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For the Quarterly Period Ended: June 30, 2012 or
For the transition period from to Commission File No. 001-35182 AMPIO PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter)
5445 DTC Parkway Suite 925 Greenwood Village, Colorado 80111 (Address of principal executive offices, including zip code) (720) 437-6500 (Registrants telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of accelerated filer, large accelerated filer and smaller reporting company in Rule 12B-2 of the Exchange Act. (Check one):
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x As of August 3, 2012, there were 36,987,654 shares outstanding of Common Stock, par value $0.0001, of the registrant. AMPIO PHARMACEUTICALS, INC. AND SUBSIDIARIES SIX MONTHS ENDED JUNE 30, 2012 INDEX
2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this report, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements appear in a number of places, including Managements Discussion and Analysis of Financial Condition and Results of Operations. These statements represent our reasonable judgment of the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use words such as anticipate, believe, estimate, expect, forecast, may, should, plan, project and other words of similar meaning. In particular, these include, but are not limited to, statements relating to the following:
Any or all of our forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors including, among others:
In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements, some of which are included elsewhere in this report, including Managements Discussion and Analysis of Financial Condition and Results of Operations. Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may vary materially from those expressed or implied in any forward-looking statements. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are made, and we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report, except as otherwise required by applicable law. This Quarterly Report on Form 10-Q includes trademarks, such as Ampion, Optina and Zertane, which are protected under applicable intellectual property laws and are our property or the property of our subsidiaries. Solely for convenience, our trademarks and tradenames referred to in this Quarterly Report on Form 10-Q may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames. 3 PART I FINANCIAL INFORMATION
AMPIO PHARMACEUTICALS, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Balance Sheets
The accompanying notes are an integral part of these consolidated financial statements. 4 AMPIO PHARMACEUTICALS, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Statements of Operations (unaudited)
The accompanying notes are an integral part of these consolidated financial statements. 5 AMPIO PHARMACEUTICALS, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Statements of Stockholders Equity (Deficit)
The accompanying notes are an integral part of these consolidated financial statements. 6 AMPIO PHARMACEUTICALS, INC. AND SUBSIDIARIES (A Development Stage Company) Consolidated Statements of Cash Flows (unaudited)
The accompanying notes are an integral part of these consolidated financial statements. 7 AMPIO PHARMACEUTICALS, INC. AND SUBSIDIARIES (A Development Stage Company) Notes to Consolidated Financial Statements (unaudited) Note 1 Business, Basis of Presentation and Merger These unaudited financial statements represent the consolidated financial statements of Ampio Pharmaceuticals, Inc. (Ampio or the Company), formerly known as Chay Enterprises, Inc. (Chay), and its wholly-owned subsidiaries, DMI Life Sciences, Inc. (Life Sciences), DMI Acquisition Corp. and DMI BioSciences, Inc. (BioSciences). These unaudited consolidated financial statements should be read in conjunction with Ampios annual report on Form 10-K for the year ended December 31, 2011, which included all disclosures required by generally accepted accounting principles. In the opinion of management, these unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of Ampio and its results of operations and cash flows for the interim periods presented. The results of operations for the period ended June 30, 2012 are not necessarily indicative of expected operating results for the full year. The information presented throughout the document as of and for the period ended June 30, 2012 is unaudited. Ampio is engaged in developing innovative, proprietary pharmaceutical drugs and diagnostic products to identify, treat and prevent a broad range of human diseases including metabolic disorders, eye disease, kidney disease, acute and chronic inflammation diseases and male sexual dysfunction. Life Sciences was incorporated in the state of Delaware on December 18, 2008 and did not conduct any business activity until April 16, 2009, at which time Life Sciences purchased certain assigned intellectual property (including 107 patents and pending patent applications), business products and tangible property from BioSciences. Life Sciences issued 3,500,000 shares of its common stock to BioSciences, and assumed certain liabilities, as consideration for the assets purchased. The assets that Life Sciences acquired from BioSciences had a carrying value of zero, as BioSciences had expensed all of the research and development costs it incurred with respect to the intellectual property purchased. On March 2, 2010, Life Sciences merged with Chay Acquisitions, a wholly-owned subsidiary of Chay Enterprises, Inc., a public company (the Merger). Chay issued 15,068,942 shares of common stock to acquire Life Sciences, which resulted in the stockholders of Life Sciences owning approximately 95.7% of Chays outstanding common stock after the consummation of the Merger and before taking into account the issuance of 1,325,000 additional shares of common stock. In conjunction with the Merger, Chay purchased 263,624 shares of its common stock from the Chay Control Shareholders for $150,000 in cash. As a result of the Merger, Life Sciences became a wholly owned subsidiary of Chay. For accounting purposes, the Merger was treated as a reverse acquisition with Life Sciences as the acquirer and Chay as the acquired party. The business and financial information included in this report is the business and financial information of Life Sciences. The accumulated deficit of Chay has been included in additional paid-in capital. Subsequent to the Merger, Chay Enterprises, Inc. was renamed Ampio Pharmaceuticals, Inc. On March 23, 2011, Ampio acquired BioSciences (the BioSciences Merger). BioSciences principal asset consisted of the worldwide rights to Zertane, as to which BioSciences held 32 issued patents and 31 pending patent applications. Zertane is a repurposed drug to treat male sexual dysfunction pertaining to premature ejaculation (PE) in men. See Note 2 Acquisition of DMI BioSciences for terms of the acquisition. Ampios activities, being primarily research and development and raising capital, have not generated significant revenue to date. Ampio is considered to be a development stage company. Note 2 Acquisition of DMI BioSciences On March 23, 2011, Ampio acquired all of the outstanding stock of BioSciences for 8,667,905 shares of Ampio common stock (the merger stock). Ampio acquired BioSciences in order to obtain all rights to Zertane, BioSciences male sexual dysfunction drug for PE. The business combination occurred following the satisfaction or waiver of all conditions to closing. As called for in the merger agreement, Ampio issued 405,066 shares of merger stock to holders of BioSciences in-the-money stock options and warrants, 500,000 shares of merger stock to holders of two BioSciences promissory notes in extinguishment of the notes, and placed 250,000 shares of merger stock in an indemnification escrow until December 31, 2011. The remaining 7,512,839 shares of merger stock were issued to the holders of BioSciences common stock on a pro rata basis. All shares were subject to a lock-up agreement under which each holder agreed not to sell, pledge or hypothecate the merger stock until on or after December 31, 2011. As required by the merger agreement, at the closing BioSciences donated back to Ampios capital 3,500,000 shares of Ampio common stock formerly owned by BioSciences which were subsequently cancelled. Ampio separately issued 212,693 options in replacement of 250,850 Biosciences options that were out-of-the-money as of the date of execution of the merger agreement. 8 As a component of the purchase price, Ampio recorded a liability of $574,000 to reflect the potential settlement with three in-the-money option holders that threatened litigation to have their BioSciences options carried over versus being issued Ampio stock in exchange for these options. The dispute involved 263,000 options that were converted to 98,416 shares of Ampio common stock. The liability was estimated based on a fair value calculation of the difference between the Ampio stock trading price and the value of Ampio options using the Black-Scholes option price model with an exercise price of $0.90. On June 17, 2011 a formal agreement was executed whereby Ampio issued 223,024 stock options with an exercise price of $0.90 and an expiration date of February 22, 2014 in exchange for the 98,416 previously issued shares of Ampio stock. The $574,000 liability has been eliminated and credited to stockholders equity. Ampio subsequently filed a claim on the indemnification escrow and was awarded 95,700 shares of Ampio stock to reflect the full value of the 223,024 options issued in exchange for the shares relinquished. The remaining 154,300 indemnification escrow shares were allocated to the appropriate shareholders on December 31, 2011. The 98,416 shares relinquished with the agreement and the 95,700 escrow shares awarded were cancelled. After these adjustments, the net merger stock issued was 8,473,789. The following table summarizes the amounts of estimated fair value of net assets acquired at the acquisition date:
The fair value of in-process research and development and patents was based on an independent third party appraisal. BioSciences had Net Operating Loss (NOL) carryforwards for federal and state income tax purposes of approximately $11,200,000, which expire from 2016 through 2030. Under the provisions of the Internal Revenue Code, substantial changes in BioSciences ownership may result in limitations on the amount of the NOL carryforwards which can be utilized in future years. Ampio provided a full valuation allowance against BioSciences $4,600,000 deferred tax asset (primarily associated with the NOL carryforwards), based on the weight of available evidence, both positive and negative, which indicated that it is more likely than not that such benefits will not be realized. Note 3 License Agreement/Revenue Recognition On September 8, 2011, Ampio entered into a license, development and commercialization agreement, effective as of August 23, 2011, with a major Korean pharmaceutical company. The agreement grants the pharmaceutical company exclusive rights to market Zertane in South Korea for the treatment of PE and for a combination drug to be developed, utilizing Zertane and an erectile dysfunction drug. Upon signing of the agreement, Ampio received a $500,000 upfront payment, the net proceeds of which were $417,500 after withholding of Korean tax. The upfront payment has been deferred and is being recognized as license revenue over a ten year period. Milestone payments of $3,200,000 will be earned and recognized contingent upon achievement of regulatory approvals and cumulative net sales targets, which may take several years. In addition, Ampio will earn a royalty based on 25% of net sales, as defined, if the royalty exceeds the transfer price of the Zertane product. Note 4 Derivative Financial Instruments Ampio issued senior convertible unsecured debentures and related warrants in five tranches between August 2010 and January 2011 (the Senior Convertible Debentures). On February 28, 2011, Ampios Senior Convertible Debentures were converted to 1,281,852 shares of common stock. The related warrants and the components of warrant derivative liability as reflected in the balance sheet as of June 30, 2012 and December 31, 2011 are as follows: 9
Ampio elected to measure the Senior Convertible Debentures at fair value in their entirety, rather than bifurcating the conversion option. The fair value of the hybrid debt instrument comprises the present value of the principal and coupon enhanced by the conversion option. Both the warrants and the conversion options embedded in the hybrid debt instruments were valued using a binomial-lattice-based valuation model. The lattice-based valuation technique was utilized because it embodies all of the requisite assumptions (including the underlying price, exercise price, term, volatility, and risk-free interest-rate) that are necessary to fair value these instruments. For forward contracts that contingently require net-cash settlement as the principal means of settlement, Ampio projects and discounts future cash flows applying probability-weighting to multiple possible outcomes. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of Ampios common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair value, Ampios income will reflect the volatility in these estimate and assumption changes. The following table summarizes the effects on Ampios unrealized loss associated with the warrants recorded at fair value by type of financing for the three and six months ended June 30, 2012 and 2011, respectively:
The following table summarizes the effects on Ampios unrealized loss associated with hybrid debt instruments recorded at fair value by type of financing for the three and six months ended June 30, 2011. There are no ongoing charges since all hybrid financial instruments were converted/eliminated in the first quarter of 2011. 10
Note 5 Fair Value Considerations Ampios financial instruments include cash and cash equivalents, prepaid expenses, accounts payable and warrant derivative liability. The carrying amounts of cash and cash equivalents, prepaid expenses and accounts payable approximate their fair value due to their short maturities. Derivative financial instruments, as defined by GAAP, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets, with changes in fair value recorded in earnings. Ampio generally does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, Ampio has entered into certain other financial instruments and contracts, such as Ampios previously outstanding secured convertible debenture and warrant financing arrangements that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by GAAP, these instruments are required to be carried as derivative liabilities, at fair value, in Ampios financial statements. However, Ampio may elect fair value measurement of the hybrid financial instruments, on a case-by-case basis, rather than bifurcate the derivative. Ampio believes that fair value measurement of the hybrid convertible debenture financing arrangements provide a more meaningful presentation. Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of Ampio. Unobservable inputs are inputs that reflect our assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on reliability of the inputs as follows:
Ampios assets and liabilities which are measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Ampios policy is to recognize transfers in and/or out of fair value hierarchy as of the date in which the event or change in circumstances caused the transfer. Ampio has consistently applied the valuation techniques discussed below in all periods presented. 11 The following table presents Ampios financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2012 and December 31, 2011, by level within the fair value hierarchy:
The warrant derivative liability for the warrants associated with debt was valued using the binomial lattice-based valuation methodology because that model embodies all of the relevant assumptions that address the features underlying these instruments. Significant assumptions in valuing the warrant liability were as follows as of June 30, 2012 and December 31, 2011:
The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair valued hierarchy:
Note 6 Commitments and Contingencies Under the terms of a Budget Agreement contained in a Clinical Research Agreement effective December 15, 2010, Ampio had agreed to fund $657,416 to support a clinical trial. Ampio notified Health Canada of its discontinuation of this clinical trial, Study DMILS-Rx09-001, on March 20, 2012 after the planned interim review indicated encouraging results. Ampio also terminated the clinical research agreement at that time. Ampio had fully paid the final negotiated fee of $458,514 at June 30, 2012. In conjunction with this clinical trial, Ampio entered into service agreements to provide data management, statistical services and project management and monitoring totaling $262,740, of which Ampio had paid $179,004 through June 30, 2012. In connection with upcoming clinical trials, Ampio has additional total commitments of $427,600 on contracts related to study drug production and corresponding studies and documentation. 12 Ampio entered into employment agreements with three of its officers in August 2010 with two remaining in effect at June 30, 2012. Under the employment agreements, the officers are collectively entitled to receive $550,000 in annual salaries. The employment agreements expire August 2013. Ampio entered into a Sponsored Research Agreement with Trauma Research LLC, a related party, in September 2009. Under the terms of the Sponsored Research Agreement, Ampio is to provide personnel and pay for leased equipment. Ampio also reimburses third party expenses incurred on its behalf. The payments for reimbursements and leased equipment were $17,391 for the three months and $31,901 for the six months ended June 30, 2011 and none in 2012. The Sponsored Research Agreement may be terminated without cause by either party on 180 day notice. Obligations under the Sponsored Research Agreement are as follows:
