AMPE Ampio Pharmaceuticals Inc (CE)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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SCHEDULE 14A

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Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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AMPIO PHARMACEUTICALS, INC.

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

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AMPIO PHARMACEUTICALS, INC.

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

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receive additional compensation for assisting with the solicitation. Alliance Advisors has been retained by the Company to solicit proxies and to assist the Company in the distribution of proxy materials for a fee estimated at $75,000 plus reimbursement of out-of-pocket expenses.

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Only stockholders of record at the close of business on the June 9, 2023 record date are entitled to receive notice of and, except with respect to any shares of Series D Preferred Stock or fractions thereof automatically redeemed in the Initial Redemption, to vote at the Annual Meeting and any adjournments or postponements thereof. As of the record date, there were 15,102,877 shares of common stock outstanding and 15,103 shares of Series D Preferred Stock outstanding.

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Each share of common stock outstanding on the record date is entitled to one vote on all matters. Notwithstanding the foregoing, holders of our outstanding shares of Series D Preferred Stock will only be entitled to vote such shares on Proposal No. 3 and Proposal No. 5 and will only be able to vote such shares of Series D Preferred Stock on such proposals to the extent that such shares have not been automatically redeemed in the Initial Redemption as described below. In this proxy statement, Proposal No. 3 is sometimes referred to as the Reverse Stock Split Proposal and Proposal No. 5 is referred to as the Adjournment Proposal.

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A stockholder’s shares can be voted at the Annual Meeting only if the stockholder attends the Annual Meeting or is represented by proxy. If you are a stockholder of record as of the record date, you will be able to virtually attend the 2023 Annual Meeting by first registering at www.viewproxy.com/AMPE/2023. Stockholders of record as of the record date will receive a meeting invitation by e-mail with their unique join link along with a password prior to the meeting date. Stockholders of record as of the record date will be able to use the link they receive via email and their virtual control number on their proxy card to vote during the 2023 Annual Meeting. Beneficial owners as of the record date may vote during the 2023 Annual Meeting only if they obtain a “legal proxy” from the broker, bank or other intermediary that holds their shares, giving them the right to vote. Such beneficial owners will then be assigned a virtual control number and will be provided a link to vote during the 2023 Annual Meeting after registering at www.viewproxy.com/AMPE/2023. You may begin to log into the meeting platform beginning at 9:30 a.m. Mountain Time on July 27, 2023. The Annual Meeting will begin promptly at 10:00 a.m. Mountain Time on July 27, 2023. We recommend that you log in at least fifteen minutes before the Annual Meeting to ensure that you are logged in when the Annual Meeting starts. If you have any questions or require any assistance in voting your shares, please contact Alliance Advisors, the Company’s proxy solicitation agent, toll-free at 877-728-5010.

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Stockholders who complete their proxy electronically over the Internet or by telephone do not need to return a proxy card. Stockholders who hold their shares beneficially in street name through a nominee should follow the voting instructions they receive from their nominee to vote these shares.

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The presence of the holders of one-third of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business at the Annual Meeting. A stockholder is counted as present at the Annual Meeting if the stockholder attends the online Annual Meeting and votes at the Annual Meeting or the stockholder has properly submitted a proxy by mail, internet or telephone. Votes of “abstain” on a proposal and broker non-votes will count for purposes of determining a quorum.

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Stockholder votes will be tabulated by the persons appointed by the Board of Directors to act as inspectors of election for the Annual Meeting. Shares of common stock represented by valid, unrevoked proxies will be voted at the Annual Meeting and, when the stockholder has given instructions, will be voted in accordance with those instructions. If no instructions on how to vote are given in a signed proxy, the shares will be voted FOR each of the nominees listed in Proposal No. 1 and FOR each other proposal. If your shares are held in a stock brokerage account or by a bank or other nominee, please see the information below regarding broker’s authority to vote.

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About the Series D Preferred Stock

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As previously announced on May 26, 2023, the Board declared a dividend of one one-thousandth of a share of Series D Preferred Stock for each outstanding share of common stock to stockholders of record of common stock as of 5:00 p.m. Eastern Time on June 8, 2023. The holders of Series D Preferred Stock have 1,000,000 votes per whole share of Series D Preferred Stock (i.e., 1,000 votes per one one-thousandth of a share of Series D Preferred Stock) and are entitled to vote with the common stock, together as a single class, on the Reverse Stock Split Proposal and the Adjournment Proposal, but are not otherwise entitled to vote on the other proposals to be presented at the 2023 Annual Meeting. Notwithstanding the foregoing, each share of Series D Preferred Stock redeemed pursuant to the Initial Redemption (as described below) will have no voting power with respect to the Reverse Stock Split Proposal, the Adjournment Proposal, or any other matter.

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Any one one-thousandth of a share of Series D Preferred Stock that is not present in person or by proxy at the 2023 Annual Meeting as of immediately prior to the opening of the polls at the Annual Meeting will be automatically redeemed as of such time, which is referred to as the “Initial Redemption.”  Accordingly, if a stockholder fails to submit a proxy to vote their shares or attend the Annual Meeting, that stockholder’s shares of Series D Preferred Stock will be redeemed immediately prior to the opening of the polls at the Annual Meeting and will not be entitled to vote at the Annual Meeting.

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When a holder of common stock submits a vote or proxy with respect to the voting on the Reverse Stock Split Proposal or the Adjournment Proposal, the corresponding number of fractional shares of Series D Preferred Stock held by such holder will be automatically voted in a mirrored fashion unless otherwise indicated. For example, if a stockholder holds 10 shares of common stock (entitled to one vote per share) and votes in favor of the Reverse Stock Split Proposal, then 10,010 votes will be recorded in favor of the Reverse Stock Split Proposal, because the stockholder’s shares of Series D Preferred Stock will automatically be voted in favor of the Reverse Stock Split Proposal alongside such stockholder’s shares of common stock.

Any outstanding shares of Series D Preferred Stock that have not been redeemed pursuant to the Initial Redemption will be redeemed in whole, but not in part, (i) if and when ordered by the Board or (ii) automatically upon the approval by our stockholders of any proposal to adopt an amendment to our certificate of incorporation to effect a reverse stock split of the outstanding shares of common stock at a ratio determined in accordance with the terms of such amendment. The redeemed shares of Series D Preferred Stock will, upon such redemption, be automatically retired and restored to the status of authorized but unissued shares of preferred stock.

Vote Required

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Proposal 1 relates to the election of directors. Directors are elected by a plurality of the votes cast at the Annual Meeting by holders of common stock voting for the election of directors. This means that since stockholders will be electing four directors, the four nominees receiving the highest number of votes will be elected. You may either vote “FOR” or “WITHHOLD” authority to vote for each nominee for the Board. If you withhold authority to vote for the election of one of the directors, it has the same effect as a vote against that director.

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The affirmative vote of the holders of the majority of the shares of common stock present and entitled to vote is required for approval of Proposal No. 2, ratification of the selection of Moss Adams LLP as our independent registered public accounting firm. You may vote “FOR,” “AGAINST” or “ABSTAIN” on Proposal No. 2.

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Proposal No. 3, the Reverse Stock Split Proposal, requires the affirmative vote of holders of a majority in voting power of the issued and outstanding shares of common stock and Series D Preferred Stock entitled to vote on the Reverse Stock Split Proposal, voting together as a single class. When a holder of common stock submits a vote or proxy with respect to the voting on the Reverse Stock Split Proposal or the Adjournment Proposal, the corresponding number of fractional shares of Series D Preferred Stock held by such holder will be automatically voted in a mirrored fashion unless otherwise indicated. For example, if a stockholder holds 10 shares of common stock (entitled to one vote per share) and votes in favor of the Reverse Stock Split Proposal, then 10,010 votes will be recorded in favor of the Reverse Stock Split Proposal, because the stockholder’s shares of Series D Preferred Stock will automatically be voted in favor of the Reverse Stock Split Proposal alongside such stockholder’s shares of common stock. You may vote “FOR,” “AGAINST” or “ABSTAIN” on Proposal No. 3.

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The affirmative vote of the holders of the majority of the shares of common stock present and entitled to vote is required for approval of Proposal No. 4, the approval of the 2023 Stock and Incentive Plan. You may vote “FOR,” “AGAINST” or “ABSTAIN” on Proposal No. 4.

