Company Quick10K Filing
Quick10K
Ampio Pharmaceuticals
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.52 111 $58
10-Q 2019-09-30 Quarter: 2019-09-30
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-10-28 Enter Agreement, Shareholder Rights, Exhibits
8-K 2019-10-10 Other Events, Exhibits
8-K 2019-09-16 Officers, Other Events, Exhibits
8-K 2019-08-20 Officers, Exhibits
8-K 2019-07-10 Accountant, Exhibits
8-K 2019-07-09 Officers, Exhibits
8-K 2019-06-19 Other Events, Exhibits
8-K 2019-06-17 Enter Agreement, Other Events, Exhibits
8-K 2019-06-14 Leave Agreement, Other Events, Exhibits
8-K 2019-06-14 Other Events, Exhibits
8-K 2019-06-13 Officers, Exhibits
8-K 2019-05-22 Other Events, Exhibits
8-K 2019-04-25 Earnings, Other Events, Exhibits
8-K 2019-04-11 Enter Agreement, Leave Agreement, Earnings, Exhibits
8-K 2018-12-15 Shareholder Vote
8-K 2018-12-11 Enter Agreement, Shareholder Rights, Exhibits
8-K 2018-12-07 Enter Agreement, Shareholder Rights, Exhibits
8-K 2018-10-04 Accountant, Exhibits
8-K 2018-10-01 Officers
8-K 2018-08-29 Officers, Exhibits
8-K 2018-08-09 Enter Agreement, Exhibits
8-K 2018-08-08 Other Events, Exhibits
8-K 2018-08-03 Other Events, Exhibits
8-K 2018-04-12 Other Events, Exhibits
8-K 2018-01-08 Regulation FD, Exhibits
ABT Abbott 148,579
FGEN Fibrogen 3,949
TBPH Theravance Biopharma 1,174
AXSM Axsome Therapeutics 828
VNDA Vanda 759
PTGX Protagonist Therapeutics 297
FTSV Forty Seven 231
IMDZ Immune Design 230
CNST Constellation Pharmaceuticals 194
CWBR Cohbar 65
AMPE 2019-09-30
Part I – Financial Information
Item 1. Financial Statements
Note 1 - Basis of Presentation
Note 2 - Going Concern
Note 3 – Prepaid Expenses and Other
Note 4- Fixed Assets
Note 5 – Accounts Payable and Accrued Expenses
Note 6 - Fair Value Considerations
Note 7 - Commitments and Contingencies
Note 8 – Warrants
Note 9 - Common Stock
Note 10 - Equity
Note 11 - Earnings per Share
Note 12 – Litigation
Note 13 – Subsequent Events
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II – Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-10.4 ampe-20190930ex104d90a64.htm
EX-31.1 ampe-20190930ex311c965dd.htm
EX-31.2 ampe-20190930ex312c72e8b.htm
EX-32.1 ampe-20190930ex321c44a71.htm

Ampio Pharmaceuticals Earnings 2019-09-30

AMPE 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 ampe-20190930x10q.htm 10-Q ampe_Current_Folio_10Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 

 

 

 

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

For the Quarterly Period Ended: September 30, 2019

or

 

 

 

 

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

For the transition period from                     to                    

Commission File No. 001‑35182


cid:image001.jpg@01CDF343.4BBAE3B0

AMPIO PHARMACEUTICALS, INC.

(www.ampiopharma.com)

NYSE American: AMPE

(Exact name of registrant as specified in its charter)

 

 

Delaware

26‑0179592

(State or other jurisdiction of
incorporation or organization)

(IRS Employer
Identification No.)

 

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

(Address of principal executive offices, including zip code)

(720) 437‑6500

(Registrant’s telephone number, including area code)

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

 

 

 

 

 

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common

 

AMPE

 

NYSE American

 

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

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

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

 

 

 

 

Large Accelerated Filer

Accelerated Filer

 

 

 

 

Non-Accelerated Filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

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

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

As of November 1, 2019, there were 158,644,757 shares of Common Stock outstanding, par value $0.0001, of the registrant.