Ampio has not recorded an accrual for compensated absences because the amount cannot be reasonably estimated. On May 20, 2011, Ampio entered into a 38 month non-cancellable operating lease for office space effective June 1, 2011. As of June 30, 2012 the remaining obligation under this lease is $51,816 for 2012, $105,060 for 2013 and $62,118 for 2014. Note 7 Common Stock Capital Stock At June 30, 2012 and December 31, 2011, Ampio had 100,000,000 shares of common stock authorized with a par value of $0.0001per share and 10,000,000 shares of preferred stock authorized with a par value of $0.0001per share. Shelf Registration On September 30, 2011, Ampio filed a Shelf Registration statement on Form S-3 with the Securities and Exchange Commission to register Ampio common stock and warrants in an aggregate amount of up to $80 million for offering from time to time in the future. The registration statement also registers for possible resale up to one million shares of common stock to be sold by directors and management (as selling shareholders) in future public offerings. On October 13, 2011 Ampio filed an amendment to identify potential selling stockholders and the number of shares they would be eligible to sell in the event of a future public offering. The shelf registration was declared effective on October 28, 2011 by the Securities and Exchange Commission. Registered Direct Offering On December 27, 2011, Ampio completed a registered direct offering of its common stock A total of 2,220,255 shares were issued at $4.25 per share resulting in gross proceeds of $9,436,084, of which Ampio received net proceeds of $8,454,001, after placement agent commissions, non-accountable expenses and other offering costs. Private Placement Offering On March 31, April 8 and April 18, 2011, Ampio closed private placements of its common stock (the 2011 Private Placement). A total of 5,092,880 shares of common stock were issued resulting in gross proceeds of $12,732,200, of which the Company received net proceeds of $10,916,538, after placement agent commissions, non-accountable expenses and other offering costs. In connection with the private placements, the placement agent also received 509,288 warrants to purchase common stock with a fair value of $888,664. Note 8 Equity Instruments Options Ampio adopted a stock plan in March 2010. The number of shares of common stock reserved for issuance to officers, directors, employees and consultants through various means, including incentive stock options, non-qualified stock options, restricted stock 13 grants, and other forms of equity equivalents was increased from 2,500,000 to 4,500,000 in August 2010 and to 5,700,000 by vote of the shareholders on December 3, 2011. In May 2012, Ampio awarded grants of options to purchase 1,505,000 shares of common stock to directors, officers and employees with a weighted average exercise price of $2.76 per share. Grants of 1,430,000 options vest monthly over 3 years and 75,000 options vested immediately. Ampio has computed the fair value of all options granted using the Black-Scholes option pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding components of the model, including the estimated fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to valuation. Ampio estimated a volatility factor utilizing a weighted average of comparable published volatilities of peer companies. Due to the small number of option holders, Ampio has estimated a forfeiture rate of zero. Ampio estimates the expected term based on the average of the vesting term and the contractual term of the options. The risk free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. Ampio has computed the fair value of all options granted during the period ended June 30, 2012 using the following assumptions:
Stock option activity is as follows:
Stock-based compensation expense related to the fair value of stock options was included in the statement of operations as research and development expenses and general and administrative expenses as set forth in the table below. Ampio determined the fair value as of the date of grant using the Black-Scholes option pricing method and expenses the fair value ratably over the vesting period. The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2012 and 2011:
14 Warrants Ampio issued warrants in 2011 and 2010 in conjunction with its Senior Convertible Debentures and 2011 Private Placements as follows:
The exercise price of the warrants associated with the Senior Convertible Debentures was fixed at $1.75 per share and the warrants expire on December 31, 2013. Warrants issued in connection with the 2011 Private Placements are at $3.125 per share and expire March 31, 2016. Note 9 Related Party Transactions Ampio has license agreements with the Institute for Molecular Medicine, Inc. (IMM), a nonprofit research organization founded by an officer and director of Ampio who also serves as IMMs executive director. The license agreements were assigned to Life Sciences as a part of the asset purchase from BioSciences. Under the license agreements, Ampio pays the costs associated with maintaining intellectual property subject to the license agreements. In return, Ampio is entitled to deduct twice the amounts it has paid to maintain the intellectual property from any amounts that may become due to IMM under the license agreements, if and when the intellectual property becomes commercially viable and generates revenue. Ampio may cease funding the intellectual property costs and abandon the license agreements at any time. Ampio incurred $60,283 and $41,376 during the six months ended June 30, 2012 and 2011, respectively, in legal and patent fees to maintain the intellectual property subject to the license agreement. Immediately prior to the Chay Merger on March 2, 2010, Chay accepted subscriptions for an aggregate of 1,325,000 shares of common stock from six officers and employees of Life Sciences, for a purchase price of $150,183. The purchase price was advanced to the six officers and employees by Chay at the time the subscriptions were accepted. These shares were issued immediately before the closing of the Chay Merger but after the shareholders of Chay had approved the merger. The advances are non-interest bearing and due on demand and are classified as a reduction to stockholders equity. During the year ended December 31, 2011 one advance of $22,660 was repaid. During the quarter ended March 31, 2012 an additional repayment of $36,883 was received. Note 10 Subsequent Events On July 18, 2012, Ampio announced the closing of an underwritten public offering for the sale of 5,203,860 shares of common stock at a price of $3.25 per share. Gross proceeds to the Company totaled $16,912,545 with net proceeds estimated to be approximately $15,200,000 after underwriter fees and cash offering expenses. Ampio also issued warrants to purchase 138,462 shares of common stock to the underwriters. These warrants have an exercise price of $4.0625 with a five year term but are not exercisable until July 18, 2013. 15