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Proposal No. 5, the Adjournment Proposal, requires the affirmative vote of holders of a majority in voting power of the issued and outstanding shares of common stock and Series D Preferred Stock entitled to vote on the Adjournment Proposal, voting together as a single class. When a holder of common stock submits a vote or proxy with respect to the voting on the Adjournment Proposal or the Reverse Stock Split Proposal, the corresponding number of fractional shares of Series D Preferred Stock held by such holder will be automatically voted in a mirrored fashion unless otherwise indicated. For example, if a stockholder holds 10 shares of common stock (entitled to one vote per share) and votes in favor of the Adjournment Proposal, then 10,010 votes will be recorded in favor of the Adjournment Proposal, because the stockholder’s shares of Series D Preferred Stock will automatically be voted in favor of the Adjournment Proposal alongside such stockholder’s shares of common stock. You may vote “FOR,” “AGAINST” or “ABSTAIN” on Proposal No. 5.

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Abstentions will be counted for purposes of calculating whether a quorum is present at the Annual Meeting, but are not counted for the purposes of determining whether stockholders have approved that matter. Therefore, if you vote “ABSTAIN” on Proposals No. 2, 3, 4 or 5, it has the same effect as a vote against that proposal. A “broker non-vote” occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting, but will not be counted for purposes of determining the number of votes present and entitled to vote with respect to a particular proposal. Thus, a broker non-vote will not affect the outcome of the vote on a proposal that requires a plurality of votes cast (Proposal No. 1) or the approval of a majority of the votes present and entitled to vote (Proposals No. 2, 4 and 5). Broker non-votes, if any, will have the same effect as a vote against Proposal No. 3. Because we believe that Proposals No. 2, 3, 4, and 5 are routine matters, we do not expect any broker non-votes with respect to these proposals.

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The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.

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Broker Authority to Vote

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If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares held in street name. These proxy materials are being forwarded to you by your broker, bank, or other nominee, who is considered to be the holder of record with respect to your shares. As the beneficial owner, you have the right to direct your broker, bank, or other nominee how to vote by filling out the voting instruction form provided by your broker, bank, or other nominee. Telephone and Internet voting options may also be available to beneficial owners. As a beneficial owner, you are also invited to attend the Annual Meeting. You may participate in the virtual webcast of the Annual Meeting by registering at: www.viewproxy.com/AMPE/2023. After registering, you will receive an e-mail containing a unique link and password that will enable you to attend the meeting and vote.

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If your shares are held in street name, and if you provide voting instructions to your broker, bank, or other nominee, your shares must be voted as you direct. If you do not furnish voting instructions to your broker, bank, or other nominee, one of two things can happen, depending upon whether a proposal is “routine.” Under the rules that govern brokers, banks, and other nominees that have record ownership of shares beneficially owned by their clients, brokers, banks, and other nominees have discretion to cast votes only on routine matters, such as the ratification of the appointment of independent registered public accounting firms, without voting instructions from their clients. Brokers, banks, and other nominees are not permitted, however, to cast votes on “non-routine” matters without such voting instructions, such as the election of directors. A “broker non-vote” occurs when a beneficial owner has not provided voting instructions and the broker, bank, or other nominee holding shares for the beneficial owner does not vote on a particular proposal because the broker, bank, or other nominee does not have discretionary voting power for that proposal. Because we believe that Proposals No. 2, 3, 4, and 5 are routine matters, we do not expect any broker non-votes with respect to these proposals.

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Phase 3 clinical trials, transacting mergers, and leading capital raises are the attributes that qualify him to serve as a member of our Board.

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David R. Stevens, Ph.D., has served as a member of our Board since June 2011. Dr. Stevens has worked in the U.S. Food and Drug Administration regulated life science industry since 1978. He has also been a consulting research pathologist since December 2006 for Premier Laboratory, LLC. He has been a board member of Cetya, Inc. since December 2013. He has served on the boards of several other public and private life science companies, including Micro-Imaging Solutions, LLC (from 2007 to 2018), Poniard Pharmaceuticals, Inc. (from 2004 to 2013), Aqua Bounty Technologies, Inc. (from 2002 to 2012), Advanced Cosmetic Intervention, Inc. (from 2006 to 2011) and Smart Drug Systems, Inc. (from 1999 to 2006), and was an advisor to Bay City Capital (from 1999 to 2006). Dr. Stevens was previously President and CEO of Deprenyl Animal Health, Inc., a public veterinary pharmaceutical company, from 1990 to 1998, and Vice President, Research and Development, of Agrion Corp., a private biotechnology company, from 1986 to 1988. He began his career in pharmaceutical research and development at the former Upjohn Company, where he contributed to the preclinical evaluation of Xanax and Halcion. Dr. Stevens received B.S. and D.V.M. degrees from Washington State University, and a Ph.D. in comparative pathology from the University of California, Davis. He is a Diplomate of the American College of Veterinary Pathologists. Dr. Stevens’ experience in executive management in the pharmaceutical industry and knowledge of the medical device industry are the attributes that qualify him to serve as a member of our Board.

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J. Kevin Buchi has served as a member of our Board since October 2021. Mr. Buchi, who previously served as the lead independent director, was elected as Chair of the Board on May 28, 2022. Mr. Buchi is the former President and Chief Executive Officer of Cephalon, Inc., having also served as corporate vice president of global branded products at Teva Pharmaceutical Industries Limited after Teva acquired Cephalon in October 2011. Mr. Buchi also served as President and Chief Executive Officer of TetraLogic Pharmaceuticals and of Biospecifics Technologies. Mr. Buchi joined Cephalon in 1991 and held various leadership positions during his tenure, including Chief Financial Officer and Chief Operating Officer, before becoming Cephalon’s Chief Executive Officer in 2010. In addition, Mr. Buchi currently serves as a Director of Amneal Pharmaceuticals, Inc. and Benitec Biopharma Ltd. Mr. Buchi previously served on the boards of several pharmaceutical companies, including Dicerna Pharmaceuticals, EPIRUS Biopharmaceuticals, Inc., Alexza Pharmaceuticals, Inc., and Forward Pharma A/S. He holds a B.A. in Chemistry from Cornell University and a Master of Management, Accounting, and Finance from the Northwestern University Kellogg School of Management. Mr. Buchi has served on our board since October 2021. Mr. Buchi’s extensive experience as a senior executive and board member in the pharmaceutical industry provide him with knowledge of a broad range of unique insights into the industry of our business, and these are the attributes that qualify him to serve as a member of our Board.

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Elizabeth Varki Jobes has served as a member of our Board since February 2022. Ms. Jobes has nearly three decades of legal and compliance experience. As a practicing attorney, she has built and guided compliance and legal programs for small- and medium-size biopharmaceutical corporations. She currently serves as Senior Vice President and Global Chief Compliance Officer at Amryt Pharmaceuticals Inc., where she led the development and implementation of a global compliance program following the acquisition of Aegerion Pharmaceuticals. In January of 2023, Ms. Jobes joined the board of directors of Blue Foundry Bank (the “Bank”), a wholly-owned subsidiary of Blue Foundry Bancorp (NASDAQ: BLFY), where she is also a member of the Bank’s Audit Committee. Previously, Ms. Jobes held leadership positions at many biopharmaceutical companies, including: Senior Vice President, Chief Compliance Officer North America for EMD Serono, Inc.; Global Chief Compliance Officer and Legal Counsel for Spark Therapeutics, Inc.; Senior Vice President, Chief Compliance Officer for Auxilium Pharmaceuticals, Inc.; Vice President, Chief Compliance Officer for Adolor Corporation; and Senior Director, Global Compliance for Cephalon, Inc. and Board Member for Eyam Vaccines, Inc. Mrs. Jobes’ extensive experience as a senior executive in the pharmaceutical industry, with an extensive focus developing and implementing industry specific regulatory and compliance programs for small to medium-size biopharmaceutical companies, are the attributes that qualify her to serve as a member of our Board.

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Required Vote and Recommendation of Board of Directors

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Under the Company’s bylaws, directors are elected by a plurality vote. This means that since stockholders will be electing four directors, the four nominees receiving the highest number of votes will be elected. If you sign the enclosed proxy and deliver it to the Company, your proxy will be voted FOR all director nominees, unless you specifically indicate on the proxy that you are withholding a vote from one or more of the nominees. Abstentions and broker non-votes will have no effect on the election of our director nominees.

