~~development~~(the ~~strategy,~~“Securities weClass ~~have determined to outsource and contract with independent organizations~~Action”), ~~advisors~~ and ~~consultants~~the topending ~~provide~~consolidated ~~specific~~derivative ~~services,~~actions ~~such~~in asthe ~~orthopedic~~United ~~expertise~~States toDistrict ~~assist~~Court ~~with~~for ~~designing~~the ~~and~~District ~~implementing~~of ~~preclinical~~Colorado, ~~clinical~~Case ~~and~~Number ~~regulatory development plans for AR~~22-~~300. We have also determined to contract with third parties for other business~~cv-~~related~~2803-KLM ~~functions such as finance and accounting and administrative support. We believe that we will be able to obtain support and relevant expertise from~~ (the ~~third~~“Consolidated ~~party~~Derivative ~~resources at an overall lower cost profile than hiring our own employees as well as benefit from greater range of expertise from third party resources than may be found in any number of employees~~Actions”). ~~However, there can be no assurance that our strategy of using third parties will result in these intended benefits.~~

WeThe ~~currently~~settlements ~~rely,~~are ~~and~~subject ~~for~~to ~~the~~various ~~foreseeable~~conditions, ~~future~~including ~~will~~confirmatory ~~continue~~discovery ~~to rely,~~ in ~~substantial~~the ~~part~~Securities onClass ~~third~~Action, ~~parties~~negotiation toand ~~provide~~execution ~~critical~~of ~~services to us. We cannot assure you that~~ the ~~services~~full ofsettlement ~~these~~agreements ~~third~~and ~~parties~~obtaining ~~will~~court ~~continue~~approval toin beeach ~~available~~action. On toJanuary us9, ~~on a timely basis when needed~~2024, orAmpio ~~that~~along wewith ~~can find qualified replacements. If~~ the ~~cost~~other ~~of these services increase for any reason, or if these third~~ parties ~~are unable or unwilling provide services~~ to ~~us,~~each wecase ~~may~~filed ~~have~~status toreports ~~find~~in ~~another~~both ~~third~~the ~~party~~Securities toClass ~~provide~~Action ~~these~~and ~~services~~the ~~which~~Consolidated ~~could~~Derivative ~~result in interruptions~~Actions, ~~increased~~advising ~~costs,~~the ~~delays,~~respective incourts ~~other~~of ~~challenges in~~ the ~~development~~status of ~~AR-300, in~~ the ~~execution~~settlements ~~of strategic alternatives or strategic transactions,~~ in ~~our~~principle. The ~~ability~~settlement toof ~~fulfill~~the ~~our~~Consolidated ~~SEC~~Derivative ~~reporting~~Actions ~~obligation~~is orsupported ~~comply~~by ~~with~~ the ~~continued~~plaintiff ~~listing requirements of NYSE American, or~~ in the ~~proper~~pending ~~functioning~~Colorado ofstate ~~other~~court ~~business~~derivative ~~functions.~~action, InCase ~~addition~~Number 2023CV30287, ifas wewell ~~are~~as ~~unable~~two tostockholders ~~effectively~~who ~~manage~~previously ~~our~~submitted ~~outsourced~~pre-litigation ~~activities~~demand orletters ifto the ~~quality~~Company’s orBoard ~~accuracy~~ of ~~the~~Directors. If ~~services~~finally ~~provided~~approved by ~~third-party~~the ~~service~~relevant ~~providers is compromised for any reason~~courts, ~~we may similarly suffer from interruptions, increased costs, delays and from~~ the ~~other~~settlements ~~challenges described above. We cannot assure you that we~~ will beresult ~~able~~in tothe ~~manage~~dismissal ~~our~~with ~~existing~~prejudice ~~third-party~~of ~~service~~all ~~providers~~of orthe ~~find~~pending ~~other~~actions ~~competent outside contractors~~ and ~~consultants~~the onwithdrawal ~~economically~~of ~~reasonable~~the ~~terms,~~two orstockholder atpre-litigation ~~all~~demands.

~~Risks~~The ~~Related~~settlements in principle of the pending actions and stockholder demands are subject to ~~Our~~a ~~Financial~~number ~~Position~~of conditions, including confirmatory discovery for the Securities Class Action, the execution and ~~Capital~~delivery ~~Requirements~~of definitive settlement agreements reflecting the terms of the settlements in principle, obtaining preliminary court approval of the settlements, providing notice to stockholders of the proposed settlements, and obtaining final, non-appealable approvals by the respective courts. The timing of completion of the settlement agreements and filing motions to seek court approvals are uncertain. However, we will be endeavoring to finalize and execute the settlement agreements and have motions for preliminary approval submitted to the relevant courts by mid-May 2024. Additionally, the timing of any final decision by any of the respective courts is subject to the discretion of such court and any potential appeal. Ampio currently expects the amount to be paid in both settlements, including related defense costs, will be covered by, and within the limits of, its D&O insurance policies. If defense costs or the amounts associated with the settlements of the pending actions and stockholder demands exceed Ampio’s current expectation, its insurance coverage may not be adequate to cover the amounts incurred by the Company including as a result of its indemnification obligations to its current and former officers and directors.

~~Our~~Accordingly, ~~history~~there can be no assurance that the settlements in principle of ~~losses~~the pending actions and ~~our~~stockholder ~~cash~~demands ~~resources~~will ~~available~~be tofinalized ~~execute~~or ~~our~~approved ~~business~~by ~~plan~~the ~~over~~respective courts, or that the ~~next~~settlements ~~twelve~~will ~~months~~be ~~raise~~completed ~~substantial~~as ~~doubt~~currently ~~about~~proposed, ~~our~~or ~~ability~~at any particular time. Additionally, the settlements in principle do not affect the ongoing investigation by the SEC. We intend to continue asto acooperate ~~going~~fully ~~concern~~with the SEC.

InOur ~~2022,~~provisional wepatent ~~experienced~~applications ~~net losses of $16.3 million, had no revenue other than interest income,~~ and ~~used~~proprietary ~~$21.1~~rights ~~million~~ in ~~cash~~OA-201 tomay ~~fund~~be ~~our operations. Due to the current level~~ of ~~liquidity~~limited at December 31, 2022 and the projected shortfall to cover operating expenses requiring cash for a period of 12 months from the report date of the annual report, management has expressed substantial doubt as to our ability to continue as a going concernvalue.

As part of ~~December~~the ~~31,~~OA-201 ~~2022~~program, ~~our~~we ~~source~~own a number of ~~liquidity~~United ~~consisted~~States ofprovisional ~~$12.7~~patent ~~million~~applications ofcovering ~~cash~~our ~~and~~proprietary ~~cash~~small ~~equivalents.~~molecule ~~While~~pharmaceutical weformulations, ~~implemented~~as ~~cost~~well ~~reductions~~as intheir ~~2022,~~therapeutic ~~our~~uses ~~finite~~and ~~cash~~manufacturing ~~resources~~processes. ~~available~~Given tothat ~~execute~~we ~~our~~have ~~business~~ceased ~~plan~~efforts ~~present~~to ~~the~~continue ~~risk~~to ~~that~~develop weOA-201, ~~will~~our ~~not~~provisional ~~have~~patent ~~sufficient~~applications ~~cash~~and ~~available~~rights in ~~the~~OA-201 ~~amount~~may orbe atof ~~the~~limited ~~time~~value. weEven ~~need~~if itthese toprovisional ~~fund~~patent ~~our~~applications ~~ongoing~~and ~~operations~~rights ~~and~~have ~~execute~~some ~~our~~value, ~~business~~we ~~plan~~may ~~involving~~not ~~the~~be ~~development~~able ofto ~~AR-300~~adequately ~~and~~protect ~~strategic~~our ~~alternatives~~rights ~~over~~due ~~the~~to ~~next~~our ~~twelve~~limited ~~months~~cash resources.

Our capital needs are based upon management estimates as to future expense and potential future capital raising activity, which involve significant judgment particularly given that we are pursuing a strategic alternatives process and cannot predict the duration or expense associated with this process. Additionally, the expense associated with and outcome of any legal proceeding is not possible to determine at this time. We cannot assure you that additional financing will be available in the amount or at the time we need it, or that it will be available on acceptable terms or at all. We believe that positive pre-clinical data for AR-300 is a condition to future capital raising to fund further development of AR-300 and an identifiable, attractive strategic transaction is a condition to future capital raising to fund that strategic transaction.

If our available cash resources are insufficient to fund our expenses (including relating to legal proceedings) and the development of AR-300 and/or completion of a strategic transaction, we may implement further cost reduction and other cash-focused measures to manage liquidity and we may pursue a plan of liquidation or dissolution of Ampio or seek

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bankruptcy protection. If we decided to cease operations and dissolve and liquidate our assets, it is unclear to what extent we would be able to pay our obligations. In such a circumstance and in light of the Company’s current liquidity position and pending legal matters, it is unlikely that cash would be available for distributions to stockholders.

We are involved in legal proceedings that likely will adversely affect our financial position and our pursuit of strategic alternatives.

We are involved in and may in the future be involved in legal proceedings. Regardless of whether any claims against us are valid or whether we are liable, litigation claims or regulatory proceedings are expensive and time consuming to defend against, require us to advance potentially substantial amounts to director and officer defendants for their defense of the claims, and will result in the diversion of management attention and resources from our business and strategic goals. Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters. The outcome of any legal proceeding is not possible to determine at this time. If we are liable in any legal proceeding, such proceeding could result in injunctions or other equitable relief, settlements, penalties, fines or damages that could materially adversely affect our results of operations, cash position and the conduct of our business and pursuit of strategic alternatives. The uncertainty relating to any legal proceedings may also impair our ability to raise capital. Given our limited cash resources, significant liabilities resulting from legal proceedings could force us to implement further cost reduction and other cash-focused measures to manage liquidity, including potential termination of our strategic alternatives process, and the Company may pursue a plan of liquidation or dissolution of the Company or seek bankruptcy protection, any of which could cause the value of any investment in the Company to decline to zero. If we decided to cease operations and dissolve and liquidate our assets, it is unclear to what extent we would be able to pay our obligations. In such a circumstance and in light of the Company’s current liquidity position and pending legal matters, it is unlikely that cash would be available for distributions to stockholders.

We may need additional capital to fund our future operations, the development of AR-300 and any strategic transaction.

As of December 31, 2022, we had $12.7 million of cash and cash equivalents which we expect can fund our operations through the fourth quarter of 2023. Our future capital requirements will depend on, and could increase significantly as a result of, many factors including:

● progress in and the costs of our AR-300 preclinical studies and any future clinical trials and research and development relating to AR-300;

● costs relating to the exploration of strategic alternatives and costs associated with pursuit of any strategic transaction, including any consideration we may pay to acquire or license later stage assets and/or merge with companies that have those assets or other transaction or series of transactions;

● the costs of defending lawsuits and other claims such as those described in Part I, Item 3. “Legal Proceedings” and any amounts paid to resolve those legal matters;

● the costs involved in filing, prosecuting, enforcing, and defending patent claims and other intellectual property rights;

● efforts to cure any future non-compliance with the minimum stockholders’ equity or other requirement of the NYSE American; and

● the costs of sustaining our corporate overhead requirements, including D&O insurance, and hiring and retaining necessary personnel or third parties.

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We cannot assure you that additional financing will be available in the amount or at the time we need it, or that it will be available on acceptable terms or at all. We believe that positive pre-clinical data for AR-300 is a condition to pursue future capital raising to fund AR-300 and an identifiable, attractive strategic transaction is a condition to pursue future capital raising to fund that strategic transaction. We may obtain future additional financing by incurring indebtedness or from an offering of our equity securities or any of these.

If we raise equity financing, our stockholders may experience significant dilution of their ownership interests and the value of shares of our common stock could decline. Our efforts to raise additional funds from the sale of equity may be hampered by the currently depressed trading price of our common stock, by pending legal matters, and by our prior non-compliance or any future non-compliance with the continued listing requirements of the NYSE American. If we raise additional equity financing, new investors may demand rights, preferences or privileges senior to those of existing holders of common stock. Our efforts to raise funds by incurring indebtedness may be hampered by our limited assets to secure debt and the absence of any revenue to support debt service payments. Any financing would likely have covenants that would affect the manner in which we conduct our business, including by restricting our ability to incur indebtedness or sell additional equity securities.

If we cannot timely raise any needed funds, we may implement further cost reduction and other cash-focused measures to manage liquidity and we may pursue a plan of liquidation or dissolution of Ampio or seek bankruptcy protection. If we decided to cease operations and dissolve and liquidate our assets, it is unclear to what extent we would be able to pay our obligations. In such a circumstance and in light of the Company’s current liquidity position and pending legal matters, it is unlikely that cash would be available for distributions to stockholders.

Risks Related to Our Intellectual Property

We are dependent on adequate protection of our patent and proprietary rights.

We rely on patents, trade secrets, trademarks, copyrights, know-how, and contractual provisions to establish and protect our intellectual property rights. We own a number of United States provisional patent applications covering AR-300, our proprietary small molecule pharmaceutical product, as well as its uses, formulations, and manufacturing processes. We anticipate filing additional patent applications in the future, covering new discoveries, formulations and/or research advancements in or relating to AR-300, as needs arise. If we do not diligently pursue our intellectual property rights or they are invalidated or circumvented, our development of AR-300 and any future commercialization of any formulation of AR-300 will be adversely affected. We must successfully defend these rights against third-party challenges.

However, these legal means afford us only limited protection and may not adequately protect our rights or remedies to gain or keep any advantages we may have over other companies seeking to commercialize product candidates similar or identical to AR-300. If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent or other legal protections of our intellectual property rights, our ability to prevent our competitors from commercializing product candidates similar or identical to AR-300 would be adversely affected.

Additionally, competitors, many of which have substantial resources and may make substantial investments in competing products and product candidates, may apply for and obtain patents that will prevent, limit, or interfere with our ability to develop, manufacture or market any product relating to AR-300. Further, while we do not believe that our claimed intellectual property interferes with the rights of others, third parties may nonetheless assert patent infringement claims against us in the future.

Costly litigation may be necessary to enforce patents issued or licensed to us, to protect trade secrets or “know-how” we own, to defend us against claimed infringement of the rights of others or to determine the ownership, scope, or validity of our proprietary rights and the rights of others.

Any claim of infringement against us may involve significant liabilities to third parties, could require us to seek licenses from third parties, and could prevent us from manufacturing, selling, or using any products that we may develop. The occurrence of this litigation or the effect of an adverse determination in any of this type of litigation could have a material adverse effect on our business and financial condition.

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Risks Related to Our Common Stock

The price of our stock has been extremely volatile and may continue to be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock.

The price of our common stock has been extremely volatile. ~~and~~We ~~may~~expect ~~continue~~that volatility to becontinue ~~so, particularly~~ as wea ~~confront~~result ~~and~~of ~~attempt~~our todelisting ~~address~~from the ~~risks~~NYSE ~~relating~~American toand ~~AR-300,~~Exchange ~~our~~Act ~~strategic~~deregistration. ~~alternatives~~In ~~process,~~addition ~~our~~to ~~capital resources~~delisting, deregistration and the other ~~risk~~ factors described in this section~~. Additionally~~, the stock market in general and the market for pre-revenue stage biopharmaceutical companies have experienced extreme volatility that has often been unrelated to the operating performance of a particular company. The following factors, ~~in addition to the other risk factors described in this section,~~ may also have a significant impact on the market price of our common stock:

~~● any actual or perceived adverse developments in the preclinical studies for AR-300, any clinical trials involving AR-300, or the general development of AR-300;~~9

●Table ~~uncertainties relating to the strategic alternatives or any strategic transaction, including actual or perceived adverse developments in this process or the announcement or pendency~~ of ~~any transaction;~~Contents

● ~~any~~uncertainties ~~announcements~~relating ofto ~~developments~~our ~~with,~~wind ordown ~~comments~~of ~~by,~~ the ~~FDA~~Company’s oroperations, ~~other~~including ~~regulatory~~the ~~authorities~~potential ~~that~~for ~~may~~dissolution ~~impact~~of ~~Ampio or~~ the ~~potential~~Company, ~~regulatory~~bankruptcy ~~path~~or ~~for~~strategic ~~AR-300~~transaction;

●

announcements regarding our estimates of the timing or amount of distributions to our stockholders, if any;

●

developments in any legal proceeding in which we are or may become involved;

●

any announcements concerning our retention or loss of key employees;

~~● our continued compliance with NYSE American listing requirements and any action taken by the NYSE American relating to our common stock;~~

● ~~announcements~~sales of ~~patent~~stock ~~issuances~~by orour ~~denials, infringement claims or other intellectual property related developments~~stockholders;

~~● announcements of the introduction of new competitive products by other companies;~~

● future issuances of common stock or other securities;

● sales of stock by our stockholders holding a significant position in the Company;

●

economic and other external factors beyond our control; and

●

public confidence in the securities markets and regulation by or of the securities market.

A significant drop in the price of our stock could expose us to the risk of securities class action lawsuits, which could result in substantial costs and divert management’s attention and resources, which could adversely affect our business.

IfWith wethe ~~cannot~~Board ~~continue~~approval to ~~satisfy~~delist ~~the~~our ~~NYSE~~stock, ~~American~~we ~~continued~~expect ~~listing~~a ~~requirements~~negative ~~and~~impact ~~rules,~~on the price of our ~~securities~~stock ~~may~~and bethe ~~delisted,~~ability ~~which~~to ~~could~~sell ~~negatively~~our ~~impact~~common ~~the~~stock ~~price~~in ofthe ~~our~~public ~~securities~~market.

Currently, our common stock is listed on the NYSE American. InBecause ~~order~~of ~~to maintain~~ our ~~listing~~current onnon-compliance with the NYSE American, welisting ~~must~~requirements ~~continue~~relating to ~~satisfy~~minimum ~~the~~stockholders’ ~~applicable~~equity ~~continued~~and likely other continuing listing ~~requirements~~standards and, ~~rules~~in addition, ~~including~~the ~~such~~expense ~~rules~~associated ~~and~~with ~~requirements~~continuing ~~relating~~the tolisting ~~minimum~~on ~~share~~the ~~price~~NYSE American, ~~minimum~~the ~~stockholders~~Board of Directors determined to pursue voluntary delisting of Ampio’s ~~equity~~common ~~and~~stock afrom ~~minimum~~the ~~number~~NYSE American as part of ~~public~~its ~~stockholders~~cash conservation plan.

~~The~~Following ~~NYSE~~delisting ~~American may delist the securities~~ of ~~any~~our ~~issuer~~common ~~if,~~stock infrom ~~its~~NYSE ~~opinion~~American, the ~~issuer’s~~Company ~~financial~~anticipates ~~condition and/or operating results appear unsatisfactory; if it appears~~ that the ~~extent~~common ofstock ~~public~~would ~~distribution~~be orquoted ~~the aggregate market value of the security has become so reduced as to make continued listing~~ on the ~~NYSE~~Pink ~~American~~Open ~~inadvisable;~~Market ifoperated ~~the~~by ~~issuer~~OTC ~~sells~~Markets orGroup ~~disposes~~Inc. ~~of principal operating assets or ceases to be an operating company; if an issuer fails to comply with~~ (the ~~NYSE~~“OTC”) ~~American’s~~under ~~listing requirements; if an issuer's common stock sells at what~~ the ~~NYSE~~same ~~American~~symbol ~~considers a~~ (“~~low selling price~~AMPE” ~~(generally trading below $0.20 per share for an extended period of time~~)~~; maintaining minimum stockholders’ equity at least $6~~.~~0 million; or if any other event occurs or any condition exists which makes continued listing on the NYSE American, in its opinion, inadvisable.~~

12If our common stock trades on the OTC market, an investor would find it more difficult to dispose of, or to obtain accurate quotations for the price of, our common stock for various reasons, including:

~~Table~~● ofa ~~Contents~~limited availability for market quotations for our common stock;

If● ~~the~~reduced ~~NYSE~~liquidity ~~American~~with ~~delists~~respect to our ~~securities,~~common westock ~~could~~or ~~face~~potentially ~~significant~~no ~~consequences,~~liquidity ~~including:~~with respect to our common stock;

● a limited availability for market quotations for our securities;

● reduced liquidity with respect to our securities;

●

a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in reduced trading;

● activity in the secondary trading market for our common stock; and

● ~~reduced~~limited ~~opportunities~~amount ~~for~~of ~~strategic~~news ~~alternatives;~~and other information.

~~● limited amount of news and analyst coverage; and~~

●Additionally, adelisting ~~decreased~~from ~~ability~~the toNYSE ~~issue~~American ~~additional~~will ~~securities~~likely affect the ability or ~~obtain~~willingness ~~additional~~of ~~financing~~certain counterparties to engage in ~~the~~certain ~~future~~transactions with us, such as a reverse merger or recapitalization.

While we continue to monitor our compliance with the NYSE American continued listing requirements, there can be no assurance that we will be able to continue to comply with the NYSE American listing requirements.

The market for the Company’s common stock may be thinly traded and stockholders may be unable to sell at or near ask prices or at all.

The Company’s common stock may be thinly traded on the NYSE American, meaning that the number of persons interested in purchasing the Company’s shares at or near ask prices at any given time may be relatively small or non-existent. Consequently, there may be periods of several days or more when trading activity in the Company’s shares is minimal or non-existent. The Company cannot assure investors that a broader or more active public trading market for the Company’s common stock will develop or be sustained or that current trading levels will be maintained.

Anti-takeover provisions in our charter and bylaws and in Delaware law could prevent or delay a change in control of Ampio.

Provisions of our certificate of incorporation and bylaws may discourage, delay, or prevent a merger or acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions include:

● requiring supermajority stockholder voting to effect certain amendments to our certificate of incorporation and bylaws;

● restricting the ability of stockholders to call special meetings of stockholders; and

● establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.

If securities or industry analysts do not publish research or reports or publish unfavorable research or reports about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us, our business, our market or our competitors. Coverage by securities and industry analysts and initiation of coverage in the future is uncertain at this time. If securities or industry analysts do not cover our company, the trading price for our stock could continue to be negatively impacted. Additionally, if any analyst downgrades our stock, our stock price would likely decline.Click or tap here to enter text.

Item 1B.

Unresolved Staff Comments.

None.

13Item 1C. Cybersecurity.

~~Table of Contents~~10

~~Item 2.Properties.~~Table of Contents

WeIn ~~maintain~~July ~~our headquarters~~2023, ~~research~~the ~~laboratories,~~SEC ~~and~~adopted ~~manufacturing~~rules ~~facilities~~requiring inregistrants ~~leased~~to ~~space~~disclose ~~located~~material incybersecurity ~~Englewood,~~incidents ~~Colorado,~~they ~~for monthly~~experience ~~minimum~~and ~~lease~~to ~~payments~~disclose ofon ~~approximately~~an ~~$30,000.~~annual ~~The~~basis ~~lease~~material ~~expires~~information inregarding ~~September 2024~~their cybersecurity risk management, strategy, and governance.

~~Effective~~Given ~~March~~our 1,current ~~2023,~~environment and structure of the Company, ~~entered~~we ~~into~~outsourced a ~~sublease~~majority ~~agreement~~of ~~with~~our ~~the~~information ~~consent~~technology offunctions ~~the~~in ~~Landlord~~2023, ~~pursuant~~including but not limited to ~~which~~hosting ~~the~~and ~~Company~~security ~~will~~access ~~sublease~~and ~~the~~cybersecurity ~~Premises~~generally, ~~for~~to athird-party ~~term~~service ~~commencing~~providers. We relied primarily on ~~March~~third 1parties to assess, ~~2023~~identify and ~~continuing~~manage ~~until~~material ~~the~~risks ~~expiration~~from ofcybersecurity ~~the~~threats. ~~Lease~~Our onagreements ~~September~~with ~~30,~~these ~~2024.~~third ~~However,~~parties ~~the~~obligated ~~address~~these ofparties ~~the~~to ~~Company’s~~provide ~~principal~~us ~~executive~~with ~~offices~~various ~~continues~~notifications toand bereports ~~373~~that ~~Inverness~~help ~~Parkway,~~our ~~Suite~~management ~~200,~~oversee ~~Englewood,~~and ~~Colorado~~identify ~~80112~~material risks from cybersecurity threats associated with our use of these third-party service providers.

Cybersecurity threats are just one of the many risks that we face. While we have not experienced a cyber-security incident, there is no assurance that we will not be impacted in the future. In 2023, risks from cybersecurity threats did not materially affect and were not reasonably likely to materially affect Ampio except to the extent that our management of risks from cybersecurity threats was reflected in our overall operations strategy in 2023. Like many of the specialized or highly technical functions within our company, we believe we obtained a greater depth of support and relevant expertise from third-party IT and cybersecurity resources at an overall lower cost profile than hiring our own employees.

Under the charter of our Audit Committee, the Audit Committee oversees management’s development and implementation of policies with respect to risk assessment and risk management, which includes risks associated with cybersecurity threats. In 2023, the Audit Committee also discussed with management the Company’s significant financial risk exposures and the actions management had taken to limit, monitor, control or mitigate such exposures. Our executive officers are responsible for managing risks from cybersecurity threats, which was primarily performed in 2023 by overseeing third parties involved in the management and monitoring of IT systems. Our executive officers also received reporting and information from third parties in 2023. Our management regularly reported to the Audit Committee on these risks. The Audit Committee also received reports from our legal counsel and internal auditors on cybersecurity matters. Currently, the Audit Committee also comprises the entire Board so we believe there is direct visibility by the Board to cybersecurity risk management.

Item 2.Properties.

We lease space located in Englewood, Colorado, for monthly minimum lease payments of approximately $30,000. The lease expires on September 30, 2024. Effective March 1, 2023, we entered into a sublease agreement with the consent of the landlord pursuant to which we sublease this Englewood, Colorado leased space for a term commencing on March 1, 2023 and continuing until the expiration of the lease on September 30, 2024.

Currently, we lease a flexible office space that serves as our principal executive offices. The address of the Company’s principal executive offices is 9800 Mount Pyramid Court, Suite 400, Englewood, Colorado 80112.

Item 3. Legal Proceedings.

From time to time, the Company may be a party to litigation arising in the ordinary course of business. InAs ~~addition, as~~ of December 31, ~~2022~~2023, Ampio was involved in the ~~following~~ material pending legal proceedings summarized in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 and, with respect to the pending securities fraud class action, Case Number 22-cv-2105-WJM-MEH, updated as follows:

~~Kain~~On v.November ~~Ampio~~17, ~~Pharmaceuticals~~2023, ~~Inc~~the parties (other than deceased defendant Macaluso) filed a Joint Stipulated Unopposed Motion to Extend Deadlines advising the Court that the parties had agreed to engage in a mediation to be conducted by January 5, 2024, and requesting that the Court vacate the time for all defendants to answer, move or otherwise respond to the Amended Complaint. The motion further requested that the parties be permitted to file a status report advising the Court within five (5) days of the mediation either being successful or being declared at impasse. On November 20, et2023, althe Court granted the motion. The mediation took place on January 4, ~~22-cv-2105~~2024.

OnSettlement August 17, 2022, a putative Ampio shareholder filed a securities fraud class action against the Company, its current CEO Michael A. Martino and two former executives, Michael Macaluso and Holli Cherevka, in ~~the~~Principle ~~United States District Court for the District~~ of ~~Colorado,~~Certain ~~captioned~~Legal Kain v. Ampio Pharmaceuticals, Inc., et al., 22-cv-2105. The Complaint alleges that Ampio and the individual defendants made various false and misleading statements regarding the efficacy, clinical trials and FDA communications relating to Ampio’s lead product, Ampion, and its treatment of severe osteoarthritis of the knee in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. The Complaint also asserts control person liability against the individual defendants under Section 20 of the Exchange Act. Proceedings

~~The~~On ~~Complaint~~January ~~relies largely on Ampio’s announcement on May 16~~11, ~~2022~~2024, ~~that~~we itannounced ~~had~~that ~~formed~~ a ~~special~~settlement ~~Board committee to investigate the statistical analysis of Ampio’s AP-013 clinical trial and the unauthorized provision of Ampion to various individuals who were not participating~~ in ~~clinical~~principle ~~trials, and Ampio’s further announcement on August 3, 2022, that the investigation~~ had ~~revealed~~been ~~that~~reached ~~various~~in ~~employees were aware that~~ the ~~AP-013~~pending ~~trial~~securities ~~did~~fraud ~~not~~class ~~demonstrate efficacy for Ampion’s primary endpoints and did not fully and timely report the results of the trial and the timing of unblinding data from the trial. Based on the Company’s reports~~action, ~~the~~Case ~~Complaint~~Number ~~asserts~~22-cv-2105-WJM-MEH ~~that various statements made by~~ (the ~~Company~~“Securities ~~during the~~ Class ~~Period were false and misleading because they: (i~~Action”), ~~inflated Ampio’s ability to successfully obtain FDA approval for Ampion; (ii) inflated the results of the AP-013 clinical trial~~ and ~~failed to disclose~~ the ~~timing~~pending ofconsolidated ~~unblinding~~derivative ~~the data from the study; and (iii) overstated the Company’s business, operations and prospects.~~

The Complaint seeks an unspecified amount of compensatory damages as well as attorneys’ fees and costs. On October 17, 2022, six putative shareholders filed motions seeking to be named lead plaintiff. On November 7, 2022, two of the movants filed oppositions to each other’s motions; the remaining movants either withdrew their motions or filed non-oppositions to another putative shareholder’s motion. The Court has not yet ruled on the competing motions for appointment of lead plaintiff. In the interim, the Court approved the parties’ joint motion to stay proceedings, and all deadlines are deferred until after a decision on the lead plaintiff motion(s).11

Ampio intends to defend itself vigorously against this action.

