Going Concern	3 Months Ended
Mar. 31, 2020
Going Concern
Going Concern	Note 2 - Going Concern As of and for the three months ended March 31, 2020, the Company had cash and cash equivalents of $2.4 million and a net loss of $5.2 million. The net loss is primarily attributable to operating expenses of $6.0 million, partially offset with the non-cash derivative gain of $0.8 million that was recognized during the three months ended March 31, 2020. The Company used net cash in operations of $4.5 million for the three months ended March 31, 2020. As of March 31, 2020, the Company had an accumulated deficit of $189.8 million and stockholders’ equity of $2.0 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 three months ended March 31, 2020, the Company entered into a Sales Agreement (“Sales Agreement”) with two agents to implement an “at-the-market” (“ATM”) equity offering program under which the Company, at its sole discretion, may issue and sell from time to time shares of its common stock. During the three months ended March 31, 2020, the Company sold shares pursuant to the ATM equity offering program, which sales yielded gross proceeds of $0.7 million (see Note 9). The Company has prepared an updated projection covering the period from April 1, 2020 through March 31, 2021 based on the requirements of ASC 205-40, “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 $0.8 million per month. The Company is assessing the impact of the COVID-19 pandemic on the AP‑013 study, and, as such, is not currently in a position to project the required liquidity needs for completion of the study. With the receipt of the loan proceeds from the PPP in April 2020 (see Note 13), combined with the planned disciplined use of the ATM equity offering program, it is possible that the Company may have sufficient liquidity to fund operations into first quarter of 2021. This projection is based on many assumptions that may prove to be incorrect, including, but not limited to, the overall effectiveness of sourcing requisite capital through the ATM equity offering program in a manner that is not materially detrimental to the Company. As such, it is possible that the Company could exhaust its available cash and cash equivalents earlier than presently anticipated. In addition, the global COVID-19 pandemic continues to rapidly evolve and its effect on the Company’s operations and ability to raise capital through the ATM equity offering program, or otherwise, is currently highly uncertain and subject to change. The Company expects to seek additional capital investments in both the near and long-term to enable it to support its business operations, including specifically (i) clinical development, (ii) BLA preparation and submission, (iii) existing base business operations and (iv) commercial development activities for Ampion. The Company will continue to closely monitor and evaluate the overall capital markets to determine the appropriate timing for such capital raise, which will primarily depend on existing market conditions relative to the Company’s need for funds at such time. However, the Company cannot give any assurance that it will be successful in satisfying its future cash needs in a manner that will be sufficient to fund its 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 liabilities, which adjustments may be necessary should the Company be unable to continue as a going concern.

Note 2 - Going Concern

As of and for the three months ended March 31, 2020, the Company had cash and cash equivalents of $2.4 million and a net loss of $5.2 million. The net loss is primarily attributable to operating expenses of $6.0 million, partially offset with the non-cash derivative gain of $0.8 million that was recognized during the three months ended March 31, 2020. The Company used net cash in operations of $4.5 million for the three months ended March 31, 2020. As of March 31, 2020, the Company had an accumulated deficit of $189.8 million and stockholders’ equity of $2.0 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 three months ended March 31, 2020, the Company entered into a Sales Agreement (“Sales Agreement”) with two agents to implement an “at-the-market” (“ATM”) equity offering program under which the Company, at its sole discretion, may issue and sell from time to time shares of its common stock. During the three months ended March 31, 2020, the Company sold shares pursuant to the ATM equity offering program, which sales yielded gross proceeds

of $0.7 million (see Note 9).

The Company has prepared an updated projection covering the period from April 1, 2020 through March 31, 2021 based on the requirements of ASC 205-40, “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 $0.8 million per month. The Company is assessing the impact of the COVID-19 pandemic on the AP‑013 study, and, as such, is not currently in a position to project the required liquidity needs for completion of the study. With the receipt of the loan proceeds from the PPP in April 2020 (see Note 13), combined with the planned disciplined use of the ATM equity offering program, it is possible that the Company may have sufficient liquidity to fund operations into first quarter of 2021. This projection is based on many assumptions that may prove to be incorrect, including, but not limited to, the overall effectiveness of sourcing requisite capital through the ATM equity offering program in a manner that is not materially detrimental to the Company. As such, it is possible that the Company could exhaust its available cash and cash equivalents earlier than presently anticipated. In addition, the global COVID-19 pandemic continues to rapidly evolve and its effect on the Company’s operations and ability to raise capital through the ATM equity offering program, or otherwise, is currently highly uncertain and subject to change. The Company expects to seek additional capital investments in both the near and long-term to enable it to support its business operations, including specifically (i) clinical development, (ii) BLA preparation and submission, (iii) existing base business operations and (iv) commercial development activities for Ampion. The Company will continue to closely monitor and evaluate the overall capital markets to determine the appropriate timing for such capital raise, which will primarily depend on existing market conditions relative to the Company’s need for funds at such time. However, the Company cannot give any assurance that it will be successful in satisfying its future cash needs in a manner that will be sufficient to fund its 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 liabilities, which adjustments may be necessary should the Company be unable to continue as a going concern.