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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES IDENTIFIED ABOVE.

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Policy on Audit Committee Pre-Approval of Services of Independent Registered Public Accounting Firm

Our Audit Committee has responsibility for appointing, setting compensation, and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. Prior to engagement of the independent registered public accounting firm for the following year’s audit, management will submit to the Audit Committee for approval an engagement letter which provides the description and estimated cost of services expected to be rendered during that year for each of following four categories of services:

Prior to the engagement of the independent registered public accounting firm, the Audit Committee pre-approves these services by category of service and estimated cost as further noted in the engagement letter. The fees are budgeted as part of the Company’s annual/periodic budgeting and forecasting process, and the Audit Committee requires the independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging the independent registered public accounting firm for such services.

The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

All of the services of Moss Adams LLP described above were pre-approved by the Audit Committee in advance of such services being provided.

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Additional reasons for the reverse stock split would be to generate investor interest in our common stock. An investment in our common stock may not appeal to brokerage firms that are reluctant to recommend lower priced securities to their clients. Investors may also be dissuaded from purchasing lower priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced stocks. Also, the Board of Directors believes that most investment funds are reluctant to invest in lower priced stocks. Accordingly, the Board of Directors believes that a higher stock price may generate investor interest in our common stock, which in turn would enhance the liquidity of the holders of common stock.

There can be no assurance that a reverse stock split, if completed, will result in the intended benefits described above, that the market price of our common stock will increase following a reverse stock split, that as a result of a reverse stock split, we will be able to maintain listing on the NYSE American or that the market price of our common stock will not decrease in the future.

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Principal Effects of a Reverse Stock Split

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If implemented, a reverse stock split will be effected simultaneously for all outstanding shares of Company common stock. A reverse stock split will affect all of the Company’s stockholders uniformly and will not affect any stockholder’s percentage ownership interests in the Company, except to the extent that a reverse stock split results in any stockholders owning a fractional share. Holders of fractional shares will be entitled to receive, in lieu of any fractional share, the number of shares rounded up to the next whole number. Common stock issued pursuant to a reverse stock split will remain fully paid and nonassessable. A reverse stock split will not affect the Company’s continuing to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As of the split effective time, the Company will adjust and proportionately decrease the number of shares of common stock reserved for issuance upon exercise of, and adjust and proportionately increase the exercise price of, all options and warrants and other rights to acquire shares of common stock. In addition, as of the split effective time, the Company will adjust and proportionately decrease the total number of shares of common stock reserved for issuance for future grants under our 2019 Stock and Incentive Plan if our stockholders do not approve the 2023 Stock and Incentive Plan by approving Proposal No. 4.  If our stockholders approve the 2023 Stock and Incentive Plan by approving Proposal No. 4, the 2019 Stock and Incentive Plan will terminate so that no new awards may be granted pursuant to that plan and all previously reserved shares will be returned to the status of authorized but unissued shares of common stock.  If Proposal No. 4 is approved, the number of shares of common stock reserved for issuance under the 2023 Stock and Incentive Plan will not be adjusted by virtue of the reverse stock split and will remain at 1,200,000. If there are any awards outstanding under the 2023 Stock and Incentive Plan at the split effective time, the number of shares of common stock underlying these awards will decrease and the number of shares of common stock remaining available for future issuance under the 2023 Stock and Incentive Plan will increase.

If this Proposal No. 3 is approved by our stockholders, any outstanding shares of our Series D Preferred Stock will be automatically redeemed in whole and not in part. Accordingly, no shares of outstanding Series D Preferred Stock will be outstanding to be adjusted by a subsequent reverse stock split.

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As an example, the following table illustrates the effects of a 20-to-1 and a 5-to-1 reverse stock split (without giving effect to the treatment of fractional shares) as of June 5, 2023:

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Authorized Shares of Common Stock

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A reverse stock split will not change the number of authorized shares or the par value of our common stock or our preferred stock under our certificate of incorporation. Because the number of issued and outstanding shares of common stock will decrease, the number of shares of common stock remaining available for issuance will increase. Currently, under our certificate of incorporation, our authorized capital stock consists of 310,000,000 shares, of which 10,000,000 shares, par value of $0.0001 per share, are designated as preferred stock and 300,000,000 shares, par value of $0.0001 per share, are designated as common stock.

Subject to limitations imposed by the NYSE American, the additional shares available for issuance may be issued without stockholder approval at any time, in the sole discretion of our Board of Directors. The authorized and unissued shares may be issued for cash, for strategic transactions, for acquisitions or for any other purpose that is deemed in the best interests of the Company.

Registered “Book-Entry” Holders of Common Stock

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Certain of our registered holders of common stock may hold some or all of their shares electronically in book-entry form with the transfer agent. These stockholders do not have stock certificates evidencing their ownership of the common stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts.

Stockholders who hold shares electronically in book-entry form with the transfer agent will not need to take action (the exchange will be automatic) to receive whole shares of post-reverse stock split common stock, subject to adjustment for treatment of fractional shares.

Holders of Certificated Shares of Common Stock

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Stockholders holding shares of our common stock in certificated form will be sent a transmittal letter by our transfer agent after the split effective time. The letter of transmittal will contain instructions on how a stockholder should surrender his, her or its certificate(s) representing shares of our common stock (the “old certificates”) to the transfer agent in exchange for certificates representing the appropriate number of whole shares of post-reverse stock split common stock (the “new certificates”). No new certificates will be issued to a stockholder until such stockholder has surrendered all old certificates, together with a properly completed and executed letter of transmittal, to the transfer agent. No stockholder will be required to pay a transfer or other fee to exchange his, her or its old certificates. Stockholders will then receive a new certificate(s) representing the number of whole shares of common stock that they are entitled to as a result of a reverse stock split, subject to the treatment of fractional shares. Until surrendered, we will deem outstanding old certificates held by stockholders to represent the number of whole shares of post-reverse stock split common stock to which these stockholders are entitled, subject to the treatment of fractional shares. Any old certificates submitted for exchange, whether because of a sale, transfer or other disposition of stock, will automatically be exchanged for new certificates. If an old certificate has a restrictive legend on the back of the old certificate, the new certificate will be issued with the same restrictive legends that are on the back of the old certificate.

The Company expects that our transfer agent will act as exchange agent for purposes of implementing the exchange of stock certificates. No service charges will be payable by holders of shares of common stock in connection with the exchange of certificates. All of such expenses will be borne by the Company.

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Beneficial Holders of Common Stock

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Upon the implementation of a reverse stock split, we will treat shares held by stockholders through a bank, broker, custodian or other nominee in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers, custodians or other nominees will be instructed to effect a reverse stock split for their beneficial holders holding our common stock in street name. However, these banks, brokers, custodians or other nominees may have different procedures than registered stockholders for processing a reverse stock split. Stockholders who hold shares of our common stock with a bank, broker, custodian or other nominee and who have any questions in this regard are encouraged to contact their banks, brokers, custodians or other nominees.

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STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE AND
SHOULD NOT SUBMIT ANY STOCK CERTIFICATES UNTIL REQUESTED TO DO SO.

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Appraisal Rights

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Under the Delaware General Corporation Law, our stockholders are not entitled to appraisal or dissenter’s rights with respect to a reverse stock split, and we do not intend to voluntarily provide our stockholders with such rights.

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Potential Anti-Takeover Effect

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Even though a reverse stock split would result in an increased proportion of unissued authorized shares to be issued, which could, under certain circumstances, have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of the Board of Directors or contemplating a tender offer or other transaction for the combination of our Company with another company), the reverse stock split Proposal is not being proposed in response to any effort of which we are aware to accumulate shares of our common stock or obtain control of us, nor is it part of a plan by management to recommend a series of similar amendments to our Board and stockholders.

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Fractional Shares

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Holders of fractional shares will be entitled to receive, in lieu of any fractional share, the number of shares rounded up to the next whole number. The ownership of a fractional share interest following a reverse stock split will not give the holder any voting, dividend or other rights, except to receive the number of shares rounded up to the next whole number.