 

 

 

 

AMPIO PHARMACEUTICALS, INC.

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

INDEX

 

 

 

 

 

Page

 

PART I-FINANCIAL INFORMATION

 

 

 

 

Item 1. 

Financial Statements (unaudited)

6

 

 

 

 

Condensed Balance Sheets as of September 30, 2019 and December 31, 2018 

6

 

 

 

 

Condensed Statements of Operations for the three and nine months ended September 30, 2019 and the three and nine months ended September 30, 2018 

7

 

 

 

 

Condensed Statements of Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2019 and the three and nine months ended September 30, 2018 

8

 

 

 

 

Condensed Statements of Cash Flows for the nine months ended September 30, 2019 and the nine months ended September 30, 2018 

9

 

 

 

 

Notes to Financial Statements

10

 

 

 

Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

 

 

 

Item 3. 

Quantitative and Qualitative Disclosures About Market Risk

30

 

 

 

Item 4. 

Controls and Procedures

30

 

 

 

 

PART II-OTHER INFORMATION

 

 

 

 

Item 1. 

Legal Proceedings

31

 

 

 

Item 1A. 

Risk Factors

31

 

 

 

Item 2. 

Unregistered Sales of Equity Securities and Use of Proceeds

33

 

 

 

Item 3. 

Defaults Upon Senior Securities

33

 

 

 

Item 4. 

Mine Safety Disclosures

33

 

 

 

Item 5. 

Other Information

33

 

 

 

Item 6. 

Exhibits

33

 

 

 

SIGNATURES 

35

 

 

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10‑Q contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this report, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements appear in a number of places, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements represent our reasonable judgment about the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “should,” “plan,” “potential,” “project,” “will,” “would” and other words of similar meaning, or the negatives of such terms or other variations. These include, but are not limited to, statements relating to the following:

·

Projected operating or financial results, including anticipated cash flows used in operations;

·

Expectations regarding clinical trials for our lead product candidate, capital expenditures, research and development expenses and other payments;

·

Our beliefs and assumptions relating to our liquidity position, including, but not limited to, our ability to obtain near-term additional financing;

·

Our beliefs, assumptions and expectations about the regulatory approval pathway for Ampion including, but not limited to, our ability to obtain regulatory approval for Ampion in a timely manner, or at all;

·

In the event that the we do not have redundant manufacturing capabilities, we may be forced to rely on third party manufacturers, if we receive regulatory approval; and

·

Our ability to identify strategic partners and enter into beneficial license, co-development, collaboration or similar arrangements.

 

Any or all of our forward-looking statements may turn out to be wrong. They may be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors including, among others:

·

Management has performed an analysis of our ability to continue as a going concern. In addition, our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern;

·

We have incurred significant losses since inception, expect to incur net losses for at least the next several years (assuming internal commercialization efforts) and may never achieve or sustain profitability;

·

We will need substantial additional capital to fund our operations. If we do not obtain the capital necessary to fund our operations, we will be unable to successfully develop, obtain regulatory approval of, and commercialize Ampion and may need to cease operations;

·

Our business is highly dependent on the success of Ampion. If Ampion does not receive regulatory approval or is not successfully commercialized, our business is likely to be harmed and we may need to cease operations;

·

Ampion is undergoing a Phase III clinical trial which is time-consuming, requires significant capital outlay, the outcome is unpredictable, and for which there is a risk of failure. If the current clinical trial for Ampion fails to satisfactorily demonstrate safety and efficacy to the FDA and other regulators, the FDA may require additional clinical trials and we, or our collaborators, may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of Ampion;

·

Delays, suspensions and terminations in our clinical trials would likely result in increased costs to us and delay or prevent our ability to generate revenues. We rely on third parties to conduct our clinical trials and perform data collection and analysis, which may result in costs and delays that prevent us from successfully commercializing Ampion;

