Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

Ampio Pharmaceuticals disclosed 9 risk factors in its most recent earnings report. Ampio Pharmaceuticals reported the most risks in the “Finance & Corporate” category.

Risk Overview Q4, 2023

Risk Distribution

56% Finance & Corporate

22% Tech & Innovation

22% Legal & Regulatory

0% Production

0% Ability to Sell

0% Macro & Political

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

2020

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

Ampio Pharmaceuticals Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q4, 2023

Main Risk Category

Finance & Corporate

With 5 Risks

Finance & Corporate

With 5 Risks

Number of Disclosed Risks

-4

From last report

S&P 500 Average: 31

-4

From last report

S&P 500 Average: 31

Recent Changes

7Risks added

10Risks removed

1Risks changed

Since Dec 2023

7Risks added

10Risks removed

1Risks changed

Since Dec 2023

Number of Risk Changed

From last report

S&P 500 Average: 3

From last report

S&P 500 Average: 3

See the risk highlights of Ampio Pharmaceuticals in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 9

Finance & Corporate

Total Risks: 5/9 (56%)Above Sector Average

Share Price & Shareholder Rights4 | 44.4%

Share Price & Shareholder Rights - Risk 1

Added

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.

Share Price & Shareholder Rights - Risk 2

Added

We 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 3

Added

With 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 4

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. 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.

Corporate Activity and Growth1 | 11.1%

Corporate Activity and Growth - Risk 1

Added

There 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.

Tech & Innovation

Total Risks: 2/9 (22%)Below Sector Average

Innovation / R&D1 | 11.1%

Innovation / R&D - Risk 1

Added

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.

Trade Secrets1 | 11.1%

Trade Secrets - Risk 1

Added

Our provisional patent applications and proprietary rights in OA-201 may be of limited value.

As part of the OA-201 program, we own a number of United States provisional patent applications covering our proprietary small molecule pharmaceutical formulations, as well as their therapeutic uses and manufacturing processes. Given that we have ceased efforts to continue to develop OA-201, our provisional patent applications and rights in OA-201 may be of limited value. Even if these provisional patent applications and rights have some value, we may not be able to adequately protect our rights due to our limited cash resources.

Legal & Regulatory

Total Risks: 2/9 (22%)Above Sector Average

Litigation & Legal Liabilities2 | 22.2%

Litigation & Legal Liabilities - Risk 1

Added

The settlement in principle of certain legal actions is subject to a number of conditions and risks.

On January 11, 2024, we announced that settlements 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. 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. The settlements in principle of the pending actions and stockholder demands are subject to a number of conditions, including confirmatory discovery for the Securities Class Action, the execution and delivery 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. Accordingly, there can be no assurance that the settlements in principle of the pending actions and stockholder demands will be finalized or approved by the respective courts, or that the settlements will be completed as currently proposed, or at any particular time. Additionally, the settlements in principle do not affect the ongoing investigation by the SEC. We intend to continue to cooperate fully with the SEC.

Litigation & Legal Liabilities - Risk 2

Changed

Currently, pending legal proceedings and any future legal proceedings may adversely affect our cash position and limit our pursuit of strategic options.

We are currently involved in and may in the future be involved in legal proceedings. Please see "The settlement in principle of certain legal actions is subject to a number of conditions and risks" for a summary of risks relating to the settlement in principle of certain of the pending legal proceedings. The settlements in principle do not affect the ongoing investigation by the SEC. We intend to continue to cooperate fully with the SEC. Regardless of whether any claims against us are valid or whether we are liable, any future litigation claims, or regulatory proceedings likely will be expensive and time consuming to defend against, require us to advance substantial amounts to director and officer defendants and other indemnifiable defendants for the defense of their claims, and result in the diversion of management attention and reduce our current cash resources. We currently expect the amount to be paid in both settlements, including related defense costs, will be covered by, and within the policy limits of our D&O insurance policy. However, 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 and other parties. Additionally, insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to the pending SEC investigation that is not resolved through the settlements in principle of the 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 may be required to expend significant amounts to satisfy our self-insured retention in order to obtain coverage of any future claims against us, our directors and officers and other indemnifiable parties. The costs relating to the defense, satisfaction and/or settlement of lawsuits or other claims threatened against us, our directors and officers or other indemnifiable parties and amounts necessary to resolve claims of any creditors or other third parties will 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 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 we are exposed to significant liabilities resulting from our current or future legal proceedings that are not covered by insurance or if our cash resources are otherwise insufficient to satisfy all claims and liabilities, we may seek bankruptcy protection.

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.

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