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Effect of a Reverse Stock Split on Equity Incentive Plans, Options, Warrants, and Convertible or Exchangeable Securities

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As of the split effective time, we will adjust and proportionately decrease the total number of shares of common stock reserved for issuance for future grants under our 2019 Stock and Incentive Plan if our stockholders do not approve the 2023 Stock and Incentive Plan by approving Proposal No. 4.  If our stockholders approve the 2023 Stock and Incentive Plan by approving Proposal No. 4, the 2019 Stock and Incentive Plan will terminate so that no new awards may be granted pursuant to that plan and all previously reserved shares will be returned to the status of authorized but unissued shares of common stock.  If Proposal No. 4 is approved, the number of shares of common stock reserved for issuance under the 2023 Stock and Incentive Plan will not be adjusted by virtue of the reverse stock split and will remain at 1,200,000.

Based upon the reverse stock split ratio determined by the Board, proportionate adjustments are generally required to be made to the per share exercise price and the number of shares issuable upon the exercise or conversion of all outstanding options, warrants and convertible or exchangeable securities entitling the holders to purchase, exchange for, or convert into, shares of common stock, including any awards outstanding under the 2019 Stock and Incentive Plan or the 2023 Stock and Incentive Plan. This would result in approximately the same aggregate price being required to be paid under such options, warrants and convertible or exchangeable securities upon exercise, and approximately the same value of shares of common stock being delivered upon such exercise, exchange or conversion, immediately following a reverse stock split as was the case immediately preceding a reverse stock split. The number of shares deliverable upon settlement or vesting of restricted stock awards will be similarly adjusted, subject to our treatment of fractional shares. The number of shares reserved for issuance pursuant to these securities will be proportionately based upon the reverse stock split ratio determined by the Board, subject to our treatment of fractional shares.

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Accounting Matters

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A reverse stock split amendment will not affect the par value of our common stock per share, which will remain $0.0001 par value per share. As a result, as of the split effective time, the stated capital attributable to common stock and the additional paid-in capital account on our balance sheet, in the aggregate, will not change due to a reverse stock split. Reported per share net income or loss will be higher because there will be fewer shares of common stock outstanding.

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Certain Federal Income Tax Consequences of a Reverse Stock Split

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The following summary describes certain material U.S. federal income tax consequences of a reverse stock split to holders of our common stock. Unless otherwise specifically indicated herein, this summary addresses the tax consequences only to a “U.S. holder”, which means a beneficial owner of our common stock that is (i) a citizen or individual resident of the United States, (ii) an entity taxable as a corporation for U.S. tax purposes and organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate whose income is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if (1) a U.S. court is able to exercise primary supervision over administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person.

This summary does not address all of the tax consequences that may be relevant to any particular investor, including tax considerations that arise from rules of general application to all taxpayers or to certain classes of taxpayers or that are generally assumed to be known by investors. This summary also does not address the tax consequences to stockholders that (i) may be subject to special treatment under U.S. federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, U.S. expatriates, persons subject to the alternative minimum tax, traders in securities that elect to mark to market, and dealers in securities or currencies, (ii) hold our common stock as part of a position in a “straddle” or as part of a “hedging,” “conversion” or other integrated investment transaction for federal income tax purposes, or (iii) do not hold our common stock as a “capital asset” (generally, property held for investment). In addition, this summary does not consider the effects of any federal, state, local, foreign, or other tax laws other than the U.S. federal income tax laws.

If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Entities or arrangements treated as a partnership for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences to them and their owners of a reverse stock split.

This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations, administrative rulings, and judicial authority, all as in effect as of the date of this information statement. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income tax consequences of a reverse stock split. We have not sought and will not seek any ruling from the Internal Revenue Service (the “IRS”), or an opinion from counsel with respect to the U.S. federal income tax consequences discussed below. There can be no assurance that the tax consequences discussed below would be accepted by the IRS or a court. The tax treatment of a reverse stock split to any U.S. holder may vary depending upon such holder’s particular facts and circumstances.

PLEASE CONSULT YOUR OWN TAX ADVISOR REGARDING THE U.S. FEDERAL,
STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF A
REVERSE STOCK SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE
CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.

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A reverse stock split should be treated as a recapitalization for U.S. federal income tax purposes. Thus, a stockholder generally will not recognize gain or loss on an exchange of common shares for common shares in a reverse stock split, except for adjustments that may result from the treatment of fractional shares of common stock as described below. The aggregate tax basis of the shares received in the reverse stock split will equal the aggregate tax basis of the pre-reverse stock split shares exchanged therefore (increased by any income or gain recognized on receipt of a whole share in lieu of a fractional share). Except in the case of any portion of a share of common stock treated as a distribution or as to which a U.S. holder recognizes capital gain as a result of the treatment of fractional shares, discussed below, the U.S. holder’s holding period for the post-reverse stock split shares of common stock should include the holding period of pre-reverse stock split shares of common stock surrendered. U.S. holders of shares of common stock should consult their tax advisors regarding the applicable rules for allocating the tax basis and holding period of the surrendered pre-reverse stock split shares of common stock to the post-reverse stock split shares of common stock received in the reverse stock split. U.S. holders of shares

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of common stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

No gain or loss will be recognized by the Company as a result of a reverse stock split.

The treatment of fractional shares of common stock being rounded up to the next whole share is uncertain. A U.S. holder that receives a whole share of common stock in the reverse stock split in lieu of a fractional share of common stock might recognize income, which may be characterized either as capital gain or as a dividend to the extent of the portion of our accumulated earnings and profits (if we have any) attributable to the rounded share. Any such taxable income would be in an amount not to exceed the excess of the fair market value of such whole share over the fair market value of the fractional share to which the U.S. holder was otherwise entitled. U.S. holders should consult their tax advisors regarding the U.S. federal income tax and other tax consequences of fractional shares being rounded to the next whole share (including the holding period of a post-reverse stock split share of common stock received in exchange for a fractional pre-reverse stock split share of common stock).

Required Vote

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Provided there is a quorum for the Annual Meeting, Proposal No. 3, the Reverse Stock Split Proposal, requires the affirmative vote of holders of a majority in voting power of the issued and outstanding shares of common stock and Series D Preferred Stock entitled to vote on the Reverse Stock Split Proposal, voting together as a single class. When a holder of common stock submits a vote or proxy with respect to the voting on the Reverse Stock Split Proposal, the corresponding number of fractional shares of Series D Preferred Stock held by such holder will be automatically voted in a mirrored fashion unless otherwise indicated. For example, if a stockholder holds 10 shares of common stock (entitled to one vote per share) and votes in favor of the Reverse Stock Split Proposal, then 10,010 votes will be recorded in favor of the Reverse Stock Split Proposal, because the stockholder’s shares of Series D Preferred Stock will automatically be voted in favor of the Reverse Stock Split Proposal alongside such stockholder’s shares of common stock. The voting rights of the Series D Preferred Stock mean that the Reverse Stock Split Proposal could be approved if a majority of the shares of common stock voted at the Annual Meeting vote in favor of the Reverse Stock Split Proposal, even if less than a majority of the outstanding shares of common stock vote in favor of the Reverse Stock Split Proposal. Abstentions will have the same effect as a vote against Proposal No. 3.

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THE BOARD OF DIRECTORS RECOMMENDS

A VOTE FOR ADOPTION OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT.

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Eligibility and Extent of Participation

The 2023 Plan would provide for discretionary grants of awards to all of our employees, non-employee directors and other key persons such as consultants, advisors and prospective employees, including those of any of our subsidiaries.

Duration and Modification

The Board of Directors may at any time terminate the 2023 Plan or make such modifications to the 2023 Plan as it may deem advisable. The Administrator may amend or cancel any outstanding award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action may adversely affect rights under any outstanding award without the participant’s consent.

Amendments to the 2023 Plan also may be subject to stockholder approval. For example, in accordance with Section 711 of the NYSE American Company Guide, a material increase in the number of shares of common stock as to which awards may be granted under the 2023 Plan requires stockholder approval.

No Repricing

Notwithstanding anything in the 2023 Plan to the contrary, the Administrator may not substitute new stock options for previously granted stock options (on a one-for-one or other basis), including previously granted stock options having higher exercise prices, purchase or cancel stock options at a time when its exercise price exceeds Fair Market Value in exchange for cash, another award or other equity of the Company, or take any other action that is considered a “repricing” for purposes of the stockholder approval rules of the Company’s primary stock exchange, without the requisite prior approval of the Company’s stockholders.

Shares Authorized for Issuance

The 2023 Plan would initially reserve 1,200,000 shares of common stock for future issuance pursuant to awards.