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This discussion should be read in conjunction with Ampio Pharmaceuticals, Inc.s historical financial statements filed with this report. The following discussion and analysis contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. For additional information regarding these risks and uncertainties, please see Part II, Item 1A of this Form 10-Q, Risk Factors, and the risk factors included in Ampios Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 9, 2012. Overview Ampio maintains an Internet website at www.ampiopharma.com. Information on or linked to the Company website is not incorporated by reference into this Quarterly Report on Form 10Q. Filings with the SEC can also be obtained at the SECs website, www.sec.gov. We are a development stage biopharmaceutical company engaged in discovering and developing innovative, proprietary pharmaceutical drugs and diagnostic products to identify, treat and prevent a broad range of human diseases including metabolic disorders, eye disease, kidney disease, cancer, acute and chronic inflammation and male sexual dysfunction. We intend to develop proprietary pharmaceutical drugs and diagnostic products, which capitalize on our intellectual property that includes assigned patents, pending patent applications, and trade secrets and know-how, some of which may be the subject of future patent applications. Our intellectual property is strategically focused on three primary areas: new uses for FDA-approved drugs, referred to as repositioned drugs, new molecular entities, or NMEs, and rapid point-of-care tests for diagnosis, monitoring and screening. On March 23, 2011, we acquired all of the outstanding stock of DMI BioSciences, Inc. (BioSciences) for 8,667,905 shares of our common stock (the merger stock). We acquired BioSciences in order to obtain all rights to Zertane, BioSciences male sexual dysfunction drug for premature ejaculation (PE). The business combination occurred following the satisfaction or waiver of all conditions to closing. As called for in the merger agreement, Ampio issued 405,066 shares of merger stock to holders of BioSciences in-the-money stock options and warrants, 500,000 shares of merger stock to holders of two BioSciences promissory notes in extinguishment of the notes, and placed 250,000 shares of merger stock in an indemnification escrow until December 31, 2011. The remaining 7,512,839 shares of merger stock were issued to the holders of BioSciences common stock on a pro rata basis. All shares were subject to receipt from each such stockholder of a signed lock-up agreement, under which each agreed not to sell, pledge or hypothecate the merger stock until on or after December 31, 2011. Certain of these lock-up agreements were modified after September 30, 2011. As required by the merger agreement, at the closing BioSciences donated back to Ampios capital 3,500,000 shares of Ampio common stock formerly owned by BioSciences. Ampio separately issued 212,693 options in replacement of 250,850 Biosciences options that were out-of-the-money as of the date of execution of the merger agreement. On June 17, 2011, an additional 223,024 options were issued in exchange for 98,416 previously issued shares of Ampio stock pursuant to an agreement with three former BioSciences option holders. During 2011, we filed a claim on the indemnification escrow and were awarded 95,700 shares of Ampio stock to reflect the full value of the 223,024 options issued in exchange for the shares relinquished. On December 31, 2011 the remaining 154,300 indemnification escrow shares were allocated to the appropriate shareholders. All shares donated back, relinquished and escrow shares awarded to Ampio have been cancelled. Business Update/Financing Activities On February 28, 2011, we issued an aggregate of 1,281,852 shares of our common stock in retirement of the Senior Convertible Debentures issued to 21 holders of such debentures. The convertible debentures were previously issued in five tranches. The first tranche consisted of $430,000 in principal amount issued in August 2010 to two directors and an affiliate of one of those directors. The next three tranches consisted of $1.38 million in principal amount issued in October, November and December 2010 to 19 unaffiliated holders (seven of whom were already our shareholders), and the remaining tranche in January 2011 was an increase of $382,000 in principal amount of debentures purchased by five holders who originally purchased debentures in November 2010. The principal amount of the debentures and accrued interest were converted into our common stock at $1.75 per share. Debentures held by two directors and an affiliate of one director were converted on the same terms as debentures held by unaffiliated parties. The debenture holders were collectively issued warrants to purchase 256,389 shares of our common stock as additional consideration for the purchase of the debentures. Those warrants are exercisable at $1.75 per share. On March 31, April 8 and April 18, 2011, we closed private placements of our common stock (the 2011 Private Placement). A total of 5,092,880 shares of common stock were issued resulting in gross proceeds of $12,732,200, of which we received net proceeds of $10,916,538, after placement agent commissions, non-accountable expenses and other offering costs. The placement agent also received 509,288 warrants valued at $888,664 in connection with the closing. We applied a portion of the private placement proceeds in March and April 2011 to pay accrued expenses, to pay accrued salaries owed to certain of our officers, to reduce accounts payable, and to repay a $100,000 promissory note to Michael Macaluso, our chief executive officer and chairman of the board. 16 On September 30, 2011, we filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission to register our common stock and warrants in an aggregate amount of up to $80 million for offering from time to time in the future. The registration statement also registers for possible resale up to one million shares of common stock to be sold by directors and management (as selling shareholders) in future public offerings. On October 13, 2011 we filed an amendment to identify potential selling stockholders and the number of shares they would be eligible to sell in the event of a future public offering. The shelf registration was declared effective on October 28, 2011 by the Securities and Exchange Commission. On December 27, 2011, we completed a registered direct offering of our common stock A total of 2,220,255 shares were issued at a price of $4.25 per share resulting in gross proceeds of $9,436,084, of which we received net proceeds of $8,454,001, after placement agent commissions, non-accountable expenses and other offering costs. No warrants were issued. On July 18, 2012, we completed an underwritten public offering for the sale of 5,203,860 shares of common stock at a price of $3.25 per share. Gross proceeds to the Company totaled $16,912,545 with net proceeds estimated to be approximately $15,200,000 after underwriter fees and offering expenses. Ampio also issued warrants to purchase 138,462 shares of common stock to the underwriters. These warrants have an exercise price of $4.0625 with a five year term but are not exercisable until July 18, 2013. The net proceeds of the 2011 and 2012 offerings have been or will be used for general corporate purposes and working capital, including conducting pivotal trials for Ampion and Zertane, Phase II and III trials for Optina, development of the methylphenidate family of compounds through the pre-IND submission, development of the ORP device and commercialization of Zertane and Zertane-ED. Product Update We continue to execute our business plan and have moved forward on our three main drug candidates and our device development. In addition, we have evaluated our methlphenidate derivatives family of compounds and have accelerated the development of these compounds. We will continue to evaluate our pre-clinical portfolio and advance drug candidates accordingly. Ampion for Osteoarthritis of the Knee The clinical trial has been completed and the preliminary results have been evaluated. A pre-IND meeting with the FDA to obtain clarity for a Phase III pivotal trial was held on May 10, 2012. The first batch of the study drug supply has been manufactured and is undergoing stability studies. We have identified initial sites and investigators and we have received quotes from clinical research organizations, which we are assessing. We anticipate that this United States trial will begin in the fourth quarter of 2012. Optina for Diabetic Macula Edema The clinical trial was discontinued after the planned interim review indicated encouraging results. The detailed analysis of the multiple data point per patient was released on June 11, 2012. Despite the small number of patients, the results showed statistical significance. The results of data analysis of the Canadian trial also indicated important changes in study design and dosage. A successful pre-IND meeting with the FDAs ophthalmology division of the Center for Drug Evaluation and Research (CDER) took place July 31, 2012. Among other things, the meeting provided guidance for approval through the 505(b)2 pathway in the United States, indicated no safety or CMC concerns, confirmed agreement that no additional non-clinical studies are necessary and provided that the measure of efficacy will be based on visual acuity end points. Zertane for Male Sexual Dysfunction We reached agreement with the Australian Therapeutic Goods Administration (TGA) on a plan for preparation of manufacturing and common technical documents to obtain regulatory approval for Zertane in Australia. The submission is dependent upon the completion of batch processes by an independent manufacturer but is expected to be made late in the fourth quarter of 2012 or first quarter of 2013 and we hope to obtain approval in Australia as early as 2013. A Type B pre-IND meeting was held with the FDA on June 20, 2012 to discuss the approval path for Zertane in