·

If we do not receive marketing approval for Ampion, we may not realize the investment we have made in our manufacturing facility;

3

·

Relying on third-party suppliers may result in delays in our clinical trials and product introduction. If we use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages or fines;

·

Even if we obtain marketing approvals for Ampion, the terms of approvals and ongoing regulation of our product may limit how we, or our collaborators, manufacture and market our product, which could materially impair our ability to generate revenue;

·

Ampion, for which we may obtain marketing approval in the future, could be subject to post-marketing restrictions or withdrawal from the market and we, and our collaborators, may be subject to substantial penalties if we, or they, fail to comply with regulatory requirements or if we, or they, experience unanticipated problems with our product following approval;

·

If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the commercialization of Ampion may be delayed, our business will be harmed, and our stock price may decline;

·

Even if collaborators with which we contract in the future successfully complete clinical trials of Ampion, our product may not be commercialized successfully for other reasons;

·

We might enter into agreements with collaborators to commercialize Ampion once we obtain regulatory approvals, which may affect the sales of our product and our ability to generate revenues;

·

We face substantial competition from companies with considerably more resources and experience than we have, which may result in others discovering, developing, receiving approval for, or commercializing products before or more successfully than us;

·

Product liability, shareholder lawsuits, SEC or other government agency investigations and other lawsuits could divert our resources, result in substantial liabilities and reduce the commercial potential of Ampion;

·

If Ampion is commercialized, this does not assure acceptance by physicians, patients, third-party payors, or the medical community in general;

·

Government restrictions on pricing and reimbursement, as well as other healthcare payor cost-containment initiatives, may negatively impact our ability to generate revenues if we obtain regulatory approval to market our product;

·

The approval process outside the United States varies among countries and may limit our ability to develop, manufacture and sell our product internationally. Failure to obtain marketing approval in international jurisdictions would prevent Ampion from being marketed abroad;

·

Our drug development program to date has been dependent in large part upon the services of Dr. David Bar-Or, who retired as Chief Scientific Officer in September 2018;

·

Business interruptions could limit our ability to operate our business;

·

While we are not aware of any cybersecurity incidents, the cybersecurity landscape continues to evolve, and we may find it necessary to make further investments to protect our data and infrastructure;

·

Our ability to compete may decline if we do not adequately protect our proprietary rights;

·

Confidentiality agreements with employees and others may not adequately prevent disclosure of our trade secrets and other proprietary information and may not adequately protect our intellectual property, which could limit our ability to compete;

·

A dispute concerning the infringement or misappropriation of our proprietary rights or the proprietary rights of others could be time consuming and costly, and an unfavorable outcome could harm our business;

·

Pharmaceutical patents and patent applications involve highly complex legal and factual questions, which, if determined adversely to us, could negatively impact our patent position;

·

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 stock may be vulnerable to manipulation;

·

If we cannot continue to satisfy the NYSE American listing maintenance requirements and other rules, including the director independence requirements, our securities may be delisted, which could negatively impact the price of our securities;

·

Concentration of our ownership limits the ability of our shareholders to influence corporate matters;

·

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

4

·

Increased costs associated with corporate governance compliance may significantly impact our results of operations;

·

We have no plans to pay cash dividends on our common stock;

·

We received an SPA agreement from the FDA relating to our product candidate. This SPA agreement does not guarantee approval of Ampion or any other particular outcome from regulatory review; 

·

We had a material weakness in our internal control over disclosure reporting during the reporting period, which could result in the failure to identify information for appropriate disclosure;

·

We may be limited in our ability to access sufficient funding through a public or private equity offering or convertible debt offering;

·

If we receive FDA licensure for Ampion, we will be subject to FDA post approval requirements, which could limit our financial resources available for other development activities; 

·

We may have difficulties obtaining and maintaining sufficient insurance coverage;

·

Ampion is regulated by the FDA,  and as such, may subject it to competition sooner than anticipated;

·

The Company and certain of its directors and executive officers received subpoenas from the SEC requesting documents and information in an investigation relating to the trading of our securities.  These requests have required us to, and may require us in the future to, expend significant financial and managerial resources, which may have a material effect on our business, financial condition, results of operations and cash flows; and

·

We currently, and from time to time in the future may, outsource portions of our internal business functions to third-party providers. Outsourcing these functions has significant risks, and our failure to manage these risks successfully could materially adversely affect our business, results of operations, and financial condition.