Types of Awards - Stock Options

Under the 2023 Plan, the Administrator may grant awards in the form of options to purchase shares of common stock. The exercise price per share of stock subject to a stock option will be determined by the Administrator and may not be less than the fair market value of the stock at the time of grant. The exercise price for a stock option may not be less than 110% of the fair market value with respect to a participant who, at such time, owns stock representing more than 10% of the total combined voting power of the Common Stock.

No option granted pursuant to the 2023 Plan may be exercised more than 10 years after the date of grant, except that a stock option granted to a participant who owns more than 10% of the total combined voting power of the Common Stock at the time the stock option is granted may not be exercised more than five years after the date of grant.

Types of Awards – Restricted and Unrestricted Stock Awards

The 2023 Plan permits the grant of stock awards, which grant the participant the right to receive shares of common stock in the future. Stock awards may contain transferability restrictions and vesting restrictions relating to the participant’s continued service with the Company and/or the achievement of pre-established performance goals. Such restrictions, if any, will be determined by the Administrator and described in the award certificate.

Types of Awards – Stock Appreciation Rights (“SAR”)

The 2023 Plan also permits the grant of awards of SARs, which are grants of the right to receive shares of common stock with an aggregate fair market value equal to the excess of the fair market value of the stock on the date of exercise over the exercise price of the SAR multiplied by the number of shares of stock with respect to which the SAR has been exercised. The exercise price of a SAR may not be less than 100 percent of the fair market value of the stock on the date of grant.

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Types of Awards – Restricted Stock Units

The 2023 Plan provides for discretionary grants of restricted stock unit awards, which consist of the right to receive cash, common stock or a combination thereof at a date on or after meeting the vesting restrictions, which may include the participant’s continued service with the Company and/or the achievement of pre-established performance goals. Such restrictions will be determined by the Administrator and described in the award certificate.

Types of Awards – Cash-Based Awards

The Administrator may grant cash-based awards, which are awards entitling the recipient to receive a cash-denominated payment. Cash-based awards may contain vesting restrictions, which may include the participant’s continued service with the Company and/or the achievement of pre-established performance goals. Such restrictions, if any, will be determined by the Administrator and described in the award certificate.

Voting Rights

Participants will not have any interest or voting rights in shares covered by their awards until the awards have been exercised or restrictions have lapsed and a certificate for such shares has been issued. In the case of restricted stock awards, a grantee will have the rights of a stockholder with respect to the voting of the shares underlying the award upon grant of the restricted stock award and payment of any applicable purchase price, subject to any conditions contained in the award certificate.

Forfeiture and Recoupment

The Administrator may specify in an award agreement that the participant’s rights, payments, and benefits with respect to an award, including any payment or stock received upon exercise or in satisfaction of the award under the 2023 Plan will be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions, without limit as to time. Such events include, but are not limited to, failure to accept the terms of the award agreement, termination of service under certain or all circumstances, violation of material Company policies, misstatement of financial or other material information about the Company, fraud, misconduct, breach of noncompetition, confidentiality, non-solicitation, noninterference, corporate property protection, or other agreement that may apply to the participant, or other conduct by the participant that the Administrator determines is detrimental to the business or reputation of the Company or any subsidiary or affiliate, including facts and circumstances discovered after termination of service.

Additionally, the 2023 Plan requires recoupment of awards from executive officers in the event of certain restatements of financial information, with the operation of these mandatory recoupment provisions designed to be in accordance with Section 302 of Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Adjustment of Number of Shares

In the event of any corporate event or transaction involving the Company, such as a merger, consolidation, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, exchange of shares or other similar change in capital structure or similar corporate event or transaction, the Administrator will, to prevent dilution or enlargement of participants’ rights under the 2023 Plan, make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the 2023 Plan, including the maximum number of shares that may be issued in the form of incentive stock options, (ii) the number and kind of shares or other securities subject to any then outstanding awards under the 2023 Plan, (iii) the repurchase price, if any, per share subject to each outstanding restricted stock award, and (iv) the exercise price for each share subject to any then-outstanding stock options and SARs under the 2023 Plan, without changing the aggregate exercise price as to which such stock options and SARs remain exercisable. The Administrator will also make equitable or proportionate adjustments in the number of shares subject to outstanding awards and the exercise price and the terms of outstanding awards to take into consideration cash dividends paid other than in the ordinary course or any other extraordinary corporate event.

However, there will be no adjustment in the maximum number of shares reserved for issuance under the 2023 Plan (including the maximum number of shares that may be issued in the form of incentive stock options) for any reverse stock split that is approved through Proposal 3 or is otherwise approved by our stockholders in 2023.

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Change in Control

Unless otherwise specified in an award certificate, upon the occurrence of (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, or (iii) the sale of all of the stock of the Company to an unrelated person or entity (each, a “Sale Event”), the 2023 Plan and all outstanding awards will terminate, unless provision is made in connection with the Sale Event by the parties thereto for the assumption or continuation of awards by the successor entity, or the substitution of such awards with new awards of the successor entity or parent thereof, with appropriate adjustment as the parties may agree.

In the event of termination upon a Sale Event, (i) the Company will have the option (in its sole discretion) to make or provide for a cash payment to the grantees holding options and SARs in exchange for the cancellation thereof or (ii) each grantee will be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding options and SARs held by such grantee. The Administrator also has the discretion to accelerate the vesting of all other awards.

Tax Aspects Under the Code

The following is a summary of the principal U.S. federal income tax consequences under the Internal Revenue Code of 1986, as amended (the “Code”) of certain transactions under the 2023 Plan. It does not describe all federal tax consequences under the 2023 Plan, nor does it describe state or local tax consequences. The summary below is based on the Code and rules and regulations promulgated under the Code as currently in effect.

Incentive Options. No taxable income is generally realized by the optionee upon the grant or exercise of an incentive stock option. If shares of common stock issued to an optionee pursuant to the exercise of an incentive stock option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such shares, any amount realized in excess of the option price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) the Company will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive stock option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.

If shares of common stock acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a “disqualifying disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares of common stock at exercise (or, if less, the amount realized on a sale of such shares of common stock) over the option price thereof, and (ii) we will be entitled to a tax deduction for the same amount. Special rules will apply where all or a portion of the exercise price of the incentive stock option is paid by tendering shares of common stock.

If an incentive stock option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a non-qualified option. Generally, an incentive stock option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply.

Non-Qualified Options. No income is realized by the optionee at the time the option is granted. Generally (i) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the option price and the fair market value of the shares of common stock on the date of exercise, and we receive a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the shares of common stock have been held. Special rules will apply where all or a portion of the exercise price of the non-qualified option is paid by tendering shares of common stock. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the option.

Restricted Stock Awards. Restricted stock awards are generally subject to ordinary income tax at the time the restrictions lapse. The Company will be entitled to a corresponding tax deduction at the time the participant recognizes ordinary income.

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Stock Appreciation Rights. No income is realized by the participant at the time upon the grant of a SAR. When the participant receives the appreciation inherent in the SARs in stock, the spread between the then current market value and the Base Value will be taxed as ordinary income to the participant. The Base Value is typically the fair market value on the date the appreciation rights were granted. The Company will be entitled to a tax deduction equal to the amount of ordinary income the participant is required to recognize as the result of exercising the SAR.

Other Awards. The Company generally will be entitled to a tax deduction in connection with an award under the 2023 Plan in an amount equal to the ordinary income realized by the participant at the time the participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an award is exercised, vests or becomes non-forfeitable, unless the award provides for a further deferral.

Parachute Payments. The vesting of any portion of an option or other award that is accelerated due to the occurrence of a change in control (such as a Sale Event) may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may be non-deductible to us, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).

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BOARD OF DIRECTORS AND COMMITTEES; CORPORATE GOVERNANCE

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Meetings of the Board of Directors

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During the year ended December 31, 2022, there were seven meetings of the Board along with a number of actions taken in writing. No incumbent director attended fewer than 75% of the aggregate of (a) the total number of meetings of the Board, and (b) the total number of meetings held by all committees of the Board during the period that such director served.

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Committees of the Board

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Our Board has an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee, each of which has the composition and the responsibilities described below. The Audit Committee, Compensation Committee, and Nominating and Governance Committee operate under separate charters approved by our Board. The charters for each committee are available on our website at www.ampiopharma.com. Our Board of Directors may from time to time establish other committees.