Maresca v. Martino, et al., 22-cv-2646-KLM

On October 7, 2022, putative Ampio shareholder Robert Maresca filed a Verified Shareholder Derivative Complaint in the United States District Court for the District of Colorado, captioned Maresca v. Martino, et al., 22-cv-2646-KLM. The derivative complaint, brought on behalf of the Company, asserts claims against a number of current and former executives and directors of the Company, namely Michael A. Martino, Michael Macaluso, Holli Cherevka, David Bar-Or, David Stevens, J. Kevin Buchi, Philip H. Coelho and Richard B. Giles.

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~~unblinding~~actions ofin ~~data from~~ the ~~AP-013~~United ~~study;”~~States ~~and~~District ~~“fail[ing]~~Court tofor ~~maintain internal controls.” The Complaint also asserts that~~ the ~~defendants~~District ~~failed to exercise due care and comply with the Company’s policies and procedures designed to ensure Board and Audit Committee oversight~~ of ~~the~~Colorado, ~~business~~Case ~~operations~~Number ~~and that ethical business practices were maintained. It also contends that two of the defendants (Cherevka and Coelho) sold Company stock while in possession of material non~~22-~~public~~cv-2803-KLM ~~information at artificially inflated prices in violation of~~ (the ~~Company’s~~“Consolidated ~~insider~~Derivative ~~trading restrictions~~Actions”). The Complaint asserts that the individuals should not have received compensation while violating their duties to the Company. The Complaint also alleges that the defendants caused the Company to repurchase its own stock at artificially inflated prices, causing damage to the Company itself.

The ~~Complaint~~settlements ~~asserts~~are ~~six~~subject ~~causes~~to ofvarious ~~action~~conditions, onincluding ~~behalf~~confirmatory ofdiscovery in the ~~Company~~Securities Class Action, negotiation and ~~against~~execution of the ~~individual~~full ~~defendants:~~settlement agreements and obtaining court approval in each action. ~~(1)~~On ~~violations~~January of9, ~~Section~~2024, ~~14(a)~~Ampio ofalong with the ~~Exchange~~other ~~Act~~parties ~~based~~to oneach ~~purportedly~~case ~~false~~filed status reports in both the Securities Class Action and ~~misleading~~the ~~statements~~Consolidated inDerivative Actions, advising the ~~Company’s~~respective ~~proxy~~courts ~~statements;~~of ~~(2)~~the ~~violations~~status of ~~Section~~the ~~10(b)~~settlements in principle. The settlement of the ~~Exchange~~Consolidated ~~Act~~Derivative ~~and~~Actions ~~Rule~~is ~~10b-5~~supported ~~promulgated~~by ~~thereunder;~~the ~~(3)~~plaintiff ~~control~~in ~~person~~the ~~liability~~pending ~~under~~Colorado ~~Section~~state ~~20(a)~~court derivative action, Case Number 2023CV30287, as well as two stockholders who previously submitted pre-litigation demand letters to the Company’s Board of Directors. Based on the ~~Exchange~~parties’ ~~Act;~~status ~~(4)~~report, ~~breach~~the ofCourt ~~fiduciary~~in ~~duty;~~the ~~(5)~~Consolidated ~~unjust~~Derivative ~~enrichment;~~Actions ~~and~~has ~~(6)~~ordered ~~waste~~the ofparties ~~corporate~~to ~~assets~~file either settlement documents or status reports every 30 days since. The ~~Complaint~~parties ~~seeks~~to anthe ~~unspecified~~Consolidated ~~amount~~Derivative ofActions ~~compensatory~~have ~~and~~filed ~~restitution~~further ~~damages~~status toreports bewith ~~paid~~the toCourt ~~Ampio,~~advising ~~together~~that ~~with~~the ~~pre-~~settlement ~~and~~documentation ~~post-judgment~~is ~~interest,~~still asbeing ~~well~~finalized. asThe ~~injunctive~~parties ~~relief~~to ~~imposing~~the ~~certain~~Consolidated ~~corporate~~Derivative ~~governance~~Actions ~~reforms~~are ~~and~~still ~~attorneys’~~negotiating ~~fees~~details ~~and~~of ~~costs.~~the settlement.

OnAmpio ~~November~~currently 2expects the amount to be paid in both settlements, ~~2022~~including related defense costs, ~~the~~will ~~Company~~be covered by, and ~~plaintiff~~within ~~(together~~the ~~with~~limits ~~plaintiff~~of, inits aD&O ~~second~~insurance ~~derivative~~policies. ~~action~~We --expect the ~~Marquis~~payment ~~action,~~is ~~discussed~~at ~~below)~~least ~~filed~~equal ato ~~joint~~the ~~motion~~amount tooffered ~~consolidate~~in the ~~two~~settlement ~~derivative~~in ~~actions~~principle, which totals approximately $3.0 million for the Securities Class Action and ~~appoint~~$0.5 million for the ~~lawyers~~Consolidated ~~representing~~Derivative Actions and will be paid by the ~~two~~insurance ~~plaintiffs~~carriers asdirectly ~~co-lead~~to ~~counsel~~the respective parties. ~~That~~ ~~same~~The ~~day~~settlements in principle do not constitute any admission of fault, wrongdoing or liability as to the Company or any other defendant. While the timing of completion of the settlement agreements and ~~plaintiff~~filing ~~filed~~motions ato ~~stipulation~~seek ~~providing~~court approvals are uncertain, the Company ~~additional~~will ~~time~~be endeavoring to ~~answer,~~finalize ~~move~~and orexecute ~~otherwise~~the ~~respond~~settlement agreements and have motions for preliminary approval submitted to the ~~Complaint~~relevant courts within 120 days from the parties advising the respective courts of the status of the settlement in principle. If finally approved by the relevant courts, the settlements will result in the dismissal with prejudice of all of the pending actions and the withdrawal of the two stockholder pre-litigation demands.

On January 10, 2023, after the Company received additional extensions of time to respond, the Court granted consolidation of the Maresca and Marquis actions but denied appointment of co-lead counsel for plaintiffs without prejudice. On January 11, 2023, Plaintiffs renewed their motion for appointment of co-lead counsel. On January 12, 2023, the Court granted the renewed motion and appointed co-lead counsel for plaintiffs.

On January 17, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the consolidated derivative actions, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On January 25, 2023, the Court granted the motion for temporary stay. Accordingly, all deadlines are deferred until the stay is terminated.

Ampio intends to defend itself vigorously against this action.

Marquis v. Martino, et al., 22-cv-2803-KLM

On October 25, 2022, putative shareholder Samantha Marquis filed a derivative complaint in the United States District Court for the District of Colorado, captioned Marquis v. Martino, et al., 22-cv-2803-KLM. The Complaint, filed on behalf of Ampio, asserts that various current and former officers and directors of Ampio – namely, Michael Martino, Michael Macaluso, Holli Cherevka, David Bar-Or, David Stevens, Kevin Buchi, Philip Coelho, and Richard Giles, breached their fiduciary duties as directors and/or officers and violated Section 14(a) of the Exchange Act by causing the Company to file false and misleading proxy statements. The Complaint focuses on the Company’s alleged failure to timely report that the results of the AP-013 trial for Ampion were unfavorable, failing to show efficacy on the co-primary endpoints of pain and function, and the Company’s alleged failure to disclose the results of and timing of unblinding the study data. The Complaint asserts that the individual defendants breached their fiduciary duties by making or causing the Company to make materially false and misleading statements regarding Ampio’s business, operations and prospects and by failing to maintain adequate internal controls. Based on these allegations, the Complaint asserts two causes of action on behalf of the Company: (1) violations of Section 14(a) of the Exchange Act against all defendants other than Cherevka; and (2) breach of fiduciary duty against all defendants. Based on these claims, the Complaint seeks judgment in favor of the Company and against the individual defendants in an unspecified amount of compensatory and restitution damages, together with pre- and post-judgment interest and costs of the action including reasonable attorneys’ and experts’ fees as well as a mandatory injunction requiring Ampio and the defendants to reform and improve the corporate governance and internal controls of the Company.

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On November 2, 2022, the Company and plaintiff (together with plaintiff in the previously filed Maresca action, discussed above) filed a joint motion to consolidate the two derivative actions and appoint the lawyers representing the two plaintiffs as co-lead counsel.

On January 10, 2023, the Court granted consolidation of the Maresca and Marquis actions but denied appointment of co-lead counsel for plaintiffs without prejudice. On January 11, 2023, Plaintiffs renewed their motion for appointment of co-lead counsel. On January 12, 2023, the Court granted the renewed motion and appointed co-lead counsel for plaintiffs.

Ampio intends to defend itself vigorously against this action.

McCann v. Martino, et al., 2023cv30287

On January 27, 2023, putative shareholder John McCann filed a derivative complaint in the District Court, City & County of Denver, State of Colorado, captioned McCann v. Martino, et al., 2023cv30287. The Complaint, filed on behalf of Ampio, asserts that various current and former officers and directors of Ampio – namely, Michael Martino, J. Kevin Buchi, David Stevens, Elizabeth Jobes, Holli Cherevka, David Bar-Or, Philip H. Coelho, and Richard B. Giles, breached their fiduciary duties as directors and/or officers by allowing the Company to issue false and misleading statements, The Complaint focuses on the Company’s alleged failure to timely report that the results of the AP-013 trial for Ampion were unfavorable, failing to show efficacy on the co-primary endpoints of pain and function, and the Company’s alleged failure to disclose the results of and timing of unblinding the study data. The Complaint asserts that the individual defendants breached their fiduciary duties by allowing the Company to make materially false and misleading statements regarding Ampio’s business, operations and prospects and by failing to maintain adequate internal controls. Based on these allegations, the Complaint asserts five causes of action on behalf of the Company: (1) breach of fiduciary duty against the current directors; (2) gross mismanagement against the current directors; (3) waste of corporate assets against the current directors; (4) unjust enrichment against all defendants; and (5) breach of fiduciary duty by insider trading against defendants Cherevka and Coelho. Based on these claims, the Complaint seeks judgment in favor of the Company and against the individual defendants in an unspecified amount of compensatory damages, costs of the action including reasonable attorneys’ and experts’ fees as well as a mandatory injunction requiring Ampio to reform and improve the corporate governance and internal procedures of the Company.

Defendant Cherevka was served and by order dated February 9, 2023, obtained an extension of time to respond to the Complaint through March 31, 2023. On March 2, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the action, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On March 3, 2023, the Court granted the motion for temporary stay. Accordingly, all deadlines are deferred until the stay is terminated.

Ampio intends to defend itself vigorously against this action.

SEC Investigation

OnThe ~~October~~settlements ~~12,~~in ~~2022,~~principle ~~the~~do ~~Securities~~not ~~and~~affect ~~Exchange~~the ~~Commission,~~ongoing orinvestigation ~~SEC,~~by ~~entered~~the anSecurities ~~order directing private investigation~~ and ~~designating~~Exchange ~~officers~~Commission, towhich ~~take~~also ~~testimony~~was topreviously ~~determine~~reported ~~whether~~by weAmpio ~~or any other entities or persons have engaged~~ in, orits ~~are~~Quarterly ~~about~~Report toon ~~engage~~Form ~~in,~~10-Q ~~any~~for ~~violations of~~ the ~~securities~~quarter ~~laws.~~ended ~~The~~September ~~SEC has since issued subpoenas to the Company and numerous current and former officers~~30, ~~directors, employees and consultants of the Company~~2023. Ampio Weintends ~~intend~~to continue to cooperate fully with the SEC.

Item 4.Mine Safety Disclosures.

Not applicable.

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PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock currently trades on the NYSE American under the ticker symbol “AMPE.” As described above, the Board of Directors determined to pursue voluntary delisting of Ampio’s common stock from the NYSE American. After delisting, the Company expects to suspend the Company’s reporting obligations under Sections 13 and 15(d) of the Exchange Act and deregister the Common Stock under Section 12(b) of the Exchange Act.

Holders of Common Stock

As of ~~March~~the ~~22,~~first ~~2023,~~day ~~there~~of ~~were~~Ampio’s ~~approximately~~fiscal ~~191~~year ~~registered~~2024 ~~holders~~(January of1, ~~our~~2024), ~~common~~Ampio ~~stock.~~had A96 ~~substantially~~holders ~~greater number~~ of ~~holders~~record of ~~our~~its common stock. ~~are~~As ~~“street~~of ~~name”~~March or15, ~~beneficial holders~~2024, ~~whose~~there ~~shares~~were ~~are~~96 ~~held~~holders of record byof ~~banks,~~its ~~brokers,~~common ~~and other financial institutions~~stock.

Dividend Policy

We have never paid cash dividends and have no plans to pay cash dividends in the near future. We intend to utilize all current and future available sources of liquidity to develop and commercialize AR-300. If we issue any preferred stock and/or obtain financing from a bank in the future, the terms of those financings may contain restrictions on our ability to pay dividends in the near or long term.

Equity Compensation Plan Information

Information regarding our equity compensation plans is incorporated by reference from Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

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Item 6.[Reserved]

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financings, includes forward-looking statements that involve risks and uncertainties. You should read the “Risk Factors” section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Critical Accounting Policies, Estimates and Judgments

Our financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses incurred during the reporting period. On an on-going basis, management evaluates its estimates and judgments. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable and appropriate under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The methods, estimates, and judgments used by us in applying these critical accounting policies have a significant impact on the results we report in our financial statements. Additional information regarding our critical accounting policies and estimates is contained in Notes 2, 6, 8 and 10 to the Financial Statements. We consider the following accounting ~~policies~~estimates to be those that are most important to the portrayal of our financial condition and that require a higher degree of judgment.

17Insurance Recovery Receivable

~~Table~~We reached the retention limit of ~~Contents~~$2.5 million under our D&O insurance policy during the second quarter of 2023 related to the SEC investigation and class action and derivative lawsuits, which were initiated during the second half of 2022 and continued through the 2023 period. As such, we estimate the percentage of legal invoices that will be reimbursed by the insurance carrier to determine the proper amount to record for the insurance recovery receivable, which offsets the legal fees incurred. The insurance recovery receivable estimate is based off previous insurance reimbursement. During the 2023 period, the average insurance recovery of legal fees was approximately 98% of legal fees incurred. Although we do not expect our estimates to be materially different from the amounts actually received, our understanding of the insurance carriers review and reimbursement process may vary and may result in the reporting of amounts that are too high or too low for any particular period. To date, there have not been any material adjustments to our prior estimates of the insurance recovery receivable.

Clinical Trial Accrual

As part of the process of preparing our financial statements, we are required to estimate our expenses resulting from our obligations under contracts with various vendors, which primarily include clinical and pre-clinical research organizations, consultants and clinical site/investigatory agreements in connection with our active and ongoing clinical trials over the reporting period. The financial terms of these contracts are subject to negotiations, subsequent amendment(s) as a result of change in scope of work and often results in payments that do not match the periods over which materials and/or services are provided under such contracts. Our key objective is to reflect the appropriate trial expenses in the financial statements by matching those expenses with the period in which services are performed, materials are received and efforts are expended. We account for these expenses according to the progress of the trials as measured by subject enrollment and progression/timing of various aspects of the trials. We determine accrual estimates by taking into account discussions with applicable personnel and outside service providers as to the progress or state of the trials, or the services completed. During the course of a clinical trial, we adjust the clinical expense recognition if actual results differ from estimates. We make estimates of our accrued expenses as of each balance sheet date based on the facts and circumstances known to us at that time. Our clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the reporting of amounts that are too high or too low for any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. As of December 31, 2022 all of the clinical trials related to Ampion have been completed and, as such, we do not expect to incur any significant future costs related to these trials.

Share-Based Compensation

We account for share-based payments by recognizing compensation expense based upon the estimated fair value of the share-based payments on the date of grant. We determine the estimated fair value of the share-based payments granted using the fair market value of the stock in the case of restricted stock awards or Black-Scholes option pricing model in the case of stock options and recognize compensation costs ratably over the requisite service period which approximates the vesting period using the graded method. To calculate the fair value of the options, certain assumptions are made regarding components of the model, including the fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to the valuation. We calculate our volatility assumptions using the actual changes in the market value of our stock. Forfeitures are recognized as they occur. Our historical option exercises do not provide a reasonable basis to estimate an expected term due to the lack of sufficient data. Therefore, we estimate the expected term by using the simplified method. The simplified method calculates the expected term as the average of the vesting term plus the contractual life of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The assumptions used in determining the fair value of share-based awards represent our best estimates, but the estimates involve inherent uncertainties and the application of our judgment. As a result, if factors change and we use significantly different assumptions or estimates, our share-based compensation expense could be materially different in the future.

Impairment of Long-Lived Assets

Fixed assets are amortized or depreciated over their estimated useful life on a straight-line basis. We monitor conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization or depreciation period. Management performs an annual evaluation of the recoverability of the carrying value of its long-lived assets or whenever our management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. When we determine that the useful lives of assets are shorter than we had originally estimated, we accelerate the rate of depreciation over the assets’ new, shorter useful lives. During the year ended December 31, 2022, management determined that there were impairment indicators; the fair value of the long-lived assets were determined based on Level 3 fair value measurements and resulted in an impairment loss of $1.6 million.

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Derivative Warrant Liabilities

Warrants issued pursuant to equity offerings that are potentially exercisable resulting in a variable number of shares being issued are considered derivative liabilities and therefore are measured at fair value. The Company uses the Black-Scholes pricing model to estimate fair value at each exercise and period end date. The key assumptions used in the model are the expected future volatility in the price of the Company’s shares and the expected life of the warrants. The impact of changes in key assumptions is described in Note 8.

Recent Accounting Pronouncements

Information regarding recently issued and relevant accounting standards (adopted and not adopted as of December 31, ~~2022~~2023) is contained in Note 2 to the Financial Statements.

Results of Operations—Year Ended December 31, ~~2022~~2023 Compared to December 31, ~~2021~~2022

We recognized a net loss for the year ended December 31, ~~2022~~2023 (the “~~2022~~2023 period”) of $168.36 million compared to the net loss recognized of $1716.13 million for the year ended December 31, ~~2021~~2022 (the “~~2021~~2022 period”). The net loss during the ~~2022~~2023 period was primarily attributable to operating expenses of $229.36 million,; ~~that~~partially ~~included~~offset aby ~~$1.9~~interest ~~million~~income ~~impairment~~and ~~loss~~rental ~~related~~income toof ~~long-lived~~$0.3 million and ~~ROU~~$0.3 ~~assets;~~million, ~~partially~~respectively, ~~offset~~in byaddition ~~the~~to a non-cash ~~derivative~~ gain ~~and~~from ~~interest~~the ~~income~~elimination of ~~$5.8~~an ~~million~~asset ~~and~~retirement obligation (“ARO”) of $0.23 million~~, respectively~~. The net loss during ~~fiscal~~the ~~2021~~2022 period was primarily attributable to operating expenses of $2022.63 million, which included a $1.9 million impairment loss related to long-lived and ROU assets; partially offset by the non-cash derivative gain and interest income of $3.5.8 million and $0.2 million, respectively. Operating expenses ~~increased~~decreased $112.7 million, or 957%, from the ~~2021~~2022 period to the ~~2022~~2023 period primarily due to a (i) $26.85 million, or 3273%, ~~increase~~decrease in ~~general~~research and ~~administrative~~development costs, (ii) ~~recognition of~~ $14.94 million, ~~impairment~~or ~~loss~~38%, ~~associated~~decrease ~~with the Company’s long-lived and ROU assets; partially offset by (iii) a $3.0 million reduction~~ in ~~research~~general and ~~development costs.~~

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administrative costs, (iii) and no recognition of impairment loss associated with the Company’s long-lived and ROU assets, which totaled $1.9 million during the 2022 period.

Research and Development

Research and development costs decreased by approximately $36.05 million, or 2573%, for the ~~2022~~2023 period compared to the ~~2021~~2022 period. ~~Categories~~Research ~~of research~~ and development costs ~~are~~with ~~summarized~~variances asabove ~~follows~~$175,000 and ~~exclude~~10% anare ~~allocation~~further ofexplained ~~general and administrative expenses:~~below.


	~~Year~~Years Ended December 31,
	~~2022~~2023		~~2021~~2022
Clinical trial and sponsored research expenses	$	2,991,000	$	5,787,000
Professional fees	$	816,000	$	780,000
Salaries and benefits		2,755,000		2,981,000
Operations/manufacturing		804,000		308,000
Depreciation		1,031,000		1,070,000
Laboratory		380,000		890,000
Laboratory		890,000		779,000
Salaries and benefits		332,000		2,755,000
Professional fees		780,000		335,000
Depreciation		123,000		1,031,000
Operations/manufacturing		308,000		816,000
Clinical trial and sponsored research expenses		7,000		2,991,000
Share-based compensation		139,000		46,000
Other		2,000		22,000
Other		22,000		86,000
Share-based compensation		(25,000)		139,000
Total research and development	$	82,~~916~~439,000	$	118,~~900~~916,000

Clinical trial and sponsored research expenses

The clinical trial and sponsored research expenses decreased by approximately $2.8 million or 48%, primarily due to a decrease in certain Ampion clinical trial costs (i.e., AP-017, AP-018 and AP-019) totaling $1.7 million. These studies commenced in late 2020 through the first half of 2021 but were substantially completed from a patient enrollment perspective in early 2022. In addition, clinical trial costs related to Ampion clinical trial AP-013 decreased $1.1 million as the study was completed with an analysis of the results filed with the FDA in late first quarter 2022 with modest costs related to final close-out of the study throughout the remainder of the 2022 period. All clinical trials were completed in 2022.

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Salaries and benefits

Salaries and benefits expenses decreased $0.2 million, or 8%, for the 2022 period compared with the 2021 period primarily due to the reduction in force (“RIF”) communicated in August 2022 which resulted in a reduction of 11 full-time equivalents (“FTEs”) with 9 FTEs separated in August 2022 and 2 FTEs in January 2023. As a result of the RIF and the termination of two executive officers, 2022 had a weighted average 11 FTEs which was 27% lower than a weighted average 15 FTEs for 2021. The reduction of salary and benefits cost for 2022 resulting from lower average FTEs and the lack of incentive compensation accrued in 2022 was partially offset by severance and related benefits related to the RIF totaling approximately $0.7 million. Accordingly, we have implemented a hybrid organizational model whereby we retain the organizational competencies to govern and comply with the public reporting requirements and select and manage specific third-party independent contractors with proven industry expertise in formulation development, preclinical development, GMP manufacturing, clinical development, regulatory and legal on an as needed basis. We believe this model will position us best to develop AR-300 in the most expeditious and cost-effective manner, and effectively control the fixed costs associated with building an all-employee organization.

Professional Fees

Professional fees expense increased $~~0.4 million~~36,000, or ~~133~~5%, ~~for~~from ~~the~~ 2022 ~~period~~to ~~compared~~2023. ~~with~~The ~~the~~increase ~~2021~~is ~~period~~attributable asprimarily ato ~~result~~costs ofwe ~~the~~incurred ~~engagement~~during ofthe ~~Chief~~2023 ~~Medical~~period ~~Officer,~~related ~~serving~~to incontractor ~~the~~fees ~~capacity~~for asdrug adevelopment ~~consultant~~and ~~which~~related ~~commenced~~advisory inservices for the ~~fourth~~OA-201 ~~quarter~~development ~~2021~~program ~~and~~as ~~continued~~part ~~throughout~~of ~~the~~our ~~2022~~human ~~period.~~capital Inresources ~~addition,~~strategy; wepartially ~~incurred~~offset ~~incremental~~by costs inincurred ~~the~~related ~~2022~~to ~~period~~a ~~associated~~contracted ~~with~~Chief ~~additional~~Medical ~~third-party~~Officer ~~biostatisticians~~services ~~and~~required ~~other~~during ~~consultants~~the in2022 ~~connection~~period, to assist with ~~finalizing~~the ~~and~~final ~~closing~~closeout ~~out~~of the ~~prior~~ Ampion clinical ~~studies (i~~trials.~~e.,~~ ~~AP-013, AP-017, AP-018 and AP-019).~~

Operations/Manufacturing

Operations/manufacturing ~~expense~~expenses ~~decreased~~increased by $0.5 million, or 62161%, from 2022 to 2023 as ~~all~~a ~~studies~~result ~~were~~of ~~completed~~the CDMO agreement, which was executed during the ~~2022~~third ~~period~~quarter of 2023 and, asthe ~~such,~~completion of the ~~purchase~~OA-201 development milestones through the end of ~~supplies~~the to2023 ~~manufacture~~period. ~~clinical~~This ~~trial~~increase ~~product~~is ~~was~~partially ~~not~~offset ~~necessary~~by the shut-down and discontinued use/support of the cleanroom and overall manufacturing facility which completed in the second half 2022.

Laboratory

Laboratory operations/manufacturing expenses decreased $0.5 million, or 57%, from 2022 to 2023 as a result of the shift to outsourced non-clinical lab work related to the continued development of OA-201, which commenced during the first quarter of 2023. During the 2022 period we conducted laboratory operations to support the AP-017 and AP-019 clinical trials, combined with outsourced services to support the development of AR-300. This decrease is partially offset by the non-clinical trials conducted with research institutions for the OA-201 program during the fourth quarter of 2023, which is included in the Professional Fees line item above. In February and March 2024, we terminated agreements with research institutions relating to the non-clinical studies.

Salaries and benefits

Salaries and benefits expenses decreased $2.4 million, or 88%, from 2022 to 2023 as a result of the reduction in force (“RIF”) which was implemented in third quarter 2022 and completed in early first quarter 2023, which resulted in a 78% reduction of our workforce and the termination of a certain officer.

Depreciation

Depreciation expense decreased by $0.9 million, or 88%, from 2022 to 2023 as a result of (i) the initial impairment of our long-lived assets in third quarter 2022, with a final adjustment in March 2023, as a result of the sublease of the Ampio’s premises and (ii) a sale of all existing personal property to the subtenant in conjunction with the provisions of the sublease agreement.

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Clinical trial and sponsored research expenses

The clinical trial and sponsored research expenses decreased by approximately $3.0 million, or 100%, from 2022 to 2023 primarily due to the close-out efforts relating to the AP-017 and AP-019 studies reflecting costs totaling $2.3 million during the 2022 period. In addition, we incurred $0.7 million during the 2022 period related to the final close-out of the AP-013 clinical trial. The Company was not engaged in any clinical trials during the 2023 period.

General and Administrative

General and administrative expenses ~~increased~~decreased $24.84 million, or 3238%, for the ~~2022~~2023 period compared to the ~~2021~~2022 period. ~~Categories~~General ~~of general~~ and administrative ~~expenses~~costs with variances above $175,000 and 10% are ~~summarized~~further asexplained ~~follows:~~below.