 

In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements, some of which are included elsewhere in this report, including, but not limited to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement should be relied upon. Our actual future results may vary materially from those expressed or implied in any forward-looking statements. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are made, and we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report, except as otherwise required by applicable law.

This Quarterly Report on Form 10‑Q includes trademarks for Ampion, which are protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks and trade names referred to in this Quarterly Report on Form 10‑Q may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names.

5

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AMPIO PHARMACEUTICALS, INC.

Condensed Balance Sheets

(unaudited)

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

    

2019

    

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

  

 

 

  

Current assets

 

 

  

 

 

  

Cash and cash equivalents

 

$

8,044,199

 

$

7,585,392

Prepaid expenses and other

 

 

1,836,770

 

 

447,136

Total current assets

 

 

9,880,969

 

 

8,032,528

 

 

 

 

 

 

 

Fixed assets, net

 

 

5,036,406

 

 

5,997,582

Right-of-use asset

 

 

1,045,339

 

 

 —

Total assets

 

$

15,962,714

 

$

14,030,110

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

  

 

 

  

Current liabilities

 

 

  

 

 

  

Accounts payable and accrued expenses

 

$

2,129,736

 

$

1,324,651

Lease liability-current portion

 

 

253,079

 

 

59,579

Total current liabilities

 

 

2,382,815

 

 

1,384,230

 

 

 

 

 

 

 

Lease liability-long-term

 

 

1,276,685

 

 

476,753

Warrant derivative liability

 

 

8,165,955

 

 

6,933,031

Total liabilities

 

 

11,825,455

 

 

8,794,014

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

  

 

 

  

 

 

 

 

 

 

 

Stockholders’ equity

 

 

  

 

 

  

Preferred Stock, par value $0.0001; 10,000,000 shares authorized; none issued

 

 

 —

 

 

 —

Common Stock, par value $0.0001; 200,000,000 shares authorized; shares issued and outstanding - 142,207,862 as of September 30, 2019 and 110,941,516 as of  December 31, 2018

 

 

14,221

 

 

11,094

Additional paid-in capital

 

 

187,735,629

 

 

176,227,510

Accumulated deficit

 

 

(183,612,591)

 

 

(171,002,508)

Total stockholders’ equity

 

 

4,137,259

 

 

5,236,096

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

15,962,714

 

$

14,030,110

 

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

6

AMPIO PHARMACEUTICALS, INC.

Condensed Statements of Operations

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

 

    

2019

    

2018

    

2019

    

2018

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

  

 

 

  

 

 

  

 

 

  

 

Research and development

 

$

3,427,985

 

$

1,184,194

 

$

7,128,996

 

$

5,343,452

 

General and administrative

 

 

1,744,694

 

 

756,104

 

 

4,301,037

 

 

3,303,315

 

Total operating expenses

 

 

5,172,679

 

 

1,940,298

 

 

11,430,033

 

 

8,646,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

  

 

 

  

 

 

  

 

 

  

 

Interest income (expense)

 

 

8,025

 

 

(3,190)

 

 

52,875

 

 

(3,190)

 

Derivative (loss) gain

 

 

(2,054,561)

 

 

7,744,708

 

 

(1,232,925)

 

 

41,110,851

 

Total other income (expense)

 

 

(2,046,536)

 

 

7,741,518

 

 

(1,180,050)

 

 

41,107,661

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(7,219,215)

 

$

5,801,220

 

$

(12,610,083)

 

$

32,460,894

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per common share:

 

 

  

 

 

  

 

 

  

 

 

  

 

Basic

 

$

(0.05)

 

$

0.06

 

$

(0.10)

 

$

0.37

 

Diluted

 

$

(0.05)

 

$

(0.02)

 

$

(0.10)

 

$

(0.08)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

142,207,862

 

 

96,930,270

 

 

122,895,080

 

 

88,782,837

 

Diluted

 

 

142,207,862

 

 

115,346,118

 

 

122,895,080

 

 

111,370,739

 

 

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

7

AMPIO PHARMACEUTICALS, INC.