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Audit Committee.  Our Audit Committee, established in accordance with Section 3(a)(58)(A) of the Exchange Act, oversees our corporate accounting and financial reporting process. This committee also assists our Board in monitoring our financial systems and our legal and regulatory compliance. Our Audit Committee is responsible for, among other things:

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The current members of our Audit Committee are Mr. Buchi (chair), Dr. Stevens and Ms. Jobes. Our Board has determined that each member of the Audit Committee meets the financial literacy requirements of the national securities exchanges and the SEC, and Mr. Buchi qualifies as our Audit Committee financial expert as defined under SEC rules and regulations. Our Board has concluded that the composition of our Audit Committee meets the requirements for independence under the current requirements of the NYSE American and SEC rules and regulations. In 2022, there were four meetings of the Audit Committee.

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Compensation Committee. Our Compensation Committee oversees our corporate compensation policies, plans and programs. The Compensation Committee is responsible for, among other things:

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The members of our Compensation Committee are Dr. Stevens (chair), Mr. Buchi and Ms. Jobes. Each member of our Compensation Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act, and satisfies the independence requirements of the NYSE American. We believe that the composition of our Compensation Committee meets the requirements for independence under, and the function of our Compensation Committee complies with, the applicable requirements of the NYSE American and SEC rules and regulations.

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In 2022, our Compensation Committee did not meet separately from the Board of Directors but took action by written consent on a number of occasions. From time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. Our CEO may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation or individual performance objectives. Our Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. In general, the Compensation Committee has set executive compensation to be in line with peer companies identified by the Compensation Committee and to incentivize the Company’s executive officers to achieve the Company’s corporate goals.

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In fulfilling its responsibilities, the Compensation Committee is permitted under its charter to delegate any or all of its responsibilities to a subcommittee comprised of members of the Compensation Committee or the Board, except that the Compensation Committee may not delegate its responsibilities for any matters that involve compensation of any officer or any matters where it has determined such compensation is intended to be exempt from Section 16(b) under the Exchange Act pursuant to Rule 16b-3 by virtue of being approved by a committee of independent or nonemployee directors.

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Nominating and Governance Committee. Our Nominating and Governance Committee oversees and assists our Board in reviewing and recommending corporate governance policies and nominees for election to our Board. The Nominating and Governance Committee is responsible for, among other things:

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The members of our Nominating and Governance Committee are currently Ms. Jobes (chair) and Dr. Stevens. Our Board has determined that each member of our Nominating and Governance Committee satisfies the independence requirements of the NYSE American. In 2022, our Nominating and Governance Committee did not meet but, took action by written consent.

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Annual Meeting Attendance and Executive Sessions

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Our policy is that our directors attend the annual meeting of stockholders. Our policy is also that our non-employee directors are required to meet in separate sessions without management on a regularly scheduled basis four times a year. Generally, these meetings are expected to take place in conjunction with regularly scheduled meetings of the Board throughout the year. Our 2022 Annual Meeting of Stockholders was held virtually on August 10, 2022 and was attended by all four of the directors then serving on our Board.

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Director Nominations and Stockholder Communications

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Our Nominating and Governance Committee’s policy is to evaluate any recommendation for director nominee proposed by a stockholder. Any recommendation for director nominee must be submitted in writing to the Corporate Secretary of the Company at our business address. Our current business address is set forth below. Stockholders are encouraged to review the documents we file with the SEC for our mailing address in effect at the time they submit any recommendation.

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Ampio Pharmaceuticals, Inc.

Attention: Corporate Secretary

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

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Our Bylaws permit stockholders to nominate directors for consideration at the annual meeting, subject to certain conditions. See “Stockholder Proposals and Nominees” section of this proxy statement for more information.

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The Nominating and Governance Committee generally identifies potential candidates for director by seeking referrals from our management and members of our Board and their various business contacts. There are currently no specific, minimum, or absolute criteria for Board membership. Candidates are evaluated based upon key factors which include independence, knowledge, judgment, integrity, character, leadership skills, education, experience, financial literacy, standing in the community and ability to foster a diversity of backgrounds and views and to complement the Board’s existing strengths. There are no differences in the manner in which the Committee will evaluate nominees for director based on whether the nominee is recommended by a stockholder.

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We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our Board. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. Communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of the Board may be excluded, such as:

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In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is excluded will be made available to any director upon request.

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Director Independence

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Our common stock is listed on the NYSE American. The listing rules of the NYSE American require that a majority of the members of the Board be independent. The rules of the NYSE American require that, subject to specified exceptions, each member of our Audit, Compensation, and Nominating and Governance Committees be independent. Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. Under the rules of the NYSE American, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

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In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: (i) accept,

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directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (ii) be an affiliated person of the listed company or any of its subsidiaries.

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In April 2023, our Board undertook a review of its composition, the composition of its committees and the independence of each director then serving. Based upon information provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board has determined that none of David R. Stevens, Ph.D., J. Kevin Buchi or Elizabeth Varki Jobes, representing three of our four directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined by the NYSE American. Michael A. Martino is not independent because he is employed by, and serves as an executive officer of, Ampio.

Code of Business Conduct and Ethics

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We have adopted a Code of Business Conduct and Ethics that is applicable to all of our employees, officers, and directors, all of which have read, acknowledged, and agreed to comply with such code. The code is available on our web site, www.ampiopharma.com, under the “Investors / Corporate Governance” tab. We intend to disclose future amendments to, or waivers from, certain provisions of our Code of Business Conduct and Ethics, if any, on the above website within four business days following the date of such amendment or waiver.

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Insider Trading Policy

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We have adopted an Insider Trading Policy that is applicable to all of our officers and directors and all of our employees, consultants, and contractors (including members of scientific advisory committees), who receive or have access to material nonpublic information about the Company. The Insider Trading Policy prohibits the misuse of material nonpublic information in trading of the Company’s securities.  The Insider Trading Policy also prohibits short sales, transactions in derivative securities on the Company’s securities, pledges of the Company’s securities as collateral for loans, and hedging or monetization transactions or similar arrangements with respect to the Company’s securities. The Insider Trading Policy is available on our web site, www.ampiopharma.com, under the “Investors / Corporate Governance” tab.

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Leadership Structure of the Board

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Our Board believes it is important to maintain flexibility as to the Board’s leadership structure. After reviewing our Board leadership structure, the Board determined to separate the role of Chief Executive Officer and Board Chair.  Accordingly, J. Kevin Buchi, who previously served as the lead independent director, was elected as Chair of the Board on May 28, 2022. Michael A. Martino continued as the Company’s Chief Executive Officer.

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We believe the separation of the positions of Chairman and Chief Executive Officer reinforces the independence of the Board in its oversight of our business and affairs and is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of us and our stockholders.

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As Chair, Mr. Buchi has the authority, among other things, to call and preside over Board meetings, to set meeting agendas and to preside over the executive sessions of the Board, during which our independent directors meet without management. In addition, he serves as the principal liaison between management and the independent directors of the Board. Accordingly, the Chairman has substantial ability to shape the work of the Board.

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Periodically, our Board assesses these roles and the Board leadership structure to ensure the interests of the Company and its stockholders are best served.

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Risk Oversight

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The Board oversees risk management directly and through its committees associated with their respective subject matter areas. The Board also reviews and approves the renewal of the Company’s annual insurance policies. In addition, as part of its oversight of our Company’s executive compensation program, the Board considers the impact of such program, and the incentives created by the compensation awards that it administers, on our Company’s risk profile. Our Board, based on the Compensation Committee’s review of all of our compensation policies and procedures, considers the incentives that they create and factors that may reduce the likelihood of excessive risk taking and determines whether they present a significant risk to our Company. The Board has determined that, for all

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employees, our compensation programs do not encourage excessive risk and instead encourage behaviors that support sustainable value creation.

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The Audit Committee is responsible for oversight of our accounting and financial reporting processes and discusses with management our financial statements, internal controls and other accounting and auditing matters. The Compensation Committee oversees certain risks related to compensation programs and the Nominating and Governance Committee oversees certain corporate governance risks.

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As part of their roles in overseeing risk management, the standing committees of the Board periodically report to the Board regarding briefings provided by management and advisors as well as the committees’ own analysis and conclusions regarding certain risks faced by us. Management is responsible for implementing the risk management strategy and developing policies, controls, processes and procedures to identify and manage risks.

