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Ampio Pharmaceuticals (AMPE) Risk Analysis
Risk Overview Q4, 2023
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1Our 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.
- Share Price & Shareholder Rights - Risk 2We plan to initiate steps to exit from certain reporting requirements under the Exchange Act, which will substantially reduce publicly available information about us.
Our common stock is currently registered under the Exchange Act, which requires that we, and our officers 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 exit from these reporting requirements, we will continue to incur expenses that will reduce the amount 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.
- Share Price & Shareholder Rights - Risk 3With the Board approval to delist our stock, we expect a negative impact on the price of our stock and the ability to sell our common stock in the public market.
Currently, our common stock is listed on the NYSE American. Because of our current non-compliance with the NYSE American listing requirements relating to minimum stockholders' equity and likely other continuing listing standards and, in addition, the expense associated with continuing the listing on the NYSE American, the Board of Directors determined to pursue voluntary delisting of Ampio's common stock from the NYSE American as part of its cash conservation plan. Following delisting of our common stock from NYSE American, the Company anticipates that the common stock would be quoted on the Pink Open Market operated by OTC Markets Group Inc. (the "OTC") under the same symbol ("AMPE"). If 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: - a limited availability for market quotations for our common stock;- reduced liquidity with respect to our common stock or potentially no liquidity with respect to our common stock;- 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 - limited amount of news and other information. Additionally, delisting from the NYSE American will likely affect the ability or willingness of certain counterparties to engage in certain transactions with us, such as a reverse merger or recapitalization.
- Corporate Activity and Growth - Risk 4There is substantial doubt about our ability to continue as a going concern.
In 2023, we experienced net losses of $8.6 million, had no revenue other than interest income, and used $8.6 million in cash to fund our operations. Due to the current level of liquidity at December 31, 2023 and the projected shortfall to cover operating expenses requiring cash for a period of 12 months from the report date of the annual report, management has expressed substantial doubt as to our ability to continue as a going concern. As of December 31, 2023, our source of liquidity consisted of $4.1 million of cash and cash equivalents and $0.9 million of an insurance recovery receivable. As of February 29, 2024, we had $3.4 million in cash and cash equivalents and $0.5 million of an insurance recovery receivable. While we continued to implement cost reductions in 2023 and additional cost reductions in February and March 2024, we have finite cash resources available to fund our now limited operations. 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 pursuit of the resolution of currently pending legal proceedings.
Risk Highlights Q4, 2023
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 9
- Share Price & Shareholder Rights - Risk 1AddedOur 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.
- Share Price & Shareholder Rights - Risk 2AddedWe plan to initiate steps to exit from certain reporting requirements under the Exchange Act, which will substantially reduce publicly available information about us.
Our common stock is currently registered under the Exchange Act, which requires that we, and our officers 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 exit from these reporting requirements, we will continue to incur expenses that will reduce the amount 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.
- Share Price & Shareholder Rights - Risk 3AddedWith the Board approval to delist our stock, we expect a negative impact on the price of our stock and the ability to sell our common stock in the public market.
Currently, our common stock is listed on the NYSE American. Because of our current non-compliance with the NYSE American listing requirements relating to minimum stockholders' equity and likely other continuing listing standards and, in addition, the expense associated with continuing the listing on the NYSE American, the Board of Directors determined to pursue voluntary delisting of Ampio's common stock from the NYSE American as part of its cash conservation plan. Following delisting of our common stock from NYSE American, the Company anticipates that the common stock would be quoted on the Pink Open Market operated by OTC Markets Group Inc. (the "OTC") under the same symbol ("AMPE"). If 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: - a limited availability for market quotations for our common stock;- reduced liquidity with respect to our common stock or potentially no liquidity with respect to our common stock;- 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 - limited amount of news and other information. Additionally, delisting from the NYSE American will likely affect the ability or willingness of certain counterparties to engage in certain transactions with us, such as a reverse merger or recapitalization.
- Share Price & Shareholder Rights - Risk 4The 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. We expect that volatility to continue as a result of our delisting from the NYSE American and Exchange Act deregistration. In addition to delisting, deregistration and the other factors described in this section, the following factors may also have a significant impact on the market price of our common stock: - uncertainties relating to our wind down of the Company's operations, including the potential for dissolution of the Company, bankruptcy or strategic 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;- sales of stock by our stockholders;- 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.
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