Condensed Statements of Stockholders’ Equity (Deficit)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Total

 

 

Common Stock

 

Paid-in

 

Accumulated

 

Stockholders'

 

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity (Deficit)

Balance at December 31, 2017

 

80,060,345

 

$

8,006

 

$

170,803,783

 

$

(204,988,674)

 

$

(34,176,885)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for services

 

17,241

 

 

 2

 

 

59,998

 

 

 —

 

 

60,000

Options exercised, net

 

249,666

 

 

25

 

 

400,734

 

 

 —

 

 

400,759

Warrants exercised, net

 

5,684,499

 

 

568

 

 

2,699,651

 

 

 —

 

 

2,700,219

Stock-based compensation, net

 

 —

 

 

 —

 

 

119,623

 

 

 —

 

 

119,623

Net income

 

 —

 

 

 —

 

 

 —

 

 

22,039,472

 

 

22,039,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2018

 

86,011,751

 

$

8,601

 

$

174,083,789

 

$

(182,949,202)

 

$

(8,856,812)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options exercised, net

 

99,117

 

 

10

 

 

235,641

 

 

 —

 

 

235,651

Warrants exercised, net

 

210,100

 

 

21

 

 

159,655

 

 

 —

 

 

159,676

Stock-based compensation, net

 

 —

 

 

 —

 

 

72,612

 

 

 —

 

 

72,612

Net income

 

 —

 

 

 —

 

 

 —

 

 

4,620,201

 

 

4,620,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2018

 

86,320,968

 

$

8,632

 

$

174,551,697

 

$

(178,329,001)

 

$

(3,768,672)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants exercised, net

 

270,548

 

 

27

 

 

109,197

 

 

 —

 

 

109,224

Stock-based compensation, net

 

 —

 

 

 —

 

 

95,105

 

 

 —

 

 

95,105

Issuance of common stock in connection with the public offering, net of offering costs of $844,409 

 

20,000,000

 

 

2,000

 

 

(2,000)

 

 

 —

 

 

 —

Net income

 

 —

 

 

 —

 

 

 —

 

 

5,801,220

 

 

5,801,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2018

 

106,591,516

 

$

10,659

 

$

174,753,999

 

$

(172,527,781)

 

$

2,236,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

110,941,516

 

$

11,094

 

$

176,227,510

 

$

(171,002,508)

 

$

5,236,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for services

 

136,362

 

 

14

 

 

59,986

 

 

 —

 

 

60,000

Warrants exercised, net

 

50,000

 

 

 5

 

 

19,995

 

 

 —

 

 

20,000

Stock-based compensation, net

 

 —

 

 

 —

 

 

27,555

 

 

 —

 

 

27,555

Net loss

 

 —

 

 

 —

 

 

 —

 

 

(5,811,634)

 

 

(5,811,634)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2019

 

111,127,878

 

$

11,113

 

$

176,335,046

 

$

(176,814,142)

 

$

(467,983)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants exercised, net

 

825,000

 

 

83

 

 

329,917

 

 

 —

 

 

330,000

Stock-based compensation, net

 

 —

 

 

 —

 

 

72,800

 

 

 —

 

 

72,800

Issuance of common stock in connection with the equity distribution agreement

 

254,984

 

 

25

 

 

142,296

 

 

 —

 

 

142,321

Offering costs related to the issuance of common stock in connection with the equity distribution agreement

 

 —

 

 