	Year Ended December 31,
	~~2022~~2023		~~2021~~2022
Professional fees	$	64,~~896~~183,000	$	26,~~517~~896,000
Salaries and benefits		1,~~485~~110,000		1,~~141~~485,000
Insurance		1964,~~124,~~000		1,~~186~~124,000
Share-based compensation		814,000		2,758,000
Director fees		230,000		312,000
Facilities		538,000		512,000
Other		214,000		297,000
Director fees		312,000		350,000
Facilities		194,000		538,000
Other		297,000		207,000
Share-based compensation		184,000		814,000
Total general and administrative	$	117,~~466~~079,000	$	811,~~671~~466,000

Professional fees

Professional fees ~~increased~~decreased $42.47 million, or ~~174~~39%, ~~for~~from ~~the~~ 2022 ~~period compared~~ to ~~the~~2023 ~~2021 period~~ due primarily to ~~legal~~the ~~costs~~SEC ~~incurred~~investigation ~~related~~and toclass ~~investigations~~action ~~coordinated~~ and ~~conducted~~derivative bylawsuits ~~the~~that ~~independent~~were ~~special~~initiated ~~committee~~in ofsecond ~~the~~half ~~Ampio Board~~ of ~~Directors~~2022 ~~(the~~and ~~“Special~~continued ~~Committee”)~~through ~~and~~the ~~which~~2023 ~~focused~~period. ~~primarily~~The onretention ~~(i)~~limit ~~the~~of ~~statistical~~$2.5 ~~analysis~~million ofunder ~~Ampio~~the Company’s ~~AP-013~~D&O ~~clinical~~insurance ~~trial~~policy ~~and~~was ~~(ii)~~reached during the ~~unauthorized~~second ~~provision~~quarter of ~~Ampion~~2023. InAs ~~addition~~such, the ~~increase is also attributable to incremental~~ legal defense costs ~~associated~~for ~~with~~the an2023 ~~SEC~~period ~~investigation~~representing ~~and~~covered ~~class~~claims ~~action~~as /further ~~derivative~~defined ~~lawsuits~~under ~~initiated in~~ the ~~second~~provisions ~~half~~ of ~~2022.~~the ~~Legal~~D&O ~~costs~~policy, ~~will~~were ~~continue~~offset ~~to be incurred~~ by ~~the~~an ~~Company~~insurance torecovery ~~defend~~totaling ~~itself~~$3.3 ~~vigorously against these actions~~million. Professional ~~Finally,~~fees ~~we incurred an increase~~ in ~~costs associated with~~ the ~~evaluation~~2022 ~~and~~period ~~assessment~~primarily ofrelated ~~strategic~~to ~~opportunities~~investigations ~~and~~conducted ~~outsourced~~by ~~accounting,~~the ~~market~~independent ~~research~~special ~~studies~~committee ~~and~~of ~~public~~our ~~and~~Board ~~investor~~of ~~relation~~Directors. ~~services~~In ~~which~~addition, ~~were~~consulting ~~focused~~expenses ~~primarily~~decreased onapproximately a$1.1 ~~special~~million, ~~stockholders~~as ~~meeting~~we ~~and~~discontinued ~~the~~certain ~~approval~~contracts ofassociated ~~the~~with ~~reverse~~analyzing ~~stock~~potential ~~split~~strategic ~~effected on November 9, 2022~~alternatives.

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Salaries and benefits

Salaries and benefit expense ~~increased~~decreased $0.34 million, or 3025%, ~~for~~from ~~the~~ 2022 ~~period~~to ~~compared~~2023 ~~with the 2021 period~~ as a result of ~~market-based compensation adjustments for the Chief Executive Officer and Chief Financial Officer effective in October 2021 which was partially offset by a~~ lower weighted average incremental headcount during the ~~2022~~2023 period ~~due~~resulting ~~primarily~~from to the termination of ~~the~~a ~~employment~~former ofofficer ~~one~~and ~~executive~~the ~~officer~~RIF which was initiated in ~~May~~third quarter 2022.

Facilities

Facilities expense decreased $0.3 million, or 64%, from 2022 to 2023 as a result of the execution of the sublease agreement in March 2023, which resulted in the transfer of all utilities and operating costs of the premises to the subtenant and the full write-off of the ROU asset and future amortization (rent expense).

Share-based Compensation

Share-based compensation expense decreased $10.96 million, or 7177%, ~~primarily~~from ~~due~~2022 to ~~stock~~2023 ~~option~~as ~~and~~a ~~restricted~~result ~~stock~~of ~~award adjustments related to~~ forfeitures and cancellations of unvested stock options ~~/ restricted stock awards resulting~~ from ~~the~~ employee terminations /and board resignations ~~during~~in ~~the~~ 2022 ~~period and whereby the expense was previously recognized~~.

Impairment of Long-lived Fixed and ROU Assets

In accordance with ASC Topic 360, Property, Plant and Equipment, the Company assesses all of its long-lived assets for impairment when impairment indicators are identified. Based on the assessment performed on September 30, 2022, the Company recorded a non-cash impairment related to its long-lived assets which was triggered by the Company’s announcement during the third quarter reporting period that it was discontinuing further development of its lead development asset, Ampion. Since the carrying value of the long-lived assets exceeded its undiscounted cash flows, an impairment loss, calculated as the difference between carrying value and fair value, was necessary. Accordingly, the Company recorded a $1.6 million impairment loss for the year ended December 31, 2022 through a direct reduction to the cost basis of the affected assets in its balance sheet.

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announcement during the third quarter reporting period that it was discontinuing further development of its lead development asset, Ampion. Since the carrying value of the long-lived assets exceeded its undiscounted cash flows, an impairment loss, calculated as the difference between carrying value and fair value, was necessary. Accordingly, the Company recorded a $1.6 million impairment loss for the year ended December 31, 2022 through a direct reduction to the cost basis of the affected assets in its balance sheet.

In addition, the Company performed an assessment of potential impairment of the ROU asset consistent with the approach applied to other long-lived assets. ROU assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Accordingly, the Company recorded a $0.3 million impairment loss on the ROU asset for the year ended December 31, 2022.

There were no impairment charges for the year ended December 31, ~~2021~~2023.

Other Income

Other income is summarized as follows:


	Year Ended December 31,
	2023		2022
Interest income	$	348,000	$	220,000
Rental income		305,000		—
Gain from elimination of ARO obligation, net		289,000		—
Derivative gain		—		5,761,000
Total other income	$	942,000	$	5,981,000

Other income

We recognized interest income of $0.3 million during the 2023 period, which increased $0.1 million from the 2022 period. The increase is attributable to an increase in interest rates since the third quarter of 2022, partially offset by the decrease in cash and cash equivalents. We also recognized a non-cash gain of $0.3 million related to the elimination of its ARO and derecognition of the ARO asset in conjunction with the sublease agreement entered into on March 1, 2023. In addition, we also recognized $0.3 million of rental income associated with the sublease agreement during the 2023 period. There was no derivative gain on the fair value of warrant liability during the 2023 period due to the adoption of ASU 2020-06 which converted the warrant liability to stockholder’s equity effective January 1, 2023.

Cash Flows

Cash flows for the respective periods are as follows:


	Year Ended December 31,
	~~2022~~2023		~~2021~~2022
Net cash used in operating activities	$	(218,~~128~~564,000)	$	(1421,~~089~~128,000)
Net cash used in investing activities		—		~~(97,000)~~—
Net cash (used in) provided by financing activities		(111,000)		30,732,000
Net cash used in financing activities		—		(111,000)
Net change in cash and cash equivalents	$	(218,~~239~~564,000)	$	16(21,~~546~~239,000)

Net Cash Used in Operating Activities

During the ~~2022~~2023 period, our operating activities used approximately $218.16 million in cash and cash equivalents, which ~~was~~is ~~more~~consistent ~~than~~with our reported net loss of $~~16.3 million. The difference of approximately $4.~~8 ~~million is attributable to a non-cash adjustment of $5~~.86 million ~~related to the warrant derivative gain and a decrease in accounts payable and accrued expenses of $4~~.0 million, partially offset by non-cash charges related to impairment loss, depreciation, accretion, amortization and stock-based compensation totaling $3.9 million and decreases in prepaid expenses and other of $1.1 million.

During the ~~2021~~2022 period, our operating activities used approximately $1421.1 million in cash and cash equivalents, which was ~~less~~more than our reported net loss of $1716.13 million. The difference of approximately $4.8 million is ~~primarily~~attributable to a ~~result~~non-cash adjustment of ~~periodic~~$5.8 million related to the warrant derivative gain and a decrease in accounts payable and accrued expenses of $4.0 million, partially offset by non-cash charges related to impairment loss, depreciation, accretion,

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~~related to depreciation and~~ amortization and ~~share~~stock-based compensation totaling $3.9 million and andecreases ~~increase~~ in ~~working~~prepaid ~~capital~~expenses ofand ~~$2.6~~other ~~million;~~of ~~partially offset by the non-cash adjustment for the warrant derivative gain totaling~~ $31.~~5 million.~~1

million.

Net Cash Used in Investing Activities

During the 2023 period and the 2022 period, there was no change in cash related to investing activities. ~~During the 2021 period, $97,000 in cash and cash equivalents was used to acquire manufacturing machinery and equipment.~~

Net Cash Used in (Provided by) Financing Activities

During the ~~2022~~2023 period, we ~~settled~~generated agross ~~tax~~proceeds ~~liability~~ of $~~79,000~~0.1 ~~related~~million tofrom the ~~vesting~~sale of ~~restricted~~28,826 ~~stock~~shares ~~awards. As a result~~ of ~~the settlement, the Company withheld 9,234~~ common ~~shares~~stock ~~for~~from ~~taxes which represented~~ the ~~fair~~ATM ~~value of the tax settlement. In addition~~Agreement, ~~the~~which ~~Company~~was ~~paid~~offset ~~$32,000~~by in offering ~~costs~~ related tocosts ~~the~~of ~~registered~~$0.1 ~~direct offering which was finalized in December 2021~~million.

During the ~~2021~~2022 period, we ~~received~~settled ~~gross~~a ~~proceeds~~tax liability of $~~22.5 million in connection with a registered direct offering~~79,000 ~~which~~related ~~was~~to ~~partially~~the ~~offset~~vesting byof ~~offering-related~~restricted ~~costs~~stock ~~of $1~~awards.8 ~~million.~~As Wea ~~also~~result ~~received~~of ~~approximately~~the ~~$10.5~~settlement, ~~million from~~ the ~~sale~~Company ofwithheld ~~approximately~~9,234 ~~0.4~~common ~~million~~ shares offor ~~common~~taxes ~~stock~~which ~~pursuant~~represented to the ~~ATM~~fair ~~equity~~value ~~offering~~of ~~program,~~the ~~which~~tax ~~was partially offset by offering-related costs of $0~~settlement.5 ~~million.~~ In addition, wethe ~~received~~Company ~~proceeds~~paid of $~~0.2~~32,000 ~~million~~in ~~from~~offering ~~investor~~costs ~~warrant~~in ~~exercises~~2022 ~~and~~related ~~stock~~to ~~option~~the ~~exercises~~registered direct offering, which was ~~offset~~finalized ~~by the shares held back~~ in ~~the~~December ~~settlement of tax obligations related to the restricted stock awards totaling $0~~2021.2 ~~million.~~

Contractual Obligations and Commitments

Our contractual obligations as of December 31, ~~2022~~2023 primarily consist of employment agreements, CDMO agreement, non-clinical agreements with laboratories, and a non-cancellable operating lease arrangement for our office and manufacturing facility. As of December 31, ~~2022~~2023, the value of our ~~obligations~~obligation under ~~the~~our non-cancellable operating lease arrangement was $~~614,000~~0.3 million. For a more detailed description of our contractual obligations see Note 6 to the Financial Statements.

Liquidity and Capital Resources

Since inception, we have not generated operating revenue, profits or operating cash flow. Over this period, we have continued to be focused on research and ~~pre~~non-clinical / clinical development, all of which has required raising a substantial amount of capital. We have completed the clinical trial reports for all legacy Ampion trials and have concluded any further development efforts on Ampion. We have shifted nearly all of our focus towards the preclinical development of AR-300 and we are currently conducting studies to evaluate the efficacy of AR-300 in osteoarthritis-related pain.

~~The~~As ~~Company’s~~of ~~sources~~December of31, ~~liquidity~~2023, ~~are~~we ~~its~~had $4.1 million of cash and cash equivalents, ~~which~~and ~~were~~an insurance recovery receivable of $~~12,653,000~~0.9 onmillion. ~~December~~As 31of February 29, ~~2022~~2024, we had $3.4 Wemillion ~~expect~~in tocash ~~use~~and cash inequivalents ~~operations~~and ~~for~~$0.5 ~~the~~million of an insurance recovery receivable. While we continued ~~development~~to ofimplement ~~AR-300,~~cost asreductions ~~well~~in as2023 ~~opportunistically~~and ~~identifying~~additional cost reductions in February and ~~evaluating~~March ~~strategic~~2024, ~~opportunities~~we ashave ~~part~~finite ofcash ~~the~~resources ~~strategic~~available ~~alternatives~~to ~~process~~fund our now limited operations. ~~Based~~Our onactivities ~~our~~currently ~~current~~consist ~~projection~~of wetaking ~~expect~~steps ~~our~~to preserve cash ~~balance~~to atadequately ~~December~~fund ~~31,~~an ~~2022~~orderly towind ~~support~~down ~~existing~~of ~~business~~the Company’s operations ~~through~~and to maximize the ~~fourth~~Company’s ~~quarter~~cash position and pursuit of ~~2023~~the resolution of currently pending legal proceedings. ~~These~~Consistent ~~projections~~with ~~are~~this ~~based~~goal, on ~~assumptions~~March ~~that~~25, ~~may~~2024, ~~prove~~the Board of Directors determined to bepursue ~~incorrect.~~voluntary Asdelisting ~~such~~of Ampio’s common stock from the NYSE American. After delisting, itthe isCompany ~~possible~~expects ~~that~~to wesuspend ~~could~~its ~~exhaust~~reporting ~~our~~obligations ~~available~~under ~~cash~~the Exchange Act and ~~cash~~deregister ~~equivalents~~its ~~earlier~~common ~~than~~stock ~~presently~~under ~~anticipated~~Section 12(b) of the Exchange Act.

IfOur welack ~~determine to move forward with the clinical development~~ of ~~AR-300,~~operating werevenue ~~believe~~or ~~the~~cash ~~development~~inflows and ~~regulatory~~our ~~process~~cash ~~could~~resources ~~comprise~~at ~~five-to-seven~~December ~~years~~31, ~~and~~2023 ~~require~~raise ansubstantial ~~incremental~~doubt ~~investment~~as ~~over and above Ampio’s general operating expense during that period. We intend~~ to ~~fund future AR-300 clinical development expense through an offering of~~ our ~~equity~~ability ~~securities. We may also seek~~ to ~~raise~~continue ~~equity~~as ~~capital~~a ingoing ~~order~~concern. toThe ~~attempt~~financial tostatements ~~cure~~as ~~non-compliance with the minimum stockholders’ equity requirement~~ of ~~the NYSE American. Such additional liquidity is subject to market conditions~~ and ~~other~~for ~~factors, including limitations that may apply to~~ the ~~Company~~year ~~under~~ended ~~applicable~~December ~~SEC~~31, ~~and~~2023 ~~NYSE~~do ~~American~~not ~~regulations~~include ~~and~~any ~~challenges~~adjustments ~~associated with raising sufficient capital~~ to ~~meet~~reflect the ~~Company’s~~future ~~financing~~effects ~~needs~~on ~~in light of~~ the ~~Company’s~~recoverability ~~current stock price~~ and ~~related~~classification ~~constraints.~~of ~~Should~~assets weor ~~require~~the ~~additional~~amounts ~~financing,~~and ~~financing~~classifications ~~may~~of ~~not~~liabilities bethat ~~available~~will inlikely ~~the~~result ~~amount~~when ~~or at~~ the ~~time~~Company weis ~~need~~unable itto ~~and/or~~continue ~~may~~as ~~not~~a begoing ~~available on acceptable terms or at all~~concern.

~~Although~~While wethe ~~have~~Board ~~implemented~~of ~~cash-focused~~Directors ~~measures~~remains open to ~~manage~~strategic ~~liquidity~~options, ~~such~~given asour ~~the~~prior ~~RIF~~efforts ~~and~~to ~~implementation~~develop similar strategic options, the Board of ~~our~~Directors ~~outsourcing~~believes ~~philosophy~~that more likely options include the liquidation and wind up of the ~~recent~~Company ~~sublease~~through a dissolution pursuant to a plan of ~~our~~liquidation ~~office~~and dissolution that would be subject to Board and ~~manufacturing~~stockholder ~~facility,~~approval weor ~~continue~~bankruptcy (should our net assets decline to ~~expect~~levels ~~cash~~that ~~used~~would require such action).

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by operating activities for 2023 to be negatively impacted by general and administrative expense, driven by higher professional fees including incremental legal and other costs associated with an SEC investigation and class action / derivative lawsuits.

Based on management's sensitivity analysis of liquidity requirements, we expect we will be able to maintain current operations and meet anticipated capital expenditure requirements through the fourth quarter 2023 based upon our cash resources and our ability to delay or discontinue development of AR-300 in order to limit expenses consistent with the availability of our cash resources. However, it is possible that we could exhaust our available cash and cash equivalents earlier than presently anticipated due to a number of factors, including unexpected expense associated with legal matters, strategic alternatives or transactions, compliance with our reporting requirements, efforts to raise capital for AR-300 and maintain our listing on the NYSE American. Our lack of revenue or cash inflows and our cash resources on December 31, 2022 raise substantial doubt as to our ability to continue as a going concern.

Management’s plans to address the doubt regarding the Company’s ability to continue as a going concern include active monitoring of our operating expenses and use of our outsourcing philosophy to minimize expenses associated with AR-300. Management expects to manage future expense associated with AR-300 clinical development to align with the timing and amount of expense with future capital raising activities. If our available cash resources are insufficient to fund our expenses (including relating to legal proceedings) and the development of AR-300 and/or completion of a strategic transaction, we may implement further cost reduction and other cash-focused measures to manage liquidity and we may pursue a plan of liquidation or dissolution of Ampio or seek bankruptcy protection. If we decided to cease operations and dissolve and liquidate our assets, it is unclear to what extent we would be able to pay our obligations. In such a circumstance and in light of the Company’s current liquidity position and pending legal matters, it is unlikely that cash would be available for distributions to stockholders.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

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Item 8. Financial Statements and Supplementary Data.

The Financial Statements and Supplementary Data required by this item are in Item 15 of Part IV, “Index to Financial Statements” at page F-1 of this annual report on Form 10-K and are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We ~~maintain~~carried ~~“disclosure~~out ~~controls~~an ~~and procedures~~evaluation,” asunder ~~such~~the ~~terms~~supervision ~~are~~and ~~defined~~with inthe ~~Rules 13a-15(e) and~~participation ~~15d-15(e)~~ of our management, including the ~~Exchange~~Chief ~~Act,~~Executive ~~that~~Officer ~~are~~and ~~designed~~the toChief ~~ensure~~Financial ~~that~~Officer, ~~information~~of ~~required~~the toeffectiveness beof ~~disclosed~~the bydesign usand inoperation ~~reports~~of ~~that~~our we“disclosure ~~file~~controls orand ~~submit~~procedures” ~~under~~(as ~~the~~defined ~~Exchange~~in ~~Act~~Rule ~~are~~13a-15(b) ~~recorded,~~of ~~processed,~~the ~~summarized~~Exchange ~~and~~Act) ~~reported~~as ~~within~~of the ~~time~~end ~~periods~~of ~~specified~~the inperiod ~~SEC~~covered ~~rules and~~by ~~forms,~~this ~~and~~report. ~~that~~Based ~~such~~upon ~~information~~this isevaluation, ~~accumulated~~the CEO and ~~communicated~~CFO toconcluded that our ~~management,~~disclosure ~~including~~controls ~~our~~and ~~CEO~~procedures ~~and~~were ~~CFO,~~effective as ~~appropriate,~~of tothe ~~allow~~end ~~timely~~of ~~decisions~~the ~~regarding~~period ~~required~~covered ~~disclosure~~by this report.

As of the end of the period covered by the Quarterly Report on Form 10-Q for the period ending March 31, 2022, the CEO and the CFO concluded that our disclosure controls and procedures were not effective due to the maters identified as part of the Company’s decision announced on May 16, 2022, to conduct internal investigations to be overseen by the Special Committee. The Special Committee concluded its investigation and the results and findings are further described in the announcement made on August 3, 2022. The Company has taken the following actions based in part upon the investigations and the findings of the Special Committee:

● Terminated the employment of two executive officers;

● Restructured the Board of Directors through resignation of certain directors;

● Separated the role of Chair of the Board and Chief Executive Officer;

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● Re-constituted the Company’s Disclosure Committee with additional subject matter experts;

● Enhanced Company policies and procedures including those related to inventory management and distribution; and

● Conducted company-wide training regarding use of clinical trial stage pre-development drugs.

Due to sufficient passage of time to demonstrate operating effectiveness of the changes and improvements that were implemented subsequent to March 31, 2022, and the results of the evaluation performed under the supervision and with the participation of senior management, including the CEO and the CFO, the company’s design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b) were deemed effective as of the end of the period covered by this report.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining ~~adequate~~ “internal controls over financial reporting” (as such term is defined in Rule 13a-15(f) under the Exchange Act). Our management assessed the effectiveness of our internal controls over financial reporting as of December 31, ~~2022~~2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Our management has concluded that, as of December 31, ~~2022~~2023, our internal controls over financial reporting are effective based on these criteria.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

~~None.~~Employment Agreement

On March 25, 2024, the Board of Directors determined to terminate the employment of Daniel G. Stokely, the Company’s Chief Financial Officer, effective March 31, 2024 in order to preserve cash to adequately fund an orderly wind down of the Company’s operations and to maximize the Company’s cash position. Pursuant to his employment agreement, Mr. Stokely will be entitled to severance and COBRA reimbursement, conditioned on, among other things, Mr. Stokely delivering and not revoking a general release of claims against the Company.

Michael A. Martino, the Company’s Chief Executive Officer, will assume the role of Chief Financial Officer following Mr. Stokely’s departure.

Rule 10b5-1 Trading Arrangements

During the quarter ended December 31, 2023, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as such terms are defined under Item 408(a) Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not Applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The ~~information~~following ~~required~~table bysets ~~this~~forth ~~item~~the isnames, toages beand ~~included~~positions inof our ~~2023~~directors ~~Proxy~~and ~~Statement~~our executive officers as ~~follows:~~of March 15, 2024.

• The information relating to our directors and nominees for director is to be included in the section entitled “Proposal 1—Election of Directors;”


Name	Age	Title
J. Kevin Buchi	68	Chair of the Board of Directors
David R. Stevens	74	Director
Elizabeth Varki Jobes	57	Director
Michael A. Martino	68	Chief Executive Officer and Director
Daniel G. Stokely	60	Chief Financial Officer

~~• The information relating to our executive officers is to be included in the section entitled “Executive Officers;”~~

~~• The~~Michael ~~information~~A. ~~relating~~Martino tohas served as a director of the Company since October 2021 and was appointed by the Board of Directors as our ~~audit~~CEO ~~committee~~on November 22, ~~audit~~2021. ~~committee~~Mr. ~~financial~~Martino ~~expert~~previously served as President, Chief Executive Officer and ~~procedures~~a bydirector ~~which~~of ~~shareholders~~HemaFlo ~~may~~Therapeutics ~~recommend~~Inc., ~~nominees~~a private company focused on the treatment of acute kidney injury, since January 2016. Prior to ~~our~~HemaFlo, Mr. Martino was President and Chief Executive Officer of Ambit Biosciences, a company focused on the development of a drug to treat acute myeloid leukemia, from November 2011 to November 2014. Under his leadership, Ambit initiated a large, multi-national Phase III study; secured $25 million in private financing; completed a $90 million initial public offering; and ultimately sold the company to a large, Japanese pharmaceutical company for $450 million in cash plus future milestone payments. Mr. Martino also previously served as President, Chief Executive Officer and a director of Arzeda, a synthetic biology company, and Sonus Pharmaceuticals, an oncology drug development company. In addition, Mr. Martino currently serves on the board of ~~directors~~Caravan isBiologix, a private company primarily focused on the development of novel oncology drugs, and was a founding director at Excision BioTherapeutics, Inc. Mr. Martino has a BBA from Roanoke College, where he served as a Trustee from 2016 to be2020, ~~included~~and a MBA from Virginia Tech. Mr. Martino has extensive experience in life sciences and his experience as the ~~section~~chief ~~entitled~~executive ~~“Board~~officer and director of ~~Directors~~other pharmaceutical companies, both public and ~~Committees;~~private, ~~Corporate~~leading ~~Governance;”~~drug development from preclinical through Phase 3 clinical trials, transacting mergers, and leading capital raises are the attributes that qualify him to serve as a member of our Board.

~~• If~~David ~~required~~R. Stevens, Ph.D., has served as a member of our Board since June 2011. Dr. Stevens has worked in the ~~information~~U.S. ~~regarding~~Food ~~compliance~~and ~~with~~Drug ~~Section 16(~~Administration regulated life science industry since 1978. He has also been a consulting research pathologist since December 2006 for Premier Laboratory, LLC. He has been a board member of Cetya, Inc. since December 2013. He has served on the boards of several other public and private life science companies, including Micro-Imaging Solutions, LLC (from 2007 to 2018), Poniard Pharmaceuticals, Inc. (from 2004 to 2013), Aqua Bounty Technologies, Inc. (from 2002 to 2012), Advanced Cosmetic Intervention, Inc. (from 2006 to 2011) and Smart Drug Systems, Inc. (from 1999 to 2006), and was an advisor to Bay City Capital (from 1999 to 2006). Dr. Stevens was previously President and CEO of Deprenyl Animal Health, Inc., a public veterinary pharmaceutical company, from 1990 to 1998, and Vice President, Research and Development, of Agrion Corp., a private biotechnology company, from 1986 to 1988. He began his career in pharmaceutical research and development at the ~~Exchange~~former ~~Act~~Upjohn isCompany, where he contributed to bethe ~~included~~preclinical evaluation of Xanax and Halcion. Dr. Stevens received B.S. and D.V.M. degrees from Washington State University, and a Ph.D. in comparative pathology from the ~~section~~University ~~entitled~~of ~~“Delinquent~~California, ~~Section~~Davis. ~~16(~~He is a) ~~Reports~~Diplomate of the American College of Veterinary Pathologists.” Dr. Stevens’ experience in executive management in the pharmaceutical industry and knowledge of the medical device industry are the attributes that qualify him to serve as a member of our Board.

~~Such~~J. ~~information~~Kevin isBuchi ~~incorporated~~has ~~herein~~served byas ~~reference~~a tomember of our ~~2023~~Board ~~Proxy~~since ~~Statement~~October 2021. Mr. Buchi, who previously served as the lead independent director, was elected as Chair of the Board on May 28, 2022. Mr. Buchi is the former President and Chief Executive Officer of Cephalon, Inc., having also served as corporate vice president of global branded products at Teva Pharmaceutical Industries Limited after Teva acquired Cephalon in October 2011. Mr. Buchi also served as President and Chief Executive Officer of TetraLogic Pharmaceuticals and of Biospecifics Technologies. Mr. Buchi joined Cephalon in 1991 and held various leadership positions during his tenure, including Chief Financial Officer and Chief Operating Officer, before becoming Cephalon’s Chief Executive Officer in 2010. In addition, Mr. Buchi currently serves as a Director of Amneal Pharmaceuticals, Inc. and Benitec Biopharma Ltd. Mr. Buchi previously served on the boards of

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~~Our~~several ~~Code~~pharmaceutical ofcompanies, ~~Business~~including ~~Conduct~~Dicerna ~~and~~Pharmaceuticals, ~~Ethics~~EPIRUS ~~applies~~Biopharmaceuticals, toInc., ~~all~~Alexza ofPharmaceuticals, ~~our employees~~Inc., ~~directors~~ and ~~officers,~~Forward ~~including~~Pharma ~~our~~A/S. ~~principal~~He ~~executive~~holds ~~officer,~~a ~~principal~~B.A. ~~financial~~in ~~officer,~~Chemistry ~~principal~~from ~~accounting~~Cornell ~~officer~~University orand ~~controller,~~a orMaster ~~persons~~of ~~performing~~Management, ~~similar functions~~Accounting, and ~~those~~Finance offrom ~~our~~the ~~subsidiaries.~~Northwestern ~~The~~University ~~Code~~Kellogg School of ~~Business~~Management. ~~Conduct~~Mr. ~~and~~Buchi ~~Ethics~~has isserved ~~available~~ on our ~~website~~board ~~at www~~since October 2021.~~ampiopharma~~ Mr.~~com under~~ ~~the~~Buchi’s ~~section~~extensive ~~entitled~~experience ~~“Investors”~~as ~~under~~a ~~“Corporate~~senior ~~Governance.”~~executive Weand ~~intend~~board tomember ~~satisfy~~in the ~~disclosure~~pharmaceutical ~~requirements~~industry ~~under~~provide ~~Item~~him ~~5.05~~with knowledge of ~~the~~a ~~SEC~~broad ~~Form~~range ~~8-K~~of ~~regarding~~unique aninsights ~~amendment~~into ~~to,~~the orindustry ~~waiver from, a provision~~ of our ~~Code~~business, ~~of Business Conduct~~ and ~~Ethics~~these byare ~~posting~~the ~~such~~attributes ~~information~~that onqualify ~~our~~him ~~website~~to atserve ~~the~~as ~~website~~a ~~address~~member ~~and~~of ~~location~~our ~~specified above~~Board.