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EXECUTIVE OFFICERS

Set forth below is biographical and other information for our current executive officers. Biographical and other information for Michael A. Martino, our Chief Executive Officer, is set forth above under Proposal No. 1, Election of Directors – Information Regarding Director Nominees.

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Daniel G. Stokely has served as our CFO and Secretary since July 2019 and has more than 30 years of experience in finance and accounting. He began his career at Deloitte & Touche and since that time, he has spent the majority of his career in positions of financial leadership within both publicly traded and privately held pharmaceutical companies. Most recently, since 2012, he served as Executive Vice President and CFO of Sentynl Therapeutics Inc., a privately held specialty pharmaceutical company focused on licensing, acquisition, marketing, and distribution of development stage and commercially marketed prescription pain products, which was sold to Cadila Healthcare Ltd. in January 2017. From 2004 to 2012, Mr. Stokely served as Vice President of Finance and Chief Accounting Officer (“CAO”) of Victory Pharma, a privately held specialty pharmaceutical company focused on in licensing, internal product development, marketing, and distribution of pain specialty products, which was sold to Shionogi, Inc., a Japanese pharmaceutical company, in 2011. From 2001 to 2004, Mr. Stokely served as the Corporate Controller and CAO for Wireless Facilities, Inc. (currently Kratos Defense & Security Solutions, Inc.), a publicly traded, global provider of communications and security services for the wireless communications industry. From 1994 to 2001, Mr. Stokely served as Corporate Controller of Dura Pharmaceuticals, a publicly traded pharmaceutical company that was sold to Elan Pharmaceuticals in late 2000. He has a B.S. degree in accounting from San Diego State University and is a Certified Public Accountant licensed in California.

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Employment Agreements

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We entered into a one-year employment agreement with Mr. Michael A. Martino, effective November 22, 2021 (the “Effective Date”) pursuant to which Mr. Martino serves as our Chief Executive Officer. This agreement provided for an annual salary of $550,000, and an annual discretionary bonus of up to fifty percent (50%) of Mr. Martino’s base salary, with the exact amount to be determined by the Compensation Committee of the Board based on achievement of individual and Company performance objectives established by the Compensation Committee. In connection with the Employment Agreement, Mr. Martino was awarded 50,000 options to purchase shares of the Company’s common stock, with 33,333 of such options vesting immediately and the remaining 16,667 options vesting on the one-year anniversary of the Effective Date. In addition, the Company agreed to grant Mr. Martino an additional 16,667 options to purchase shares of the Company’s common stock on January 1, 2022, with all of such options vesting on the one-year anniversary of the Effective Date. On August 30, 2022, the Company amended the existing employment agreement with Mr. Martino, extending the employment term to November 22, 2023. All other terms and conditions of Mr. Martino’s employment agreement remain unchanged.

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On October 11, 2021, the Company entered into a new three-year employment agreement (the “Stokely Employment Agreement”) with Daniel G. Stokely, the Company’s Chief Financial Officer and principal financial officer. The Stokely Employment Agreement supersedes and replaces the Company’s prior employment agreement with Mr. Stokely entered into on July 9, 2019. The Stokely Employment Agreement provides for an annual base salary of $335,000 and an annual discretionary bonus of up to fifty percent (50%) of Mr. Stokely’s base salary, with the exact amount to be determined by the Compensation Committee of the Board based on achievement of individual and Company performance objectives established by the Compensation Committee. In connection with the Stokely Employment Agreement, Mr. Stokely was awarded 22,334 shares of restricted stock, with 4,467 shares vesting upon the effective date of the Stokely Employment Agreement, 4,467 shares vesting on January 1, 2022 and 4,467 additional shares vesting annually each year thereafter, such that all shares of restricted stock will be fully vested on January 1, 2025.

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If Mr. Stokely’s employment is terminated by the Company without Cause (as defined in the Stokely Employment Agreement) or by Mr. Stokely for Good Reason (as defined in the Stokely Employment Agreement), he would be entitled to a lump sum severance payment equal to six months of his base salary in effect at the date of termination, less applicable withholding. In addition, the vesting and exercisability of all then outstanding options held by Mr. Stokely would accelerate in full. Upon the occurrence of a Change in Control (as defined in the Stokely Employment Agreement), all then outstanding stock options, restricted

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stock and other stock-based grants held by Mr. Stokely would immediately and irrevocably vest and become exercisable and any restrictions thereon will lapse.

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Effective May 31, 2022, the Company terminated the employment of Ms. Cherevka under the employment agreement previously entered into on October 11, 2021. Ms. Cherevka was not entitled to any severance or other amount under the October 2021 employment agreement. Additionally, due to Ms. Cherevka’s termination of employment, any outstanding stock options, restricted stock or other equity compensation ceased to vest and whether or not vested as of the termination date, became no longer exercisable and was cancelled.

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Each officer is eligible to receive a discretionary annual bonus each year that will be determined by the Compensation Committee of the Board based on individual achievement and Company performance objectives established by the Compensation Committee. The targeted amount of the annual bonus for Messrs. Martino and Stokely is 50% of the applicable base salary, although the actual bonus may be higher or lower. For 2022, we did not pay a discretionary annual bonus to any named executive officer.

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Potential Payments Upon Termination or Change in Control

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Under the employment agreement with each of Mr. Martino and Mr. Stokely, the named executive officers serving at the end of 2022, if the executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, the executive would be entitled to a lump sum severance payment equal to 0.5 times his base salary in effect at the date of termination, less applicable withholding and certain offsetting payments. In addition, the vesting and exercisability of all then outstanding equity awards (excluding the performance-based awards) held by our executive would accelerate in full. Any performance-based award held by such executive would become vested and exercisable only if the applicable performance-based criteria are satisfied at the end of the applicable period relating to such award, at which time such performance-based award would become vested and exercisable on a pro-rated basis by multiplying such award by a fraction, the numerator of which is the number of full months such executive was employed by the Company during the applicable performance period, and the denominator of which is the total number of months in such performance period. Any performance-based award for which the performance criteria are not satisfied within the applicable performance period would terminate at the end of such period. All severance payments, less applicable taxes and withholdings, are subject to our executive’s execution and delivery of a general release in a form acceptable to us, and is further conditioned upon complying with the confidentiality, non-solicitation, non-competition, intellectual property and post-termination cooperation obligations under his employment agreement. If the employment is terminated by the Company for Cause or by the executive without Good Reason, no severance would be payable by us.

“Good Reason” means, without the executive’s written consent:

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“Cause” means, with respect to Mr. Martino, in the sole discretion of a majority of the Board:

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“Cause” means, with respect to Mr. Stokely, in the sole discretion of a majority of the Board:

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Our employment agreements with the executives do not provide for the payment of a “gross-up” payment under Section 280G of the Code.

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The following table provides a summary of potential payments upon termination or change in control for each of Mr. Martino and Mr. Stokely, our named executive officers as of December 31, 2022 (rounded to the nearest thousand):

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Pay Versus Performance

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In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer, or PEO, and Non-PEO named executive officers, or Non-PEO NEOs, and Company performance for the years listed below. Our PEO is Michael A. Martino. For our fiscal year ended December 31, 2022, our Non-PEO NEOs were Daniel G. Stokely, our Chief Financial Officer and Secretary, and Holli Cherevka, our former President and Chief Operating Officer. Ms. Cherevka served as our President and Chief Operating Officer between October 2021 and May 2022. We had no other executive officers serving during the year ended December 31, 2022.

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The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.

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Year-end fair values are determined based on the same methodology used for grant date fair value purposes. Stock awards and option awards under the 2019 Stock and Incentive Plan were valued using a fair value per share determined in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation – Stock Compensation, rather than amounts paid to or realized by the named individual. The value of stock awards was computed based on the stock price on the grant date. The value of the option awards was estimated using the Black-Scholes option pricing model. The valuation assumptions used in the valuation of options granted may be found in Note 10 to our financial statements included in the annual report on Form 10-K for the years ended December 31, 2022 and 2021, respectively.

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STOCKHOLDER PROPOSALS AND NOMINEES

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Stockholder proposals, including nominations of persons for election to our Board of Directors, will be considered for inclusion in the proxy statement for the 2024 Annual Meeting in accordance with Rule 14a-8 under the Exchange Act, if they are received by the Secretary of the Company, on or before February 15, 2024. If the date of the annual meeting is moved by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, then notice must be received within a reasonable time before we begin to print and send proxy materials. If that happens, we will publicly announce the deadline for submitting a proposal in a press release or in a document filed with the SEC.