 —

 

 

(144,329)

 

 

 

 

 

(144,329)

Issuance of common stock in connection with the public offering, net of offering costs of $1,243,372

 

30,000,000

 

 

3,000

 

 

10,753,878

 

 

 —

 

 

10,756,878

Net income

 

 —

 

 

 —

 

 

 —

 

 

420,766

 

 

420,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2019

 

142,207,862

 

$

14,221

 

$

187,489,608

 

$

(176,393,376)

 

$

11,110,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation, net

 

 —

 

 

 —

 

 

246,021

 

 

 —

 

 

246,021

Net loss

 

 —

 

 

 —

 

 

 —

 

 

(7,219,215)

 

 

(7,219,215)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2019

 

142,207,862

 

$

14,221

 

$

187,735,629

 

$

(183,612,591)

 

$

4,137,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

8

AMPIO PHARMACEUTICALS, INC.

Condensed Statements of Cash Flows

(unaudited)

 

 

 

 

 

 

 

 

 

    

Nine Months Ended September 30, 

    

 

    

2019

    

2018

    

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

Net (loss) income

 

$

(12,610,083)

 

$

32,460,894

 

Adjustments to reconcile net (loss) income to net cash used in operating activities

 

 

 

 

 

 

 

Stock-based compensation, net

 

 

346,626

 

 

287,339

 

Depreciation and amortization

 

 

975,295

 

 

968,034

 

Issuance of common stock for services

 

 

60,000

 

 

60,000

 

Derivative loss (gain)

 

 

1,232,925

 

 

(41,110,851)

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

Increase in prepaid expenses and other

 

 

(1,389,634)

 

 

(278,666)

 

Increase (decrease) in accounts payable and accrued expenses

 

 

805,085

 

 

(2,154,477)

 

Decrease in lease liability

 

 

(51,907)

 

 

(44,652)

 

Net cash used in operating activities

 

 

(10,631,693)

 

 

(9,812,379)

 

 

 

 

 

 

 

 

 

Cash flows used in investing activities

 

 

 

 

 

 

 

Purchase of fixed assets

 

 

(14,120)

 

 

(485,750)

 

Net cash used in investing activities

 

 

(14,120)

 

 

(485,750)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Proceeds from sale of common stock in connection with the equity distribution agreement

 

 

142,321

 

 

 —

 

Costs related to sale of common stock in connection with the equity distribution agreement

 

 

(144,329)

 

 

 —

 

Proceeds from sale of common stock in connection with the public offering

 

 

12,000,000

 

 

8,000,000

 

Costs related to sale of common stock in connection with the public offering

 

 

(1,243,372)

 

 

(844,409)

 

Proceeds from warrant exercises

 

 

350,000

 

 

2,969,119

 

Proceeds from option exercises

 

 

 —

 

 

636,410

 

Net cash provided by financing activities

 

 

11,104,620

 

 

10,761,120

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

458,807

 

 

462,991

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

7,585,392

 

 

8,209,071

 

Cash and cash equivalents at end of period

 

$

8,044,199

 

$

8,672,062

 

 

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

 

Initial lease liability arising from the adoption of ASU 2016-02

 

$

1,704,153

 

$

 —

 

Initial recognition of right-of-use asset arising from the adoption of ASU 2016-02

 

 

1,167,821

 

 

 —

 

Warrant derivative liability in connection with the public offering

 

 

 

 

 

8,008,500

 

 

 

 

 

 

 

 

 

 

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

9

AMPIO PHARMACEUTICALS, INC.

Notes to Condensed Financial Statements

(unaudited)

Note 1 - Basis of Presentation

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

These financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10‑K filed with the SEC on March 18, 2019 (the “2018 Annual Report”). The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The balance sheet at December 31, 2018 was derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company has no off-balance-sheet concentrations of credit risk, such as foreign exchange contracts, option contracts, or foreign currency hedging arrangements. The Company maintains cash and cash equivalent balances in the form of bank demand deposits and money market fund accounts with financial institutions that management believes are creditworthy. Such balances will exceed the insured amount.