the U.S. under the 505(b)2 regulations. We are proceeding based on the guidance received and anticipate the completion of modification of the patient reported outcome (PRO) measure as suggested by the FDA and the completion of protocol design for submission of the IND in the first quarter of 2013. As with the TGA submission, the IND submission is also dependent on the manufacturer. Our sexual drug therapy portfolio was recently expanded with the allowance of the PE-ED patent in Europe and Canada. We expect the United States patent allowance to follow shortly. As a first step for the clinical study of Zertane-ED, we entered into an 17 agreement with Syngene International to begin manufacturing, in compliance with FDA standards, the combination product for use as a study drug in clinical trials to be conducted according to FDA standards and guidelines for approval in South Korea and to support an FDA submission. We also entered into a license and distribution agreement with a Brazilian pharmaceutical company for exclusive rights to market Zertane in Brazil. Methylphenidate Derivatives for Cancer We have accelerated the development of our methlphenidate derivatives family of compounds (NCE-001) to preclinical development for the treatment of glioblastoma multiforme (brain tumor), renal cell (clear cell) carcinoma and inflammatory breast cancer following the granting of multiple composition of matter and use patents in the USA, Canada, Europe and China. We have preliminarily agreed with Syngene International that Syngene will manufacture relevant compounds and conduct all preclinical stages of development to an IND submission to the FDA and we are in the process of finalizing a definitive agreement relating thereto. These cancers do not have adequate treatment options so NCE-001 may qualify for an accelerated approval path by regulatory agencies, including the FDA. ORP, Point-of-Care Diagnostic Device Enrollment of patients has been completed for our clinical trials and the analysis of the results has begun. The results will determine the clinical utility of this technology. We intend to prepare a 510(K) FDA submission upon completion of data analysis. Management Update On January 9, 2012, we announced that our Chief Executive Officer, Donald B. Wingerter, Jr., had requested and was granted a compassionate leave from all duties as CEO, member of the Board of Directors and an employee. Compensation and benefits totaling $634,000 have been paid to Mr. Wingerter pursuant to terms of his employment contract. This includes a lump sum payment of two years salary, a supplemental payment and two years of continued health benefits. All of his outstanding stock option awards vested, bringing total stock options exercisable at $1.03 per share to 600,000 shares. The 325,000 shares of Ampio common stock owned by Mr. Wingerter were subject to the terms of a lock-up agreement that has expired. Ampios Chairman of the Board, Michael Macaluso, was appointed Chief Executive Officer concurrent with this departure with his compensation set at $195,000 per year. Lockups All lockup agreements related to the stock issued in connection with the acquisition of BioSciences expired on June 30, 2012. In October 2011, Ampio management and employees holding an aggregate of 8,250,000 shares agreed to extend their existing lock-up restrictions until July 15, 2012. The management and employee lockups exclude their pro rata portion of holdings of up to 1,000,000 aggregate shares for all selling shareholders should Ampio decide to sell stock in a future public offering, as previously detailed in our Form S-3 Registration Statement effective October 28, 2011. In July 2012 two of the executive officers and directors of Ampio holding approximately 4,700,000 shares of common stock voluntarily extended their lockup restrictions to January 1, 2013. These two voluntary lockups allow for the sale of collectively up to 429,400 shares as selling stockholders should we decide to sell stock in a future public offering. These executives did not participate as selling shareholders in the July 2012 offering. Known Trends or Future Events We have not generated any significant revenues and have therefore incurred significant net losses since our inception in December 2008. The assets we purchased from BioSciences in April 2009 generated minimal revenues prior to their acquisition. Unless we secure a collaborator for one or more of our product candidates and generate substantial license revenues, we will need additional capital in order to continue to implement our business strategy. Although we have raised capital in the past and raised net proceeds of approximately $15.2 million and $19.4 million through the sale of common stock in 2012 and 2011, respectively, we cannot assure you that we will be able to secure such additional financing, if needed, or that it will be adequate to execute our business strategy. Even if we obtain additional financing, it may be costly and may require us to agree to covenants or other provisions that will favor new investors over existing shareholders. Due to the time required to conduct clinical trials and obtain regulatory approval for any of our product candidates, we anticipate it will be some time before we generate substantial revenues, if ever. We expect to generate operating losses for the foreseeable future, but intend to try to limit the extent of these losses by entering into co-development or collaboration agreements with one or more strategic partners, such as the license agreement entered into in September 2011 with a major Korean pharmaceutical company. 18 At this time, due to the risks inherent in the clinical trials and the stage of development of our product candidates, we are unable to estimate with any certainty the costs we will incur for the continued development of our product candidates for commercialization as clinical development timelines, probability of success, and development costs vary widely. While our current focus is primarily on obtaining regulatory approval for our product candidates, initiating pre-clinical development of our methylphenidate product family, and the development of the ORP device, we anticipate that we will make determinations on an ongoing basis as to which product candidates to pursue and how much funding to direct to each product candidate in response to the scientific and clinical success of each product candidate, as well as an ongoing assessment of each product candidates commercial potential and our financial position. We cannot forecast with any degree of certainty which product candidates will be subject to future collaborative or licensing arrangements, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our product candidate plans and capital requirements. Significant Accounting Policies and Estimates Our financial statements have been prepared in accordance with accounting policies generally accepted in the United States of America. The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to recoverability of long-lived assets, fair value of our derivative instruments, allowances and contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The methods, estimates, and judgments used by us in applying these most critical accounting policies have a significant impact on the results we report in our financial statements. Results of Operations June 30, 2012 Compared to June 30, 2011 Results of operations for the three months ended June 30, 2012 (the 2012 quarter) and the three months ended June 30, 2011 (the 2011 quarter) reflected losses of approximately $2,496,000 and $2,818,000, respectively. These losses include non-cash charges related to derivative expense, stock based compensation and depreciation and amortization in the amount of $580,000 in the 2012 quarter and $1.5 million in the 2011 quarter. Results of operations for the six months ended June 30, 2012 (the 2012 period) and the six months ended June 30, 2011 (the 2011 period) reflected losses of approximately $5,332,000 and $11,598,000, respectively. These losses include non-cash charges related to derivative expense, common stock and stock based compensation, losses on the fair value of debt instruments and depreciation and amortization in the amount of $679,000 in the 2012 period and $8.8 million in the 2011 period. Revenue We are a development stage enterprise and have not generated material revenue in our operating history. The $25,000 license revenue recognized in the 2012 period represents the amortization of the upfront payment received on our license agreement. The initial payment of $500,000 from the license agreement with a Korean pharmaceutical company was deferred and is being recognized over 10 years. Expenses Research and Development 19 Research and development costs are summarized as follows:
Research and development costs consist of labor, research and development of patents and intellectual property, stock-based compensation as well as drug development and clinical trials. Costs of research and development increased $542,000 or 54% for the 2012 quarter compared to the 2011 quarter and increased $1,382,000 or 84% for the 2012 period compared to the 2011 period due to continued focus on the development of and pursuit of regulatory clarity on our primary product candidates, Ampion, Optina and Zertane, and the development of our ORP device. We also continued to maintain and strengthen our patent portfolio on our primary product candidates. Labor costs also increased as a result of the increased efforts in this area. General and Administrative General and administrative costs are summarized as follows:
General and administrative expenses increased $159,000 or 28% for the 2012 quarter compared to 2011 quarter. The increase is due primarily to the non-cash stock-based compensation award expense recognized during the 2012 quarter. The increase in general and administrative costs in the 2012 period compared to the 2011 period was $91,000 or 4%. Labor costs increased as the result of the employment agreement payout to our former CEO upon the granting of indefinite compassionate leave of absence. Stock based compensation decreased in the 2012 period from the 2011 period due to the reduction of new options being issued and the majority of previously issued options having vested. Professional fees consist primarily of legal, audit and accounting costs, costs related to public company compliance costs, and consulting related to capital formation. In the 2011 period we had higher professional fees related to the filing of an S-4 document and the acquisition of BioSciences. Occupancy, travel and other expenses consist of rent, insurance, investor relations and other public company costs such as exchange listing. The increase in the 2012 period relates primarily to NASDAQ annual fees and increased investor relations activities. Derivative income (expense) We recorded non-cash derivative expense in connection with our hybrid financial instruments consisting of debentures and related warrants. This expense was $233,226 in the 2012 quarter compared to $1,243,642 in the 2011 quarter, and $76,247 in the 2012 period compared to $2,192,097 in the 2011 period. These amounts relate to the fair value at inception and subsequent changes in fair value of the debentures issued in 2011 and 2010 stemming from the embedded derivative features (conversion options, down-round protection and mandatory conversion provisions) and the changes in fair value of warrants issued in conjunction with the debentures. Unrealized loss on fair value of debt instruments We recorded $5.6 million in non-cash unrealized loss on fair value of debt instruments in the first quarter of 2011. The expense reflects the change in fair value of our debentures prior to their conversion to common stock in February 2011 and stemmed primarily from the increase in our common stock price between December 31, 2010 and February 28, 2011, when the debentures were converted. 20 Net Cash Used in Operating Activities During the 2012 period our operating activities used approximately $5.2 million in cash. The use of cash was approximately the same as the $5.3 million net loss. Non-cash charges for common stock and stock based compensation, depreciation and amortization was $679,000. Current assets in the form of prepaid expenses used cash of $263,000 and the decrease in accounts payable used cash of approximately $272,000. During the 2011 period our operating activities used approxiately $3.4 million in cash. The use of cash was significantly lower than the $11.6 million net loss, primarily as a result of non-cash charges of $981,000 for common stock issued for services and stock based compensation and $7.8 million in unrealized loss on fair value of debt instruments and derivative expense. Net of these non-cash expenses, our operations used $2.8 million in cash. We also used $642,000 in cash from operations to pay deferred salaries, accounts payable, related party payables and net changes in other current assets and $75,000 for the purchase of fixed assets and rent deposits. Net Cash from Financing Activities Net cash provided by financing activities in the 2012 period was due to a cash exercise of stock options of $618,000 and a repayment of $37,000 related to the stockholders advances made in 2010. Net cash provided by our financing activities was $11.2 million for the 2011 period. During this period, we received $382,000 from the sale of additional senior unsecured debentures and $10.9 million from the sale of common stock. We also repaid a $100,000 note to a director of Ampio. Liquidity and Capital Resources At June 30, 2012, Ampio had cash of approximately $6.8 million and payables of approximately $358,000. As a development stage biopharmaceutical company, we have not generated significant revenue as our primary activities are focused on research and development, advancing our primary product candidates, and raising capital. In the six months ended June 30, 2012, we used net cash in operating activities of $5.2 million and inception to date of $18.3 million. We have historically funded our operations through sales of common stock and debt securities. During the first six months of 2012, we completed two pre-IND meetings with the FDA that provided clarity for pivotal trials of Ampion and Zertane, completed the submission package for Optina and held a successful pre-IND meeting with the FDA on July 31, 2012 and accelerated the development of our methylphenidate family of compounds. In July 2012, we completed a public offering of 5,203,860 shares of common stock resulting in gross proceeds to the Company of $16,912,545 with proceeds net of cash offering and underwriting expenses estimated at approximately $15,200,000. We are reviewing solicited proposals and quotes for the clinical trials, ORP device requirements and other costs associated with our development programs. We believe that we have adequate capital to execute most, if not all, of our product strategies; however, we may also enter into licensing or collaboration agreements to further leverage our capital resources. Our on-going expenses such as payroll, legal and accounting and overhead are currently anticipated to be in the range of $600,000 per month, inclusive of new patent applications and maintenance of existing patents. Assuming this burn rate stays the same, along with anticipated cash expenditures to execute our product strategies, we expect our cash reserves to last into mid-2014. To the extent we decide to further expand our clinical trials, it will be necessary to raise additional capital and/or enter into licensing or collaboration agreements. At this time, we expect to satisfy our future cash needs through private or public sales of our securities or debt financings. We cannot be certain that financing will be available to us on acceptable terms, or at all. Over the last two years, volatility in the financial markets has adversely affected the market capitalizations of many pharmaceutical companies and generally made equity and debt financing more difficult to obtain. This volatility, coupled with other factors, may limit our access to additional financing. If we cannot raise adequate additional capital in the future when we require it, we will be required to delay, reduce the scope of, or eliminate one or more of our research or development programs or our commercialization efforts. We also may be required to relinquish greater or all rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. This may lead to impairment or other charges, which could materially affect our balance sheet and operating results. Off Balance Sheet Arrangements We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as variable interest entities. 21
The Company is not currently exposed to material market risk arising from financial instruments, changes in interest rates or commodity prices, or fluctuations in foreign currencies. The Company has no need to hedge against any of the foregoing risks and therefore currently engages in no hedging activities.
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out by the Companys management, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Companys disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports the Company files or furnishes under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SECs rules and regulations, and are operating in an effective manner. Changes in Internal Control over Financial Reporting There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 22
The Company is currently not party to any material pending legal proceedings, whether routine or non-routine.