Elizabeth Varki Jobes has served as a member of our Board since February 2022. Ms. Jobes has nearly three decades of legal and compliance experience. As a practicing attorney, she has built and guided compliance and legal programs for small and medium-size biopharmaceutical corporations. She currently serves as Global Chief Compliance Officer at Immunocore Ltd, where she leads the development and implementation of a global compliance program. For the prior three years (2020-2023) she was Senior Vice President, Global Chief Compliance officer for Amryt Pharmaceuticals which was formed in 2020 following the acquisition of Aegerion Pharmaceuticals. In December 2023, Amryt was acquired by Chiesi Farmaceutici S.p.A. In January of 2023, Ms. Jobes joined the board of directors of Blue Foundry Bank (the “Bank”), a wholly-owned subsidiary of Blue Foundry Bancorp (NASDAQ: BLFY), where she is also a member of the Bank’s Audit Committee. Previously, Ms. Jobes held leadership positions at many biopharmaceutical companies, including: Senior Vice President, Chief Compliance Officer North America for EMD Serono, Inc.; Global Chief Compliance Officer and Legal Counsel for Spark Therapeutics, Inc.; Senior Vice President, Chief Compliance Officer for Auxilium Pharmaceuticals, Inc.; Vice President, Chief Compliance Officer for Adolor Corporation; and Senior Director, Global Compliance for Cephalon, Inc. and Board Member for Eyam Vaccines, Inc. Mrs. Jobes’ extensive experience as a senior executive in the pharmaceutical industry, with an extensive focus developing and implementing industry specific regulatory and compliance programs for small to medium-size biopharmaceutical companies, are the attributes that qualify her to serve as a member of our Board.

Daniel G. Stokely has served as our CFO and Secretary since July 2019 and has more than 30 years of experience in finance and accounting. He began his career at Deloitte & Touche and since that time, he has spent the majority of his career in positions of financial leadership within both publicly traded and privately held pharmaceutical companies. Most recently, since 2012, he served as Executive Vice President and CFO of Sentynl Therapeutics Inc., a privately held specialty pharmaceutical company focused on licensing, acquisition, marketing, and distribution of development stage and commercially marketed prescription pain products, which was sold to Cadila Healthcare Ltd. in January 2017. From 2004 to 2012, Mr. Stokely served as Vice President of Finance and Chief Accounting Officer (“CAO”) of Victory Pharma, a privately held specialty pharmaceutical company focused on in licensing, internal product development, marketing, and distribution of pain specialty products, which was sold to Shionogi, Inc., a Japanese pharmaceutical company, in 2011. From 2001 to 2004, Mr. Stokely served as the Corporate Controller and CAO for Wireless Facilities, Inc. (currently Kratos Defense & Security Solutions, Inc.), a publicly traded, global provider of communications and security services for the wireless communications industry. From 1994 to 2001, Mr. Stokely served as Corporate Controller of Dura Pharmaceuticals, a publicly traded pharmaceutical company that was sold to Elan Pharmaceuticals in late 2000. He has a B.S. degree in accounting from San Diego State University and is a Certified Public Accountant licensed in California.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that is applicable to all our employees, officers, and directors, all of which have read, acknowledged, and agreed to comply with such code. The code is available free of charge on our web site, www.ampiopharma.com, under the “Investors” tab. We intend to disclose future amendments to, or waivers from, certain provisions of our Code of Business Conduct and Ethics, if any, on the above website within four business days following the date of such amendment or waiver.

Committees of the Board

Our Board has an Audit Committee, a Compensation Committee and a Nominating and Governance Committee, each of which has the composition and the responsibilities described below. The Audit Committee, Compensation Committee, and Nominating and Governance Committee operate under separate charters approved by our Board. The charters for each committee are available on our website at www.ampiopharma.com/corporate-governance/. Our Board of Directors may from time to time establish other committees.

Audit Committee. Our Audit Committee, established in accordance with Section 3(a)(58)(A) of the Exchange Act, oversees our corporate accounting and financial reporting process. This committee also assists our Board in monitoring

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our financial systems and our legal and regulatory compliance. Our Audit Committee is responsible for, among other things:

●

selecting and engaging our independent auditors;

●

appointing, compensating and overseeing the work of our independent auditors;

●

approving engagements of the independent auditors to render any audit or permissible non-audit services;

●

reviewing the qualifications and independence of the independent auditors;

●

monitoring the rotation of partners of the independent auditors on our engagement team, as required by law;

●

recommending inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K and providing the Report of the Audit Committee to be included in the Company’s annual proxy statement;

●

reviewing our quarterly and annual financial statements and our critical accounting policies and estimates;

●

reviewing the adequacy and effectiveness of our internal controls over financial reporting;

●

reviewing and discussing with management, the independent auditors and any internal auditors the results of our annual audit, reviews of our quarterly financial statements and our publicly filed reports; and

●

reviewing related party transactions.

The members of our Audit Committee are Mr. Buchi (chair), Dr. Stevens and Ms. Jobes. Our Board has determined that each member of the Audit Committee meets the financial literacy requirements of the national securities exchanges and the SEC, and Mr. Buchi qualifies as our Audit Committee financial expert as defined under SEC rules and regulations. Our Board has concluded that the composition of our Audit Committee meets the requirements for independence under the current requirements of the NYSE American and SEC rules and regulations. In 2023, there were four meetings of the Audit Committee.

Compensation Committee. Our Compensation Committee oversees our compensation policies, plans and programs. The Compensation Committee is responsible for, among other things:

●

reviewing and approving policies, plans and programs relating to compensation and benefits of our directors and executive officers;

●

reviewing and approving compensation, corporate goals, and objectives relevant to compensation for our CEO and for executive officers other than our CEO;

●

evaluating the performance of our executive officers while considering established goals and objectives;

●

reviewing the executive compensation disclosure that is prepared by the Company for inclusion in the Company’s annual proxy statement;

●

assessing how the Company’s compensation programs encourage the taking of enterprise or other risks that may bear on the Company’s overall financial or operational performance;

●

administering our equity compensations plans for our employees and directors and consultants; and

●

administering our Compensation Recoupment Policy adopted on October 24, 2023.

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The members of our Compensation Committee are Dr. Stevens (chair), Mr. Buchi and Ms. Jobes. Each member of our Compensation Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act, and satisfies the independence requirements of the NYSE American. We believe that the composition of our Compensation Committee meets the requirements for independence under the applicable requirements of the NYSE American and SEC rules and regulations.

In 2023, our Compensation Committee met one-time and took action by written consent on a number of occasions. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. Our CEO may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation or individual performance objectives. Our Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. In general, the Compensation Committee has set executive compensation to be in line with peer companies identified by the Compensation Committee and to incentivize the Company’s executive officers to achieve the Company’s corporate goals.

In fulfilling its responsibilities, the Compensation Committee is permitted under its charter to delegate any or all of its responsibilities to a subcommittee comprised of members of the Compensation Committee or the Board, except that the Compensation Committee may not delegate its responsibilities for any matters that involve compensation of any officer or any matters where it has determined such compensation is intended to be exempt from Section 16(b) under the Exchange Act pursuant to Rule 16b-3 by virtue of being approved by a committee of independent or nonemployee directors.

Nominating and Governance Committee. Our Nominating and Governance Committee oversees and assists our Board in reviewing and recommending corporate governance policies and nominees for election to our Board. The Nominating and Governance Committee is responsible for, among other things:

●

evaluating and making recommendations regarding the organization and governance of the Board and its committees;

●

assessing the performance of members of the Board and making recommendations regarding committee and chair assignments;

●

recommending desired qualifications for Board membership and conducting searches for potential members of the Board;

●

developing and periodically reviewing with our Board a succession plan for our CEO; and

●

reviewing and making recommendations for our corporate governance guidelines.

The members of our Nominating and Governance Committee are currently Ms. Jobes (chair) and Dr. Stevens. Our Board has determined that each member of our Nominating and Governance Committee satisfies the independence requirements of the NYSE American. In 2023, our Nominating and Governance Committee did not meet but, took action by written consent.

The Nominating and Governance Committee charter provides that the Nominating and Governance Committee will review periodically with the Chairman of the Board the succession plans relating to the Chief Executive Officer and other corporate officer positions. In October 2023, the Company and Mr. Martino, our Chief Executive Officer, entered into an amendment to Mr. Martino employment agreement to change the term of the employment agreement in order to continue the services of Mr. Martino. The term changed from one ending on November 22, 2023 to an indefinite term.

Item 11.

Executive Compensation.

~~The~~As ~~information~~noted ~~required~~in byItem ~~this~~1, ~~item~~on isNovember 9, 2022, the Company effected a 15-to-1 bereverse ~~included~~stock insplit. ~~our~~On September 12, 2023, ~~Proxy~~the ~~Statement~~Company ~~under~~effected a 20-to-1 reverse stock split. The Company has retroactively applied the ~~sections~~reverse ~~entitled~~stock ~~“Executive~~splits ~~Compensation,”~~to share and ~~“Non-Employee~~per ~~Director~~share ~~Compensation~~amounts in the financial statements as of December 31,” 2023 and isDecember ~~incorporated~~31, ~~herein~~2022. byAdditionally, ~~reference.~~

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pursuant to their terms, a proportionate adjustment was made to the per share exercise price and number of shares issuable under all the Company’s outstanding options under the 2010/2019 Stock and Incentive Plans, the number of shares of restricted stock outstanding under the 2010/2019 Stock and Incentive Plans, and common stock warrants, with any fractional shares rounded up to the next whole share. The number of shares authorized for issuance pursuant to the 2023 Plan was not impacted by the 20-to-1 reverse stock split (see Note 10 for additional information). The Company also retroactively applied such adjustments in the notes to the condensed financial statements as of December 31, 2023 and December 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.

Clawback Policy

In October 2023, the Board of Directors adopted a Compensation Recoupment Policy (the “Policy”) in order to comply with Section 311 of the NYSE American Company Guide and Rule 10D-1 promulgated under the Exchange Act. The Policy will be administered by the Compensation Committee of the Board consisting solely of directors that are “independent” under rules of the NYSE American or, in the absence of such committee, the independent directors serving on the Board of Directors (acting by a majority).

The Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from current and

former executive officers (each, a “Covered Officer”) of the Company in the event of any required accounting restatement

of the financial statements of the Company due to the material noncompliance of the Company with any financial reporting

requirement under the applicable U.S. federal securities laws, including any required accounting restatement to correct an

error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

Under the Policy, the Company must recoup from the Covered Officer erroneously awarded incentive compensation received within a lookback period of the three completed fiscal years preceding the date on which the Company is required to prepare such accounting restatement, as well as any required transition period resulting from a change in the Company’s

fiscal year.

Named Executive Officers

For the fiscal year ended December 31, 2023, our named executive officers were: (i) Michael A. Martino, who has served as our CEO since November 2021 and (ii) Daniel G. Stokely, who has served as our CFO since July 2019. We had no other executive officers serving during the year ended December 31, 2023.

The following table shows, for the fiscal years ended December 31, 2023 and December 31, 2022, compensation awarded to, paid to, or earned by our named executive officers.

Summary Compensation Table


					Option	All Other
				Stock	Awards	Compensation
Name and Principal Position	Year	Salary ($)	Bonus ($)	Awards ($)(1)	($)(1)	($) (2)	Total ($)
(a)	(b)	(c)	(d)	(e)	(f)	(i)	(j)
Named Executive Officers

Michael A. Martino, CEO	2023	550,000	—	—	—	—	550,000
	2022	548,141	—	—	120,000	—	668,141

Daniel G. Stokely, CFO	2023	335,000	—	—	—	3,315	338,315
	2022	335,000	—	—	—	11,725	346,725

(1)

The amounts reported under “Stock Awards” and “Option Awards” in the above table reflect the grant date fair value of these awards as determined in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation – Stock Compensation, rather than amounts paid to or realized by

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the named individual. The value of stock awards was computed based on the stock price on the grant date. The value of the option awards was estimated using the Black-Scholes option pricing model. The valuation assumptions used in the valuation of options granted may be found in Note 10 to our financial statements included in the annual report on Form 10-K for the years ended December 31, 2023 and 2022, respectively.

(2)

The Company provides group term life insurance coverage in an amount equal to one times employees’ covered annual earnings up to a maximum of $50,000 for all full-time employees, including the named executive officers, for a nominal annual premium amount. In addition, the Company has a 401(k) plan that allows participants to contribute a portion of their salary, subject to eligibility requirements and annual IRS limits. The Company provided matching employee contributions covering the 12-month period commencing in April 2022.

Outstanding Equity Awards at Fiscal Year-End

The following table provides a summary of stock options outstanding for each of the named executive officers as of December 31, 2023:


	Option Awards

				Equity Incentive
		Number of		Plan Awards:
	Number of	Securities		Number of
	Securities	Underlying		Securities
	Underlying	Unexercised		Underlying
	Unexercised	Options		Unexercised	Option	Option
	Options Exercisable	Unexercisable		Unearned	Exercise	Expiration
Name	(#)	(#)		Options (#)	Price ($)	Date
(a)	(b)	(c)		(d)	(e)	(f)
Named Executive Officers

Michael A. Martino	367	133	(1)	—	501.00	10/13/2031
Michael A. Martino	2,500	—		—	342.00	11/22/2031
Michael A. Martino	833	—		—	171.00	1/1/2032
Daniel G. Stokely	868	—		—	129.00	8/20/2029
Daniel G. Stokely	65	—		—	176.16	1/2/2030
Daniel G. Stokely	67	—		—	534.00	12/17/2030

(1)

Mr. Martino’s unexercisable options become vested at approximately 13 shares monthly on the 13^th of each month until October 13, 2024. The option awards remain exercisable until their expiration on the ten-year anniversary of the date of grant subject to earlier forfeiture following termination of employment.

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The following table provides a summary of restricted stock awards outstanding for each of the named executive officers as of December 31, 2023.


	Stock Awards

				Equity Incentive
			Equity Incentive	Plan Awards:
	Number of Shares	Market Value of	Plan Awards:	Market or Payout
	of Stock	Shares of Stock	Number of Unearned	Value of Unearned
Name	that Have Not	that Have Not	Shares, Units or Rights	Shares, Units, or Rights
(a)	Vested (#)(1)	Vested ($)(2)	that Have Not Vested	that Have Not Vested ($)
Named Executive Officers

Michael A. Martino	—	—	—	—
Daniel G. Stokely	446	914	—	—

(1)	The restricted stock award shown here was granted in October 2021. The unvested portion reflected in this column will vest equally on January 1^st of each year through January 1, 2025.

(2)	The market value reflected in this column is based on a closing share price on December 29, 2023 of $2.05.

Employment Agreements

On November 22, 2021, the Company entered into a one-year employment agreement (the “Martino Employment Agreement”) with Michael A. Martino, the Company’s CEO. The Martino Employment Agreement provided for an annual salary of $550,000, and an annual discretionary bonus of up to 50% of Mr. Martino’s base salary, with the exact amount to be determined by the Compensation Committee of the Board based on achievement of individual and Company performance objectives. On August 30, 2022, the Company executed a first amendment to the Martino Employment Agreement, extending the employment term to November 22, 2023, with all other terms and conditions of the Martino Employment Agreement remaining unchanged. On October 1, 2023, the Company executed a second amendment to the Martino Employment Agreement, which changed the term of the agreement from a term ending on November 22, 2023 to an indefinite term, with all other terms and conditions of the Martino Employment Agreement remaining unchanged.

On October 11, 2021, the Company entered into a new three-year employment agreement (the “Stokely Employment Agreement”) with Daniel G. Stokely, the Company’s CFO and principal financial officer. The Stokely Employment Agreement supersedes and replaces the Company’s prior employment agreement with Mr. Stokely entered into on July 9, 2019. The Stokely Employment Agreement provides for an annual base salary of $335,000 and an annual discretionary bonus of up to 50% of Mr. Stokely’s base salary, with the exact amount to be determined by the Compensation Committee of the Board based on achievement of individual and Company performance objectives.

For 2023, the Compensation Committee did not set performance objectives for either Mr. Martino or Mr. Stokely given the nature of the challenges facing the Company and the Company’s cash position. Accordingly, the Company did not pay a discretionary annual bonus to either Mr. Martino or Mr. Stokely.

Under their respective agreements, the employment of Mr. Martino and Mr. Stokely may also be terminated by the Company immediately upon notice with or without Cause or as a result of the officer’s disability, or by the officer with or without Good Reason. If the Company terminates the employment of Mr. Martino or Mr. Stokely for Cause, if the officer resigns as an employee of the Company other than for Good Reason, or the officer dies, then Ampio is obligated to pay the executive only his accrued compensation and will have no obligation to pay severance or other compensation any kind.

If the officer’s employment is terminated by the Company without Cause or by the Named Executive Officer for Good Reason, the officer would be entitled to a lump sum severance payment equal to 0.5 times his base salary in effect at the date of termination, less applicable withholding. In addition, the vesting and exercisability of all then outstanding options held by the Named Executive Officer would accelerate in full and remain exercisable for a period of three years from the date of termination. The officer would also be entitled to the continued participation (via state or federal insurance

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continuation laws such as COBRA, to the extent available) in health and welfare plans provided by the Company at the time of termination for a period of two years from the date of termination or, if earlier, until the officer is eligible for other employer sponsored group health coverage with a subsequent employer.

Any severance payments and/or other separation benefits are conditioned on, among other things, the officer delivering and not revoking a customary general release of claims against the Company and the officer’s continued compliance with the proprietary information and inventions agreement with the Company.

See Part I, Item 9B. “Other Information” of this Annual Report for information regarding the termination of the employment of Mr. Stokely effective March 31, 2024.

Additionally, the employment agreements provide that upon the occurrence of a Change in Control, all then-outstanding stock options, restricted stock and other stock-based grants to either Mr. Martino or Mr. Stokely will, irrespective of any provisions of his award agreements, immediately and irrevocably vest and become exercisable and any restrictions thereon will lapse. In either case, if any payment or benefit the officer would receive pursuant to a Change in Control from the Company or otherwise would constitute a “parachute payment” within the meaning of Section 280G of the Code and be subject to the excise tax imposed by Section 4999 of the Code, then such the amount of such payment will be calculated to be (1) the largest portion of the payment that would result in no portion of the payment being subject to the excise tax or (2) the largest portion, up to and including the total, of the payment, whichever amount, after taking into account all applicable taxes and the excise tax, results in the officer receiving, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the payment may be subject to the excise tax.

Potential Payments Upon Termination or Change in Control

The potential payments and benefits to Mr. Martino or Mr. Stokely under his respective employment agreement in connection with termination of the officer’s employment by the Company without Cause, by the Named Executive Officer for Good Reason, or in connection with a Change in Control are described above under “Employment Agreements.”

For purposes of the employment agreements, “Good Reason” means, without the executive’s written consent:

●

with respect to all executives:

o

a material reduction of his compensation (except where there is a general reduction also applicable to the other members of the senior executive team); or

o

a material reduction in his overall responsibilities or authority or scope of duties (it being understood that the occurrence of a change in control shall not, by itself, necessarily constitute a reduction in his responsibilities or authority).

●

With respect to Mr. Stokely:

o

a material change in the principal geographic location at which the executive must perform his services (it being understood that the relocation of the executive to a facility or a location within forty (40) miles of the State Capitol Building in Denver, Colorado shall not be deemed material).

For purposes of his employment agreement, “Cause” means, with respect to Mr. Martino, in the sole discretion of a majority of the Board:

●

Our executive’s failure or refusal to substantially perform his duties;

●

personal or professional dishonesty that could reasonably be expected to have a materially adverse impact on the financial interests or business reputation of the Company;

●

incompetence, willful misconduct, breach of fiduciary duty (including duties involving personal profit);

●

breach of the Company’s Code of Business Conduct and Ethics and personnel policies or compliance policies;

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●

material violation of the Sarbanes-Oxley requirements for officers of public companies that in the reasonable opinion of the Board will likely cause substantial financial harm or substantial injury to the reputation of the Company;

●

willfully engaging in actions that in the reasonable opinion of the Board will likely cause substantial financial harm or substantial injury to the business reputation of the Company;

●

willful violation of any law, rule, or regulation, or final cease-and-desist order (other than routine traffic violations or similar offenses);

●

the unauthorized use or disclosure of any trade secret, proprietary, or confidential information of the Company (or any other party as to which our Executive owes an obligation of nondisclosure as a result of his relationship with the Company);

●

failure to follow the reasonable and lawful directives of the Board pertaining to his duties with the Company;

For purposes of his employment agreement, “Cause” means, with respect to Mr. Stokely, in the sole discretion of a majority of the Board:

●

willful malfeasance or willful misconduct by the executive in connection with his employment;

●

the executive's gross negligence in performing any of his duties under the employment agreement;

●

the executive’s commission, conviction of, or entry of a plea of guilty to, or entry of a plea of nolo contendre with respect to, any crime other than a traffic violation but including a felony that results in significant bodily injury or an infraction which is a misdemeanor, but in all events including crimes that involve fraud, theft, or moral turpitude;

●

the executive’s willful and deliberate violation of a Company policy;

●

the executive's unintended but material breach of any written policy applicable to all employees adopted by the Company which, to the extent curable, is not cured to the reasonable satisfaction of the Board within thirty (30) business days after notice thereof;

●

the executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party as to which our Executive owes an obligation of nondisclosure as a result of our Executive’s relationship with the Company;

●

the executive’s willful and deliberate breach of her obligations under the employment agreement; or

●

any other material breach by the executive of any of his obligations in the employment agreement which, to the extent curable, is not cured to the reasonable satisfaction of the Board within thirty (30) business days after notice thereof.

Additionally, under the 2010/2019 Stock and Incentive Plans, in the case of and subject to the consummation of a Sale Event (i.e. a change in control of the Company), the plan and all outstanding awards granted thereunder will terminate, unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto for the assumption or continuation of awards granted by the successor entity, or the substitution of such awards with new awards of the successor entity or its parent. In the event of such termination, (i) Ampio will have the option (in its sole discretion) to make or provide for a cash payment to the grantees holding options and stock appreciation rights, in exchange for the cancellation thereof, in an amount equal to the difference between (a) the sale price multiplied by the number of shares of stock subject to outstanding options and stock appreciation rights (to the extent then exercisable (after taking into account any acceleration hereunder) at prices not in excess of the sale price) and (b) the aggregate exercise price of all such outstanding options and stock appreciation rights; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Compensation Committee, to exercise all outstanding options and stock appreciation rights held by such grantee. The Compensation Committee also has the discretion to accelerate the vesting of all other awards.

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Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee are named in the section titled “Committees of the Board – Compensation Committee.” No member of our Compensation Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of the Board. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Compensation Committee during the last fiscal year.

Non-Employee Director Compensation

Our Compensation Committee established the following annual fees for payment to non-employee members of our Board and committees, for the fiscal year ended December 31, 2023:


Name	Cash Compensation
Board Annual Retainer:
Chairman/lead independent director	$	71,000
Each non-employee director	$	38,500
Audit Committee Annual Retainer
Chairman	$	20,000
Each non-employee director	$	10,000
Compensation Committee Annual Retainer
Chairman	$	12,000
Each non-employee director	$	6,000
Nominating and Governance Committee Annual Retainer
Chairman	$	10,000
Each non-employee director	$	5,000

In fiscal year 2023, we did not grant equity awards to our non-employee directors for their service.

Director Compensation for 2023

The table below summarizes the compensation paid by us to our directors for the year ended December 31, 2023. Mr. Martino, who served as director and executive officer for 2023, did not receive compensation as a director during 2023.


	Fees Earned or		Option				All Other
Name	Paid in Cash		Awards		Stock Awards		Compensation		Total
J. Kevin Buchi (1)	$	99,500	$	—	$	—	$	—	$	99,500
David Stevens, Ph.D.	$	65,500	$	—	$	—	$	—	$	65,500
Elizabeth Varki Jobes	$	64,500	$	—	$	—	$	—	$	64,500

(1)

Amount reflects an adjustment totaling $2,500 related to an under payment of director fees for the year ended December 31, 2022.

For a summary of the option awards held by Mr. Martino as of December 31, 2023, please see “Executive Compensation – Outstanding Equity Awards at Fiscal Year End.” As of December 31, 2023, the outstanding stock option awards held by our other directors are as follows: Mr. Buchi, 750, shares; Dr. Stevens, 1,913 shares; and Ms. Jobes, 500, shares.

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Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The ~~information~~following ~~required~~table bysets ~~this~~forth ~~item with respect to equity compensation plans is to be included in our 2023 Proxy Statement under the section entitled “Equity Compensation Plan Information” and the~~ information ~~required~~regarding bybeneficial ~~this item with respect to security~~ ownership of ~~certain beneficial owners and management is to be included in~~ our ~~2023~~Common ~~Proxy~~Stock ~~Statement~~as ~~under the section entitled “Security Ownership~~ of ~~Certain~~March ~~Beneficial~~15, ~~Owners~~2024 ~~and Management” and in each case is incorporated herein~~ by ~~reference.~~:

●

each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our Common Stock;

●

each of our named executive officers;

●

each of our directors; and

●

all current executive officers and directors as a group.

We have determined beneficial ownership in accordance with SEC rules. The information does not necessarily indicate beneficial ownership for any other purpose. Under these rules, the number of shares of Common Stock deemed outstanding includes shares issuable upon exercise of options and warrants held by the respective person or group which may be exercised or converted within 60 days after March 15, 2024.

For purposes of calculating each person’s or group’s percentage ownership, stock options and warrants exercisable within 60 days after March 15, 2024 are included for that person or group but not the stock options or warrants of any other person or group. Ownership is based on 1,135,358 shares of Common Stock outstanding on March 15, 2024.

The Company is not aware of any arrangements that have resulted, or may at a subsequent date result, in a change of control of the Company.

Unless otherwise indicated and subject to any applicable community property laws, to our knowledge, each stockholder named in the following table possesses sole voting and investment power over the shares listed. Unless otherwise noted below, the address of each stockholder listed on the table is c/o Ampio Pharmaceuticals, Inc., 9800 Mount Pyramid Court, Suite 400, Englewood, Colorado 80112.


	Number of Shares Beneficially	Percentage of Shares
Name and Address of Beneficial Owner	Owned (1)	Beneficially Owned
5% Stockholders
None	—	—	%

Directors and Name Executive Officers
David R. Stevens (2)	7,112	*	%
Michael A. Martino (2)(3)	7,608	*	%
J. Kevin Buchi (2)	8,023	*	%
Elizabeth Varki Jobes (2)	368	*	%
Daniel G. Stokely (3)	1,971	*	%

Directors and executive officers as a group	25,082	3.0	%

* Represents ownership of 1% or under of the Company’s outstanding common stock.

(1)

Includes the following number of shares that could be acquired within 60 days of March 15, 2024 upon the exercise of stock options: David R. Stevens, 1,913 shares; Michael A. Martino, 3,763 shares; J. Kevin Buchi, 680 shares; Elizabeth Varki Jobes, 368 shares; Daniel G. Stokely, 1,000 shares; and all current directors and executive officers as a group 7,724 shares.

(2)

Director.

(3)	Named Executive Officer.

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Securities Authorized for Issuance Under Equity Compensation Plans


				Number of Securities
				Remaining Available
				for Issuance under
	Number of Securities to	Weighted-Average		Equity Compensation
	be Issued upon Exercise	Exercise Price of		Plans (Excluding
	of Outstanding Options	Outstanding Options		Securities Reflected in
Plan Category	(a)	(b)		Column (a)) (c)
Equity compensation plans approved by security holders	—	$	—	1,200,000	(1)
Equity compensation plans not approved by security holders	—		—	—
Total	—	$	—	1,200,000

(1)	The securities remaining available for issuance pursuant to the 2023 Plan may be issued in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, and unrestricted stock awards.

The Company’s 2019 Stock and Incentive Plan was cancelled concurrently with the adoption of the 2023 Plan; as such there were no remaining securities available for issuance under that plan as of December 31, 2023. On February 28, 2024, we filed a post-effective amendment to deregister the remaining shares available under the Company’s equity compensation plans, which was effective upon filing.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

~~The information required by this item is to be included in our 2023 Proxy Statement under the sections entitled “Certain Relationships and~~ Related Party Transactions~~” and “Director Independence” and is incorporated herein by reference.~~

Other than required indemnification and advancement of expenses made to our directors and executive officers relating to the legal proceedings described in Part I, Item 3. Legal Proceedings of this Form 10-K, we have not been a participant in any transaction since January 1, 2023 and are not a participant in any currently proposed transaction in which the amount involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, or holder of more than 5% of any class of our voting stock, or any member of the immediate family of or entities affiliated with any of them, had or will have a material interest.

Policies and Procedures for Related Party Transactions

We have a policy that our executive officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of our common stock and any member of the immediate family of any of the foregoing persons, are not permitted to enter into a related party transaction with us without the prior consent of our Audit Committee, subject to the pre-approval exceptions described below. If advance approval is not feasible then the related party transactions will be considered at the Audit Committee’s next quarterly scheduled meeting. In approving or rejecting any such proposal, our Audit Committee is to consider the relevant facts and circumstances available and deemed relevant by our Audit Committee, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s inters in the transaction. Our Board has delegated to the chair of our Audit Committee the authority to pre-approve or ratify any request for us to enter into a transaction with a related party, in which the amount involved is less than $120,000 and where the chair is not the related party. Our Audit Committee will also review certain types of related party transactions that it has deemed pre-approved even if the aggregate amount involved will not exceed $120,000 including, employment of executive officers, director compensation, certain transactions with other organizations, transactions where all stockholders receive proportional benefits, transactions involving competitive bids, regulated transactions and certain banking-related services.