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.

The Company has identified the clinical trial accrual as a critical accounting estimate. The clinical trial accrual involves identifying services that third parties have performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for these services as of the balance sheet date. The Company develops estimates of liabilities using its judgment based upon the facts and circumstances known at the time.

Adoption of Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “Leases (Topic 842)”. The new standard established a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Lessees are required to use a modified retrospective transition approach for finance and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases”, to clarify how to apply certain aspects of the new lease standard. In July 2018, the FASB also issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, to give entities other options for transition. The additional options for transition allowed an entity to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in

10

the period of adoption or apply a practical expedient. The new standards were effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. 

 

The Company elected to adopt the practical expedient permitted by ASU 2018-11 during the first quarter of 2019. As a result of the adoption, on January 1, 2019, the Company recognized a lease liability of approximately $1.7 million, which represented the present value of the remaining minimum lease payments using an estimated incremental borrowing rate of 5.75%. The Company also derecognized the lease liability as of December 31, 2018 of approximately $540,000 and recognized a ROU asset of approximately $1.2 million. Lease expense did not change materially as a result of the adoption of ASU 2016-02.

 

In June 2018, the FASB issued ASU 2018‑07, “Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”.  ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions used to acquire goods and services from non-employees. Companies should apply the requirements of Topic 718 to non-employee awards except for certain exemptions specified in the amendment. The guidance was effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted, but no earlier than the Company’s adoption date of ASU 2014‑09 “Revenue from Contracts with Customers (Topic 606)”.  The Company adopted ASU 2018‑07 during the first quarter of 2019 and the adoption of this guidance did not have a material impact on the Company’s financial statements.

 

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements”, which facilitates amendments to a variety of topics to clarify, correct errors in, or make minor improvements to the accounting standards codification. The effective date of the standard is dependent on the facts and circumstances of each amendment. Some amendments do not require transition guidance and were effective upon the issuance of this standard. A majority of the amendments in ASU 2018-09 were effective for fiscal years beginning after December 15, 2018. The Company adopted ASU 2018-09 during the first quarter of 2019 and the adoption of this guidance did not have a material impact on the Company’s financial statements.

 

In July 2019, the FASB issued ASU 2019-07, “Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update).”  The updated guidance clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations, thereby eliminating redundancies and making the codification easier to apply.  This ASU is effective upon issuance and did not have a significant impact on the Company’s financial statements and related disclosures.

 

 

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018‑13, “Fair Value Measurement - Disclosure Framework (Topic 820)”. The updated guidance modified the disclosure requirements on fair value measurements. The updated guidance is effective for fiscal years beginning after December 15, 2019, including interim reporting periods within those fiscal years. Early adoption is permitted for any removed or modified disclosures, however the Company has not yet adopted this ASU. When adopted, the Company does not expect the adoption of this ASU to have a significant impact on its financial statements.

 

This Quarterly Report on Form 10-Q does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Note 2 - Going Concern

As of and for the nine months ended September 30, 2019, the Company had cash and cash equivalents of $8.0 million and a net loss of $12.6 million. The net loss is primarily attributable to operating expenses of $11.4 million, along with the non-cash derivative loss of $1.2 million, offset by $53,000 of interest income that was recognized during the nine months ended September 30, 2019. The Company used net cash in operations of $10.6 million for the nine months ended

11

September 30, 2019. As of September 30, 2019, the Company had an accumulated deficit of $183.6 million and stockholders’ equity of $4.1 million. In addition, as a clinical stage biopharmaceutical company, the Company has not generated any revenues or profits to date. These existing and on-going factors continue to raise substantial doubt about the Company’s ability to continue as a going concern.