Certain factors exist which may affect the Companys business and could cause actual results to differ materially from those expressed in any forward-looking statements. The Company has revised the below risk factor from those risk factors as previously disclosed in the Companys Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 9, 2012. Future sales of shares by existing stockholders could cause our stock price to decline. As of June 30, 2012, we had 31,761,169 shares of our common stock outstanding. Of these shares, 8,667,905 shares of common stock were issued to former BioSciences shareholders in connection with the acquisition of BioSciences in March 2011. Subsequently, 194,116 of these shares were cancelled as a result of a settlement with three shareholders, resulting in 8,473,789 net shares outstanding. The 8,473,789 net shares issued to the former BioSciences shareholders were free-trading, subject to the provisions of lock-up agreements under which such shareholders were prohibited from selling, pledging or hypothecating our common stock until December 31, 2011. On October 5, 2011, our board of directors approved a modified lock-up program under which former BioSciences stockholders who voluntarily agreed to a six-month extension of existing lock-up restrictions to June 30, 2012, would be permitted to sell up to 5% of their shares per month effective September 15, 2011 and immediately upon their establishing trading accounts that were approved by Ampio. The holders of approximately 54% of the total 8,473,789 net merger shares agreed to these terms. In addition, a group holding approximately 18% of the merger stock, agreed to a lock-up that allowed them to collateralize a loan provided that shares could not be sold unless the share price fell below a defined floor or, if not used as collateral, allowed the monthly sale of 5% of the holdings beginning January 15, 2012 through June 30, 2012. An aggregate of approximately 2,336,036 shares (representing approximately 28% of the net shares issued to former BioSciences shareholders) became freely tradable without lock-up restrictions as of January 1, 2012. As a result of the lock-up agreement modifications described above, an aggregate of approximately 6,137,753 shares (representing approximately 72% of the net shares issued to former BioSciences shareholders) were subject to modified lock-up agreements, of which an aggregate of approximately 2,137,753 shares became freely tradable without lock-up restrictions prior to June 30, 2012. The lock-up restrictions covering the remaining approximately 4,000,000 shares expired on June 30, 2012. In addition, executive officers and directors of BioSciences and Ampio agreed to lock-up restrictions expiring on February 28, 2012. In October 2011, Ampio management and employees holding an aggregate of 8,250,000 shares (including 2,700,000 shares owned by Dr. David Bar-Or) agreed to extend their existing lock-up restrictions until July 15, 2012, but they will not be prohibited from selling a pro rata portion of their holdings of a total of up to 1,000,000 shares for all selling stockholders should Ampio decide to sell stock in a future public offering. Subsequent to these lockups being signed, the former CEO owning 325,000 shares took an indefinite leave of absence and his lockup expired April 8, 2012. On July 3, 2012, we announced that Dr. David Bar-Or, our chief scientific officer and member of our board of directors, and Mr. Michael Macaluso, our chief executive officer, agreed to extend their lock-up restrictions until January 1, 2013. These lock-up restrictions cover approximately 4,743,373 shares, but allow for the sale of collectively up to 429,400 shares as selling stockholders through future public offerings we may consummate from time to time pursuant to our Form S-3 Registration Statement effective October 28, 2011. Since all of the BioSciences lock-up agreements are now expired as of June 30, 2012, and lock-up restrictions with respect to an additional approximately 5,225,000 shares expired as of July 15, 2012, sales of a substantial number of these shares in the public market could cause the market price of our common stock to decline. If there are more shares of common stock offered for sale than buyers are willing to purchase, then the market price of our common stock may decline to a market price at which buyers are willing to purchase shares. 23
24 Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
25 |


text:
CHSE authorities clueless about source of question paper leak
The slur of question paper leak has returned to haunt examination regulators in the State. Thousands of students of Plus Two Science stream will have to write paper-I of their physics paper again on March 25 after leakage of its question paper was detected on Thursday.
Authorities of Council of Higher Secondary Education, Odisha, which conducts Plus Two examinations, are clueless about source of question paper leak.
Question paper leak came to the light on Thursday when a vernacular Odia daily printed four questions of Physics paper – which was scheduled for Thursday – claiming that it was in possession of the question paper.
Initially, CHSE authorities seemed to be on a denial mode. When pressure mounted on them to verify the claim, those incharge of conducting examinations finally matched questions with original papers and found substance. Initially, leakage of English paper was also reported in local media. But CHSE had ignored the claims.
"We have come across the incident of question paper leak. Preliminary investigation pointed out no safety box was broken open by miscreants for making the question public. It is handiwork of people incharge of keeping questions in their safe custody. A centre superintendent could have connived with frauds to leak the question paper," said G. S. Ray, Chairman of CHSE, here.
Mr. Ray said, "We have formed squads who would visit all centres in different regions to ascertain the source of question paper leak. The examination committee of CHSE would discuss the incident in detail and take a final decision on rescheduling the examination."
The issue of question paper leak was also raised by Opposition Congress during zero hour in the State Assembly.
"We will take stringent action against the culprits who would be found responsible for question paper leak. We are taking all possible measures to prevent question papers from falling in hands of miscreants before the examination," said State Higher Education Minister Badri Narayan Patra.
It needs to be mentioned that last year the annual High School Certificate examination had been postponed by 20 days after report of question paper leak .
The CHSE sources said many private higher secondary colleges in desperate attempt to show better performance were indulging in the illicit act of procuring question papers before its schedule time. These private colleges try to win over centre superintendents in naxalite-hit regions for laying their hands on question papers before crucial several hours of the examination schedule. They take down questions over their telephones.
The CHSE authorities were also suspecting that unscrupulous elements could have made attempts to know questions at its origin – place of printing. CHSE Chairperson said every aspect of question paper leak would be looked into. About 2.90 lakh students are appearing Plus Two Science Examination which began from March 1.
It came to light on Thursday when a vernacular Odia daily printed four questions Stringent action will be taken against the culprits, says Minister

subset: commoncrawl


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"We absolutely loved our invitations for our daughters baptism! The invitations look exceptional the print and delivery were prompt, we were kept updated with the status throughout, would highly recommend!"
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text:
MezzengerKlient - MSN Messenger Class 0.01
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Share Cookies with a soldier or local charity!
Want to share a sweet surprise with our service men and women? Or help local charities? You can do that simply by purchasing a package of Girl Scout cookies! Girl Scouts of Kansas Heartland has distributed more than 78,800 packages of cookies through our Cookie Share Program since 2010, with more than half going to military members and their families.
Continue >Banish the boring. Bling Your Booth for a chance to WIN!
Participate with your Girl Scout sisters in an exciting Cookie Booth competition! It's time to banish the boring and "bling" your Cookie Booth to help reach your Cookie Sales goal. This year, there are two contests you can participate in: a local and a national contest! So have fun with your Girl Scout friends, be creative, and bling on!
Continue >UPCOMING EVENTS
Celebrate Girl Scouts - All About Tradition
Date: Sat Feb 28 2015, 9 AM - 4 PM
Location: Camp Flying T
Date: Sat Feb 28 2015, 10 AM - 12 PM
Location: Museum of World Treasures
Turn Everyday Objects Into Jewelry
Date: Wed Mar 4 2015, 6 PM - 8 PM
Location: The Wichita Center for the Arts
Brownie Starry Night Artists' Lock-in - Spring Session
Date: Fri Mar 6 2015, 7 PM - Sat Mar 7 2015, 8 AM
Location: CityArts
Girl Scout Little House gets National Register of Historic Places nomination
19 Feb 2015
The Girl Scout Little House in Ashland, built in 1937 by laborers employed through the Works Progress Administration (WPA), was one of 10 Kansas sites nominated for the National Register of Historic Places!
Be Girl Scout Proud during Girl Scout Week!
18 Feb 2015
Girl Scout Week, March 8 through 14, is a time to celebrate Girl Scouting with your Girl Scout sisters! Be a Proud Scout on March 12 for the Girl Scouts' Birthday, and participate in the council-wide Birthday in a Bag service project!