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Stockholders who intend to present a proposal, including nominations of persons for election to our Board of Directors, outside of the proxy access process, at the 2024 Annual Meeting without inclusion of such proposal in our proxy materials for the 2024 Annual Meeting are required to provide timely notice of such proposal or nominee in accordance with our bylaws. To be timely, a stockholder’s notice must be delivered to the Secretary at the principal executive offices of the Company not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the Annual Meeting - that is, not later than April 21, 2024 nor earlier than March 22, 2024. However, as provided in our bylaws, different deadlines apply if the 2024 Annual Meeting is called for a date that is not within 30 days before or after the anniversary of the Annual Meeting. If the 2024 Annual Meeting is advanced by more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice must be delivered prior to the later of (a) the 90th day before the annual meeting or (b) the 10th day after which announcement of the meeting day is first made, but no earlier than 120 days prior to the annual meeting. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.

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If a stockholder does not meet these deadlines or, does not satisfy the requirements of Rule 14a-4 of the Exchange Act, the persons named as proxies will be allowed to use their discretionary voting authority when and if the matter is raised at the 2024 Annual Meeting.

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The current address of the Secretary of Ampio Pharmaceuticals, Inc., 373 Inverness Parkway, Suite 200, Englewood, Colorado 80112. Stockholders are encouraged to review the documents we file with the SEC for our mailing address in effect at the time they submit a notice of a proposal or nominee.

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In addition to satisfying the foregoing advance notice requirements under our bylaws, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees at the 2024 Annual Meeting must provide notice that sets forth the information required by Rule 14a-9 under the Exchange Act no later than May 21, 2024, which is 60 days prior to the anniversary date of the Annual Meeting.

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HOUSEHOLDING OF PROXY MATERIALS

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The Notice and the Proxy Statement and the Form 10-K are available at www.proxyvote.com.

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In some cases, only one copy of this proxy statement or our 2022 Annual Report is being delivered to multiple stockholders sharing an address unless we have received contrary instructions from one or more of the stockholders. We will deliver promptly, upon written or oral request, a separate copy of this proxy statement or such Annual Report to a stockholder at a shared address to which a single copy of the document was delivered. Stockholders sharing an address who are receiving multiple copies of proxy statements or annual reports may also request delivery of a single copy. To request separate or multiple delivery, or single copy delivery of these materials now or in the future, a stockholder may submit a written request to Corporate Secretary of Ampio Pharmaceuticals, Inc. at our mailing address or an oral request at (720) 437-6500. Our current mailing address is 373 Inverness Parkway, Suite 200, Englewood, Colorado 80112. Stockholders are encouraged to review the documents we file with the SEC for our mailing address in effect at the time they submit their request.

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APPENDIX A

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CERTIFICATE OF AMENDMENT

TO THE CERTIFICATE OF INCORPORATION

OF

AMPIO PHARMACEUTICALS, INC.

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Ampio Pharmaceuticals, Inc., a corporation organized and existing under the laws of the State of Delaware, does hereby certify as follows:

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“Section 1. Authorized Shares. The aggregate number of shares which the Corporation shall have authority to issue is 310,000,000; of which 10,000,000 shares of the par value of $0.0001 shall be designated Preferred Stock and 300,000,000 shares of the par value of $0.0001 shall be designated Common Stock.

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Upon filing and effectiveness of this Certificate of Amendment with the Secretary of State of Delaware (the “Effective Time”), every [●]¹ issued and outstanding shares of Common Stock shall without further action by this Corporation or the holder thereof be combined into and automatically become one share of Common Stock (the “Reverse Stock Split”). The number of authorized shares of Common Stock of the Corporation and the par value of the Common Stock shall remain as set forth in this Certificate of Incorporation, as amended. No fractional shares shall be issued in connection with the Reverse Stock Split. In lieu of any fractional shares to which a stockholder would otherwise be entitled (after taking into account all fractional shares of Common Stock otherwise issuable to such holder), all fractional shares resulting from the Reverse Stock Split shall be rounded up to the nearest whole share. The capital of the Corporation will not be reduced under or by reason of any amendment herein certified.”

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4.This Certificate of Amendment shall become effective as of [   ] at [a.m./p.m.].

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***

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IN WITNESS WHEREOF, this Certificate of Amendment to the Certificate of Incorporation has been executed by a duly authorized officer of this Corporation on this                 day of                 , 20__.

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APPENDIX B

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AMPIO PHARMACEUTICALS, INC.

2023 STOCK AND INCENTIVE PLAN

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The name of the plan is the Ampio Pharmaceuticals, Inc. (the “Company”) 2023 Stock Option and Incentive Plan (the “Plan”).  The purpose of the Plan is to enable the Company and its Subsidiaries to attract and retain officers, employees, Non-Employee Directors and other key persons (including Consultants and prospective employees), to provide additional incentives to them and align their interests with those of the Company’s stockholders, and to thereby promote the Company’s long-term business success.

The following terms shall be defined as set forth below:

“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

“Administrator” means either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation committee.  At such time as the Company’s common stock is listed on a national securities exchange, the compensation committee will be comprised of not less than two Non-Employee Directors who are independent.

“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Unrestricted Stock Awards and Cash-Based Awards.

“Award Certificate” means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan.  Each Award Certificate is subject to the terms and conditions of the Plan.

“Board” means the Board of Directors of the Company.

“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

“Consultant” means any natural person that provides bona fide services to the Company, and such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.

“Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code.  

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“Effective Date” shall have the meaning described in Section 18.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“Fair Market Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is admitted to quotation on the OTC Bulletin Board, the Nasdaq Stock Market, the New York Stock Exchange, NYSE American or another national securities exchange, the determination shall be made by reference to market quotations.  If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations.

“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.

“Non-Employee Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.

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“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.

“Restricted Stock Award” means an Award entitling the recipient to acquire, at such purchase price (which may be zero) as determined by the Administrator, shares of Stock subject to such restrictions and conditions as the Administrator may determine at the time of grant.

“Restricted Stock Units” means an Award of phantom stock units to a grantee.

“Sale Event” shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, or (iii) the sale of all of the Stock of the Company to an unrelated person or entity.

“Sale Price” means the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event.

“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.

“Stock” means the Common Stock, par value $0.0001 per share, of the Company, subject to adjustments pursuant to SECTION 3.

“Stock Appreciation Right” means an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.

“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has at least a 50 percent interest, either directly or indirectly.

“Ten Percent Owner” means an employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.

“Unrestricted Stock Award” means an Award of shares of Stock free of any restrictions.

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All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.

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Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award.  The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.

Grantees under the Plan will be such full or part-time officers and other employees, Non-Employee Directors and key persons (including Consultants and prospective employees) of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.

Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve.

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Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified Stock Options.  Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code.  To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock Option.

Stock Options granted pursuant to this SECTION 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable.  If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.

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Grant or Sale of Unrestricted Stock.  The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award under the Plan.  Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.

Grant of Cash-Based Awards.  The Administrator may, in its sole discretion, grant Cash-Based Awards to any grantee in such number or amount and upon such terms, and subject to such conditions, as the Administrator shall determine at the time of grant.  The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine.  Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator.  Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in shares of Stock, as the Administrator determines.

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To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A.  In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A.  Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.

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For purposes of the Plan, the following events shall not be deemed a termination of employment:

The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder’s consent.  The Administrator is specifically authorized to exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or effect the repricing of such Awards through cancellation and re-grants.  To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders.  Nothing in this SECTION 15 shall limit the Administrator’s authority to take any action permitted pursuant to SECTION 3(b) or SECTION 3(c).

With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards.  In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.

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The Plan shall be effective upon its adoption by the Board on May __, 2023, subject to the approval of the Plan by the Company’s stockholders at an annual or special meeting of stockholders next following such date (the date of such stockholder approval, the “Effective Date”).

Upon the Effective Date, the Company’s 2019 Stock and Incentive Plan (“2019 Plan”) will terminate so that no new awards may be granted pursuant to the 2019 Plan.  The termination of the 2019 Plan will not affect the rights of holders of awards previously granted and outstanding under the 2019 Plan.  

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