During the nine months ended September 30, 2019, the Company conducted a public offering of its securities through which it raised gross proceeds of $12.0 million (see Note 9). In addition, the Company received a total of $350,000 from the exercise of investor warrants (see Note 8). The Company has prepared an updated projection covering the period from October 1, 2019 through December 31, 2020 based on the requirements of ASU 2014-15, “Going Concern”, which reflects cash requirements for fixed, on-going expenses such as payroll, legal and accounting, patents and overhead at an average cash burn rate of approximately $800,000 per month. The Company’s projection also reflects an appropriation of additional funds for regulatory approvals, clinical trials, outsourced research and development and commercialization consulting of approximately $1.1 million per month. Based on the current projections, the Company expects that current cash resources and operating cash flows will be sufficient to sustain operations into the first quarter of 2020. The ability of the Company to continue its operations beyond this point is dependent on its ability to satisfy the Company’s future cash needs, including but not limited to, private or public sales of securities, option/warrant exercises, structured debt financings and/or partnering/licensing transactions. However, there is no assurance that the Company will be successful in satisfying its future cash needs such that the Company will be able to continue operations.

The accompanying unaudited interim financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 – Prepaid Expenses and Other

Prepaid expenses and other balances as of September 30, 2019 and December 31, 2018 are as follows:

 

 

 

 

 

 

 

 

    

September 30, 2019

 

December 31, 2018

 

    

 

 

 

 

Insurance premiums

 

$

775,000

 

$

164,000

Clinical trial deposit

 

 

713,000

 

 

 —

Biologics License Application ("BLA") consulting services deposit

 

 

182,000

 

 

182,000

Director Fees

 

 

48,000

 

 

 —

Annual service agreements

 

 

39,000

 

 

19,000

Lease deposit

 

 

34,000

 

 

34,000

Other

 

 

46,000

 

 

48,000

Total prepaid expenses and other

 

$

1,837,000

 

$

447,000

 

 

12

Note 4- Fixed Assets

Fixed assets are recorded at cost and, once placed in service, are depreciated on the straight-line method over their estimated useful lives. Leasehold improvements are accreted over the shorter of the estimated economic life or related lease term. Fixed assets consist of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated

 

As of December 31, 

 

 

 

 

 

 

 

As of September 30, 

    

 

    

Useful Lives in Years

    

2018

 

Additions

 

Disposals

    

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing facility/clean room

 

3 - 8

 

$

3,076,000

 

$

5,000

 

$

 —

 

$

3,081,000

 

Leasehold improvements

 

10

 

 

6,075,000

 

 

 —

 

 

 —

 

 

6,075,000

 

Office furniture and equipment

 

5 - 10

 

 

511,000

 

 

 —

 

 

 —

 

 

511,000

 

Lab equipment

 

5 - 8

 

 

1,128,000

 

 

9,000

 

 

 —

 

 

1,137,000

 

Less accumulated depreciation and amortization

 

 

 

 

(4,793,000)

 

 

(975,000)

 

 

 —

 

 

(5,768,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed assets, net

 

 

 

$

5,997,000

 

$

(961,000)

 

$

 —

 

$

5,036,000

 

 

Depreciation expense for the respective periods is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

 

    

2019

    

2018

    

2019

    

2018

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation Expense

 

$

320,000

 

$

347,000

 

$

975,000

 

$

968,000

 

 

 

 

Note 5 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of September 30, 2019 and December 31, 2018 are as follows:

 

 

 

 

 

 

 

 

    

September 30, 2019

 

December 31, 2018

 

    

 

 

 

 

Accounts payable

 

$

542,000

 

$

707,000

 

 

 

 

 

 

 

Clinical trial

 

$

870,000

 

$

407,000

Insurance premiums

 

 

294,000

 

 

 —

Professional fees

 

 

130,000

 

 

99,000

Accrued compensation

 

 

87,000

 

 

 —

Property taxes

 

 

72,000

 

 

97,000

BLA consulting services

 

 

58,000

 

 

15,000

Directors Fees

 

 

51,000

 

 

 —

Other

 

 

26,000

 

 

 —

Total accrued expenses

 

$