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Director Independence

Our common stock is listed on the NYSE American. The listing rules of the NYSE American require that a majority of the members of the Board be independent. The rules of the NYSE American require that, subject to specified exceptions, each member of our Audit, Compensation, and Nominating and Governance Committees be independent. Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. Under the rules of the NYSE American, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: (i) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (ii) be an affiliated person of the listed company or any of its subsidiaries.

In March 2024, our Board undertook a review of its composition, the composition of its committees and the independence of each director. Based upon information provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board has determined that none of Mr. Buchi, Dr. Stevens or Ms. Jobes, had a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors was “independent” as that term is defined by the NYSE American. Our Board also determined that Mr. Buchi, Dr. Stevens and Ms. Jobes, who comprised our Audit Committee, our Compensation Committee, and our Nominating and Governance Committee during 2023, satisfied the independence standards for those committees established by applicable SEC rules and the NYSE American rules.

Item 14.

Principal Accountant Fees and Services.

The ~~information~~Company’s ~~required~~independent byregistered ~~this~~public ~~item~~accounting firm is toMoss beAdams ~~included~~LLP, inIssuing ~~our~~Office ~~2023~~Denver ~~Proxy~~Colorado, ~~Statement~~PCAOB ~~under~~ID: ~~the section entitled “Proposal 2—Ratification of Appointment of Independent Registered Public Accounting Firm” and is incorporated herein by reference~~659.

The following table presents aggregate fees billed for professional services rendered by our independent registered public accounting firm, Moss Adams LLP for the respective periods indicated:


	For the year ended December 31,
	2023		2022
Moss Adams LLP
Audit fees (1)	$	306,000	$	278,000
Audit-related fees (2)		—		11,000
Tax fees (3)		—		—
All other fees (4)		—		—
Total fees	$	306,000	$	289,000

(1)

Audit fees includes fees related to the audit of our annual financial statements; the review of our quarterly financial statements; comfort letters, consents, and assistance with and review of documents filed with the SEC; and financial reporting consultation and research work billed as audit fees or necessary to comply with the standards of the Public Company Accounting Oversight Board (United States).

(2)

Audit-related fees would include employee benefit plan audits, due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, attest services related to financial reporting that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. The Company did not incur expenses for audit-related services for the year

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ended December 31, 2023. The Company incurred $11,000 for audit-related fees in its exploration of strategic initiatives for the year ended December 31, 2022.

(3)

Tax fees comprise federal and state services related to tax compliance, consulting, and preparation. The Company did not incur expenses for tax services from Moss Adams LLP for the years ended December 31, 2023 or 2022.

(4)

All other fees include fees billed for products and services provided by the principal accountant, other than the services reported in (1) or (3). The Company did not incur other fees from Moss Adams LLP for the years ended December 31, 2023 or 2022.

Policy on Audit Committee Pre-Approval of Services of Independent Registered Public Accounting Firm

Our Audit Committee has responsibility for appointing, setting compensation, and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. Prior to engagement of the independent registered public accounting firm for the following year’s audit, management will submit to the Audit Committee for approval an engagement letter which provides the description and estimated cost of services expected to be rendered during that year for each of following four categories of services:

(1)

Audit services include fees for services that generally only the auditor can reasonably provide, such as statutory audits required domestically and internationally (including statutory audits required by insurance companies for purposes of state law); comfort letters; consents; assistance with and review of documents filed with the SEC; section 404 attestation services; other attest services that generally only the auditor can provide; work done by tax professionals for the audit or quarterly review; and accounting consultations billed as audit services, as well as other accounting and financial reporting consultation and research work necessary to comply with the standards of the PCAOB.

(2)

Audit-related services include, but are not limited to, employee benefit plan audits, due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, internal control reviews, attest services related to financial reporting that are not required by statute or regulation and consultation concerning financial accounting and reporting standards.

(3)

Tax services consist principally of assistance with federal and state tax compliance and reporting, as well as certain tax planning consultations.

(4)

Other services are those associated with services not captured in the other categories. We generally do not request such services from our independent auditor.

Prior to the engagement of the independent registered public accounting firm, the Audit Committee pre-approves these services by category of service and estimated cost as further noted in the engagement letter. The fees are budgeted as part of the Company’s annual/periodic budgeting and forecasting process, and the Audit Committee requires the independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging the independent registered public accounting firm for such services.

The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

All the services of Moss Adams LLP described above were pre-approved by the Audit Committee in advance of such services being provided.

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PART IV

Item 15.

Exhibits and Financial Statement Schedules.

(a)(1) Financial Statements

The following documents are filed as part of this Form 10-K, as set forth on the Index to Financial Statements found on page F-1.

●Report of Independent Registered Public Accounting Firm

●Balance Sheets as of December 31, ~~2022~~2023 and ~~2021~~2022

●Statements of Operations for the years ended December 31, ~~2022~~2023 and ~~2021~~2022

●Statements of Stockholders’ Equity for the years ended December 31, ~~2022~~2023 and ~~2021~~2022

●Statements of Cash Flows for the years ended December 31, ~~2022~~2023 and ~~2021~~2022

●Notes to Financial Statements

(a)(2) Financial Statement Schedules

Not Applicable.

2533

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(a)(3) Exhibits

Exhibitnumber		Exhibit title
3.1		Certificate of Incorporation of Chay Enterprises, Inc. (Incorporated by reference to Exhibit 3.3 of the Registrant’s Form 8-K filed March 30, 2010).
3.2		Certificate of Amendment to Certificate of Incorporation of Ampio Pharmaceuticals, Inc. (f/k/a Chay Enterprises, Inc. (Incorporated by reference to Exhibit 3.4 of the Registrant’s Form 8-K filed March 30, 2010).
3.3		Certificate of Amendment to Certificate of Incorporation of the Registrant. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed December 18, 2019).
3.4		Certificate of Amendment to Certificate of Incorporation of the Registrant. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed November 9, 2022).
3.5		~~Amended~~Certificate ~~and~~of ~~Restated~~Designation ~~Bylaws~~ of the ~~Registrant,~~Series asD ~~currently~~Preferred inStock ~~effect~~of Ampio Pharmaceuticals, Inc. filed May 25, 2023 (~~Incorporated~~incorporated by reference to Exhibit 3.12 to the Registrant’s Current Report on Form 108-QK filed ~~November~~on 14May 26, ~~2018~~2023).
3.6		Certificate of Amendment to Certificate of Incorporation of Ampio Pharmaceuticals, Inc. filed August 30, 2023 (Incorporated by reference to the Registrant’s Current Report on Form 8-K filed on August 31, 2023).
3.7		Amended and Restated Bylaws of the Registrant, as currently in effect. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q filed November 14, 2018).
3.8		Amendment to the Amended and Restated Bylaws of Ampio Pharmaceuticals, Inc. adopted May 24, 2023 (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 26, 2023).
4.1		Specimen Common Stock Certificate of the Registrant. (Incorporated by reference to Exhibit 4.1 to the Registrant’s Form 10-K for the year ended December 31, 2021).
4.2		Description of Capital Stock of Ampio Pharmaceuticals, Inc. (Incorporated by reference to Exhibit 4.5 to the Registrant’s Form 10-K filed on February 21, 2020).
10.1**		2010 Stock Incentive Plan and forms of option agreements. (Incorporated by reference to Exhibit 10.7 from Registrant’s Form 8-K/A filed March 17, 2010)
10.2**		Amendment of 2010 Stock and Incentive Plan. (Incorporated by reference to Appendix A to the Registrant’s Proxy Statement on Form 14A filed October 21, 2011)
10.3**		2019 Stock Incentive Plan and forms of option agreements. (Incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-K filed on March 3, 2021)
10.4**		Form of restricted stock award agreement under the 2019 Stock Incentive Plan. (Incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-K filed on March 29, 2022)
10.5		Lease Agreement by and between Ampio Pharmaceuticals, Inc. and NCWP – Inverness Business Park, LLC, dated December 13, 2013. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed December 19, 2013)
10.6**		Employment Agreement between Ampio Pharmaceuticals, Inc. and Daniel Stokely, dated October 11, 2021. (Incorporated by reference to Exhibit 10.8 to the Registrant’s Form 10-K filed on March 29, 2022)
10.7**		Employment Agreement between Ampio Pharmaceuticals, Inc. and Michael Martino, dated November 22, 2021. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K Filed November 29, 2021)
10.8**		Amendment No. 1 to Employment Agreement by and between Ampio Pharmaceuticals, Inc. and Michael A. Martino, dated August 30, 2022. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on September 1, 2022)
10.9**		Stock Option Cancellation and Grant Agreement for Executive between Ampio Pharmaceuticals, Inc. and Daniel Stokely, dated August 20, 2019. (Incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K filed August 23, 2019)

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10.10**		Form of Indemnification Agreement between Ampio Pharmaceuticals, Inc. and certain directors, executive officers and key employees. (Incorporated by reference to Exhibit 10.11 to the Registrant’s Form 10-K filed on March 29, 2022)
10.7**		Employment Agreement between Ampio Pharmaceuticals, Inc. and Michael Martino, dated November 22, 2021. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K Filed November 29, 2021)
10.11**		Amendment to Cancellation Agreement, dated November 7, 2019, between Ampio Pharmaceuticals Inc. and Daniel Stokely. (Incorporated by reference to Exhibit 10.4 to the Registrant's Form 10-Q filed November 7, 2019)
10.8**		Amendment No. 1 to Employment Agreement by and between Ampio Pharmaceuticals, Inc. and Michael A. Martino, dated August 30, 2022. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on September 1, 2022)
10.9**		Amendment No. 2 to Employment Agreement dated October 1, 2023 by and between Ampio Pharmaceuticals, Inc. and Michael A. Martino (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 4, 2023).
10.10**		Stock Option Cancellation and Grant Agreement for Executive between Ampio Pharmaceuticals, Inc. and Daniel Stokely, dated August 20, 2019. (Incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K filed August 23, 2019)
10.11**		Form of Indemnification Agreement between Ampio Pharmaceuticals, Inc. and certain directors, executive officers and key employees. (Incorporated by reference to Exhibit 10.11 to the Registrant’s Form 10-K filed on March 29, 2022)
10.12**		Amendment to Cancellation Agreement, dated November 7, 2019, between Ampio Pharmaceuticals Inc. and Daniel Stokely. (Incorporated by reference to Exhibit 10.4 to the Registrant's Form 10-Q filed November 7, 2019)
10.13		At the Market Offering Agreement dated September 18, 2023 by and between Ampio Pharmaceuticals, Inc. and H.C. Wainwright & Co., LLC. (Incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed September 22, 2023).
14.1		Ampio Pharmaceuticals, Inc. Code of Business Conduct and Ethics. (Incorporated by reference to Exhibit 14.1 to the Registrant’s Form 8-K filed December 18, 2019.)
23.1*		Consent of Moss Adams LLP.
31.1*		Certificate of the Chief Executive Officer of Ampio Pharmaceuticals, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certificate of the Chief Financial Officer of Ampio Pharmaceuticals, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certificate of the Chief Executive Officer and the Chief Financial Officer of Ampio Pharmaceuticals, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97		Ampio Pharmaceuticals, Inc. Compensation Recoupment Policy adopted October 24, 2023. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on October 27, 2023).
101		Inline XBRL (extensible Business Reporting Language). The following materials from Ampio Pharmaceuticals, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 formatted in XBRL: (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Stockholders’ Equity (Deficit), (iv) the Statements of Cash Flows, and (v) the Notes to the Financial Statements.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


*	Filed herewith.
**	This exhibit is a management contract or compensatory plan or arrangement.

Item 16.

Form 10-K Summary.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	AMPIO PHARMACEUTICALS, INC.

Date: March 27, 2023	By:	/s/ Michael A. Martino
Date: March 27, 2024	By:	/s/ Michael A. Martino
		Michael A. Martino
		Chief Executive Officer
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities indicated, on March 27, ~~2023~~2024.

Signature		Title

/s/ Michael A. Martino		Chief Executive Officer (Principal Executive Officer) and Director
Michael A. Martino

/s/ Daniel G. Stokely		Chief Financial Officer (Principal Financial and Accounting Officer)
Daniel G. Stokely

/s/ David R. Stevens		Director
David R. Stevens

/s/ J. Kevin Buchi		Director
J. Kevin Buchi

/s/ Elizabeth Varki Jobes		Director
Elizabeth Varki Jobes

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INDEX TO FINANCIAL STATEMENTS

AMPIO PHARMACEUTICALS, INC.

	Page

Report of Independent Registered Public Accounting Firm (Moss Adams LLP, Denver, Colorado PCAOB ID 659)	F-2

Balance Sheets	F-4

Statements of Operations	F-5

Statements of Stockholders’ Equity	F-6
Statements of Mezzanine Equity and Stockholders’ Equity	F-6

Statements of Cash Flows	F-7

Notes to Financial Statements	F-8

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Ampio Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Ampio Pharmaceuticals, Inc. (the “Company”) as of December 31, ~~2022~~2023 and ~~2021~~2022, the related statements of operations, mezzanine equity and stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2022~~2023 and ~~2021~~2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations, plans to pursue voluntary de-listing of the Company’s common stock, and is preserving cash ~~used~~to infund an orderly wind down of operations. ~~that~~These factors raise substantial doubt about ~~its~~the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-2

Table of Contents

Critical Audit Matter

~~The~~Critical ~~critical~~ audit ~~matter~~matters ~~communicated~~are ~~below~~matters ~~is a matter~~ arising from the current period audit of the financial statements that ~~was~~were communicated or required to be communicated to the audit committee and that (1) ~~relates~~relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. ~~The~~We ~~communication~~determined ofthat ~~critical~~there ~~audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we~~ are ~~not,~~no ~~by communicating the~~ critical audit ~~matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates~~matters.

Impairment Evaluation of Long-lived Assets and Right-of-use Asset

As described in Note 2, the Company performs an evaluation on an annual basis, or sooner if management believes a triggering event has occurred, of the recoverability related to the carrying value of its long-lived assets to determine if facts and circumstances indicate that the carrying value of assets may be impaired and if any adjustment is warranted. The Company recorded impairment charges of $1.6 million and $0.3 million on its long-lived and ROU assets, respectively, during the year ended December 31, 2022.

We identified the impairment evaluation of long-lived assets and right-of-use asset as a critical audit matter because of significant judgements made by management to estimate the fair value of the long-lived assets and right-of-use asset. This required a high degree of auditor judgement and an increased extent of effort, including the need to involve internal valuation specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions.

The primary procedures we performed to address this critical audit matter included:

• Testing management’s process for assessing impairment of long-lived assets, including the timing of the triggering events leading to the impairment. We corroborated key events through review of board minutes, external press releases, corroborating inquiries of management, and direct testing of the reduction in force.

• Utilizing our internal valuation specialist to assist in testing the methodologies and significant assumptions, including marketability of long-lived assets, and calculations of management’s fair value estimates.

• Performing appropriate mathematical checks of supporting schedules related to the assumptions, data, methodology and models used in the valuation report, including the completeness and accuracy of the fixed asset detail used in impairment analysis, as well as the impairment adjustment and agreeing to general ledger.

/s/ Moss Adams LLP

Denver, Colorado

March 27, ~~2023~~2024

We have served as the Company’s auditor since 2019.

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AMPIO PHARMACEUTICALS, INC.

Balance Sheets


		December 31,			December 31,
		~~2022~~2023			~~2021~~2022

Assets
Current assets
Cash and cash equivalents		$	124,~~653~~089,000		$	3312,~~892~~653,000
Prepaid expenses and other			676,000			1,740,000
Insurance recovery receivable			920,000			—
Total current assets			13,329,000			35,632,000
Prepaid expenses and other			727,000			676,000
Total current assets			5,736,000			13,329,000

Fixed assets, net			~~184,000~~—			2184,~~564,~~000
Right-of-use asset, net			~~75,000~~—			~~629~~75,000
Total assets		$	135,~~588~~736,000		$	3813,~~825~~588,000

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued expenses		$	~~852~~2,102,000		$	4852,~~811,~~000
Lease liability-current portion			~~340~~274,000			~~311~~340,000
Total current liabilities			12,~~192~~376,000			51,~~122~~192,000

Lease liability-long-term			~~274,000~~—			~~614~~274,000
Warrant derivative liability			~~44,000~~—			544,~~805,~~000
Asset retirement obligation			~~289,000~~—			—289,000
Total liabilities			12,~~799~~376,000			111,~~541~~799,000

Commitments and contingencies (Note 6 and Note 13)
Commitments and contingencies (Note 6)

Mezzanine equity
Preferred Stock, par value $0.0001; 10,000,000 shares authorized; shares issued and outstanding - none as of December 31, 2023 and December 31, 2022			—			—

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 - 833,430 as of December 31, 2023 and 804,674 as of December 31, 2022	[1]		—			—
Common Stock, par value $0.0001; 300,000,000 shares authorized; shares issued and outstanding - 15,102,877 as of December 31, 2022 and 15,172,111 as of December 31, 2021			2,000			2,000
Additional paid-in capital			245,887,000	[1]		245,728,000
Additional paid-in capital			245,726,000			244,884,000
Accumulated deficit			(242,527,000)			(233,939,000)
Accumulated deficit			(233,939,000)			(217,602,000)
Total stockholders’ equity			3,360,000			11,789,000
Total stockholders’ equity			11,789,000			27,284,000

Total liabilities and stockholders’ equity		$	135,~~588~~736,000		$	3813,~~825~~588,000

[1] December 31, 2023 balances have been adjusted and December 31, 2022 balances have been retroactively adjusted to reflect the 20-to-1 reverse stock split effected September 12, 2023.

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

F-4

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AMPIO PHARMACEUTICALS, INC.

Statements of Operations


	Year Ended December 31,
	~~2022~~2023		~~2021~~2022

Operating expenses
Research and development	$	82,~~916~~439,000	$	118,~~900~~916,000
General and administrative		117,~~466~~079,000		811,~~671~~466,000
Long-lived assets impairment		~~1,614,000~~—		—1,614,000
Right-of-use asset impairment		322,000		—
Right of use asset impairment		—		322,000
Total operating expenses		22,318,000		20,571,000
Loss on sale of fixed assets		56,000		—
Total operating expenses		9,574,000		22,318,000

Other income
Interest income		~~220~~348,000		4220,000
Derivative gain		5,761,000		3,492,000
Rental income		305,000		—
Total other income		5,981,000		3,496,000
Gain from elimination of ARO obligation, net		289,000		—
Derivative gain		—		5,761,000
Total other income		942,000		5,981,000

Net loss	$	(168,~~337~~632,000)	$	(1716,~~075~~337,000)

Net loss per common share:
Net loss per common share: [1]
Basic	$	(110.0866)	$	(121.2968)
Diluted	$	(110.4766)	$	(129.5132)

Weighted average number of common shares outstanding:
Weighted average number of common shares outstanding: [1]
Basic		15810,~~072,308~~113		13753,~~286,605~~615
Diluted		15810,~~072,308~~113		13753,~~664,202~~615

[1] Net loss per common share and weighted average number of common shares outstanding for the current period have been adjusted and the prior periods have been retroactively adjusted to reflect the 20-to-1 reverse stock split effected September 12, 2023.

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

F-5

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AMPIO PHARMACEUTICALS, INC.

Statements of Mezzanine Equity and Stockholders’ Equity


	Mezzanine Equity			~~Additional~~					Additional	~~Total~~				Total
	~~Common~~Series ~~Stock~~D Preferred			~~Paid-in~~Common Stock			~~Accumulated~~		Paid-in	~~Stockholders'~~		Accumulated		Stockholders'
	Shares	Amount		~~Capital~~Shares		Amount	~~Deficit~~		Capital	~~Equity~~		Deficit		Equity
Balance at December 31, 2020	12,909,017	$	2,000	$	218,041,000		$	(200,527,000)		$	17,516,000
Balance at December 31, 2021	—	$	—	808,136		$	—		$	244,886,000		$	(217,602,000)	$	27,284,000

Issuance of common stock for services	3,604		—		80,000			—			80,000
Share-based compensation, net of forfeitures	—		—	—			—			1,462,000			—		1,462,000
Share-based compensation, net of forfeitures	—		—		2,724,000			—			2,724,000
Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards	—		—	(462)			—			(79,000)			—		(79,000)
Stock options exercised, net	25,774		—		120,000			—			120,000
Offering costs related to the issuance of common stock and warrants in connection with the registered direct offering	—		—	—			—			(32,000)			—		(32,000)
Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards	(7,572)		—		(186,000)			—			(186,000)
Restricted stock award forfeitures	—		—	(3,000)			—			(509,000)			—		(509,000)
Warrants exercised, net	39,215		—		114,000			—			114,000
Net loss	—		—	—			—			—			(16,337,000)		(16,337,000)
Shares issued in connection with restricted stock awards	119,000		—		—			—			—

Issuance of common stock in connection with the "at-the-market" equity offering program	416,406		—		10,511,000			—			10,511,000
Balance at December 31, 2022	—		—	804,674			—			245,728,000			(233,939,000)		11,789,000
Issuance of common stock and warrants in connection with the registered direct offering	1,666,667		—		22,497,000			—			22,497,000

Offering costs related to the issuance of common stock in connection with the "at-the-market" equity offering program	—		—		(512,000)			—			(512,000)
Reclassification of warrant derivative upon adoption of ASU 2020-06	—		—	—			—			—			44,000		44,000
Offering costs related to the issuance of common stock and warrants in connection with the registered direct offering	—		—		(1,816,000)			—			(1,816,000)
Share-based compensation, net of forfeitures	—		—	—			—			159,000			—		159,000
Fair value related to the issuance of warrants in connection with the registered direct offering	—		—		(6,689,000)			—			(6,689,000)
Issuance of Series D preferred stock dividend	15,103		—	—			—			—			—		—
Net loss	—		—		—			(17,075,000)			(17,075,000)
Preferred stock redemption	(15,103)		—	—			—			—			—		—

Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards	—		—	(70)			—			—			—		—
Balance at December 31, 2021	15,172,111		2,000		244,884,000			(217,602,000)			27,284,000
Common stock issued related to the ATM Equity Offering Program	—		—	28,826			—			98,000			—		98,000

Offering costs for the common stock issued related to the ATM Equity Offering Program	—		—	—			—			(98,000)			—		(98,000)
Share-based compensation, net of forfeitures	—		—		1,462,000			—			1,462,000
Net loss	—		—	—			—			—			(8,632,000)		(8,632,000)
Shares held back in settlement of tax obligation for shares issued in connection with restricted stock awards	(9,234)		—		(79,000)			—			(79,000)

Offering costs related to the issuance of common stock and warrants in connection with the registered direct offering	—		—		(32,000)			—			(32,000)
Balance at December 31, 2023	—	$	—	833,430		$	—		$	245,887,000		$	(242,527,000)	$	3,360,000
Restricted stock award forfeitures	(60,000)				(509,000)						(509,000)
Net loss	—		—		—			(16,337,000)			(16,337,000)

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

Note that the shares numbers and balances for the current period have been adjusted and prior periods have been retroactively adjusted to reflect the 20-to-1 reverse stock split effected September 12, 2023.

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

F-6

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AMPIO PHARMACEUTICALS, INC.

Statements of Cash Flows


	Year Ended December 31,
	~~2022~~2023		~~2021~~2022

Cash flows used in operating activities
Net loss	$	(168,~~337~~632,000)	$	(1716,~~075~~337,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation, net of forfeitures		1159,~~462,~~000		21,~~724~~462,000
Restricted stock award compensation, forfeitures		~~(509,000)~~—		—(509,000)
Issuance of common stock for services		—		80,000
Depreciation and amortization		122,000		1,048,000
Depreciation and amortization		1,048,000		1,094,000
Long-lived assets impairment		—		1,614,000
Long-lived assets impairment		1,614,000		—
Right-of-use asset impairment		—		322,000
Right-of-use asset impairment		322,000		—
Loss on sale of fixed assets		56,000		—
Accretion of asset retirement obligation		7,000		—
Net gain from elimination of ARO obligation		(289,000)		7,000
Derivative gain		(5,761,000)		(3,492,000)
Accretion of asset retirement obligation		5,000
Derivative gain		—		(5,761,000)
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses and other		1,064,000		(593,000)
Increase in insurance recovery receivable		(920,000)		—
(Decrease) increase in accounts payable and accrued expenses		(3,959,000)		3,262,000
(Increase) decrease in prepaid expenses and other		(51,000)		1,064,000
Decrease in lease liability		(79,000)		(89,000)
Increase (decrease) in accounts payable and accrued expenses		1,251,000		(3,959,000)
Net cash used in operating activities		(21,128,000)		(14,089,000)
Decrease in lease liability		(265,000)		(79,000)
Net cash used in operating activities		(8,564,000)		(21,128,000)

Cash flows used in investing activities
Net cash used in investing activities		—		—
Purchase of fixed assets		—		(97,000)
Net cash used in investing activities		—		(97,000)

Cash flows (used in) provided by financing activities
Cash flows used in financing activities
Proceeds from sale of common stock in connection with the "at-the-market" equity offering program		—98,000		~~10,512,000~~—
Costs related to sale of common stock in connection with the "at-the-market" equity offering program		—(98,000)		~~(512,000)~~—
Proceeds from sale of common stock and warrants in connection with the registered direct offering		—		22,500,000
Costs related to the sale of common stock and warrants in connection with the registered direct offering		—		(32,000)
Costs related to the sale of common stock and warrants in connection with the registered direct offering		(32,000)		(1,816,000)
Funding of tax obligation relative to shares withheld in connection with restricted stock awards		—		(79,000)
Proceeds from warrant and stock option exercises, net		—		234,000
Net cash used in financing activities		—		(111,000)
Funding of tax obligation relative to shares withheld in connection with restricted stock awards		(79,000)		(186,000)
Net cash (used in) provided by financing activities		(111,000)		30,732,000

Net change in cash and cash equivalents		(218,~~239~~564,000)		16(21,~~546~~239,000)

Cash and cash equivalents at beginning of period		3312,~~892~~653,000		1733,~~346~~892,000
Cash and cash equivalents at end of period	$	124,~~653~~089,000	$	3312,~~892~~653,000

Non-cash transactions:
Commercial insurance premium financing agreement	$	1703,~~159,~~000	$	1,~~016~~159,000
Recognition of asset retirement obligation	$	~~282,000~~—	$	—282,000

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

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AMPIO PHARMACEUTICALS, INC.

Notes to Financial Statements

Note 1 – Basis of Presentation

The accompanying financial statements have been prepared in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”). Ampio Pharmaceuticals, Inc. (“Ampio” or “the Company”) is a pre-revenue stage biopharmaceutical company, located in Englewood, CO, that iswas ~~currently~~ focused solely on the ~~preclinical~~ development of ~~AR-300~~a ~~and~~potential ~~currently~~treatment ~~conducting~~for ~~studies~~Osteoarthritis toof ~~evaluate~~ the ~~efficacy~~Knee (“OAK”) as part of ARthe OA-~~300~~201 inprogram. ~~osteoarthritis~~The ~~related~~OA-201 ~~pain~~program sought to advance Ampio’s unique and proprietary small molecule formulation that was Ampio’s only product development opportunity.

The Company’s core activities in 2023 relate to research and development and raising capital. The Company has not generated operating revenue to date.

OnIn ~~November~~late 92023, ~~2022,~~we ~~the~~initiated ~~Company~~non-clinical ~~effected~~studies ~~a 15-~~to-1 ~~reverse~~determine ~~stock~~whether ~~split.~~OA-201 ~~The~~would ~~Company~~support ~~has~~an ~~retroactively~~Investigational ~~applied~~New ~~the~~Drug ~~reverse~~(“IND”) ~~stock~~submission. ~~split~~Previous ~~made~~smaller ~~effective~~studies onhad ~~November~~demonstrated 9,that ~~2022~~OA-201 toshowed ~~share~~efficacy ~~and~~versus ~~per~~saline ~~share~~control ~~amounts~~to inreduce ~~the~~pain ~~consolidated~~and ~~financial~~preserve ~~statements~~cartilage asin ofnon-clinical ~~December~~models ~~31,~~of ~~2022~~osteoarthritis ~~and~~of ~~December~~the 31knee. However, ~~2021.~~as ~~Additionally,~~we ~~pursuant~~announced toin ~~their~~February ~~terms~~2024, athe ~~proportionate~~pain ~~adjustment~~reduction benefit was ~~made~~not toobserved in the ~~per~~data ~~share~~from ~~exercise~~the ~~price~~recent ~~and~~set ~~number~~ of ~~shares~~non-clinical ~~issuable~~studies ~~under~~which ~~all~~utilized ofa ~~the~~larger ~~Company’s~~population ~~outstanding~~of ~~options~~animal ~~and~~subjects. Because ~~warrants, and~~ the ~~number~~data offrom ~~shares authorized for issuance pursuant to~~ the ~~Company’s~~larger ~~equity~~non-clinical ~~incentive~~pain ~~plans~~reduction ~~have~~trial ~~been~~of ~~reduced~~OA-201 ~~proportionately,~~did ~~with~~not ~~any~~support ~~fractional shares rounded up to~~ the ~~next~~same ~~whole~~pain ~~share.~~reduction ~~The~~benefit ~~Company~~as ~~also~~was ~~retroactively~~demonstrated ~~applied such adjustments~~ in the ~~notes~~earlier ~~to the consolidated financial statements as of December 31~~trials, ~~2022~~Ampio ~~and~~determined ~~December~~to ~~31,~~cease ~~2021.~~all ~~The~~preclinical ~~reverse stock split did not reduce the number of authorized shares of common stock~~ and ~~preferred~~clinical ~~stock~~development ~~and~~activities ~~did~~relating ~~not~~to ~~alter the par value~~OA-201.

