Going Concern	6 Months Ended
Jun. 30, 2020
Going Concern
Going Concern	Note 2 - Going Concern As of and for the six months ended June 30, 2020, the Company had cash and cash equivalents of $4.8 million and a net loss of $7.9 million. The net loss is primarily attributable to operating expenses of $8.6 million, partially offset with the receipt of the Paycheck Protection Program (“PPP”) proceeds of $0.5 million (see Note 6) and non-cash derivative gain of $0.2 million. The Company used net cash in operations of $9.1 million for the six months ended June 30, 2020 as well as an accumulated deficit and stockholders’ equity of $192.5 million and $6.3 million, respectively. In addition, as a clinical stage biopharmaceutical company, the Company has not generated any operating revenues or profits to date. These existing and projected on-going factors continue to raise substantial doubt about the Company’s ability to continue as a going concern. In February 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 authorized common stock. During the six months ended June 30, 2020, the Company sold shares pursuant to the ATM equity offering program, which yielded gross proceeds of $7.9 million (see Note 10). In July 2020, the Company received additional gross proceeds of $1.5 million from the sale of 2.3 million shares of common stock under the ATM equity offering program, which was offset by offering related costs of $61,000. The Company has prepared an updated projection covering the period from July 1, 2020 through June 30, 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 $800,000 per month. The Company continues to assess the impact of the COVID-19 pandemic, while taking into consideration the recent spike in COVID-19 cases in the United States, on the AP-013 study and any new studies related to COVID-19, and, as such, is not currently in a position to project the required liquidity needs for completion of the study. The Company anticipates using the ATM equity offering program and could supplement the funds raised with separate private/public equity offering(s). Based on the Company’s current cash position, projection of operations and expected access to equity financing, the Company believes it will have sufficient liquidity to fund operations through the second 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 and/or private/public equity program(s) in a manner that is not materially detrimental to the Company’s shareholders. As such, it is possible that the Company could exhaust its available cash and cash equivalents earlier than presently anticipated. In addition, as the global COVID-19 pandemic continues to rapidly evolve, 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) Biologics License Application (“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 sourcing such capital raise, which will primarily depend on existing market conditions relative to the timing of the Company’s liquidity needs. However, the Company cannot give any assurance that it will be successful in satisfying its future liquidity 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 separate adjustments relating to the recovery of recorded assets or the classification of liabilities, which adjustments may be necessary in the future should the Company be unable to continue as a going concern.

Going Concern

6 Months Ended

Jun. 30, 2020

Note 2 - Going Concern

As of and for the six months ended June 30, 2020, the Company had cash and cash equivalents of $4.8 million and a net loss of $7.9 million. The net loss is primarily attributable to operating expenses of $8.6 million, partially offset with the receipt of the Paycheck Protection Program (“PPP”) proceeds of $0.5 million (see Note 6) and non-cash derivative gain of $0.2 million. The Company used net cash in operations of $9.1 million for the six months ended June 30, 2020 as well as an accumulated deficit and stockholders’ equity of $192.5 million and $6.3 million, respectively. In addition, as a clinical stage biopharmaceutical company, the Company has not generated any operating revenues or profits to date. These existing and projected on-going factors continue to raise substantial doubt about the Company’s ability to continue as a going concern.

In February 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 authorized common stock. During the six months ended June 30, 2020, the Company sold shares pursuant to the ATM equity offering program, which yielded gross proceeds of $7.9 million (see Note 10). In July 2020, the Company received additional gross proceeds of $1.5 million from the sale of 2.3 million shares of common stock under the ATM equity offering program, which was offset by offering related costs of $61,000.

The Company has prepared an updated projection covering the period from July 1, 2020 through June 30, 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 $800,000 per month. The Company continues to assess the impact of the COVID-19 pandemic, while taking into consideration the

recent spike in COVID-19 cases in the United States, on the AP-013 study and any new studies related to COVID-19, and, as such, is not currently in a position to project the required liquidity needs for completion of the study. The Company anticipates using the ATM equity offering program and could supplement the funds raised with separate private/public equity offering(s). Based on the Company’s current cash position, projection of operations and expected access to equity financing, the Company believes it will have sufficient liquidity to fund operations through the second 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 and/or private/public equity program(s) in a manner that is not materially detrimental to the Company’s shareholders. As such, it is possible that the Company could exhaust its available cash and cash equivalents earlier than presently anticipated. In addition, as the global COVID-19 pandemic continues to rapidly evolve, 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) Biologics License Application (“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 sourcing such capital raise, which will primarily depend on existing market conditions relative to the timing of the Company’s liquidity needs. However, the Company cannot give any assurance that it will be successful in satisfying its future liquidity 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 separate adjustments relating to the recovery of recorded assets or the classification of liabilities, which adjustments may be necessary in the future should the Company be unable to continue as a going concern.