text: Em 02-08-2013 19:45, Fernando de Oliveira escreveu: > Em 02-08-2013 18:05, Bruce Dubbs escreveu: > > I almost always have time for BLFS, but since yesterday, I could not yet > do it. This is wrong. I mean I can give almost all my time to BLFS but have been busy about the last 24 hours temporarily with something else. -- []s, Fernando


text:
circuit breaker NS400N-400A
FOB Price: | US $ 1 - 1,000 / Piece | Get Latest Price |
Min.Order Quantity: | 1 Piece/Pieces Circuit Breaker |
Supply Ability: | 500 Piece/Pieces per Week Circuit Breaker |
Port: | Shanghai |
Payment Terms: | L/C,D/A,D/P,T/T,Western Union,MoneyGram,paypal |
Quick Details
- Place of Origin: Shanghai, China (Mainland)
- Brand Name: origin
- Model Number: NS400N-400A
- Type: Moulded Case
- Poles Number: 1-4
- Warranty: 180 days
- Lead free status: ROHS compliant
- Lead time: STOCK
- Condition: NEW
- Service: One-stop service
- Dissipation Power: normal
Packaging & Delivery
Packaging Details: | Original Schneider Circuit Breaker package |
Delivery Detail: | Within 3 days after receiving payment |
circuit breaker NS400N-400A1.Best Quality
2.Competitive Price
3.Professional Service
4.New and Original
circuit breaker NS400N-400A
Product Description
What is Details of our Schneider Circuit Breaker?
Description | 1.Circuit breaker is to point to to close, loading and open circuit loop current, under the condition of normal and can close, within the prescribed time and open circuit abnormal circuit conditions (including short circuit conditions) under the current switch devices. |
2. Circuit breaker is to point to to close, loading and open circuit loop current, under the condition of normal and can close, within the prescribed time and open circuit abnormal circuit conditions (including short circuit conditions) under the current switch devices. | |
3. Can be used to allocate electricity, not frequent start asynchronous motor, the protection of power line and motor, when they happen serious overload or short circuit and under-voltage fault can automatically cut off the circuit, its function is equivalent to fuse switch to owe the combination of thermal relay, etc.And after the breaker fault current generally do not need to change parts. | |
Feature | 1). Rated voltage Ue. |
2). Rated current In; | |
3). The set values for the short circuit relay tripping current (Im); | |
4). The rated short circuit breaking capacity (Icu or Icn); | |
5). Short circuit breaking capacity (Ics) | |
Application | 1). Under normal circumstances on and off the no-load and load current in high voltage circuit; |
2). A failure occurs in the system can be made to match the protection device and automatic device, cut off the fault current quickly, prevent accident expanding, thus ensuring the safe operation of the system. | |
3). The short circuit protection and prevent serious overload. | |
4). Efficient arcing. |
Schneider Circuit Breaker details show
Packaging & Shipping
1. We will ship the items within 3 working days after the payment is reached.
2. All the goods will be tested before shipment.
3. Packing in professional anti-static bag.
4. We can ship to you by DHL/TNT/UPS/EMS/Fedex... Pls contact us directly and we will ship as your requirement.
2. All the goods will be tested before shipment.
3. Packing in professional anti-static bag.
4. We can ship to you by DHL/TNT/UPS/EMS/Fedex... Pls contact us directly and we will ship as your requirement.
Strict quality test of Schneider Circuit Breaker by equipment
Carefully package process of Schneider Circuit Breaker
Big warehouse keep lots of Schneider Circuit Breaker in stock. Ready to send!
Our Services
Why Choose Yaspro?
- We keep more than 10 thousands Transistors in warehouse, it could cut lead time of most items.
- Customer service in 1-4 hours. If there's any question, please contact with our sales.
- Experienced technichal support team.
- 180 days warranty for all the goods from us.
- 2000+ suppliers with us, we could help you to get any components which is difficult to get.
- Risk-free guarantee, 60 days refund. If the item you purchase from our store are not of perfected quality, simply return them to us for replacement or refund.
Office/factory and professional sales team
Company Information
Our Certifications
Professional Team, Do Our Best!
Frequently Asked Questions
1. Q: Do you provide warranty for the goods?
A: Yes, we provide warranty for all the goods from us.
2. Q: Could Yaspro provide technology support?
A: We're in this field more than 12 years. If there's any problem, please contact with us,we'll provide suggestion from our engineer to help you solve problem.
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Semporna isn't the nicest town in the world, but it acts as the gateway to some fabulous islands, like Sipadan, Mabul, Kapalai etc. If you have some spare time there then the fish market is worth a look and the mosque is very pretty. It's also well worth taking a wander round the fishing villages which are built on stilts. Here you can really see locals going about their everyday life. People had warned me off going there but I had no hassle. The people were a mixture of friendly or shy but certainly never hostile. The kids were excitable and loved having their photo taken.
Questions answered about visiting Semporna
Im going to sempoerna on this april 2011for 6 days can you suggest me any interest places in sempoerna other thn the islands.. Is it better to get a snorkeling trip to Sipadan Island or do the 'Discover Scuba' in Mabul and then go snorkeling around a different island of the Archipelago? Where can i find place of pearl processing at semporna
Ask a travel question about Semporna
Travel Tips from people who've been to Semporna
Pulau Sipadan- a diver's paradise! It's on the Eastcoast of Sabah/ Borneo. Fly from KL to Tawau or Sandakan. Share the taxi with someone to go to Semporna.
Semporna itself isn't very interesting, no big nightlife.
But check http://www.scuba-junkie.com If you like diving or you want to learn, Semporna's a great place for it.
Also Malaysia is very cheap- so you don't need a lot of money to spend some days there, enjoying your daily dives, boat trips, good food and young coconuts. Good tip? (0) Cheapest Way to dive Sipadan & Mabul: Scuba Junkies. But it's a everydays ride all the way from Semporna with Speedboads. Scuba Junkies also got good accomodation and a bar. Good tip? (0) Dragon Inn is a pleasant place to stay for a few nights, it is built on sticks over the water and reasonably priced. Good tip? (0) Recent Updates for Semporna
Ihavetravellust T. answered Jakub M.'s question: 2 years ago Jakub M. asked the question: 2 years ago 3 years ago Jonathan R. wrote a review on Sipadan, Semporna 3 years ago Ask a travel question about Semporna
Bradt Travel Guides
Related Links
Travel insurance from Worldnomads.com


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She's got a strong pose, and if you look at her front view versus her angled view, it's interesting how she transforms from sort of endearingly cute in the first into a power performer in the second. I also love her hair, although I wish her outfit was slightly darker or brighter to contrast against that super pale skin. Still, beautiful stuff.
figure comes from CM's Corporation as part of their Gutto Kuru line,
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Nanoha-- I'm liking this move to
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(about $49
USD), if you like her you can probably get your hands on her, too.


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