On November 9, 2022, the Company effected a 15-to-1 reverse stock split. On September 12, 2023, the Company effected a 20-to-1 reverse stock split. The Company has applied and retroactively applied, the reverse stock splits to share and per share amounts in the financial statements as of December 31, 2023 and December 31, 2022, respectively. Additionally, pursuant to their terms, a proportionate adjustment was made to the per share exercise price and number of shares issuable under all the Company’s outstanding options under the 2010/2019 Stock and Incentive Plans, the number of shares of restricted stock outstanding under the 2019 Stock and Incentive Plan, and common stock warrants, with any fractional shares rounded up to the next whole share. The number of shares authorized for issuance pursuant to the Company’s 2023 Stock and Incentive Plan (the “2023 Plan”) was not impacted by the 20-to-1 reverse stock split (see Note 9 for additional information). The Company also applied and retroactively applied such adjustments in the notes to the condensed financial statements as of December 31, 2023 and December 31, 2022, respectively. The reverse stock split did not reduce the number of authorized shares of common stock and preferred stock and did not alter the par value.

Note 2 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses, and related disclosures in the financial statements and accompanying notes. The Company bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Significant items subject to such estimates and assumptions primarily include the Company’s projected current and long-term liquidity, ~~the~~needs ~~clinical trial accrual, projected useful lives~~ and ~~potential~~availability ~~impairment of long-lived assets~~ and ~~ROU~~the ~~asset~~insurance ~~(“right-of-use~~recovery ~~asset”)~~receivable. The Company develops these estimates using its judgment based upon experience and the facts and circumstances known at the time.

Cash and Cash Equivalents

The Company considers instruments purchased with an original maturity of three months or less to be cash equivalents. The Company’s investment policy is to preserve principal and maintain liquidity. On March 10, 2023, the Federal Deposit Insurance Corporation (“FDIC”) placed Silicon Valley Bank (SVB) into receivership. At that time, the Company held approximately $1,250,000 in a deposit account at SVB. The balance of the Company’s cash was held in an investment account that is not a deposit account and therefore, these amounts would not be impacted by the FDIC’s receivership of SVB or subject to FDIC insurance limits. Following the joint statement by the U.S. Treasury, Federal Reserve and the FDIC on March 12, 2023, the Company regained access to all of its deposit account funds. The Company refined its cash management strategy in order to further mitigate the potential risk of loss associated with deposit accounts balances in excess of the FDIC insured amount.

Concentrations of Credit Risk

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~~exchange~~Deposit ~~contracts,~~Insurance ~~option~~Corporation ~~contracts~~(“FDIC”) orplaced ~~foreign~~Silicon ~~currency~~Valley ~~hedging~~Bank ~~arrangements~~(“SVB”) into receivership. At ~~The~~that time, the Company ~~consistently~~held ~~maintains~~approximately ~~its~~$1,250,000 ~~cash~~in ~~and~~a ~~cash~~deposit ~~equivalent~~account ~~balances~~at inSVB. The balance of the ~~form~~Company’s ofcash ~~bank~~was ~~demand~~held ~~deposits,~~in ~~United~~an ~~States~~investment ~~federal~~account ~~government~~that ~~backed~~was ~~treasury~~not ~~securities~~a deposit account and ~~liquid~~therefore, ~~money~~these ~~market~~amounts ~~fund~~were ~~accounts~~not ~~with~~impacted ~~financial~~by ~~institutions~~the ~~that~~FDIC’s ~~management~~receivership ~~believes~~of ~~are~~SVB ~~creditworthy.~~or ~~The~~subject ~~Company~~to ~~periodically~~FDIC ~~monitors~~insurance ~~its~~limits. Following ~~cash~~the ~~positions~~joint ~~with~~statement by the U.S. Treasury, Federal Reserve and the ~~credit~~FDIC ~~quality~~on ofMarch 12, 2023, the ~~financial~~Company ~~institutions~~regained ~~with~~access ~~which~~to itall ~~invests~~of its deposit account funds. The ~~During~~Company ~~the years~~refined ~~ended~~its ~~December 31,~~cash ~~2022~~management ~~and~~strategy ~~2021,~~in order to further mitigate the ~~Company~~potential ~~has~~risk ~~maintained~~of loss associated with deposit accounts balances in excess of ~~federally~~the FDIC insured ~~limits~~amount.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company has no off-balance-sheet concentrations of credit risk, such as foreign exchange contracts, option contracts or foreign currency hedging arrangements. The Company consistently maintains its cash and cash equivalent balances in the form of bank demand deposits, United States federal government backed treasury securities and liquid money market fund accounts with financial institutions that management believes are creditworthy. The Company periodically monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. During the year ended December 31, 2023, the Company did not maintain balances in excess of the federally insured limits; however, during the year ended December 31, 2022, the Company maintained balances in excess of federally insured limits.

Insurance Recovery Receivable

During the second quarter of 2023, the Company’s legal expenses associated with the litigation proceedings exceeded the retention limit per the insurance policy and, as such, legal expenses incurred subsequently are covered and reimbursed by the insurance carrier. As of December 31, 2023, the Company estimated an insurance recovery receivable of $920,000.

Fixed Assets

~~Fixed~~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 the Company’s existing fixed assets ~~are~~(see Note 4). As such, as of December 31, 2023, the Company has no fixed assets. However, in prior years, fixed assets were stated at cost less accumulated depreciation and amortization. Cost ~~includes~~included expenditures for equipment, leasehold improvements, replacements, and renewals and the related cost required to get certain equipment in operating condition. The Company ~~charges~~charged routine and ongoing maintenance and repairs to expense as incurred. When assets ~~are~~were sold, retired, or otherwise disposed of, the cost and accumulated depreciation ~~are~~were removed from the accounts and any resulting gain or loss iswas reflected in operations. The cost of property and equipment iswas depreciated using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements ~~are~~were amortized over the remaining life of the lease.

Impairment of Long-Lived Assets

The Company performs an evaluation on an annual basis, or sooner if management believes a triggering event has occurred, of the recoverability related to the carrying value of its long-lived assets to determine if facts and circumstances indicate that the carrying value of assets may be impaired and if any adjustment is warranted. ~~The~~As noted above, there were no long-lived or ROU assets to evaluate as of December 31, 2023. However, the Company recorded impairment charges of $1.6 million and $0.3 million on its long-lived and ROU assets, respectively, during the year ended December 31, 2022. ~~No impairment existed for long-lived or ROU assets at December 31, 2021.~~

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts payable and accrued expenses~~, and warrant derivative liability~~. The carrying amounts of cash and cash equivalents, accounts payable and accrued expenses are carried at cost, which approximates fair value due to the short maturity of these instruments. ~~The~~In ~~warrant~~prior ~~derivative~~years, ~~liability~~the isCompany recorded ata ~~estimated fair value based on utilization of the Black-Scholes~~ warrant ~~pricing model depending on facts and circumstances. See Note 7 and Note 8 for additional information on the warrant derivative liability.~~

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derivative liability associated with former offerings at estimated fair value based on utilization of the Black-Scholes warrant pricing model depending on facts and circumstances. However, the Company early adopted ASU 2020-06, resulting in the reclassification of the warrant derivative liability to stockholders’ equity, effective January 1, 2023. See Note 7 and Note 8 for additional information on the warrant derivative liability.

Share-Based Compensation

The Company accounts for share-based payments by recognizing compensation expense based upon the estimated fair value of the share-based payments on the date of grant. The Company determines the estimated fair value of the share-based payments granted using the fair market value or Black-Scholes option pricing model and recognizes compensation costs ratably over the requisite service period which approximates the vesting period using the graded method. See Note 10 for additional information on share-based compensation.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. The measurement of deferred tax assets may be reduced by a valuation allowance based on judgmental assessment of available evidence if deemed more likely than not that some or all of the deferred tax assets will not be realized. The Company has recorded a valuation allowance against all of its net deferred tax assets, as management has concluded that it is more likely than not that the net deferred tax asset will not be realized through projected future taxable income, based primarily on the Company’s ongoing history of operating losses and the lack of taxable income in the foreseeable future. See Note 11 for additional information on income taxes.

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Research and Development

Research and development costs are expensed as incurred in the respective periods.

Liquidity

The ~~company~~Company ~~recognized a net loss of $16.3 million, which~~ is primarily attributable to operating expenses of $22.3 million, partially offset by the non-cash derivative gain of $5.8 million (see Note 8) and interest income of $0.2 million. The Company used $21.1 million of cash to fund business operations for the year ended December 31, 2022 and ended the year with an accumulated deficit and stockholders’ equity of $233.9 million and $11.8 million, respectively. As a pre-revenue stage biopharmaceutical company, ~~the~~that ~~Company~~ has ~~not~~incurred ~~generated~~an ~~any~~accumulated ~~operating~~deficit revenues or profits since inception. Based on current cash flow projections, management believes that additional capital will be required to fund the business subsequent to December 31, 2023. Our current projection which contemplates the completion of the preclinical studies for AR-300 and, depending on the data results, taking additional steps toward the filing of an IND reflects that we should have sufficient liquidity to fund operations through the fourth quarter 2023$242.5 ~~This~~million ~~projection~~as is based on many assumptions that may prove to be incorrect. As such, it is possible that we could exhaust our available cash and cash equivalents earlier than presently anticipated. Due to the current level of ~~liquidity at~~ December 31, 2022 and the projected shortfall to cover operating expenses requiring cash for a period of 12 months from the report date of the annual report, management has expressed substantial doubt as to our ability to continue as a going concern2023.

Over this period, we have continued to be focused on research and pre-clinical / clinical drug development all of which has required raising a substantial amount of capital.

~~Recently,~~As weof ~~announced~~December ~~that~~31, we2023, ~~completed~~the ~~clinical~~Company ~~trial~~had ~~reports~~$4.1 ~~for~~million ~~all~~of ~~legacy~~cash ~~Ampion~~and ~~trials~~cash equivalents and ~~submitted~~an ~~those~~insurance ~~reports~~recovery toreceivable of $0.9 million. As of February 29, 2024, the ~~appropriate~~Company ~~agencies~~had ~~for~~$3.4 ~~review~~million in cash and ~~ultimate~~cash ~~publication~~equivalents onand ~~Clinical~~$0.5 ~~Trials~~million of an insurance recovery receivable.~~gov. In~~ ~~addition,~~While wethe ~~also~~Company ~~informed~~continued to implement cost reductions in 2023 and additional cost reductions in February and March 2024, the ~~FDA~~Company ~~that~~has wefinite ~~have~~cash ~~discontinued~~resources ~~further~~available ~~development~~to fund its now limited operations. Its activities currently consist of taking steps to preserve cash to adequately fund an orderly wind down of the ~~product~~Company’s operations and ~~withdrawn~~to maximize the ~~INDs.~~Company’s ~~The~~cash ~~combination~~position and pursuit of ~~these~~the ~~activities~~resolution ~~concludes~~of ~~the~~currently ~~development~~pending ~~efforts~~legal proceedings. Consistent with this goal, on ~~Ampion~~March 25, 2024, the Board of Directors determined to pursue voluntary delisting of Ampio’s common stock from the NYSE American. After delisting, the Company expects to suspend its reporting obligations under the Exchange Act and deregister its common stock under Section 12(b) of the Exchange Act.

InBased ~~addition~~on the above, wethese ~~have~~conditions ~~continued~~and events raise substantial doubt about the Company’s ability to ~~focus~~continue onas ~~reducing~~a ~~operating~~going ~~costs,~~concern. ~~including~~The ~~but~~accompanying ~~not~~financial ~~limited~~statements ~~to,~~were ~~the~~prepared ~~reduction~~on ofa ~~personnel~~going ~~expense~~concern tobasis, ~~correspond~~which tocontemplates the ~~conclusion~~realization of ~~development~~assets ~~efforts~~and ~~relating~~the tosatisfaction ~~Ampion~~of ~~and~~liabilities ~~have~~in ~~engaged~~the anormal ~~nationally~~course ~~recognized~~of ~~commercial~~business. ~~real~~These ~~estate~~financial ~~broker~~statements todo ~~assist~~not ~~with~~include ~~sublease~~any ofseparate ~~the~~adjustments ~~existing~~relating ~~office~~to ~~space. As~~the ~~previously~~recovery ~~stated,~~of werecorded ~~are~~assets ~~currently~~or ~~conducting~~the ~~preclinical~~classification ~~studies~~of toliabilities; ~~evaluate~~however, ~~the~~such ~~safety~~adjustments ~~and~~may ~~efficacy~~be ofnecessary ~~AR-300~~in ~~with~~the future when the ~~initial~~Company ~~target~~is ~~for~~unable ~~treatment~~to ofcontinue ~~OAK~~as a going concern.

Adoption of Recent Accounting Pronouncements

The Company has not adopted any recent accounting pronouncements during the year ended December 31, 2022, as none were deemed to be applicable.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standard Board (the “FASB”) issued ASU 2020-06, “Debt (Subtopic 470-20); Debt with Conversion and Other Options and Derivatives and Hedging (Subtopic 815-40) Contracts in Entity’s Own Equity”. The updated guidance is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. Consequently, more convertible debt instruments will be reported as single liability instruments with no separate accounting for embedded conversion features. The ASU 2020-06 also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. In addition, ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The updated guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted for periods beginning after December 15, 2020. The Company plans to early adopt ASU 2020-06 in the first quarter of 2023; the adoption is not expected to have a material impact on the Company’s financial statements.

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Adoption of Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standard Board (the “FASB”) issued ASU 2020-06, “Debt (Subtopic 470-20); Debt with Conversion and Other Options and Derivatives and Hedging (Subtopic 815-40) Contracts in Entity’s Own Equity”. The updated guidance is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. Consequently, more convertible debt instruments will be reported as single liability instruments with no separate accounting for embedded conversion features. The ASU 2020-06 also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. In addition, ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The updated guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted for periods beginning after December 15, 2020. The Company 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.

Recent Accounting Pronouncements

This Annual Report on Form 10-K does not discuss recent pronouncements that are not anticipated to have a current and/or future impact on or are unrelated to the Company’s financial condition, results of operations, cash flows or disclosures.

Note 3 – Prepaid Expenses and Other

Prepaid expenses and other balances as of December 31, ~~2022~~2023 and ~~2021~~2022 are as follows:



	December 31, ~~2022~~2023		December 31, ~~2021~~2022

Unamortized commercial insurance premiums	$	~~610~~339,000	$	~~465~~610,000
Deposits		34,000		884,000
Non-clinical trials (upfront payments)		215,000		—
Professional fees		19,000		235,000
Deferred issuance costs		136,000		—
Clinical trial inventory		—		72,000
Deposits		34,000		34,000
Other		133,000		8432,000
Total prepaid expenses and other	$	~~676~~727,000	$	1676,~~740,~~000

Note 4 – Fixed Assets

Fixed assets balances, net of accumulated depreciation, as of December 31, ~~2022~~2023 and ~~2021~~2022 are as follows:


	Estimated
	Useful Lives
	(in Years)	December 31, ~~2022~~2023		December 31, ~~2021~~2022

Leasehold improvements	10	$	~~4,965,000~~—	$	64,~~075~~965,000
Manufacturing facility/clean room	3 - 8		~~2,803,000~~—		2,~~984~~803,000
Lab equipment and office furniture	5 - 8		~~1,661,000~~—		1,~~739~~661,000
Fixed assets, gross			~~9,429,000~~—		109,~~798~~429,000
Accumulated depreciation			~~(9,245,000)~~—		(89,~~234~~245,000)
Fixed assets, net		$	~~184,000~~—	$	2184,~~564,~~000

In accordance with ASC Topic 360, Property, Plant and Equipment, the Company assesses all of its long-lived assets for impairment when impairment indicators are identified. ~~Based~~During on the ~~assessment~~third atquarter ~~September~~of ~~30,~~ 2022, the Company ~~recorded~~announced ~~a non-cash impairment related to its long-lived assets which was triggered by the Company’s announcement during the current reporting period~~ that it was discontinuing further development of its lead pipeline ~~asset~~, Ampion. ~~The~~This ~~Company~~announcement ~~utilized~~was aidentified market valuation approach for determining the fair value of the ROU asset and a combination of the indirect cost approach and market approach for determining the fair value of the long-lived fixed assets. Based on this analysis, we concluded that the carrying value of the assets exceeded its undiscounted cash flows, and, as ~~such,~~ an impairment loss, calculated as the difference between carrying value and fair value, was deemed necessary. Accordingly, the Company recorded a $1.6 million impairment loss during the third quarter of 2022 as a direct reduction to the cost basis of the affected assets.

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indicator and, as such, the Company recorded a non-cash impairment as of September 30, 2022 related to its long-lived assets. The Company utilized a market valuation approach for determining the fair value of the ROU asset and a combination of the indirect cost approach and market approach for determining the fair value of the long-lived fixed assets. Based on this analysis, the Company concluded that the carrying value of the assets exceeded its undiscounted cash flows, and, as such, an impairment loss, calculated as the difference between carrying value and fair value, was deemed necessary. Accordingly, the Company recorded a $1.6 million impairment loss during the third quarter of 2022 as a direct reduction to the cost basis of the affected assets. Due to the impairment in the prior year, there were no fixed assets to evaluate or impair as of December 31, 2023.

Depreciation expense as of December 31, ~~2022~~2023 and ~~2021~~2022 is as follows:


	Year Ended December 31,
	~~2022~~2023		~~2021~~2022

Depreciation and amortization expense	$	1122,~~048,~~000	$	1,~~094~~048,000

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Note 5 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of December 31, ~~2022~~2023 and ~~2021~~2022 is as follows:



	December 31, ~~2022~~2023		December 31, ~~2021~~2022

Accounts payable	$	97750,000	$	~~427~~97,000
Clinical trials		89,000		2,995,000
Professional fees		706,000		157,000
Professional fees		157,000		510,000
Manufacturing development		274,000		—
Commercial insurance premium financing		~~189~~177,000		~~269~~189,000
Accrued severance		143,000		—
Non-clinical and clinical trials		73,000		89,000
Accrued compensation		—		389,000
Subtenant security deposit		62,000		—
Other		177,000		221,000
Franchise taxes		22,000		78,000
Accounts payable and accrued expenses	$	852,000	$	4,811,000
Property taxes		—		74,000
Accrued severance		—		143,000
Other		38,000		25,000
Accounts payable and accrued expenses	$	2,102,000	$	852,000

Commercial Insurance Premium Financing ~~Agreement~~

In June ~~2022~~2023, the Company entered into an insurance premium financing agreement for $10.27 million, with a term of ~~eight~~nine months and an annual interest rate of 38.9800% and made a down payment of $~~402~~171,000. Under the terms and provisions of the agreement, the Company is required to make principal and interest payments totaling $9559,000 per month over the remaining term of the agreement. The outstanding obligation of $~~189~~177,000 as of December 31, ~~2022~~2023 was paid in full in ~~February~~March ~~2023~~2024.

Note 6 – Commitments and Contingencies

~~Key~~Employment ~~Clinical Research Trial Obligations~~Agreements

~~Osteoarthritis~~As of December 31, 2023, the ~~Knee~~Company is a party to an employment agreement with Michael A. Martino, Chief Executive Officer, dated November 22, 2021 and amended August 30, 2022 with an initial base salary of $550,000. The amendment on August 30, 2022 extended the term to November 22, 2023. On October 1, 2023, the Company and Michael A. Martino entered into a second amendment to the employment agreement, which changed the term ending on

AP-013 study

In December 2020, the Company entered into an initial contract with a clinical research organization (“CRO”) in reference to the AP-013 study totaling $1.4 million. The contractual provisions required a retainer of $315,000, which was applied to study expenses as further defined by the contract. The Company entered into change orders to the initial contract in February 2022 totaling $0.2 million and April 2022 totaling $0.7 million which reflected the final costs to close out the study. The Company had an outstanding future contractual commitment of $120,000 (net of the $315,000 deposit) as of December 31, 2021. As of December 31, 2022, trial activities and related services have been completed and, as such, there is no commitment for future services.

Inhaled treatment for COVID-19 patients

AP-018 study and AP-019 study

In March 2021, the Company entered into a contract with a CRO totaling $318,000 in reference to a Phase 1 study for at-home treatment utilizing inhaled Ampion to treat patients with Long-COVID, or prolonged respiratory symptoms due to COVID-19 (the “AP-018 study”). Subsequent to March 2021, the Company agreed to a contractual amendment totaling $946,000 resulting in a total contractual commitment of $1.3 million. As of December 31, 2022, trial activities and related services have been completed and, as such, there is no commitment for future services.

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InNovember ~~June 2021~~22, ~~the~~2023 ~~Company entered into a contract with a CRO totaling $2.6 million in reference~~ to aan ~~multicenter~~indefinite ~~Phase 2 clinical trial, using inhaled Ampion in the treatment of respiratory distress due to COVID-19 (the “AP-019 study”)~~term. ~~The~~All ~~contractual~~other ~~amount~~terms ~~was~~and ~~subsequently~~conditions ~~amended by $0.9 million resulting in a total contractual commitment~~ of $3Mr.5 ~~million.~~Martino’s ~~The~~employment ~~AP-019~~agreement ~~study~~remain ~~has been completed as of December 31, 2022 and, as such, there is no commitment for future services~~unchanged.

~~Intravenous~~As ~~(“IV”)~~of ~~treatment~~December ~~for~~31, ~~COVID-19~~2023, ~~patients~~the Company is a party to an employment agreement dated October 11, 2021 with Daniel Stokely to serve in the capacity as the Company’s Chief Financial Officer with an initial base salary of $335,000 and an initial term ending in October 2024.

~~AP-017~~Under ~~study~~these employment agreements, each executive is entitled to a severance payment in the event the Company terminates employee’s employment without cause, or employee terminates his employment with good reason.

InOn ~~December~~March ~~2020~~25, 2024, the ~~Company~~Board ~~entered~~of ~~into~~Directors adetermined ~~contract~~to ~~with~~terminate athe ~~CRO~~employment ~~totaling~~of $1Mr.8 ~~million~~Stokely ineffective ~~reference~~March to31, a2024 ~~multicenter~~in ~~Phase~~order 2to ~~clinical~~preserve ~~trial~~cash ~~utilizing~~to IVadequately ~~Ampion~~fund inan ~~the~~orderly ~~treatment~~wind down of ~~patients~~the ~~with~~Company’s ~~COVID-19~~operations ~~requiring~~and ~~oxygen~~to ~~supplementation~~maximize (the ~~“AP-017 study”). The~~ Company’s ~~stopped~~cash ~~the~~position. ~~trial~~Pursuant ~~after~~to anhis ~~interim~~employment ~~analysis~~agreement, ~~which~~Mr. ~~reflected~~Stokely ~~enrollment~~will ofbe 35entitled ~~subjects~~to ~~and~~severance ~~resulted in a favorable net contractual adjustment~~ and ~~revised~~COBRA ~~contractual~~reimbursement, ~~commitment~~conditioned ofon, ~~$0.5~~among ~~million~~other ~~and $1.3 million~~things, ~~respectively~~Mr. ~~The~~Stokely ~~AP-017~~delivering ~~study was completed as of December 31, 2022~~ and, asnot ~~such,~~revoking ~~there~~a isgeneral norelease ~~commitment~~of ~~for~~claims ~~future~~against ~~services~~the Company.

~~Employment~~Manufacturing ~~Agreements~~Development

AsIn ofSeptember ~~December 31~~2023, ~~2022,~~ the Company isentered into a ~~party~~manufacturing todevelopment anagreement ~~employment~~with ~~agreement~~a ~~dated~~contract ~~October~~development ~~11,~~and ~~2021~~manufacturing ~~with~~organization ~~Daniel~~(“CDMO”), ~~Stokely~~which toreflected ~~serve~~an asinitial ~~the~~scope ~~Company’s~~of ~~Chief~~work ~~Financial~~for ~~Officer~~the ~~with~~OA-201 aprogram ~~term~~totaling ~~ending~~$1.6 inmillion. ~~October~~The ~~2024~~initial ~~and~~scope atof anwork ~~initial~~included ~~base~~analytical ~~salary~~method ofdevelopment, ~~$335~~formulation development,~~000.~~ Onand ~~August~~GLP ~~30,~~animal ~~2022,~~study supply on the ~~Company~~prototype ~~amended~~formulations ~~the~~of ~~existing~~OA-201. ~~employment~~In ~~agreement~~addition, ~~originally~~the ~~dated~~CDMO ~~November~~will ~~22,~~prepare ~~2021~~GMP ~~that~~supply ~~specified~~of anthe ~~initial~~formulation ~~base~~and ~~salary~~complete ofa ~~$550,000,~~corresponding ~~with~~stability ~~Michael A~~study. ~~Martino~~In toDecember ~~serve~~2023, as the Company’s ~~Chief~~executed ~~Executive~~a ~~Officer.~~change ~~The~~order ~~employment~~with ~~term~~the ~~was~~CDMO ~~extended~~for toan ~~November~~additional 22$20, ~~2023~~000. ~~All~~In ~~other~~February ~~terms~~2024, ~~and~~the ~~conditions~~Company ofterminated ~~Mr.~~the ~~Martino’s~~manufacturing ~~employment~~development agreement ~~remain~~with ~~unchanged~~the CDMO. ~~Under~~As ~~these~~of ~~employment~~March ~~agreements~~15, ~~each~~2024, ~~executive is entitled to a severance payment in~~ the ~~event the~~ Company ~~terminates~~has ~~employee’s~~an ~~employment~~obligation ~~without~~for ~~cause,~~accrued orand ~~employee~~unpaid ~~terminates~~services ~~his~~and ~~employment~~related ~~with~~expenses ~~good~~of ~~reason~~$160,000.

Non-Clinical Trials

~~Related~~In ~~Party~~September ~~Research~~2023, ~~Agreements~~the Company entered into a non-clinical trial agreement with a research institute to conduct an animal study totaling $105,000. In December 2023, the Company executed a change order with the research institute for an additional $117,000. Payments are based on the completion of milestones, with the first payment due upon execution of the agreement. However, the Company systematically amortizes or accrues expenses when incurred. In February 2024, the Company terminated the non-clinical trial agreement with the research institute. As of March 15, 2024, the Company has an obligation for accrued and unpaid services and related expenses of $32,000.

OnIn ~~February~~December 42023, ~~2022,~~ the Company entered into afour ~~sponsored~~additional ~~research~~non-clinical ~~services~~trial ~~agreement~~agreements with ~~Trauma~~another ~~Research,~~research ~~LLC,~~institute anto ~~entity~~conduct ~~owned~~a byseries ~~one~~ of ~~the~~animal ~~Company’s~~studies ~~former~~totaling ~~directors. The agreement totaled~~ $~~400~~625,000. ~~for~~Payments ~~research~~are ~~activities~~based toon ~~be performed over~~ the ~~next~~completion ~~two~~of ~~years. In addition~~milestones, with the ~~Company~~first ~~also~~payments ~~entered~~due ~~into~~upon aexecution ~~personal~~of ~~services~~the ~~agreement dated February 4, 2022 with that individual to provide research services~~agreements. ~~The agreement totaled $250~~However,~~000~~ ~~and~~the ~~was~~Company tosystematically beamortizes ~~paid~~or inaccrues ~~four~~expenses ~~equal~~when ~~installments payable quarterly over the one-year term~~incurred. OnIn ~~August~~February 52024, ~~2022,~~ the Company ~~delivered~~terminated ~~notice of termination of~~ the ~~personal~~non-clinical ~~services~~trial ~~agreement,~~agreements ~~effective~~with ~~September 5, 2022 and during September paid~~ the ~~remaining~~research ~~obligation of $21,000~~institute. OnAs ~~August~~of 5March 15, ~~2022~~2024, the Company ~~delivered~~had ~~notice~~no ofobligation ~~termination~~for ofaccrued ~~the~~and ~~research~~unpaid services ~~agreement, effective November 4, 2022,~~ and ~~paid~~related ~~the remaining obligation of $63,000~~expenses.

Facility Lease

InThe 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 ~~2013~~ 13, 2013 pursuant to which the Company ~~entered~~has ~~into~~leased office and manufacturing space in Suite 200 and Suite 204 in the building located at 373 Inverness Parkway, Englewood, Colorado (the “Premises”). The lease is a 125-month non-cancellable operating lease for office space and a manufacturing facility, set to expire September 2024 with the right to renew for an additional 60 months. The effective date of the ~~lease~~Lease was May 1, 2014. The initial base rent of the ~~lease~~Lease was $23,000 per month. The total base rent over the term of the ~~lease~~Lease is approximately $3.3 million, which includes rent abatements and leasehold incentives. In accordance with the provisions of the lease agreement, the Company is legally obligated to dismantle and remove certain components of leasehold improvements at the end of the lease term. (See also Note 15.) In accordance with FASB ASC 410-20, Asset Retirement Obligations, the Company recognized the fair value of a liability for an asset retirement obligation in the amount of $0.3 million which was capitalized as part of the cost of leasehold improvements.

~~The~~Effective ~~Company~~March ~~adopted~~1, 2023, the ~~FASB~~Company ~~issued~~entered ~~ASC~~into ~~842,~~a ~~“Leases~~sublease ~~(Topic 842)”~~agreement ~~effective~~whereby ~~January~~the 1,Company ~~2019.~~subleased ~~With~~ the ~~adoption~~Premises offor ~~ASC~~a ~~842,~~term ~~the~~commencing ~~Company~~on ~~recorded~~March an1, ~~operating~~2023 ~~right-of-use~~and ~~(“ROU”)~~continuing ~~asset~~until ~~and~~the anexpiration ~~operating~~for ~~lease~~the ~~liability~~Lease on ~~its~~September ~~balance~~30, ~~sheet~~2024. The ~~ROU~~subtenant ~~asset~~will ~~represents~~pay to the Company’s ~~right~~rent toand ~~use~~other amounts assessed by the ~~underlying~~Landlord ~~asset~~against ~~for~~the Company under the ~~lease~~Lease. ~~term~~The subtenant is also fully responsible for utilities and insurance under the ~~lease~~sublease agreement. Under the terms

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~~obligation~~and ~~represents~~conditions ~~the~~of ~~Company’s commitment to make~~ the ~~lease~~sublease ~~payments~~agreement, ~~arising from~~ the ~~lease.~~Company ~~ROU~~was ~~lease~~fully ~~assets~~released ~~and~~of ~~obligations~~its ~~are~~obligation ~~recognized~~under at the ~~commencement~~Lease ~~date~~to ~~based~~dismantle onand ~~the~~remove ~~present~~certain ~~value~~components of ~~remaining~~leasehold ~~lease~~improvements ~~payments~~at ~~over~~the end of the lease term. AsAccordingly, the Company’s ~~lease~~derecognized ~~does~~its ~~not~~asset ~~provide~~retirement anobligation ~~implicit~~(“ARO”) ~~rate,~~in the ~~Company~~amount ~~used an estimated incremental borrowing rate~~ of ~~5.75%~~$294,000 ~~based~~which onresulted ~~the information available at the commencement date~~ in ~~determining~~ the ~~present~~recognition ~~value~~ of ~~the lease payments. Lease expense is recognized on~~ a ~~straight~~non-~~line~~cash ~~basis~~gain ~~over~~totaling ~~the~~$289,000 ~~lease term~~gain, ~~subject~~net toof ~~any~~$5,000 ~~changes~~loss inon the ~~lease~~derecognition orof ~~expectations regarding~~ the ~~terms.~~ARO ~~The lease liability is classified as both current in part and long-term on the balance sheet~~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 presented in the balance sheet as of December 31, ~~2022~~2023:


	Facility Lease Payments		2023		2024		2025		2026		2027		Thereafter

Remaining Facility Lease Payments	$	644,000	$	364,000	$	280,000	$	—	$	—	$	—	$	—
Less: Discount Adjustment		(30,000)
Total lease liability	$	614,000

Lease liability-current portion	$	340,000

Long-term lease liability	$	274,000

The Company reviews the potential for impairment of the ROU asset consistent with the approach applied to other long-lived assets. ROU assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Accordingly, the Company recorded a $0.3 million impairment loss on the right-of-use asset, recorded in operating expenses and against the ROU asset, during the year ended December 31, 2022. The following table provides a reconciliation of the Company’s remaining ROU asset for its facility lease presented in the balance sheet as of December 31, 2022:


	Facility Lease Payments		2024		2025	2026		2027		2028		Thereafter

Remaining Facility Lease Payments	$	280,000	$	280,000	$	$	—	$	—	$	—	$	—
Less: Discount Adjustment		(6,000)
Total lease liability	$	274,000

Lease liability-current portion	$	274,000

Long-term lease liability	$	—


	ROU Asset

Balance as of December 31, 2021	$	629,000
Amortization		(232,000)
Impairment loss		(322,000)
Balance as of December 31, 2022	$	75,000

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


	Year Ended December 31,
	~~2022~~2023		~~2021~~2022

Lease expense	$	~~311~~113,000	$	~~275~~221,000

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Table of Contents

Note 7 – Warrants

~~The~~As disclosed in Note 2, the Company ~~has~~adopted ~~issued~~ASU ~~both~~2020-06 ~~equity~~effective ~~(“placement~~January ~~agent”)~~1, 2023 using the modified retrospective method, and ~~liability~~accordingly ~~classified~~reclassified (“its investor”) ~~warrants~~liability inclassified ~~conjunction~~warrants ~~with~~to ~~equity~~accumulated ~~raises~~deficit. The Company’s ~~had~~placement aagent ~~total~~warrants ofwere 0previously classified as equity.1 ~~million~~The Company had approximately 36,100 equity-classified warrants ~~and~~as 1of December 31, 2023.0 ~~million~~The ~~liability-classified~~following ~~warrants~~table ~~outstanding~~summarizes the Company’s warrant activity as of December 31, ~~2022.~~2023:

The following table summarizes the Company’s warrant activity:


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

Outstanding as of December 31, 2021	1,220,194		$ 15.36	4.24
Warrants expired	(155,057)		$ 11.40
Outstanding as of December 31, 2022	1,065,137		$ 15.94	3.80


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

Outstanding as of December 31, 2022	53,263	$	318.80	3.80
Forfeited, expired and/or cancelled	(17,179)
Outstanding as of December 31, 2023	36,084	$	316.28	2.77

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	$	~~$ 16~~330.5000	Investor	133,~~000,000~~334			32.9673
August 2018 public offering		$ 6.00	Investor	10,227			0.61
June 2019 public offering	$	150.00	Placement agent	2,750			0.04
June 2019 public offering		$ 7.50	Placement agent	54,910			1.46
Outstanding as of December 31, 2023				36,084	$	316.28	2.77
Outstanding as of December 31, 2022				1,065,137		$ 15.94	3.80

In ~~connection~~August ~~with~~2023, ~~the~~a ~~December~~total ~~2021~~of ~~registered~~512 ~~direct~~investor ~~offering,~~warrants ~~the~~expired. ~~Company~~A ~~issued~~total ~~investor~~of ~~warrants~~16,667 toof ~~purchase~~the an2021 ~~aggregate~~Warrants ofwere 1abandoned in December 2023.0 ~~million~~Pursuant ~~shares~~to ofa ~~common~~waiver ~~stock~~letter atdated anDecember ~~exercise~~18, ~~price~~2023, ofthe ~~$16.50~~warrant ~~with~~holders airrevocably ~~term~~abandoned all of ~~five~~their ~~years~~rights, title, and ~~are~~interest ~~immediately~~to ~~exercisable~~the ~~(see~~2021 ~~Note~~Warrants ~~9).~~and ~~Due~~any tocommon ~~certain~~stock ~~derivative~~underlying ~~features,~~the ~~these~~2021 ~~warrants~~Warrants ~~were accounted~~ for ~~under~~no ~~liability~~consideration. ~~accounting~~There ~~and~~were ~~are~~no ~~recorded~~issuances ator ~~fair~~exercises ~~value~~of ~~each~~warrants ~~reporting~~during ~~period.~~the Asyear ofended December 31, ~~2022~~2023. ~~and~~Due ~~2021~~to the adoption of ASU 2020-06, ~~these~~there ~~warrants~~was ~~had~~also ano ~~fair~~warrant ~~value~~derivative ofliability ~~$44,000~~as ~~and~~of ~~$5.6~~December ~~million~~31, ~~respectively~~2023. The ~~assumptions,~~total ~~using~~value for the ~~Black-Scholes~~warrant ~~valuation~~derivative ~~model~~liability as of December 31, 2022, ~~and~~was atapproximately ~~issuance~~$44,000 ~~were~~(see asNote ~~follows:~~8).


Assumptions for warrants issued December 15, 2021:	December 31, 2022			December 31, 2021

Exercise Price		$ 16.50			$ 16.50
Volatility		121	%		101	%
Equivalent term (years)		3.96			4.96
Risk-free interest rate		4.11	%		1.25	%
Number of warrants		1,000,000			1,000,000
Derivative liability		$ 44,000			$ 5,597,000

In connection with the August 2018 confidentially marketed public offering, the Company issued investor warrants to purchase an aggregate of 1.3 million shares of common stock at an exercise price of $6.00 with a term of

five years. Due to certain derivative features, these warrants were accounted for under liability accounting and are recorded at fair value each reporting period. As of December 31, 2022 and 2021, these warrants had a fair value of approximately $0 and $52,000, respectively. The assumptions, using the Black-Scholes valuation model, as of

December 31, 2022, December 31, 2021, and at issuance were as follows:

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Table of Contents


Assumptions for warrants issued August 13, 2018:	December 31, 2022			December 31, 2021

Exercise Price		$ 6.00			$ 6.00
Volatility		200	%		107	%
Equivalent term (years)		0.61			1.61
Risk-free interest rate		4.75	%		0.60	%
Number of warrants		10,227			10,227
Derivative liability		$ -			$ 52,000

In connection with the June 2017 registered direct offering, the Company issued investor warrants to purchase an aggregate of 733,334 shares of common stock at an exercise price of $11.40 with a term of five years. Due to certain derivative features, these warrants are accounted for under liability accounting and are recorded at fair value each reporting period. The investor warrants expired on June 1, 2022. As of December 31, 2021, these warrants had a fair value of $156,000. Significant assumptions as of December 31, 2021 were as follows:



Assumptions for warrants issued June 2, 2017:	December 31, 2021

Exercise Price		$ 11.40
Volatility		92	%
Equivalent term (years)		0.42
Risk-free interest rate		0.15	%
Number of warrants		135,128
Derivative liability		$ 156,000

There were no issuances or exercises of warrants during the year ended December 31, 2022. The total value for the warrant derivative liability as of December 31, 2022 was approximately $44,000 (see Note 8).

During the year ended December 31, 2021, the Company issued 18,940 shares of its common stock as a result of the exercise of investor warrants with an exercise price of $6.00. The Company received proceeds of $114,000 during the period related to these investor warrant exercises. In addition, former placement agents elected to exercise 35,249 of their warrants utilizing the net exercise option, where the total number of shares of common stock issued was reduced to cover the exercise price and, as such, the Company issued 20,275 shares of common stock. The Company did not receive any cash related to the exercise of placement agent warrants.

Note 8 – Fair Value Considerations

Authoritative guidance defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources not affiliated with the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on reliability of the inputs as follows:

~~Level 1: Inputs that reflect unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities;~~F-15

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Table of Contents

	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.

The Company’s financial instruments include cash and cash equivalents, accounts payable and accrued expenses, and warrant derivative liability. Warrants are recorded at estimated fair value utilizing the Black-Scholes warrant pricing model.

The Company’s assets and liabilities which are measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company’s policy is to recognize transfers in and/or out of the fair value hierarchy as of the date in which the event or change in circumstances caused the transfer. The Company has consistently applied the valuation techniques in all periods presented.

The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, ~~2022~~2023 and ~~2021~~2022, by level within the fair value hierarchy:

Fair Value Measurements Using

Level 1

Level 2

Level 3

Total

December 31, 2022

December 31, 2023

Liabilities:

Warrant derivative liability

—

~~44,000~~—

December 31, 2021

December 31, 2022

Liabilities:

Warrant derivative liability

—

544,~~805,~~000

~~The~~Due ~~recurring~~to ~~warrant~~the ~~derivative~~implementation ~~liability~~of ~~was~~ASU ~~valued~~2020-06, ~~using~~effective ~~the~~January ~~Black-Scholes~~1, ~~valuation~~2023 ~~methodology~~the ~~because~~fair ~~that~~value ~~model~~of ~~embodies~~financial ~~all~~liabilities ~~the~~classified ~~relevant~~as ~~assumptions~~Level ~~that~~3 ~~address~~in the ~~features~~fair ~~underlying~~value ~~these~~hierarchy ~~instruments.~~was ~~The~~reduced ~~significant~~by ~~assumptions~~$44,000. inThere ~~valuing~~were ~~the~~no ~~warrant~~financial ~~derivative~~liabilities ~~liability~~classified as ofLevel ~~December 31~~1, ~~2022,~~2 ~~December~~or ~~31,~~3 ~~2021,~~as ~~and~~of atDecember ~~issuance~~31, ~~are disclosed in Note 7.~~2023

The warrant derivative liability for the December 31, 2022 period presented was valued using the Black-Scholes valuation methodology as the Company believes 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 valued hierarchy:


	Derivative Instruments

Balance as of December 31, 2021	$	5,805,000
Change in fair value		(5,761,000)
Balance as of December 31, 2022	$	44,000

Note 9 – Common Stock

Authorized Shares

The Company had 300.0 million authorized shares of common stock as of December 31, ~~2022~~2023 and ~~2021~~2022.

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Table of Contents

The following table summarizes the Company’s remaining authorized shares available for future issuance:

F-17


	December 31, 2023

Authorized shares		300,000,000

Common stock outstanding		833,430
Options outstanding		12,291
Warrants outstanding		36,084
Reserved for issuance under 2019 Stock and Incentive Plan		—
Reserved for issuance under 2023 Stock and Incentive Plan		1,200,000
Available shares for future issuance		297,918,195

Table of Contents


	December 31, 2022

Authorized shares		300,000,000

Common stock outstanding		15,102,877
Options outstanding		297,460
Warrants outstanding		1,065,137
Reserved for issuance under 2019 Stock and Incentive Plan		441,300
Available shares for future issuance		283,093,226

Registered Direct Offering

In December 2021, the Company completed a registered direct offering whereby it issued 1.67 million shares of its common stock at a price of $13.50 per share, along with investor warrants to purchase up to 1.0 million shares of common stock, generating gross proceeds of $22.5 million. In connection with this offering, the Company entered into a Placement Agent Agreement with the placement agent. Pursuant to the Placement Agent Agreement, the placement agent received a 7% commission of $1.6 million, and $75,000 as compensation for other costs related to the offering. The Company also incurred expenses related to legal, accounting, and other registration costs of $167,000. The shares and warrants were offered and sold pursuant to the Company’s shelf registration statement.

The investor warrants issued in connection with the registered direct offering have an exercise price of $16.50 per share and are immediately exercisable with a term of five years from issuance. Based on the terms of the warrant and related securities law, the contract does not meet the criteria within Accounting Standards Codification (“ASC”) 815 “Derivatives and Hedging” to permit the company to settle in unregistered shares. Therefore, the Company could be forced to cash settle the warrants. Based on this derivative feature, these warrants must be accounted for as a liability at fair value under ASC 815. On the date of issuance, these warrants were valued at $6.7 million, using the Black-Scholes valuation model (see Note 7) and represents a reduction in additional paid-in capital at the time of issuance.

ATM Equity Offering Program

~~Sales~~On September 18, 2023, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC as Manager (in such capacity, the “Manager”), establishing an at-the-market equity distribution program, pursuant to which the Company, through the Manager, may offer and sell from time to time shares of the Company’s common stock, par value $0.0001 (the “Common Stock”), having an aggregate gross sales price of up to $1,250,000. The Registration Statement on Form S-3 (File No. 333-274558) (the “Registration Statement”) which included a base prospectus and an at-the-market offering prospectus was filed by the Company on September 18, 2023 and became effective on September 27, 2023.

InSubject ~~February~~to ~~2020~~the terms and conditions of the ATM Agreement, the ~~Company~~Manager ~~entered~~may ~~into~~sell aCommon ~~Sales~~Stock ~~Agreement~~by ~~with~~any ~~two~~method ~~agents~~permitted by law deemed to ~~implement~~be an “at the market offering” ~~(ATM)~~as ~~equity~~defined ~~offering~~in ~~program~~Rule ~~under~~415 ~~which~~promulgated under the ~~Company~~Securities Act of 1933, ~~from~~as ~~time~~amended. toThe ~~time~~Manager ~~and~~will atuse ~~its~~commercially ~~sole~~reasonable ~~discretion,~~efforts ~~may~~consistent ~~offer~~with its normal trading and sales practices to sell ~~shares~~the ofCommon ~~its~~Stock ~~common~~from ~~stock~~time ~~having~~to antime, ~~aggregate~~based ~~offering~~upon instructions from the Company (including any price, uptime toor ~~$50.0~~size ~~million~~limits toor ~~the~~other ~~public~~customary ~~through~~parameters or conditions the ~~agents~~Company ~~until~~may (iimpose). ~~each~~The ~~agent~~Company ~~declines~~will topay ~~accept~~ the ~~terms~~Manager ~~for~~a ~~any~~commission ~~reason,~~of ~~(ii)~~3.0% of the ~~entire~~gross ~~amount~~sales proceeds of ~~shares~~each ~~has~~sale ~~been~~of ~~sold,~~shares orpursuant ~~(iii)~~to the ATM Agreement. The Company ~~suspends~~will oralso ~~terminates~~reimburse the ~~Sales~~Manager ~~Agreement.~~for ~~The~~the ~~Sales~~documented ~~Agreement~~fees ~~includes~~and ~~customary~~costs ~~indemnification~~of ~~rights~~its legal counsel reasonably incurred in ~~favor~~connection ofwith ~~the~~entering ~~agents~~into ~~and~~the ~~provides~~transactions ~~that~~contemplated by the ~~agents~~ATM ~~will~~Agreement bein ~~entitled~~an amount not to anexceed $50,000 in the aggregate, ~~fixed~~as ~~commission~~well as an additional reimbursement of 4up to $2,500 per due diligence update session for the Manager’s fees.0% ofThe Company has provided customary representations, warranties and covenants, and the ~~gross~~parties ~~proceeds~~have ~~(2.0%~~agreed to ~~each~~customary ~~agent)~~indemnification torights. ~~the~~The Company ~~from~~has ~~any~~the ~~shares~~right ~~sold~~to ~~pursuant~~terminate tothe provisions of the ~~Sales~~ATM Agreement in its sole discretion at any time upon seven business days’ prior written notice. ~~Due~~The toManager ~~its~~has ~~terms~~the ~~and~~right ~~conditions,~~to terminate the ~~Company~~ATM ~~does~~Agreement ~~not~~in ~~anticipate~~its sole discretion at any ~~sales~~time. In the case of ~~stock~~a ~~under~~termination by either party, specified provisions of the ~~Sales~~ATM Agreement will survive, including the indemnification provisions.

~~During~~Under the ~~year~~terms ~~ended~~of ~~December~~the ~~31,~~ATM ~~2022~~Agreement, in no event will the Company ~~had~~issue noor ~~activity~~sell ~~under~~through the ~~ATM~~Manager ~~equity~~such ~~offering~~number ~~program~~or dollar amount of shares of Common Stock that would (i) exceed the number or dollar amount of shares of Common Stock registered and available on the Registration Statement, (ii) exceed the number of authorized but unissued shares of Common Stock, or (iii) exceed the number or dollar amount of Common Stock for which the Company has filed a prospectus supplement to the Registration Statement. ~~During~~As of December 31, ~~2021~~2023, the Company sold ~~416~~28,~~406~~826 shares of common stock ~~which~~under ~~resulted~~the inATM ~~net~~Agreement, generating gross proceeds of $~~10.~~0.1 million, ~~after~~which ~~deducting~~was ~~$0.5~~offset ~~million~~by ~~for~~ placement agent commissions and issuance costs of $0.1 million.

On ~~Issuance~~February 26, 2024, the Company terminated the ATM Agreement with the Manager effective as of ~~Common~~March ~~Stock~~6, ~~for~~2024. ~~Services~~On February 28, 2024, the Company filed a post-effective amendment to deregister the remaining securities available under the Registration Statement relating to the offerings under the ATM Agreement, which was declared effective by the SEC on March 4, 2024.

The Company issued 3,604 shares of common stock under the Ampio Pharmaceuticals, Inc. 2019 Stock and Incentive Plan (the “2019 Plan”), valued at $80,000, as partial compensation for the services of non-employee directors, during the year ended December 31, 2021. During the year ended December 31, 2022, the Company did not issue any shares of common stock as partial compensation for the services of non-employee directors.

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Note 10 – Mezzanine Equity ~~Instruments~~and Stockholders’ Equity

InPreferred December 2019, the Company’s Board of Directors and stockholders approved the adoption of the 2019 Plan, under which shares were reserved for future issuance of equity related awards classified as option awards/grants, restricted stock awards and other equity related awards. The 2019 Plan permits grants of equity awards to employees, directors and consultants. The stockholders approved a total of 10.0 million shares to be reserved for issuance under the 2019 Plan, which was reduced to 666,667 shares as a result of the 15-to-1 reverse stock split effective November 9, 2022. The Company’s previous 2010 Stock ~~and Incentive Plan (the “2010 Plan”) was cancelled concurrently with the adoption of the 2019 Plan.~~

~~The~~On ~~following~~May ~~table~~24, ~~summarizes~~2023, the ~~activity~~Board declared a dividend of one one-thousandth of a share (1/1000th) of Series D Preferred Stock, par value $0.0001 per share (“Series D Preferred Stock”), for each outstanding share of common stock of the ~~2019~~Company, ~~Plan~~par ~~and~~value $0.0001 per shares (the “Common Stock”) to stockholders of record at 5:00 p.m. Eastern Time on June 8, 2023 (the “Record Date”) that resulted in 15,103 Series D Preferred shares ~~available~~being ~~for~~issued. ~~future~~In ~~equity~~accordance ~~awards~~with the terms of the Series D Preferred Stock, all shares of Series D Preferred Stock that were not present in person or by proxy at the 2023 Annual Meeting of Stockholders held on July 27, 2023 as of ~~December~~immediately 31prior to the opening of the polls at such meeting were automatically redeemed. The remaining outstanding shares of Series D Preferred Stock were redeemed automatically upon the approval by Ampio’s stockholders of the reverse stock split proposal at the 2023 Annual Meeting of Stockholders. Accordingly, ~~2022:~~as of July 27, 2023, all outstanding shares of Series D Preferred Stock were redeemed and returned to the status of authorized but unissued shares of preferred stock.


	2019 Plan

Total shares reserved for equity awards as of December 31, 2021		294,489
Options granted		(106,555)
Forfeited, expired and/or cancelled equity option awards		184,132
Forfeited, expired and/or cancelled equity restricted stock awards		60,000
Shares forfeited to settle exercise price and tax obligation		9,234
Remaining shares available for future equity awards as of December 31, 2022		441,300

Each share of Series D Preferred Stock was redeemed in consideration for the right to receive an amount equal to $0.01 in cash for each ten whole shares of Series D Preferred Stock that are beneficially owned by the beneficial owner. From July 27, 2023 to the date hereof, there have been no Redemption Payment Requests.

The shares of Series D Preferred Stock were classified within the mezzanine equity in the Company’s condensed consolidated balance sheet as of June 30, 2023. The shares of Series D Preferred Stock were measured at redemption value which was considered immaterial to the Company’s financial statements at the time of issuance. As of December 31, 2023, all shares of Series D Preferred Stock have been cancelled and returned to the status of authorized but unissued shares of preferred stock.

Options

~~The~~In July 2023, the Company’s Board of Directors and stockholders approved the adoption of the 2023 Plan, under which shares were reserved for future issuance of equity related awards as further defined under the 2023 Plan. The 2023 Plan permits grants of equity awards to employees, directors and consultants. The stockholders approved a total of 1.2 million shares to be reserved for issuances under the 2023 Plan and the full amount of the reserve remains available for future issuances as of December 31, 2023. Pursuant to the terms of the 2023 Plan, the number of shares authorized for issuance pursuant to the 2023 Plan were not impacted by the 20-to-1 reverse stock ~~option~~split. ~~activity~~The isCompany ~~summarized~~has inno authority to grant new awards from the ~~table~~2010 ~~below:~~Stock and Incentive Plan or the 2019 Stock and Incentive Plan (collectively, the “Prior Plans”). However, approval of the 2023 Plan does not affect awards outstanding under the Prior Plans, which will continue in accordance with their terms.

The following table summarizes the Company’s stock option activity at December 31, 2023:


		Weighted		Weighted Average
	Number of	Average		Remaining		Aggregate
	Options	Exercise Price		Contractual Life		Intrinsic Value
Outstanding as of December 31, 2021	500,466	$	16.81	7.36	$	—
Outstanding as of December 31, 2022	14,873	$	299.40	6.41	$	—
Granted	~~106,555~~—	$	~~7.14~~
Forfeited, expired and/or cancelled	(309,561)	$	15.26
Exercised	—
Outstanding as of December 31, 2022	297,460	$	14.97	6.41	$	—
Forfeited, expired and/or cancelled	(2,582)	$	352.49
Exercisable as of December 31, 2022	257,216	$	15.85	6.59	$	—
Outstanding as of December 31, 2023	12,291	$	288.12	6.81	$	—
Exercisable as of December 31, 2023	11,652	$	288.14	6.74	$	—

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Table of Contents

Outstanding options that were issued in accordance with the 2010 Plan and 2019 Plan are summarized in the table below:


Outstanding Options by Plan	December 31, ~~2022~~2023
2010 Plan		~~116~~4,~~571~~508
2019 Plan		~~180~~7,~~889~~783
Outstanding as of December 31, 2022		297,460
Outstanding as of December 31, 2023		12,291

~~F-19~~Stock options outstanding at December 31, 2023 are summarized in the table below:

Table of Contents

Stock options outstanding at December 31, 2022 are summarized in the table below:


	Number of	Weighted		Weighted Average
	Options	Average		Remaining
Range of Exercise Prices	Outstanding	Exercise Price		Contractual Lives
Up to $7.50	63,457	$	6.67	3.73
Up to $150.00	2,040	$	132.37	6.80
$7.51 - $15.00	140,327	$	10.39	6.45
$150.01 - $300.00	5,935	$	206.45	6.30
$15.01 - $22.50	53,600	$	17.30	8.83
$300.01 - $450.00	2,620	$	346.95	7.86
$22.51 and above	40,076	$	40.98	7.31
$450.01 and above	1,696	$	670.16	6.98
Total	~~297~~12,~~460~~291	$	14288.9712	6.4181

Restricted Stock Awards

InThe ~~connection with the three executive employment agreements issued in October 2021, the Company awarded 119,000 shares of~~ restricted stock ~~in accordance with the 2019 Plan, of which a portion vested immediately, with the remaining shares of restricted stock~~ awards ~~vesting~~activity ~~annually~~for ~~on January 1st until 2025. The 2019 Plan allows~~ the ~~restricted~~period ~~stock~~ending ~~award~~December grantee to authorize the Company to withhold shares of common stock to settle the tax obligation at such time the shares vest. The shares of restricted stock that vested immediately were subject to statutory tax withholdings and all three employees authorized the Company to withhold shares of common stock to settle the tax obligation31, ~~which~~2023 ~~resulted~~is summarized in ~~a forfeiture of 9,234 shares of common stock, due to~~ the ~~termination~~table ~~of two executives during 2022, and 15,233 net shares of common stock being issued during the year ended December 31, 2022.~~below:

The restricted stock awards activity for the twelve-month period ended December 31, 2022 is summarized in the table below:


		Weighted
		Average Grant-Date			Aggregate
	Awards	Fair Value			Intrinsic Value
Nonvested as of December 31, 2021	97,867	$	24.60
Nonvested as of December 31, 2022	670	$	492.00
Vested	(~~24,467~~223)	$	24492.6000	$	—
Forfeited	~~(60,000)~~—
Nonvested as of December 31, 2022	13,400	$	24.60
Nonvested as of December 31, 2023	447	$	492.00

The unvested restricted stock awards at December 31, 2023 will vest equally on January 1, 2024 and 2025, respectively.

Share-based Compensation

The Company computes the fair value for all options granted or modified using the Black-Scholes option pricing model. To calculate the fair value of the options, certain assumptions are made regarding components of the model, including the fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to the valuation. The Company calculates its volatility assumption using the actual changes in the market value of its stock. Forfeitures are recognized as they occur. The Company’s historical option exercises do not provide a reasonable basis to estimate an expected term due to the lack of sufficient data. Therefore, the Company estimates the expected term by using the simplified method. The simplified method calculates the expected term as the average of the vesting term plus the contractual life of the options. The risk-~~free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar~~

F-2019

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~~maturity.~~free ~~The~~interest ~~Company~~rate ~~computed~~is ~~the~~based ~~fair~~on ~~value~~the ofU.S. ~~options~~Treasury ~~granted~~yield ~~and~~in ~~modified~~effect ~~during~~at the ~~period~~time ~~ended~~of ~~December~~the ~~31,~~grant ~~2022~~for ~~and~~treasury ~~December~~securities ~~31,~~of ~~2021,~~similar ~~using~~maturity. ~~the following assumptions:~~


	Year Ended December 31,
	2022		2021

Expected volatility	116.83% - 119.43	%	113% - 127	%
Risk free interest rate	1.26% - 1.94	%	0.78% - 1.38	%
Expected term (years)	5.45 - 6.51		5.00 - 6.50

The Company did not grant or modify options during the period ending December 31, 2023, as such, there are no assumptions to compute the fair value of options. The Company computed the fair value of options granted and modified during the period ended December 31, 2022 using the following assumptions:

Based on these assumptions, the Company recognized approximately $1.1 million of share-based compensation related to options, which was partially offset by $0.2 million due to reversals for non-vested shares for director and employee forfeitures during the year ended December 31, 2022.


	Year Ended December 31,
	2022

Expected volatility	116.83% - 119.43	%
Risk free interest rate	1.26% - 1.94	%
Expected term (years)	5.45 - 6.51

The Company also computes the fair value for all restricted stock awards based on the closing stock price on the grant date and recognizes share-based compensation ratably over the requisite service period which approximates the vesting period. The Company recognized $83,000 of share-based compensation related to restricted stock awards as of December 31, 2023. The Company recognized $0.5 million of share-based compensation relating to restricted stock awards which was fully offset by $0.5 million due to forfeitures as of December 31, 2022.

Share-based compensation expense related to the fair value of stock options and restricted stock awards is included in the statements of operations as research and development expenses and general and administrative expenses as set forth in the table below. The Company determined the fair value as of the date of grant for options using the Black-Scholes option pricing model and expenses the fair value ratably over the vesting period. The following table summarizes stock-based compensation for the years ended December 31, ~~2022~~2023 and December 31, ~~2021~~2022:


	Year Ended December 31,
	~~2022~~2023		~~2021~~2022
Research and development expenses
Share-based compensation, net of forfeitures	$	~~139~~(25,000)	$	46139,000

General and administrative expenses
Issuance of common stock for services (see Note 9)		—		80,000
Share-based compensation, net of forfeitures		184,000		814,000
Share-based compensation, net of forfeitures		814,000		2,678,000

Total share-based compensation, net of forfeitures	$	~~953~~159,000	$	2953,~~804,~~000

Unrecognized share-based compensation expense related to stock options as of December 31, 2022	$	185,000
Unrecognized share-based compensation expense related to stock options as of December 31, 2023	$	28,000

Weighted average remaining years to vest for stock options		1.4200

Unrecognized share-based compensation expense related to restricted stock awards as of December 31, 2022	$	116,000
Unrecognized share-based compensation expense related to restricted stock awards as of December 31, 2023	$	34,000

Weighted average remaining years to vest for restricted stock awards		21.01

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Note 11 – Income Taxes

Income tax expense (benefit) resulting from applying statutory rates in jurisdictions in which the Company is taxed (Federal and State of Colorado) differs from the income tax provision (benefit) in the Company’s financial statements. The following table reflects the reconciliation for the respective periods:


	~~Years~~Year Ended December 31,
	~~2022~~2023		~~2021~~2022
Benefit at federal statutory rate	(21.0)	%	(21.0)	%
State, net of federal income tax impact	(43.04)	%	(4.40)	%
Stock-based compensation	4.0.8	%	04.10	%
Registered offering gain/warrant expense	(7.2)	%	(4.6)	%
Registered offering loss (gain)/warrant expense	0.0	%	(7.2)	%
Change in state deferred tax rate	10.50	%	01.05	%
Expiration of tax attribute carryforwards	0.63	%	10.16	%
Other	0.0	%	20.10	%
Change in valuation allowance	2623.13	%	26.71	%
Effective tax rate	0.0	%	0.0	%

Deferred income taxes arise from temporary differences in the recognition of certain items for income tax and financial reporting purposes. The approximate tax effects of significant temporary differences which comprise the deferred tax assets and liabilities are as follows for the respective periods:


	~~Years~~Year Ended December 31,
	~~2022~~2023		~~2021~~2022
Long-term deferred income tax assets (liabilities):
Accrued liabilities	$	~~3,000~~—	$	963,000
Interest expense carryforward		—		73,000
ROU asset		—		(18,000)
ROU asset		(18,000)		(155,000)
Lease liability		67,000		150,000
Lease liability		150,000		228,000
Net operating loss carryforward		51,902,000		50,196,000
Net operating loss carryforward		50,196,000		47,858,000
Share-based compensation		424,000		459,000
Share-based compensation		459,000		1,050,000
Unrealized loss on trading security		768,000		768,000
Unrealized loss on trading security		768,000		772,000
Property and equipment		—		606,000
Property and equipment		606,000		113,000
Warrants		65,000		65,000
Warrants		65,000		96,000
Capitalized development costs		3,177,000		2,093,000
Capitalized development costs		2,093,000		—
Asset retirement obligation		—		68,000
Asset retirement obligation		68,000		—
Other		1,000		1,000
Less: Valuation allowance		(5456,~~391~~404,000)		(5054,~~132~~391,000)
Total long-term deferred income tax assets (liabilities)	$	—	$	—

As of December 31, ~~2022~~2023, Ampio has approximately $~~205~~212.0 million in net operating loss (“NOL”) carryforwards that, subject to limitation, may be available in future tax years to offset taxable income. These net operating loss carryforwards expire from ~~2023~~2024 through 2037. Approximately $7481.5 million of the NOL carryforward carries forward indefinitely. Under the provisions of the Internal Revenue Code, substantial changes in the Company’s ownership may result in limitations on the amount of NOL carryforwards that can be utilized in future years.

The Company has provided a full valuation allowance against its deferred tax assets as it has determined that it is not more likely than not that recognition of such deferred tax assets will be utilized in the foreseeable future. The amount of income taxes and related income tax positions taken are subject to audits by federal and state tax authorities. The Company has adopted accounting guidance for uncertain tax positions which provides that in order to recognize an uncertain tax benefit, the taxpayer must be more likely than not of sustaining the position, and the measurement of the benefit is calculated as the largest amount that is more than 50% likely to be realized upon recognition of the benefit. The Company believes that it has no material uncertain tax positions and has fully reserved against its future tax benefit

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~~The Company believes that it has no material uncertain tax positions and has fully reserved against its future tax benefit~~ with a valuation allowance and does not expect significant changes in the amount of unrecognized tax benefits to occur within the next twelve months. The Company’s policy is to record a liability for the difference between benefits that are both recognized and measured pursuant to GAAP and tax positions taken or expected to be taken on the tax return. Then, to the extent that the assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company reports tax-related interest and penalties as a component of income tax expense. During the periods reported, management of the Company has concluded that no significant tax position requires recognition. The Company files income tax returns in the United States federal and various state jurisdictions. The Company is no longer subject to income tax examinations for federal income taxes before ~~2019~~2020 or for Colorado before ~~2018~~2019. Net operating loss carryforwards are subject to examination in the year they are utilized regardless of whether the tax year in which they are generated has been closed by statute. The amount subject to disallowance is limited to the NOL utilized. Accordingly, the Company may be subject to examination for prior NOL’s generated as such NOL’s are utilized.

Note 12 – Earnings Per Share

Basic earnings per share is computed by dividing net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is based on the treasury stock method and computed by dividing net loss available to common stockholders by the diluted weighted-average shares of common stock outstanding during each period. The Company’s potentially dilutive shares include stock options, warrants for the shares of common stock and restricted stock awards. The potentially dilutive shares are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when the effect is dilutive. The investor warrants are treated as equity in the calculation of diluted earnings per share in both the computation of the numerator and denominator, if dilutive. The following table sets forth the calculations of basic and diluted earnings per share for the year ended December 31, ~~2022~~2023 and ~~2021~~2022:


	Year Ended December 31,
	~~2022~~2023		~~2021~~2022
Net loss	$	(168,~~337~~632,000)	$	(1716,~~075~~337,000)
Less: decrease in fair value of investor warrants		~~(5,761,000)~~—		(35,~~492~~761,000)
Net loss available to common stockholders	$	(228,~~098~~632,000)	$	(2022,~~567~~098,000)

Basic weighted-average common shares outstanding		15810,~~072,308~~113		13753,~~286,605~~615
Add: dilutive effect of equity instruments		—		~~377,597~~—
Diluted weighted-average shares outstanding		15810,~~072,308~~113		13753,~~664,202~~615
Earnings per share – basic	$	(110.0866)	$	(121.2968)
Earnings per share – diluted	$	(110.4766)	$	(129.5132)

The potentially dilutive shares of common stock equivalents that have been excluded from the calculation of net loss per share because of the anti-dilutive effect as of December 31, ~~2022~~2023 and ~~2021~~2022 are as follows:


	Year Ended December 31,
	~~2022~~2023	~~2021~~2022
Warrants to purchase shares of common stock	136,~~065,137~~084	~~842~~53,~~597~~257
Outstanding stock options	~~297~~12,~~460~~291	~~500~~14,~~466~~873
Restricted stock awards	~~13,400~~447	~~97,867~~670
Total potentially dilutive shares of common stock	148,~~375,997~~822	168,~~440,930~~800

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Note 13 – Litigation

From time to time, the Company may be a party to litigation arising in the ordinary course of business. In addition, as of December 31, ~~2022~~2023, Ampio was involved in the following material pending legal proceedings:

Kain v. Ampio Pharmaceuticals, Inc., et al., 22-cv-2105

On August 17, 2022, a putative Ampio shareholder filed a securities fraud class action against the Company, its current CEO Michael A. Martino and two former executives, Michael Macaluso and Holli Cherevka, in the United States District Court for the District of Colorado, captioned Kain v. Ampio Pharmaceuticals, Inc., et al., 22-cv-2105. The Complaint ~~alleges~~alleged that Ampio and the individual defendants made various false and misleading statements regarding the efficacy, clinical trials and FDA communications relating to Ampio’s then-lead product, Ampion, and its treatment of severe osteoarthritis of the knee in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. The Complaint also ~~asserts~~asserted control person liability against the individual defendants under Section 20 of the Exchange Act.

The Complaint ~~relies~~relied largely on Ampio’s announcement on May 16, 2022, that it had formed a special Board committee to investigate the statistical analysis of Ampio’s AP-013 clinical trial and the unauthorized provision of Ampion to various individuals who were not participating in clinical trials, and Ampio’s further announcement on August 3, 2022, that the investigation had revealed that various employees were aware that the AP-013 trial did not demonstrate efficacy for Ampion’s primary endpoints and did not fully and timely report the results of the trial and the timing of unblinding data from the trial. Based on the Company’s reports, the Complaint ~~asserts~~asserted that various statements made by the Company during the Class Period were false and misleading because they: (i) inflated Ampio’s ability to successfully obtain FDA approval for Ampion; (ii) inflated the results of the AP-013 clinical trial and failed to disclose the timing of unblinding the data from the study; and (iii) overstated the Company’s business, operations and prospects.

The Complaint ~~seeks~~sought an unspecified amount of compensatory damages as well as attorneys’ fees and costs. On October 17, 2022, six putative shareholders filed motions seeking to be named lead plaintiff. On November 7, 2022, two of the movants filed oppositions to each other’s motions; the remaining movants either withdrew their motions or filed non-oppositions to another putative shareholder’s motion. ~~The~~ Court has not yet ruled on the competing motions for appointment of lead plaintiff. In the interim, the Court approved the parties’ joint motion to stay proceedings, and all deadlines are deferred until after a decision on the lead plaintiff motion(s).

~~Ampio~~On ~~intends~~August 9, 2023, the Court ruled on the competing motions for appointment of lead plaintiff, and appointed Tao Wang and SynWorld Technologies Corporation as lead plaintiffs and approved the firm of Faruqi & Faruqi, LLP as lead counsel. The August 9, 2023, order also lifted the stay that had been in place and ordered the parties to ~~defend~~jointly ~~itself~~contact ~~vigorously~~the ~~against~~magistrate ~~this~~judge ~~action~~to schedule a status conference or such other proceeding as the magistrate judge deemed appropriate to move the litigation forward.

Pursuant to the Court’s order, on August 10, 2023, lead plaintiffs and defendants advised the magistrate judge that lead plaintiffs intended to file an amended complaint in the action and that the parties intended to submit a joint proposed scheduling order by August 18, 2023. On August 14, 2023, the Court entered a minute order setting a scheduling conference for August 30, 2023. On August 15, 2023, the parties filed a joint motion with a schedule for lead plaintiffs to file the amended complaint and a deadline for defendants to answer or file motions to dismiss, along with a briefing schedule for any potential motions to dismiss. On August 16, 2023, the Court entered an order granting in part and denying in part the parties’ joint motion. The order vacated the August 30, 2023 scheduling conference and any related deadlines and set lead plaintiffs’ deadline to file an amended complaint as October 16, 2023. It provided that defendants file answers or motions within sixty days of service of the amended complaint. It set a briefing schedule for any potential motions to dismiss. The order further provided that if defendants answer the amended complaint or any motion to dismiss does not fully resolve the case, the parties are required to contact the magistrate judge within 5 business days thereafter to schedule a scheduling conference.

On September 19, 2023, defendant Michael Macaluso’s counsel filed a motion to withdraw due to Mr. Macaluso’s death and the lack of a personal representative to represent Mr. Macaluso’s interest. On September 20, 2023, the Court denied the motion without prejudice to refiling and ordered Mr. Macaluso’s counsel to file a Statement Noting the Death pursuant to Rule 25 of the Federal Rules of Civil Procedure and further noting that, if the claims are not extinguished

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against Mr. Macaluso by his death, any party may file a motion to substitute within 90 days of the filing of the Statement Noting the Death or Mr. Macaluso will be dismissed from the case. On September 20, 2023, Mr. Macaluso’s counsel filed a Suggestion of Death as directed by the Court and renewed his motion to withdraw adding additional information about his efforts to communicate with Mr. Macaluso’s family and the status of any probate proceedings. On September 27, 2023, the Court granted counsel’s renewed motion to withdraw.

On October 16, 2023, lead plaintiffs filed an Amended Complaint, asserting the same claims against the Company and adding several additional defendants (namely the Company’s current CFO, Dan Stokely, and former directors David Bar-Or, Philip Coelho and Richard Giles), in addition to the previously named individual defendants Michael Martino, Michael Macaluso and Holli Cherevka. Pursuant to the Court’s order, Defendants had until December 15, 2023 to file answers or motions to dismiss in response to the Amended Complaint.

On November 17, 2023, the parties (other than deceased defendant Macaluso) filed a Joint Stipulated Unopposed Motion to Extend Deadlines advising the Court that the parties had agreed to engage in a mediation to be conducted by January 5, 2024, and requesting that the Court vacate the time for all defendants to answer, move or otherwise respond to the Amended Complaint. The motion further requested that the parties be permitted to file a status report advising the Court within five (5) days of the mediation either being successful or being declared at impasse. On November 20, 2023, the Court granted the motion. The mediation took place on January 4, 2024.

As reported above, at the mediation, the parties reached a settlement in principle, subject to lead plaintiffs completing confirmatory discovery, to the negotiation and execution of final settlement papers, and to the Court approving the settlement. On January 9, 2024, the parties filed a status report with the Court advising it that they had reached agreement in principle and intended to file a motion for court approval within one hundred twenty (120) days. On January 12, 2024, the Court entered a minute order vacating all deadlines and providing, among other things, “The Parties shall submit to the Court a stipulation and agreement of settlement and a motion for preliminary approval of the settlement (including a plan of allocation and procedures for class notice) pursuant to Fed. R. Civ. P. 23(e) on or before May 13, 2024.” The parties are currently engaged in confirmatory discovery and are endeavoring to finalize and file the required settlement documents with the Court by May 14, 2024.

Maresca v. Martino, et al., 22-cv-2646-KLM

On October 7, 2022, putative Ampio shareholder Robert Maresca filed a Verified Shareholder Derivative Complaint in the United States District Court for the District of Colorado, captioned Maresca v. Martino, et al., 22-cv-2646-KLM. The derivative complaint, brought on behalf of the Company, asserts claims against a number of current and former executives and directors of the Company, namely Michael A. Martino, Michael Macaluso, Holli Cherevka, David Bar-Or, David Stevens, J. Kevin Buchi, Philip H. Coelho and Richard B. Giles.

Based largely on the same allegations as the Kain securities fraud class action complaint (including Ampio’s reports in May and August, 2022, regarding its internal investigation and findings), the Complaint asserts that the individual defendants caused the Company to make false or misleading statements in its SEC filings by “hyp[ing Ampio’s] ability to successfully file a BLA for Ampion;” “~~exaggerate~~exaggerat[ing] results of the AP-013 study;” “misstat[ing] the true timing of unblinding of data from the AP-013 study;” and “fail[ing] to maintain internal controls.” The Complaint also asserts that the defendants failed to exercise due care and comply with the Company’s policies and procedures designed to ensure Board and Audit Committee oversight of the business operations and that ethical business practices were maintained. It also contends that two of the defendants (Cherevka and Coelho) sold Company stock while in possession of material non-public information at artificially inflated prices in violation of the Company’s insider trading restrictions. The Complaint asserts that the individuals should not have received compensation while violating their duties to the Company. The Complaint also alleges that the defendants caused the Company to repurchase its own stock at artificially inflated prices, causing damage to the Company itself.

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~~Company~~(6) waste of corporate assets. The Complaint ~~also~~seeks ~~alleges~~an ~~that~~unspecified ~~the~~amount ~~defendants~~of ~~caused~~compensatory ~~the~~and ~~Company~~restitution damages to ~~repurchase~~be ~~its~~paid ~~own~~to ~~stock~~Ampio, attogether ~~artificially~~with ~~inflated~~pre- ~~prices~~and post-judgment interest, ~~causing~~as ~~damage~~well toas ~~the~~injunctive ~~Company~~relief ~~itself~~imposing certain corporate governance reforms and attorneys’ fees and costs.

The Complaint asserts six causes of action on behalf of the Company and against the individual defendants: (1) violations of Section 14(a) of the Exchange Act based on purportedly false and misleading statements in the Company’s proxy statements; (2) violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder; (3) control person liability under Section 20(a) of the Exchange Act; (4) breach of fiduciary duty; (5) unjust enrichment; and (6) waste of corporate assets. The Complaint seeks an unspecified amount of compensatory and restitution damages to be paid to Ampio, together with pre- and post-judgment interest, as well as injunctive relief imposing certain corporate governance reforms and attorneys’ fees and costs.

On November 2, 2022, the Company and plaintiff (together with plaintiff in a second derivative action -- the Marquis action, discussed below) filed a joint motion to consolidate the two derivative actions and appoint the lawyers representing the two plaintiffs as co-lead counsel. That same day, the Company and plaintiff filed a stipulation providing the Company additional time to answer, move or otherwise respond to the Complaint.

On January 10, 2023, after the Company received additional extensions of time to respond, the Court granted consolidation of the Maresca and Marquis actions but denied appointment of co-lead counsel for plaintiffs without prejudice. On January 11, 2023, Plaintiffs renewed their motion for appointment of co-lead counsel. On January 12, 2023, the Court granted the renewed motion and appointed co-lead counsel for plaintiffs.

On January 17, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the consolidated derivative actions, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On January 25, 2023, the Court granted the motion for temporary stay~~. Accordingly,~~ ~~all~~but ~~deadlines~~ordered ~~are~~the ~~deferred~~parties ~~until~~to ~~the~~provide ~~stay~~periodic isstatus ~~terminated~~reports.

~~Ampio~~As ~~intends~~reported above, on January 4, 2024, the parties to ~~defend~~the ~~itself~~Consolidated ~~vigorously~~Derivative ~~against~~Actions ~~this~~participated ~~action~~in a mediation at which they reached agreement in principle. The settlement is subject to various conditions, including the negotiation and execution of the full settlement agreements and obtaining court approval. On January 9, 2024, the parties filed a status report in the Consolidated Derivative Actions, advising the Court of the status of the settlement in principle and that the parties intended to file settlement documents within thirty days. Since then, the parties have filed several further status reports updating the Court on the parties’ continued negotiations and efforts to finalize the settlement documents.

Marquis v. Martino, et al., 22-cv-2803-KLM

On November 2, 2022, the Company and plaintiff (together with plaintiff in the previously filed Maresca action, discussed above) filed a joint motion to consolidate the two derivative actions and appoint the lawyers representing the two plaintiffs as co-lead counsel.

On January 10, 2023, the Court granted consolidation of the Maresca and Marquis actions but denied appointment of co-lead counsel for plaintiffs without prejudice. On January 11, 2023, Plaintiffs renewed their motion for appointment of

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~~On January 10, 2023, the Court granted consolidation of the Maresca and Marquis actions but denied appointment of~~ co-lead counsel ~~for plaintiffs without prejudice~~. On ~~January 11, 2023, Plaintiffs renewed their motion for appointment of co-lead counsel.~~ On January 12, 2023, the Court granted the renewed motion and appointed co-lead counsel for plaintiffs.

On January 17, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the consolidated derivative actions, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On January 25, 2023, the Court granted the motion for temporary stay~~. Accordingly,~~ ~~all~~but ~~deadlines~~ordered ~~are~~the ~~deferred~~parties ~~until~~to ~~the~~provide ~~stay~~periodic isstatus ~~terminated~~reports, which they did throughout 2023.

McCann v. Martino, et al., 2023cv30287

On January 27, 2023, putative shareholder John McCann filed a derivative complaint in the District Court, City & County of Denver, State of Colorado, captioned McCann v. Martino, et al., 2023cv30287. The Complaint, filed on behalf of Ampio, asserts that various current and former officers and directors of Ampio – namely, Michael Martino, J. Kevin Buchi, David Stevens, Elizabeth Jobes, Holli Cherevka, David Bar-Or, Philip H. Coelho, and Richard B. Giles, breached their fiduciary duties as directors and/or officers by allowing the Company to issue false and misleading statements, . The Complaint focuses on the Company’s alleged failure to timely report that the results of the AP-013 trial for Ampion were unfavorable, failing to show efficacy on the co-primary endpoints of pain and function, and the Company’s alleged failure to disclose the results of and timing of unblinding the study data. The Complaint asserts that the individual defendants breached their fiduciary duties by allowing the Company to make materially false and misleading statements regarding Ampio’s business, operations and prospects and by failing to maintain adequate internal controls. Based on these allegations, the Complaint asserts five causes of action on behalf of the Company: (1) breach of fiduciary duty against the current directors; (2) gross mismanagement against the current directors; (3) waste of corporate assets against the current directors; (4) unjust enrichment against all defendants; and (5) breach of fiduciary duty by insider trading against defendants Cherevka and Coelho. Based on these claims, the Complaint seeks judgment in favor of the Company and against the individual defendants in an unspecified amount of compensatory damages, costs of the action including reasonable attorneys’ and experts’ fees as well as a mandatory injunction requiring Ampio to reform and improve the corporate governance and internal procedures of the Company.

Defendant Cherevka was served and by order dated February 9, 2023, obtained an extension of time to respond to the Complaint through March 31, 2023. On March 2, 2023, the parties filed a joint stipulated motion seeking a temporary stay of the action, subject to various conditions, until the earlier of: (1) the dismissal of the Kain action; (2) a defendant filing an answer in the Kain action; or (3) another derivative action being filed that is not stayed for the same duration. On March 3, 2023, the Court granted the motion for temporary stay. ~~Accordingly, all deadlines are deferred until the stay is terminated.~~

~~Ampio~~As ~~intends~~reported above, on January 4, 2024, the parties to ~~defend~~the ~~itself~~McCann ~~vigorously~~derivative ~~against~~action ~~this~~participated in the mediation at which the parties to the Consolidated Derivative Actions reached agreement in principle. The settlement of the Consolidated Derivative Action is subject to various conditions, including the negotiation and execution of the full settlement agreements and obtaining court approval. The plaintiffs in the McCann action have indicated their assent to the settlement of the Consolidated Derivative Actions and would seek dismissal of the McCann action if and when the Court finally approves the settlement of the Consolidated Derivative Actions.

~~SEC~~In ~~Investigation~~accordance with ASC 450, Contingencies, the Company has not recorded an accrual for a contingent liability associated with these legal proceedings based on its understanding that payment is currently expected to be at least equal to the amount offered in the settlement in principle, which totals approximately $3.0 million for the Securities Class Action and $0.5 million for the Consolidated Derivative Actions, is expected to be within the D&O insurance policy limits, and will be paid by the insurance carriers directly to the respective parties with no control by the Company,

On October 12, 2022, the Securities and Exchange Commission, or SEC, entered an order directing private investigation and designating officers to take testimony to determine whether we or any other entities or persons have engaged in, or are about to engage in, any violations of the securities laws. The SEC has since issued subpoenas to the Company and numerous current and former officers, directors, employees and consultants of the Company. We intend to cooperate fully with the SEC.

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relieving the Company of any liability. It is reasonably possible that the estimated amount of the loss will change in the near term as the formal settlement(s) are finalized and approved by the court(s); however, the Company expects that payment would continue to be paid directly by the insurance carrier to the parties involved in the Shareholder Class Action and Consolidated Derivative Actions.

SEC Investigation

Note 14 – Employee Benefit Plan

The Company has a 401(k) plan that allows participants to contribute a portion of their salary, subject to eligibility requirements and annual IRS limits. The Company provided $5,000 and $67,000 matching employee contributions during the year ended December 31, 2023 and December 31, 2022, respectively.

Note 15 – Subsequent Event

~~Ampio~~ATM ~~Pharmaceuticals, Inc. (the “Company”) is a party to a Lease~~ Agreement (the “Lease”) with Beta Investors Group, LLC (successor by assignment to NCWP – Inverness Business Park, LLC) (the “Landlord”) dated December 13, 2013 pursuant to which the Company has leased office and manufacturing space in Suite 200 and Suite 204 in the building located at 373 Inverness Parkway, Englewood, Colorado (the “Premises”).

~~Effective~~As ~~March~~of 1February 25, ~~2023~~2024, the Company ~~entered~~received ~~into~~gross aproceeds ~~sublease agreement with the consent~~ of ~~the~~$0.7 ~~Landlord~~million ~~pursuant~~from ~~to which~~ the ~~Company~~sale ~~will~~of ~~sublease the Premises for a term commencing on March 1~~301,928 ~~2023~~shares ~~and~~of ~~continuing~~common ~~until~~stock ~~the~~from ~~expiration of~~ the ~~Lease~~ATM ~~on September 30~~Agreement, ~~2024. However,~~which ~~the~~was ~~address~~offset ofby ~~the~~offering ~~Company’s~~related ~~principal~~costs ~~executive~~of ~~offices continues to be 373 Inverness Parkway~~$99, ~~Suite 200, Englewood, Colorado 80112~~000.

In January 2024, the Company filed a prospectus supplement (the “Prospectus Supplement”) to the base prospectus included in the Registration Statement on Form S-3, which became effective under the Securities Act of 1933, as amended, on September 27, 2023, in connection with the ATM Agreement. Pursuant to the Prospectus Supplement, from time to time, the Company may offer and sell shares of its common stock having an aggregate gross sales price of up to $1,315,900.

On February 26, 2024, the Company terminated the ATM Agreement with the Manager effective as of March 6, 2024. On February 28, 2024, the Company filed a post-effective amendment to deregister the remaining securities available under the Registration Statement relating to the offerings under the ATM Agreement, which was declared effective by the SEC on March 4, 2024.

Litigation Update

On January 11, 2024, the Company announced that a settlement in principle had been reached in the pending securities fraud class action, Case Number 22-cv-2105-WJM-MEH (the “Securities Class Action”), and the pending consolidated derivative actions in the United States District Court for the District of Colorado, Case Number 22-cv-2803-KLM (the “Consolidated Derivative Actions”).

The settlements are subject to various conditions, including confirmatory discovery in the Securities Class Action, negotiation and execution of the full settlement agreements and obtaining court approval in each action. On January 9, 2024, Ampio along with the other parties to each case filed status reports in both the Securities Class Action and the Consolidated Derivative Actions, advising the respective courts of the status of the settlements in principle. The settlement of the Consolidated Derivative Actions is supported by the plaintiff in the pending Colorado state court derivative action, Case Number 2023CV30287, as well as two stockholders who previously submitted pre-litigation demand letters to the Company’s Board of Directors.

Ampio currently expects the amount to be paid in both settlements, including related defense costs, will be covered by, and within the limits of, its D&O insurance policy. The settlements in principle do not constitute any admission of fault, wrongdoing or liability as to the Company or any other defendant. While the timing of completion of the settlement

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agreements and filing motions to seek court approvals are uncertain, the Company will be endeavoring to finalize and execute the settlement agreements and have motions for preliminary approval submitted to the relevant courts by May 2024. If finally approved by the relevant courts, the settlements will result in the dismissal with prejudice of all of the pending civil actions and the withdrawal of the two stockholder pre-litigation demands.

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Filing Compare · Ampio Pharmaceuticals, Inc.